Morning Post

OK, so China decides to start cashing out and the Greece volleyball keeps getting bounced around. It appears the global financial fireworks are starting to launch some of the bigger shells as we work our way thru the show. I am surprised there was not a bigger move on the China divestment announcement. Remember there has to be a buyer for every seller, so you gotta wonder who that will be (since our government is the great backstop of the planet). I guess the market is saying this deal is a wash. If you look at the action in the currencies during the Greece announcements yesterday, the dramatic swings on the in/out announcements were pretty wild.

Earnings calendar -

Economic calendar - Lots of numbers pushed back to Friday due to snow storm on east coast (maybe a few global warming meetings should be canceled as well?). Uncle Bennie speaks at 10:00.

E-minis 15m - Channeling up towards resistance. The dailys still remain oversold even after this move up off of 1040. Looking at the indicators I'd be forced to lean long or for downside volatility to be little risk.

SPX Daily - If those upper TL's on the indicators start to give way, the bears are gonna be pissed. If they hold and throw the market down for one more pop, then there will have a nice set up for a larger corrective wave to come. It is oversold, the RSI5 divergence, the looks of some of the other indicators and the possible solution (if you can call it that) to the Greece issue may actually have us in 1 of 2 of 1 of P3 already. 

Gold - Still oversold and bouncing off of support. I think it consolidates for a short while.
Oil - Holding lower support line and coming off of oversold conditions.
Dollar - Overbought and reversing.
Natgas - Reversing off of upper TL and possibly breaking down. Low volatility expected as indicators are playing in the middle of the road.
EUR/USD - Look - if you measure it (and listen to all the bitching going on) it has completed and ABC corrective almost to the number. On the inverse the dollar has done the same. Let's see if we go into strengthen the Euro mode as the financial saga continues to churn.

This is a strange spot. I am seeing conflicting messages. The indicators want more but the numbers say the corrective is done. The dollar may have peeked and the EUR may have finished its fall. The FI markets may be the catalyst we are waiting on as everyone digests what China's move towards financial terrorism will do. The Greece saga is not over. I still have some small shorts from long ago and that tiny long that everyone thought I was crazy to play from the 1049 level. Is 1 of 3 is toast or did we just complete a corrective? The indicators to me say there is room for a 5 down left based on the position of the TL's, but if they give way we are in 2. The only hope I see of a 3rd wave scenario is that the weeklys still have room to fall. I remain cautiously positioned both long and short LOL (with more weight short).

GL out there.

Morning Post

MCD and KO do well. Ignore them, cause all eyes are on the PIIGS and who else might be invited to play Default Dominoes.

I'm sticking that it all comes down to Greece, the other PIIGS and the EU. Nothing else really matters anymore. The focus is there. The only question is does the thief come in the middle of the night or during trading hours. How much of it is priced in?

The rumors and news surrounding Greece and the PIIGS are insane. Just how much of this is in the control of GS and not Trichet or any other fraudulent government money man.

What was up with the secretive banker meeting in Australia while the G7 was meeting on the other side of the world?

Earnings calendar -

Economic calendar -

E-mini 60m - Channeling down (Sky blue lines) after breaking the Green support line that held the market up since June. Reversing near the 38% retracement (yellow line at 1037) of the 862 low. The dailys as expected are pretty oversold and this mornings pop of 9.5 points is not surprising. Any good news will cause a thrust these days and the fact that things in Greece have calmed down somewhat is reason for the dip buyers to get active again.

SPX - I still contend it is fighting off the upper bear market TL. It tagged it again yesterday and reversed. Can it hold is yet to be seen. The daily indicators are struggling to gain ground and remain oversold. The RSI5 divergence tried to give way yesterday, but may be coming home to roost today based on the futures. 1085 is the max if we even get close to that. 1110 is the 68% retracement at this time and the 50 ma on the daily chart. It is only a matter of time before the collapse. As I mentioned earlier, will we wake up to it one morning or will it happen during trading hours.

