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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 | Link to Comment 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 | Link to Comment Australian Economist
Australian Economist's picture

1805.750000000000000000 Bullish!

1805.749999999999999999 Bearish!


Fri, 01/24/2014 - 12:01 | Link to Comment Bearwagon
Bearwagon's picture

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

Fri, 01/24/2014 - 12:03 | Link to Comment synergize
synergize's picture

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

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

 

 

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

 

 

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

 

 

Uh, oh...

DOW 16,000 is in danger...

 

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

 

 

15,999.80

Mission accomplished...

 

Fri, 01/24/2014 - 12:54 | Link to Comment LawsofPhysics
LawsofPhysics's picture

BTFD, period.  BTFATH is out...

didn't you get the memo?

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

1801.5

T-R-O-U-B-L-E

Fri, 01/24/2014 - 12:47 | Link to Comment 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 | Link to Comment 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 | Link to Comment Levadiakos
Levadiakos's picture

Perhaps you picked the wrong day to wear see thru leggings

Fri, 01/24/2014 - 12:09 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Ban KKiller
Ban KKiller's picture

From their criminal banking assholes..exactly!

 

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

Ungrateful,

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 | Link to Comment Jason T
Jason T's picture

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

Fri, 01/24/2014 - 11:47 | Link to Comment 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 | Link to Comment fooshorter
fooshorter's picture

Gold Bitches!!

Fri, 01/24/2014 - 11:51 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Cursive
Cursive's picture

@monopoly

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

Fri, 01/24/2014 - 12:00 | Link to Comment Muppetrage
Muppetrage's picture

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

Fri, 01/24/2014 - 12:22 | Link to Comment 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 | Link to Comment 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 | Link to Comment Oldwood
Oldwood's picture

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

Fri, 01/24/2014 - 12:27 | Link to Comment 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 | Link to Comment Snoopy the Economist
Snoopy the Economist's picture

Dr,

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 | Link to Comment Cursive
Cursive's picture

Lulz.

 

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 | Link to Comment 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 | Link to Comment 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....

behold....

http://www.silverseek.com/

 

http://www.kitco.com/charts/livesilver.html

Fri, 01/24/2014 - 12:00 | Link to Comment 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 | Link to Comment pauhana
pauhana's picture

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

Fri, 01/24/2014 - 12:08 | Link to Comment SurlysonofaBitch
SurlysonofaBitch's picture
Hugh Hendry: I Would Recommend You Panic
Fri, 01/24/2014 - 12:15 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment orangegeek
orangegeek's picture

Thanks BoAML - some kind of forecast.

 

Should be interesting to see what comes next week.

 

http://bullandbearmash.com/chart/sp500-daily-remains-consolidated-antici...

 

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

Fri, 01/24/2014 - 12:20 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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.

Fri, 01/24/2014 - 12:40 | Link to Comment SheepDog-One
SheepDog-One's picture

Bank of Murca- 'Hey thanks for buying our shares higher'.

Fri, 01/24/2014 - 12:41 | Link to Comment anyways
anyways's picture

i would wait for Stolper.. ;-)

Fri, 01/24/2014 - 12:51 | Link to Comment Iam Yue2
Iam Yue2's picture

My tea leaves say the bears are already in control.

Fri, 01/24/2014 - 12:53 | Link to Comment slightlyskeptical
slightlyskeptical's picture

There is no way this market stays below 1805 today. The BTFD team isn't going to be defeated so easily especially into what could be a volatile weekend.

Fri, 01/24/2014 - 14:55 | Link to Comment SheepDog-One
SheepDog-One's picture

Well until their goal becomes to make stocks go lower. These people don't care whether stocks go up or down, it's all in the timing of the pump and dump cycle.

Fri, 01/24/2014 - 15:43 | Link to Comment Yen Cross
Yen Cross's picture

   I can see the 200day avg. on usd/jpy (99.90 area). But I think 93.00 is a bit ambitious. I've stated my inital target as the 101.50 area. Might have to lower it a bit. I still think the 1267 area in gold is a more important level then 1270, but it's only $3 difference.

Fri, 01/24/2014 - 16:00 | Link to Comment Bryan
Bryan's picture

Below 1806 spells trouble; with a capital T and that rhymes with P and that stands for PONZI!

Fri, 01/24/2014 - 16:32 | Link to Comment atoast2toast
atoast2toast's picture

elliot wave nonsense

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