Friday, September 4, 2009

Morning Post - Flat To Down As 5 Churns Out

Good morning. Holiday weekend, more bank failures expected and the onslaught of college football. I could not think of a better combination.

On to the markets. Simply amazing the rebound from the glorious jobs number. /ES went from 1007 to 1000 in a minute and three minutes later it is at 1009. After all of the rumors this week about banks and the relevant fact that we can assume at least one bank in Georgia should bite the dust this afternoon, I am a little leery of the possibilities of something nasty happening after the close. Is the climb in gold someone applying some sunscreen to their portfolio?

Daily SPX chart - RSI bouncing off of 50, but Full and Slow Sto still in nose dive. MACD still rolling over but Histogram appears to be losing some steam and there is a trendline to cross right under the signal line. ADX whipsawed yesterday. The bears should not like the RSI and MACD hist moves as they possibly foretell of a pause in the fall. COMP, DOW and SPX are all sitting on various trendlines of what I believe to be significant. Mainly COMP as it has made it to the lower wedge support line.

60m SPX Chart - - You can see the channel down to back test the last triangle. All the indicators are green. They can embed, but given the more than 61.8% retracement of the run from 974 to 1039 maybe the dip is being bought up by the bots.

Here is the 60m /ESU( chart from this morning. Three things to notice. A) The channel that has formed. B) The indicators in relation to the top trendline say toppy. C) A 38.2% retracement of the fall has been made. This move now qualifies and looks like a completed ABC for a 4th wave corrective up. If the fall from 1038 to 1012 = 26 and the /ES sops at 1010 then you get a target for 5 down at 984. Very reasonable I think. This is, of course, that the counts are right. Notice the support from the 75% line (red on the bottom) of the GSEC channel.

Just like the reaction to the jobs number, I am confused. Sorry, sure you do not want to hear that at this stage of the post, but you have to ask the questions how, why and WTF about the reaction to another dreadful employment number? Bizzaro shit if you ask me. TARP money in play at GS or did some kid just fat finger a trade? I am going to stick with my call for a basically flat to down day today given where the indicators are as 4 churns out and 5 should begin. If she falls I like 984. I would be surprised if it climbs much at all looking at 1015 as the peak of the range if it should. I will speculate that this afternoon may be interesting given the rumors this week.

GL trading.

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