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The Week Ahead
From Nic Lenoir
The Week Ahead
It's beginning to look a lot like Christmas, at least volume-wise. Hard to think today could have been much slower. So without further ado, here are the key things to watch for technically next week.
The Dax has been the clearest index technically in the US and Europe so I will rely on it to trade the roadmap ahead. I see that starting at 6,125 we have traced an impulse which has topside target between 6,675 and 6,750. It corresponds to the trend channel resistance as well as the standard Elliott Wave extension for the impulse. After that we should get a correction back towards 6,400 at the minimum. I would start scaling into puts around 6,700, knowing that if we break directly below 6,557/6,570 we should sell off directly without reaching those targets. The support corresponds to 1,156 in S&P which if not be violated here we could make new highs though not by much as momentum is very weak and the market over-extended. That is inline with our observations on the 19th when after the sell-off we pointed that if 1,173/1,175 was bypassed we would potentially keep grinder higher. We have bypassed slightly the 1,155/1,165 topside I had indicated for the S&P future but the sell-off on the 19th was a good oppotunity to average out at better levels. The technical set-up based on the VIX signal and momentum divergence remains intact and a pull-back towards 1,123 is more than likely. It is this last level that will determin if we retest the trend envelope at 1,034 (88-week moving average).
The USD look like it could rally here as well. The original target once 80 was broken on the downside was 74.90 but the hammer on the lows put in last week set up a potential reversal pattern which has not been invalidated so far and allowed us to capture a nice 2% move earlier this week. Here again we can observe that the EURUSD has so far held the 76.4% from the highs, and the AUDUSD is setting up another pottential H&S with neckline around 0.9700. If bypassed expect another sharp sell-off like we epxerienced this week.
In Fixed Income while we remain for the medium term in a bullish trend, if the 10Y future bypasses 126-10 we would trigger a H&S near-term which could take us back towards 124-24. Failure to accelerate lower however would open up potential towards 130 in a hurry once we bypass the highs.
I have added the charts of the Nikkei and the Shanghai Composite. The Shanghai composite for one is very bullish if the market exits the channel to the topside. Note that this is not necessarily incoherent with the SPX selling given that in 2008 the SHCOMP bottomed in September 2008, just when Lehman collapsed!! The Nikkei is also set-up with a potential inverted H&S. 9,600 is the intermediary resistance before the neckline at 9,750. If that last level is broken then expect a significant move up.
Good luck trading and have a great weekend,
Nic
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Yes, good luck trading indeed. Zimbabwe Ben wants to destroy the dollar, but he also wants to take out some the a**holes who dare short the USD, so keep that in mind.
This isn't trading advice, but IMO, get out of the game, and hold gold, lead, oil, and food.
2011, the year of the underground economy, I am telling you!
http://psychonews.site90.net
Chart: ES and ZB
Christmas lights.
http://99ercharts.blogspot.com/2010/10/es-zb_2879.html
http://www.zerohedge.com/forum/99er-charts
Have a nice weekend!
thanks for sharing nic
would have read it, normally
but there's no point now
f*ck it
you got to dance as long the music is playing....chuck prince
none told him the music had already stopped...soros aka the man
The SP500 should be renamed the 'SeaBiscuit500' as it appears you can't lose. At one stage gold was tracking the indexes but even that is now diverging. Traders seem determined to drive this thing flat stick over a cliff!
All the money printing, skyrocketing deficits,
ballooning OTC derivatives, POMO's, nationalizations, etc. emerging from
the depths of the 2008 credit crisis...
Created UNINTENDED CONSEQUENCES.
1. Skyrocketing energy prices?
Nope.
In fact, natural gas is now trading at world record lows
when adjusted for inflation. Resulting in one of the biggest ETF bear markets in history.
2. Collapsing bond market?
Nope.
Willing debt enablers are clamoring for even more of our U.S.
Fiatsco-based Treasuries, driving yields down to new 45-year lows.
Basically its a "now, more than ever" attitude towards AAA-rated,
gilt-edged, U.S. debt.
3. Galloping gold stock prices?
Nope.
In fact, the XAU is flat out the most disappointing, worst sector
to be in given that gold itself managed to print over $1,300.
Mainly because the gold mining companies are infested with OTC
derivatives foisted upon them by nefarious Canadian investment banks, making it impossible for them to make any meaningful profits
whatsoever.
4. Global depression with millions of starving hordes?
Nope.
The housing bust turned out to be a bonanza for consumers because
many of them have been living mortgage free for 2 years now, thus
driving the price of gaming stocks, Starbucks, Chipotle Grill, Panera
Bread to fresh, world record highs.
So what was the unintended consequence of this massive money
printing?
AN OUTRIGHT BUYING ORGY OF INTERNET STOCKS once again, for the 3rd
time, as the same bubble keeps coming back again and again!!!
Perma-gloomers betting against the consumer and the old 1999 Nasdaq hookers keep getting punched in the face over and over again.
LOL....
I can't help but think of one thing - how can you make fun of perma-gloomers when all you're showing is returns from Nov 2008 on?
