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BofA Technician Watching 1750 S&P Support: "Below Here Is Trouble"

Tyler Durden's picture





 

"Where's the bounce," asks (rhetorically) Bank of America's Macneil Curry, warning that despite the repeated signals that investor anxiety is at unsustainable levels and that this is a late stage "risk off" environment, given the blow off top conditions in several EM currencies, particularly $/TRY, and extreme readings in SPX volatility, with the VXV/VIX ratio recently breaking below 1, the S&P500 can't maintain a bid. "Risk assets are vulnerable," he concludes...

 

Via BofAML's Macneil Curry,

S&P500 key support at risk.

Despite the repeated signals that investor anxiety is at unsustainable levels and that this is a late stage "risk off" environment, given the blow off top conditions in several EM currencies, particularly $/TRY, and extreme readings in SPX volatility, with the VXV/VIX ratio recently breaking below 1, the S&P500 can't maintain a bid. Key support is vulnerable.

A break of 14m trendline support, now 1750/52 and risk markets are in big(ger) trouble.

Stay bullish US Treasuries

As such, we stay bullish Treasuries. US10yr yields target 2.544%/2.459%, potentially below. Meanwhile, 5s continue to stair step lower to 1.473%. This should be strong resistance, but a break below opens 1.245%/1.2245 (see charts for key support in 10s and 5s).

For risk assets to regain a more stable footing, ESH4 needs to regain 1790.75, with a move above 1801.25/1805.75 to confirm a base and turn higher. 

Bullish the US $, but the Japanese ¥ is the fairest of all

With the risk off environment continuing the US $ and Japanese ¥ remain on strong footing. The €/$ setup remains bearish. Declines are impulsive and gains are corrective. We target the 200d (now 1.3377) ahead of 18m channel support at 1.3177. Watch the US $ Index. 7wk trendline resistance at 81.37 is fast approaching. Above here should provide further bullish momentum for the Greenback.

As much as we like the US $, we like the Japanese ¥ even more.

Indeed, $/¥ continues to roll over. Watch 14m trendline support at 102.00. Below here clears the way for the 200d (now 100.05) and eventually the summer/spring 2013 lows at 93.79/92.57.

 


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Fri, 01/31/2014 - 14:00 | Link to Comment Bearwagon
Bearwagon's picture

Crash already, you pig!

Fri, 01/31/2014 - 14:03 | Link to Comment Headbanger
Headbanger's picture

Oh but pleeeez...Nooo!... They have to do something cause a crash "is absolutely not allowed to happen" according to the cheerleaders here!

Fri, 01/31/2014 - 14:11 | Link to Comment THX 1178
THX 1178's picture

The hits just keep coming. Something wicked this way comes.

Fri, 01/31/2014 - 14:34 | Link to Comment BoNeSxxx
BoNeSxxx's picture

Is this the same clown who was calling for a 'whoops' at 1770 last week?

Or was it a different BOA joker?  I am too lazy to look and too apathetic to care.

Just jump and get it over with already!

Fri, 01/31/2014 - 14:55 | Link to Comment RSloane
RSloane's picture

Death by a 1000 papercuts, not a crash.

Fri, 01/31/2014 - 14:09 | Link to Comment stocktivity
stocktivity's picture

Gads...I can hear maria now squeeling..."OFF THE LOWS"

Fri, 01/31/2014 - 14:11 | Link to Comment Headbanger
Headbanger's picture

But isn't she leaving CNBS for Fox soon anyways???

Fri, 01/31/2014 - 14:02 | Link to Comment Al Huxley
Al Huxley's picture

Gee, JPY, USDs USTs, S&P - so many overpriced, overproduced paper assets to choose from, it's hard to choose!

Fri, 01/31/2014 - 14:05 | Link to Comment whatsinaname
whatsinaname's picture

Dont forget the EUR and the GBP - the ones that are making all the EMs take it in the ....

btw.. good Friday humor here as Jim Cantore from TWC knees this college kid !!

http://www.weather.com/video/sponsored-video/cantore-knees-attacker-4386...

Fri, 01/31/2014 - 14:02 | Link to Comment brewing
brewing's picture

Fuck BofA

Fri, 01/31/2014 - 14:04 | Link to Comment stock trout
stock trout's picture

"Where's the bounce?"...said several bankers lately as they jump off tall buildings and into roadside ravines. 

Fri, 01/31/2014 - 14:05 | Link to Comment maskone909
maskone909's picture

what happened to that "short squeez in gold above 1270"?

Fri, 01/31/2014 - 14:12 | Link to Comment BandGap
BandGap's picture

It was very short.

You missed it.

