Monday, February 3, 2014

Morning Charts 02/03/14 SPX /ES

Employment this week. After the disaster 70k print there should be only one way to go. Low hurdle, easy beat and markets applaud is what I'm guessing at this time. ADP Wednesday will add to the confusion and have the market chasing its tail as usual. Who knows? I can guarantee one thing, that the workforce will continue to shrink. 

The other issue this week is we have fed speakers three separate days. The possibilities of mixed signals going into the jobs report should be enough to confuse everyone. There should be plenty of after taper talk as the dust settles from last week. I doubt anyone will be tipping any hats towards future policy at this time, but you never know. 

So, we have markets at critical support junctures, some rowdy bears that have decided to come out of hibernation and the  coming potential for an employment surprise along with Fed speak. If the emerging markets behave, if Japan does not melt down, if China continues to ease and the EU just stays quiet (all of that is asking a lot) then maybe they will be able to hold support here and get a little lift. 

Apparently Japan is refusing to cooperate cause there are Alarms Going Off As 102 Dollar-Yen Support Breached. Fundamentally this is an issue. Technically I feel the 100 area is the line in the sand, so IMO there still treading above critical support. This charts that shows the long term upper market resistance and the rising wedge leading into it suggests it is only a matter of time now before a dreadful reversal comes in the USD/JPY pair.

STB suggested reading - Paul Singer's "Vision" Of The Coming "Riot Point" And The Fed's "Formula For Destruction"
"This is a formula for destruction. The crash of 2008 should have been smoking-gun evidence of the folly of this approach, but every mistake leading up to the crash, especially excessive and “invisible” leverage and interest rates that were too low, has been doubled down upon in the years since.""

On to the lie -

Minis 4hr - Price does the tango with STB's red line of death. If this cracks 1705 would be the next stopping point and then 1635, so the gaping supportless holes they have left via this manufactured run up could lead to a more rapid descent than most are anticipating. I'll be watching the 1760 area like a hawk for critical support. As for upside the blue LT upper market resistance diagonal sits near 1800. 1810 is resistance. 1815 is the STB bull/bear line.

More to come below. 

Have a good week. 

GL and GB!

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