Bank of America Head Technician: "Our Bullish View Is Invalidated, Going Neutral; Below 1806 Spells Trouble"

Tyler Durden's picture


Yesterday's BofA's MacNeill Curry warned that once above $1270, gold becomes "explosive" as the squeeze trap slams shut, which explains why the shorts are desperately defending the critical resistance redline. Today, the chief technician of Bank of Countrywide Lynch looks at the two other key correlation pairs: the S&P500 (via the Emini ESH4) and the USDJPY, which by virtue of being the key funding pair determines the price of risk in virtually every corner of the globe. He is not too happy with what he sees.

Here are his thoughts:

On the S&P500: ESH4: From Bullish To Neutral

Anxiety across markets has reached a n/term extreme. The trends of the past few days/weeks are set to correct, but not turn...  The break of 1809.50 has invalidated our bullish view, but we ARE NOT BEARISH, JUST NEUTRAL. Going forward, we expect an 1805.75/1846.50 range trade before an eventual resumption of the larger bull trend. Below 1805.75 spells trouble, but bears only gain control on a close below 1767.75. See the chart for equivalent cash levels.

On USDJPY: Bearish $/¥.

Stay bearish $/¥. As we highlighted yesterday (Liquid Technical Alert: Stay bearish $/¥ 23 January 2014), bounces remain corrective and temporary. Our initial downside target is the 200d, at 99.97, but this should only be a temporary stopping point. Medium-term targets are seen to the Jun'13/Apr'13 lows, at 93.79/92.57, before greater signs of stabilization and a resumption of the LONG-TERM uptrend toward 124/147 (to be fine-tuned).

Finally, gold - redux: Gold upside continues - watch 1270

Gold continues to trade bullishly. Yesterday's price action formed a Bullish Outside Bar on daily charts and NOW it is testing pivotal resistance at 1270. A close above should be the catalyst for short squeeze higher, exposing the confluence of resistance between 1362/1394.

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Fri, 01/24/2014 - 11:44 | 4362708 nuclearsquid
nuclearsquid's picture

Our view is invalidated...

What a pleasant way to say we tried to get you all to keep buying what we were selling, but you stopped allowing yourselves to be sheared.

Fri, 01/24/2014 - 12:00 | 4362765 Australian Economist
Australian Economist's picture

1805.750000000000000000 Bullish!

1805.749999999999999999 Bearish!

Fri, 01/24/2014 - 12:01 | 4362767 Bearwagon
Bearwagon's picture

In fact it's all bearish, but nobody cares.

Fri, 01/24/2014 - 12:03 | 4362777 synergize
synergize's picture

Chartists are modern-day fortune-tellers - nothing more, nothing less

Fri, 01/24/2014 - 12:17 | 4362853 Pool Shark
Pool Shark's picture



Don't look now, but 1805.75 just got taken out...



Fri, 01/24/2014 - 12:23 | 4362879 Pool Shark
Pool Shark's picture



Uh, oh...

DOW 16,000 is in danger...


Fri, 01/24/2014 - 12:23 | 4362884 Pool Shark
Pool Shark's picture




Mission accomplished...


Fri, 01/24/2014 - 12:54 | 4363084 LawsofPhysics
LawsofPhysics's picture

BTFD, period.  BTFATH is out...

didn't you get the memo?

Fri, 01/24/2014 - 12:30 | 4362929 GooseShtepping Moron
GooseShtepping Moron's picture



Fri, 01/24/2014 - 12:47 | 4363040 SheepDog-One
SheepDog-One's picture

Right, since it was 1,801 like, 1month ago. Revisiting that old past surely means diaster as S&P should be up at leas 1% daily from here on out till he sun burns out.

Fri, 01/24/2014 - 13:14 | 4363188 GooseShtepping Moron
GooseShtepping Moron's picture

I guess some people certainly cannot perceive irony without sarc tags, or do not read the OP, or both.

Fri, 01/24/2014 - 14:00 | 4363365 Levadiakos
Levadiakos's picture

Perhaps you picked the wrong day to wear see thru leggings

Fri, 01/24/2014 - 12:09 | 4362815 eclectic syncretist
eclectic syncretist's picture

Yellen to Bernanke on PPT phone conference: "Wait, if we just print up a lot of money and loan it to the banks at 0.25% interest, while simultaneously keeping bond rates near zero, maybe they'll use it to bid up stocks?"

Bernanke: "Actually, that's exactly what got us into this mess"

Yellen:  "Maybe it's not good to have high equity values and low interest rates at the same time"

Bernanke:  "I never thougth of that. I bet somebody will get a great dissertation out of that one.  When's lunch time?"

