Mid Day Market Update
Submitted by Nic Lenoir of ICAP
Let's get a bit technical here, because it is required. As stated yesterday my concern was that the drop into the close last night would not lead to enough follow through in the morning and we would chop around the tops some more. Unfortunately I do think that this is what we are dealing with here.
Looking at the Dax first. There is a HUGE resemblance, even in the details of substructure, between the open triangle we are currently forming, and that we formed the last two weeks of September. That indicates our next move is up and that on should get long this morning around 5,700/5,730 to play 5,890. This is where the difference will be made between September and now. At 5,900 we should drop again around 5,650, probably to test the gap or the support line of the channel, and either break through, or like at the end of September waste our downward momentum on the support before forming a new bullish impulse. Honestly formations could not be much clearer than here, so we will rely on that as our game plan.
Translating this into S&P futures term, it seems the 1,070/1,075 support zone is holding for now, and we are at risk to go test 1,100. I highlighted on the 180 minute chart the same type of open triangle consolidations we have observed for the Dax. We can see the redundancy quite clearly. If we do test 1,100/1,120 I think it will be a great opportunity to get short for at least a 4% or 5% move.
Looking at FX markets we can see clearly how AUDUSD which is trading in perfect harmony with equity markets has been testing and holding support around 0.9190 and would most likely retest 0.93 before it has a chance for a bigger retracement.
The charts might seem overloaded a little bit with annotations but I feel very strongly about the market structures observed and their similarities. We keep seeing these open ended triangle where RSI indicators on time-frames shorter than 3 hours retrace trading sideways to 40 until the next impulse up. When we revisit the highs, the next leg down will be quite indicative of whether the retracement has potential for more depth or not. We need to have areas where momentum grinds back upwards with little advance rather the other way around.
Good luck trading,
Nic
(1 vote)
on Thu, 10/22/2009 - 10:56
#106871
You go ahead and get long.
Not this kid.
Good luck to you though. Watch out for Goldman drones. They gobble up little investors trying to make a dime.
on Thu, 10/22/2009 - 11:07
#106885
+100 No damn way I am going long at this level. These "great" EPS beats and yet we are this flaky? Hell no...people are READING the filings and finding shit and not these rosy BS spewed by CNBC (Communist News Broadcasting Channel).
-Michael
on Thu, 10/22/2009 - 23:18
#107891
Ok. Tomorrow may be a short term high till we correct to 1035ish. I'd still like to keep something on the table. Go hogs! Beat Ol' Miss!
on Thu, 10/22/2009 - 11:27
#106903
just seems like a different vibe in the market today/y'day. oil off 1.25 as the dollar has dropped considerably from its daily highs? even the s/p now looking like its rolling back over as the dollar weakened. think further liquidation of galleon?
on Thu, 10/22/2009 - 11:31
#106908
I think we will see 1070 tested later today.
on Thu, 10/22/2009 - 11:32
#106909
I watched the Dax and FTSE this morning and despite Far East being down as well as those two down a lot the Dow was being held up at every opportunity.. of course thin out of hours made it easy to do but this was so blatant! But despite this the DAX and FTSE kept selling off
on Thu, 10/22/2009 - 11:32
#106910
HUGE USD RALLY COMING...! Ahahaha... LMAO...
on Thu, 10/22/2009 - 11:32
#106913
Housing Market Has Bottomed, Banking Analyst Bove Says
http://www.cnbc.com/id/33411724
on Thu, 10/22/2009 - 11:47
#106937
OH wow, if housing has bottomed, wouldn't it be a great time to buy WFC. WWJD? (What Would Jerkoff bove Do?)
on Thu, 10/22/2009 - 11:48
#106939
ok, seriously. Who is this guy, and why is he always on CNBC? I mean, I understand he's some big wig analyst, but WHY?! We're nowhere near the bottom of the housing market. Are there actually people out there who make financial decisions based on what this guy says?
on Thu, 10/22/2009 - 11:33
#106916
I don't have the balls to go long or short at this time. Cash is King for now.
on Thu, 10/22/2009 - 12:10
#106969
Mmmh that is debatable given it's the very thing under attack from Mr Bernanke.
on Thu, 10/22/2009 - 14:09
#107152
I hope you have accounts in Canada and US; the flip-flop serves very well, and has for some time.
on Thu, 10/22/2009 - 14:14
#107160
The $US - CAD flip flop has been working extremely well for some time now, but I think they are on to us in this transaction. Get them to follow you down a hole, then make another hole.
