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3/28/2010 Weekly Report Submitted by The Stock Market Barometer
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ill try to get the ball rolling after NFP
Employment numbers don't matter. They might cause a small blip that lasts an hour or so but they don't matter.
Searching for news this morning is a chore. Got any other weekend reading, i.e. the Sunday ZH Times for us, Tyler?
Bedridden and resorting to watching Spooks from Season 1, episode 1.
the equity pattern has been break to new highs followed by expanding wedges to grind put holders. not surprising since derivatives are the tail that wags the dog in today's "economy."
Probably should just circle the wagons, close any April open interest, and accumulate May, June, July, etc. I suspect "extend and pretend" will go on longer than any put holder is comfortable with. On the long side maybe just scalp as usual without holding overnight.
Sounds like alotta work! There are plenty of long dated strategies to employ especially with XLF, IWM, DIA's and even SPY out late in '11 and early '12. Those premiums are really shaved. Then you could go out and enjoy the great outdoors and plan cabin living in the not too distant future. At least you'll have some money left oh and some gold.
It's only just a mirage, move the money around at the speed of light. The Fed and the IMF are just one big circle jerk. Meanwhile, they are skim,skim,skimming on the self inflicted peaks and valleys.
http://www.youtube.com/watch?v=n0NYBTkE1yQ
Scary notion if charts, analysis and fundamentals pan out as noted. Bond market clearly holds the "key" although one has to wonder what solutions/reactions the "powers that be" impose to once again, stunt the move we "should" see. There are many "stars" to align to justify another "shallow" correction of no more than 3-4% when we should be trading down around SPX 900 at a minimum and gasping at the cliff below IT!
Well showing a chart that has in it the crash and save model's all in one crazy graphline is not a big picture answer, nor a way to predict. The fundamentals are way off balance with no ability to fund liability , the system would be down now if not for intervention and mass propaganda, the common citizen is simply bankrupt or darn near, to weak financally to purchase without systemic intervention. Sure the dollar is looking better, at least against itself but so what, everything else that was built and measured around a strong dollar has inherent weakness in this poly global system. Charts to me are yesterdays story , they will not show the reaction for tomorrow and we are left to know human nature as the only stable element. Human nature says those with power will do anything , anything, to keep it ......and those without power will do anything to attain it. The struggle goes on. The dollar is toast and so is globalization because the method used to measure is a ponzi , just to many fundamentals are wrong.
Let's simplify this.
The 2006/7 period is Box A.
The 2010 period is Box B.
The 2011/12 period is Box C.
.....................................
Each box contains all possible money in the form of equity, credit, and debt.
Largely due to the elimination of the shadow banking segment, and the inability of the government to form pro-business government policies, it is a no brainer to suggest that all prices will shift down to the extent that the fuel for higher prices across the board is diminishing.
Box B contains maybe 65% of what was in Box A, and Box C is going to contain a lot less than what is in Box B.
This suggests that all prices go down.
Good analysis here; one additional thought, Pi day from the 2007 high is the first week of April according to Martin Armstrong. That may be the catalyst for another pullback in the Dow. We are at a key resistance level this week & there's a diagonal resistance line just above. I suspect punching thru both levels of resistance may prove to be a daunting task. Gold at $1048 is another buying op IMHO.
When I have the chart ready I will put the link into this comment. Here's the Dow chart & it shows the importance of jobs report into the Pi day zone. We are a decision point.
http://i43.tinypic.com/2lbce8w.jpg
Market is currently set for another round of new highs next week as our big mystery buyer has just trapped a huge set of "logical" shorts late last week...note the DOW closed a mere 100 points off of new highs within the context of a major breakout in the USD, soaring Treasury Yields, major concerns over Greece, and a convincingly concerning reversal in US indices late Thursday....last week was a huge test for markets, and it seems clear that US markets still remain sufficiently bid by a "mystery buyer"....a break above 1170 on the S&P likely triggers another solid round of short-covering as shorts are well aware of the trajectory of this rally and the fact that pullbacks have been extremely short-lived and followed by new highs just a day or so later. No reason why out "mystery buyer" should let up and the gas now as he has enough fuel for a move well over 11,000 on the DOW, likely to the 11,100-11,200 level this week...watch AAPL as a solid equity risk barometer as stock remains widely owned and susceptible to fund liquidation..
Last note, keep an eye on Gold near-term as a commodity looks set for another momentum wave above $1150 on a near perfect 3-month inverted head and shoulders on the charts with head bottoming at $1060ish, both shoulders bottoming at roughly $1080, and neckline at $1150...global funds (especially overseas) clearly looking for currency hedges as stability of global currencies remains at the forefront of capital allocation ideas.
www.matrixanalytix.com
Market probably will want to "paint" this EOM/EOQ silliness. No MM will want to sell before then. Why would they??
Selling pressure will come back in April/May as the year has been made by many, you really can't expect another 70% return....Deflation will take over as the rationale....
I really don't get gold because if paper goes to zero, how do a trade gold for food/land/housing/etc. Who sets the price? If I am hungry and have a gold bar, the person who has the chicken has all the leverage. Also, they can conterfeit gold, etc.
It really would be no different than paper as a medium of exchange. Sorry gold bugs.
silver coinage pre 1964 aka (junk silver) the guy with the chicken would try to figure out how much the gold coin was worth, because he's alread realized the frn is an empty promise. gold is what it is, not what someone promises it is.
Great post Tyler and the team..Thanks
Bonds down market higher ... go figure
Lost me after the first chart.
A head and shoulders pattern is a reversal pattern.
The first rule of this pattern is there has to be a previous trend. In this case, since the author is claiming a bearish move, the Dollar should have been in major bull market(which is not the case).
Clear case of fitting tech analysis to what the author wants to see rather than reality.
The world blew up in the 4th qrt '08 - 2nd qrt '09. The world was ending, it was raining frogs, cats and dogs were living together blah blah blah.
What happened to the dollar? Exactly....
Everyone is claiming it's just a matter of time before the markets blow up again based on the fundamentals. Which way is the dollar going to move.... again....? exactly....
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