WEEKEND EDITION - Off to Jellystone (Open Thread)

Andy will be off on a camping trip with the family this weekend so it is unlikely that the usual SUNDAY EVENING POST will arrive at out doorstep.

He is working on some charts though and will likely make a special appearance on Monday Evening to be integrated with the other threads.


I'll definitely be checking in - and will probably post some charts on Sunday Evening in lieu of Andy (or, if I-Man, or Nic want to offer something of that nature, let me know and I'll cue it up)...


Summertime weekends take me away a bit as well because there are a number of chores to do (and, of course, there's THE GREAT OUTDOORS)... :-)

As long as Roman doesn't show up...

AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection

SPX
Bullish thrusting day. Still far below 1110.02 (fibo .09) Midpoint submerged below 10 SMA. Back above the 233 SMA (1079.31). Also back above the 1.618 fibo (using low) of 1078.87. No daily 3LB changes (reversal is 1165.87). Trending down on the daily 3LB. Made new weekly low (confirming reversal) and is below the monthly 3LB reversal price. QE2infinity.



DXY
Bullish short day. Midpoint above 10 SMA (barely). The 85.11 (fibo .1459) is holding (91.80 is next). Back below the 76.4% retrace. Weekly chart is bearish thrusting. No daily 3LB changes.



VIX
Bearish engulfing day. Fear of the truth of how bad it really is. Closed back below the 38.2% retrace. No daily 3LB changes (reversal is 24.91). Trading well above the monthly 3LB reversal (24.51).



GOLD
Spinning top day (again). Still below the 21 SMA. Midpoint below 10 SMA. "Ring ring. Hello? This is your margin call. Sell whatever you have to...again." To hell with fiat! (Gold's rally cry). New low on daily 3LB with reversal still 1220.30.



EURUSD
Doji day. Guess they're unsure about the BS also. Midpoint above the 10 SMA. Fibo level of 1.2935 is history. Up next is 1.1571 (the .236 fibo level). Don't be fooled. It still has problems. Still below trendline (11/27/09-3/17/10). No daily 3LB changes.



JNK
Bullish engulfing day. But it didn't close the gap. Now above the 14.6% retrace but still below the 233 SMA. Midpoint below 10 SMA (downtrend). No daily 3LB changes (reversal is 39.38).



GS
Bullish long day. Midpoint below the 10 SMA. Still below the 2.058 fibo (using low) of 144.98. Looking to test the 1.618 fibo (using low) of 124.12 (oh yeah it's coming). Note: All MA's are still pointing down. No daily 3LB changes (reversal is 142.32).


WTI
Bullish harami day. Midpoint below 10 SMA. Closed above 23.6% retrace. No daily 3LB changes (reversal is 71.61).

Morning Audibles 5.21.10 - A "Cock & Bull" Story

Bloomberg (for Dummies)


May 21 (Bloomberg) -- Any investor who wants to gauge how serious the stock market’s retreat is need only know the Standard & Poor’s 500 Index has fallen to within 6 points of its low on May 6, when panic selling prompted calls for reform.

Translation: We make up things like "fat fingers" because we too like to watch "Dancing With the Stars" and taking the time to get to the bottom of things would distract us from that.

Europe’s debt crisis has pushed the S&P 500 down 12 percent during the past month as concern grew that deficits in Greece, Spain and Portugal will unhinge the global economic recovery. Regulators have proposed six potential causes of the May 6 crash, including losses in exchange-traded funds and an unwillingness to match orders among some electronic traders.

Translation: if we can't blame it on fat fingers, we'll make sure you believe that the problem is caused by fiscally irresponsible little countries across the pond (even though our own policies are just as bad).

“As far as we know, it’s not a computer error today,” Jerome Dodson, who oversees $4 billion as president of Parnassus Investments in San Francisco, said of yesterday’s slump. “The May 6 flash crash was driven by technical troubles and didn’t reflect any fundamentals. It’s surprising that regular trading would take us down to the same levels as a technical glitch.”

Translation: "Fundamentals!" (pauses to clean coffee off of keyboard). If the stock market GOES UP, it's fundamentals, if it GOES DOWN it's a glitch. & "These are not the droids you are looking for".

The chart patterns show concern the U.S. economy may weaken after expanding during the past three quarters. Reports yesterday showed more Americans filed for jobless benefits in the week ended May 15 and the Conference Board’s index of U.S. leading economic indicators unexpectedly declined in April.

