Thursday, June 7, 2012

Morning Charts 06/07/12 $SPX $ES

What can you say? The markets are solely relying on intervention (read: corruption, fraud, manipulation) to keep from crashing. As the global economies fade and as insurmountable piles of debt exponentially grow, they must print more to keep the global financial life support machines running.  From Zero Hedge - Overnight Sentiment: The People Demand A Bailout #POMOList “and Bernanke will be on his own. God save the markets if he does not deliver, either today at the JEC testimony at 10 am or at 2:15 pm on June 20, as the S&P has now priced in at least 75 points of NEW QE intervention.”

So here you stand as an informed investor. You know the risk, the global strife, the debt and funding issues, you understand that without the liquidity pump that everything dries up worse than the Sahara, what do you do? You (as repeated here almost daily) must follow the Fed. You can not tug on superman's cape. You can not bet against the dealer with the rigged boot. You can not do what is logical, right or correlates to anything involving traditional investment or market theory.

So here you stand as an uninformed sheeple. You know nothing about the markets other than they go up and down and what you see on your monthly statements (if you even look at them). You listen to CNBS from time to time and own LULU, AAPL and were fortunate to get some FB after the IPO.  Cramer says all is well and the banks are a bargain. You go to work and move along.

The way I see it is the informed investor will eventually win at this game if he/she is solvent at the top and has powder to play. The sheeple will all get sheered and never knew what hit them when it is all gone. You dear informed investor are enduring a multi-year trial by fire. You are being tortured hardened. Pay attention to the liquidity issues, catch a ride on the rumor/easing train at every stop, don't doubt team manipulations power to move the markets, never underestimate greed and at all times be ready for an 'event' that totally rips the ass out of the market.

Here we are again. Can the Fed ease? When will they ease? Can the EU salvage another stick save and will it last longer than a month? The markets do not care. All the markets care about is that they are discussing it and that some sort of remedy will eventually be in place. The markets do not care about the eventual end game just about near term profits.

Trading/investing is now a short term game. Risk on/off is what you must follow. Scalps and short swings with guarding stops and a hair trigger are what you have been reduced to. This zombie market will eat you face off if you leave the wrong play on overnight. It will shred the most logical short positions. TA has done a really good job thus far and I believe combined with the Fed's more than telegraphed movements  you can win this game. All you have to do is remove your brain and emotions from the equation.

Same chart as last night - SPX Daily - The tell tale candle off of a support level they could not let break (yet). 1340 level is the next most logical stop then 1374. I'm not willing to look above there at this time till the Fed and ECB's plans are made clear. Several options exist here - if that was a 4th wave then 1482 is where 5=1. If that was a 1 then a standard retracement is coming to 1325 to 1341 and then a zombie, eat your face off fall is coming then. A range may form like the top last year with a volatile range forming from 1374 to 1260.

The one thing that is 100% guaranteed is that the global financial system is fighting with all it has to save its life right now. they are on the verge of total collapse. They may make this last extend and pretend move work one last time. Deal with it and know that with every dollar printed they come closer to death's door. It will implode one day.  You can be sure of that. till then you just have to deal with their bullshit.

As usual, during the day I deliver charts and thoughts in the commentary and on twitter.

Minis 4hr - The falling wedge resistance has been busted along with several of the key resistance points. 1341 should be the next stop. I would not rule out a backtest of the 1308 area (although these rips in the past just like to rip - screw anything normal or prudent).

Minis 15m - Possible rising wedge (green). This tumble may not be over just yet. All it will take is a little bad news, but it sure seems like the market has its mind made up that the savior is coming again.

GL and GB!

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