Fri, 01/24/2014 - 14:07 | 4363394 TheRideNeverEnds
TheRideNeverEnds's picture

hey man, that is a pretty good call and I agree; the market will go down from here, unless it goes up.  

Fri, 01/24/2014 - 12:00 | 4362768 dark pools of soros
dark pools of soros's picture

easy... that's the number they want fools to wait for while they sell into it..

gold will rise this year..  I tell everyone to $1600 but once it crosses $1500 I will begin selling into the rally

Fri, 01/24/2014 - 11:47 | 4362720 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

I would like to know where these fucking criminal banker assholes come up with some projected exact number everytime.

Fri, 01/24/2014 - 11:52 | 4362737 Oldwood
Oldwood's picture

Spouting specific numbers makes them sound credible, like they really know what they are talking about. Its the same with every confidence game. Create an illusion of unquestionable authority to perpetrate a fraud. Only trust those who will admit they don't have the answers.

Fri, 01/24/2014 - 12:05 | 4362784 Emergency Ward
Emergency Ward's picture

"We've looked at the alignment of the stars and analyzed our proprietary hockey-stick graphs.  The crossing of the five-day-average support line means we cannot be bullish this week."

Fri, 01/24/2014 - 12:20 | 4362866 Pool Shark
Pool Shark's picture



Definition of "Analyst's Forecast":

"Wild-ass guess carried out to two decimal places."


Fri, 01/24/2014 - 12:52 | 4363067 Ban KKiller
Ban KKiller's picture

From their criminal banking assholes..exactly!


Fri, 01/24/2014 - 13:30 | 4363237 Snoopy the Economist
Snoopy the Economist's picture


Technicians calculate many areas of support and resistance that are unseen by most eyes. Most that do not understand technical analysis will call it BS - but it's really powerful information that allows one to know where to buy and sell - especially on breakouts.

Fri, 01/24/2014 - 11:47 | 4362721 Jason T
Jason T's picture

good .. i want to clean up with my VIX calls.

Fri, 01/24/2014 - 11:47 | 4362725 Iocosus
Iocosus's picture

Another front-runner bank with 0 trading losses last year singing an enchanting pitch for the muppets.

Fri, 01/24/2014 - 11:50 | 4362731 fooshorter
fooshorter's picture

Gold Bitches!!

Fri, 01/24/2014 - 11:51 | 4362735 disabledvet
disabledvet's picture

just because the Fed can guarantee profits doesn't mean savers can't be choosy. that's still a reserve currency, it's acting like one, and not everything is following gold's lead here.

Fri, 01/24/2014 - 12:03 | 4362736 Emergency Ward
Emergency Ward's picture

"We need the retail crowd to start selling for a while to meet our trading fee quotas this quarter!"

Fri, 01/24/2014 - 11:53 | 4362740 monopoly
monopoly's picture

Thank goodness he is just "neutral", we cannot be bearsh oh no. Not in Americas markets.l

Fri, 01/24/2014 - 11:55 | 4362750 Oldwood
Oldwood's picture

Being a broker means you never say I'm sorry or "sell, as it is all just a fucking Ponzi scheme and is going to consume us all"!

Fri, 01/24/2014 - 11:54 | 4362751 Cursive
Cursive's picture


Everytime a bear wins, an angel loses its wings....

Fri, 01/24/2014 - 12:00 | 4362769 Muppetrage
Muppetrage's picture

It's a gentler way of saying get out now.

Fri, 01/24/2014 - 12:22 | 4362877 Dr. Engali
Dr. Engali's picture

They don't want you out. It's their way of sucking in bears so they can squeeze this thing higher. 

Fri, 01/24/2014 - 11:54 | 4362746 Dr. Engali
Dr. Engali's picture

Nothing like a little controlled sell of to send people scurrying to the ten year and making the fed's job a little easier.

Fri, 01/24/2014 - 11:56 | 4362754 Oldwood
Oldwood's picture

There is only "relative" safety as it is all fucked.

Fri, 01/24/2014 - 12:27 | 4362901 the grateful un...
the grateful unemployed's picture

their drug of choice is stocks, if they can't sell them, its game over

Fri, 01/24/2014 - 13:36 | 4363255 Snoopy the Economist
Snoopy the Economist's picture


I bet it's more like teh fed backing offf from buying stawks to put their money into the bonds - of course you are correct that other money coming out of stawks also help support bonds. They are fighting to hold below 3% on the 10yr.

Once they push the 10yr low enough then they have room for another run up in stawks to all new highs yet again.

