Thursday, February 23, 2012

Morning Market Summary and Charts 02/23/12 $ES #SPX

Minis 60m - The green channel is something I'm trying. It has been moved from the one I was showing yesterday. This chart has it all, everything I am looking at. As mentioned it will be sad to see the blue wedge and yellow channel go away as they have been spot on for months now in allowing us to stay right where we needed to be on a ST and LT basis. That lower purple diagonal is the next major support which at this moment is right on the 1351 support line. Then you have 1341 and 1333. The red vertical line is the apex of the blue wedge. These points can cause major price action or mark specific moves of interest. The apex occurs in the 11:00 hour this morning.

Minis 15m - Gotta love that backtest of yellow channel support. Green channel resistance held after the jobs pop this morning and 1355 support is being tested. (9:22 1355 busted. that backtest of the yellow channel may have formed a HnS and targets 1349 which works nicely with purple support in the chart above).

Daily SPX (link) - I'm tempted to call 1367, but can't at this moment. Remember it is about getting the trade right and not the perfect top call (although you know I want that). I may be pressing this liquidity run a bit and the markets can turn in the face of it as shown in June and July. I might have to wait a week to get thru the LTRO on the 29th, and then you have to deal with the markets rise into FOMC meeting phenomena.

If you missed Mish's Global Economic Trend Analysis: Liquidity Floodgate Set to Backfire; Transmission Broken; Shutting Down the Liquidity Spigot in yesterday's AD you need to read it. I got more from this one post explaining the EU and liquidity situation than almost anything I have read in the past few months. "The ECB's balance sheet skyrocketed in the process, and banks that plowed into those 3-Year LTROs (long term refinance operations) at cheap rates will face a huge rollover problem when the program ends, if not substantially before then."

So STB chooses to wait on LTRO 2 on the 29th as it will be a massive event. STB has also been noting the major dates in March (9, 13 and 20) as keys for the markets. Markets move on liquidity announcements or rumors thereof and not much else (well, except AAPL of course).

The markets may continue their tumble (note not a fall or crash - more like a coordinated pullback). As I say, form is everything. Yes, channels and wedges are gone and backtests appear to be complete. In any "normal" market I would be all over a top call here, but this is not any "normal" market. You must follow the Fed. Fisher on CNBS has pretty hawkish this morning and I'm surprised the markets did not pull back more on his lack of QE3 conviction (although at some time the Fed will have to pull the plug and when that happens look the F out).

As noted for years now this market is the last thing they have between them and anarchy in the US. It is the last hope of wealth, prosperity and savings. They are fighting to contain it (and the sheeple) and will do so with (as stated by the Fed) any means possible (regardless the eventual price that must be paid).

GL and GB!

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