Natural gas surges after EIA inventories data (A UNG Post)

Natural gas surges after EIA inventories data so says MarketWatch. Inventories fall significantly. OK, question time, what happens when  you have near record inventories and you basically cut production in half and consumption increases slightly? Folks, do not get to excited about real demand increasing for some time. Now, will this inventory change effect the forward spot price for NG thus driving UNG higher? That is yet to be seen. That is the danger to the trade. 

Working off oversupply while dramatically cutting production = reduced inventories which does not necessarily mean increased pricing structure which is what we care about.

Here is the link to the EIA NATGAS page.

Sure, this is a form of price manipulation and you will pay for it in the end. You, the consumer, are witnessing price manipulation that is not working in your favor, but instead in the name of salvaging corporate profits. On the conspiracy side, I am beginning to wonder if the NATGAS price destruction was a predetermined action in relation to the green movement in some way that has been influenced by the carbon kooks and big oil?

Then again, to what extent do you really trust any numbers coming form any government agency? IMO, you should not. Should that work into your trading decisions? I do not think so. You need to find the momo and where "they" want prices to go and ride that train. right now that momo is still to the downside and will remain there till proven differently.

NATGAS and UNG are not exactly tracking each other any more. Well they are, just from a distance. I am not commenting on the dislocation other than a lot of people who bought UNG for the pop got ripped off IMO. I think this is one of those "charts you are not supposed to see". If things were "normal" UNG should be somewhere near $20 right now.

UNG daily - This chart's indicators look pretty green and may have a chance to run. RSI cracking the divergence line could be a key point for the bulls. The weeklys do not look as bad as they have in the past (kind of mixed right now). For the bears I have some black arrows showing prior interaction with the MA's in this fall. That combined with the upper channel resistance would cause me to caution against any aggressive move here. There is a lower blue box with a question mark in it  that I deem a possible target based on the channel, MA's, indicators and cycle lines. Is there a possible H&S in there? Yes, but .... Can it make it to gap resistance? Yes, but ....

Again (as usual) I caution investors and warn that UNG moves mainly as a function of the forward spot price. If it goes up so does UNG. If not, it falls. Based on the first chart, once would speculate that a correction is in order. That is it. you are either lucky or not.

Now let's look at another relationship that NATGAS shares with OIL. The ratio of the price of oil to the price of NATGAS is out of proportion now and a correction is in order. There are a lot of people that believe NG will be retesting the recent lows. That would require one heck of a fall in oil. there are so many possibilities that can drive prices around, I won't speculate on what could happen (war, global depression, carbon credits, you name it.). I believe Oil will do most of the work here over time as I believe Oil is going to $55.

You UNG investors need to be nimble and keep the stops tight. It could run to the moon, but then again it has been proven time and time again that there is not yet a limit to how low it can go. There is a bunch of resistance above right now, and I would not chase it here. That is a big bullish candle, but it also left a nasty gap. That is pretty typical MO for every move off of a low so far. If it were to get above the upper channel line and if we can get some sort of established EWT count going up, then I'll look into holding it. Till then, I'll keep swing trading off of the bottoms. I'll  add that IF it should break out and the H&S plays out, somewhere near 14.50 would be the target (there is a nice resistance line near there).

NATGAS futures Prices


GL and have a great holiday season .

Morning Post

Another day in paradise! Leave it to ZH to bring up the obvious and thank them for allowing us to be able to see the forest. In the post Citigroup: KIA'd I got the real understanding of what I believe is the beginning (or potential escalation) of financial terrorism. This is where the big boys play ball and it is a game that is not televised for the world to see. It is a rare glimpse into the war of global politics. What I came away with is the simple fact that CITI is one withdrawal away from doom. I won't comment any more now, but read the post and then digest the ramifications.

Isn't this volatility GREAT!

/ES 60m daily - Had to go daily for the most accurate presentation of the LT tendlines. The blues P2 (bull market rising wedge) has been violated. The green falling wedge formed over the past several days fell to the 1085 support and appears now to possibly want to reverse as RSI bounces off of the 50 line. I'm thinking the range will be between the upper red resistance line and the lower green support line thru the end of the year. Exciting!

