Friday, September 11, 2009

Morning Post

As the channel churns away! Will it end soon? Absofreakinglutely it will! But this is not the top just yet IMO. It should be as simple as watching for the /ESU9 channel to break down.

SPX Daily Chart - I blew this one up last night and reworked it. You'll see the new upper channel in blue that I believe has the market captive along with the upper BB and they will keep it that way for some time to come. Upside from here at this time is limited (depending on what GS and HAL 9000 want to do of course).

SPX 60m Chart - Indicators severely over bought here with several nice divergences. This chart shows the larger channel that had developed as the roll over of the market continues as the climb to infinity and beyond is running out of steam. You will see the new market top trendline above. IMO there is not much more room to climb.

NASDAQ Daily Chart - Yes, I chart more than the SPX, I just share the others with you when necessary. This chart really shows the consolidation in the top of the wedge well. The bear market top trendline is right above price right now. What I'd like to see here is the possibility of the final divergence in RSI playing out very soon given the severe rise in price, low volume and the positions of several of the indicators. I am not buying the RSI break of the downtrend line. There is resistance above at the 50% retrace point and a resistance line near 2167.

/ESU9 - Churning Channel grinding the bears into permadust. Are all the bears dead? Volume would say every investor is dead (see the blue box). I think JPS and GS played toss with SPY yesterday as the rest of the world took the day off. The /ESU9 is trading at the larger channel 50% line which should add some resistance to the move up.

SPX fib for the retracement of this climb are 1023, 1017 and 1011. I am getting tired of moving fibs up so it better turn soon, and I think it will. Runs like these have to have a pressure release and that valve will pop soon. 1018 to 1026 on the /ES would be a good starting point. I do not see SPX going over the upper channel line or 1050. The daily indicators still look strong, so do not be surprised to see a little more of this fundamentalless, TARP driven, BS rally. Next week the bears get revenge (and more top callers come out).

Please remember the victims and their families of 9/11 today. I believe the 9/11 Commission Report was crap, and I support further investigation into the events surrounding 9/11.

GL trading.

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