Wave 2 count I offered yesterday is off the board. This is either part of wave 3 of 1 or we are
in 5. I'm not in love we the idea of a 5 because this plunge, on an hourly basis, exceeds anything we have seen so far. However, the RSI on the hourly is diverging markedly which argues it is part of 5 of 1 down.

(in my best burgess meredith* voice) But we were BULLS noow!

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¨°º¤ø„¸ N E W „ø¤º°¨
¸„ø¤º°¨ P O S T ``°º¤ø„¸
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RUT
http://screencast.com/t/ZGOSfqhaGg0P

If this keeps going the way its going, surely this is the sign for Bears to grow some cohones and go after this thing. On no occasion since July has a reversal day like yesterday been followed by something like this. The fall has been so steep and the reversal after the 9.45 spike so sudden, this could end up being a major fall day.

Berk - what do you think about EL as potential short? options are pretty cheap too.

What a beautiful day.

I was thinking the exact same thing. Look at all those gorgeous red candles on my screen. Perfect for Halloween eve.

Patience as paid off for the persistent bears!

Exit door a little too small?:

"Looks like the troubles recently seen in NYSE's handling of ING stock, when unexpected sell volume caused a halt in the stock, could be spreading to the US. The pick up in the equities followed the PMI number, which were followed by a dramatic downside reversal thanks to sell orders caused the NYSE to almost crash. An alert just released notifies that the NYSE cash market "experienced an inordinate influx of orders that caused delays in quote dissemination and several locked quote conditions." First the rating agencies, and now the exchanges simply have no idea how to deal with action that is not perpetually positive. Just how much selling volume will be needed for the NYSE to announce it is halting trading?"

http://www.zerohedge.com/article/inordinate-inf...

CMTL may be ready to break. target 29 poss 26

it only goes down today, and USD rising, or so it seems. it would be a perfect day for out of the blue black swan event :)

This is not the P3 you are looking for.

http://screencast.com/t/gY869ZTbGz

Soylent orange is dead.

*sob*

LVS seems to be correcting... still holding front month puts from yesterday.

Nothing like holding front month puts as the underlying falls.

BREAKING NEWS: The Steerage passengers have escaped and are storming the decks. First class passengers beating them off with oars as they try to get in the last lifeboats. NYSE Euronext organises an official "system breakdown" to allow the first class passengers (GS) to exit before the steerage people.

Yay

My instincts yesterday were correct.....only delayed for a day lol. The flood gates could open here if we drop some more here. To have yesterday's gains wiped out would utterly screw a lot of people I reckon.

Mole, I hope you're happy now as I am after loading up on puts yesterday near the close. :)

I haven't had a more profitable week of trading since the 'good ol days'. It just goes to show that the ones that stick it out through thick and thin are the ones that make it in this business, just like Mole has said countless times on this blog.

This has been a good week. Hopefully a sign of what the rest of the year will be like... as Mole (and many others) pointed out months ago, it is the later part of the year (and early next year) that we are waiting for.

NYSE Problems Escalating As Selling Intensifies; Exchange Moving To Backup Servers

http://www.zerohedge.com/article/nyse-problems-...

RIMM

http://screencast.com/t/Fy7Y3zma

On my daily, it looks like the VIX broke out on Wednesday. And we are currently above trendline:

http://screencast.com/t/SnUn8ryraof1
http://screencast.com/t/hyelJHtGK

VIX

http://screencast.com/t/89TWrlbKjx

Rimm is dying a slow death..below 60 now

IS SRS forming a saucer bottom?

In what timeframe? It seems to be doing that in all of them. Put some SKF together and you have a complete tea service. :) :)

1h view of euro/usd:

http://www.screencast.com/t/fdsCD9PjA

I'm my eyes nothing much has changed, but my bias is towards weakness. My indecision zone is still holding, and until we break out I would be cautious. We keep bouncing around there, but a retest of the lows (or at least the main green trendline) should be in the cards after we fell below the mean line.

Wow, that's a pretty Inverse Head and shoulders...

yeah, I was also considering it, but it wasn't fully formed and in my experience HSs show up quite often on shorter timeframes, without playing out. For now, I'm considering movements inside this box as noise, maybe barring action against the green trendline.

Maybe not...tankage of euro continues, hope you euros bought your Hogs this summer....

If it's any help for you forex traders, DAX remains very weak and only 60 pts away from a downtrend confirmation. Once it breaks that 5440 it just might take the Euro with it...