Dollar - Is it having an overthrow of a wedge? It would be backtesting the upper TL right now if it is. Pretty overbought, but this will not mean anything if a flight to safety occurs. I also think there is a possibility that an ABC has completed, but looking at things politically I believe the rush to safety on an EU breakdown sends the dollar to 89. Then it crashes with everyone else.
Gold - Getting a nice pop this morning. It is oversold and might have a little upside left. A pop to the 1085 - 1090 range may be in order. There is upper channel resistance there.
Oil - Oversold and bouncing off of lower channel support. If this support cracks 65 and 59 would be likely stopping points. I called $55 months ago. That TL and target may have moved.
Natgas - Revesding off of the upper channel line, but at support. Indicators are mixed. So, /NG is in a very precarious spot. Charts are telling me there is confusion among the ng troops, that is usually not a good thing.
EUR/JPY and /USD recovered some yesterday and have been crushed over the past month. As correlated to the dollar, they look to have completed ABC correctives, but given the PIIGS situation, I have to expect worse. If this is a 5 wave move we are in 3 down and should be expecting a 3 of 3 soon.

GL out there.

Morning Post

Good morning. Futures are up a smidge (2.50 at this time). They have pulled back 4 points off of the 1092 high. The minis and SPX are dancing to a different band right now. The minis have broken their major top tl and have broken back above the market support line gong back to June. This should have been a brick wall, but was not. Let's see what happens in the 1104 area if it can get there.

Earnings calendar - AFL goes after hrs today (that would be a hometown ex-employer of yours truly) with MET and TSO. In the am we have PFE, SGP and TWX as a few bigger names roll thru.

Economic calendar - Timmaaaah gets grilled at 10:00 for the next three days. Pending home sales at 10:00 as well.

SPX daily has almost confirmed a st trend change. ADX and a couple others are not at the party yet, but the main playas are there and it should not be long till it gets going. The base at the 61.8% retracement f the run from 1028 is another positive development. Cracking 1087 resistance in the last few minutes yesterday opened the door to 1103. I got a 1/2 position yesterday in SSO.

The chart I share this morning is the Dollar Triangle. Your thoughts would be appreciated. Remember, you saw it here first (well, maybe not, but I have not seen it anywhere else). Looks a lot like P1 doesn't it? This is part of the reason I am looking for an ABC and not a 5 wave move here. My target calls for an over throw of the triangle sometime next year.Of course it is possible that the 40ma throws it back down here and it just runs to new lows. Remember I am pretty biased towards a very weak dollar.

Dollar - topping nt on the daily indicators. It needs a breather. Support at 78.
Gold - Approaching an upper TL that might slow it down some, but I think it is in an ABC wave 2 corrective that might throw it up to the 1150 to 1175 range. Dailys are oversold and turning.
Natgas -  Channeling down but may be oversold somewhat and might pop based on the daily MACD and possible S Sto bull cross.
ERU/JPY - Should reverse here for a pop. Really oversold.
EUR/USD - Looks like a throw under of a falling wedge in oversold conditions stopping just above a 50% retracement. If it does continue to fall 1.3755 should be the max.
Oil - At support and oversold. I'd look at playing a reversal here. USO or OIL might be worth looking into. Do your homework and use stops. Inventory data comes at 4:30 later today.

I'm looking for more upside today and thru the rest of the week. Maybe 1 is complete (if it was a 1). The dollar looks like it is going to confirm the move and remain in concert with the indexes. I'm long 1/2 SSO and looking to add to it and possibly some TNA for the short pop.

Have a good one!

Morning Post

Good morning. I hope you had a good weekend. Getting this week cranked up early with the futures up over 6 points on the minis. After Fridays sell off and given the overbought conditions, the buyers had to show up sooner or later. Question is, how long will they hang around? Friday's dramatic reversal was a sign of things to come as I believe you have to begin viewing the market as having more downside potential/risk than upside as the tide has most likely turned.

Earnings calendar -Tomorrow is a bigger day as we get into the energy sector.

Economic calendar - Mfg index and construction spending today along with a treasury auction (3 and 6mo)

SPX daily - Remember, the market does not "have to" do anything, looks can be deceiving and beauty is only skin deep. SPX has completed a 61.8% retracement of the rise off of 1028. S Sto is embedding, RSI is at 33.3, The gap on MACD is huge (8pts) and the hist has not turned, ADX is doing it's best Letterman impersonation showing a huge gap, and other indicators are showing similar characteristics. The lower BB is getting abused again. At this time I believe a correction is overdue and downside should be limited simply because of oversold conditions and some divergences on shorter time frames. 1055 is my max downside at this time and if it turns I'm looking at 1101 as the first target and then the gap at 1115. I do not see it moving over the 1131 level at all, but with this market you never know.

