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Thoughts Ahead Of The Open
Submitted by Nic Lenoir of ICAP
Equities are slightly lower than they were last night after GS beat expectations by less than expected, if that makes any sense. There are two key charts to focus on. The Nasdaq yesterday left an indecision candle on what people could see as a doublt top in formation. Obviously it all depends on how we trade today. If we trade down or even gap down and follow through into the close then maybe we have something, but it's not worth trying to front run it too much at this point.
The Shanghai composite also left an indecision candle on recent highs just as the 50 and 100 daily moving averages are about to post a bearish cross, so a sell off there in the next couple days would be relatively bearish.
Note on the flip side that the Nikkei did not confirm indecision shown the previous couple days and actually filled its gap overnight at 10,230. The market tested and failed to break the 50 daily moving average so far, but should proceed to break through on the upside in the next few days then technicals would be bullish. Price action will likely be driven by what happens in the US and China.
It's options week, so indecision is to be expected. Let's see if we get any resolution in the next few days. We remain bearish on 10Y treasury futures from 119-23 for the medium term, but in the immediate future we need to get a close below 117-29 to accelerate otherwise the risk is to retest 119 before trading lower.
Good luck trading,
Nic
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You have to be nuts to short this market. They will buy any dip and bring it higher.
Nic, thank you for your point of view. Until proven otherwise, it appears to be all about the dollar.
chinese currency reserves 3.2 T
hmmm, if i was a chinese official i think that number would
be very worrisome.
I think the NQ depend on GooG AH... good report, we blast through DT, bad report then you will have your DT...
I think this is where we start to get interesting seeing as the final Federal Money Laundering Program has ended (well at least publicly). Can this mean that the dollar will begin to form a base? One will know shortly CD! I'd like to see some sort of flattening out or leveling off, that would imply the default rate is = to the amount having been printed, we should also watch bank reserves being held, if they start to get drawn down then we may see dollar strength if M2 keeps contracting.
Once dollar breaks out of its downward channel, this rally is through. VIX already has broken out of its downward trend and has flat-lined at previously what were considered high values. It could also be said that anyone who is buying after a 50% index rally is nuts.
OT... prisoners will get H1N1 shots before general public. Shorts may wait for a confirmed trend to triple down !!!
For some reason, it appears that you are all posting from the future. How is it out there?
Or is that the new captcha - "You wake up in Singapore after flying west from Cairo..."
I keep taking shots at shorting and balancing it with longs. Have to play the extremes unless you truely trust this market. Learned lots of leasons about taking my profits when I have profits. Up about 50% for the year so even with market gain. Some day, this market will change and my shorts will win. In the mean time, I take the losses and work the winners. Luck trading.
This is the part that I respect from the Elliot wave theory. It is that news don't actually move stocks,rather the other way around. When in the previous earning seasons AA use to come up with a loss of 1.5 bil,and stocks move up,the news says"well,stocks moved up because the loss is less than expected".A couple of million loss,never mind the 1.5 bil loss. At any rate,no wonder for the resetting,the 10year is dangerously at 3.4,and I have noticed for the last five months that whenever the 10y comes to that level,there is usually a break in the melt up. I think the FED and the Street have a lack of trustwith each other.
regarding your comment that there is usually a melt-up when the 10yr yield approaches 3.4 - can you clarify please? - usually a melt-up in equities....in bond yields....in bond prices......? Thx.
Joe Kernan to Alex Merk jokingly on CNBC - Somebody is gonna shut you up Alex. Let somebody else start your car.
http://www.cnbc.com/id/15840232?video=1296133387&play=1
When they were talking to Ken Langone this morning, he said something along the lines of people have been talking the market up, as one of the reasons it has went up so much.
Joe Kernan, with a bewildered look on his face, said "who is talking this market up."
Joe - get a grip dude. Or go home and turn on your own channel. Dumb ass.
<rhetorical>
CNBC? No?
</rhetorical>
Fed apparently in buying a load of mbs this morning...possibly exlpain why USTs have rallied strongly from intra-day lows and why the Dollar has also weakened back towrds its lows of the session....unusual not to see stocks advance too, but I guess they're well over done as it is.
I believe that after all the hard "work" the Gang is going to try to have the S&P close at 1,105 today, at the point where the downward line from the high and the relevant upward line of this rally meet.