And Euro maybe takes oil down with it.

Else if not then probably my oil short today runs out of gas soon. Attm no reason to close it.

I'm also liking the DAX now. It was frustrating to watch OMX today as it refused to give in.

Glad to hear the DAX has been of some help to you. I also find it a lot easier to read than some of the US-indexes. And it broke 5440 a while ago... :)

Too much open interest in the November puts...maybe December or January, then bombs away...

picked up some GMCR @ 67.50 as a rental, just for the day.

inverted h&s hourly /DX coming up?

i don't like it... nasdaq drop contained as spx drops to equivalence? things being redrawn as a violent w4 of up impulse?

SSH, I'm no longer standing by your side with 100% short exposure. My exposure has dropped to ~50%. This was unexpected. I didn't realize my price targets could be hit today by such a "small" move down. Half of my orders were just filled. I'm adjusting the others so they don't get filled.

if you subscribe to this being a wave 2 up starting yesterday that would put us in c of b of 2 currently, with c of 2 to come. if a=c then /es ~1048 is where c of 2 should start.

That should put the start of C on my channel's lower trendline of the Oct 22,26 & 27th lows

Gap filled on X - now it this is the 4th wave up ... should bounce from this area ...

I agree with you, put sell order on yesterday's puts from HOD.

Everyone should take a look at the changes I've made to jesterx' $INDU down channel. Notice that it has six lines instead of the standard five. See how the price action fits so well?

PRSGuitars, there's that recurring 133 extension, baby.

http://screencast.com/t/qOjPGecdqHZ

Next target is 1.4718 on EUR (a pivot line) as we've broken an important TD support area on the 3 min chart. Remember the last LOW was at 1.4683 (if my tired eyes are reading that correctly).

On a related note, I've been watching the CAD and it seems to be ahead of the EUR in its movements - i.e. it was down before the EUR. EUR and SPX are moving in lockstep so that correlation is holding (or DXY if you will)

Spending by US consumers fell for the first time in five months in September, and by the largest amount in percentage terms since December 2008, data released by the Commerce Department on Friday show.

Consumer purchases decreased by $47.2bn, or 0.5 per cent - in line with analyst estimates - after a 1.4 per cent increase the month prior. The government revised the August reading up from an originally reported increase of 1.3 per cent. Economists largely attributed the decline to the end of the government’s “cash for clunkers” program, which had boosted spending on cars.

On an inflation-adjusted basis, spending declined 0.6 per cent in September and increased by 1 per cent in August.

Rising unemployment contributed to a 0.2 per cent decline in wages and salaries, the figures showed.

Wouldn't it be lovely if we had one of those slow meltdown days today, kinda like the reverse of the upward grind of the past 6 months, that wiped out all of yesterdays gains?

Surely that would rattle the confidence of the dip buyers?

Dow is tracing a beautiful downward channel today on the 1 minute. You can draw a perfect line with 5 or 6 touchpoints that contains the entire move today.

Greg - great call on X yesterday - missed getting in :) - where do you see the next re=entry point ? I am looking to buy the Dec 30s ...

lower lows on SPX, market fully disjointed

USD strenghtening. Probably a good setup for another down.

USD is tanking ??? I have DXY at 76.28 which and its rising. . ..

had to edit, you know, when you watch EURUSD chart it goes down (ie USD gaining vs EUR), it was a typo.

Just habit, not used to USD not tanking

forget violations... does it look like a 4th wave triangle on a down impulse?

Looking at the 1 minute chart of the dow today, it has the look of someone trying to allow a baloon to deflate slowly rather than letting go and having it fly around the room before collapsing on the floor somewhere.

Kinda like the 1st class passengers on the titanic arranging their hat boxes before getting on the lifeboats, fully in the knowledge the steerage passengers were locked up down below and wouldn't cause them any trouble.

The teeter-totter is perfectly in the middle - up or down - seems like an important moment for the day

yes, but major indexes are out of joint count-wise...

better reset them

What's up with AMZN..? What's holding it so far...?

All the nervous underwater shorts

Short interest on AMZN is very less (5 %), and with overall market going down, why would short want to bump AMZN price up to sell even more at loss. If it is going down, let it be, and trim their loss. Thanks,

The vast majority of AMZN shares are tightly held, so even though only 5% of the shares outstanding are short, you need to take into account that the CEO alone is holding 25% and won't sell a share, and institutional investors hold nearly all the rest of the outstanding shares. I think you could see some selling once the calendar rolls over as institutional holders might want to ring the register a bit, but it is basically a situation of who blinks first right now, shorts or the longs. And the shorts have a bug walking on their eyeball in the form of being so far underwater as is.

