Monday, January 25, 2010

Morning Post

Financial Terrorism? That is what Denninger is calling it and I agree with his assessment 100%. In Financial Terrorism? You Decide some great questions are asked."Is not a threat to destroy financial markets along with acting intentionally and directly opposite what you claim needs to happen an act of financial terrorism?" is one of them. Please read this if you have not. Zero Hedge covers it here - Chasing Red Liquidity Herrings.

The reason I open with this is because it supports my theory that the markets are manipulated and that the Creature From Jekyll Island is running the show (with a little help from their evil twin GS). How can I continue to call for higher highs in the face of all of this mess? It is simple, the GAME IS RIGGED. They are playing Russian Financial Roulette with our financial future. These meat heads play the game backwards though. They start with a fully loaded clip work backwards. It is only a matter of time before they actually pull the trigger. The Brown election actually took a round out of the clip, so at least there is one empty chamber.

 Don't forget we are still in earnings season. Lots of companies report this week. Earnings calendar HERE. The Barron's Economic Announcement Calendar is HERE.

On to the charts. Impressive move south last week that you had to be on Mars to have missed. Looking at the daily SPX, some of the indicators here have not reached oversold status yet. The futures indicate they won't get there either (E-mini up 7 at this time). This run has blown out the lower Bollinger Band, crushed the 50 ma and closed two gaps. that is a lot in such short a time. It has also completed a 50% retracement of the last run up off of the 1031 low. I would like to point out that while sellers greatly outnumbered buyers last week, the volume was not all that impressive.

SPX 60m - This chart on the other hand is dramatically oversold and to me does the best job of showing how the recent trends in price swings was crushed. 1087 to 1090 is a strong support area. At this time I'm not sure what wave structure is. Is this a 2 or a 4 is the big question. I think it is a 4. Given the length of 1 I do not expect much more weakness for some time to come. Think about it. 4 up, a short 5 down,  then you have to trace out an ABC corrective, so it may get dull again for a week. The Bernanke confirmation vote may keep a bunch on the sidelines. Let's look for a retrace to the 1111 to 1115 range then we'll go from there. I have not called a top yet. At this time I expect the 1131 range for the to of 2 if we are in P3.

Gold- looks oversold on the indicators and may be consolidating at this support level. This could be a C up here.
Dollar - Set a new NT high last week. This may be a 2 of a 3. I will be long again large for the 3 of 3.
Oil - Oversold and near a lower support/channel line. I'd look for a pop back to 77/80.
Natgas - Still traveling up the support line. Indicators have divergences to price which is not good. Good support at 5.32.

GL out there and take care.