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 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.]

It’s share buybacks and indirect Fed purchasing (through their aligned financial institutions) that keeps this market from falling.  Notice that these folks don’t push the market up now.  They just show up on the intraday (see hourly) and as soon as the market weakens, in comes Yellen and company.  Very well coordinated.  As long as you trade small, you are safe.  But the cash is coming from somewhere – someone owns these shares when buying.  There is speculation that share buybacks help the bottom line, not just EPS due to ZIRP.  In any event, TWTR debt went junk this week – so all good things do end.  We were expecting a pullback this week.  Instead we were up marginally.  Look for the pullback next week.  Are we guessing?  You bet we are – we don’t have a technical indicator for “when the music stops”.  Momentum is fading – see price and MACD wave forms.

Click on chart to enlarge S&P500 Weekly Closes Up Four Straight Week – Momentum Fading Fast

S&P500 Hourly -

[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.]

We expected the rollover this week and it could still occur.  Europe tanked today and if the same continues tomorrow, the US markets should follow this time.  The FTSE and DAX are well diverged from the SPX.

Click on chart to enlarge S&P500 Hourly Likes Going Sideways – Fed Backed Buying Is Fading – Rollover Expected Soon

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 Hourly -

[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.]

Yellen is continuing to be the used car saleman – full of tricks and quietly disclosed games to keep markets up beyond mid-term elections.  Europe has already rolled over and has little chance of recovering.  This will put huge downward pressure on US markets.  The USD also remains extremely strong as gold and oil found out today (they both tanked – again).  These over priced markets should normalize this week.  Worth noting are bond yields – they are rising in the face of Yellen’s commitment to keep rates down – yet another example of how the Fed has impaled markets.  Because there is no daily report (there was a daily POMO report before its end in late October), it is difficult to estimate how much liquidity (bond interest income) the Fed will dump into the markets tomorrow – we expect this nonsense to end very soon.  Honestly Yellen, are you done yet?

Click on chart to enlarge S&P500 Hourly Struggles To Stay Up As Yellen Continues To Pump Fed Interest Income Into Markets
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