Gold - 1066 level has all kinds of support. I do not think this is the time to jump in even though it is pretty oversold.
Dollar - Continues strengthening. Over $5 move in DXY since 11/23 (7%). It is getting overbought but might have a little room to run yet.
Oil -  Sitting on support and the 23.6% retracement (I'll give you charts on all these tomorrow) and it is oversold. This one may warrant some buying attention at this level.
Natgas - Broke TL and support and is channeling down with a short series of lower lows and lower highs. 4.67 is the 38% retracement. It is at 5.13 now.
EUR/JPY -  124.37 is the next support point (and that is a weak one). When it took out 126 that should have been it. Channeling south. Support has now become resistance.
EUR/USD - 139.17 below the 140 Mendoza line. 138 to 135 is the 50 to 61% retracement zone. 136 is where C=A is this is a corrective. If it is a major wave we're in a 3 south.

GL out there!

Morning Post

Christmas week and with me skiing in Colorado next week there is no telling what you will get from me between now and the end of the year. If something happens, I'll be here. If not, I'll be enjoying the holidays. You should too! We got Xmas kicked off early and the kids got some big presents from the family - GUNS! That's right, 28 gauge single shot shotguns. (My boys are 7 and 9). We shot all weekend and should be able to have them ready to defend the southern border of the homestead by mid summer if necessary.

 
 
The dollar is channeling, but is RSI on the daily chart getting tired? No divergence yet. I know gaps show up all over the place on a daily chart of the dollar and are not that noteable, but this one back on 9/4 was to me and it is just about closed.

A closer look at the dollar's channel on a 60m chart. 

SPX last year at this time. Traded is a 100pt range for most of December till that late pop, but notice how it just fell back into the trading range for most of January, before it let go. I really hate thost that look at stuff and say "It did this then so it may/should do this now". That was a bear market and this is a bull market. Quickly eyeballing January over the last 10 years, it tends to be a down to flat month.


I'll look at more stuff later if necessary. Gold daily appears to be getting support from it's 50ma. Oil is in an uptrend. Natgas breakout is in pause mode right now with RSI sitting near a spot where past price reversals have happened. EUR/JPY is near support and just above a 50% retracement level. EUR/USD is at a LT support level and just above the 38% retracement level at 1.4121.

That is all for now. Go get your shopping done and have a cocktail or two. Enjoy the season and remember the reason for the season.

GL and happy holidays.

UNG Popping

Tough call on UNG here. I was obviously wrong on my read this am that "Natgas is topping I think - It is at resistance at least and struggling to get any higher. The turbo boost it got this week from the XOM deal may need to be corrected some." Well. it simply blew thru resistance this am. I was looking for a little consolidation, but they thought differently.

UNG daily - I was a few days off and a few pennies short on my target, but overall very close (that was made in a 12/10 post you can see here). Does the upper TL hold and where does it go from here? It appears to want to be holding based on the spike thru it at this time (Note - it has not cracked this upper TL like this before). The break of the 65ma and a run to the TL has been the MO thus far. The completed 62% retracement and the topping of the 30 and 60m chart indicators look like some resistance is in place here. The daily indicators look to have a little room to run other than a topping S Sto.

The weekly chart may tell the best story. This is as bullish as it has looked in a long time. Clear breakouts of all the indicators. If price can get thru the 20ma and the upper TL, this may be the pop we all have been looking for. See the resistance points for the many targets that lie above if it should pop here. Folks this weekly chart is the main reason I have remained so bearish on UNG for so long. Now these breakouts give me some real hope for more upside. If the 20ma and TL hold, it may be the same old story so keep your stops close. Remember, there is no real reason to be bullish on a price rise other than an artificial shortage created by massive cuts in production.

Do your own homework on this one. Relying on TA alone is not enough as futures pricing really controls the price. I will say the weekly indicators look more bullish now than they have in a long time. this does not mean the volatility is gone, but possibly the bottom is in.  Please refer to the EIA site here for a bunch of good info on NATGAS.

I am long a 15% position in UNG.

Morning Post

Fed day today. Ya think they are gonna surprise and raise rates? I doubt it. With 1mo treasuries yielding zero and the equity markets the only play in town where any money can be made, why screw up a good thing? (ghood thing for whom can be debated) They will have to raise them eventually, but I'm not going to hold my breath. CPI and housing numbers are being spun on CNBS. So are you in the deflation of inflation camp? I think we deflate first with some signs of specific pricing pressures that eventually leads to inflation. Its like having a bad tooth that you know needs to be extracted, but you don't want to face the surgery. You deal with the pain and deal with the pain, yet eventually you will have to go under the knife.

