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Market Update

Submitted by Tyler Durden on 06/22/2010 07:46 -0400

Nic Lenoir

By Nic Lenoir of ICAP

We issued a bearish recommendation yesterday given the daily reversals observed. The S&P future here is sitting very close to the neckline of a short-term H&S pattern (1,103.5). This is relevant because few people spot those on a 10-minute chart so chances of a headfake are actually far lesser. Also the neckline is situated right around the 200-dma which has been a relatively important pivot and the top of yesterday's candle rejected the 100-dma which is about to post a bearish cross with the 50-dma. Overall there is therefore a decent lid on the market. We would use 1,118 as a stop for shorts, and add on to shorts if 1,103/1,100 is broken.

Good luck trading today,

Nic

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Tue, 06/22/2010 - 07:54 | 426438 TooBearish

PPT has same charts- thanks Nic!

Tue, 06/22/2010 - 09:03 | 426498 Boilermaker

I don't doubt that they are driving the markets according to the chartology non-sense. But, aside from that, this is just bunk. Nobody can even explain chartology. It's just a way to make mediocre minded retail investors feel like they are analyzing something and being uber-clever about it.

That being said, yeah, the PPT will jack the living piss out of it to play the 'technical' garbage higher.

Tue, 06/22/2010 - 09:12 | 426511 Joe Shmoe

I sometimes wonder the same thing, Boilermaker. But, I think the HFT/algo traders are probably heavily driven by technical factors )much easier to program into a system than something so esoteric as... JUDGEMENT). So, maybe technical analysis is "bunk" as you say, but if it's what drives the computers, which drive the market, then it's self-fulfilling... until it isn't. Know what I mean?

Tue, 06/22/2010 - 09:14 | 426515 Boilermaker

Well, I agree that if enough people believe it then it will become relevant. I just don't understand it or 'get it', personally.

Tue, 06/22/2010 - 08:08 | 426453 Careless Whisper

algos love to trigger stops, as well as key price points, so i usually don't execute unless the market trades for an hour at that price point. any comments on that ? thanks.

Tue, 06/22/2010 - 09:56 | 426590 Abiggs

I worked at an hft firm for two years. Trading is driven by simple linear algebra not fibonacci levels or sma's. The majority of phd's are clueless about how these principles pertain to trading.

Tue, 06/22/2010 - 08:26 | 426469 newstreet

and to think I just went long.

Tue, 06/22/2010 - 08:33 | 426473 anony

I didn't add any shorts on today. I'm gonna dangle freely all day.

Tue, 06/22/2010 - 08:36 | 426476 greased up deaf guy

always appreciate your insights, nic.

Tue, 06/22/2010 - 08:56 | 426489 jkruffin

Obama is losing all his people, something must be rotten in D.C.

3 FED positions vacant as the rats jump ship

Obama just might get impeached soon

Sat, 06/26/2010 - 05:14 | 435024 mbtshoe

Tue, 06/22/2010 - 08:59 | 426491 Boilermaker

When did 'technical' trading schemes get so popular? How the fuck can anyone use this and / or place credence to this shit? I guess I'm plagued by the fact that I'm an engineer by profession and that logic exist in my world. But, technical trading is based on absolutely nothingness. Applying overly simplistic rolling averages to a chart is just non-sense. Unless, of course, there are so many people that 'believe' it that it takes on a life of it's own.

Nevertheless, this is garbage from a mathematical point of view. It has no value or substance, at all.

Tue, 06/22/2010 - 09:44 | 426568 TWORIVER

Actually TA is very effective if you only focus on supply/demand dynamics and accumulation/distribution patterns. I do not use moving averages, only volume price and trendlines.

Tue, 06/22/2010 - 10:22 | 426626 IE

You mean this isn't simple math, as in 2 + 2 = 4?

Or do you mean you believe math can't identify patterns & attempt to predict aggregate behavior in like circumstances?

Tue, 06/22/2010 - 09:23 | 426533 jkruffin

It is definitely time to go DUTCH !!!!!!!!!!! LOL

http://d.yimg.com/a/p/afp/20100622/capt.photo_1277205639676-1-0.jpg?x=40...

Tue, 06/22/2010 - 09:48 | 426578 HarryWanger

I guess everyone did notice. Market dancing higher again today ignoring all of those "solid" technicals from yesterday. Bearish candles, engulfing candles, etc, etc. This is why only t/a that every really seems to matter to most traders is the 200 dma. The rest is pretty much tea leaves.

Tue, 06/22/2010 - 11:54 | 426826 Brett in Manhattan

Trends have a slightly better chance of persisting than not.

Why?

Because the game is still about accumulation and distribution and it takes a while to do both; hence, a trend.

The 200dma is a way of measuring the trend. Is it foolproof? No.

However, anyone who used a simple arbitrary formula of buying/selling when the dow crosses the 200dma would've gotten out at ~13k and back in ~8.5k. That beats the hell out of virtually every one of these so-called forecasters.

Tue, 06/22/2010 - 10:11 | 426611 wagefreedom

Wow, everyone is quick to dismiss, instead of fading that open! It's early, but I believe S&P 1118 is the high of the day so far. Just like Nic said. I just think it takes balls to put it out there like he does.

Sat, 06/26/2010 - 05:14 | 435025 mbtshoe

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