Translation: When Uncle Sugar runs out of money that was borrowed and you've yet to be taxed on, and that was used to artificially bring demand forward to make himself look good & to give his bankers friends betting cash, the charts start looking bad after awhile.

“If this begins to bleed into people’s psyches, then it can perpetuate a negative sentiment that could weigh not only further on the index, but begin to impact the real economy,” said Kevin Caron, a market strategist at Stifel Nicolaus & Co. in Florham Park, New Jersey, which oversees about $90 billion.

Translation: People don't like it when their Treasury is looted.

U.S. stocks are valued at 19.4 times annual earnings from the past 10 years, according to inflation-adjusted data tracked by Yale University Professor Robert Shiller. That compares with the average of 16.4 since 1881.

Translation: I'm being "generous" with these so-called valuations. But you'll never hear that on TOUT-TV.

Birinyi Buys

While the stock selloff reflects reasonable concern that Europe’s sovereign debt crisis will derail global growth, U.S. corporate earnings and favorable valuations will prevail, said Laszlo Birinyi, the founder of Birinyi Associates Inc. Profits for S&P 500 companies are forecast to increase 17 percent this year, pushing the index’s price to 13.2 times annual income, according to data compiled by Bloomberg.

“I am not of the view that we’re going to go into a 20 percent downdraft,” Birinyi said in a telephone interview yesterday. “We are buying to take advantage of this weakness.”

Translation: "I'm a tool"

Billionaire investor Kenneth Fisher also sees the equity plunge as a buying opportunity. The chairman of Fisher Investments Inc., who oversees about $35 billion in Woodside, California, said the U.S. economic recovery will outweigh the debt crisis in Europe.

Gross domestic product in the world’s biggest economy rose at a 3.2 percent annual rate in the first quarter. Consumer spending increased by the most in three years and business investment on new equipment advanced at a 13 percent pace. The economy will grow 3.2 percent to 3.7 percent this year, the Federal Reserve said on May 19.

“If GDP is rising, you don’t have a recession,” said Fisher. “We’re getting the stock market correction that begins to let us put everything behind us and move on to the next leg. This is a bull market.”

Translation: "I'm an even bigger tool than Birinyi. Anybody that followed my real estate advice back in 2005 is broke & destitute. But I still flap my gums whenever I get a chance"

All kidding aside, Last night I was asked my views on some levels that we could hit... Frankly, there are too many crosscurrents at play here, but I'll toss out a few levels to give it some perspective.

1070 - TD&ZH are warning that there's a huge "size wall" there... If it gets taken out in the cash, watch out below...

1065 - Flash crash LOW PRINT (seems irrelevant now - futures pointing near there)

1050 - The Chicago pits seem to love that number

1044 - The February low (with the "forces that be" may prove to be an irrelevant number as well)

1042 - The .1457 FIBO extension from 1219.80... EW'ers & fibo freaks (like me) are keen to this number

1000 - purely psycological

972 - A number CV tossed out during the January correction but was never hit...

956 - That was the summer '09 previous high (may act as somewhat of a H&S)...

932 - (a .2357 fibo extension from 1219.80)... This would mean the market has done more than a 20% correction... Many pundits would say that we're now in "BEAR MARKET" territiory (as if we were ACTUALLY in a bull)... Whatever...

Or, if you wish, I could go find Birinyi, Fisher, or AJC for you... In the end, they'll probably be right... Obama is probably on the phone right now asking how many trillion it will cost to buy back 2,000 DOW points...

AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection

SPX
Bearish LONG day. A marubozu day. Blew through 1110.02 (fibo .09) as if it wasn't even there. Midpoint submerged below 10 SMA. Now below the 233 SMA (1078.58). Also below the 1.618 fibo (using low) of 1078.87. New low on daily 3LB with reversal now 1165.87. Trending down on the daily 3LB. Making new weekly low and below monthly 3LB reversal price. QE2infinity.



DXY
Spinning top day. Confirmed dark cloud cover. Midpoint above 10 SMA. The 85.11 (fibo .1459) is holding (91.80 is next). Back below the 76.4% retrace. No daily 3LB changes.



VIX
Bullish long day. Fear of the truth about economy getting out. Closed above the 38.2% retrace. New high on daily 3LB with reversal now 24.91. Trading well above the monthly 3LB reversal (24.51).



