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Market Support: A Break Here Opens A Fall To 1,007 On The S&P
As the attached chart indicates, the primary support trendline is here. The robots that have been pushing the market higher on diminishing volume need to reverse the massive volume surge that has wiped out over 3 week of profits in 2 days (yes, that's why we show those VWAPs over and over). Even more troubling is that the support line and the 100 DMA intersect, and we are right on top of it. Should we drop below current levels on higher volume, the next major resistance is over 80 points below.
Now no rational person should allows technical analayis to be the only (or even primary) determinant in investing strategy. However, in this market, which has been far from rational, momentum and trendlines seem to be the core variables. Watch for Monday's very action closely.
And for those who like to see market comparisons with prior precedents, here is a chart from reader Joe which compares the current bear market rally with prior Recessions/Depressions. Draw your own conclusions.
h/t Joel
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gotta bust 1085 decisively first.
i'll sit back and enjoy the ride and begin to pay attention once that monster gap at 901 is filled. and, it will be.
deadhead i hope you're wrong just as i folded my core-short hand after 4 months of dipping in and out here it comes. fuck me
Unfortunately Mr Head as I prefer to call him, calls some good ones. But I'm sure he's not "the one".
Saddle up!
chicken...it's gonna be a long secular bear market in my view, plenty of opportunities.
the really hard part of the decision is the fucking around that the Fed does....one thing trading a market with a bunch of human beings, another thing trading against one entity with a stacked deck......
i still say the easiest trade in the world i made was a heavy FAS position as the "nationalization" talk was all the rage in early 09....there was NO way in the world that it was going to happen and I never slept easier with a large trade on in a volatile market.
Consider this possible synchronicity: the last time we had a sudden and unexpected turnover at the Fed was back on June 2, 1987 when Paul Volcker surprisingly announced his resignation. Market crashed October of that year.
The big one is that the second leg of the Great Depression was precipitated by the Austrian bank crisis of May 1931 and now the weakest point in the global system are the EU banks, any of the large EU banks goes it's 10x Lehman and they are too big to save.
if bernanke doesn't make it, market crashes.
if bernanke does make it, market crashes.
only a question of when.
i'm thinkin' we need to be careful here. remember who we dealin' with. i'm expecting a day when the market is crap and everyone is short, distinguished senatoor reid will hold a surprise news conference and announce he has many more than the 60 votes for professoor bernanke. wham bam shazam futures ramp. short squeeze. panic buying. dow up a few hundred and we have to listen to those idiots on cnbc tell us that the market gave bernanke a vote of confidence.
Even if Bernanke is confirmed, he would be a weak Fed Chairman the way the vote is shaping up. They'll think it thru and realize that it's a very risky appointment. Also AIG hearings are coming up. Perfect storm for the Fed.
@DH. I think Bernanke is not reappointed the market crashes, like Oct '87. If he is reappointed, the market tanks.
Finally got to see my FAZ and SRS go up for a change this week. They only have to quadruple for me to get back to even... Don't call me at 1 800 BEARING asking for trading advice!
Hey, if gold, etc. keep going down, I will be happy to buy that! Don't call 1 800 GOLD BUG either.
i've been trading faz/fas continually, though backed off a bit cuz the fed is just too involved in propping the banks.
best (luckiest) call was on a friday back in july, had a 2 handle profit (at 40 interestingly enough Andy) and knew i was not going to hold over the weekend....anyways, it started moving against me and got out at 39. as you know, the market went into liftoff that next Monday in July and hasn't looked back.
you'll do well....at this point, the tough call will be where to bail in the short term.....i imagine, notwithstanding other matters, banks will get a pop if that phuck Bernanke makes it back in and it became clear late this p.m. that obama is still backing him and that little pussy harry reid went to yes.
maybe the senate won't get the 60 needed to invoke cloture for a vote......gonna be interesting.
i saw your comment on the 901 gap, which we had discussed previously. i fully expect to see that in 2010.
when you going to write an article?
when you going to add some spice to robo's column? robo seems to have forgotten we are in a depression and need more meat.
i still always think of you on days like the last 2 when the vix rockets!!
you're a good man Andy!
if i am ever the president, i nominate you (not for this pic, but that other one) for FAA commissioner. you are the landing strip expert.
p.s. she does have the west virginny face; did you get this from Cheeky? and where the hell has he been, have a only seen a quick comment or 2 lately?
thanks andy...looked at cheeky's twitter.
i see he is still reading but not commenting.
i hope cheeky reconsiders....his views and insights are most helpful and educational.