Whatever anyone says, surely AMZN is the short of the century here at these levels? With market conditions as they are, a P/E of 80 and an enormous gap to fill, surely its only a matter of time?

For those who have worked in some majro firms or on the floor with MM's. That spike between 9.42 and 9.43......was there any reason for it, or would market makers routinely do that as a stop sweep? Because it must have hurt a lot of people.

Often a lot of people pull bids and offers around data points. Others leave stops in so you can get a vacumn where it swings around hoovering up liquidity.

Pretty sure that spike was due to the Chicago PMI. As mentioned below, subscribers to the service that publishes the number get to see it three minutes prior to its public release.

Ok thanks. Whoever it was, they misjudged the subsequent selloff.

Incidentally, is that not illegal?

No, any body willing to spend the money can subscribe.

Bears, Cmon you can do it.1060 on the SPX must fail. If 1070 seems to be an important level here.

9:58 AM Oct. Reuters/UofM Consumer Sentiment: While their view of the economy improved, "consumers continued to voice very dismal assessments of their personal financial situation. These grim financial evaluations, coupled with intentions to increase savings and decrease their indebtedness, will limit any rebound in consumer spending."

well, it's sure is a soothing feeling, when you just know, that you are participating in such nonmanipulated and fair market :)

more like a warm breathing down your neck and a slight rocking feeling

there's only one thing I can say about that long green pole on my chart and slump of USD in less than one minute and it's not a nice thing...

Big efforts there to defend these levels look like failing.

they better, bastards, now we probably also know who actually killed Kenny.

9:56 AM Oct. Reuters/UofM Consumer Sentiment: 70.6 vs. 69.8 expected and 73.5 prior. Expectations 68.6 vs. 73.5 prior.

Don't think any real pros put much stock in the Mich number. The real confidence number was 2 days ago, and it was much worse than expected.

s&p also doing lower lows below fear zone (i think)

Wow thats some awesome volatility today. I would say people getting raped on both sides of the tape.

yes!

nasdaq says we're going down...

Next up at 9:55am ET is Mich Sentiment (70 is expected, prior was 69.4)

Came in at 70.6.

BREAKING
Oct Chicago PMI 54.2% vs 46.1% in Sept.

Market top is not this year chaps. Come back in 2010.

54.2 vs expected 48.5 on Chicago PMI

Jeebus, DOW jumped 50 points in 20 seconds there, filling the opening gap. If you're gonna buy dips, thats how to do it!!! LOL

I must admit, at this point the bear case looks hosed, and the pullback is looking no different to the last god knows how many pullbacks that ultimately proved to be bear traps, before powering higher.

Although between starting this post and finishing it, we look like heading back down!!!!

Banks/RE barely responded to jump, I wonder if CIT is the reason...

DAX following the game plan ..so far...looking for 5400 min..then flat..and see

If it goes to 5400 I'll use any possible bounce to add to shorts. GL

I think you are right.. further to go n downside before a good bounce. Also looking at FTSE possible down to 4850

Just put in a higher low on the 3 min EUR. This could be the turn around for a little while, anyways. If we break 1.4821 then it is a higher high as well.

holy crap that was a big move lol

reversed at my fear value... 1058 (as I mentioned yesterday)

now let's see if it breaks the opening

EDIT but as I've been mentioning... watch the nasdaq. my bet is a lower low today

DAX retraced to today's pivot as expected. The banks did not give it the necessary hold to rally from there, it's now dropping rapidly, first support 5.500 if it loses 5.440 this will confirm a new downtrend, first support 5.335 area.

re: GDP, read Mish's skeptical take on it, he's been very astute the past year;
http://globaleconomicanalysis.blogspot.com/2009...

Getting close to S1 (73.46) on FAS, let's see if it holds...

if there is a strong down during the next minutes, 5 points on spx is enough, i say we revisit yesterday's gap up

Remember: don't get chopped by the Chicago Business Barometer at 9:45 US Eastern! That nailed a bunch of traders last month.

ISM Chicago subscribers get something like a 5-minute preview. Watch the price and TICK movements from 9:40 - 9:45 carefully. ;)

must be bad...

or good

Or maybe just ok....Haha, my /es has gone schitzo!

Three minutes prior.

Trying to figure this up/down stuff is just giving me headache... but I think I have my head around it. Pick stuff that outperforms and go long, pick stuff that underperforms and go short.

