Tuesday, April 10, 2012

Morning Chartapalooza 04/10/12 $SPX $ES

Read 'em and weep. All we need now is a catalyst. I'm not sure what it is going to take afer the employment data and a US downgrade did little. The promise of easing hangs over the markets and the liquidity pumps are still on. It is painfully clear what will happen if they turn the liquidity off (see 2010 and 2011). I'm not sure the Fed is willing to let that happen in an election year. The Fed might have to cool the presses a bit or take some sort of breather. The only thing keeping me from calling a top right now is the upcoming FOMC meeting April 24- 25. I almost pulled the trigger on the top call this morning.

FOMC Meeting chart -

CPC - is totally ready and in a position very similar to the 2007 top.

Bullish percent - the tell tale divergence is in place along with sentiment levels.

10m SMA - Can it be any more perfectly bullish?

Daily SPX - Nasty double divergence.

SPX 60m - One last support line to go. Target boxes are in green.

Index Comparison - You all know I like it when this chart 'bunches'.

Minis - Looking at the pink diagonal near 1350. Head and Shoulders neckline backtest near 1386 may still be in play. this was the first HnS not to be a launching pad in some time and so far has acted normally ad with some promise.

Odds are very good some sort of top is set. We still need a catalyst stronger than the easing pump to motivate the bears. When they do come in be ready cause this thing is gonna fall hard and fast. Form, patience and Follow the Fed is the story. Yesterday was a great example of a market ready to fall, but the Fed not willing to let it go yet. I'm still looking for 15 to 20% correction before they pull the QE3 bazooka, but that does not mean they won't 'promise' it before the fact as they did in 2010. 1341 is my key number.

GL and GB!

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