Wednesday, September 30, 2009

Is not the same

Some are celebrating a new rally as ES has now recovered levels, after loosing foot seriously today . I don't trust in it, I think, as I have been posting, that the structure is damaged and internals favor more downside. All these spikes up were just news driven, non continuated and a product of lack of volume + desperated intents to maintain indice's levels .

McClelland oscillator


Tuesday, September 29, 2009

Monday, September 28, 2009

So far so good

Finally bulls had the expected bouce and even surpassed ES1056 area. But as they didn't close above ES1060.5 we still can expect the continuation of the bearish move towards ES1028. If 1060,5 is taken out tomorrow then the target for longs is near Es1090 uffff!:)
Regarding GS setup obviously was bought today but as well as SPX bulls have not yet crossed the key level so bearish stance remains.

We will be looking currencies tonight for more clues on tomorrow action but bears need ES dropping below 1054 quickly to maintain hopes healthy



As another proxy you can use is QM, which is serving us well as indicator. Now we have clear references for the ST:

What are they using your money for?

This is a pic that I found at Moo blog some time ago but now that I think about it, can't see why we aren't more worried about the use of tax payer's money. It is not conceivable to me that it is used to pay AIG's officers bonuses or a war in Iraq while a small fraction of those budgets will suffice to feed and educate all children in the world....

Sunday, September 27, 2009

Nikkei update - range resolved

Nikkei daily 09-28-
Signal is in, needs only confirmation.

Shameless crooks

BTW, I love this guy Grayson






Saturday, September 26, 2009

Setup on GS

Is risky but I like it...


Friday, September 25, 2009

Interest rates and stocks II

This is a continuation of this post. Main ideas and original chart is already sketched there.
I wish I had posted this one earlier since is more clear but I got too busy with intraday trading. Anyway, as I said, main idea was already presented before.

What we can see here is how divergences between stocks markets and interest rates are resolved in the direction of the latter. Probably because during the period of divergence, monetary authorities are already seeing what is to come and therefore changing interest rates accordingly. At the present (09-23) we are experiencing one of those divergences and interest rates are pointing downwards....







Daily wrap up

ES wrap up:
Main mid term trend still bearish ( so far so good) . Only concern is commented and marked with the red arrow. Basically , we would expect a bounce to 1056 zone before more meaningful downside

VST bounce may be coming...

And it did come :) but wasn't decisive. They let the door open for both sides...

What's up Boyz??

No more tax payer money to buy your own stock or what?

VIX uncoiling


Expected break out resolved the range nicely

VIX coiling

Keep an eye on this one for a potential break out.

Watch for dip buying in the vst

Some risk-appetite indicators are popping since 9:30 am EST. (in the VST)

See what I meant?

So recession was over, uh?
Maybe some of my post sound like rants against the system but I wish to provide some data to show that is more than that. At least is an alternative view that refuses to buy BS. Moreover our wish is to find "the unobvious" by methodically digging into different markets and data.

When I see this or this :



as a reaction to important economic data like this:




How can I believe this??:

Thursday, September 24, 2009

Daily wrap up 09-24

SP500 future wrap up:



As you may recall, we were studying some patterns at AUDJPY and used it as an indicator. Here is the update:



Dow update:




Interest rates and stocks I

See how short term interest rates have been anticipating intermediate tops and bottoms on SPX.
Since it is one of the most powerful instruments Governments have to intervene at the economy you can track its rises and falls and expect a delayed response at the economy and at stocks markets. This is particularly clear when divergences appears between interest rates and stocks indices. See following post for more details.

Short term interest rates are also a good instrument to gauge how much "aid" does the Economy need at a given time. Since 2007 highs we dropped 96% , it means much more aid is needed and it is not diminishing (IRX price is not rising on the chart). Just keep this in mind particularly when politicians and media come across with their intelligence-insulting-BS.





So the recession is over??Economy is ok now??. Let me ask: Where are the jobs?
Moreover, how can you expect us to believe that Economy is recovering if it needs immense ammounts of "aid" from short interest rates?.... please....



http://www.wikinvest.com/concept/Interest_Rates

Wednesday, September 23, 2009

A view on DJ Industrials

As you see the structure is very similar to SPX but much more clear IMO, the trend channel has been respected during the rally and descending trendline is much cleaner.
Needless to say these are bearish setups....



Close up view (same chart)

Intraday update 2 and wrap up

As expected the Fed announcement unleashed a rally but as the whole structure was damaged it couldn't sustain prices and reversed to the originall (bearish ) path to hit the defined target. The only question now is if the down-volume will join the move. Probably this time it will



Regarding a bigger time frame the setups we were watching continues to develop as expected.






Intraday update

Pullback continues. Among other reasons we can see: Oil falling 4% and EURUSD turning red after early strength. Anyway be aware of Fed rally and cover short positions when this down move shows exhaustion.


Still watching....

Specially for these setups BUT after the Fed. More importantly, today's close. During the day many things can happen but I will rely on today's and tomorrow's close.



