Morning Audibles 9.1.10

Welcome to September (traditionally - the WORST performing month of the year, on average, for equities - though you wouldn't know it by the S&P futures which are on track to gap up 10 points on news that China’s purchasing managers’ index had a WHALLOPING rise to 51.7 from 51.2)...

Pardon Me while I Raff Out Roud

For those of you who don't understand Chinese, that basically means that there will be 517 vacant buildings in every city instead of 512... A 5 building increase!

So now the FOXCONN employees won't have to stand in line anymore to jump out of windows...

Anyway... Since CV gets paid just about as much as these contented little worker bees... I'll offer my ENTIRE PAYCHECK and give you all the 5 cent rundown:

- Yeah I suppose the indices (which always lead) are a little oversold "short term"

- Yeah we had a "generational" triple bottom at 1040... count 'em! 3 in 26 hours! GENERATIONAL I say!

- Yeah it's the first of the month (time for Jamie & Lloyd to offload their overpriced crap onto your friendly neighborhood 401k manager... You know... For THE FUN)...

- Yeah it's still summer (and remember - this is the SUMMER OF HOPE - so we have that going for us)... And even though "Creditcane Earl" is bearing down on the Hamptons, well, for masters of the universe, that is just an excuse to go windsurfing, right?

So the question is? How long will this last?

Frankly... I have no idea... Many wavers still have tight ranges (not giving much more than the 1070 - 1080 area)... Some others like RETESTS back up in the 1110 area... And then there are still gaps to fill, potentially, around 1120 and way up at 1150...

What I thought I'd do is take a broader look at things... The following is a MONTHLY chart (going clear back to 1987)... Stock Market people remember that year... And it was also the year that this movie came out...

And here's what the S&P has done since then...

I think pictures tell their own words but since I make the BIG BUCKS here, I'll offer up what I see for free... (admitting this is REARVIEW MIRROR analysis)...

- The straight line ruler from the post 1987 crash low thru the monthly closing candle low in 2002 takes us to a point that the market lost this summer, and is thus far failing to regain... It is very close to the 1130 level where the market failed on the July candle, and now the August candle as well

- The 233 month moving average & 377 month moving averages are on the chart... When looking at things from a long term perspective, you need to apply long term thinking... 233 months takes you back to about 1991... 377 takes you all the way back to 1978... At minumum, these should "smooth out" presidential cycles, credit bubbles, and CRAZY IVAN Fed czars...

- The RSI (of the "bubblicious" 2003-2007 period, and the "fear-a-licious" 10/08 - 7/09 period can be seen is periods OUTSIDE of a fairly flattish wedge which extends back 15 years. The most recent months show some consolidation within, but the August candle produce a a trend line break of the trajectory since the March '09 lows... It may be nothing, but in May the trend line was broken as well, and the move to do so happened to be the flash crash...

So again... For all I know, this chart is worth nothing more than looking back at 1990 candles and reminiscing about that night in Copenhagen with "Rannevig" from Iceland...

Or you could instead LOOK FORWARD to Wall St. II... Where I suppose "Greed" is still "Good" and "Money Never Sleeps" because it's all debt and electrons anyway... (Here, see for yourself)...

http://www.huffingtonpost.com/2010/01/28/wall-street-2-trailer-vid_n_440392.html?show_comment_id=39036913#comment_39036913

Good luck trading...