Monday, September 10, 2012

Tick-Tock Tick-Tock 09/10/12 SPX /ES

On the clock are the German judges and the Greeks this week. On top of that the Fed meeting and 9/11 are in the wings. Spain is in really deep trouble. Global economies are collapsing, yet oil and copper are rising anticipating the potential bailouts to come. That makes all the sense in the world doesn't it? We're in the third year of this "recovery" and the global markets now solely react to potential bailouts. So, totally disregarding all reality markets react based on whether the central bank du jour will be easing today or not. This should be the most brutal week of speculation and rampant rumors we have seen in some tome. Friday will be HUGE, no other way of saying that.

I think Germany is going to disappoint and the Fed will ease on the heals of that decision. Remember the EU has meetings all the time that never deliver any sort of solution. More spending is the only answer and the markets are growing wary of this fact. This time will be no different.

The charts have been ready now for weeks and the final missing piece of the puzzle came in last week. All we need now is a catalyst. This week should see some violent swings as the on/off easing rumor train swings emotions violently. My suggestion is to keep on scalping long or short. Get in and out. Take your profits and run or cut your losses and get out.

Daily SPX - Living outside the upper BB being propped up via speculative rumors is not a good place to be. Divergences are being set on the blow off top setting up a potentially violent move south if the Fed or German judges disappoint.

Minis Daily - Upper blue wedge/channel resistance is in play again. This line has held since the Draghi low back in May. This is the 6th test of this resistance diagonal that has a history of generating some wild reversals.

As for me calling a top, I think the odds are good that I will pull the trigger this week. the top could be set now. Unfortunately, I will have to wait on the Fed this week. The potential for a EU disappointment and a Fed easing to follow which will suck everything into our markets is really good. This would further exaggerate the already overbought conditions. This is keeping me from pulling the trigger at this time.

For reference, here is a quick look at the 2007 top and the 1432 resistance level we are at now which was significant then.

Have a good week.

GL and GB!

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