Fri, 01/31/2014 - 14:13 | Link to Comment cro_maat
cro_maat's picture

It's Chinese New Year so the owners of the fiat $ monopoly know that they can sell paper gold all day into thin volume markets. Have to deliver special Holiday priced gold for all those Year of the Horse revellers.

Fri, 01/31/2014 - 14:07 | Link to Comment Dr. Engali
Dr. Engali's picture

The S&Ps support is wherever old Yeller says it is. Nothing else matters.

Fri, 01/31/2014 - 14:55 | Link to Comment RSloane
RSloane's picture

Exactly right Doc. Market forces are tightly within her grasp meaning that market forces don't even come into play. Daneric's has been sweating this out a bit but overall there is enough support padded in. This is way too early for alarm bells. 

Fri, 01/31/2014 - 14:07 | Link to Comment cro_maat
cro_maat's picture

Why pick 1 when you can trade them all!!

Get a MyRA while you are at it. First 100 to sign up get a signed picture of Yellen.

Fri, 01/31/2014 - 14:23 | Link to Comment stant
stant's picture

i tried the myra.gov web site is down

Fri, 01/31/2014 - 14:07 | Link to Comment Jameson18
Jameson18's picture
BofA Technician Watching 1750 S&P Support: "Below Here Is Trouble"

 

I'm sick an tired of reading this crap. Below this number is trouble. Cross this line its trouble. SHUT THE F UP. Tomorrow it will be a different number or a different line. Everything is all ready in trouble. All you have to do is open your eyes. The system is broken its not coming back anytime soon and NOBODY is goin to jail.  So pick a side.

 

//
Fri, 01/31/2014 - 14:25 | Link to Comment Fuh Querada
Fuh Querada's picture

too right sport - those fancy trendlines don't mean dogshit, one of them only touches a single point on the chart!

Fri, 01/31/2014 - 15:35 | Link to Comment Boston
Boston's picture

This is the SAME "technician" who, over the past 30+ days, repeatedly argued that the US 10yr could drop from 3.0% to the 2.5% range.

He was pretty much on target. And after backing up the truck and loading up on T-Notes, I'm starting to lock in the gains on a trade that, to me, was a no-brainer.

But now that the 10s has hit 2.65%, I see it being a little overbought, and ripe for a pullback in prices. If yields backed up to 2.8%, I'd be interested in buying back in.

On the other hand, the 2.5% level if/when approached will present a major test. If yields crash below 2.5%, then look out below........2.0-2.2% could be the next step. And the perfect catalyst to drive rates so low would be a CRASH in the S&P to well below 1,750.

Fri, 01/31/2014 - 14:10 | Link to Comment buzzsaw99
buzzsaw99's picture

i guess b of a is unaware that there is no market, there is only old yeller?

Fri, 01/31/2014 - 14:10 | Link to Comment LawsofPhysics
LawsofPhysics's picture

BofA technician?  LMFAO!  Someone open the window for him.

Fri, 01/31/2014 - 14:11 | Link to Comment B.J. Worthy
B.J. Worthy's picture

Looks like Ben cut Janet's printer cable on the way out.

Fri, 01/31/2014 - 14:24 | Link to Comment El Vaquero
El Vaquero's picture

I really dislike analyses that rely on trend lines.  Seriously, even if you can point to some correlation, they are just a proxy for what is really going on.  IMO, when they do indicate something, it is after the fact.  What I'd rather see is a probability distribution indicating what the chances of a cascade effect due to margin calls vs the S&P500 is.  I'd also like to know the contents of the not-for-public-consumption conversations at the Fed.  I want real fucking data.

Fri, 01/31/2014 - 14:35 | Link to Comment FreeMktFisherMN
FreeMktFisherMN's picture

I've come to integrate some TA into my trading for positional setups, and backtesting is not a bad idea, but at the EOD I only trade commodities because I actually integrate fundamentals such as that these are not video games being traded on the screen but actual items of intrinsic value. 

Fri, 01/31/2014 - 14:55 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

There be dragons!  

 

Clearly it is time to panic, someone should tell the markets; they havent had a down tick since the open.

Fri, 01/31/2014 - 14:37 | Link to Comment GK
GK's picture

The battle for the top of the '09 channel continues for the 6th day in a row.

That seems to be the more important level right now 

Fri, 01/31/2014 - 14:45 | Link to Comment Breezy47
Breezy47's picture

I thought someone said here this week below 1775 was trouble?

Fri, 01/31/2014 - 14:47 | Link to Comment orangegeek
orangegeek's picture

The major support line is the December 2013 low - near 1770.

