Sunday Evening Post: S&P 500

Hello All,

This update is really only focused on the S&P 500, which had an outstanding performance last week.  The bottom line is that this market is once again knocking on the door of the previous highs.  That is not a sign of a market that is "peaking" at all.  Markets that have peaked have no business going back to its previous highs.  It seems like a higher probability event that we will take out 1344 sometime this week.  The wave count, though, suggests that if we do break to new highs this week, it will likely be a "bull trap" as there is a zone of technical resistance between 1367 and 1380.

So, if one plans on "buying the break" to play the momentum up, just stay nimble.

SP500 Update 24Apr11



Addendum:

I caught this interesting interview on "disrupting" the educational system.  It's a subject near and dear to my heart.  What was most fascinating, though, was that it was JEB BUSH spearheading the effort.



After listening to the interview, two things struck me:

1) George and Babs Bush are wishing Jeb had been just a little more experienced in 2000 as he would have burnished a much better legacy for the Bush Clan.  This guy has always seemed more competent and intelligent than his elder brother.

2) Jeb Bush would be the leading Republican candidate in 2012 if his name wasn't "Bush."

This fellow seems like a "Clear Thinker" to me.
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One of our readers, Jennifer, was wondering about the Silver Wave count, specifically what the labelling of the move lower was in 2008. Attached here is a chart I created in September '09 that highlighted that wave count. The move lower was not impulsive and the wave up was not impulsive either. It turns out Silver was probably in a massive, multi-year triangle, which is why all the various 'legs' were corrective and which is also why we saw such powerful move up once the triangle concluded August 2010.


19 comments:

qqqqtrader said...

I don't want to mention the inverse head-n-shoulders on the daily SPX chart because nobody else sees it, and I'll jinx the outcome IF everyone else knows about it.

Andy T said...

Just becuase I like to pick on the Golden State sometimes.

I was sitting in this camping chair (the kind that collapses small) and there was a tag on it that read:

"Warning. This chair does not meet the California Bureau of Home Furnishing Guides on Flammability Section 117.xxx"

California has a group dedicated to Home Furnishings?

Wonder how much money gets tossed down that drain each year?

Andy T said...

qqqq: I gave it a brief mention on slide #3....

I know there are some bulls salivating on that one.

qqqqtrader said...

AT... thx

re H-n-S... I just briefly looked at the pics without reading... sorry

I like your possible 1367-1380 target. First of the year I gave 1375 area as high for 2011 using the Major 18's... still within play IMO.

About CA, yeh, that state is messed up. Even though I'm still a legal resident of CA, I'm hardly ever there. It's really amazing the difference in the cost of things from state to state.

cv said...

Stay nimble bitchez!!!

(as AT suggested)... I just say that so as to make sure that my posts aren't too long, & that HOPEFULLY everything I touch doesn't turn to shit... (like silver did when I prepped it last August)...

cv said...

Just to PROVE to you all that everything CV touches, does, in fact, turn to shit like silver...

I'm going to post you the following link...

http://www.youtube.com/watch?v=Lnt5HuGGcKw

Your job is simple... TRY TO DETERMINE which side CV is on with regards to this trade...

Whatever you decide... Don't say anything about it... Then, 3 weeks, or a month later, when the charts have definitely made a break one way or another... PRETEND CV was on the other side of that call and 'demonize' him for it...

Express your demonization by NOT POSTING COMMENTS... That way, we'll all be better informed as to how to trade...

Francis Soyer said...

http://www.youtube.com/watch?v=LrllCZw8jiM

qqqqtrader said...

LOL... If THIS isn't a short squeeze I'll eat my silverware!

AmenRa said...

The State and Local Update from the Rockefeller Institute: http://www.rockinst.org/pdf/government_finance/2011-03-18-Boyd_GIOA.pdf

Andy T said...