SPX 30m - This time frame is just to emphasize the range bound market. Does it go to the top again here? I do not think so, but it could easily. The 60m SPX indicators have bottomed and are turning. The dailys are continuing their long walk down setting a massive divergence to price that should be like a uge storm cloud coming over the horizon. With the Daily RSI at 50 and the 60m bottoming, maybe it is time for some sort of a pop here.The dollar has some room to breathe and even though the correlation has gone away some, it has not totally left the building.

Gold daily - Is it close to bottoming? Following S Sto I would say there may be a shot at an entry point for a trade soon. The big question is will  this be a major or minor bottom and for those of you that want to get in need to make a decision? I personally think there is further downside, but do not want to miss any opportunity to get in in case I am wrong, so at this next low I will make a purchase (10% position) in GLD and will have to decide on the stop loss I am willing to bear (I am planning on holding LT, but am also willing to trade to get the best entry). As I have been discussing I will continue to DCA into gold on weakness.



Remember you can get all of my Stockcharts charts on a 20m delay at my link on the right. Use the drop down bx just above the chart's top RH corner.

GL out there today. It should be really exciting! (LOL)

Happy holidays.

EUR/USD Breakdown (In Pictures!)

Long term - the pink channel starts off of the low in 2001. Pay close attention to that lower channel line and how it works thru to this years backtest of the breakdown in the sky blue wedge. On this monthly chart you can see a nice roll over in S Sto and RSI and it appears MACD just could not get it up and is petering out.Notice the fist pullback to a near perfect 50% retracement ( the gray rectangle is the 50 to 62% retracement zone). Also notice the yellow dashed TL incorporating the two lows and then the green dashed TL that is drawn off of the previous lows from '00 and '02.

Now for a medium term look at this same chart. Here you can see the yellow dashed TL picking up the bottoms which should serve as ultimate support here near 1.31 (I do not think that will hold as I'm thinking the green TL in the chart above is the ticket). You can clearly see the sky blue wedge backtesting the pink channel and stopping near the 1.50 resistance point. Is that a 2 wave corrective?

Now to drill into the action on a weekly view. IMO if you combine the indicators from the monthly chart with those on this weekly chart you get a recipe for disaster. On this chart you have nasty divergences on S Sto and RSI. That MACD bear cross and HIST going negative does not look good either. Include the breakdown of the sky blue rising wedge at the backtest of the major bull channel and that just adds to the misery. For the $1.24 low to $1.51 high the heavy yellow line is the 38% fib at 1.41. The retracement zone is from1.38 to 1.35. The support line you see is at 1.34 and then the yellow TL catching both major bottoms is at 1.31. Let's not forget the lower green TL near 1.04! You can clearly see a nice red weekly candle poking out the bottom of the blue wedge.

So there you have it. The analysis of the breakdown of the EUR/USD. No turning back from here. This one has been set in motion. the targets are above. I can not determine any time frames at this time. I did leave out one TL and the possibility of this being a massive H&S formation with us forming the right shoulder now. The target for that would be somewhere near $.90. Neckline is the last two lows. Ouch if that is right.

GL out there and happy holidays.

Morning Post

Running a little late so it has to be a quickie.

SPX 60m - See the red TL? Break that with some conviction and set a lower low and we'll get a full frontal bear move. Till then that range in the red diagonal is still in play. I do not believe the top TL will be tested again (that is not saying I have called a top - which 1119 was most likely it at this point). 60m indicators still have a little room to fall and there are no divergences to speak of to price at this time signaling a turn up. 

SPX daily - Whether the TL's and labels are right or wrong (this is a chart I play with), you can not argue with the divergences to price in the indicators and the interaction with the upper bear market TL and the 50% fib retracement.  See the red box? Taht is a lot of nasty stuff in there that does not look good for the bulls. I do like that target in the circle. Those should look familiar from the SPX channels I showed yesterday.

VIX daily - I think the VIX has bottomed based on the action of price and it's relation the the 50 and 100ma. The blue boxes tell a good story. It can't hold a break above the ma's. When the 50 crosses the 100 the bears party will be on. No telling how long that will take, but with them less than 6 points apart it may not take long. The indicators are mixed, but favor a bullish move here for the VIX.





