Thursday, January 6, 2011

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

On The Dark Side we have been discussing the mass animal deaths, earthquakes, floods, volcanoes and the like for several days now. I am please that our friends at Zero Hedge have picked up on this trend as well and posted "The Birds": Mapping The Global Mass Animal Deaths Graveyard. "Did the Mayans forget to carry the zero?" may be a valid question. I won't go all Alex Jones on you this morning on the subject, but I will ask you to open your minds to the vast possibilities of such events. The 10 leading theories are here.

Economic Calendar -  Please ALWAYS check the calendar.  Tomorrow may be a biggie with employment, Bernank and cons credit.

POMO Schedule - 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 and news posts in the comments.

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

Plain and simple (well it should be) the 5 thru 60m indicators all have some nasty divergences to price. The retail sales disappointments are no surprise to me (they are to CNBS that pumped the fact that things were looking up up up all thru the holidays - please send in your recovery success stories!).Sadly we're back to the big POMO days. The Jobs number was not so hot as indicated by ADP (a number of people pointed out that ADP was not the most reliable indicator).

SPX 30m - Looks set up to sell to me. Can technicals (with some bad retail fundamentals) overrule a big POMO day?

Minis are only up a little over two right now but falling. No violent moves overnight. Just a steady climb till the fall started around 7:30 this morning. I showed my CPC chart on the big blog yesterday. That one and many others are screaming top. Most are thinking this will be THE top. I'm pretty much in that camp, but POMO has me reserving any specifics at this time (the debt ceiling discussions are the key). My cycle target chart below has been pretty accurate. Some of you may remember the green circle call on this chart from a week before the April top (possibly my best ever). Pay close attention to that next red vert line.
I have speculated that the charts are indicating that earnings season will not be so rosy. The retail numbers this morning are supporting that theory. All along I thought that 4th quarter or first quarter numbers would be the end of the line for most of the cutback/downsized earnings beats (with continued revenue misses). Don't worry about the unregulated financials. They should be fine toting their REPO 105 subsidies inflating their assets to acceptable levels.

Let's keep a cautions eye to the surprise (to me at least) downside move here. TGT and the retail sector may take a beating, but we have POMO to come to the rescue. The charts are indicating yet another divergence in an already overbought market that has unsuccessfully tried to pull back once. Maybe the bears have another push in them. Either way the retail and jobs data should weigh in the markets and provide resistance to the upside (along with that 50% minis channel diagonal I have been showing for some time).

GL and GB.