Thursday, December 9, 2010

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

The best news of the morning (and for some time now other than some hackers trying to take down the establishment) is that It's Official: Ron Paul Is Head Of Monetary Policy Subcommittee. Things could get interesting in DC with Ben now having to face down his greatest (and possibly only) nemesis in DC. For those of you not following the wikileaks wars on the internet, I suggest you do on twitter via @Op_Payback for all the blow by blow. Fascinating stuff to me. Santelli just reported non-seasonally adjusted jobs numbers takes the employment figure to over 500k if I got that right. Sorry Liesman was not there to have a fit over Rick reporting that.

Our lovely friends at ZH report Arms (TRIN) Index At Most Extreme Deviation Since 1956 "With the S&P at a 52-week high, this is the most-extreme deviation in the Arms Index since 1956." For those who foolishly believe that technical indicators "indicate" anything anymore in a market in which there is just one player left, may want to be concerned - all the other times such an extreme deviation has occurred, any short-term gains were erased during the months ahead." Which fits nicely with my thoughts that after Xmas all bets are off regarding the markets and that I believe in early to mid 2011 we turn for good. 

Economic Calendar -   Please ALWAYS check the calendar. 

POMO Schedule -  Yet another POMO day today, but have no fear cause there is still over $500B to go. (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.

Pivot Points -  For what they are worth in this busted market.

Minis gapped down after the close yesterday and have obviously recovered. 1226 has gone from resistance to support. The HnS pattern that would have projected 1200 is still alive but has lost symmetry. 1235 is the top of the recent trading range. Today is similar to yesterday in that the minis were down then up. That tends to lead to an up then down market. Nothing is guaranteed of course. Just considering at trends.

The SPX rising wedge we were following yesterday that looked to be a corrective might prove to be something different. Markets are really tough to read right now with varying patterns across indexes. What jumped out at me yesterday going thru the charts was the possible triangle on SPX (black dashed) indicating more upside from here rather than a stronger corrective we were considering. I am also considering the possibility that recent trend of consolidated range bound trading may continue here (form a rectangle) as the SPX may remain in the range of 1235 to 1220 for the remainder of the year. 
Looking at the $DJUSFN's improbable rise we find first yet another busted head and shoulders pattern that have been prevalent across many indexes as the Fed POMO run ramps jeep destroying technical setups. We see busted LT resistance. We see the 61% retracement held price the break at 280 and now just above there is the resistance diagonal and that 280 level as well. Indicators are overbought.
 SPX daily - Possible divergences being set. Not sure what this chart will look like as blogger is not cooperating at all. Bottom line is that it remains overbought but as seen in the past POMO can drive this as far as they want to.

So, we're looking at a possible breakout today. Would be some sort of 5th wave or the second 2 of a 1,2  1,2 pattern if triangle resistance gives way. Indexes are all over the place and finding a leader or consensus is not possible right now making things very difficult. I believe at the top of this next pop we'll get some notable consolidating and then a tradeable trend will be established.