It is a  tough call here. We are near the TL of what has been a really choppy market for three weeks and they may force it back up here some. I think the bulls have lost their mojo and the top is most likely in, but that is not a call (you can't go against the PPT). Odds are good that we stay range bound till the EOY. Bottom line is the divergences on the daily and weekly charts with the price action say loud and clear the bulls have had their run. Now we have to wait patiently for the selling to commence.

GL and happy holidays.

I'll be doing some more daily posts on other stuff so look for them.

$DJUSFN

The financial index. What some of you that are looking for a top might not realize is that one of the leading sectors might just have topped back in October.

There are many ways to look at this chart, but up is one I am not even considering. Thanks to MW on CNBS this am. Since I hate posting the CNBC vids, I'll summarize her statements this morning "Not good".

OK, so we saw the divergences coming and RSI crossing the TL and the top was set (red vertical). If you are a FAZ owner you'd never really know the top was is would you? Well, FAZ did "bottom" on October 15th. So, what happens now?

In Shanky's world we like to draw pretend lines and do pretend things (that will not be discussed here). What is amazing is how these pretend things tend to work out (no wonder I liked Calculus so much). Some are calling the move up a 1,2 1,2 and some an ABC. I don't care what it was I just care where it is going and for that there are multiple options. I have drawn 3 dashed parallel lines to make three possible channel scenarios. I have not begun a "count". Right or wrong (as far as the channel assumption goes) I will always assume a channel will form first during any corrective. Why? It makes the most sense. Stocks like to channel. What can I say.

The PINK option. The worst option for the bears and the best for the bulls, but the least probable IMO. We'll know the answer to this one sooner than the others (duh?). See the pink arrow at the intersection of the 38% fib, near support and where the potential dashed pink lower channel line intersect? That's the first possible spot that screams at me.So we'll call 245 target 1.

The GRAY option. This one is pretty good for a bear but not a perma bear. I actually like this one a lot. In late February I have a dashed vertical blue line. This line intersects both retracement zones (51 to 62%) and the potential channel lines. So, the gray option makes for a NT bottom in late February near 236. I like this one a lot because of the position of the 200ma (currently 233).

(IF that is a descending triangle forming now AND it breaks down, it measures near perfectly to the 214 38% blue fib - No, I do not see a H&S - if I did it would measure the same. Just thought I would throw that in there.)

The BLUE option. This is best case scenario for the perma bears AT THIS TIME (that is not saying I can't see worse). Late February at the 176 level. I really like this cause of the trend in RSI and where the upper RSI TL plays out in relation to it bottoming (yellow box). This gives us a long slow death. there is good support in the 175 to 195 level as well.

Can it get beyond the blue target? Sure it can, but I am not going there till we see the form of the fall. the targets are all hypothetical as far as time goes, but as for price I like them all. IMO the sector is hanging from a cliff by one hand and someone is slowly lifting one finger at a time from the death grip it has on the ledge. If it does channel, good for me. If not those are still some valid TL's that may come into play so keep an eye out for them.

Want to learn more about Climategate and what's happening in Copenhagen regarding your future RIGHT NOW? Please see this - http://scienceandpublicpolicy.org/ I will be blogging on it this week. Tremendously important IMO.

GL out there and happy holidays.

Morning Post

Boy MW looks like shit. WTF was she doing last night? Sorry I was not there. Her best point, "The component parts do not add up." They don't now and they won't later.Or," A 2010 prediction that is so disturbing on so many levels." I'm guessing this new Comcastic relationship and the break from GE is allowing the truth to be told.

Let's open with the one chart you need to see. This is so simple it is stupid - Guess which component in this chart has not reacted, but needs to to catch up with all the others? Something good is about to happen for the bears I believe.

E-minis closed below lower P2 support on the daily chart which is a big deal. 1082 is support. For detailed support of the SPX look at the post I did yesterday afternoon which lists 'em all.

76.58 is the next big hurdle for DXY. The target for the yellow triangle breakout is 77.05. NOW, do not doscount the possibility of a backtest. Things do not always go straight up or down (well- this was the dollar - sorry). Just be warned of a possible backtest.