Guy Adami actually made a good point on Silver last week. He said: "One day, we're going to come in and Silver will be up 6-7 bucks and then it'll trade down hard. That's when we'll know it's over."

I have to agree with that concept at this point. It has the feel of "wheat" back a few years ago or oil going to $147. We're going to have to find out about some Trading House going down the tubes on a Silver short and stopping out.

We basically need to see a human sacrifice in the trading pits...

And, then, we'll know it's over.

Anonymous said...

Jeb sounds like he is pitching pets.com, all the words everyone wants to hear with absolutely no substance behind them.

AmenRa said...

DXY catching a bid. Yen getting dumped. Silver looking to breach 48 in the after hours. Should be a fun morning.

Andy T said...

Anon/DSS@9.54

Yep, Jeb is just like the sock puppet from Pets.com....

What planet are you from again?

Andy T said...

AR: It's going to be a fantastic morning...I'm taking the day off tomorrow. I think it's a Euro holiday tomorrow, so I'd be surprised to see a big move either way...maybe these overnight moves get faded a little bit.

AmenRa said...

Andy T

This post http://www.zerohedge.com/article/stock-world-weekly-convergence-trouble made this point:

Excerpt:

Lee Adler of The Wall Street Examiner wrote last week, “The market sailed through a week of light Treasury supply with reduced POMO support. A big Treasury paydown this week put extra cash in dealer trading accounts and it did exactly what we expected it to. S&P threw a little glitch into things on Monday by putting the US on a negative watch. They probably just had a big client with a huge buy order outstanding. A little negative news and Voila! Done!

Next week, Lee thinks, will be a little more interesting. “POMO will be insufficient to absorb $52 billion in new supply. With that much paper to sell, the government will want to see yields lower. So be on the lookout for a 3 AM stock futures selloff in the pre market probably Tuesday and/or Wednesday. There’s nothing like a little stock market liquidation to get a buying panic going in Treasuries. If that doesn’t happen, then something will need to take a hit around May 2. That’s settlement day for $45 billion in new notes. We would need to keep an eye on the technicals for clues to which market would bear the brunt of that if there’s no pre auction liquidation of stocks.” (The Wall Street Examiner, subscription required)


We shall see.

AmenRa said...

I turn my back for a second and silver busts through $48. Currently has a high of $48.24.

AmenRa said...

http://www.ashraflaidi.com/forex-news/

quote:

ASIA PACIFIC PREVIEW

Most markets are now closed and typically this means flat trading in Asia. With the yen rallying once again Thursday, however, there is a risk that policymakers try to talk down JPY during thin trading. The same risk applies to Monday which will be quiet with Australia closed for ANZAC day and several other countries closed for Easter Monday.

Expect to see the DOLLAR RHETORIC HEATING UP in the days ahead after Americans are blasted with headlines lamenting the dollar over the long weekend. This could boost the USD but we cant imagine savvy traders doing anything but selling the bounce. The only thing able to prompt dollar buying at the moment is risk aversion. Even then, the dollar comes in third place to the yen and Swiss franc. Traders are also getting more aggressive in using those opportunities to establish short USD positions. We cant help but speculate about what can stop the falling U.S. dollar?

The Treasury Dept. is entrusted with protecting the value of the buck but it has neglected this responsibility for nearly a decade. There is almost nothing now that Geithner can say to spark a rally. Obama is focused on jobs and the weak USD is boosting manufacturing. The Fed thinks along the same lines and hawkish hopes for Wednesdays meeting are a pipe dream. So who is going to take action? The dollars best (only?) hope may be that leaders elsewhere decide to start selling their currencies. Japan is already back in the intervention zone while leaders in New Zealand, Canada and Australia are likely drawing up contingency plans. Otherwise, we cant see any reason in the week ahead to be buying dollars.

By AB -AshrafLaid.com Staff

AmenRa said...

Update: Silver high 49.78

spoonman said...

Silver unbelievable. Very powerful.

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