 

http://bullandbearmash.com/chart/sp500-daily-closes-1-remains-bull-channel/

 

A close below the December low breaks the pattern of higher highs and higher lows going back to 2012.

 

1750?  Sure - close enough, but the key is a close for more than just one day - there is still a lot of interest out there to make these markets go higher.

Fri, 01/31/2014 - 15:01 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

How is there interest in these overbought markets? The numbers are looking horrible and the retail sector is getting hammered, the taper is on (Fed support off), earnings reports are horrible. Emergging markets falling aprt.  I fail to see the upside.

Fri, 01/31/2014 - 14:59 | Link to Comment glossolalia
glossolalia's picture

Without "plunge" or "collapse" in the headline I'm just not feeling sufficiently panicked.

Fri, 01/31/2014 - 14:59 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

If this market doesn't close in the red in a major way, I may take the banker way out too!  Where is the nearest bridge!

Fri, 01/31/2014 - 15:03 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

It wont, the bottom is in.  Expect to be trading past 1850 by next friday.

Fri, 01/31/2014 - 15:07 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

Look at this amazing rally!! How could I have ever doubted our masters!

Fri, 01/31/2014 - 15:17 | Link to Comment RSloane
RSloane's picture

Yup. S&P is at 1790+ right now. Two hours to go before the weekend then we can all get tucked in for another round next week.

Fri, 01/31/2014 - 15:20 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

Do you think it's going to be a shit show next week or do are you thinking green??

Fri, 01/31/2014 - 15:18 | Link to Comment The_Ungrateful_Yid
The_Ungrateful_Yid's picture

This is StupidBowl weekend, no way they will let all their gambling buddies have a red day before the big one!

Fri, 01/31/2014 - 15:28 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

I'm going to go puke. GO SEACAWKS! GO BRONCHOES!  I want off this train!

Fri, 01/31/2014 - 15:08 | Link to Comment Quinvarius
Quinvarius's picture

I don't know that this is about risk.  Volatility seems to be a likely outcome when you explode the money supply, but give all the money to trend chasing gamblers.  I am not saying the S&P won't crater and does not deserve to crater.  But it would take very little from the Treasury or the Fed to put the cat heard back on track.  The idea that there is a liquidity problem at 0% with teh Fed on the bid for bank garbage assets is kind of a joke.  Liquidity cuts both ways when all you have is derivatives.

Fri, 01/31/2014 - 15:13 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

I still don't get it. By all factors it should be falling off a cliff right now. We should be down over 250.

Fri, 01/31/2014 - 15:22 | Link to Comment RSloane
RSloane's picture

You must be operating under the impression that market forces are at play here. They are not. Doc nailed it. The S&P is wherever Bernanke said, and now Yellen says, it is.

Could it fall cascading out of the Feds' hands and crash? I don't think so. Not without a signficant precipitating event.

Fri, 01/31/2014 - 15:24 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

True - I was just hoping, you know like Obama told be to do.  I am ready for change.

Fri, 01/31/2014 - 15:17 | Link to Comment The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Hey mr. technician, just jump already!

Fri, 01/31/2014 - 16:07 | Link to Comment Carnegie_IB
Fri, 01/31/2014 - 16:11 | Link to Comment pupdog1
pupdog1's picture

If the science of squiggles actually worked, any technician could have Warren Buffett taking out their trash after a couple of years.

I love how support is support until it isn't.

Fri, 01/31/2014 - 17:07 | Link to Comment Carnegie_IB
Carnegie_IB's picture

what is working for you? 

what can life expect from you? 

 

Fri, 01/31/2014 - 17:14 | Link to Comment Spungo
Spungo's picture

As the old saying goes, keep your tea leaves dry. Here's my technical prediction: monday will be very interesting.

I should add some real technical analysis. Keep in mind I know nothing about reading tea leaves. Here's what I'm seeing:
-Volume on SPY jumped dramatically in Q4 of 2012, which I think means braindead idiots have jumped into the market, which usually indicates the top is coming. It's really amazing it hasn't crashed yet.
-MACD on a weekly scale shows very slight downward momentum
-RSI on a weekly scale is showing significant downward momentum
-Slow stochastics on a weekly scale are starting to turn south.
-50 week moving average is still positive slope, so we're still not in the panic and shoot people phase.
-SPY spot price dropped blow the 50 day moving average on Jan 24, indicating now might be a good time to sell.

 

Sat, 02/01/2014 - 01:43 | Link to Comment Haager
Haager's picture

BofA asking for trouble? That translates into 'we get it' - like the 1750 level where they draw a line into the sand. Come on, everyone should know that those lines are more flexible than Reed Richards.

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