 
Gold 60m looks to have put in a consolidation wave under the gray TL that I adjusted up yesterday and is gearing up for another move south. If this is an ABC corrective and B is complete I have a target of 1080. that may be a bit low given the floor that has been set in price. That yellow line is the 38% fib is at 1092. I'm not taking my eye off of the 1035 level. For you EWTers, this really does not fit a 5 wave move of any sort unless you can chop that first move south into a 1 and 3. Bottom line it that it has set a lower low and now we need a lower high.

Oil had a good fall yesterday and really broke down taking out the lower support of the gray and green channel. I hbacked this chart out so you can see the TL from the bottom at 33.55 was taken out. Next stop is the lower TL of the yellow channel near $70. I'll do a more detailed post on this with full analysis later this morning.

Natgas is consolidating between the yellow support and the 5.32 price level (which will not be breached IMO).








Look at the SPX support post I did yesterday. It has lots of detail all the way down to the 867 level. I'll do more on the dollar and oil and possibly UNG today. I'm thinking something good is gonna happen for the bears today. That first chart above is pretty telling to me.

GL out there.

Is There Any Good News?

Trick question, it depends on if you are a bull or a bear. If you want to hear something good go back to watching CNBS or turn on CNN where you'll get some sort of sanitized feed that will keep you in the dark forever. If you want to hear me gloat in the impending doom of our democracy or hear me bash on a politician du jour, please read on.

I was going to try to string these few Zerohedge posts into a clever scentance, but could not pull it off. You 'll get the gist of what I was going to try to get across as Most Recent Insider Selling to Buying Ratio: 82:1 as Consumer Credit Contracts For 9th Straight Month, Non-Revolving Credit Increases, but since Cash is King  there is no need to worry about Fried Calamari? for dinner. Wait a minute - I did make a sentence out of it. Caution, that may become some sort of new game for Shanky to play with himself. I think Marla may appreciate that (the sentence - not the playing thingy).

Mish has a good one from the most corrupt city in the USA. We all know Chcago is a really screwed up place that has produced a litany of characters that leave much to be desired (most recently our president). So what do they do to balance their budget? Chicago Cannibalization: Mayor Daley's Budget Eats 75% of a 75 Year rainy Day fund in One Year You just have to read this one to believe it. Creative financing at it's finest. And some wonder why I am such a perma bear? Cities, states, federal governments are using every available crutch right now without regard to the future consequences to solve a variety of funding issues. You talk about a recipe for disaster. The dig drop, deflation, depression is coming folks. It is just a matter of time.

Since we're dissing local governments (like shooting fish in a barrel these days) why don't we try But Wait, How About The States? from Dennninger. "Things are probably worse than most people believe," state Sen. Mike Doherty told me the other day. "It’s questionable if we’ll even be able to meet payroll in a few weeks." Oh kay, so payroll may be a problem as well as some possible bond default issues (nothing to worry about- really ;-)). Don't say they did not tell you so and don't say I did not tell you so. It is only a matter of time and the ammunition used in reflation project 2009 is empty.

naked capitalism has a must read in Newsweek: Goldman Supplied 9 Pages of Proposed Changes to Derivatives Legislation. This one is a classic, "Newsweek’s “Why is Barney Frank So Effing Mad?” is supposedly about the Congressman from Fidelity but is really about how the banksters are succeeding in neutering financial reform. One Congressional staffer has told me that everyone involved recognizes the measures don’t go far enough, but feel they can’t do much more (Congress can step out only so far ahead of the Executive, and this one clearly is in no mood to take a more aggressive stand)."  You'll laugh and cry your way thru a great article that is filled with suspence (just how much of the recent legislation did GS actually write) and humor regarding the neuterization of everything in Washington. This one might actually make you scream.

The Pragmatic capitalist brings you 10 REASONS THE EQUITY RALLY IS OVER from Rosie. BUT, BUT, BUT - TPC has this to say, "In other words, we remain in a “beat and raise” world.  That is unchanged for now and will ultimately be the reason why David’s 10 reasons are wrong and why the unwavering bear will be wrong again about this market top…." I'll have to go comment on this one later on TPC's site. They do great work and maybe I need some clarification to his statement. I can actually go for a little more manipulated upside, but his "improvement in corporate margins" reasoning has me a bit miffed.