I see 500 coming in the next 18 months.
Remember Oct 29th... same result will happen.
Where is gold? Where is USD? Where are rates and inflation?
Stocks are fine. Be a buyer at 1090. Load the boat at 1070... if we ever get there.
Oct '07? well anyway, 1020-1040 will be easy to break. What about breaking 996? This pullback is what I expected but with all the new geopolitical happenings I am becoming even more bearish (who coulda guessed!) I think 886-996 should be the end of it around March 6th. This of course with QE 2, the jobs program, etc. Without any of that I have S&P at 600, thereabouts by the summer. I like gold parallel to the DJ, btw.
Gold's getting whooped, bitches!
It's on sale, and I hope it goes down to 1000 again. It will likely be the last time this decade to buy it at or slightly below a 1000 bucks.
Whup it good! Bash it down! So I can buy more!
Bank Fail Friday:
#5 for the year -
PR-14-2010 Premier American Bank, Miami, Florida, National Association, Assumes All of the Deposits of Premier American Bank, Miami, Florida
cost to the DIF, $85M
She better get crankin'.
Oh sheeit. I'm in the construction business and have a project underway that Premier American is the lender on. For the past several months, payments have been coming slower and slower. I billed $98K four weeks ago and am still waiting. Emailed the senior VP at Premier yesterday looking for an update on funding. Hey, no reply yet!!
Just a matter of time now before the Soylent Green becomes available.
One of my favorite movies. Do you think it will be available in mild, medium, and hot?
I think the SPX holds at the weekly down trendline that was broken on the upside around 1070.
I'm not buying into the "crash thru 1085" meme yet. There was no real indication that the EURUSD was tanking (last 20 min) nor Gold. It feels a whole lot like New Years Eve. I'm game it will bounce 2% or so, then dump again.
Deflation rearing its head. Time to watch gold trip back to 800.
Gold will only crash if the kill the banks and given what happened over the past year I am not holding my breath
Gold is actually more of a deflationary hedge over inflation. Deflation brings uncertainty and uncertainty bring the jizz to the goldbugs pants.
It is a strange feeling to be heavily hedged for the worst yet still hoping for something better to come from this mess.I guess we understand that if the worst comes our gold might not be enough.
Still it is great to see gold bugs calling for sound money policies even though in some instances it is against their financial interests.
No Way. Suppor is ah $1040, my frien.
The market has been PROGRAMMED by the light-volume algo hands - to "buy the dips."
We are going much lower in the trend - to SPX 865 eventually. Next week will be very interesting, especially Monday evening when everyone's HFT darling AAPL releases earnings. I think this is a $150 stock rather than the $300 stock analysts want us to buy. Let's see.....
The market will go down enough to frighten the typical person who reads these sites. Anybody who thinks that the 50% decline, "wasn't enough". History shows it's a mistake to keep fighting the last war.
Discussed earlier this week in a ZH article (I forget by whom) was the observation that a significant portion of the US stock market gains have happened on Monday. IF Monday is a down day, especially if it is significantly down then I will start to think this action may have some real legs. As Lizzy noted earlier, GS (and I suspect other banks as well) price their stock options the day after award. So, perhaps this movement is part Dodd's water boy comments about scaring the markets and part of an effort by the administration to help the banks meet their mandatory minimum compensation requirements while looking good on the Q4 contributions while the administration gets to make populist noises out of the side of their neck.
We'll see.
GS is selling theirs but who is buying the stock?
"guranteed to go up 11% over time"....hahahahahahahaha
Ya, just like the folks who believe that a 13.7% net-net-net is an expected rate of return.... ROFLMAO
NOTE: In my comment at the top of this sub-thread I should have said; "A significant portion of the gains in stock market since the March lows of 2009 have happened on Monday". My apologies.
PPT, and Leo.
Indeed Andy. And, according to reports the institutional money is leaving the market in droves.... I am no expert as well, but aren't their many sayings about major institutional movements generally and more specifically, their heavy use of guaranteed VWAP executions and VWAP target executions and the effects these may have on a market used to no/low volume up movements? So, these aspects coupled with the earlier discussion over the evaporation of HFT down order liquidity and bid provision begin to paint a picture. Have a great weekend Andy. Good to see you being active on these spaces.
the gs volume is pretty amazing....
even with all the anti GS crap, it's not a bad buy at 150ish, unless they are really thinking seriously about going private, then those phucks will short the piss out of it back to 40.
pontificating support levels is so .... ____?
awesome.
