SPX (weekly info)
-no change (below mid)
trend=down
low= 1123.53
rev= 1268.45; mid= 1195.99
It appears the fantasy of QE3 has permeated the market as it has pushed above it's weekly 3LB mid, SMA233, SMA89 & 50.0% retrace. So short-intermediate term sentiment is bullish but long term is bearish as the SPX may close below its monthly 3LB reversal price.
IWM/SPY (weekly info)
-no change (below mid)
trend=down
low= 0.5827
rev= 0.6246; mid= 0.6037
The proxy for liquidity is still indicating it's not there. So even though the market is up it isn't because of liquidity. It's still below SMA89, SMA55 & SMA13. It's also below its weekly 3LB mid. It appears traders collectively yelled "Show me the car fax!"
26 comments:
SPX fair value 1211ish. So futures are only up $4. This is pre-ADP.
ADP 91k consensus 110k
Not only that, the last ADP was revised down by 5k.
BinT
I noticed that also. Of course this means the possibility of QE3 increases as futures decided to jump higher.
http://www.bloomberg.com/news/2011-08-30/aging-baby-boomers-shrinking-labor-force-may-curb-u-s-growth-for-20-years.html
Women and baby boomers entering the American workforce after 1950 helped to supercharge expansions in 1975 and 1983 by filling an increasing number of jobs and purchasing more goods and services. Now as the share of women with jobs falls and older Americans age into retirement, the shrinking -- or, at best, slowly growing -- workforce will weaken economic activity for the next two decades.
The demographic changes may be the biggest and least- appreciated reason why the two-year recovery has slowed, because the rate of growth for labor and capital is “the most important determinant” of economic expansion, said James Paulsen, chief investment strategist for Wells Capital Management in Minneapolis.
BinT
But the rumor that Germany will back the new EU rescue plan didn't hurt.
Amen:
I have come around to the idea that very low interest rates produce a malaise that everyone expects little return on investment...and perpetuates the idea that all of us should curtail spending...
I suppose this seems counterintuitive to the Fed, but it seems to be what is happening.
I think the German taxpayer has realized they are the "frog in the water"...and that since Greece et al is really just another tax since this money will never be paid back, I think there will be a voter revolt when this hits home.
How do you say Tea Party in German?
@ben (other thread)
'that it was all by design by JPM that they lost everything, all JPM's fault that they were "suckered" in'
What I'm trying to say is that the underlying argument is the same damn argument that talking heads used on TV (Re: the 'housing crisis' - 'people got suckered in'), or for ANY OTHER ponzi scheme that has existed all the way back to PT Barnum's great great great (to the "nth") grandfather... There's a sucker born every minute... So tell me something else that is effin new...
All that matters is that in the end 3 things happen:
- the 'suckered' blame the 3 card monte dealers (hoping they can get a few Maxine Waters to help out in the process)...
- The '3 card Monte dealers' have folded up the card table & are already off ealing a new game (so they could really give a FF about Maxine Waters, they're 3 blocks away saying 'come find me' & having a stack ready to 'pay off' anyone who decides to)...
- SOMEONE in the end, has to pay for it all (& in the ULTIMATE 3 card monte game - that's the middle class taxpayer)...
Well... There's also a 4th thing... That is:
Prechter shows you a wave chart after all is said & done to show you how it all went down...
so in 5-6 months when you hear me rip the shit out of zero hedge crying woe over the CME you'll understand why now
I don't have to wait 5-6 months... I already know it will happen again... & already know ZH will cry woe... I & already know you'll rip the shit out of them...
I suppose ZH should just 'shutter up shop'... After all, EVERYONE already knows that they're playing 3 card monte with the CME's & JPM's of the world right?... They teach you that in the 3rd grade, I think... Right between recess & lunch...
Of course, there are SOME who are still playing around in the 'ultimate ponzi scheme' (as escribed above)... But I'm sure they know what they're doing...
'I never said a damn thing about how markets work'
You don't have to sit at a keyboard & type out words & sentences to make an implied case...
& before you take a wrecking ball to that statement, consider your/our boy 'Ritholtz'...
Gee... I've never read anything anywhere where he's come out & stated that he's a 'LIBERAL' (in fact, he says he's a LIBERTARIAN)... So what am I supposed to believe? What he 'says', or how he 'behaves'...
You behave in a way that implies that you believe very strongly about EW theory... I'm not knocking that, I'm simply stating that, I believe, that's how you behave...
EW theory, in general, gives 'parameters' on how socioeconomics (& markets), for lack of better term 'work' (or don't work - as the case may be)...
So YES... I'd go as far as to say that if you're a believer of EW, then you believe that markets work (in the long run)... Because even if, at any given moment in any present, they SEEM to NOT be working, the trajectory of wave patterns would become NULL or UNSUSTAINABLE according to the theory itself...
I'm not sure why people follow the ADP still
it's a giant fail, for months on end
even if the figure was really bad, something I'd generally expect right now
I wouldnt' believe it.....
CV,
not today, I'll pass. I've got better ways to spend my time. Whatever you think I believe, it's true to you, so that's all that matters.
If anyone is wondering why I bother making comments on this stuff (because I don't have BRAZILLIONS riding on a trade at any given 'tick'), it's for several reasons... Not the least of which is what's stated above...
---
"The Comments Section is uncensored and open to the public. Please try and adhere to the "Blogger Policy."
