Monday, August 27, 2012

Morning Charts 08/27/12 SPX /ES

OK, Jackson Hole here we come. What do I think we get? The same 'ol crap, The Bernank will say something along the lines of we'll do what we have to when we have to cause we're the ultimate backstop. The markets will be a bit disappointed, but content to know that the Fed has their back and will move if necessary.

The presidential political football is in the air, the EU issues remain front and center, the economy is floundering at best all while the SPX resides above 1400 which means there is no pressure right now for any action (regardless of the harsh cold reality that lies deep under the economic veil of deception).

Looking at the EU, Merkel is at least talking about being damned determined to save the Euro. Bottom line is no matter what Greece does, no matter how far they go to commit to austerity or tax hikes, they will never make it out of the current hole they are in. So the Germans and the ECB (rest of the failing euro zone) are basically willing to lose money to keep this parasite or leach of a country in the group. Why? That's a good question. To keep a loss leader like that in the fold, to go to all of the troubles and spend all of that money, something somewhere else must be really good or the loss of that one leg will be totally devastating to the system as it stands.

We'll get a little more clarity once we hear from the Bernank later this week. There will be lots of news bites and speculation on whether to ease or not or when or what it will look like this next time. Remember easing is all the markets care about, nothing else.

I found this post quite revealing and it fits with what I warn about all the time, the market can literally crash at any moment - On Sub-Pennying, 'Internalizers', And Why The Flash Crash Could Happen Any Second Of Any Day

As for the markets, we sit technically at a major top primed for the Fed to disappoint I guess. This week has potential for some volatility, but I would suspect the volume and range to be quite muted unto the Bernank speaks later this week,

As for me, I just sit and wait on my catalyst to blow it all up. Remain patient and in scalp mode, no reason to get too one sided before Helicopter Ben makes his speech.

Daily SPX - Bear cross on the MACDaddy last week was not good indicating the blow off top may be set. Price action this morning does not indicate that, but let's see what happens after the open where reality may set in a bit. For about three weeks now I have been searching for a top. I have still not bitten and still question whether I should have called one at the 1424 mark. I have to wait on the Fed, sorry. There is literally no telling what surprise he could deliver (that goes for news out of the EU as well or China for that matter). This chart is pretty sick right now.

Minis 60m - The channel down off of th top has broken out to the upside as support (thick blue falling diagonal) off the 2007 top and green (old March HnS neckline) remain in play. Price appears to want to consolidate now around the 1400 mark.

Remain patient folks. The market should not front run anything coming from the Fed or the EU as those actions (or lack of) are priced in already.

Have a good week.

GL and B!

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