Thursday, September 2, 2010

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

Lots and lots of action. Which way will the wind blow these fragile markets today? From what I see this range bound churn is doing nothing but crating confusion and further dividing the bulls and bears. Just like the 52wk high/low and other discrepancies confirming the Hindenburg Omen (for like the 6th time), so are the calls of all the chartists. There are near term calls from 940 to 1140 with a lot like me looking both up and down simply waiting on clarity and trend to return.

With Bernanke speaking at 9:00 there is no telling what knee-jerk reaction the markets will have. Normally I would sat the predictive powers of TA would lead us to be able to predict the result of his speech. These days, my confidence wanes in any predictive power of the charts beyond a 30m time frame.

Economic Calendar - Jobless Claims Come At 472K On Expectations Of 475K, Previous At 473K, Non Farm Productivity Misses Expectations Factory and home sales at 10 and natgas at 10:30. It all goes down at 8:30 tomorrow morning with employment report (which I think is worthless on two fronts 1) it is manipulated as hell and 2) until we seriously crack the 500k barrier on a weekly basis it will be a non event (remember when 300k was a really big deal?).

SPX 60m - The black wedge I have been warning about for a while appears to have ended in a non typical triple bottom at 1040 support. So, was that bottom B or 1? Will this correct to the 1100 level or run to another triple top near 1130?
SPX Daily - Decisively bullish if you ask me. There was a time when this chart would have had me long as all get out and screaming for the bears to run for cover. Sadly given the economic conditions and the fact that the markets are rigged I can not be as bold with my calls these days. So, let's just say it looks like a buy here, but I'm not promising anything. Other than the RSI5 coming up on that downtrend line and RSI14 at the 50 line it looks like the potential MACD bull cross and climbing hist could lead us much higher.
Apparently the VIX and SPX are busted, cause the move in the bond markets is no longer translating to equities. Folks, the VIX and SPX should be moving in OPPOSITE directions. One of two things is about to happen 1) the divergence of SPX price to the VIX signals the SPX is about to skyrocket or the SPX will correct to the TNX where it should be and the VIX goes bananas. This chart to me shows the dislocation with reality the market are in right now. Where should price be based on TNX? Sub 900 for sure. You are witnessing a supported manipulated market that is untradeable for the most part here.

SPX 30m - Here is a better view of the wedge and the breakout. Lets look to the 1100 level and see what happens there. If this is a 3 the bears are in good shape at the next top. If it is a 5 we could be looking as high as 1130 to 40.
So, I'll be watching the 30m chart for a corrective here this morning and then possible strengthening. The jobs data is the wild card, and if the Fed starts screwing with the bonds again and forcing the trade back into the markets the bears could be in trouble for a while.
GL out there!