Long SPY, C, AA and short XLF & APOL. As long as it moves I ought to be ok...

gmak wrote somewhere: I would feel more comfortable if all 3 points lined up since any two points will give a straight line
using a non-log scale you got a TL passing Mar 6, 2009 July 10, 2009 and October 2nd that is now at approx 1070

this does not bode well for the bulls.


http://www.screencast.com/t/eGSJgtfjq

Over the short term, though it looks as though DXY would head down to retest the bottom trend line, no? Or are you saying that the slight retrace today means that we might be breaking up out of the wedge?

Thanks.

I could be wrong, but it looks as though the dollar has bottomed. This would be consistent with interest rate chatter, end of POMO, end of stimulus, creditors growing concern about future solvency, talk of reserve currency revise, etc..

Watch the impact of the MBS purchase program (toilet paper for toxic waste exchange), as well as the extension of the new homeowners program, a possible new QE etc etc etc......




________________________________

If it holds, it could paint a nice looking dollar bull flag. Very nice.

you bet. in addition, and i have to admit that i get in trouble on these at times, but it looks like a nice ending diagonal and a fractal if you drill down. the spike in volume underscores it. if this is the case, we have turned the corner. a little more boost and we might get a nice short squeeze and that could turn into something dramatic.

Another lower low on the 3 min EUR. Watch this. If we pop back above 1.4821 then the move down may be over. That was the most recent high. A pivot lies below at 1.4788; then the 24% FIB at 1.4773.

If EUR closes the current 30 min bar below 1.4798 (at 9AM EDT) then we have a qualified price exhaustion down at 1.4737 and that becomes a plausible target intra-day. The next bar will have to open lower for this qualification to stick, I believe.

Currently the 30 minute chart is in wave 3 of 5 down (TD Waves which are sequential and do not do waves within waves).

I'm also sensing euro/usd weakness, but I'm sticking to my 1.470-1485 zone of indecision. We tested the bottom two says ago, the highs yesterday, and are now floating in between. I think that a break to the downside is more likely, but until it breaks out either way I'm hesitant.

It's the lower lows and lower highs that suggest a downward direction to me. But, like you, I remain cautious and expect a rebound that would start with a higher high (on the 3 min chart). Possibly it is already underway with this bounce off of the neutral pivot. Lot of white (green) candles on the bounce.

When I post via Disqus - my longer posts are vanishing once I refresh. It has happened here and at option babe. Haven't tried slope of hope yet - but I would expect the same thing.

Anyone have any similar experience, and/or solutions?

I think the post shows up when I click on my avatar - you know in Disqus - but it doesn't display on the site where it is posted.

obvious solution... break the post in 2 or 3

Well, my premarket post vanished again - to my eyes anyway. I'm going to post it at option babe and see if it sticks there.

Probably too many links - I'll check the spam folder in disqus once I fall out of my cozy bed.

Thanks. Take your time (no sarcasm). Anyone who does want to see it after a refresh can just click on my avatar. It's not really worth the effort to chase down - I'm just very virus-sensitive lately and any inconsistency gives me the willies. heh.

You are blogging from your bed this morning? lol

Not blogging - just scanning the comments.

good morning evil master

Hey - can you give me a quick run down on what's happening on the Dollar front - trying to decide if I should roll out of bed now or rest a little more.

the dollar front stays inconclusive IMHO

Here it is:

[These posts keep vanishing to my eyes on ES. I suspect disqus - so I'm going to post it here to check. Sorry for the length.

Pre-Market warm up
I’m looking at TK’s chart above – and it is very interesting in that it says that SPX has come back up to re-test the long term trend line which should mean a drop off from there in a bearish scenario. My problem is that I am unable to replicate that trend line by drawing through the lows from Mar 6, 2009 (666.79) and July 10, 2009 (872.81). I would need to bypass the July 10th point and instead use the low of October 2nd (1019.95). Then I get TK’s scenario.
What makes Oct 2nd more important than July 10 in trend drawing? I would feel more comfortable if all 3 points lined up since any two points will give a straight line and, IMO, conclusions from that are suspect.
If I use the July 10th point in drawing the line, then yesterday easily cleared the trend line, and is back above it. To me this means that the next wave up has started (you can clearly see each wave like a camel’s hump on TK’s chart). There has been a series of higher highs and higher lows since March – and the trend has not been broken, IMO.

