Thursday, October 6, 2011

Morning Post 10/06/11, SPX

Steve Jobs, what a wild and crazy ride we had with him. One sensational innovator that has changed the lives of millions for the better. Bless him and his family.

What do you do when your back is against the wall, there is no hope and all remedies have been exhausted? QE FOR EVERYONE! "As many expected, the Bank of England has followed in Bernanke's footsteps and proceeded with extra QE, 75 billion extra, or about 25 billion more than consensus - this is the first expansion in the British QE since November 5, 2009 when it did the latest  £25 billion expansion. Unfortunately, this is just the beginning: much more global QE is coming down the line as the "monetary authority" realizes it only has itself and its printers to rely on in a world rapidly reentering recession." Bank Of England Expands QE By £75 Billion To A Total Of £275 Billion, Keeps Rate Unchanged | ZeroHedge 

Kicking the can is almost as popular as an iDevice these days. QE announcements seem to be outpacing new Apple product announcements. Sadly they are the inverse. One changes lives exponentially and makes things easy and joyful. The other increases debt and delays addressing important issues that will lead to no one being able to afford an iDevice in the future. Speaking of POMO. no POMO today, here's the schedule

The jobs report today sucked as usual. "Somehow the robotic knee jerk reaction to claims surging back to over 400k, which means the economy is not creating jobs, was enough to generate a jump higher in futures, confirming the market is now only and all about wild momentum swings and attempts to sucker other suckers in." Jobless Claims Back Over 400K, 26th Week In A Row Over 395,000 | ZeroHedge 

Speaking of psycho markets - I have been struggling with calling a bottom and or sticking with my 1040 low call (if not worse). Many of you walk in my shoes every day attempting to decipher when the next rumor driven ramp will trash the technicals (who cares about fundamentals - those have been busted for at least 3 years now) and your longs or shorts in a heap and your portfolio with a gaping hole in it. 

I have been pointing to the impending positive divergences on the daily charts since mid September. They have been there just hanging out, waiting, annoying me as the markets were crumbling. They are there for a reason. the markets are telling you they want to turn and will. That did not matter last week as a little known bank called Dexia (which is going to be nationalized, but that's not news) was rocking the financial world. A rumor that all would be well sent the markets soaring. 

Let's look and see if a low is set and a corrective has begun. It sure feels that way now. STB is not giving up on the 1040 call quite yet although technically I should hang it up. Calling 1040 from 1370 and only missing it by 35 points is not all bad. My optimal call is that it would backtest upper daily resistance, reverse fairly hard and then we can all get long at 1040. 

Here is the 30m chart that timed the bottom nicely. At the time of the bounce the 5, 10 and 15m charts looked nasty. I believe the markets were on the verge of another strong move south at that point. 

Here is my Cycle Target Chart - see the circles - 

SPX Daily Indicator Chart - That the turn was coming was very obvious and the divergences in the indicators were screaming. 

SPX weekly indicator - Again the divergences were there. On this chart I want you to look at the fractal from the '07 top to this top. That would suggest (and stay just within EWT guidelines for those that follow that crap) a backtest of the weekly 50ma may be what we are looking for before the great fall. 

GL and GB.

Minis - 60m - Resistance at 1170 and 1180 then 1218.

Minis 15m - Busted support? This wedge got reformed overnight as it got larger than the one I showed yesterday. This is common. Near term overbought. Watch that blue support diagonal. It has been a magnets over the past two weeks.

Minis 1m with VWAP -

UPDATED - 12:00

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