Buy GS for the massive divi, they treat their shareholders right!
Cramer?
I agree that the gap at 910 needs filling and this stupid monkey in the whitehouse is just what we need to get it filled! On a related note, I've bashed Prechter a fair bit over the past many months for his way early calls for p3 to start. I don't know that it has started, but in one of his EWI "theory" reports, I recall him writing that one of the huge headwinds for the coming years and impetus for deflation would be gov regulation. Paraphrasing "as the gov tightens the regulatory noose around the necks of business in reaction to what has ALREADY happened and in an effort to APPEAR proactive, the econ will further slow creating more deflationary headwind" I have to hand it to him with this 'prediction' or at least insight. If nothing else, this guy does show that history repeats itself and mastering what has happened is a great tool for predicting what will happen.
Got to wonder what obama was thinking with this populist rhetoric at this time (particularly since there isn't a chance in hell that he'll follow thru with it). While i applaud it, i don't understand the timing---its as if he wanted to crash the market. OMG, maybe he IS the antichrist afterall????
Got to wonder what obama was thinking with this populist rhetoric at this time (particularly since there isn't a chance in hell that he'll follow thru with it).
Deflecting populist anger away from a non-jobs creating stimulus package, a failed senatorial election and a failing health care agenda? False flags, axis of evil, bad bankers, Chinese currency manipulators - every administration needs at least one bogey man to deflect blame from failed policies without any regard for the truth......
Just because you have to be intelligent to understand technical analysis, it does not follow that technical analysis yields actionable intelligence.
The Weak Law of Large Numbers is a law. Ignorance of the law is no excuse.
Bonus question: Why is ignorance of the law no excuse?
Extra bonus question: Explain q.v. (which see).
Eh.... Bernanke is going to get support over the weekend and then when it starts to disappear on Tuesday or Wednesday the market sells off again. AB=CD people, nothing goes straight up or straight down... plus bonds are a bit overheated just like stocks are oversold. As for Market Technicians, they're all mixed, I hear some of the finest daily and they've been calling a top for 6 months while the "non-gurus" have been making cash hand over fist. Tyler had it right, simple trendlines and vwap are all you need right now, the break will come, but it doesn't have to be today or tomorrow.
Patience, you don't need to be an expert, you just need to know how to use stops (unless you're an options trader and then you better know your ass from a hole in the ground or your ass will be in the ground). If you shorted near the close today, you're all sorts of backwards. as for CSIQ like LK was calling, I'm watching it and it's due for a bounce, I'll think about testing the waters on Monday morning, look for China stocks to bounce as capital re-allocates based on an eventual Yuen de-link from the USD. *sigh* I'm no expert, but damn there is a lot of bad trading advice on these boards.
Monday runs flat (down .11%), with all out war resuming tuesday; continuing wednesday, thursday, friday, weekend, then on monday February 1st...HOLIDAY!!! Bank HOLIDAY!!!
Amen bro - Tyler is right on the VWAP. It's that reversion to mean thing that's gonna bite people (Read: VIX closing above Upper BB)
Even knowing your butt from a hole in the ground on options still served me a few times on this P2!
All over those financials, baby. Got my pound of flesh out of MS and BAC.
Notice how well Scotia held up? What gives with that?
Check Robo's take on what was churning...
http://www.zerohedge.com/article/outright-panic-too-far-too-fast
That might give some light on the roll from one to another.
Forget Mondays, it's the first of the month when the money comes in. And don't get caught short options expiration week during a selloff, that's when BB et al do their best work. that huge cross trade in the minis a few days ago, evidently meant something
I have a different interpretation of the chart guys. The 100 and 200 day averages aren't really used that much. The 50 day is better, and the SPX blew through that today. It also blew through the bottom bollinger band which indicates we are due for a bounce.
On the SPY there was support at 110.76, 110.30, and 109.60 and of course they are toast, so I have a hard time saying where we land, except that this is getting oversold short term because of the bollinger bands.
comments appreciated
I only use the 50, 200 sma & vwaps for simple trends and basic overbought/oversold. The 50/200 is perfect for hourly as well. When 50's are breached they usually need to retest for confirmation.
