Tuesday, February 28, 2012

Morning Market Commentary and Charts 02/28/12 #SPX $ES

Minis took out the 5/2/11 high of 1373.5 last night by .25 points. Since that point the markets have not been happy at all falling rather abruptly to as low as 1366 support level taking out 1368 support. Of the major indexes only the RUT (of all things, the Fed's darling) has not taken out the May '11 highs.

As you can see yellow channel support is still acting as resistance. STB is focusing on the yellow channel and the purple support. For those that missed it, I gave an extensive view of my /ES minis futures charts last night in the AD. There is a link to the right if you would like to go back and see what I am seeing.

Today all that matters is LTRO2 - that's it, so not much commentary cause it is a huge waste of time to speculate till that announcement is complete. Then the FOMC in March and finally the Greek Default on the 20th. That is your road map. No, that is not a cop out, it is sensible and reasonable especially given the markets actions over the past month and its lofty overbought conditions. Patience has been prudent thus far, and I'm not giving up on that plan quite yet. All I can say is be ready. Look for the sign. I've been saying we'll all see "it" (the turn) at the same time. I think it will be painfully obvious when the time to short comes. Till then, patience and form people, patience and form.

The news that drove the quick move south this morning, Durable Goods Big Miss -4%, Expected -1%, Biggest Sequential Drop Since January 2009 | ZeroHedge, "And so the transition to the QE3 "economic disappointment" regime begins. Because after the ECB is done with the LTRO it's over for global QEasing, and the Fed is next. Remember- Bernanke's semiannual testimony to Congress is tomorrow. Whatever will he say...."

That "they" allowed this miss was a bit surprising to STB. This miss either means that Greece will be OK (for now) or they are getting ready to let the markets fall so the fear will allow them to print without any opposition. In the past STB has been on the "manufactured crash to allow for an easy transition to QE3" thought pattern. I did not get it all wrong or all right. I was suspecting this back in November around the time of the Super Congress budget fiasco and with the fall to 1070.

Well, at that time we did not officially get QE3 but we got some sot of "tool" along with Twist that has worked 300 SPX points (30%) of magic. So, I was right in action, but not in name. All that means is they still have (in name only) QE3 hanging out there like the carrot in front of the sheep. Dangling promises to keep hope alive that the great backstop is always in place. Not sure what Madison Ave. marketing firm the Fed is working with, but they are really good.

STB constantly preaches to follow the Fed and the liquidity train (along with patience and form). That is all that matters, nothing else. They are protecting this market, because I believe they fear a crash now more than ever. This market is all they have left between them and keeping the sheeple in line. All they have left now is QE3 (or QE to infinity). This printing is doing wonders for the gold and oil markets as the dollar gets abused on a daily basis.

This market is the last and greatest illusion that all is well. That pensions, social security and all your retirement assets are doing just fine and you have no reason to be alarmed. That is a load of crap! The whole world knows at this point what a bullshit scam this market is and when it turns the rush for the gates will be like nothing anyone has ever seen, true capitulation. They plan on playing QE3 like hitting an Ace on the river card (much like Obummer playing the race card in the election).

Just be ready with training sell stops on your longs and plenty of dry powder for the fun ride down. I'm not sure when it happens (this is definitely a when not if scenario), I do know that you better be prepared.

GL and GB.

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