Tuesday, October 21, 2014

Morning Charts 10/21/2014 SPX /es

Like I have said for literally years now, follow the Fed. That may be easier said now than done at this immediate time with the Fed heading into the blackout period, and the news they've doled out over the past couple of weeks has been worse than a local weather forecast. Hot, cold, rain, sun, windy, calm - who can tell right? 

There should always be questions regarding the Fed;s actions and intentions, Right now my question is does confusion reign, or is the mix of Fed speak intentional? (or does it just follow the prevailing wind?) The Fed has become quite adept at just in time announcements, whether the need be hot or cold (and they can even be opposite in the same day).

This chart from zero hedge sums up the past week or so of Fed speak action. I called for the dove speak a day ahead of Williams first utterance on the 14th. Then they played whatever cards they wanted when as usual. 

Right now I'm in a holding pattern waiting their mandate. POMO is still flowing with Thursday the only day this week without additional market assistance. 

On to the lie - 

SPX 10m - The cross above 1898 negated a few technical items and opened the door for moar upside. There is still a battle waging though. The red rising wedge support cracked and negative short term divergences are weighing after this pop off the bottom tot eh 38% retracement. On the other hand there could be a rather large inverse head and shoulders pattern with price moving through the 1898 neckline that targets as high as the resistance area around 1978. 

Resistance areas are 12-15, around 30, and then upper black resistance near 45. If the 61% retracement goes the odds are really good that they will push price right back up to a new ATH. The election/Xmas ramp thought process must be headed. The market remains their main grand illusion generator. I don't think they are ready to let things go quite yet. Remain patient. You may have to wait till next week for clarity from the Fed on QE direction. I don't think we're out of the confusion stage quite yet. We may not be out of the dip stage quite yet either. For those into the EWT thing, I have a feeling the counters are gonna get burned one last time. 

More to come below. 

Have a good day. 

GL and GB!

No comments:

Post a Comment

Keep it civil and respectful to others.