Friday, May 28, 2010

Morning Post, SPX, S&P 500, e-mini

Morning from the Florida Panhandle. For now nothing has changed, just as beautiful as ever. Wondering how long BP and the government can keep a lid on just how large the environmental damage will be excuse me, I mean how long the docile, ignorant, self absorbed American Sheeple will remain silent on this issue. With the news of a possible  Another Leak, Much Bigger, 5 to 6 Miles Away just how screwed up are things really gonna get? Looking at recent history, the sheeple have been getting financially raped by the government and the big banks for the past two+ years and have done little to combat that, so I expect the masses to continue to sit on their asses as another catastrophe spirals out of control. One simple question regarding the oil spill - why the fuck is anyone still buying BP gas anywhere in the world? Please boycott BP. There are no simple questions regarding the financial crisis.

Economic Calendar -  PI this AM slightly disapointing (LOL - likeyou can trust any of these numbers anyway?). Later Chicago PMI at 9:45 then Consumer Sentiment at 9:55.

Pivot Points -

Minis - Down to up now fading some after the PI numbers. Fought thru the 91 resistance level yesterday. The 1100 level is significant.

Charts are at a point they can literally go either way. The daily RSI cracked the resistance line that defined this downtrend. Price has taken out some resistance lines as well. Price is back over 1100. Liquidity and controlled trading are still levitating the markets. All that says up. My gut says up should be out of the question. Common sense says up should be out of the question (well, it has for at least a year now). The 30m and 60m are very toppy and the 1110 double fib gap area (second target) I have been pointing to for a while now is in sight. BUT the daily RSI cross of the resistance line is a strong buy signal (like one of my favorite ones). Are the bulls making their last stand here? Is that really an inverted H&S that broke out yesterday when 91 level was cracked? Wait a minute. Is that daily 200ma gonna smackdown price? WTF?

Here is what I am gonna recommend - Go with the flow on a daily basis right now. If it wants to run, go with it. I still like my 1020 to 1000 area a lot. Maybe this falling wedge that is developing needs a higher D point. Maybe it is not a wedge and price is retracing to backtest the last triangle BD line? Maybe it is in a channel down?  Maybe it has bottomed and this corrective is gonna be something more extensive. Maybe the holiday weekend will cause a lackluster trading day that leaves us all with even more questions.

I can promise the 30m will trigger a sell signal early today. The should provide a good short entry opp for a day trade. Will that signal the top to this move and a plunge to my final target range? Will the anticipated low volume Friday before a holiday weekend allow the bulls to step in and ramp it up even more after that 30m cycles thru today?

All are valid questions and concerns. Shanky is a notorious conservative investor and right now Shanky is saying to wait it out till the trend is clear. So you miss a day. BFD, there are plenty more to come. As a bear my main concern is that RSI cross on the daily chart. That is notoriously bullish. I'm kinda going against my religion not screaming reversal here with that signal. In other words my gut is over ruling conventional wisdom and tried and true TA. That says I'm conflicted. Not good. In these cases I back off and day trade only. I am 100% in cash now.

I'll be working today. I'll post some charts when and if appropriate. Sorry for the confusion, but I'm sure you understand. Sometimes when you have to back off and let things settle. Now, with the holiday weekend upon us, is a good time to do that. Lighten up some. Take some profits. Make sure your stops are set. Review your trades and strategies.

Memorial Day is most likely the most important day we observe. Those that fought and died for our freedom should never be forgotten. You might get a good rant out of this from me as we as a nation have most likely severely disappointed the dead. Rolling over in their graves would be an understatement.