Sunday S&P 500 Update

So, last week ends with the SEC charging the almighty and all powerful Goldman Sachs with securities fraud related to their "packaging" of toxic CDOs. What to make of it? Here's the problem from a trading perspective: Bull moves usually don't end on "bearish" news and events. They almost aways end when all the news is bullish and every bullish factor is "priced in." With that in mind, I'm a little skeptical that the overall advance ended at 1214. However, the candlesticks are UGLY and the market is peaking right into the 61.8% of the entire decline. On top of that, it's the seasonal time of year for stocks to start beating a retreat. So, the medium term picture looks bearish. "Investors" and traders should be prepared for at least a 10% market decline.

Embedded below this Scribd document are a couple of libertarian-leaning clips I found this weekend in light of the recent "Tax Day." Don't watch them if you believe that government offers "solutions."
S&P 500 Update 18 Apr 10


While I disagree with his ideas on money creation and causes of the Great Depression, Milton Friedman was a pretty clear thinker on several subjects. Here is on poverty in 1977-1978...



I often say that accountants and lawyers are the "barnacles" on the ship that is American society in that they tend to "slow down" the economy. Indeed...

24 comments:

mcHAPPY said...

@AndyT

I strongly believe your thought of a 10% correction followed by another push higher - maybe even to new highs. This would also tie in with Lara's current DXY wave count, if the correlation with the USD means anything anymore, of course, however you can't ignore the last 10 years on the USD relationship with nearly EVERYTHING else. Anyways, back to Lara's count: we are in wave 2 having completed A down, starting B up (S&P 10% correction time?), followed by C down at which point we start a 3rd of a 3rd up causing everything else to go DOWN, DOWN, DOWN in a burning ring of fire.

CV - this would also fit your ongoing war with Citi, JPM, and GS on the EUR:USD going to 1.29 :)

karen said...

thotful post and great links, andy! thank you! today is my birthday.. enjoying my weekend and not thinking too hard about tomorrow until tomorrow! Wishing B n T a happy birthday, as well! : )

Andy T said...

Happy Birthday Karen!

call me ahab said...

AT- good thoughts- I wonder though if the "bull" can continue when the USG/TBTF link is broken- GS being a huge beneficiary-

Karen- HAPPY BIRTHDAY!!!!!! AWESOME!

call me ahab said...

. . . and Wanger man says something that I find worthwhile at TBP-

"It’s all bullshit. When the market does something, there’s always an old time mantra as to why. Personally the “markets look 6 months ahead” is my favorite. After all, when the DOW was at 14k it was certainly looking ahead six months to nothing but blue skies!"

no doubt

call me ahab said...

"Pursuing Banking Fraud is 'Top Priority': SEC'S Khuzami"- CNBC

this should make folks in any decision making capacity at the TBTF's shudder-

maybe the Obama administration was biding their time before they unleashed the "WWE smack down"
- lol

Andy T said...

Geez. Just went to TBP for some reason. BR has the classic "comment-bait" headline....

Goldman receives the "kiss of death." His source for the silly post is the ex-CFO of Crazy Eddies who is clearly simply asserting "truthiness"--he believes it to be true, therefore it is true.

There is no basis of fact for his "Kiss of Death" commentary. i.e. demonstrate for me more than one example in real life that supports your claim.

For the right clients, white collar attorneys are always available on the weekend. Nobody at GS is "stewing over the weekend" waiting to talk to their attorney. The timing of this has more to do with creating the right buzz/headlines for the Sunday talk shows....

DL said...

"The timing of this has more to do with creating the right buzz/headlines for the Sunday talk shows...."

and the debate in the Senate over financial regulatory "reform".

Andy T said...

@DL. Probably so...there are no "coincidences."

AmenRa said...

Andy T

I still think there's something else pretty big that had to be "hidden". I need to check all financial news sources and sovereign risk levels.

DL said...

AmenRa @ 9:20

I think we see ($SPX) 1205 by Wednesday.

After that, I don't know.

Ironworker said...

I think DL nailed it...intransigent GOP trying to block financial "reform"...Dems need public/media outcry to Do Something. GS is the Wall St. posterboy, but of course TPTB don't want to do any serious permanent damage- this suit seems to fit the bill.
IW

DL said...

Ironworker,

I don't know what the Republican's gripe really is. It might be that there's a problem with the consumer protection part of the legislation. But in any case, the bill does seem to be a big step forward with respect to TBTF (even if it does create a $50B slush fund, and still permits a backdoor bailout).

Perhaps also, the Republicans are staking out a position so that they can revisit the legislation after the midterm elections, when their numbers are greater.

Mannwich said...

@DL: Well, there's been evidence that the GOP has been cozying up to Wall Street in efforts to get the lion's share of the campaign money this year and in '12. Their opposing Obama and the Dems doesn't have anything to do with what's "right". I think that's obvious by now. It's just politics for them too, except they're getting played for fools by the O man here, as they get backed into a corner looking like they're supporting some of the very parasites on Wall Street who got us into this mess by opposing reform. They are making a very BIG mistake, IMO. Clueless.

Ironworker said...

DL,
I honestly haven't looked the particulars of the bill, nor the issues that the Republicans have with it, mostly because I have this sinking conviction that whatever is enacted will have loopholes and back-doors aplenty for all interested parties, save for the American taxpayer (I almost wrote "citizen", but I feel that there is a growing differentiation between the two). I feel that there is maybe not a hair's breadth of difference between the two parties on the most basic issues. Both parties have and will continue to spend us into oblivion while their backers are enriched/empowered (and the two groups are not mutually exclusive). Sorry for the rant, all.

DL said...

A Sunday evening is a particularly good time for a rant.

Bruce in Tennessee said...

Karen:

How on earth did you know it was my birthday? Do I know you? You aren't the Karen I went to the football dance with are you? I'll check your answer tomorrow. Night.

BinT

Bruce in Tennessee said...

I am amazed by this...unless it is something simple I've overlooked, I know you could figure out who I am with enough thinking, but knowing it is my birthday...that really caught me off guard. On second thought, don't tell me how you did it. Let me be amazed.

AmenRa said...

Happy Birthday Karen and Bruce!!!

Anonymous said...

Happy, Healthy Birhtday Karen, Bruce and lil I(I Man's son).

From Canada.

AmenRa said...

But...the SPX missed a higher weekly close by $2.25. So there's a .18% lower weekly close. I'm worried because it didn't close below the weekly 3LB mid and the daily midpoint is still above the 10 SMA. Brian's phone will be off tomorrow (beep beep beep Brian is away from his desk at the moment. Please leave a detailed message and he will return your call as soon as possible). Make sure his area code is not in the Cayman Islands when he calls.

Anonymous said...

@Amen, Market is red!

I-Man said...

Whats up friends?

Happy Birthday Karen and Bruce!

(Karen, I tore into some CEF charts over the wknd but havent polished them up yet.)

Andy, thanks for sharing your work here, I really look forward to it. Its nice to see that we're on the same page, btw as you'll see from I SPX chart. I'm actually kind of relieved to see the move we had on friday, regardless of how it ends up playing out. I happen to want to play this one on the short side, but I have some parameters.

http://dreadcapital.blogspot.com/

Catch up with yall in the morning. Interested to see how europe opens.

CV said...

NEW THREAD UP

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