Thursday, October 2, 2014

Morning Charts 10/02/2014 SPX /es

The last few days have been a bit rough - the Carmen Segarra tapes (These guys can do whatever the hell they want), PIMCO liquidations (possibly $200 billion), the largest Fed reverse repo ever ($400 billion), in Japan the biggest ever fat finger ever ($617 billion), yesterday the VIX options smackdown VIX halted and all this in consecutive days leads us to the fact that something may finally be broken
"With just $10 billion of freshly-printed money left (plus reinvested maturing debt) the Fed is rapidly running out of put-providing, VIX-selling, low-volume-levitating ammunition to keep the wealth-creation dream alive."

Ya think?

Maybe Mr. Market's tumble is sending a message. The CPC was set for this at the beginning of the year and again in June. Maybe the RUT (the onetime Fed darling) has been telling us this was coming for months now

Top psychology - it's different this time. Totally different. This civilization has never dealt with a completely corrupt and totally rigged market where everything from market data to the economy to the money is make believe. Look at this BS - Here are all the major indexes, and remember the Fed says there are no bubbles here and CNBS fawn Tepper says stocks are "not expensive". Funny, the RUT chart above does not look so bad in relation to the below chart. Damn, that's a long way down. Presentation is everything.

WTF? Funny, an advisor I spoke to last week, as I explained to him the precarious technical position of the market, said his client's portfolios had great diversification and they could weather most anything. LOL.

Now back to that Top/BTFD conditioned mentality thingy. What if they pull the rug? Everyone is gonna be left holding only their peckers in their hand. Well, where the apparent last bastion of Fed manipulation (SPX) sits, we're about to find out how much gas they have left in the tank and how much conviction there is left in their hopium Keynesian policy. All this with 5 weeks to go before a huge election. Does someone want to deliver the final blow to this administration, or are they setting up for a glory rally into it? 

Good thing Ebola just made it to the states, just in time for a deflection. Amazing how these things time out. Makes one wonder sometimes. (/s). SPX did complete a 61% retracement of the move off 1904 today. It did hit the 100dma target of 1955. This and the STB red diagonal of death (I still got it) have kept me in the market calling business for years now - it's easy to sound smart when what they do is right there for you to see. 

You need to know that 1910 is the magic support number if things fail here. That's about as low as they can go. 1904 double bottom would be exalted on CNBS as a dynamic buying opportunity. 1886 is where I contend that all the sell stops lie that will devastate and open the flood gates. The daily chart is not ready to turn, but then again in the Fed's world (as seen above) they can turn it on a dime whenever they like. 

This leads me to STB's greatest fear, moar QE. How? Impossible! Not really. In a world of make believe where the Fed controls all while complete and utter market and economic collapse is at hand - desperate times require desperate actions. To save their ass, their dollar and their global dominance one last desperate act may be in order. I would not be surprised to see Hilsy make a comeback with QE rumors sooner than later. EU, Japan, China, any QE rumor at this point would be timely and honestly expected. 

SPX 60m - I discussed the overthrow and subsequent breakdown of upper black diagonal resistance and the backtest of it and busted rising green wedge support. Green actually busted and backtested twice just to make sure we were paying attention - this all after the second improbable holiday ramp we all knew was coming. 

Falling channel or wedge - if the channel down is your preference then the move may be over. If the falling wedge fits your eye there is still a D and E move to go for completion. That lower green dashed diagonal (Just below lower black) is the rising green wedge breakdown target line. You EWT freaks may think that today started an impulsive third wave - after the nice HnS breakdown today and continuation - there is a chance that is the case. Yesterday was only 1 of 3 if so. 

More to come below. 

Have a good day. 

GL and GB!

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