So, where do you stand? Washington's Blog has 79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job. "Trust will not be restored until Bernanke and Geithner are replaced with people whose loyalty is to the American public and small businesses, rather than the Wall Street giants, and whose track record demonstrates that they will put the American people and entire economy as a whole - rather than the big boys - first."  I could not have said it better and the sooner we get these self serving bastards out of their posts the better off we will be. Oh, did you read where Kashkari is going to work? Now the Kashkari Puff Piece Makes Perfect Sense

The Big Picture has a nice post on Who Wins When the US Dollar Falls? that you should read.

That is enough for now. Yet another day without any good news (unless you want to count TPC's statement that I am ignoring). Market is very toppy now and teetering, but that is usually when the PPT/reinflation team is at their best. I am very suspicious of them letting the dollar breathe a little and then using it's powers to assist in halting any major down turns that may be imminent (note the market fell today 15min before the dollar reacted)

GL out there and happy holidays.

Look At The Daily SPX And All That Support

Here is the glaring thing that stands out to me and says something has got to give very soon. The Bollinger band width and the continuing consolidation. 

The Bollinger Bands operate as a good wrapper confining the markets moves to the specific range. Stockcharts defines Bollinger Bands: An indicator that allows users to compare volatility and relative price levels over a period of time. It consists of three bands designed to encompass the majority of a security's price action. Prices will often meet resistance at the upper band and support at the lower band. See ChartSchool article on Bollinger Bands.

Currently the width of the BB's on the daily chart are an extremely low 32 and dropping like thy have not in a long time. The upper BB is just now showing back up on this chart and is at 1116.97 (it stopped the market at 1119 on Friday) and the lower is at 1084.79. Now, the BB 20ma is at 1100.88 which means price is trading in a 16 point window between the upper BB and the BB 20ma. That is as narrow as I can remember.

A narrow BB is a signal that volatility should be coming soon.Unfortunately all the volatility recently associated with narrowing BB's has been to the upside. What will make this time different and cause volatility to spike down rather than up? To keep it brief (and you will see in more detail in posts to come), the dollar may have bottomed and the horrifically overbought indicators with the massive divergences to price should be to much for the market to overcome.

This top has drawn out like no other in the recent C leg run up. Most tops have averaged 7 to 9 days before any sort of correction (see blue boxes). Well, guess what? No correction this time and this top is now on its 20th day. That is unprecidented for this run off of the 667 bottom. The point of recognition is near as the bulls and bears werstle in this low volume arena. The shorts have all been squeezed and the bulls are out of buying power (and upgrades, liquidity, and all other sorts of tricks). I believe you are witnessing a top being set. The only other option is this is a Rectangle Continuation pattern. Which I absolutely hate the idea of, but it is worth mentioning as any break to the upside of any significance (as unbelievable and undeserved as it would be) could lead to much higher highs no matter what the indicators say.

Lets look at all that support in detail since I think we're gonna drop soon.

BB20ma - 1100

Lower BB10848

38% fib off of 1030 low - 1085

50ma - 1079

50 to 62% fibs off of 1030 low - 1074-1064

Lower Trendline - 1055ish

38% fib off of 869 low - 1023

gap - 1018

50 to 62% fib off of 869 low - 994 - 964

The previous lowas at 1030/1020/991/979

Gap 910

Last major low 869

That is a whole lot of junk to get thru so calling places to stop may be difficult with any precision cause there will be so many options. When it get's turned I'll keep you updated on important targets. The main thing to take from this post is the width of the BB's. Keep a close eye on them.

GL and happy holidays!

Morning Post

Gold is getting pummeled and the dollar has broken out and the minis are flat for the most part. The MOST IMPORTANT thing this week is the climate summit in Copenhagen. If you have not read or heard of Climategate, please read up on it and learn about the fraud that Al Gore and the climate alarmists are trying to push on you. This could be the most important meeting regarding our future on how we are taxed, governed and controlled by the UN or whatever global consulate they decide to submit to. I'm not kidding.Look, I'm all about protecting the planet and recycling, but not at the expense of fraud and manipulation all in the name of power and greed.