SPX daily- I just do not know what it will take to get this market out of this trading range. BB width is 29. That is under 30 folks. That is 15 up or 15 down is all you are theoretically gonna get. Narrow BB's usually lead to volatility, so I still expect a breakout one way or the other. CCI may have topped and RSI stopped at the blue divergence line. Now RSI is running in a range between the 50 line as support and the upper divergence lines getting pinched down. I'm not sure how long it can stay in this range. At this time I'm leaning to a push south to the 1085 level.

SPX 60m - This chart says fall, but I would caution bears to look out for the 1103 level where the 50ma and the lower BB sit. If that cracks the bears may be in business.See my 15m chart for the most detail on fibs, TLs and S/R.









E- minis - Up 4.5 at this time and were as high as 1112 overnight. Currently 1108. Trading at the upper end near resistance of the upper resistance line of the past few weeks and backtesting the lower P2 support line. So that should be a double doozie.

DXY - Ending a rising wedge and should rollover here. The daily indicators are getting pretty toppy.

Oil - If you look at the chart I showed yesterday am, you will see the lower channel line held and there is a good chance it is going to pop from here. I'll do an energy post today I think.

Natgas - /NG futures have moved above NT resistance, but will that move hold? Indicators are a little toppy with a divergence in RSI showing upside should be limited from here. I'll get a UNG post out soon.

/ZN 10yr treauries futures - looks like an ABC corrective is just about complete and the daily indicators are about to show some buy signals.


EUR/USD continues to fall and has taken out all support lines I have. Daily indicators are embedding on the low end. I think the 1.51 high is set.

EUR/JPY - Holding the 128.50 support. We'll know more in January when it nears it's upper TL.

Inflation? Frozen Concentrated OJ - No there has not been a big freeze. Like I said- It will and is happening in specific areas, thus not the perfect storm. This chart demonstrates there is some inflation out there.

GL out there and happy holidays.

Morning Post

Good morning!

SPX 15m -  The boom, boom, boom chart from Sunday. Fib targets, supprt and resistance, the gap and the fibs are viewed really well on this chart. Let's see if the trend holds and if GWLK (BSLS) likes it better today? The 60m looks as toppy as this chart, but the daily may be telling a different story. It needs to turn here or soon for the bears.

Gold daily - decided to take an $8 plunge last night. I am not sure if that is a channel down (green) or not, but I drew it as one. I backed the chart out so you can see the support levels better. Green, sky blue and gray lower TL's are all valid. The yellow line is the 38% retracement off of the 809 low and may be the ultimate target for a meaningful pullback at 1066.

Dollar 1hr - You can see the breakout of the pink falling wedge that led the bull market. I am not positive that the proper backtest has occurred. The gray wedge form is ending and a pullback would be in order. Is the green TL a target ot the blue one? How will the markets react to the dollar correcting this move? Will the somewhat broken correlation correct, or are they somewhat independent now? The retracement levels from here off of the 74.17 low are 38% - 75.97, 50% - 75.66 and 61.8% - 75.34.

EUR/JPY daily - Seems to have found a happy place for now around 128.50 as it either remains range bound or as the gray falling wedge plays out.

Oil daily - I updated all of the energy sector in my chartbook yesterday and there looked to be some potential technical buys in there. With oil futures possibly holding the bottom of this channel (MACD hist turning up and RSI as well) maybe there is something to look at here. XOM on weakness from the deal yesterday might be worth keeping on the radar as well.

Natgas daily - just slightly taking out the upper resistance. Now, this can be stretched a little higher, a real breakout may be happening. I'm not all that convinced, but it is possible. gray boxes are gaps and the yellow rectangle is the retracement zone from 3.91 to 3.56. 





GL today and happy holidays.

Natural gas surges after EIA inventories data (A UNG Post)

Natural gas surges after EIA inventories data so says MarketWatch. Inventories fall significantly. OK, question time, what happens when  you have near record inventories and you basically cut production in half and consumption increases slightly? Folks, do not get to excited about real demand increasing for some time. Now, will this inventory change effect the forward spot price for NG thus driving UNG higher? That is yet to be seen. That is the danger to the trade. 

Working off oversupply while dramatically cutting production = reduced inventories which does not necessarily mean increased pricing structure which is what we care about.

Here is the link to the EIA NATGAS page.

Sure, this is a form of price manipulation and you will pay for it in the end. You, the consumer, are witnessing price manipulation that is not working in your favor, but instead in the name of salvaging corporate profits. On the conspiracy side, I am beginning to wonder if the NATGAS price destruction was a predetermined action in relation to the green movement in some way that has been influenced by the carbon kooks and big oil?

