Thursday, November 18, 2010

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

With IRE behind us (for now) and GM upon us the markets appear to be pleased. The best news of all was the shut down of HR 3808 late yesterday. Many thanks to for all their  efforts to rally the troops.

Economic Calendar -  Leading indicators and Philly Fed at 10 and NG at 10:30. Bond sales compressed and a slew of Fed speak. Nothing tomorrow.  Jobs info from this morning on ZH HERE. Please ALWAYS check the calendar.

Pivot Points -

POMO Schedule -  The next 5 days are POMO days. (really we'll most likely have POMO from now to infinity or till the systemic failure that is destined to come.) 

Shanky's Dark Side - Where I call all the intraday action and throw out tons of charts.

OK, so where do we go from here. That is a tough question. Basically the TAists are divided. Top in, top not in is all the rage on discussion boards now. The more I look at the charts (esp the one posted below) I am finding it hard not to believe the top has not been set. I am not biting though. I have to believe in POMO and the manipulative forces of the Fed. EOY prints, bonuses and Xmas must be saved for the psyche of the few investors left in the markets.

Dollar is in a precarious spot having held and reversed off LT resistance, but is now at recent support, thus forming a tight range that it may consolidate in for a day or two leaving us all in limbo going into the weekend.

I added another top to this chart to emphasize things a bit. With the dollar at resistance and possibly turning to fall again you have to ask do we get a disconnect of the inverse relationship with SPX as seen during the last great fall in June.

SPX 60m - I have been pointing to the resistance diagonals on these indicators for a few days now and to the 20ema on the RSI14. When these crack a reversal of some sort should be in play. Well, here we are. I have been calling for a pop to the 92 range then one last fall to complete this portion of the move down. My 93, 87 and 77 targets were all met. I have been speculating on more weakness, but have not called anything below 77. Based on the daily chart above more weakness should be expected, but it can not be promised in the face of POMO and manipulation.
How is your favorite index trading compared to the others?
So where do we go. My call has been for one more pop then drop. this was screwed up a bit when price fell to 87 and then did not pop but paused for 45min and then fell to my big target of 77. I also expected the down move to end going into today with the GM IPO being the catalyst for some sort of turn. This move will look an awful lot like a 3 and might signal that a stronger bottom has been set. At this point I can't make a call on a trend change. Let's see how this corrective plays out and if some of the POMO funds can be diverted from the muni market back to equities. Patience here will pay off. Now is not the time to be jumping on one side or the other.

As for GM - Pop-n-Drop is what I am expecting. I will not be shorting it today, but sooner than later.