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JPMorgan Technicals: "The “One Way” Market Rally Since Dec-Jan Is Over"

Tyler Durden's picture





 

For those who believe in this sort of thing, here is JPM's Chief Technician Michael Krauss, who says that "The “one way” market rally since Dec-Jan is over. Expect weeks, if not months of lateral movement." Well, there's that. Then there is the only thing that matters in "markets" these days - which way Ben Bernanke sneezes. Everything else is meaningless: McClellan oscillators, Ichimoku clouds, RSIs, oh and of course, fundamentals.

From JPM:

Short term- Lift today held the 1358 Oct-Nov weekly uptrendline, after Mon’s short term top breakdown below 1386/1394. Bears have agenda below 1400. Next supports are 1350 Oct CH/Mar range break target, 1340 Mar low, 1333 Jan hig.

Long term- Risks a 1422 April downside reversal month (<1408), from our 1400-1440 midyear target ceiling. Technical setup is not as vulnerable now as May ‘11, but the Dec-Jan surge is over. Favor weeks/ months of sideways above 1300ish. No move above 1450 without Nov Election results

Sentiment/Breadth/Momentum- Short term sentiment gauges are net-oversold. Weekly polls did not become euphoric in Feb-Apr. NYSE Advance-Decline lines saw new all-time highs, but have come off sharply. Monthly momentum retains Jan’s Buy signal, with divergence risk. Weekly probes an overbought Sell with no divergence. Better than 2011

Overall (1367): The S+P 500 peaked at 1422 on April 2, meeting & rejecting our 1400-1440 by midyear targets, while risking an April downside reversal month (below 1408). With the distinct weakness in European Equities since mid-March, and weeks of mega underperformance by S+P Industrials & Materials, I am surprised that the S+P 500 even stayed above 1400 until just two days ago (stay short term bearish below there). I view this as a “garden variety” 5 to 8% correction from the 1422 April 2 peak (SPX stopped beautifully near the July ‘10-Oct ‘11 channel high at 1417....see page 2, 3). The “one way” market rally since Dec-Jan is over. Expect weeks, if not months of lateral movement. To maintain a cyclical bull market hypothesis, corrections must hold the 1293-1300 interim floor (Oct high/Jan pivots).

Short term: Today held the 1358 Oct-Nov weekly UTline (page 3). Just below is the 1350 March range break obj/Oct-Mar parallel channel, 1340 March 6 low, 1333 Jan 26high. Upside resistance rests at 1386 and 1400. Two straight closes above 1400 allow a marginal new high above 1422....but divergences would be huge, allowing a 1423-1440 “Sell in May” short trade. Momentum: Daily- Sell oversold. Weekly- Overbought Sell. No divg. Monthly- Jan Buy stays intact. Divg risk.

S+P 500 Sentiment gauges:

1)Daily Sentiment Index (DSI) (Apr 10): 25% bulls, (46% 5 day avg, 57% 10 day avg). Falling quickly, after peaking at a 75% bulls 10 day on March 21. Bottomed at a 17% bulls 10 day avg oversold extreme in late-Dec.

2)Investors Intelligence readings (Apr 10): 48.4% bulls (vs 52.7%), 21.5% bears (vs 22.6%), 30.1% correction. Neutral. Bulls rose from  43.6% to 52.7% the prior three weeks. Peaked at a 54.8% bulls reading on Feb 14, and at 57.3% on Apr 5 last year. Historical danger zone is 56-62% bulls. Note that the bears level is quite low- the fewest since July 2011.

3)American Association Of Individual Investors (AAII) (Apr 5): 38.2% bulls (vs 42.5%), 27.8% bears (vs 25.5%). Neutral. Peaked at  52.3% bulls on Jan 11. Nov low was 33%. Bottomed last year at 21% bulls in July & Aug. March ‘09 troughed at 18.9% bulls.

 


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Thu, 04/12/2012 - 11:52 | Link to Comment buzzsaw99
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What time is it? Half past bernanke's ass, a quarter 'til his balls.

Thu, 04/12/2012 - 16:43 | Link to Comment BarberKen19
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my neighbor's mom makes $82 hourly on the computer. She has been out of a job for ten months but last month her pay check was $14998 just working on the computer for a few hours. Read more on this web site and click Home .....  WWW.LAZYCASH.COM

Thu, 04/12/2012 - 11:52 | Link to Comment The Swedish Chef
The Swedish Chef's picture

But, but, but... This was the best time IN A GENERATION to get in to stocks!?! 

Thu, 04/12/2012 - 12:38 | Link to Comment William113
William113's picture

So says that ass hat Cramer.