Then again, to what extent do you really trust any numbers coming form any government agency? IMO, you should not. Should that work into your trading decisions? I do not think so. You need to find the momo and where "they" want prices to go and ride that train. right now that momo is still to the downside and will remain there till proven differently.

NATGAS and UNG are not exactly tracking each other any more. Well they are, just from a distance. I am not commenting on the dislocation other than a lot of people who bought UNG for the pop got ripped off IMO. I think this is one of those "charts you are not supposed to see". If things were "normal" UNG should be somewhere near $20 right now.

UNG daily - This chart's indicators look pretty green and may have a chance to run. RSI cracking the divergence line could be a key point for the bulls. The weeklys do not look as bad as they have in the past (kind of mixed right now). For the bears I have some black arrows showing prior interaction with the MA's in this fall. That combined with the upper channel resistance would cause me to caution against any aggressive move here. There is a lower blue box with a question mark in it  that I deem a possible target based on the channel, MA's, indicators and cycle lines. Is there a possible H&S in there? Yes, but .... Can it make it to gap resistance? Yes, but ....

Again (as usual) I caution investors and warn that UNG moves mainly as a function of the forward spot price. If it goes up so does UNG. If not, it falls. Based on the first chart, once would speculate that a correction is in order. That is it. you are either lucky or not.

Now let's look at another relationship that NATGAS shares with OIL. The ratio of the price of oil to the price of NATGAS is out of proportion now and a correction is in order. There are a lot of people that believe NG will be retesting the recent lows. That would require one heck of a fall in oil. there are so many possibilities that can drive prices around, I won't speculate on what could happen (war, global depression, carbon credits, you name it.). I believe Oil will do most of the work here over time as I believe Oil is going to $55.

You UNG investors need to be nimble and keep the stops tight. It could run to the moon, but then again it has been proven time and time again that there is not yet a limit to how low it can go. There is a bunch of resistance above right now, and I would not chase it here. That is a big bullish candle, but it also left a nasty gap. That is pretty typical MO for every move off of a low so far. If it were to get above the upper channel line and if we can get some sort of established EWT count going up, then I'll look into holding it. Till then, I'll keep swing trading off of the bottoms. I'll  add that IF it should break out and the H&S plays out, somewhere near 14.50 would be the target (there is a nice resistance line near there).

NATGAS futures Prices


GL and have a great holiday season .

LOOK Into The Future(s).

/ES 60m - Minis are up 3.50 at this time (8:22p est). Looks like a completed 5 wave move down and a break up above the upper trendline (sky blue) after completing a 76% retracement of the last wave up. Most are counting this as 1 of 1 of P3 and we are beginning 2 up. I'm not all that sure about that, but I'm not discounting it. 

DXY 60m - Almost completed a 76% retracement of the last move just like the minis. Looks like a good move south coming is possible if the backtest of the Green wedge gives way. Testing the yellow dashed trendline with the sky blue rising wedge support just below.

/CL Lt Sweet Crude daily - Channeling up and now channeling over (pink). The green trendline catches a lot of common tops and bottoms. Red lines are major support. The yellow line is the 38% retracement and the yellow box is the retracement zone (50 to 61%).

/NG daily - Looks like a possible break of the downtrend line afterstalling at a 38% retracement.

/YG Mini gold Futures 60m - BIG GAP UP to the top wedge line (gray rectangle).

EUR/JPY daily - Testing lower support while wedging sideways. If green support gives way it should fall all the way to the lower wedge support.

EUR/USD daily - Riding lower channel support line (yellow channel) being held down buy resistance (upper red). The 50% line of the blue channel is providing support here as well. We'll know for sure soon if the blue channel has taken over or not.

You may want to read this - Bills Yielding Zero as Stocks Soar Make Bernanke’s 1938 Moment - from Bloomberg. 
"For the first time in seven decades, Treasury bills are paying no interest while stocks continue to appreciate -- a divergence in U.S. financial markets that might be perilous if Federal Reserve Chairman Ben S. Bernanke didn’t know all about 1938.
That’s when the Standard & Poor’s 500 Index climbed 25 percent even as bill rates tumbled to 0.05 percent from 0.45 percent. As 1939 began, stocks began a three-year, 34 percent decline after the Fed increase borrowing costs prematurely to stymie inflation that never materialized.  Sounds like we know the playbook he is using.



GL trading this holiday week. I'm not sure of anything other than continued low volume and a possible push higher. I am a little leery of some sort of surprise announcement during the slower holiday weeks.