Gold /GC gold futures 60m - Well it paused at the lower tendline for a while, but it could not hold it. I'll have to do a more detailed post on gold later as a picture does not tell the whole story. The many issues surrounding this trade need to be brought into discussion. Bottom line is that I believe a floor has been set around 1100 and that is near the .38 fib retracement (yellow line) and support.

/ES 60m - Same old boring chart. Nothing to see here - move along. Pretty much range bound (two red lines) outside the top of the bear market top trendline (light blue) riding inside the P2 bull market rising wedge (dark blue). So, 1090 to 1080 is great support now and until that gives way, you can keep your shorts in your back pocket.

/NG 60m - Trendline support off of the 2.41 low (this is /ng not UNG) is holding nocely and it appears to have broken out of the gray diagonal. Indicators are mixed and the stoppage at the trendline was a surprise to me. That resistance line at 5.20 has been the ceiling going back to the beginning of '09. If that gives way there could be a significant jump, but until it does, don't get too excited.

10yr Treasury /ZN 60m - Channeling down with a crippling blow on Friday morning. It has tried to recover some since then, but the trend is down and should remain that way. The 120 level was a good resistance point to get rejected at. 116 should be good support.With the talks of impending rate hikes, this puppy may get busy.

Oil /CL oil futures daily - I had to back it out so you can see the larger form and channel. Trading in the green channel now and at the lower TL of the gray channel. Now is the time we find out if that yellow channel means anything. The indicators could fall some more. With the dollar apparently heading up, the yellow channel may be it as oil continues to roll over (that is what I think it is doing).

/DXY daily - Backing it out again so you can see the breakout. Taking out 76.15 was a big deal as that should have been some solid LT resistance. So, it is out of the pink dominant wedge and any corresponding resistance lines with the indicators headed north. A more detailed post is coming on the dollar and what's happening with it.Art mentioned a treldline breakout this AM of the dollar on CNBS - I believe it has already broken out as you can see.





The moves in most of these indicators are significant and a Morning Post will not do them justice. things are moving and fast now (all except for the major indexes which should follow soon. I'll be doing more detailed posts on all of the above today and the rest of the week. The markets are setting up for next year and the trends may be changing.

GL and happy holidays.

The Trends And The E-minis

Just a simple post with two simple charts. It does not take much to explain where we are right now. For you seasoned folks this is a nothing post, but for thsoe of you that want to understand where we are read on.

  
/ES daily 1 year - Here is the P2 bull market rising wedge. A few things to notice. First, The red P2 support line. Next, the Pink Bear Market top trendline. Next the sky (Carolina) blue New lower support line. Next the 50ma and its relation to price. Finally the negative divergence in the RSI indicator.

 /ES daily short term - Same chart as above, but covering just the last 4 months. OK, zooming in you can see the interaction with all of the support (50ma and red P2 support especially) even better. I have added what I think is possibly the final wedge of the bull market run (gray wedge). One more touch of the top line or a slight throwover should do it. When the red line and the 50ma go that should be it. One word of caution to the bears, look out for the backtest of the pink bear market top trendline could fool some. It is just something to keep an eye on.


GL out there this week. Hopefully we'll get some good action. This sideways crap is driving me nuts. I'll have more detailed stuff this week. At this time everything is calm and no red flags are flying.

Happy holidays!

Check Gold Out

60m /GC Gold Futures - Just an interesting spot. Based on the daily indicators just getting started breaking down, Looks like it will eventually get thru this support. 1050 to 1009 is the retracement zone for gold.

Now back that out to a daily chart and you can get a feel for the spike from 1000 to 1227. Notice the overbought indicators in conjunction with the price climb. Yellow box is the retracement zone and the yellow line is the .38% rtracement. There is an interesting intersection on 12/28 at 1092 of the .38% fib and the green trendline.

Now look at gold in a weekly chart. S Sto bear cross and that topping of RSI at 90 are something. Also pick up how the lower blue trendline runs thru the current retracement zone box (yellow) around 1032. The increase in volume should be looked at thru all three time frames in the charts. That is some massive sell volume today. Note: I really don't take gaps into account cause there are so many.