I don't think we were all perma-gloomers, but I don't think you should make fun of anyone who thinks the stock market is a big sham. It has a fraud been since the dot com rise since the late 90s (and some would argue sooner). On that note, there's no reason why Nov 2008 can't repeat again. NO government has ever been able to completely avoid the "bust" period within the natural boom/bust economic cycles.. but they can stall it for a definite amount of time before everything comes crashing like a house of cards. After all, it took 4+ years to get from 10k to 14k.. but only 9 months to get from 14k to 6.5k.
If you gamble and you win, more power to you - but we can't help but think - you're either from the Fed/Wall Street or you have a quicker ejection seat (e.g - HFT speed) than the majority of us on this site.
One could argue that a non-trader could have made a bunch of money in equities just following the direction of the dollar, even on a trailing basis.
Homer,
No offense intended but Robot is a MUST read, E S P E C I A L L Y, if you are a retail trader.
Robot was short the market up to Tues Aug 31 then reversed and has consistently called this direction higher since.
The only thing I can possibly add is wake the fuck up.
Robo, your "boner" charts continue to impress...I think Eric King may be contacting you sooner than you think.
Kudos for the confidence but since you sound more like a gambler rather than an Investor then why not play with Jr. mining companies where you can make at least 10x your money and even manipulate the share price if your pockets are deep enough.
Hey, first time I've seen the snooki punch at the bar he really gives it to her. He should have gotten his but kicked. Also what I think is happening is three things. One is that there is no viable safe place for the investors to put their money into so they are running over here where the govt. is business/investor/shady practices friendly (I never thought I would say that about the US at this day and age). And so they can inflate and reinflate bubbles if they need too and also store their wealth for now. Two, all the trillions of dollars of QE/printing money didn't all into the Treasury. It also is going into the market. And three, the HFT are not only frontrunning and trying to make money a penny here and a few pennies there. They are also helping to fatten the pigs for slaughter. So when the fake and artificial wealth that is generated they can also manipulate it down quickly.
The financial people need the game to keep going, but it's getting harder and harder to keep it afloat.
I agree 100%. Data looking much better. Earnings looked pretty damn good so far. Apple selling over $20 BILLION in product. That doesn't sound like a recession to me. Sounds like people are out spending money on iThings and eating out.
WTF just happened to the Dollar??? Down 3 dollars... 74
Heh...dollar flash crash. Reed must've needed a few Euro for the weekend on the Riviera.
Almost looks like a flash crash... It just fell off the cliff at 77.600 straight down to 74.600 (15:03:58 to 15:04:48 - A Lifetime for HFTalgo computers)
Something happened at the G20...
This was timed so the markets couldn't react to it.
Any word on what it was?
It might have something to do with this...
St.Louis Fed's Waller-probability of easing pretty highOct 22 (Reuters) - The probability that the Federal Reserve will provide monetary easing at its November meeting is quite high, a top adviser for the St. Louis Federal Reserve said on Friday.
Waller's comments, in a rare on-the-record interview with an aide who is present at discussions of the U.S. central bank's policy-setting Federal Open Market Committee, amplify signals from top officials that further easing is on the way.
St. Louis Fed President James Bullard said separately on Thursday that if the Fed decides to ease monetary conditions, he would favor incremental purchases of around $100 billion of Treasury securities, without setting an outer limit on the total bought.
http://www.reuters.com/article/idUSNLLMLE6L620101022
Ice.com cancelling all DX trades below 75.85...
ALL of mine are cancled--- all 55 of them--- bullshit---i still have to unwind the other leg and eat all that commission
I hate computers
What was strange is the the UUP reacted but the currency pairs didn't...
ya nuts... call me crazy, but this tells me the algos play the illiquids... i mean 100 contracts can move the dx futures, but nothing in forex.
UUP is at 22.33- are they going to wash all those too?
Forex not moving?
i arbed the bottom of that fucker.. forex did not even flinch? So is forex not linked to the algos, but NYBOT is? WTF? Who sold me that shit? i mean short EURUSD and long dxy?
Possible scenario:
Most/all RRE/CRE mortgages get dumped on FNM/FRM. "Banks can't be trusted."
Fed/Banks buy FNM/FRM and Treasury bonds. "Fed returns to rational, sound investing within their longstanding scope limitations."
FedGov hammers down on said mortgages with mods/foreclosures/whatever the fuck they feel like doing with them. "People need to be rescued/vilified."
Washed. Seem implausible? Plosser is specifically recommending it, using unspecific language. Would placate the hawks to a degree while acheiving the objectives of the doves.
Thoughts?
The oligarch's goal is a return to feudalism. That is the yardstick by which their actions should be measured. The only part I don't agree with is the Fed returning to rational investing. Clearly it is a zero-sum game between the Fed and the USD.
One has to CEASE to exist before this game is over.
