Morning Corner 5.20.11

Nifty 50 (weekly info)
-no change (below mid)
direction=up (2 bars)
high= 5927.50
rev= 5398.50; mid= 5663.00

This is the third week that the Nifty 50 couldn't get above its weekly 3LB mid. It's already below its monthly 3LB mid. It's also below its SMA(21), SMA(55) and SMA(89) on the weekly chart. The weekly 3LB reversal beckons.

IBEX (weekly info)
-no change (above mid)
direction=up (1 bar)
high= 11068.10
rev= 8923.40; mid= 9995.75

The problems in Spain are starting to catch up with its market. It's showing weakness by trading below its monthly 3LB mid. It's trying to desperately hold on to the SMA(55). Just like Greece, Spain can't avoid it forever.

PSI 20 (weekly info)
-no change (above mid)
high= 7765.00
rev= 6727.00; mid= 7246.00

Portugal seem to be holding up despite taking a bailout. Go figure.


BinT said...

Interesting...not just Lowes and HD, now Gap having problems due to higher costs..futures negative...

It would seem PE ratios must decline if earnings in certain industries do due to higher costs of doing business...

Perhaps WMT was the canary in the coal mine.

Leftback said...

India will be fine in the long run. 2nd half may see a resurgence for emerging markups and Japan if Chinese inflation gets under control a bit, which it may well do if commodities continue to roll over.

Spain is f***ing bankrupt and the biggest con job in recent years.
Europe, meet your LEH and AIG all rolled into one.

B in T: it is hard to see a large broad market advance while the energy, retail, financial and mining groups are all struggling. Summer markets are typically a big sausage machine of cash rotation from growth to value (utilities, telecoms, boring stuff). This is no exception.

Andy T said...

The Dollar Index sporting a very choppy/consolidative pattern....that's not bearish.

It looks like a "flag" on the 30-60 min charts.

ben22 said...


been charting USD/CAD a lot lately, would agree with you based on that chart the dx itself is not yet done going up, still, I like your corrective labels.

I'm bearish CAT and a few other indy names, I'm bullish a few names too.

ben22 said...

James Harden made some huge shots last night as did the man from VCU come up big.

Westbrook's gotta get his shit together

best hoops we've had in a while imo.

AmenRa said...


Bench players have been a major factor in the championships.

qqqqtrader said...

In the car (from Reno, driving to CA HWY 49, gold country, heading to Yosemite for a day or two, then, who knows), out of the market... feels comfortable. 99ercharts

18's target still 1314, 1305ish (almost got there on the 14th), after hitting Major 18's 1375 (1370, well close enuff for me from a Jan prediction).

Worse case this month we see 1296? My signals seems to be a bit confusing lately.

ben22 said...


tru dat. John Paxson comes to mind right away.

I'm keeping an eye on the TICK today, betting you are too.

Andy T said...


Was raised around those parts....good stuff.

Have fun.

qqqqtrader said...

@AT, thx, lately, seems I just want to take my 3 or 4 day weekends and get away. Wanted to go back to Santa Cruz area but the wife has different plans... grrr.

Told her while in gold country, we're going to stop at one of those "panning for gold that guarantees you find gold" tourist places and pan until we find a BIG nugget (fat chance!)

as always, AT/AR charts, LB commentary, THX!

AmenRa said...


The usual script:

Paxson checks in.

Jordan get double teamed.

Jordan finds Paxson.

Paxson hits a three.

Wash. Rinse. repeat.

qqqqtrader said...



seems it's at good support now, if it fails here, can see it going to 96, somewhat strong support, then 93. after that, 83/84 looks possible.

AmenRa said...


TICKS has been in a range most of the day. No extreme readings...yet.

ben22 said...


don't see it that way at all, I only view those as intermediate supports, strongest support is in the 70' won't be a straight line move but the price action on the trendlines, MA's and channel I've been following for months now has been bearish of late. All momentum indicators and OBV had big divergence at the last top.

qqqqtrader said...

B22... agree

Markets been doing well last 2 years. Owebama has 2 years left. Maybe this year flat so next year can be an up year to help re-elect him? Just can't see how he'll do this, with the job situation and all. shit... gotta get on the road!

ben22 said...

"Owebama has 2 years left. Maybe this year flat so next year can be an up year to help re-elect him?

Well, I hear you there, the DOW and president popularity is a very tight correlation for a long long time now, I'm really dreading the election, all the stupid ads, etc. Going to be crazy.

Have fun on that trip.

*I've got stops on the CAT trade, it won't go to $70 if the market isn't ready to move down yet and it appears it's not, that's probably the move that will occur in AT's (C) wave on CAT, but 5-10 more points here wouldn't shock me.

AmenRa said...

This is becoming too commonplace. Move ten handles in either direction in a couple of hours. Sheesh.

Andy T said...

This whole "Rapture" deal getting a lot of play.

AmenRa said...

Andy T

That's that pastor claiming that May 21, 2011 is THE day.

ben22 said...

yeah it really is, people bringing it up in all my meetings

do you guys have the vans driving around your area? i see them all over around here, they even have ads on the DART bus in DE.

