Wednesday, October 21, 2009

Morning Post - Possible Sell Signals

I hoped you got to see "The Warning" last night on Frontline. If not please visit the PBS site here and learn how the bankster pigs in the name of greed and power really screwed up this country and shut down Brooksly Borne and her efforts to contain the contagion (derivatives market) that has caused the mess we are in now. If you think we'll ever get any sort of meaningful regulation of the financial markets, you have been smoking too many green shoots. If they ever decided to try to regulate the derivatives market it is guaranteed the 400+ trillion mess would surely collapse. Thus, we are left to either make it or break it, and I don't like our odds. Pretty good odds at getting a rant from me out of this though.

/ES 5m - The gray line is the bear market top trendline. The royal blue line is the top P2 (or overall market correction) trendline.

/ES 60m - You can see the interaction between the gray and blue trendlines better here as the e-minis consolidate between the two over the last few weeks. The breakdown out of the top of the wave C rising wedge (yellow) seen here is a good sign combined with the SPX indicators of some workable downside here (I am actually questioning if I should have called a top yesterday). The fib retracement for the fall is the yellow box from 1055 to 1044. The red line below the fib box is the target for the measured wedge move at 1027. Also note the lower P2 rising wedge lower trendline (royal blue) near 1013.

SPX daily chart - You all know this is my favorite chart cause the indicators IMHO tell the market moves the best. Most of the indicators have run up to their divergence lines and are (thankfully/hopefully) turning south now. IMO a possible sell signal was given yesterday, but I did not act on it as today is a POMO day and they usually guarantee a ramp job. I plan on shorting this afternoon if conditions persist. If I missed the opportunity to short yesterday, this fall should be good enough to jump in and get some action even if late.

SPX 60m - LOL, do ya'll remember the Mr. Microphone commercials from way back when? "Hey good looking, we'll be back to pick you up later!" Ha! Dig the hair and the clothes, priceless! Well welcome to the Mr. Megaphone market formation screaming loudly, "Hey, babe! I'm manipulated as hell and am gonna keep going up cause of extensive fraud and a total lack of regulation and there ain't shit you can do about it!"

Looks like 3 of C is topping and there are some nice divergences in the indicators. There are a whole bunch of fibs listed on this chart to use to measure the possible fall.

Note: On the statement I made above about contemplating a top call yesterday, bottom line is IMHO we're getting close. The interaction with the bear market top trendline on the e-minis, the overbought conditions, the price multiples, sentiment, insider selling, the indicators (except for the monthlys) and the fact that I believe we'll have a truncated 5th topping wave all lead me to believe the top could possible be set. We'll see. (EDIT- LOL, guess not. Hey, I had one of those "feelings". Let's call it a moment. A bad moment before a POMO day. I said almost but did not do it. About those feelings, they usually come a day early. One thing is for sure, I'll start screaming from the roof tops when I think the top is coming.)

Please read this - Unmask The Fed

Earnings Calendar from for your convenience.

GL out there.


  1. shank

    beige book at 2 PM

    a good short point?

  2. shanky

    are you still calling for a truncated fifth?

    if it doesn't work out what is your target


  3. Anon 1 - yes, once POMO is cleared IMO and if the indicators still hold I'll be shorting.

    Anon 2 - yes, if not you don't want to know my targets. LOL, just kidding. I threw out a 1146 yesterday in a post and the other is massive resistance in the 1210 to 1230 range. See my weekly indicator chart (3rd one in the chartbook).

  4. were not at the top yet... I believe top will hit mid NOV

  5. Joe - I'm just getting antsy. I can go for mid November. We may have to settle for next April. When it does turn this time we'll have to pay attention the the form of the fall.


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