Thursday, September 16, 2010

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

Manipulation. Are there any questions? Are they running out of bullets? Well, other than controlling the markets, rampant rumors, accounting fraud (which may be getting questioned) and the largest printing operation in the universe they have nothing (I hope you got the joke there).

Economic Calendar - Reaction to jobs data was muted after a brief spike. Philly Fed and Timmaayyy at 10 and Natgas at 10:30.

This has been an enormously frustrating month for traders and prognosticators like me. Fortunately I warned against the lack of economic data from the middle of last week till today, POMO and the missing 5th wave on the RUT and all along have not fallen for the myriad of divergences that have shown up on the 30 and 60m charts. I have also warned that the daily MACD was not ready and have been looking for the hist to put in a negative candle to possibly mark the top. We got that yesterday, and the data stream had been turned back on. The holiday may be over.

SPX 5m -  See the two gray rectangles? Miserable trading as the market appears to be trying to roll over. You wonder why I am pulling my hair out on Shanky's Dark Side trying to call this mess daily? Here is the reason.
So, what now? Well, there are still two very broad scenarios. POMO ramp jobs continue and the market continues it gravity defying levitation act into the election or 940 happens pretty quickly (thus my continuing call for either the ABC up or the ending top here). What the market must have is a catalyst (this is now a growing consensus opinion). Not the LEH event we've all been looking for, not yet, but something that will put us on the path to that event. We need a bank in the EU to go under. Everything is in place but the sellers. This is not a time when you can come out of the gates and make a definitive call.

SPX 60m - I adjusted all the lower diagonals on the wedges to include the fall yesterday. Where these lines should be is still anyone's guess. It could have broken down yesterday. The upper diagonal could be in question as well and this point in the wedge could be an overthrow. No matter how you draw it, it is wedging and price is consolidating under resistance at 31. The last rising wedge (small red) is still actually in play where both diagonals from that formation remained in play yesterday.The divergences and cracking (black) indicator trend/support lines combined with the wedge formation say we're either there or will be very very soon.

Bottom line is do POMO ramps continue? The weeklys have rising indicators that don't have far to go to get to the top lines where they can turn and the candles there are miserable. The dailys have all the topping criteria except for the confirming MACD bear cross. I do caution that they can embed and still have some room to run to extremes as only the minimums have been met. SPXA50 is finally over 400 (a major signal for me that a top can now happen). Price has still not hit the August highs on SPX, DOW, NAS or rut (SPX and NAS are very close).

I have also been preaching form of the fall. We need impulsive selling to get this bad boy moving south. We have had none of that. I think we top near here if the top is not in. I think we'll know at 10:00 with Geitner and the Philly Fed what we need to do. What happens from here? It all depends on form. If it is massively impulsive, then bears will be happy. If not then we only have a corrective and I'm afraid more upside (C wave) is to come. Without an event of some sort the markets will not do a darn thing. Sellers and volume have been non existent.

Call A) top near here if the top is not in and B wave to the 92 to 80 range then a run to the final top (ABC to the top of 2 of 1 of P3).

Call B) top near here and the ass falls out and we get to 940 within a month max (this is 2 of 3 of P3)

GL and thanks for the views.