Good job.
i'm of the opinion that all moving averages (50-day, 100-day and 200-day in this case) are relevant to a degree and should be considered/monitored accordingly. i've closed positions too soon based on a breach of the bollinger bands, so i'd say they're relevant until they're not. lol... rsi not showing oversold yet, but may get there as soon as monday.
I think a break below 1085 with volume is a short term game over. If we kiss 901, we'll kiss 680 again. Either way, the bulls are about to get a history lesson and they had best PRAY that Bernanke gets reconfirmed (not me) or the markets will see something they have never experienced beyond going to Broadway:
Don't Cry for Me, Argentina
If Obama names a new Fed Head, that 'person' will be the ultimate definition of an inflationist. ABBAnomics, here we come....
I sold my DTO shares today, bought in at 61.55 on Jan 8th, sold at 74.96. When crude popped to $83.50 a barrel the permabulls were calling for $90 oil. I figured it was a bit premature with china cooling its mon policy. We should see a floor around 72-74 range. Thinking of shorting DTO now with crude popping back to 77-79 range. We shall see.
Like the Nikkei 225?
http://www.zerohedge.com/article/meltup-cometh
Look out below...
"Now no rational person should allows technical analayis to be the only (or even primary) determinant in investing strategy."
NOW THEY TELL ME!??!
=]
I really see little support after today until 950 on the S&P.
I really see little support after today until 950 on the S&P.
1085 is a huge battle line.
I really see little support after today's sell off until 950 on the S&P.
Gold is money. Money outperforms in Deflation.
Assets, prices, currencies ... all deflating in term of Gold.
From shorty at Cap Stool.
Great post, Tyler, especially for a Friday evening after big moves--minor stuff alert-- you might want to fix 'the next major resistance is over 80 points below' to the next major SUPPORT is over 80 points below. And since you are in a fix, ya might as well set 'Watch for Monday's very action closely' straight like as in 'Watch Monday's action very closely.' Keep swinging Tyler!
don't need no silly "analysis" about support lines and moving averages to tell me that this is the start of a very serious move down in the maket.
"Now no rational person should allows technical analayis to be the only (or even primary) determinant in investing strategy."
Are you kidding me? If your trading strategy is not primarily based on a some type of technical rational you don't have a trading strategy.
Goodbye. Your credibility on anything you post is zero.
Relax, bears. Market is toast. Won't happen all at once, never does, but rallies will be brief and tentative with sharp selloffs.
Too many factors are converging. Mainly, the ENTIRE market leadership got taken out and shot today. Selloff was on volume too with lots of nervous hands selling at every chance.
Plus I maintain that the market bean its slide well before the political stuff (Obama and Tuesday). And there's one reason. The economy is souring once again and it's all happening way too quick and too soon for bulls to stomach. Actually I think it was the jobs report creeping back up for a second week toward 500K along with many other discouraging and suggestive data points that spooked 'em. Big players were bailing last week.
It ain't just deflation and it ain't just inflation. It's the Frankenstein economy with a killer blend of both in just the worst places. Yikes!
This is all well and good but, we must wait till the next davos/WEF for the final say and if the last time was any indacation see:
http://www.youtube.com/watch?v=66Y9xdWD6gI&feature=related
Were screwed!
the fact that the message boards are full of bearish bashes says it all.....
they refuse to see how this was an orchestrated sell off for political reasons and to get bernanke relected. some of it was china and "Excuse" to sell but mostly its physchology
we will retest the highs in next few weeks imo if too many of you go short
10% drops in big banks from 2 days ago on a potential 1-3% prop trading hit..if its even passsed.
its bogus
DOW/SP500 daily charts are now bearish, weeklies remain in an uptrend for now.
I'm short.
My earlier bearish warnings for stocks continues.
My earlier USD uptrend and EURO downtrend warnings continue.
In early 2007 I warned of an impending stockmarket crash.
I confirmed a bottom by early April 2009.
In mid 2009 I warned of an impending USD rally (has much further to go too)
The uptrend since March 2009 has been a bear market rally contained within a much larger bear cycle that started in 2000.
UPDATES:
http://www.zerohedge.com/forum/market-outlook-0
US@DX (US at the double xcross) ceiling at 82. Will top in early march. then the doelarr will continue it's downtrend.
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