S&P500 Daily -

[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.]

Zerohedge pulled apart the Fed’s minutes – many thanks Tyler.  The encrypted message from the Fed was that there will be no bailout for markets next time.  The next time we tank, that’s it.  The market has to stand on its own and bounce back on its own.  Should be interesting times for those who continue to buy back their shares. The RUT closed red for the 2014 today.  The SPX, NDX and Dow are still well above where they started in January 2014, but were below this level October 14 – a few weeks ago.  The sell off could start as early as tomorrow (how many times has that been said?) and this time it appears that the Fed has finally got the heck out of the way.  Deflation should pick up momentum as the global economy continues to shrink – and the Fed knows they can’t do much about it.  The daily MACD shows way over bought.

Click on chart to enlarge S&P500 Daily Closes Flat As Yellen Skips The Speech – Message To Markets From Fed – No Bailout This Time

S&P500 Daily -

[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.]

Some consider the VIX, the FTSE and the RUT as leading indicators for major market bottoms and tops.  We have seen topping indicators for the past five days in the SPX.  The RUT has clearly broken rank and fell almost 1% today.  With central banks gaming the system higher and corps issuing low interest debt to buy shares back, today’s weakness may not follow through.  What is clear are the macros coming from all major economies indicate shrinking GDPs throughout.   Japan’s announcement this morning is just one example of the economic mess out there.  Yellen bloviates on Wednesday – which usually means a market ramp follows.  There’s no more POMO, but it sure seems like there is – interest income during POMO should have faded by now.  The joke of the day goes to the VIX – it was up 5% – another sign as the SPX closed up on day 26 of the move up – another tell that this central bank nonsense should end soon.

Click on chart to enlarge S&P500 Daily Closes Flat On A Spinning Top – RUT Down Almost 1% – Divergence Continues

S&P500 Daily -

[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.]

Pulling away from the bollinger, MACD fading, one spinning top and three dojis – indecisiveness.  The dominant cycle appears to have shifted one half cycle (we have not adjusted them yet).  Cycle brackets are very subjective, but like elliott wave, can provide perspective.  In effect, cycle brackets break down the market in smaller chunks for a more concise analysis – but they do shift.  Look for a pullback, much like late August.  We could see another push up after, but this move should be short in duration.  And then we roll over for our long awaited bear market – the USD remains key.

Click on chart to enlarge S&P500 Daily Shows Doji – Again – Indicates Indecisiveness – We Are Ready To Roll Over Early Next Week

S&P500 Daily -

[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.]

So where’s the buying coming from?  It’s the Fed.  Not directly, but indirectly through other cooperating financial institutions.  The Fed balance sheet is being watched closely, so it remains the same – some say it’s actually shrinking.  Regardless, central bank driven buying continues primarily through interest earnings from bond purchases.   Many are calling this a megaphone top too – these patterns are rare.  In the end, when the Fed chooses to back off, markets should pull back.  It’s look like it should happen this week.  As well, congratulations to all those companies that posted lousy earnings, lousy revenue, lousy guidance and a move up in your stock of 5-10% on the announcement – you’ve made this market what it is today.

Click on chart to enlarge S&P500 Closes Flat As Europe Closes Down Sharply And USD Moves Higher

S&P500 Daily -

[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.]

Volume is fading.  Price moves are fading and pulling away from the upper bollinger.  There’s a bulging the lower bollinger indicating top too.  More importantly, Yellen’s spending hasn’t recovered Europe’s markets. Germany’s DAX and England’s FTSE sit retraced about 60% with little or no chance of regaining where they have fallen from despite the falling Euro.  Europe will eventually drag US markets lower – same happened during the 2011 flash crash.  As well, the USD continues to get pounded in the morning only to bounce back in the afternoon with more upside in the weeks to come.   These last two indications are applying enormous downside pressure on US indexes.  When will the turn occur?  We were expecting today, but the Fed spent their way out of it with interest accumulated from US bond purchases.  There’s no reason for markets to be at these levels.  We are expecting markets to fall this week – perhaps as soon as tomorrow.

Click on chart to enlarge S&P500 Daily Run Continues – Day 18 – Yellen Blowing Bond Interest Income To Keep This Bad Joke Going
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