Looking At The BB's And The SPX

Overbought? Who cares. We're having a party dude. ROCK ON DUDE!

Just thought I would throw this out there as a caution signal for the bulls and bears (yes, I said both). You would think this trend would come to an end sometime, but as long as the roulette table keep landing on red you ride the trend.

This analysis focuses on the Bollinger Bands and their interaction with price. Do you see a trend? See the red circles? Every time the BB has dipped to price a breakout has occurred. Some more than others, but every time on this recent run up this set up has happened there has been some sort of a rally. That is a bull cross in the overbought S Sto. The one thing that is different in this situation is there is now an apparently established upper trendline. The width of the daily BB's is extremely narrow (>43). Narrow BB's indicate impending volatility of some sort. Given the prior trends and the Opex Chart I posted this morning are we set for some more undeserved upside or does it tank from here. Sorry, I can't make the call. Just too tough to see and the indicators are not any help at this time.

Putting all the pieces together is getting tougher for NT trading as the past two weeks have been some sort of a mess as apparent bottoms and tops of some sort are being set. 1121 is just around the corner, the upper range of my original 1050 to 1121 top call. Be patient and let the trade come to you.

GL trading.

Morning Post

Nice 10pt spike in the minis in one minute. Let's see what it does from here. The dollar spiked as well. Gold tried to spike with them for some strange reason, but has since given back all of it's move. Oil futures spikes 1.25 on the news as should be expected. The 10yr treasury tanked. Is this the beginning of the dislocation of the markets from the dollar trade?

I am VERY PLEASED that CNBS is warning that this is "only one month" and that they have not begun parading in Times Square. That is quite a change from what you would have heard from the GE days. I'll speculate that December will be OK as well on the jobs front and January or February will be the next month that ques reality.

E-mini 60m - You can see the spike making up all the ground lost late yesterday. The divergences to price on the dailys are still impressive and the weeklys remain overbought. the weekly RSI challenging and cracking above its RSI divergence line should bother the bears. It can cross it and set a higher high and still maintain the divergence, but not by much.

DXY 60m - I'm not sure what to make of this chart (maybe Johnny from Airplane should help me - a Brrroach?) Looks like a bottoming process with divergences on the weeklys that should cause the turn. Let's pay attention to the dislocation from here as this may allow the dollar to strengthen with the market. What would that do? Allow them some room for a weakening dollar to support the market if trouble were to come on down the road.

Gold 60m - That lower trendline is around 1155. 1181 to 1170 is the fib retracement area for the last move low to high. There is support and a gap at 1133. If fear goes away for some time my buying window may open.

Oil 60m - Not sure if that is a IH&S or not with the H at 72.39. That would make an 86ish target. Oil is gave back half its spike from this morning.









After the tough retail numbers this past week, and given the tremendous financial issues I would caution you not to get caught up in this "good news". Sure, the markets can keep climbing, but reality will have to set in sooner or later. I have cautioned about and been scoffed at for even mentioning SPX 1210 targets. I have constantly warned that the manipulators are in charge of the markets and that it will take something "external" out of their control to rip the market away from "them".

Remember this cycle chart from the last opex?

And this weekly chart? (better viewed HERE)

Let's be patient and keep putting the pieces together. I'll update everything this weekend. take a peek at ENER and FSLR and WFR.

Whutz In The Newz?

Jobs report leaked by White house? LOL, now that's funny, but I don't put anything past this administration. Maybe they wanted to test the waters to see what kind of withdrawal they had to make for the PPT in the am. Did the White House leak Friday's employment report? Obama has before. 


Mish has a doozy in Service Sector ISM Back In Contraction; Stimulus Fades Already - "Not only are there no pavement fairies, there are no fairies of any kind. The idea that Keynesian work projects can stimulate the economy back to a lasting recovery is loony. Japan proved that for two decades, but Keynesian clowns still insist it's just a matter of throwing more money around until something good happens. Nothing good happened in Japan from Quantitative Easing or Keynesian stimulus efforts and nothing good will happen in the US from them either. The problem is debt and the cure is paying off that debt, not going deeper into it. In the meantime prepare for the double-dip or an economic flatline at best because that is how the signs are pointing." I'm gonna keep on hammering home this point. We are in deep shit and no one seems to really notice (or at least want to admit it). Maybe the reincarnation of a Comcastic CNBS will help the masses get back up to speed?

