Morning Audibles 6.11.10 Let's Look At This From a "Mission" Standpoint

I gotta admit... It's as confusing to CV as it is to anyone else what these charts look like right now...


The whole scenario reminds me of the scene in Apollo XIII when the oxygen tanks of the spacecraft exploded... There was entire chaos, but the crew of the space module and Gene Kranz (Flight Director at NASA's Mission Control in Houston - & whose character was played by the outstanding actor Ed Harris in the movie Apollo XIII), had to get an entire working team focused on the task of bringing the three astronauts (Jim Lovell, Ken Mattingly, & Fred Haise) back to Earth safely...

Gene Kranz

Decorated - PRESIDENTIAL MEDAL OF FREEDOM

I'm going to start by making some of you PHD's out there do your own homework and research the various EW scenarios that Andy T has been talking about on his "Sunday Evening Post" offerings (specifically - slide 5 from this past Sunday, June 6th)...


You don't have to be a "waver" to understand the diagram... It simply outlines a potential scenario (which can subsequently be NEGATED by a different set of outcomes)... There are OTHER scenarios, but they all follow rules... It's a process of ELIMINATION...


Despite my "joking around", CV is the pragmatic type... When things get serious, I like to LOOK AT THINGS FROM A MISSION STANDPOINT (like Mr. Krantz)... I want to first eliminate what's not working, and then assign probabilities to WHAT IS working...

"Let's work the problem people... Let's not make things worse by guessing"

Here are a few points that are CERTAIN... (SPX wise)


- 1140 is a bad number that the market (or TPTB) are trying to avoid
- Equity BULLS need to do a lot of work to reclaim a lot of technical damage done to the market during the month of May
- Presently, there are a number of different RESISTANCE levels overhead... There is, of course, the "Wanger Magical Mystical Number" that every fund manager, central banker, and sovereign leader is quaking in their boots over, 1097 (jk)... Beyond that:
- chart gap in the 11-teens
- some technical levels in the 1120's
- 1150 is a biggie
- 1173 would invalidate many wave scenarios


Basically, there are enough "scenarios" to boggle ones mind at the moment... But the bottom line is this... It's a more COMPLEX gauntlet for BULLS to navigate (if they hope to extend the rally from the March '09 lows), than what the BEARS might have to suffer... Recently, gains have been fought for "tooth & nail" or by outright market intervention (whereas SELL OFFS come along rather easily)...


Notwithstanding, If your inclination is to GO SHORT this market, doing so WILLY NILLY could be hazardous to your nether regions (depending on your entry point, your risk profile, or your tolerance for pain)... 


Therefore, I'm going to present this SHORT TERM chart to perhaps serve as a guide to short term ENTRY POINTS (and/or positions to "flee from)... This is a 10 minute chart on the SPX for the past 20 days... Some of it is annotated, but I'll bullet point some of those thoughts in text as well...

- In the past 20 days, CV notes MANY breaks of the 200SMA have occurred in "overnight" trading... While I could ask the simple question "WHY"?... The answer to that question ought to be obvious to anyone who DOESN'T work for CNBC, Bloomberg, the Fed, or the Obama Administration...


- Note the (RSI) waves... The extreme "overbought" or "oversold" readings came either on a sharp break to the other side of the SMA, or otherwise as an EWI peak was being established...


- The DEVIATIONS are also of interest... While we've had OVERSOLD amplitude deviations, the largest OVERBOUGHT deviation came at only 1/3rd the amplitude of the weaker side... This may or may not say anything, but it's certainly something to FACTOR IN (especially considering that there's a little room to spare on the UPSIDE of the RSI at the moment)...


- The potential TARGET of upside (potentially the 1110-1120 area) happens to be an area of interest to "wavers"... It should also be of note that the last time the SPX traded at those levels (7 days ago), the RSI hit a PEAK... Therefore, EXCEEDING those levels with a lower RSI would generate bearish divergence...


- On the other side of the equation... The next cross to the downside of that 200SMA may portend doom... Furthermore, based on recent pattern, those "crosses" may happen overnight (so be careful of your positions going to bed at night)...


Things are already interesting... And they're about to get MORE INTERESTING...


Come to think of it... While we're working on PROBLEMS... Why don't we get this guy...

"Look Americans, this is sand, and we don't like tar blobs "washing-TON" up on it on our beaches... So I'm here before you, to look authoritative, and make promises to KICK SOME ASS... Please now, go back to your "Dancing With The Stars Episodes & remember "I INHERITED THIS PROBLEM"... Sooner or later I'll get to that "Hope & Change" crap you bought into..."


Instead of just posing for foto-ops...


To call someone like this guy...

Or please, at least someone like him that has either RUN A DAIRY QUEEN before (or "something" else even mildly managerial in nature)... & hopefully DIDN'T go to Harvard!