Equity
Asia was mixed, but both Nikkei and Shanghai were over 1% green. In S.Korea, Samsung reported blow out earnings due primarily to memory – now, was this due to inventory rebuilding around the world or to consumer demand? The answer suggests whether or not the recovery might continue. I’m withholding judgment until I get more information. I suspect that it was inventory rebuilding, based on the USD GDP.

Europe is mixed. FTSE is green, but DAX is red by about 0..40%; The only green sectors are consumer services, utilities, and Tech – so it looks sort of like Wednesday again, which is away from the risk trade.

FX
USD is stronger, now. JPY is stronger as well – so this suggests a move away from the risk trade. CAD, EUR, and GBP are all slightly weaker.
Here are some of my personal notes on EUR. Unfortunately, I can’t post the charts since I’m at work.

EUR daily has been achieving higher highs and higher lows since March. The long term trend is still up. TD TDST Down is at 1.4576, with the lower Bollinger at 1.4587. This is where major buying would be expected to come in, on this longer term view. TD Combo Risk is at 1.4970 from the 2nd last SELL Setup. The most recent SELL setup has the TC Combo Risk at 1,5092 which is around the upper Bollinger at 1.5087; These are major resistance overhead. – 2nd previous SELL setup Combo Risk would indicate a down trend starting. Last SELL Combo Risk still indicates an up trend.
Summary: Up trend still intact. Need to get turned back at 1.4970 for a down trend to start, and exceed 1.4576 / 1.4481 on the downside to confirm with a lower low.

30 minute EUR shows the beginning of a lower low and lower high. Also the formation of a downward sloping H&S is underway. Expect weakness into the NY open, as the mid-bollinger is acting as leaky resistance. Pins have been put through the lower Bollinger, and the FIB at 1.4828 (38%) is where the lower lows are happening.


3 minute shows more detail for the 30 min EUR. The EUR is falling but needs to get below 1.4805 to put in the lower low and keep the sequence moving. Just after this chart was printed, EUR fell to 1.4806 – was there some news?

EUR pivots:
R2: 1.4964
R1: 1.4893
Neutral: 1.4788 – Blew by this yesterday on the USD dump.
S1: 1.4718 – acted as support and springboard for yesterdays 30 min rocket launch at around 8:30 AM – when GDP was released
S2: 1.4613 – below the recent low.

Important FIBs from the high last week and the low this week are:
High = 1.5063
62% = 1.4918
50% = 1.4873 - didn’t get near it overnight.
38% = 1.4828 – EUR pushed down over this with lower lows until it broke just in the last hour.
Low = 1.4683


News
Apparently CBs are reducing stimulus measures which is leading to USD and JPY strength. BoJ said it would end emergency bond buying (i.e. their version of QE).ni f
Vampire Squid denies that ties to Galleon were illegal (how about immoral?).

Samsung blows away estimates on earnings due to chip and LCD prices. Was this inventory build or end consumer demand? Intel is boosting capital spending for next year on semis and displays. Apparently there is strong PC demand coming.
Data
See here for the coming items
http://www.briefing.com/Investor/Public/Calenda...
8:30 Personal spending etc.. expected to be down. Notice how US GDP and this data point contradict the Samsung and Intel results and forecasts.

SPX
I just want to beat the horse a little more about MBS program. It is alive and well and a bigger source of liquidity than POMO ever was. POMO was designed to put a bid under tbills and keep yields (and bond vigilantes) from putting a stick in the spokes of the economic recovery myth. It’s pretty hard to keep the economy pumping if the 10 year rate is ramping up.

Go to this site, and set the parameters to cover all the time until Dec 31st, and you will see that there are 4 major TAF maturities that take the Slosh to zero! by Dec 17th. If they are not rolled over, or not replaced by MBS purchases then the liquidity coming out of risk assets will act as a lid on prices there. How this is played by the FED depends on whether or not they want a market event to scare Congress.

I’m still not in the market, and I find that the next few days are critical – especially based on the different trend lines and the different interpretations that can result. Be careful.

ES Pivots:
R2: 1081 = far far away for today
R1: 1071 = Nowhere near overnight
Neutral: 1054.25 = still below ES, and didn’t see any action since acting as resistance for a bit yesterday
S1: 1044.5 = maybe if we fail to get a higher high this wave (on a daily basis)
S2: 1027.5 = nothing to see here. Move along.

Cheers.]

But it still vanished when I did a refresh on the screen.*sigh* Definitely disqus.