Mel said...

Good debate last night dudes.

Econ 101 wasn't offered in art school when I was attending (not that the former would explain much) I appreciate it. Many thanks.

Anonymous said...

There have been a lot of 10+ point downdrafts on the SPX of late. Each one gets bought back to the 1340-1350 level...but no higher.

Could this pattern represent algo-driven attempts to separate the last remaining short-sellers from their money? As we all know, the rally over the last two years is partially attributable to short-covering.

It makes me believe that the short-covering part of this rally is completely done. There are no short-sellers left. And it also makes me believe that there is no one left to buy this market. It has stalled.

Only time will tell. STL

Andy T said...


Randy "Macho Man" Savage Dead.

I watched this guy A LOT when i was kid.

Anonymous said...

Classic Moment in Wrestling history...

Hulk Hogan Saves Randy Savage...

Anonymous said...


guess what?

Hedge Farm: The Doomsday Food Price Scenario Turning Hedge Fund Managers Into Survivalists
May 19th, 2011

Via: New York Observer:

This is happening in part because investors see their play as a hedge against hyperinflation. While the rest of the world uses the current calculation of the Consumer Price Index as a proxy for the cost of goods, some farmland investors are using a different equation, one from 1980. These investors assert inflation should be calculated the way it was before the Boskin Commission’s 1996 reworking of the CPI formula-in which case, it would be much, much higher.

“The CPI supposedly today is something like 1.5 percent,” says the hedge fund manager. “We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis. It’s also not about what it’s been over the last 10 years; it’s about what it’s going to be over the next 10 years.”


AmenRa said...


It seems like they want to force a short bout of short covering on a daily basis. Probably hope that it triggers a large bullish move. Anything to counteract the horrible economic data that has been coming out.

Leftback said...

Buying Japan again today. We are not wildly bullish, nor bearish the US.
Europe is going to fall down a great big rabbit hole, and we think a lot of that is manifest in the US Treasury market of late.

Current positions:

EWJ about 9%
Single names (NLY, CIM, NZT, T, FTR etc..) 28%
JNK about 5%
TLT about 3%

Cash 55% (this reflects the fact that we are dollar bulls).

I thought I would post that here where I wouldn't immediately be called "FULL OF IT" and other expressions of affection.

We think Real Money is getting the message that they are under-invested in income-producing stocks and over-invested in low yielding tech and retail.

Leftback said...

Inwestors should open their minds to the possibility of job creation out there, and try not to be blindsided by a BTE jobs report.

(I know.....)

We agree that employment is weak, but one really hot number (450k?) could spoil your whole day if you are very long bonds, gold or silver. This is why we are not enthusiastic about fixed income here at these low yields.

June 1 ADP. June 3 NFP. Just a thought to keep on the radar....

Anonymous said...

@ AmenRa

Without short-covering or positive economic data, what is left to lift/support the stock market other than further gov't intervention? It really feels like the rally is done. STL

Leftback said...

"what is left to lift/support the stock market other than further gov't intervention?"

JOHN E - and any rotation out of bonds by real money.
That's all. Remember that QE lite continues for now.

However, do not discount the possibility this lifts the market.
Low volume summer markets can be moved easily.

Remember the weeks into Labor Day 2008?
We knew what was coming but they kept on buying.....

AmenRa said...


This current move in the market looks like some traders decided to get the hell out before the weekend...

Anonymous said...

Equity bears are neutered at this point. Fear of the next QE announcement. Fear of further short-covering rallies.

People seem to be bullish or uninvested. That asymmetry is going to end badly. STL

leftback said...

There are several markets going in parallel here. One equity market has a lot of margin and leverage (LNKD, miners, energy, and some EM markets) and the other doesn't. Then there is the bubble in commodities, which has not yet completely popped.

So that's the asymmetry we see.

We wouldn't mind taking a few shots from the short side but the technical picture would have to align with macro first. Those slow grinding rallies can be painful for bears. Trust me, I know....

AmenRa said...

Run don't walk to the exit please.

Anonymous said...

LB, your perspective is appreciated.

I'm still amazed about what has happened over the last two years -- the unrelenting pursuit of RISK. Everything -- bonds, commodities and equities -- seems massively overbought.

Must remain patient....STL

Leftback said...

"Everything -- bonds, commodities and equities -- seems massively overbought."

Not really. Equities are very patchy. Solid dividend payers trading in single digit P/Es, and then other stocks trading at P/E > 50-100.

Commodities. Silver, crude, overbought. Copper, natty gas maybe not?

Bonds, Spain 10y at 5.5%, Brazil at 12.5%. You'd take Brazil, no?

Bubbles a-plenty, but not evenly distributed. Risk is apparently not at all clearly perceived.

We are not at that 2008 place where EVERYTHING was overpriced - except for Treasuries.

Anonymous said...


I can't say that I'm enthused about Spanish bonds.

On the surface, Brazillian bonds seem like a SCREAMING BUY -- a 3-month bond is yielding over 12%. But I have absolutely no knowledge of the risk involved. Brazil may be an economic steam engine but there must be significant risk with that rate. STL

Post a Comment


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.