Which Way Wednesday – 1,333 or Bust!

ilene's picture

Which Way Wednesday – 1,333 or Bust!

By Phil of Phil's Stock World 


That’s the number Art Cashin is looking for on the S&P as our breakout line.  I’ve been using 1,332 but Art is right as the bottom on the S&P in March, 2009 was 666.79 so, tecnically, 1,333.58 is a 100% gain on the S&P off that low, not 1,332, which was my lazy rounding off 666. “Everyone’s got this psychological area of 1,333 [on the S&P 500]—they want to prove that we can double where we were from the panic lows,” Cashin told CNBC. “So later in the week, the bulls are going to circle the wagons and take another shot at it and that will tell us whether it’s a rest and recoup or not.” (Dave Fry’s chart)

Well, that pretty much sums things up. Have a good day everybody…  

We had a good day yesterday with our bullish positions really starting to fly and our $25,000 Portfolio is up to a virtual cash position of $26,240 in day 12 with a fairly even mix of winners and losers in our still too-bearish mixture.  The mixture on the Nasdaq yesterday was also bearish and you wouldn’t know it from their down 5-points finish (0.17%), but declining volume yesterday was 1.35Bn vs. just 637M of advance.  

Fortunately (by some amazing coincidence that could not possibly have anything to do with IBanks masking their selling by pumping the top of the Nas while selling the rest), this 2:1 bearishness in volume did not scare off the after-hours crowd, who immediately popped the Nasdaq futures from 2,382 to 2,391, right back to Monday’s highs as if 2 days of selling never happened.  

IYT WEEKLYThe Dow is just as excited with 80 points worth of gains since 3:30 yesterday and the S&P is, of course, right up on their 100% line, as are the Transports (see Dave Fry’s chart), which we’ll be watching as they test the 95 mark on IYT.  I had mentioned to Members in Chat yesterday that the Transports were the key to breaking the S&P over the line and we discussed FDX’s amazing action in yesterday’s post that seemed like a Gang of 12 effort to manipulate the Transports ahead of Cashin’s predicted run at 1,333 – NO MATTER WHAT!

I do my charitable bit, of course.  Go back and read our totally free "Secret Santa’s Inflation Hedges" that I published on Christmas Day and see if this kind of trading would have been helpful to you for the past 6 weeks.  If so, I would STRONGLY recommend not missing the next round IF the S&P breaks the levels Art and I are watching because this runaway inflation train may have, as Ian Anderson tried to warn us: "No way to slow down."  The POMO train left the station yesterday at 11:12 and TradeBot 3000 reminded our Members to buy the f’ing dips (as well as making a great call on oil!):  

As noted by TradeBot, 82.50 is a significant point of resistance on IWM and that kept us short-term bearish ahead of the possible breakout.  We are also still expecting a capitulation move on the NYMEX, based on the barrel count we’ve been tracking on the March contracts which close next week.   With Monday a holiday, there should be a lot of pressure for the pump boys to get out of the front-month contracts ahead of the weekend. That, we reason, should knock back XLE and OIH and that, then should knock the markets down a peg as well.  If that does not happen, then we are wrong and we have a lot of short-term flipping to do!  

With the NYSE being taken over by Germany, I reminded members not to mention the war and, of course, it’s not such a bad thing to have Germany take charge of such a vital part of the US economy.  Maybe they will actually regulate it for a change!  Meanwhile, as time is short, here is a quick rundown of the bad news that "just doesn’t matter" this morning:  

Does it matter? No, of course, not!  As Art said, "they are circling the wagons" today to get us over the hump on the S&P so bad news will bounce right off the markets – until it doesn’t.  And who, you may ask, are "they"?  How about our friends at JP Morgan (JPM), one of our favorite financial holdings, who just reported that they did not lose money on a single trading day in the ENTIRE 2nd HALF of 2010, making $76 Million dollars per day on the average for all of 2010, when they did have 8 losing days in the first half that left their record at 252 wins and 8 losses for a 96.9% success rate.  Sure the odds are 3,768,943,762,399 to one against having that kind of winning percentage but hey – THAT’S WHY WE’RE LONG ON THEM! 

If the game is fixed – it is smart to be on the guy the game is fixed in favor of, right?  