________________________________

Just thought I would share.... Excellent site and really geeky, I love it although I just usually just skip to the conclusion..

http://www.tradingtheodds.com/

nteresting to note that – since 01/06/2001 and with respect to the then following session (in this event Friday, October 30) – the ES E-MINI S&P 500

* opened lower on 2 out of every 3 occurrences,
* posted an intraday low of at least -2.0% on 11 out of the last 13 occurrences,
* was trading at least +0.50% above the previous session’s close at the end of the first hour of the then following session on only 4 out of 44 occurrences (maximum gain +0.81% ),
* was trading at least +0.50% above the previous session’s close at the start of the last hour of the then following session on only 5 out of 44 occurrences (maximum gain +1.05%),
* closed (partly significantly) lower on 12 out of the last 13 occurrences.

Update:

EUR put in a lower low on the 3 min chart (and on the 30 min chart). There is a bounce - but it is not convincing.

Apparently, the SNF (swiss central bank) was buying USDCHF.

Pre-Market warm up
I’m looking at TK’s chart above – and it is very interesting in that it says that SPX has come back up to re-test the long term trend line which should mean a drop off from there in a bearish scenario. My problem is that I am unable to replicate that trend line by drawing through the lows from Mar 6, 2009 (666.79) and July 10, 2009 (872.81). I would need to bypass the July 10th point and instead use the low of October 2nd (1019.95). Then I get TK’s scenario.
What makes Oct 2nd more important than July 10 in trend drawing? I would feel more comfortable if all 3 points lined up since any two points will give a straight line and, IMO, conclusions from that are suspect.
If I use the July 10th point in drawing the line, then yesterday easily cleared the trend line, and is back above it. To me this means that the next wave up has started (you can clearly see each wave like a camel’s hump on TK’s chart). There has been a series of higher highs and higher lows since March – and the trend has not been broken, IMO.

Equity
Asia was mixed, but both Nikkei and Shanghai were over 1% green. In S.Korea, Samsung reported blow out earnings due primarily to memory – now, was this due to inventory rebuilding around the world or to consumer demand? The answer suggests whether or not the recovery might continue. I’m withholding judgment until I get more information. I suspect that it was inventory rebuilding, based on the USD GDP.

Europe is mixed. FTSE is green, but DAX is red by about 0..40%; The only green sectors are consumer services, utilities, and Tech – so it looks sort of like Wednesday again, which is away from the risk trade.

FX
USD is stronger, now. JPY is stronger as well – so this suggests a move away from the risk trade. CAD, EUR, and GBP are all slightly weaker.
Here are some of my personal notes on EUR. Unfortunately, I can’t post the charts since I’m at work.

EUR daily has been achieving higher highs and higher lows since March. The long term trend is still up. TD TDST Down is at 1.4576, with the lower Bollinger at 1.4587. This is where major buying would be expected to come in, on this longer term view. TD Combo Risk is at 1.4970 from the 2nd last SELL Setup. The most recent SELL setup has the TC Combo Risk at 1,5092 which is around the upper Bollinger at 1.5087; These are major resistance overhead. – 2nd previous SELL setup Combo Risk would indicate a down trend starting. Last SELL Combo Risk still indicates an up trend.
Summary: Up trend still intact. Need to get turned back at 1.4970 for a down trend to start, and exceed 1.4576 / 1.4481 on the downside to confirm with a lower low.

30 minute EUR shows the beginning of a lower low and lower high. Also the formation of a downward sloping H&S is underway. Expect weakness into the NY open, as the mid-bollinger is acting as leaky resistance. Pins have been put through the lower Bollinger, and the FIB at 1.4828 (38%) is where the lower lows are happening.


3 minute shows more detail for the 30 min EUR. The EUR is falling but needs to get below 1.4805 to put in the lower low and keep the sequence moving. Just after this chart was printed, EUR fell to 1.4806 – was there some news?

EUR pivots:
R2: 1.4964
R1: 1.4893
Neutral: 1.4788 – Blew by this yesterday on the USD dump.
S1: 1.4718 – acted as support and springboard for yesterdays 30 min rocket launch at around 8:30 AM – when GDP was released
S2: 1.4613 – below the recent low.

Important FIBs from the high last week and the low this week are:
High = 1.5063
62% = 1.4918
50% = 1.4873 - didn’t get near it overnight.
38% = 1.4828 – EUR pushed down over this with lower lows until it broke just in the last hour.
Low = 1.4683


News
Apparently CBs are reducing stimulus measures which is leading to USD and JPY strength. BoJ said it would end emergency bond buying (i.e. their version of QE).ni f
Vampire Squid denies that ties to Galleon were illegal (how about immoral?).

