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Not Going Down Without A Fight

Tyler Durden's picture





 

Submitted by Nic Lenoir of ICAP

All or pretty much all of the major equity indices have it an important intermediary support this morning and bounce on it. The support trend joining the lows of 08/19 and 09/02 was tested and temporarily breached by the Dax, the Nikkei, and the S&P. The only exception is the Nasdaq which has not retraced comparatively. But overall strong support has been tested.

While I have been a strong advocate of shorting this tape ever since we tested the 88 week moving average in the S&P, it would be wise to lighten positions a bit here and reassess. The 30-minute chart on the Dax shows there was no divergence around the lows, but a proper confirmation of the break would be preferable rather than just trusting short-term momentum indicators especially after a 7% move down. Note also that we have failed so far to close the gap at 1016.48 on the SPX index. That would be the best confirmation that the break is validated and we will be moving lower.

Regarding bonds, the Tnote future is posting a massive reversal on a key resistance at 119-23. If the future closes down on the day we are at risk of posting an evening star on a major resistance (probably the biggest resistance until the highs of last December should we break). I would advocate a reversal to be confirmed here. While for equities my medium-term view is so bearish that I do not rule out further selling off, in Fixed Income we have hit a major inflexion point.

The usual suspects [ZH: emphasis ours] did a great job at managing the market expectation yesterday, which is why we dipped ahead of the number, and shorts took profit following the release. Congress's Finance Committee get the numbers at 2PM the day prior, why shouldn't the right institutional traders get them too? Obviously this softened the blow delivered by the news. The key is that economic news has started to roll over a bit, and if this trend continues then it will be hard for the market to shrug it off. Most indications coming out of the credit markets show that the widening in CDSs is continuing for now. As this happens this will also put pressure on the stock market.

Good luck trading,

Nic

 


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Fri, 10/02/2009 - 11:56 | Link to Comment BetterOffDead
BetterOffDead's picture

Clearly the squid got the numbers yesterday as well and revised their claims estimate, then told their favored clients the news.  How is this not insider trading?  Or does it fall under the "no insider trading for political info" category?

Fri, 10/02/2009 - 13:29 | Link to Comment Careless Whisper
Careless Whisper's picture

I doubt Goldman would need to get the numbers from someone on the Finance Committee; isn't it standard operating procedure for them to have their own person at the source?

Fri, 10/02/2009 - 14:04 | Link to Comment _Biggs_
_Biggs_'s picture

Indeed.

Fri, 10/02/2009 - 18:45 | Link to Comment Anonymous
Fri, 10/02/2009 - 14:59 | Link to Comment Anonymous
Fri, 10/02/2009 - 12:06 | Link to Comment Michael
Michael's picture

OT
Another big win. The planets must be aligning and the gods smiling down on us.
Chicago was eliminated from the Olympics.
It would have elevated Obama to god like status if they had gotten the games, but now he is confirmed to be mortal.

Fri, 10/02/2009 - 12:09 | Link to Comment Divided States ...
Divided States of America's picture

Oh too bad for Obama, now he cant make fun of the handicap athletes at the Special Olympics.

Fri, 10/02/2009 - 13:03 | Link to Comment Anonymous
Fri, 10/02/2009 - 12:09 | Link to Comment SilverIsKing
SilverIsKing's picture

Mortal?  Very generous of you.

Fri, 10/02/2009 - 12:20 | Link to Comment ratava
ratava's picture

Long eurusd long gold here.

"tinfoil hat on"

Did you know gold molecules can carry proteins around?

Fri, 10/02/2009 - 12:21 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

Madrid should get the nod.

Fri, 10/02/2009 - 12:29 | Link to Comment mule65
mule65's picture

I'll take prime time thongs in Rio!

Fri, 10/02/2009 - 12:31 | Link to Comment Michael
Michael's picture

I'm roorting for Rio too.

Fri, 10/02/2009 - 12:51 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

12:52 PM, Rio thongs it is.

