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

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.]

It appears that the Fed has finished its pet project – market tampering – merely because the balance sheet is so bloated, there isn’t much else left that Yellen can wreck.  We should see another, stronger down move next week.  We have been over bought for almost two years according to the MACD.  At some point this ends  and next week could be the start.

Click on chart to enlarge Dow Jones Weekly First Down Finish In Six Weeks – Volume Spikes To Confirm Downside

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.]

Markets have been overbought for almost TWO YEARS as evidenced by the MACD.  We are closing in on six years of bull run with little correction along the way.  Corps are buying back their stock at or near all time highs and they have been doing this for years in exchange for near ZIRP bonds and higher EPS – for some reason we are bought in that this makes companies more valuable.  Media continues to pump recovery –  something that has never existed.  Volume is in the tank while we find more all time highs.  Global GDP forecasts are at multi year lows and markets are at all time highs.  The cash VIX (at 12.09) is about 15% above it`s all time low and the September VIX (expires on the 17th) is at 13.20 – discrepancies galore.  There`s big downside brewing.

Click on chart to enlarge Dow Jones Weekly Up For Fifth Straight Week – How High Can Central Banks Drive This Market Up?

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.]

Same POMO for September as for August – so much for tapering.  And since the US GDP is at 4.1%, Yellen believes more cash injection is required.  Makes no sense, but the Fed continues to be the never ending nuisance.  We are close to channel resistance.  Market volume is at record lows.  How much longer will this joke market last?  Not sure.  If you are in the market, keep small positions and exit quickly.  We are closing in on six years of up market with one significant pullback.  When the sell off happens, it will be ugly.

Click on chart to enlarge Dow Jones Weekly Up Fourth Straight Week To Another All Time High – Global Economy Remains In The Tank
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