Right, the quoted parts were primarily to show how it would be sold by the MSM, a rational investor wouldn't touch FNM/FRM bonds. :-)
It makes the most sense, but the RMBS structure is fundamentally flawed on several levels, not just in terms of non-conforming loan ratio, but broken chains, missing notes, over pledged assets. If the GSEs take these loans, they need to do so at a fair price, but the owners of the bonds have legitimate claims for massive compensation, so this means the banks take the hit. How would the broader markets respond if 50% is wiped off the market cap of the big banks? Would they be honorable enough to admit the mistakes, draw a line and move on, or will they try and extend and pretend for just a bit longer?
The problem is, dealing with the issues requires admitting they exist and American leadership isn't very good at that.
Source for DXY?
don't see 74...
http://www.marketwatch.com/investing/index/DXY
http://finviz.com/futures_charts.ashx?t=DX&p=h1
jsmineset shows 77.37
http://finviz.com/futures_charts.ashx?t=DX&p=m5
The 5 minute shows the extreme dip and recovery. Normally a dip of that size doesn't happen without a big player doing something interesting.
Note also that the extreme dip got pretty close to the 2008 low, we're less than a couple of bucks off it. Also note what happened following that 2008 low, and the resultant carnage in equities.
http://www.tickertapeguide.com/chart.jpg
Dollar (candles) and SP500 (blue line)
There are bad ticks all the time, especially in the CHF crosses. No Big "E."
Bad ticks don't usually include actual trades -- it's bad data, right. These "bad ticks" we keep getting aren't like our old ones they include real trades (that get busted for those that lost, not for those that win!)
And isn't the point here that while this is a very illiquid contract, IF this type of move had happened during more normal hours the resulting reactions could have/would have begun feeding on itself. I took it to mean when there is only one working exit, things can get pretty frenetic if someone screams fire. I didn't take it to mean that TD was signaling impending doom in the FX market, just that we have reached a point were the touchy trigger finger seems to be showing up everywhere.
Yes. Tyler said on another thread that there were actual trades, according to Bloomberg. That is quite strange.
"?
I see the tick on UUP as well, looks like USD was the only one that moved?...
Yep. Weird. Very weird.
Chart from ARAK0:
http://www.screencast.com/users/arak/folders/Jing/media/b30cea3c-48a7-4c2f-aead-7e38434a60f1
Looks like Bennie was testing out his new super duper QE2 enabled printing press.
It's a flash crash ment to sent someone a message ahead of the G20. The only question is who is sending the message.
http://finviz.com/futures_charts.ashx?t=CURRENCIES&p=m5
Having some trouble figuring it out, must be one of the minors, but who? So far I've checked off CNY and the peso, gotta meet somebody though, this really was a pretty gigantic fuck you to somebody though, multi-billions just went the fuck off.
Apparently it was a glitch at my expense
Do you pay a fee to keep your servers colocated a the exchange?
No? FU.
Yes, trades reversed. Do you get it yet?
YUP... that is how it goes... bullshit
OT< but that dude doesn't appear to be in a movie, anyone who would hit a woman like that needs his ass STOMPED.
To be fair, that chick in his face is from Jersey, and the clip is from Jersey Shore, as far as I know.
Watch the most recent episode of South Park if you aren't familiar with America's 'Jersey' obsession!
I agree, even if the chick is a horrible human being, that dude needs several headbutts to the face, followed by an introduction to the wonders of a KA-BAR.
Anyone who would say that has never dated a Jersey girl.
Was once married to a Jersey girl. I'd consider his actions to be a public service.
its snooki and the over tanned peruvian pig needs to be punched in the face..shes not even italian..not to say bad either way...jersey herpe hoes deserve what they get...lol, that guy WAS a new york city teacher..badazz
was from "Jersey Shore" reality tv
I've got some good intel that Q4 will be very disappointing for the industry.
So that gives us room to rally 2 more months.
Based on that natural gas chart, looks like I might buy some UNG for my retirement portfolio... Could be an inflation hedge.
Christmas is coming everybody. Make sure you get the latest Glock season catalog for that lady in the house. Ammo make a great stocking stuffer.
fucking A it does. bought to go bow hunting...as a perennial NYS gubernatorial candidate would paraphrase...ammo is too damn high..lots of acorns out i heard..might do some squirrel and rabbit huntin myself..shits and giggles
Nothing says "I love you" like a box of hollow points.
Oh, you meant to give the box as a gift....my bad. I'll just pick up these casings and show myself out.
Chart: Dollar
So Nic, how would one explain this?
http://99ercharts.blogspot.com/2010/10/dollar_22.html
Have a good one.
So...was that "Fat Finger" a middle one? And whose was it?
(Reuters) - Finance leaders from the Group of 20 economies will pledge on Saturday to commit themselves to pursue market-determined exchange rates and refrain from "competitive devaluation" of their currencies, a U.S. official said.
http://www.reuters.com/article/idUSTRE69K0Q720101022
there will be tell soon..soon we will have some clues..give it time my friend
Jeidi mind trick...you don't see the low on the dollar chart...
IMF
That deal will make China the third most powerful member of the IMF, up from six as it overtakes traditional powerhouses Germany, France and Britain. India moves to eighth place from 11th.
http://www.reuters.com/article/idUSTRE69K0Q720101023
Oh thanks Nic,the markets going down,the charts,the charts the charts.........puhleeeeeze...........
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