---
So, the day that Amen & Andy become Ritholtz & Thor, & decide to 'censor' me from making comments on the blog because it's not relevant enough towards praising Paul Krugman, or giving wonderous re-countings of shopping for pissing pharaoh statues in the Cairo markets... then I guess I'll just hang around...
I bet football games (from time to time), as you may know...
So let me see... do y'all think that I just sit around & wait for Ron Jaworski & Merrill Hoge to give me the "factor back" recap before I decide on what to do?
There's 'stuff' all around you & much of it has NOTHING to do with the 'experts' who are all paid to parrot each other & end up getting 61.8% of the people thinking a certain way...
I'll give you a 'market' example here...
--- From AMEN/this morning ---
It appears the fantasy of QE3 has permeated the market as it has pushed above it's weekly 3LB mid, SMA233, SMA89 & 50.0% retrace. So short-intermediate term sentiment is bullish but long term is bearish as the SPX may close below its monthly 3LB reversal price.
Then, on last evenings 'corner', there was a bunch of EWI potential counts & several numbers getting tossed out (like 1252 - all the way up to 1286 - if I recall)...
So great... Let's start with all that & make a synthesis...
- It's 3 days before Labor day weekend (meaning: the 'likelihood' is that the junior varsity algos are at the switch)...
- dollar looks like it's frozen in suspended animation
- no formal QE3 (to anyone's knowledge announced)
- market perhaps "expecting" such QE3 (otherwise, the recent rise UNEXPLAINEd ['unexplained' - is NOT CV's view, just the consensus of what I've been reading])...
---
Basically, I just laugh when I see all those dynamics juxtaposed against each other... Why? The 'beauty' of it all...
I just ask myself, 'What is the way to create the LARGEST pain for the LARGEST number of people...
So here's the diabolical plan (or UNPLAN, as the case may be)...
- Market rises to 1252-1286 (on low volume)causing EWI to come out with 200% 'short' call...
- After Labor day... QE3 is, in fact, announced... A massive short squeeze occurs as technical levels are broken & reconfigurations made to the waves...
- In the end, that big long candle was, in fact, just a short squeeze, & stocks get dumped sending the markets plunging...
- So the big QE3, ends up being a "sell the news" event...
- The BROKEN 'ewi' shorter term wave count, morphs into a larger, longer count (which conveniently has a triangle point that ens about mi next January [when bonuses are paid - & the primary election cycle gets into gear])
- Zero Hedge screams 'manipulation'
- someone around here chastizes THEM for being a bunch of 'probably failed & disgruntled former hedge fund managers who prefer to scream 'manipulation', instead of taking the bad trades like a man...
... & the colored girls go 'doop doop doop d-d-d doop doop doop
These are just the 'opinions' of a man (not named Ron Jaworsji or Merrill Hoge)...
ben22
ADP is for small businesses. So if small business is the engine to grow our economy then it stalled.
Ra,
I suppose my larger point is that its not relevant really to a trader, though I certainly understand why an economist would look at it. A macro trader might claim they use it but I'd like to know how.
Small business/private sector job growth has been punk for a decade now, while one could argue the stock market has been in a secular bear that entire period of time, it was in fact UP more years than it was down over the same time frame so I'm not sure how using ADP to take a bearish stance on stocks makes a ton of sense.
with what appears to be a very large margin of error in the reporting, seems ADP only tells you something way after the fact.
Also, I might disagree that the "engine" of the economy are small businesses
I think the real engine is credit and whether it is expanding or contracting
ben22
Ok. I was thinking in terms of jobs.
ADP reports the checks they print for companies. That's it. Why they would want to SA their numbers is beyond me.
@ben
Whatever happens... always look on the bright side...
1. NFL is about to begin
2. Chick-fil-A is offering FREE BREAKFAST
What could possibly go wrong???
Head on over to Chick-Fil-A & find out...
http://www.youtube.com/watch?v=qrZHroTxgtE
Ra,
of course we have a jobs problem, I'm not trying to deny that, but that's not new, thats all I'm saying, it has been the case for 11 years running and in the meantime we might get these big market rallies to trade anyway
ADP is used more than anything else to adjust these regression models that economists use, the entire introduction to their methodoly explains this. It's only a 7 page pdf if you care to read it.
the regression models are glorified trend extrapolation programs as they "react" to "anomalies" in the ADP
thus, all the "reporting" of such things by economists won't give any trader an edge, not even a macro trader
I suppose one could argue they'd track it for secular market work/observation.
I get free food at CFA all the time
every other week they run a promo it seems
come in today, keep your receipt, come back on the same day in two weeks and we give whats on your receipt for free
I do it all the time....
'I do it all the time....'
---
I'll bet you don't do it on Sundays...
But that's just ME... Gamblin'/Wagerin' fool that I am... :-)
Low volume pre-Labor Day trading. Fade the action....
Profit taking may begin as soon as tomorrow, ahead of Friday's NFP.
LB
Do yo think ISM will accelerate the profit taking (especially if it's under 50).
We will know soon enough, my friend....
I wonder if it will be tweaked...?
Maybe 50.1 ?
Cynical..?
LB
You mean similar to GDP 1.0% (actually was 0.99%)?
It was probably lower than that before a few tweaks.
SPX had a monthly 3LB reversal down. That's all.
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