Anyone else suffering from Football withdrawals?
Yeah...thought so....
Some S&P 500 thoughts to consider here. This is more bigger picture in nature with thoughts toward: "What if the market takes out the highs? What does it mean?"
S&P 500 Commentary 12Feb12
Addenda:
Grammy Awards Tonight. Wonder if Whitney Houston will get a mention or two? What a waste....
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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.
17 comments:
Weekly 3LB Update 2/10/12
Andy T
For the bears they should look for a confirmation of the bearish harami formed on the SPX weekly chart. Unfortunately haramis have had a horrible record of confirmations recently. Might be one the patterns that the bots are programmed to not confirm (/snark).
Thanks for the update, Andy. It looks like sentiment hasn't reached the bullish extreme it did in early 2011, so it is possible for a continued rally like the one from late November until early February. Here's an overlay chart.
It's also possible that this is more like 1991. However, in both cases the preceding year didn't have the H&S top look that this Feb - July period did, so I think we're close to the top than the bottom.
I tried to find an analog from the 70s, but the January rally has gone too far to match the 1977-78 scenario.
There is still a gap in SPY from 134.47 - 134.56 so it looks like that will be filled tomorrow.
It seems unlikely that the Fed will actually launch QE3 until there is a significant selloff, since that was the pattern for all of their past major actions (ZIRP in December 2008, QE in mid-March 2009, QE2 in late August 2010, Twist in Sept 2011). So a stunted version of the 2010 QE2 rally, where the market rallies more but ultimately can't close above 1374, seems more likely.
I mentioned something about 1474 last week (around ~ paper napkin), just spec a latin...
1562-1342 = 220
220 * .618 = 136
136 + 1342 = 1478
just sayin'
I guess I'm the crazy one on this blog for thinking about the historical maneuvers involving fiat currencies & geopolitics whilst FAILING in my quest to look for '70's era analogs...
I now realize my error...
& I guess MY POINT for saying that is that there is really no point at all...
Which basically means... In my cock-a-mamey view of things, probably a move past 1374 would make NO SENSE AT ALL (as Eric describes) in the context of what's going on because everyone still seems wrapped up in this "QE3" thing, which, if anybody is paying attention is just a boogeyman because QE3 has been ongoing for months via swaps...
But since it's verboten to talk about those things 'officially', traders need some excuse to cling to... As if Bernanke is actually going to hold a press conference, clear his throat, and tell everybody... "OK people, we've started QE3 now"...
Instead, there is no real reason to go past 1374 other than the fact that it buys more time, and a lot of the WRONG people would lose a lot of money if it did & the right people would steal that money from them...
What's worse ~ is that (even as Andy illustrated on the chart, whether he implied it or not), was that then next stop would be the all time highs...
GUARANTEED 100% that that's all you'd hear on CNBC for the next two months, with shill after shill coming on saying we're gunning for the all-time highs...
Only that ~ if it then NEVER MADE it, again,,, all the WRONG people would lose a lot of money and all the RIGHT people would steal that from them...
1474 is somewhere in between... There's no 'magic' in it (I told you it was really only paper napkin for me)... But it's as good as any other...
Welcome to FREE MARKETS!
"...But the obesity epidemic hardly looks like a growth killer. Highly processed corn-based food products, with lots of chemical additives, are well known to be a major driver of weight gain, but, from a conventional growth-accounting perspective, they are great stuff. Big agriculture gets paid for growing the corn (often subsidised by the government), and the food processors get paid for adding tonnes of chemicals to create a habit-forming - and thus irresistible - product. Along the way, scientists get paid for finding just the right mix of salt, sugar and chemicals to make the latest instant food maximally addictive; advertisers get paid for peddling it; and, in the end, the healthcare industry makes a fortune treating the disease that inevitably results.
Coronary capitalism is fantastic for the stock market, which includes companies in all of these industries. Highly processed food is also good for jobs, including high-end employment in research, advertising and healthcare.
So, who could complain? Certainly not politicians, who get re-elected when jobs are plentiful and stock prices are up - and get donations from all of the industries that participate in the production of processed food. Indeed, in the US, politicians who dared to talk about the health, environmental, or sustainability implications of processed food would in many cases find themselves starved of campaign funds.
True, market forces have spurred innovation, which has continually driven down the price of processed food, even as the price of plain old fruits and vegetables has gone up. That is a fair point, but it overlooks the huge market failure here.
Consumers are provided with precious little information through schools, libraries or health campaigns; instead, they are swamped with disinformation through advertising. Conditions for children are particularly alarming. With few resources for high-quality public television in most countries, children are co-opted by channels paid for by advertisements, including by the food industry..."
http://www.aljazeera.com/indepth/opinion/2012/02/20122384633401456.html
ibid.
If they put those additives & chemicals in Natty Boh, I'd be a goner!
cv--
that sounds 'funny', until you realize..
"...In Lee Janson's book, Brew Chem 101, he states that "commercial brewers are allowed to add, in any combination, over seventy-five chemicals, dyes, and additives to beer without informing the consumer." Is anyone privilaged to know what some of those additives are? They are obviously not (initially) dangerous additives or the FDA wouldn't let the beer companies put them in, right?
Also, why are commercial brewers allowed to keep their ingredients secret from their consumers? Is it a matter of brand and trademark protection?..."
"...For those same reasons the labelling effort has been fought by the wine and beer industry because the ingredients label would be longer than the Bible.
Like cigarettes...if you knew what was in there would you put it into your body?..."
"...Ever wondered why you get a worse hangover on commercial than hb. It's the Chemicals..."
http://www.homebrewtalk.com/f14/chemical-additives-commercial-beers-21378/
http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=Lee+Janson%27s+book%2C+Brew+Chem+101
http://www.mainbrew.com/pages/beerpages/ingredientpgs/beeradditives.html
People, G-d Love 'em, Love to Assume..~
AAIP
http://finviz.com/quote.ashx?t=AAPL
HOD: 503+
looks like ~190, before ~490 was an Error..~
ibid.
Barron's cover: Dow 15000.
Time to get the hell out?
@Amen
lulz ~ not so sure...
this kind of reminds me of 1999 & 2007
I think it was 2/27/2007...
a day which will live in infamy (in my mind)...
CV is on the "FAST MONEY" ticker that night... saying the market would crash tomorrow (because it as a "Martin Armstong" red circle day...
It did... (but went on to recover & make the all time highs later that year against much skepticism including the famous "Cramer rant" about the FED in August of that year)...
In any case... I made about $60,000 just on that day alone (2/27/07)... where my name is also on the "Fast Money" ticker...
~~~~~~~~~~~~
For some reason, it all 'feels' like that now...
just sayin...
FWIW...
On that occasion I was playing in the March, April, & December PUT OPTIONS...
Probably the most stupid & reckless trade I ever made...
Which ended up being the best ever...
go figure...
WTI back over $100. Kiss the consumer goodbye.
Consumer?
Do you mean that 'consumer' who is on SNAP & rides the bus?
It's gonna take $140...
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