Thu, 04/12/2012 - 11:53 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Is this the Morgue's way of pleading for Ag to stay below $35/oz?

Thu, 04/12/2012 - 11:58 | Link to Comment LawsofPhysics
LawsofPhysics's picture

More like suckering people in to keep enough cover on the prop-desk front-running.

Thu, 04/12/2012 - 11:55 | Link to Comment prains
prains's picture

robofarter, where's your call?

Thu, 04/12/2012 - 11:56 | Link to Comment jmac2013
jmac2013's picture

zerohedge and JPM on the same team trying to keep the sheep out of the raging bull market.  No matter how many silly black swan articles ZH pushes, no crash is happening at least until Obama is re-elected.  Sorry doomers, you're missing it.

Thu, 04/12/2012 - 11:58 | Link to Comment SheepDog-One
SheepDog-One's picture

Go buy all the raging bull market stocks you want then if its all so great, I dont see anyone physically stopping you, dickhead pumper.

Fri, 04/13/2012 - 00:31 | Link to Comment StychoKiller
StychoKiller's picture

For some reason, jumping into the Battlebot™ arena, does not appeal to me, it would be just like swimming with a large school of Pirahnas!

Thu, 04/12/2012 - 12:05 | Link to Comment SheepDog-One
SheepDog-One's picture

So then....this means '1 way rally' is back ON then I presume? Anyway, its only good for a few hours at this point, until the next rumor hits to drive the entire world markets back to the lows again.

Thu, 04/12/2012 - 11:57 | Link to Comment Alexmai
Alexmai's picture

The US economy is so bad that Mexican illegal immigrants are going home in large numbers and replacements are not showing up.

http://investmentwatchblog.com/the-us-economy-is-so-bad-that-mexican-illegal-immigrants-are-going-home-in-large-numbers-and-replacements-are-not-showing-up/#.T4b6Y1xYuIA

Thu, 04/12/2012 - 12:03 | Link to Comment HarryM
HarryM's picture

According to Napolitano, it's due to the vigilance of the Border Patrol - what a farce

Thu, 04/12/2012 - 11:58 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

I can hear Bernanke - "Oh really JPM....we'll see about that."  "Get Dudley on the phone....NOW!"

Thu, 04/12/2012 - 11:57 | Link to Comment CitizenPete
CitizenPete's picture

The Fed will change all this downtrend with just a thumb and index finger ... Cntl_P

 

Ever onward to the cliff!

Thu, 04/12/2012 - 11:59 | Link to Comment HarryM
HarryM's picture

As today demonstrates ..... It's Ben, Bitchez!!!   LOL

Thu, 04/12/2012 - 11:59 | Link to Comment Cdad
Cdad's picture

Indeed, Fed jawboning is the only catalyst left...despite the JPM ode to the market.  Ironically, the more the Fed jawbones, the more average Joe hits the exits [confirmed yet again by ICI]...as that jawboning and Fed action is the underlying economic problem markets are suffering from.

As such, capital formation will continue to be thwarted, meaning that the FED jawboning leads only to more of the same poison that is killing us.

<golf clap> Way to go Wall Street...you killed your own industry.  Bonuses all around!

Thu, 04/12/2012 - 12:03 | Link to Comment SheepDog-One
SheepDog-One's picture

They can stage as many fake euphoria 'ALL IS WELL THIS TIME' rallies as they want, but no ones buying their bullshit! 

Thu, 04/12/2012 - 12:14 | Link to Comment Cdad
Cdad's picture

All financial industry credibility is dead.  The average Joes of the world have known it for a couple years now.  Only Wall Street seems confused, and bent on currency debasement as their best plan to prop up appearances.  The betrayal coming out of Wall Street continues.

Thu, 04/12/2012 - 12:17 | Link to Comment SheepDog-One
SheepDog-One's picture

They do seem 'confused' or confounded anyway...they printed and pumped, and firgured by now avg retail would be swarming all over the place buying their pump off their hands. It didnt happen, so now theyre reduced to daily QE on/off rumors and hand grenades in a box to drive commodities or equities, depending on what they need that day, and thats IT!

Thu, 04/12/2012 - 12:37 | Link to Comment Cdad
Cdad's picture

There will be no capital flowing into the stock market until this criminal regime is purged.  It's really simple.  That Wall Street  continues this lie backed by money printing [our money] is simply an extension of the bank led crime wave with DC incompetence and cronyism as a multiplier. 

The game is over, but for some reason, these players are still standing on the field...and have failed to notice that the grandstand is empty.  

