I'm going lite this weekend. So, talk about whatever you want.

Just to let you guys know. Andy needs to skip this week's Sunday Night chart because he's busy commanding the Navy Silent Drill Team in Norway. His charts will be back next week! :-)

- Music
- Markets
- Mayhem
- Makes no difference

AmenRa's Daily Candle Wrap

Doji day. Boring. Midpoint stayed above 10 SMA. No daily 3LB changes. Only 3 more days of QE!!!

Bearish long day. Gann 2x1 level held. Uptrend is back. Slight distribution due to supposed Greece solution. No daily 3LB changes.

Spinning top day. Tested the 50% fibo ext and passed. Held the 21 SMA. Midpoint still above 10 SMA. No daily 3LB changes.

Bullish long day. Still below the 89, 55, 21 and 10 SMA's. Held the 144 SMA. Looks more like a search and destroy stops mission. No daily 3LB changes.

Bullish long day. Maybe 3/25/10 was an inverted hammer and this was confirmation. Still searching for a bottom (but it ain't over yet IMO). Midpoint is way below the 10 SMA. Next fibo level of 1.2935 is coming soon. No daily 3LB changes (I'd figured it would have had a reversal if all was well...NOT)

Bearish harami day (body & shadow fully enclosed by previous body). Closed above weekly 3LB reversal price of 38.62 (so there is a weekly 3LB reversal up). No daily 3LB changes. Two different views with daily saying heading down and weekly saying heading up.

Morning Audibles 3.26.10 - Musical Chairs (to Tetris Music)

Sometimes waiting around for a market break feels like a game of musical chairs. 

I suppose musical chairs can be fun, when you're a kid. (OTOH, what a better way to teach kids at a young age that they don't fit in, they're losers, so go stand in the corner while the other kids fight it out). Now you know where the idea for the reality show 'Survivor' came from...

Don't these people look like they're having fun?

Usually doesn't end this way (with everyone laughing). And why does the guy in the pink shirt look like he wished the guy on the other end had landed in his lap instead. I mean, you'd think he's be fishing for dollar bills out of his pocket instead of staring down the aisle (if you know what I mean). For his own part, the other guy looks like he'd be happy to oblige. Couple more rounds guys. Only a couple more rounds and we can book you two a room!

Now try playing musical chairs against a bunch of computer driven algos written by MIT nerds, who, just to annoy you, decided to loop the TETRIS music as the "game on", "game off" indicator...

Quick! toggle that bar over to the left and flip it 90 degrees you jackass!

Sometimes the best thing to do is to shut off the music and let others play the game. Things are sometimes too confusing in the short term (whether you're a fundamental trader, a technical trader, or both).

- What's the dollar doing?
- Is options pinning involved?
- What's the latest yak from politicians?
- Why is this so over sold/bought?
- Why did Gross/Soros/Bernanke say that?

My K.I.S.S. idea was to take a weekly view of the SPX over the past 10 years to see if it revealed anything. Here's what I came up with...

The chart is "sans" annotations. I'm just going to tell you what I see here:

- The downward trend line is from the March 2000 highs (this makes the entire 2006-2008 period appear to be a bubble - we are back to that trendline, and IMO, in the "noise" phase where to takes the markets a few weeks to figure out if we're really going to go higher, or if this is a serious barrier).
- The wavy line is the 144MA (weekly). While we crossed through this to the upside on yesterdays move, the market came SERIOUSLY reeling back. Depending on Friday's action, we may not 'close' the week above that MA.
- The market went into serious meltdown in 2008 after abandoning that MA
- In 2003, it took the markets a few weeks of tap dancing on it before doing a skyward move. 8 months later, it had retraced the entire move.
- The fibonacci levels you see are the RETRACEMENT from October '02 lows back to the March '00 highs. Note that THAT retracement NEVER really got past 50%. That level corresponds to the price levels we're at now (not FIBO wise - based on the '07 highs/'08 lows), but rather we're around those previous price levels (as if you were to fold the chart and erase 7 years).

Draw your own conclusions... CV's takeaway is that it's about time for the market to decide if we're going to just "bubble-up" again, or, if this was all just an exercise to get back to a more manageable slide down, rather than armageddon... 

Or in other terms, this is where the music stops (or keeps playing)...

