Thursday, April 19, 2012

Morning Market Summary and Charts 04/19/12 #SPX $ES

What can you say, the futures are high as hell on hopium. Let's review the news bites that have the market showing morning wood.

First let's look at what the sheeple will see and hear from the propagandist MSM. "U.S. stock index futures pointed to a higher open on Thursday after a better-than-expected Spanish bond auction lifted investor sentiment about peripheral Europe, and more solid earnings contributed to the notion that the U.S. banking system is on the rise." Futures Lifted by Bank Earnings, Spain Auction - CNBC

Stop right there. Read no further. By reading farther you endanger your person by exposing yourself to the truth behind the numbers. Be a good little sheeple, see the good headlines, read the first sentence of the story and go plow all your retirement assets into some AAPL shares. Warning, the truth behind the numbers can be harmful to your portfolio, so go buy a $5 Starbucks Mocha Latte and don't sweat the details.

BAC beats! Oh really, care to elaborate on that? "Yet the number that the market is fascinated by is the one arising from "negative valuation adjustments" of $4.8 billion, which included $1.5 billion in DVA "resulting from the narrowing of the company's credit spread", and resulted in a $0.28 per share addition." Bank of America Earnings: Cutting Through The Noise | ZeroHedge. So a profit of 31 cents versus an estimated 12 cents was the beat, now do some math and tell me just how much the 28 cents just discussed made a difference. "Accountant fudge heaven" is an appropriate way of describing this "beat". But all the public will hear is big beat, and all CNBS will report is whatever the government allows them to on the subject. I can't wait to see what magical tricks MS used when that analysis comes out.

Spain, how's Spain doing this morning after the much anticipated auction? Well, remember the CNBS headline above the results must have been good if they lifted the futures here right? Again, be a good sheeple and stop reading this STB conspiracit truther trash and go back to your Mocha and CNBS. "It was the all-important yield that told the tale of the fail which came at its highest in 5 months and almost 35bps cheap to the previous auction and the 3rd highest ever." Spanish Auction #Fail As 10Y Borrowing Cost Highest In 5 Months | ZeroHedge. Yield - schmield - what do yields matter? They sold all of the paper. Never mind that most likely an underfunded (if not bankrupt) ECB or IMF 'supported' the auction. Folks the yield tells the truth. The risk that is involved is growing rapidly and countries (like the USA will) that have to pay more in interest, that directly impacts and worsens the already dire situation.

And for those that poo poo my talk about popagandist cheerleading and the MSM misleading you  - check this out fresh off the presses, "Instead of printing at the expected 370K, an improvement from last week's already big miss of 380K, this week came at a whopping 386K, the worst standalone print in 4 months. Well, until last week's revision that is: instead of the 380K print that stunned everyone, last week's number has now been revised to a massive 388K. Why? So that mainstream media can declare, with a straight face, that this week saw the number of initial claims decline!" Initial Claims Propaganda 101 | ZeroHedge. This was a joke, now I'm not sure what it has developed into it has gotten so bad.

I have to apologize for being so boring this year, but having been right for the most part, maybe boring is not all that bad. The mantra of follow the Fed has been key to keeping us on the right side of the trade. We watched as the markets rise into the first FOMC meeting, then the second, then the LTRO2 and now we're at the third FOMC meeting, the G20/7, the IMF/ECB meeting and the French elections and you can throw in the AAPL earnings release as well all within the next week. The markets care only about QE or stimulus or easing or whatever you want to call it.

Twist ends in June. Right now this market is acting eerily similar to the 2011 top and the fractals are similar as well. QE2 ended in June of last year. QE1 ended in April of 2010. Take a look at the weekly chart below and see what happens to the markets when they pull liquidity. Can you say an immediate 20% plunge that is only stopped by the promise of more easing? I thought you could. You can also see the HnS formation that I have been looking at for well over a year now that should mark the ultimate top and the last exit before the great collapse.

SPX 30m - I updated all my short term charts last night. What I found looks like a 5 down and we have completed a pretty ABC corrective to 1390 resistance which may lead to a massive failure to (my long desired) 1340 very soon.

Minis 60m - This 60m chart looks sick as the divergences show incredible weakness and the 1386 resistance is strong. You can clearly see all the support and resistance below and above price here. The key is the pink support diagonal near 1371. That is diag support off the November lows.

Say it with me - Patience, form and follow the Fed. Gangsta style hit and run scalps long and short are still the only way to trade this market (with protection of course). I've been saying this since early January. This next week is HUGE for the markets and a very dangerous time for both bulls and bears. I advise extreme caution. STB is looking south in a big way, but I'm not about to get into a tare down with Team Manipulation. I'm gonna let them show their hand and will then act accordingly. There will still be plenty of time to get into the right trade. Now is not the time to try and force anything.

I'll tweet FX and PM charts today to get to you folks as well.

GL and GB!

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