Thursday, February 25, 2010

Morning Post

Good morning class! I trust you all are ready for another fine day of HFT, algo driven, low volume ramp jobs. Today I bring you a study from contributor SellPuts at ZH called Guest Post: Is The SPY Getting A "Jump" At Key Levels From A Quant Algo? Please read this and understand it well. You will be tested on it at 3:30 every day the market is open. 

Minis down 7 as the durable goods number was not so hot. Jobs? I totally missed it on CNBS. Just another non-event you do not need to be concerned with. (They jumped of course)

Economic Calendar - Bernanke at 9:00 and NatGas at 10:30. 

Earnings Calendar - Nothing jumps out at me there. 

Emini 60m - Time for me to either eat my words or not. I said if the gray channel and green support gave way look out. Looks like a break and a backtest to me. I hate any call down in this market (as you shorties can well understand). Was that B of the ABC corrective I am looking for? Let's throw out a target of 1083 or the support line at 1080 and see what that brings. The fibs are 1085, 1076 and 1068 so my target is just between the 38 and 50% fib lines. If the minis can get one more lower low, I'd really like the call. If the Daily indicator set up is right and if RSI can crack the 50 line this fall may have some more meat. This could be the decision point of whether 2 of 1 of 3 has topped or not. I doubt it has cause the market is to rigged. You permabears need to remain patient. Sorry. (9:22 edit - minis got lower low)
SPX Weekly - (click on it for better view or go see it at my chartbook) I don't like the wiggles in the indicators. As you can see I have charted numerous possibilities. At this time I have temporarily let go of the 1214 top pipe dream that looked to be such a nice set up. The larger rising wedge could very well still be in play. Look, this market is all they have left between them and total anarchy, so I expect the GS HFT algos to front run and continue to suck as much money front running the system as possible and for the primary dealers and the treasury to continue to play the monetization shell game. As I have speculated all along - it will take something "external" and "out of their control" to rest the market away from the bots. I have wanted a reset of the lower TL to allow for more time and room to run north since early this summer. Is this the reset or is this the breakdown? Do the monthlys need to finish their march to being overbought? That was not a very convincing correction on the weeklys. Do they need to finish the move or was that it?
Near term I'm bearish. Is this C of the 3 of the 5.3.5 I am looking for here or something even better for the bears? I hope it friggin shits all over its self cause until that happens we have no recovery. All the excess must be wrenched from the system and the sooner the better. Again, we have to see how this plays out here. The dailys are trying to roll over but but the 5 and 14 RSIs are bouncing off the 50 lines. The 30 and 60m indicators are mixed. Tough call today. Let it sort its self out. We'll get a better picture soon. Let the trend come to you. Don't force anything.

I am working on the futures now.I'm gonna do separate posts on them later. Sorry, but you'll at least get more detail.

The dumbed down version for the newbies - My initial thoughts is that this is a corrective move down (profits being taken during a run up) and there is a little downside left before another (and possibly the final) move up in the market. What we have to watch for is if this is not just a corrective and something more, like a much larger move south. Thus, I am advising patience. The indicators (the things below the chart like RSI and MACD) are not painting a clear picture tight now. I am a believer in market manipulation (the government and GS control the action with a little help from their friends) and that every up move since April has all been fraudulently concocted. So, I am advising patience to see a clear directional trend. Then pounce.