The same theme continues thru the daily and minute charts, note the rising wedge profile, overbot conditions and negative divergence, all are bearish. She's ripe to roll over but the Energizer Bunny keeps moving upwards. Look for price to potentially place another high along the top rail of the rising wedge. If price moves back up to that small pink line and moves above, check the indicators to see if the negative divergence remains. This is a minute chart so it is only applicable over the next hour. The SPX is supsended in mid air now. The LTRO news will be dramatic but perhaps today's market action will kick off the show. The important 1372 and 1370.58 levels are highlighted.
given the how overbought the markets already are; is there any room to grow???
ReplyDeletehmmm, how to interpret this mid-day decline? just an intra day move to get rid of the overbought on an intra-day scale; setting up for an explosion up tomorrow?
ReplyDeleteHello Arnie, markets simply trending sideways, basically 1368-1372 the whole day long, four measley point range, traders are hanging tight and wiling to take the wild roller coaster ride overnight into the LTRO2 announcement tomorrow. Some will ride ot victory and others will jump the track. The size of the LTRO2 go juice is important as well as how much is already priced into the markets. We find out soon.
ReplyDeleteI don't believe this year we will see a bearish market. This is an election year in states and in major european countries. We have already seen the power of manipulators...
ReplyDeletejimmy
Hello Jimmy, it is easy to see your viewpont since you believe the money pumping not only from the central banker's, Fed, ECB, BOE, BOJ and China, but also with all the elections on tap. Politician's love to walk around handing out large cardboard checks ahead of elections to buy votes.
ReplyDeleteThe caution in this reasoning, however, is that one, the money printing is unprecedented in the last three years and there is simply limited amount of funds available to serve as cardboard checks. Additionally, look at the third year of the Presidential Cycle, which was last year, 2011, typically the strongest return of all four years of the cycle where 10% or more return is expected, the market were lucky to finish flat.
A lot of the third year run-up in markets is due to the politicians flooding money into infrastructure and other projects to boost their election prospects, that way they are visiting various sites before the election shaking happy workers hands since they have been employed over the last year. Thus, we will have to see how the year goes but your point is an important one and definitely one to consider.
Also, the events out of left field such as World War III starting in the Middle East, a pandemic or even something like Japan debt issues coming due over the next month can send markets into a tizzy. Never a dull moment.