Samsung blows away estimates on earnings due to chip and LCD prices. Was this inventory build or end consumer demand? Intel is boosting capital spending for next year on semis and displays. Apparently there is strong PC demand coming.
Data
See here for the coming items
http://www.briefing.com/Investor/Public/Calenda...
8:30 Personal spending etc.. expected to be down. Notice how US GDP and this data point contradict the Samsung and Intel results and forecasts.

SPX
I just want to beat the horse a little more about MBS program. It is alive and well and a bigger source of liquidity than POMO ever was. POMO was designed to put a bid under tbills and keep yields (and bond vigilantes) from putting a stick in the spokes of the economic recovery myth. It’s pretty hard to keep the economy pumping if the 10 year rate is ramping up.

Go to this site, and set the parameters to cover all the time until Dec 31st, and you will see that there are 4 major TAF maturities that take the Slosh to zero! by Dec 17th. If they are not rolled over, or not replaced by MBS purchases then the liquidity coming out of risk assets will act as a lid on prices there. How this is played by the FED depends on whether or not they want a market event to scare Congress.

I’m still not in the market, and I find that the next few days are critical – especially based on the different trend lines and the different interpretations that can result. Be careful.

ES Pivots:
R2: 1081 = far far away for today
R1: 1071 = Nowhere near overnight
Neutral: 1054.25 = still below ES, and didn’t see any action since acting as resistance for a bit yesterday
S1: 1044.5 = maybe if we fail to get a higher high this wave (on a daily basis)
S2: 1027.5 = nothing to see here. Move along.

Cheers.

keep eye on euro dollar ..as this has been driving the mkts recently..

Greetings from not so sunny Ireland folks. Miserable day today. Unfortunately I have a problem with the roof in my 120 year old Victorian house, so its out with the pots and pans.

I have to admit I called yesterday badly (albeit not disastrously so since the shorts I added at various levels over Dow 10k are still in the money, just less so). I expected yesterdays pop, but felt that at some stage, some major selling would occur, as smart money used the irrationally exuberant pop from a number that was so well flagged in advance, is full of holes and possibly fraudulent, to distribute shares to dumb money.

Well, they did it, but not in such a way as caused any kind of decent pullback. I continue to believe we are very close to a top, if it hasn't already happened. Next quarters GDP figure cannot possibly compete with this, especially when nearly half the growth came from CFC, and we've already seen what has happen to SSARs after it was withdrawn.

The big danger for the bears is undoubtedly the fact that you are not fighting traditional market forces here. Noone knows how long the Fed can keep printing, or how many times a desperate Government will keep introducing incentives to people like homer buyers tax credits or CFC or whatever. Lets hope they run out of ammo soon.

GDP next quarter could be as much as 5%. The investment component has turned up and the inventories drag looks to be finishing. These alone, provided nothing else goes sharply negative (and the qoq ex autos retail sales is tracking at zero at the moment), could be a swing of 300bps. This GDP report was a game changer and have made me look for a market top in Dec or Jan, not here.

your house sounds romantic. i HAD one of those. my EX-wife had to have it. never again.

i think we have seen the top. longer term we are completely screwed. anyone that thinks otherwise is a moron or has an agenda that will cause you pain. there is, quite literally, no way out of this bag. there are only 2 ways to repudiate debt: inflate or default. inflate and our creditors will eventually walk/run away. default....hmmmm. let's face it, do the Chinese really expect American's to give up entitlements in order to pay them. so, what's on THEIR mind, i ask? these folks are not fools. my thought is that they have us over a proverbial barrel. i do not think they just want a seat at the table. i think they want the table. we shall see.

+1 jaxon. If only we can get even a shred of the bigger game correct, we could certainly use that to plan better long term plays.

I try to explain to people close to me what is really going on "in the shadows" right now (using actual data that never seems to make the news) and it amazes me how most people really just don't see it. It brings me to the conclusion that the greatest theft in history has been perpetrated over the last decade... and the genius of it is that we were robbed of our futures, not our present. Therefore, most people are simply to caught up in the now to see it... and of course do not feel it yet.

My only comfort in this is that we are all so equally screwed, I do feel so singled out!

you got it. i am really serious about this: before the dust settles on this
chapter in history words like treason and fraud will become part of the
popular lexicon when it comes to referring to some of our recent "heroes".

