Intra-Day Update: 768

UPDATE 9:45am EST: Looks like we didn’t get that rally we were hoping for. 776 is the next long RT – right now this bus is basically empty, which completely sucks. In any case, the one chart you guys need to keep in mind right now is not today’s tape but this:

That’s a nice double top, wouldn’t you say? If we close below 768, all hell will break loose. I am not saying that will happen today, but it might happen Monday.
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Also, light sweet crude futures (CLZ8) are touching the 50 mark – this must be below the current production costs for most OPEC members.

UPDATE 10:18am EST: For your convenience here’s an updated SPX chart including the new corrected RTs:

Erik over at TradingAddicts posted the average crude production cost – which is very interesting in the context of light sweet crude hovering slightly above 50:

UPDATE 10:40am EST: Glad I got out of those calls right away – gold star to myself for good timing. Would have been actually faster wasn’t I so busy spoiling you leeches. Anyway, Berk points out that the wave up looks like a nice a,b,c.

UPDATE 10:49am EST: I just scalped a few points with another call. Watch the 1.055 pivot on the Yen (@6JZ8) futures.

UPDATE 11:02am EST: Back in calls – looking good so far – will cut at 1118 pivot on NQ. BTW – check this out:

UPDATE 11:18am EST: This might be it for our little rally. Yen is holding slightly below its pivot and my stochastic says that it’s oversold. If the Yen rallies from here, watch out below for equities.

UPDATE 11:36am EST: Okay, the next leech who asks me to post my Yen chart gets booted off the blog. Here it is – make a style in TOS and watch it – I have been posting this 100 times in the last few months – grrrrr.

UPDATE 11:44am EST: Okay, in case we plunge – I do like DRYS, GNK, MOS maybe, WYNN, and especially RIMM. Anyone else? Shoot out some symbols please – you leeches are useless today. I’m working my ass off over here – show me some love – I can’t do it all on my own (kudos to Erik again – he’s on fire lately it seems).

UPDATE 12:01pm EST: ES futures dropped below S1 – I’m sure there will be a retest. Yen getting close to R2 at 1.055. Watch this level like a hawk people.

UPDATE 12:06pm EST: Here’s the retest – should be our chance to load up on puts.

UPDATE 12:19pm EST: Okay, this doesn’t make any sense to me – the Yen should have breached this pivot. I just jumped out of my puts again as I don’t like the tape. I just can’t have that Yen start tanking like this while it’s completely oversold. Again, let’s remember it’s expiration week, MMs are eager to push the market up. I’m in holding pattern right now.

UPDATE 12:26pm EST: Yen just dropped through R1 pivot as well – completely tanking. I’m stepping aside now, lost only a few bucks on that whipsaw but I’m not chasing this. Seems my initial instincts were correct but the Yen threw me a little curve ball here.

UPDATE 12:44pm EST: Unless the Yen makes a move we will not drop. Watch the 1.049 and 1.055 pivots on the Yen. Also, watch the 1.040 pivot on the downside – I don’t expect this one to give, but in this market anything is possible.

UPDATE 2:07pm EST: Paulson is on the tube – keep an eye on the ticker:

• The word ‘regulatory reform’ = instant black candle on SPX.
• Bla bla bla – housing correction was inevitable (now he tells us)
• Paulson: Ooops – we screwed up by not regulating the financial industry.
• Recovery first than repair system. Encourages regulatory framework so that these mistakes will never be repeated.
• “GSES clearly posed a systemic risk” – now he tells us.
• Paulson mentioned ‘systemic risk’ now the 5th time I think.
• “Never been about the banks, but about the continued prosperity for the American people” – yeah right!
• Reid: Will give automakers another chance to plead their case in December. Congress will return if auto industry presents viable plans for survival. I guess the ‘none of this was our fault’ argument didn’t stick – hehe 🙂
• Pelosi: Auto industry is not on the road to recovery right now. We want a viable auto industry and recognize how important it is. We are giving the industry time to come up with a viable plan.
• Yadayada – Paulson is taking a stroll down history lane – I’ll fade it out now and watch the tape, hoping for a drop towards the close.

UPDATE 2:58pm EST: Yen attempting to breach 1.055 – careful it’s overbought right now. NQ at 1065 pivot – it’s do or die at this point –  one hour left. I’m sick of the back and forth – give me pivot breach for crying out loud.

UPDATE 3:05pm EST: I think we might have breached that pivot on the Yen. Still cautious because of my stochastics telling me that it’s overbought. It rarely lies to me – if we were lower on the stochastics I’d be jumping in here. Maybe caution will get the better of me today, but I need to stick with my system, even if it hurts and I miss out on a nice drop. Once you neglect you system you’re basically gambling. Even worse – neglecting your system and winning will guarantee you to get wiped out further down the line. Anyway, let’s see what the Yen does – if it keeps climbing here and NQ breaches 1065 I’ll pick up some SPY puts.

UPDATE 3:39pm EST: WE BREACHED 768 ON THE SPX – IF WE CLOSE BELOW THIS LEVEL TODAY WE WILL SEE A MASSIVE DROP.

UPDATE 3:46pm EST: In case you wonder why we just swung up. We touched the 1040 pivot on the NQ – I was holding SPY puts and sold them into strength right as it touched – got the perfect fill 2nd time today. There is a reason why I keep hammering those into you guys – watch those indicators and you will bank some mighty coin.

UPDATE Closing Bell: Well, Eric called it again – here we are at new lows for the day. What’s eve more important is that we closed below 786, which is an extremely important level. We bascially just confirmed a 5 year double top – you figure it out 😉

Anyway, in closing – since Eric keeps pushing his USO chart I set up a comparison between the two (black is USO) – what’s interesting is that the SPX seems to react in an exaggerated fashion, while USO calmly points the way. Food for thought as to the nature of this correlation and how to use it as an indicator.