Dow Jones Weekly -

[Technical Indicators We Use – MACD, MACD Histogram, Bollinger Bands, Candlestick Patterns, Elliott Wave Counts, Cycle Brackets, Volume, Channel Support and Channel Resistance, Support and Resistance Levels.]

Looks like a  hammer bottom, but we don’t expect much follow through next week.  We expect to see channel support break next week as POMO takes one last run at pumping up markets.  Why does the Fed do this?  The US President appointed Yellen and experts know that market indexes reflect an incumbent’s chance of getting re-elected.  If markets stay up, it is likely that things will stay the same.  If markets tank, it is likely that the US Senate will change hands.   It would be shocking to see Yellen extend POMO – the message would be clear that the Fed is now the newest market maker in the business.  This was suspected in the past, but it would be a blatant confirmation if POMO goes into November.  Yellen’s word would be worthless – similar to that of a cheesy used car salesman – and calls for Yellen to resign would get very loud.

Click on chart to enlarge Dow Jones Weekly – Fourth Down Week In A Row – POMO On Monday, Tuesday And Thursday

Dow Jones Weekly -

[Technical Indicators We Use – MACD, MACD Histogram, Bollinger Bands, Candlestick Patterns, Elliott Wave Counts, Cycle Brackets, Volume, Channel Support and Channel Resistance, Support and Resistance Levels.]

And once the Feds stop screwing with the markets using POMO, the markets fall/normalize.  So why was/is the Fed doing this?  It is common understanding that the market indexes are measures of social mood – the higher, the better.  It is also common knowledge that when markets stay up, US Presidents get re-elected.  Trillions out the door to game the masses into believing that the economy is doing just fine and to re-elect a US President who’s probably the biggest nincompoop in the history of US Presidents.  Oh yes, and with the active participation of the MSM promoting all this bullshit, the process completes itself.  All good until music stops.  Expect much bigger swings in daily markets in the weeks ahead – hear that all you day traders?  We need a close below 16000 to confirm this bear.

Click on chart to enlarge Dow Jones Weekly Falls Almost 3% – Look Yellen, NO POMO – Need To Get Below 16000 Support

Dow Jones Weekly -

[Technical Indicators We Use – MACD, MACD Histogram, Bollinger Bands, Candlestick Patterns, Elliott Wave Counts, Cycle Brackets, Volume, Channel Support and Channel Resistance, Support and Resistance Levels.]

Seven years of pouring trillions into US markets ends on October 28.  There’s still reverse REPO and the proceeds the Fed has received from POMO.  These won’t have the same longer lasting impact as POMO itself.  The USD has rocketed recently – up 13 straight weeks.  This will hurt earnings / guidance.  In short, this week’s move could lead to more all time highs, but instead we should see markets fall sharply next week.  Yellen and her “buy anything that moves” tactics are out of rope.

Click on chart to enlarge Dow Jones Weekly Closes Red As Forecast But Still Has Legs – It Probably Won’t Last Long

Dow Jones Weekly -

[Technical Indicators We Use – MACD, MACD Histogram, Bollinger Bands, Candlestick Patterns, Elliott Wave Counts, Volume, Channel Support and Channel Resistance, Support and Resistance Levels.]

Big POMO day on Monday – this should send markets up sharply at the open, but by 1230p or thereabouts, markets should head back down.  POMO for October is down to a “mere” $15B from $25B in September.  It’s pathetic that market analysis amounts to how much the Fed is pushing into these over valued markets.  The other Fed wildcard is RRP (Reverse REPO), but this program is running out of momentum.  We are also into earnings season next week, so share buybacks may be a bullish factor too.  Most parties partaking in pushing these markets to “infinity and beyond” are either running out of cash, out of leverage or out of bonds.  October could be the month we free-fall – unless Yellen chooses to pump more liquidity.  No wonder there’s so much infighting at the Fed.  Haven’t you had enough Yellen?

Click on chart to enlarge Dow Jones Weekly Falls Again As Signs Of Weakness Continue To Mount

Dow Jones Weekly -

[Technical Indicators We Use – MACD, MACD Histogram, Bollinger Bands, Candlestick Patterns, Elliott Wave Counts, Volume, Channel Support and Channel Resistance, Support and Resistance Levels.]

News from Yellen and her infighting Fed is that POMO ends at the end of October.  But Reverse REPO will continue in its place.  So the Fed is out of the “cash infusion” business for now and into the purchase business (Reverse REPO).  There’s still $15B of POMO to contend with in October, but the upside impact should be minimal.  Corps have run out of rope to continue their share buyback game.  Reality is almost upon us.  Commodities are falling sharply (CCI index hit a five year low today) which indicates deflation is well on its way.  The USD is still climbing which puts enormous downward pressure on commodities and US indexes.  The RUT (Russell 2000 – small business index) fell 1% today – it’s small business that usually leads a recovery and this index is in the tank and should fall sharply next week.  October VIX is 14.10 and today’s cash VIX closed at 12.11.  Warning signs are abundant.  On a separate note of how good things are, it appears that the San Diego County Employment Retirement Association (SDCERA) will be day trading to meet their financial obligations.  There is no recovery folks.

Click on chart to enlarge Dow Jones Weekly Reverses Back Up In Face Of Bearish Signs – Should Pull Back Early Next Week
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