Fri, 10/02/2009 - 12:21 | Link to Comment OrganicGeorge
OrganicGeorge's picture

I still think it's too early for the next leg down.  Expect more sideways chruning in the comming week.  Just enough for everyone to get turned into chum

Fri, 10/02/2009 - 12:28 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

This is the kind of stuff where those zany Zero Hedge types will start talking about the Fed needing to sell $138 billion of debt next week with an all-but-exhausted OMO budget and so the Fed and the Squids will engineer a precisely-timed equities market pullback in order to drive money away from the stock market and into risk averse investments.  Those guys crack me up! Gosh, let me guess, today's close will be kind of iffy (give 'em a bad weekend!), and Monday a complete rout! Right, c'mon. Sure.

Fri, 10/02/2009 - 12:34 | Link to Comment Anonymous
Fri, 10/02/2009 - 12:57 | Link to Comment curbyourrisk
curbyourrisk's picture

Don't you know...we are not idiots here on ZeroHedge.  We aer all well educated.  We know it is not his fault, we just ENJOY blaming the idiot for everything because refuses to his job and lead.  Until he starts doing the RIGHT things, we will continue to hammer him......regardless.  It might not be his fault, but he could have acted differently and taken other steps to actually try to get things right.  he chose not to take those steps and therefor we hold the right to bash him.

Fri, 10/02/2009 - 13:39 | Link to Comment Anonymous
Fri, 10/02/2009 - 16:36 | Link to Comment Marge N Call
Marge N Call's picture

+100. Yep, it's not all his fault, but he's such a complete doofus one can't help but bash him.

Fri, 10/02/2009 - 14:12 | Link to Comment ZerOhead
ZerOhead's picture

Idiots... hmmm....

http://www.windows.ucar.edu/earth/Water/images/tides_sm.gif

And am I the only one here who finds Sarah hot... in a tard kinda way?

Fri, 10/02/2009 - 14:52 | Link to Comment Herne the Hunter
Herne the Hunter's picture

Didn't even bother checking URL, thought it would lead to a hot GIF of Sarah Palin... Damn my instincts

Fri, 10/02/2009 - 16:38 | Link to Comment Marge N Call
Marge N Call's picture

Relative to other politicians she is SMOKING hot.

Fri, 10/02/2009 - 17:15 | Link to Comment Argos
Argos's picture

Oh, please.  If America wants a big comeback in the world, we NEED to elect Angelina Jolie.  Putin would do anything we like then.

Fri, 10/02/2009 - 21:56 | Link to Comment Anonymous
Fri, 10/02/2009 - 12:37 | Link to Comment Bearish Spirits
Bearish Spirits's picture

CNNMoney:  "Stocks Down, But Not Out on Jobs Report"

Look for this to be a new talking point if the market holds up today.  "The market is SO resilient!  Even with bad news, you'll still have the chance to get out at a time of your choosing!"

Fri, 10/02/2009 - 12:40 | Link to Comment Michael
Michael's picture

The nation has been so pusssyfied up to this point, but the process in now being reversed. Everybody I know is now listening to Alex Jones and checking out InfoWars.

http://www.infowars.com/

Fri, 10/02/2009 - 12:44 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

When the market's are in doubt, you can always tank the dollar a bit to save them.

Fri, 10/02/2009 - 12:56 | Link to Comment TraderMark
TraderMark's picture

didn't realize congress finance gets the number at 2 pm

 

that means goldman must get it at 1 pm which plays exactly into their last minute adjustments.... its all coming together

 

where is taibbi!

Fri, 10/02/2009 - 13:07 | Link to Comment cocoablini
cocoablini's picture

This may be a recoil off the bollinger band. The robo-bot buyers may be buying the bottom band puncture and selling on the recoil on the top band-it that happens.

Most of the daytrader black boxes are flying on Bollinger autopilots and bracket the falls and rises by triggers.

The market has been mediocre and weak for about 1.5 weeks-except for the unexplained 100 pt runup on the Holiday. Bound to have rebound but watch and see if it's weak and falls back down before the top bollinger is tapped. That is a sure sign that market has changed

Fri, 10/02/2009 - 16:14 | Link to Comment cocoablini
cocoablini's picture

As suspected, it's the Bollinger bans whihc provided some support for the markets. Traders are using the BBands to take chipshots at the deltas between the standard deviations. The harder the hit, the harder the recoil. The fact that we ended up down means market sentiment and volume is strong downwards-especially if the SPY gunner is firing as well. This happened last year. 500 pt. drops would get bracketed by the Band algorithmic traders and the PPT would of cours turbo charge the recoils

 

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