Thursday, July 26, 2012

Morning Charts 07/26/12 $SPX $ES

Well, we discuss well timed baseless rumor driven ramps all the time here at STB and we got one last night. Read ECB's Draghi Repeats The Party Line, Forces Another Brief EUR Squeeze, Sends Futures Soaring | ZeroHedgeIt never ceases to amaze me what they can pull out of their ass hat at the most critical times. Here we are on the cliff with everything busted under price but the 50 dma support and wham. Of course you and I know that everything said was a lie and is total BS, but the markets react with glee as if all will be well and the recovery is back on. Like Pavlov's dog, the markets begin to salivate with the mention of more easing or intervention. 

SPX Daily - Pretty simple, consolidation. I've been discussing consolidation for a few months now. About the only thing I have missed was the upside ceiling which I thought would be near 1341, but I did have a second target of 1375 (my max) which has held nicely so far. The one thing on this chart you need to note is the 50dma that is driving down like a kamikaze pilot towards the 200dma setting up the death cross (yes, the Fed sees this coming as well). As I mentioned yesterday there is a wad of support on cash from 1316 to 1332 right now. If that should go, you can run for the hills.

Minis 4hr - was it a double top or is it a double bottom now? That move last night (a day after the AAPL miss) was totally ridiculous. It just goes to show the extreme BS of a market that we play in. Price in the low volume overnight session drove back thru the yellow diagonal backtest and 1341 to stop at the blue wedge diagonal support backtest. Why? Because of a promise that for the umpteenth time has been delivered that all will be well that is guaranteed to fail within a week? What a joke. Note the open gap (gray) that runs from 1358.75 to 1356.75. That may want to get filled.

SPX 60m - The bears need a lower low. The run is weakening and by most measures price should be failing here. It is only thru intervention that they are keeping things afloat. This chart has done a nice job of timing these intermediate tops and bottoms with healthy divergences calling the tops and bottoms (especially) with a high degree of accuracy.

Minis 30m - Here are all of your key points today. I think they may go for gap closure. They may go full court press and shoot for 1375 again (triple top). I know they should not get it there and would think they can't, but betting against a totally manipulated market has proven to be pure insanity. They are in desperation mode right now trying their best to keep price up going into August which should be an even worse month than July has been. They can only fight against the current so long. They will tire and market forces will eventually prevail.

I would like to think the backtest of the busted blue wedge support here would be it and price should reverse here for good. I hoped the backtest of 1341 would have been it, but the overnight action ruled that out. Could it be a triple top at 1375? That's a possibility here, but only if the latest farce can gain traction.

I don't know what to tell you. Maybe what I have been saying every morning for Lord know how long, follow the Fed and remain patient. Gangsta style trading, hit and run, get your scalp and get out. No matter what you know is structurally, ethically or morally right you can not, you can not, use that in making judgement regarding your trading. Both good and bad news are good now. Heck, the worse news the better. All of us here at STB know we're headed to oblivion, it is just going to take an immense amount of patience to let Team Manipulation fun their course to ultimate failure.

GL and GB!

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