Tuesday, January 6, 2015

Morning Charts 01/06/2015 SPX /es

Still not ready for the BOY post, but I dug into an old closet for you on the charts below. You need to know that charting the past two years became more of a chore than anything given the situation. There used to be a time when I'd update every chart in the chartbook almost daily. It was real back then. It is not so real now. I do feel that technically the story is becoming a bit more enticing to tell. IMHO, I believe the real technical top happened back in August. I think there is a good possibility that we're in a blow off bull trap phase here.  

Now, the Fed's road has narrowed and their bullets are almost all shot. Their game has expanded globally (it had to). One problem remains for the bears, and this will be their salvation as well, "they" retain total control of the matrix. Either a planned (and well prepared for) end of the farce or the STB "event" comes to end it all. It's guaranteed to get really messy either way. We're nearing the end one way or another. 

On to the lie - 

SPX and VIX LT Comp Chart - This is an STB oldie but goodie chart. It's had little relevance except in certain situations over the past few years. It's daily so a bit hard to read, but it tells a simple story. I've held this one in the closet till now, cause the VIX (absolutely broken and worthless for years) is finally starting to tell something that needs to be noticed. Is the VIX about to make a comeback and become relative again? 

Explaining the price action in VIX is simple. It broke years ago and became irrelevant until recently. The positive divergence to price the last few months and the breaking of LT resistance is something I've waited for years now. 

On the other hand price in the SPX needs a bit more explaining, and this chart does it well. It's rather simple, see the LT dashed channel, see the overthrow of this LT resistance in 2014. This is the first real technical abuse "they" caused. It follows the beginning of the period of "unprecedented manipulation" STB called/talked about at the end of 2012. 

The next thing to notice is the STB Diagonal of Death (red support starting at Nov '12 low). I used this diagonal for years to sound brilliant calling bottoms even in advance of tops. "They" made it easy for me. Now support is the busted LT channel resistance and the STB diagonal of death has been abused twice now (which I did not think could be survived a year ago). It is not good when reliable LT support begins to fail, and busted LT resistance is major support in an overthrow overbought situation. 

TNX and USD Daily - Another chart that resides in the closet. In case you needed a picture to put things in perspective. Magically the moves in both of these major players does not affect the SPX one bit? 

More to come below. 

Have a good day. 

GL and GB!

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