on Thu, 10/22/2009 - 15:44
#107296
Dear Screwball
paper is for wiping your arse & flushing down the toilet. Gold you hold in the vault.
regards
on Thu, 10/22/2009 - 11:59
#106956
http://www.youtube.com/watch?v=OAd7sHR1WoE&feature=channel
on Thu, 10/22/2009 - 12:06
#106962
BLah blah blah blah, there's as many ways to to interpret this market as there are people to interpret it. I dont believe anyone is putting their money where their predictions are, they are just selling their rhetoric to make money. Anyone know how much those guys that appear on CNbC especially Kudlow get paid for their blah blah blah?
The point is if you talk enough or write enough you use the market, not play it. Present company excepted. ZH lets the truth out in big chunks, I like the big chunks. Meaty beefy big and bouncy meatballs of truth. MMMMm
on Thu, 10/22/2009 - 12:18
#106977
A random thought precipitated by the price action in U.S. equity and the discussions on this forum. I cannot fathom why U.S. "investors" are so focused on the U.S. equity markets. Aside from the auto-pilot 401(k) crowd (which I exclude from the equation of informed decision makers), I do not see why individuals are seeking to profit from equity markets, considering that it appears clear to anyone with a brain that it is a rigged game having no basis in reality. Not only that, but people are trying to understand how it works and devise all kinds of fascinating theories, trading systems etc to profit from it. All of this when everyone knows that the traded paper is worth only as much as you can sell it to the next delusional sucker. There are better venues to make a profit. Some young emergent markets, commodities such as wheat, collecting stamps for crying out laud or learning about antiques (at least there is some tangible knowledge with real application to it). Making money in U.S. equity and understanding how U.S. equity markets work seems to me akin to a kid looking up at the sky and trying to figure out what's beyond the galaxy or a black hole. The kid may grow up and may come up with some scientific theory but it will never know if it is correct - of course, it can get lucky and be correct. Not to mention that there are relatively solid statistics that small fish "traders" invariably lose money. I post every once in a while here, trying to understand people's thought process in gaming U.S. equity. It is a great site by the way. At least attempts to challenge the conventional thinking and look behind the mirror. Thanks and keep up the good work.
on Thu, 10/22/2009 - 23:42
#107909
you are exactly wrong.
the point is to direct the future course of investment so that kid can hypothesize about that blackhole, then go up and check it out for him or herself.
and a lot of people like to play poker, with the people who have had a foot on their neck since birth, with everything on the table.
on Thu, 10/22/2009 - 12:18
#106979
SPX still holding below key hourly MA's. Still looks a bearish setup to me unless we break 1090. Yyesterday was a big reversal day, that's two we have had up around these levels now, and stocks can't see to rally on good news.
on Thu, 10/22/2009 - 12:35
#106997
TBT is worth a look with tight stops of course. Resistance seems to be 47-48. I still have FAZ on the brain through. Considering the reverse split, if anything goes wrong on the financial side , that ETF could be explosive to the upside.
on Thu, 10/22/2009 - 13:13
#107058
Yesterday tried to fill the Oct 3rd 2008 gap down. Critical level is 1096.8
on Thu, 10/22/2009 - 13:25
#107076
1422: Merrily we roll along, roll along, roll along, merrily... It's all good. I'm pumped. Got tomorrow off! Think I'll smoke a Rocky P, get trashed, and play with my cash. Who knows what will come of this.
on Thu, 10/22/2009 - 13:46
#107111
If you're in the business of market manipulation and you felt that someone liquditated massively yesterday after 3pm, what would you do today?
Right, ramp up the market on crap news and prepare for a pull back in case someone else starts liquidating.
Remember, in this enviroment nobody can be trusted and GS trading monkeys don't trust JPM trading monkeys vv.
on Thu, 10/22/2009 - 15:34
#107283
News of more Stim money on the way. Only this time, the dreaded " S " word will be avoided. Instead, break it all up into individual bite-sized pieces for easier swallowing by the sheeple. Cobra subsidies, unemployment extensions, etc.
Spoonful of sugar helps the medicine go down.
on Thu, 10/22/2009 - 15:48
#107303
Don't forget the Pig Farmers attempting to get their slice of the Pork barrell. They are just following the stupidity of the Nips.
(cheap McPorkers coming to a Macca's near you???)
regards
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