GOLD
Spinning top day. Broke through the 21 SMA. Midpoint below 10 SMA. "Ring ring. Hello? This is your margin call. Sell whatever you have to." To hell with fiat! (Gold's rally cry). New low on daily 3LB with reversal still 1243.10.



EURUSD
Spinning top day. Confirmed bullish engulfing. Midpoint still below the 10 SMA. Currently below all MA's. Fibo level of 1.2935 is history. Up next is 1.1571 (the .236 fibo level). Also tested the .1855 fibo of 1.2336 and passed. Still below trendline (11/27/09-3/17/10). No daily 3LB changes.



JNK
Bearish long day. Risk off and hurry. Now below the 0% retrace and below the 233 SMA. Midpoint below 10 SMA (downtrend). New low on daily 3LB with reversal now 39.38.



GS
Bearish short day. Midpoint below the 10 SMA. Well below the 2.058 fibo (using low) of 144.98. Looking to test the 1.618 fibo (using low) of 124.12 (oh yeah it's coming). Note: All MA's are still pointing down. New low on daily 3LB with reversal now 142.32.



AAPL
Bearish long day. Tested and then closed below the 55 SMA. No daily 3LB changes (reversal is 270.83).

Morning Audibles 5.20.10

Ladies & Gents... I'm a little out of pocket this morning because I'm having some computer problems... I'm starting this new thread (just to get it started), but I'll have to insert the THEME later on...


CV

AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection

But not on my watch!

SPX
Bearish short day. Still pushing lower. Testing 1110.02 (fibo .09) again. Midpoint below 10 SMA. Noe below the 144 SMA. No daily 3LB changes (so close to a new low). Still trending down on the daily 3LB. QE2infinity.



DXY
Now that is a dark cloud cover day. Midpoint above 10 SMA (uptrend). The 85.11 (fibo .1459) price has been broken and is holding (91.80 is next). Still above the 76.4% retrace. Tested the 85.4% retrace at 87.37 and failed. No daily 3LB changes.



VIX
Spinning top day. Fear of Merkel. Didn't bother the 23.6% retrace. No daily 3LB changes. Still above the monthly 3LB reversal (24.51).




GOLD
Bearish long day. Tested but didn't break the 21 SMA. Midpoint still above 10 SMA. To hell with fiat! (Gold's rally cry). Daily 3LB reversal down with reversal now 1243.10.



EURUSD
Bullish engulfing day. Midpoint well below the 10 SMA. Currently below all MA's (again 12x). Fibo level of 1.2935 is history. Up next is 1.1571 (the .236 fibo level). Also tested the .1855 fibo of 1.2336 and passed. Still below trendline (11/27/09-3/17/10). No daily 3LB changes.



JNK
Bearish short day. Risk on risk off (thanks Miyagi). Still below the 50% retrace and below the 144 SMA. Tested the 38.2% retrace and failed. Closed at the 233 SMA (uh oh). Midpoint below 10 SMA (downtrend). No daily 3LB changes.



GS
Bullish short day. Possible bullish harami. Midpoint below the 10 SMA. Well below the 2.058 fibo (using low) of 144.98. Looking to test the 1.618 fibo (using low) of 124.12. Note: All MA's are still pointing down. No daily 3LB changes.

Morning Audibles 5.19.10 - Of all Elaborate Plans

"...of everything that stands..."

"I love the smell of napalm in the morning..."

"The horror, The horror"

AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection

SPX
Bearish long day. Resolved doji lower. Still below 1151.86 (fibo .0557) and pushing towards 1110.02 (fibo .09). Midpoint below 10 SMA. Tested the 144 SMA and failed. No daily 3LB changes (reversal is 1073.60). Still trending down on the daily 3LB. QE2infinity.



DXY
Bullish long day. Rejected the shooting star. Midpoint above 10 SMA (uptrend). The 85.11 (fibo .1459) price has been broken and is holding (91.80 is next). Still above the 76.4% retrace. Looking to test the 85.4% retrace at 87.37. New high on daily 3LB with reversal now 85.21.



VIX
Bullish long day. Fear is knowing there is nothing you can do to stop it. Banning short selling cuts the brake line. Tested the 23.6% retrace and passed. No daily 3LB changes. Still above the monthly 3LB reversal (24.51).



GOLD
Spinning top day. Inching down day by day but nothing drastic. Midpoint still above 10 SMA. To hell with fiat! (Gold's rally cry). No daily 3LB changes.