It will be worth shorting there but not yet.

People please, this is upsetting me. The odds are not in your favour if you are short here. Please be more careful - this could be at 1080 ESZ9 today.

depends on your time frame. it could also be down big sooner than later. some serious technical damage has been done. my thought is that we are going to trade in a range until the Chinese pull the string in Nov.

don't upset yourself...! I'm sure you have your own things to worry about!!

Ray Barros for Friday --
"The ES bounced strongly off the Linear Regression Band rejecting Wednesday's attempt to accept below it.
The effect of last night's price action: (He's in Asia)

"1) The probability that the correction was only of a 5-d magnitude and
2) The presence of 'trapped money' around the 1044 to 1048 area (basis Dec).

"Both suggest we should see a test of the Primary Sell Zone 1088 to 1099 (basis Dec). (1102 to 1091, basis cash).

"I attach the Normalised Volume, end of day Delta and Split Delta for yesterday - all showing support for the idea of a move to the Primary Sell Zone."
http://tradingsuccess.com/barrotwitter/index.ph...

DAX...
http://www.screencast.com/t/ky9GNWArc9
that break of mini up trend still there..testing underside..if we bust above bulls are back..
if not then I think we can go as low as 5400
was that rally yesterday TOO obvious?

lookin good for us bears, futures down almost 5 points so far

Good Afternoon Rats.

Infrequent poster but since Mole is doing solitary battle nowadays I figure I might as well add what I have. I might consider buying any weakness or chopiness at the open. This Sep-Oct analog suggests the monthly cycle low was made and we are on our way to 1130.

As always, mileage may vary. I would add that the bounce off of the low (yesterday) was very large which hasn't happened previously. Maybe it's a bull trap.
http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0...

Here's another example. Renault this morning. Q3 bad as we all know. But what are they guiding to? Order book more than 2 months of sales, a big increase. Guiding to profit in H2 vs consensus of a loss. Valuation ex Nissan? 1.5x EV/EBITDA. The equity value could explode.

Brits are in. Sorry people but I think this is another huge bear trap. It has huge similarities with July as a technical set-up. Inventories are building again as per the GDP report. It won't last and just sets us up for another collapse but in the mean-time, 4Q09 and 1Q10 GDP are going to be inflated. It will be impossible to sell equities when top line upgrades start coming through. Let me give you all an example - Continental, the tyre company in Germany reported yesterday. Is it a screwed-up over leveraged business? Yes. Are they seeing a small pick-up in demand? Yes. Are they now guiding to Q4 EBIT which is 60% ahead of current consensus? Yes. What do you think those earnings numbers will go to when they is more than a tiny pick-up in demand?

The time to get short this market is when earnings momentum is peaking and rolling over, we are only on the lower part of the vertical on the S curve. Valuations aren't silly enough to sell eps momentum. The consumer is screwed up enough to continue the stimulus for a while longer - expect a reload of the QE gun, especially in the UK.

You can't place technical analysis outside of the fundamentals. At our fund, we do a lot of technical analysis of the fundamentals. Right now, that is telling me we have probably just seen the low short-term. Sorry, I don't like it either but I am not going to fight the analysis.

What do I know? You may be right. I may be wrong.

Nevertheless, my technical analysis hasn't failed for me yet. The price action on $INDU still haven't broken my purple line, and the price action hasn't even come close to Stainless Steel Chicken's "Great Channel" line (orange on my chart). If the rally breaks both, I'll capitulate and look to short again in 2010 when the price action has moved up to 12,500 area.

For me, it doesn't make any sense to capitulate now since everything is still going according to plan.

http://screencast.com/t/y6okcNai

If Government Sachs is reading this and you are still committed to the bullish cause, hint, hint, you need to break above the overhead purple line, the orange line, and the top green trend line.

Nice chart. Great perspective! Beautiful classic TA. Love this chart. My thoughts...based on charts like this over the years, I say much better than 50% chance the top is in. Enough hits on channel lines. But, IF it rises to upper channel for the 6th point (don't like even numbers), it is a mother of all shorts! Just too perfect though, since it will be so obvious to everyone that they should mortgage the wife and throw everything into shorting the market.

Thank you cramar!

Great point. We always have intermediate reversion to (slightly fwd) expectations. If we're getting Q4 EBIT 60% ahead of consensus haha then that is setting up for large disappointment. I think Q1 '10 will be the disaster quarter. If the market was always in line with fundamentals it would be hurt in April.