Both Zero Hede and Denninger have this one covered, so since we all read ZH, I thought I'd give Karl the nod on the post here. Here It Comes... (Sovereign Treasury Sales) "If Japan starts selling in size rates on the long end will go materially higher.  This will whack the daylights out of the cash price for these bonds.  Who else has a lot of these things?  China. Stampede risk here?  Yep. Danger to our government's ability to finance its profligate spending? Uh huh." This is a big deal especially with the Fed testing the repo waters. Can you say double whammy? do you blame Japan? I'm surprised that we have not seen more of this already (that we are at least aware of). Taking liquidity (the life blood) out of the markets and treasury sales at the same time would be like removing the feeding tube. Not good.

Leave it to TD and team at the almighty Zero Hedge to expose the meaningful. The Untold Story - Emergency Unemployment Compensation Claims Surge By 265k In One Week  - "In light of this massive divergence in jobless trends, an eager Kool Aid drinking world is expecting Goldman's Jan Hatzius to provide a forecast (with at least 10 significant digit precision) ahead of tomorrow's NFP number. Jan, don't let the Goldman prop trading desk down!!!"

The Pragmatic Capitalist has AN INTERVIEW WITH A COMMERCIAL REAL ESTATE INSIDER  - "We owe foreigners $50 trillion. The government wants to sink the dollar so that we’ll owe $25 trillion.. Longer term, it’s better to have a strong currency. But as a debtor nation, we want the dollar weak. In any event we’ll eventually be owned by foreigners. But what does Obama care if he sells out the country? The leaders are international, and they take care of themselves. Once you’re in this vicious cycle, you’re in it. The nature of the information is a problem once you’re so weak." That sums it up nicely. Can you say End Game? This was a good read coutesy of Phil's Stock World.

I am not ignoring the Bernanke hearings today. I believe that would be overkill reporting it here. What was not overkill was his hearing. IMO he got off real easy today. I believe that if some of the Senators would show some real emotion the public would love it and that would do us all some good. 

Don't forget to keep an eye on the National Debt Clock.

Tomorrow morning should be interesting. If 1080 in the minis gives way get your hard hats out. I'll do a Look Into The Futures post later tonight if anything is cooking.

Have a great holiday season.

Morning Post

No comment on the jobs report or the way CNBS covers it. Markets remain at the top end of their trading range they have been stuck in for a few weeks. Indicators remain overbought. IMO upside potential is limited, but that is not saying it cant go to 1121 or 1135.

/ES 60m - Virtually no reaction to the jobs report contrary to whatever chart CNBS had on the screen that showed a huge spike after the announcement. It was an S&P futures chart. Maybe it was in 133 ticks or something, but it sure was a misleading graphic. Maybe someone will pick up on that and bust them. Blue P2 wedge dominates the range. Possible gray channel. Green line is lower support from the last few major bottoms.

SPX weekly -  The reason I show this chart is that the divergence line on the weekly RSI is cracking. Bears looking for a top can not lose that divergence. There is room for it to go over a little and still keep the divergence, but not much.

DXY - Looks like a triangle to me over hte last 5 days. Could be a possible channel down (dashed gray). Pink lines are the major bull market falling wedge playing out. The series of lower highs and that upper trendline need to be busted.

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Gold /GC 60m - The top trendline is clear. What this chart does not show are the weekly and daily indicators that are extremely overbought.If you look at the chart on a weekly tine frame it looks like the left side of Mount Everest.

Frozen Concentrated OJ daily - Don't laugh. I promise you will not be laughing after looking at the chart. So who cares the price of FCOJ has DOUBLED since march. You get a feeling they are not telling you the whole story about inflation and what the Fed needs to do with rates? I'm gonna start throwing in a few like this from time to time.









I'm gonna do a UNG post today  and update a bunch of charts. Folks, it is flat out boring and most likely will remain that way thru the end of the year. Sorry. My gut is that we slowly grind price up thru late december and then all bets are off.

GL trading.