Tuesday, June 1, 2010

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

Running late today, sorry. Hope everyone had a  great Memorial Day weekend.

So, why are the futures down 15? Fat Fingered Flash Crash, Japan Edition: Nikkei Plunge Blamed On Erroneous Sell Orders, As Panic Selling Just Does Not Exist would give you the best answer I can come up with this morning. Apparently no one cares that the global financial system is collapsing under a mountain of systemic risk and sheer weight of the liquidity pumped into the system. Oops, I failed to mention the slow death of the carry trade as well.

Economic Calendar - ISM and Construction Spending both at 10:00

Pivot Points - Know 'em.

After the plunge the minis have actually recovered 5 points and have showed little volatility. Still trading under the VWAP with the 30m and 60m chart that bottoming. Might bounce at the open to 86, but I think that will be it.

We have to see what happens after this most recent wedge/corrective breaks down this morning. How it let's go will give us clues if this will be the third of a third that everyone has been waiting on or just another leg in the corrective. I'm cautiously thinking down from here. What I don't like is how oversold everything is. Technicals all over the place need to be abused to destroy some of the buy signals I'm seeing. That is what 3rd waves do. With it all being so manipulated, that adds to the difficulty of the call. That said, let's digest what happens after the open. The wedge will crack. Will it want to backtest? Will it just tank? At this point we're looking for a lower low that 1040. If we get that look out.

I'll be back later with some more detail. Sorry this post was not any better, but wait and see the form of the fall is the name of the game. With the manipulation and the oversold conditions, I would not be surprised to see this market put a head fake on everyone here. Yet, with the global situation it could just keel on over and die. Catalysts exist everywhere. Why this market is not totally void of investors right now is beyond me. (well- not really - you see the fund managers have to have you invested or they do not get paid - so there will always be a select group of individuals foolishly investing your money.)

GL this week! I promise more and better post later on. Let me add this, patience is the name of the game here. Being impulsive investing in what you think may be a trend will get you killed. The market is in a bear market corrective. It will fall a lot more, but when is the question. Let it come to you . Do not force the issue.