Friday, August 10, 2012

Morning Charts 08/10/12 SPX /ES

Bad news, well, the worst news, is the best news. You all know that. So CNBS is touting that China may now ease sooner than later. Yippie! You got that? The world's best hope for economic expansion and the last great bailout backstop is falling apart and that's a good thing. Speaking of bad news we all know the EU is a withering, dysfunctional, corrupt, broke sack of poo, but none of that matters as the promise of more easing to kick the can is all that matters. How bout here at home? Pick any economic number you want and things are looking pretty dire. And let me remind you that those economic numbers are all BS in the first place (lipstick on a pig) and they still can't make 'em look good. Now Jackson Hole is just weeks away and the Fed's annual bailout fest will be another massive party for the kick the can crowd.

It is pretty clear how we got to this point. It is sad that at this point we continually do all the wrong things and refuse to take our medicine. I used to use the analogy of we got the patient in pre-op and have just held him there. We never made it to the operating room to remove the cancer. So that cancer (corruption and debt) have grown exponentially over the past 4 years. Now the patient is terminal and what was a serious surgery (heart and lung transplant) where the patient at least had decent odds of survival has now become something akin to a Anakin Skywalker makeover where the odds of survival are virtually nil.

So what does price do here? We wait to see how large China's stimulus package is, we wait to see how the EU handles their latest funding crisis and we wait on Jackson hole to see if the Fed is actually going to try and rekindle the housing bubble. The markets remember only care about price and the next growth phase. Growth these days is not organic, but infused. The markets only care where the next liquidity injection is coming from, so they wait, watching the economies of the globe collapse and knowing the next bailout will come.

Here we sit in a topping process. I spoke about top calling earlier this week. That is a difficult process for me. Technical analysis does a wonderful job, but in a rigged market you need to watch the man dealing from the rigged boot that can hit 21 whenever he needs it. I could not call "the" top back at 1420 because I knew the Fed had a lot more easing left in them. I have called and still believe that they can not carry this charade much past the first quarter of 2013.

I think the market will top soon and this will be "the" top. I still contend that it will take an event to rip control from the crony capitalists to break the markets back. I have long called for at least two market closures in the next tumble. I also contend that there was never a true point of real capitulation in 2008 where everyone ran for the exits. That coming. By everyone, I mean everyone.

Minis 4hr - Blue wedge resistance meets upper LT resistance (also blue) off the 2008 top. This is the STB point I mentioned a few weeks back (thinking it was highly improbable but not impossible). As noted many times, anything above 1374 is living in an oxygen depleted environment and can not stay there too long.

Minis 30m - Every line on this chart is in play. Price is stalling and consolidation. Upside should be limited. I would honestly like to see 1420 taken out but am not sure if that will happen or now. That all depends on the Fed's actions. At this point I will go into consolidation mode as the marts await China, the EU and the Fed's upcoming actions. I do believe this rubber band is stretched as tight as it can be and that some sort of snap back sell the news event or an actual critical market moving event is coming.

SPX Daily - It is what it is.

Remain patient and let this move come to you. Don't force ti and what ever you do, long or short, keep the protection on.

Have great weekend.

GL and GB!

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