Thu, 04/12/2012 - 12:00 | Link to Comment HD
HD's picture

Funda-what-als?

Thu, 04/12/2012 - 12:21 | Link to Comment WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

mentals, or is it metals?

Thu, 04/12/2012 - 12:01 | Link to Comment SheepDog-One
SheepDog-One's picture

If this is all theyve got, lame 'QE rumor' and 'financial center threats sympathy rally' then Im confident the entire game is about over. All theyre doing is 'check...checkmate' about 500 times now HEY IDIOTS youre not fooling anyone THE GAME IS OVER! Everyone is gone from the markets! You can stage as many moron rallies as you want, but no ones buying it! 

Thu, 04/12/2012 - 12:07 | Link to Comment Eric L. Prentis
Eric L. Prentis's picture

My technical analysis model, based on long-term trends in the stock market, predicts the US will slip back into recession in April/May 2012.

http://ccsenet.org/journal/index.php/ijef/article/view/7033

Thu, 04/12/2012 - 12:18 | Link to Comment WonderDawg
WonderDawg's picture

We never really got out of the recession. Sure, the markets re-inflated, but housing, which has always lead the US out of recession, is tanking, and unemployment, when viewed without the BLS manipulations, has barely budged. Anyone can make things look better for a while if they have several trillion dollars to spare, but even that effect is wearing off. The next leg down will see is in a severe depression. IMHO.

Thu, 04/12/2012 - 12:07 | Link to Comment Vince Clortho
Vince Clortho's picture

JPM didn't get the memo that technicals don't mean squat anymore?

Thu, 04/12/2012 - 12:20 | Link to Comment q99x2
q99x2's picture

 

Bad omen for the shorts out there. The “One Way” Market Rally Since Dec-Jan Is Over: JPMorgan

except for yesterday and today and Feb, Mar, and the first week of April.

 

 

Thu, 04/12/2012 - 12:21 | Link to Comment rebelscum1967
rebelscum1967's picture

AAPL not participating in today's "rally" so far...floundering....NASDAPPL up 1% but not it's driving force? how is this possible? hmmm

Thu, 04/12/2012 - 12:31 | Link to Comment skepticCarl
skepticCarl's picture

This quarter's earnings in general will be O.K., and not fall off the cliff as expected by Schiller and Rosenberg.  So, the 50 day moving average will probably be supportive for the S&P 500, regardless of a correction in AAPL.

Fri, 04/13/2012 - 00:35 | Link to Comment StychoKiller
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Cloud the future, the Dark side does...

Thu, 04/12/2012 - 12:22 | Link to Comment CitizenPete
CitizenPete's picture

Listen to Cramer! 

 

http://youtu.be/QS8qpdjRRnE

 

lMFAO

Thu, 04/12/2012 - 12:28 | Link to Comment DarthVaderMentor
DarthVaderMentor's picture

and you believe in technicals still Tyler?

Thu, 04/12/2012 - 12:29 | Link to Comment skepticCarl
skepticCarl's picture

The RUT and Transportation averages are leading the bounce.  This indicates that the rally will resume to at least the year's highs.  The dip buyers win again.

Thu, 04/12/2012 - 12:38 | Link to Comment skepticCarl
skepticCarl's picture

Thanks, Tyler, for a U.S. market-related topic.  Many of us would enjoy at least a daily thread that addresses current stock market action.

Thu, 04/12/2012 - 12:51 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Euro flat since 9:50 am.  But the Dow has pushed up another 80 pts.  Hmmmmmm, looks like a good short here....or a decouple.  We'll see.

Thu, 04/12/2012 - 13:56 | Link to Comment cowdiddly
cowdiddly's picture

Jpm predicts lateral movement. BWAHAHAHAHHAHAHAHAHAHAHAHHA Look out below you scumbags this market is on the cliff and the rock has a big crack in it.

See ya wallstreet bagholders. Joe isn't coming back 

Thu, 04/12/2012 - 15:00 | Link to Comment monsi
monsi's picture

The Worldwide Protectionist Society a la` G20 2008-2012 class dumbs the trend down to a range....spin,spin n` loads a` spin....off to make me a G20 Cuckoo Clock  

Thu, 04/12/2012 - 17:46 | Link to Comment ZeroConfidence
ZeroConfidence's picture

Is there an ETF that tracks Bernanke-schpeak yet?

Fri, 04/13/2012 - 15:32 | Link to Comment malek
malek's picture

 Expect weeks, if not months of lateral movement.

LOL - why does that remind me of "we reached a permanent high plateau"?

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