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falak pema's picture

Cunta Clinto ...reminds me of a wet havana that went places no Fidel Castro ever visited.

Lady Heather...UNCLE's picture

As previously referred , I think Wall St might be significant bag holders here. So: infinity and beyond, fuelled by endless fiat issuance. Mind you, perhaps Banker Ben is buyer at the end, and Wall st use the final cash-out to purchase hard assets...then crash the system... goodbye middle class, hello fiefdom. You shall all bow to effigies of Morgan, Rockefeller, Kissinger et al.

"What is your name?"

"Kunta Kinte"       CRAAACK

"What is your name?!!"

"Kunta Kinte"       CRAAAAAACK

"What is your name?!!!!"


Downtoolong's picture

So later in the week, the bulls are going to circle the wagons and take another shot at it and that will tell us whether it’s a rest and recoup or not.”

I wasn't planning to sell another chunk of my equities for another month. But, based on this post I might do it sooner if the S&P hits 1331.


Update: Done.


eddiebe's picture

Here is wisdom: Strength needs to be sold.

(PS. In increments.)

ThirdCoastSurfer's picture

Unadjusted multifamily starts 11,700 units, Single-family 25,600.  

From 25,600 aka 301,800 to 596,000 = 96,000 difference /12 = 8,000 or 33% +/- variance.   

Based on data from before the crisis we shall continue to assume, just like we did last year,  and the year before that,   that Spring will bring a rebound because the only thing we don't have to fear is confidence. 

Dadoomsayer's picture

Thank God we got Obama instead of McCain.  Can you imagine the riots? But since Obama is for the little guy everything is wonderful.


Thank the banks for doing God's work.

Ned Zeppelin's picture

As if a Rethuglican would be any better than a Demoncrat.

Larry Darrell's picture

I interpreted his statement a little differently -- I think he's saying that this would be going on if McCain was president right now, but that the stupid american sheeple who would be crying bloody murder against a repub president are silent right now because they actually believe Obama represents them.

Dadoomsayer's picture

thank you for spelling it out for the previous poster.

10kby2k's picture

1336 with 26 minutes to go

Lord Peter Pipsqueak's picture

There is no such thing as resistance any more,only support and btfd.The market can only go up sheeple.

Bansters-in-my- feces's picture

I hope Jamie chokes to death on a horse cock.

eddiebe's picture

Thou blasphemer! Don't you know He is doing god's work???

Dr. Gonzo's picture

JPM should be awarded the Congressional Medal of Freedom for making money on trades every day of the year. It's wonderful how they make all this honest money just by really hard work and by being smart. I was so proud to see Obama bestowing my favorite thrifty billionaire Warren Buffet this prestigious award yesterday. More needs to be done for the banking interests in this country.

eddiebe's picture

And didnt it make your heart swell when our pres was awarded the Nobel peace price. Whaaaaa?

Robslob's picture

Funny thing about all these posts on ZH...people wrongfully assume that everyone has to be in the market.

This time was made different by the very entities that made bull markets to sell to suckers...guess what...the suckers, unfortunately now need that money to eat.

Fuck you Wall Street...you actually did the unthinkable and killed your golden goose and the only ones holding the bag this time is you!

Racer's picture

Yes, they buy and sell to each other all day long to make it look like there is someone in the market when there really isn't at all and they are just taking the money they are given them so they can churn all day long.


unwashedmass's picture

actually, what's hysterical is how the POMO money never, in all this time, has made it down to the HUI stocks....

did you see how JPM managed the HUI today, yeah, it bolted out of the gate.....and then they held it flat ALL DAY LONG.

so, right now, we've got NEM selling at what it sold for back when gold was at 700, HL is selling at the same price it sold for when silver was under 12 an ounce.

who says this insanity doesn't create real opportunity? they are so scared the populace will start screaming about inflation that they are spending millions to keep one tiny sector of the market down....

and when it blows, well, this one that will legitimately go to the moon...some of these stocks should double or triple.

eddiebe's picture

unwash, you are more than likely right, and guess who will be makeing money selling those stocks to you??? Correct! The same people that are shorting them now.

 Isn't the market great when you own the reserve and the press and make the rules?

jobs1234's picture

Whats a "resistance level"?


Thats so 2010

Traianus Augustus's picture

These guys really are doing god's work!!!  Let the Ark building commence!