Fri, 01/24/2014 - 11:53 | 4362747 Cursive
Cursive's picture



but we ARE NOT BEARISH, JUST NEUTRAL. Going forward, we expect an 1805.75/1846.50 range trade before an eventual resumption of the larger bull trend. 

Fri, 01/24/2014 - 12:20 | 4362868 the grateful un...
the grateful unemployed's picture

i recall a live presentation from a very highly rated technical analyst in the late 90s (she was showing the charts of the new energy companies, ENRON) and projecting the thesis than an overbought market can work its way through high PEs and earnings projections without a correction, if there is enough time on the chart in which the market trends sideways. the market did not trend sideways, and then there was ENRON. of course we're a lot higher than that now but if you average the returns since say 98 and project to say 2018, well you get the picture

Fri, 01/24/2014 - 11:56 | 4362756 Kaiser Sousa
Kaiser Sousa's picture

what have i told ya'll about the close in London...

every fucking day the same bullshit atttack on the phony paper price....


Fri, 01/24/2014 - 12:00 | 4362766 Spungo
Spungo's picture

When I'm watchin' my TV,
And a man comes on and tells me,
How big my IRA could be,
But he can't be a man 'cause he doesn't buy
The same stocks as me.
I can't get no, oh no, no, no.

Fri, 01/24/2014 - 12:03 | 4362774 pauhana
pauhana's picture

Just wait 'til Puerto Rico declares bankruptcy.  You ain't seen nothin' yet.

Fri, 01/24/2014 - 12:08 | 4362799 SurlysonofaBitch
SurlysonofaBitch's picture
Hugh Hendry: I Would Recommend You Panic
Fri, 01/24/2014 - 12:15 | 4362843 buzzsaw99
buzzsaw99's picture

what a bunch of crap. why don't they draw in the lines where the fed interceded? worthless effing charts without fed interventions highlighted. nothing has changed. to make $ you must btfd.

Fri, 01/24/2014 - 12:15 | 4362847 the grateful un...
the grateful unemployed's picture

invalidated bull market? since this market has climbed out of every conceivable bear indicator lets say we have moved from invalidated bear market to invalidated bull market, which is quite a lot to say actually. the usual pattern of corrections has been down hard, down harder, down harder yet - break all normative resistance levels, and then rally back (markets best gains the last few years on pullbacks of greater than 10%: an article posted here some time ago) beware of the style of collapse of the 2000 nasdaq, relentless constant, and all on a small rise in interest rates

Fri, 01/24/2014 - 12:49 | 4363016 SheepDog-One
SheepDog-One's picture

Yea when I see the DOW down aound 11,000 then I'll beieve somehing is real here. Until theit's just the same old pump and dump within a range. I'm waiting any moment for 'The New Rescue' speech from the Fed to correct this little blip down and save us all for the big Stupor Bowl weekend. We can't be down 2% without another massive emergency monetary intervention.

Fri, 01/24/2014 - 14:06 | 4363388 the grateful un...
the grateful unemployed's picture

12800 is a bear market or 20%, which puts us back at 2000 highs. there would be a lot of consternation over that, as it would imply that bond returns were better then stock returns over that period, and we all know how poor the bond market has been.

Fri, 01/24/2014 - 12:20 | 4362864 orangegeek
orangegeek's picture

Thanks BoAML - some kind of forecast.


Should be interesting to see what comes next week.


The NASDAQ100 is still down only 0.7% on the week.  Not quite a crash - yet.

Fri, 01/24/2014 - 12:20 | 4362867 Spungo
Spungo's picture

It's crashing! EVERYBODY PANIC RIGHT NOW. Go out and spend to save the economy!

Fri, 01/24/2014 - 12:25 | 4362895 the grateful un...
the grateful unemployed's picture

the chart makers are in the Mariner Eccles building, what do they think?

Fri, 01/24/2014 - 12:29 | 4362912 disabledvet
disabledvet's picture

just because the Fed can guarantee profits doesn't mean savers can't be choosy. that's still a reserve currency, it's acting like one, and not everything is following gold's lead here.

Fri, 01/24/2014 - 12:35 | 4362951 Spungo
Spungo's picture

I love the bullshit yet real part of technical analysis. The lines people draw are totally arbitrary, but a lot of people are basing decisions on these arbitrary lines. The arbitrary line or tea leaves or astrology say people should sell if the price goes below X, and that's exactly what people do. The fundamentals have been pointing to a crash for a long time, but now the technicals are saying crash as well. This could be the start of a crash or a slow downtrend.

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