AmenRa's Daily Candle Wrap

Bearish short day (heavy selling also). Not a shooting star because it needed to gap higher from a long day. Closed lower and confirmed bearish harami. No daily 3LB changes. Only 4 more days of QE!!! (and I think the market is starting to realize this)

Bullish short day. Gann 2x1 level is history. Uptrend back in vogue. New high on daily 3LB with reversal now 80.72. Go Bucky! Go Bucky! It's your birthday! It's your birthday! Drop it like it's hot!

Bullish LONG day. Tested the fibo ext of 61.8% (support) and passed. Then went and tested the 50% fibo ext and passed. Midpoint now above 10 SMA. New high on daily 3LB with reversal still 16.28.

Bullish short day. Still below the 89, 55, 21 and 10 SMA's. Held the 144 SMA. Couldn't close above the Gann 4x1. No daily 3LB changes.

Bearish short day. Not an inverted hammer because of too much lower shadow. Still searching for a bottom (but it ain't over yet IMO). Midpoint is way below the 10 SMA. Next fibo level of 1.2935 is coming soon (where's that sound effect for Jason in Friday the 13th). New low on daily 3LB with reversal now 1.3536.

Bullish long day (again). Trading above weekly 3LB reversal price of 38.62. New high on daily 3LB with reversal now 35.95. Timmy thought it was a nightmare but realized he was wide awake.

Doji day. An evening star wants to go supernova. New high on daily 3LB with reversal now 17.12.

Morning Audibles 3.25.10 - Sobriety Checkpoint

"FUN"ding... As it turns out, isn't so much "fun" after all...

In recent months, Fed Chariman Ben Bernanke has been dropping hints that rates could go up later this year. In addition, the Federal Reserve, of late, has been reducing its purchases of mortgage-backed securities from Fannie Mae and Freddie Mac, and has 'still' not said it will extend those purchases past the end of March.

Those purchases have kept interest rates artificially low for months. What's the takeaway here? A game of chicken, if you ask me. In anticipation of an end to those MBS purchases, by the FED, the yield curve has gotten increasingly wider. Despite the decision to extend the first-time homebuyer tax credit through April 30, 2010, recent months have brought an unexpected drop in pending home sales. This is unwelcome news for a government, and a Fed that were expecting those markets to "auto-correct" (not that anyone 'outside' the beltway ever expected that to happen anyway - but beltway insiders live in their own fantasyland). 

The takeaway is painfully obvious. That is, that the entire system still only exists on life support by whatever money the government goes into debt to spend to support it, and by the money that the Fed prints to monetize it. The Treasury Department, (trying it's best to fund spending on top of spending by this goverment), has found that there is little interest, of late, in rolling over short term debt for a measley .02 return. (in Bills). Treasury is therefore having to look farther up the curve to fund this insatiable appetite of spending (turns out Obama paying for everyones gas and mortgages is costlier than the former community organizer would have ever imagined). The bond market now seems set to turn this into a "game of chicken". They're basically saying, "let's see how much you want to pay to come play in our yard". Since the US government has already heaped on an amount of debt that it's not likely to be able to service, the idea of ratcheting up even only a few hundred basis points more seems out of the question. So 'something' has got to give.

All this comes at a time when Washington is going to have to start considering OTHER spending or 'stimulative' proposals as well (such as a JOBS BILL, aid to states and local governments who are insolvent [time to break out those blue and red maps again to see which areas are in MOST DIRE need], and probably yet another extension of unemployment benefits). You know, elections are coming up in the fall. They're on SOMEBODY's mind I'm sure.

There are not many good options here, but the simplest idea, of course, would be to tank the equity markets for a bit. A couple of weeks of this could chase enough "risk" assets into the safety of T-Bills so that the government could go on "extending & pretending" servicing its debt for a few months. At that point, I'm sure Bernanke would have to come out and announce another round of MBS purchases in the $600bln range, and perhaps another round of Bond purchases depending on how the roll over rates on short term bonds (which haven't looked so hot as of late) go. Here's a recent picture of the Capital Beltway if you haven't been around these parts in awhile.

With the problems in Europe putting the Euro on shaky ground, it would seem to me that now would be the perfect time to orchestrate this type of shell game...