Tuesday, September 22, 2009

No sellers

So why was the pullback so shallow yesterday? : No sellers, no real selling pressure, just longs taking profits and waiting to buy 1052 big time. I was confident about more downside if that level was taken out but was defended hardly. Still have to see what happens at ES1071 level during trading hours, it may bounce off but untill we see real selling here, all pullbacks are likely to be brief and shallow as we were fearing


Monday, September 21, 2009

GOLD: hot or not?

Of course Gold is on a bullish trend but is it really so hot?. See this chart where it is priced in euros to assess how much of its last explosives runs have been propeelled by a weak USD:



Now we couldn't be surprised if some more correction is under way...

Interesting coference from Antal Fekete about Gold and Financial markets (thanks www.simplenorisk.com)

Sunday, September 20, 2009

Thoughts for next week

After reviewing market internals indicators we can easily see this last week's rally ran on sound support. Last week rises have been coupled by increases in most instruments. The fact that this rally has gone too long and too fast, though maybe is true to the common sense, is not tradable at all. Nevertheless, we think the time for a pullback is very close so we have to be alert and watching the correct indicators to avoid losses and the long side and ideally catch a nice short entry when the market turns. So our job for next week is
1) not to fade the rally until clear signs are shown.
2) Actively look for indications of pullback not only in price but also it corresponding moves at market internals, currencies and bonds.
In regards of this last task, we found this chart of NYHL which is quite interesting, particularly if next week continues to the down side.

NYHL










Also see here an update of this previous study:

AUD - JPY ratio (not Forex)




As always, close surveillance on USD. If any pullback is to come to stocks markets, it should start at the USD. Here are some signs I have found:




close up view:

USD open on strength as expected

EUR/USD, AUD/USD , GBP/USD all gapping down at opening.

Sunday guess work - Currencies telling the tale

Here is an interesting chart which may help to explain why I am always pounding at the currencies stuff despite of trading mostly stocks and futs:

What is the pattern here?



Also here:





and here...

Friday, September 18, 2009

Sumup in a picture

This is a perfect graph for a sum up. You can see clearly here where the money was allocated this past week. These moves are what we try to watch constantly to identify market direction at all times.

Appetite for risk is clear in this chart:


Thursday, September 17, 2009

Incipients signs





Intraday risk thermometer

See how our indicator are performing , showing some decrease in risk appetite during intraday.

Thursday outlook

Rinse and repeat

This is all about lastly. Both from the currencies and credit markets point of view, there is no reason to get out of a short term and mid term bullish position. Even stock markets overbought condition and dissonance with real economy have reached unprecedented levels, from the technical point of view we have to focus on more upside. IT targets are SPX 1105 and SPX 1123. Dips are very likely to be bought.

Keep an eye on 8:30 EST data: Building permits and Unemployment Claims. The content itself is non important IMO but they are moments in which we can expect acceleration.


Bears hope (small) :
  • ISEE 146 show very high bullish (fadable) sentiment
  • A 30 min close below ES1058 could trigger longs covering.

Wednesday, September 16, 2009

Ron Paul loud and clear about all this BS

Wednesday outlook

USD continues to fall and carry traders are making the most of it and gunning stocks relentlessly. We could see EURUSD gapping up and running today. AUD is quite flat and the strength on JPY seems is not going to be enough to control bulls.

High Yields are still under demand and credit market in general still shows risk appetite.

From the technical perspective all indices are more than due for a pullback from days ago but until the above mentioned sentiment reverses we cannot expect meaningful drops.

As the bears hope we can point out the extreme sentiment ISEE reading suggest (146) .

Again, until clear strength on the dollar appears, bull's party has high probabilities to continue.

Tuesday, September 15, 2009

Da Man

Monday, September 14, 2009

Wall Street pre opening - 50 most active securities by volume

BAC and C around -1,5% in pre open

EU opening 09-14

EU opening confirming weakness so far:

Eurostoxx 50




DAX

Sunday, September 13, 2009

I hate to say it but.... they told us.

We have been talking about AUDJPY and EURJPY quite frequently since they were enlightening some worrying shades in this crazy-bull rally. It seems that on friday close they were already confirming moves. See these charts of them separated to see each performance and tell me if you can see what I was seeing: such a strong JPY (risk aversion currency) can't be foretelling much more upside in stocks.


See the picture EURJPY was showing on Friday (which is confirmed so far be Monday gap down). These signsamong others were negating the posibilities of ES surpassing 1043 on Friday, that is why we shorted that level.





JPY weekly view:


JPY daily view:




Same message coming from a weak AUD.




But there was more on friday. Remeber out junction point? There were two apparently decoupling (commodities and stock indices) instruments. My guess is that there is no sucha a decoupling but a leading move at commodities that may be signaling the way down for the rest of the market. Despite the huge rally last week these indices couldn't close above resistance and gap...


Commodities ETF, inflation corrected



One thing that does not match with these bearish ST scenario is credit markets still showing appetite for H yields. So keep an eye on it.