EURUSD
Bullish long day. Midpoint well below the 10 SMA. Currently below all MA's (again 11x). Fibo level of 1.2935 is history. Up next is 1.1571 (the .236 fibo level). Also tested the .1855 fibo of 1.2336 and failed. Still below trendline (11/27/09-3/17/10). New low on daily 3LB with reversal now 1.2603.



JNK
Bearish long day. Risk was OFF. Still below the 50% retrace and below the 144 SMA. Tested the 38.2% retrace and passed. Midpoint below 10 SMA (downtrend). No daily 3LB changes.



GS
Bearish long day. Midpoint below the 10 SMA. Well below the 2.058 fibo (using low) of 144.98. Looking to test the 1.618 fibo (using low) of 124.12. Note: All MA's are pointing down. New low on daily 3LB with reversal now 145.20.



COPPER
Doji day (possible 4 price doji but common for HG). Midpoint below 10 SMA. Still below weekly 3LB reversal but back above monthly 3LB reversal and 76.4% retrace. No daily 3LB changes.

Morning Audibles 5.18.10 - Turnaround Tuesday?

Turnaround Tuesday ? We'll see... Not much to "turn around" really (unless you want to call yesterdays intraday recovery a turnaround).

CV makes the case that we're still in a "backing and filling" phase. The following SPY chart illustrates some of the key "backs" and "fills" that have occurred since 1219.80 on the S&P cash, and the lows from the "flash crash".

Most of the major turnarounds have occurred on FIBO days.

- Day 8 was important (as that is where the "flash crash" occurred after 1219.80)
- Day 13 was important (as I'd suggested to watch out for in the thread last Thursday)

While today is Day 16... It IS Day 8 past the "flash crash", so it might bear watching. Futures are pointing positive. There is a strong likelihood, IMO, that some kind of smaller top could be put in today. The closest destination points would be the .0557 fibo extensions from the April 26th highs. MACD is showing some "bullish" divergence on most of the short term candles, so there is also a chance that we'll get a few intraday swings (basically establishing a peak in the morning, giving it up, then pushing back higher later in the day less enthusiastically).

All in all, CV plans to be watching for "bearish divergence" to show up by the end of the day (to indicate that Day 8 post "flash crash" will indeed be a TURNAROUND day)...

So I'm going with the FADED LOOK "FADE THE LOOK" strategy here...

Gisele B... World Famous FOREX arbitrage expert... Is probably applying her "fading" skills as we speak and moving back to getting paid in Dollars vs. Euros (she looks pretty happy about it too).

AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection

SPX
Bullish harami day. Could also be a high wave day. Still below 1151.86 (fibo .0557). Almost tested 1110.02 (fibo .09). Midpoint below 10 SMA. Tested the 144 SMA and passed. No daily 3LB changes (reversal is 1073.60). Still trending down on the daily 3LB. QE2infinity.



DXY
Shooting star day. Definitely rejected the high print (for now). Midpoint above 10 SMA (uptrend). The 85.11 (fibo .1459) price has been broken and is holding (91.80 is next). Still above the 76.4% retrace. Bucky is a celebrity. Everyone wants Bucky. New high on daily 3LB with reversal now 84.89.



VIX
Shooting star day. Fear is being long or short. Period. Tested the 23.6% retrace and failed. The market is afraid of being above 30. No daily 3LB changes. Still above the monthly 3LB reversal (24.51).



EURUSD
Bullish short day. Midpoint well below the 10 SMA. Currently below all MA's (again 10x). Fibo level of 1.2935 is resistance. Up next is 1.1571 (the .236 fibo level). Tested the .1855 fibo of 1.2336 and passed. Still below trendline (11/27/09-3/17/10). No daily 3LB changes.



JNK
Spinning top day. Traders thinking about risk on. Still below the 50% retrace and below the 144 SMA. Midpoint below 10 SMA (downtrend). No daily 3LB changes.



LQD
Spinning top day. Tested the 55 SMA and 21 SMA and passed. Continues to make higher lows. Inching toward safety but is not absolutely sure. No daily 3LB changes.



GS
Spinning top (or high wave) day. Midpoint below the 10 SMA. Still below the 2.058 fibo (using low) of 144.98. Still making lower lows. No daily 3LB changes.



XHB
Doji day. Tested the 55 SMA and passed. Tested the 23.6% retrace and failed. Midpoint still below 10 SMA. No daily 3LB changes.