- Blame the stock market correction on Europe and it's problems (& deflect from your own structural problems).
- Let the Euro find a new level
- When the Euro finds its new level, Bernanke can fire up the printing press again
- Commodities ought to rebound at that point (but need to take a deep hit in the process)
- Hopefully, if orchestrated correctly, you'll be able to keep the plaster on the walls until November. At that point, one of two results occur:
1. You win (because people are still fooled into thinking things are alright, or because now you've 'scared' them into relying on YOU for all their needs)
2. You lose (and whatever 'austerity' that comes from that, and the PAIN that goes with it can be blamed on the 'other guy' because the effects will happen on their watch).

I'm not saying that any of the above will happen (it may, it may not). I'm just presenting the most logical scenario (but as we know, "logic", "politics", & "capital markets" don't often collide in the same sentence).

So for now, CV is basically saying that this will only be a "garden variety" sobriety checkpoint.

You're doing it WRONG!
You're doing it RIGHT!

AmenRa's Daily Candle Wrap

Bearish harami day. Closed back below fibo ext of 1172.08. No daily 3LB changes. Only 5 more days of QE!!!

Bullish LONG day (I did say long, right?). Tested Gann 2x1 and passed (after 3 tries). Uptrend may be back (midpoint is still above 10 SMA). New high on daily 3LB with reversal now 79.75.

Bullish long day. Closed back above the fibo ext of 61.8% (support). Midpoint still below 10 SMA. Daily 3LB reversal up with reversal now 16.28.

Bearish long day (killing the bullish harami from yesterday). Already below the 89, 55, 21 and 10 SMA's and closed below the 144 SMA today. Tested the weekly 3LB mid (1099.50) and failed. New low on daily 3LB with reversal now 1108.10.

Bearish long day PERIOD. Searching for a bottom (but it ain't over yet IMO). Midpoint is still below 10 SMA. Next fibo level of 1.2935 is coming soon. New low on daily 3LB with reversal now 1.3700.

Bullish long day. Not an engulfing so could be profit taking or start of three soldiers. Still below the monthly 3LB reversal of 18.61. No daily 3LB changes.

Bearish long day. Closed below the Gann 8x1 (again). Hot potato, hot potato. New low on daily 3LB with reversal now 115`195.

Morning Audibles 3.24.10 - Anatomy of a P2

Don't worry if you're NOT a "chart-o-logist", CV is here to explain to you the basic definition of what the Elliott Wavers describe as a "P2"...

Here's what it looks like to EW'ers... (courtesy DANERIC)

Here's what it looks (and "feels") like to the rest of CRAMERICA (with appropriate "date" insignias)...

It all starts with a friendly bartender (preferably a Princeton or Harvard type) - March '09
Line 'em up - April '09
Don't FRUIT the damn things!
Nice first round there! You feelin' it? I'm feelin'it! - May/June '09
Let's take it another step! - July '09
Now that's what I'm talking about! (but skeptics appear - chick in green top) - August '09
You're doing it WRONG! - September '09
Uh oh! It appears I might have a drinking problem - October '09
OK then... FINE! I'll be analytical about this and set some 'targets' - November '09
Go for it... But just a friendly reminder from some RESPONSIBLE types - December '09
No heed? Well then, we wish you our best upon embarking on your quest - January '09
Last warning... But this is what happened to the LAST GUY... - January '10
Had too much? OK, we'll support you for a couple more rounds - April '10
Welcome to P3... Hope you enjoy your stay! - BEYOND
Just sleep it off... don't mind us! - FURTHER BEYOND
Your trusty dog Cramer, Obama, Bernanke, Rover said it would be OK? He'll explain it all to you when you eventually sober up. - Do DATES really matter at this point?

But who am I to stop you from your celebratory TOAST?

Gotta warn you though that this might happen!

But no matter what happens... You'll always have people like Peggy Joseph on your side because, HEY, you're going to pay for her gas and mortgage, right?


This blog should not be interpreted as investment advice of any kind. The authors are NOT representing themselves CTAs or CFAs or Investment/Trading Advisor of any kind. The authors may or may not trade in the markets discussed. The authors may hold positions opposite of what may by inferred by this blog.The information contained in this blog is taken from sources the authors believes to be reliable, but it is not guaranteed by the authors as to the accuracy or completeness thereof and is presented here for information purposes only. Commodity trading involves risk and is not for everyone.