Thursday, September 13, 2012

SPX 5-Minute Chart Shows Market Launch After FOMC QE3 Announcement 9/13/12

Each candlestick is five minutes of time.  The SPX drifted lower into the announcement at 12:30 PM EST where the rocket launch occurred.  The Fed is basically saying the economy is far worse than anyone thought and they are throwing the kitchen sink at the problem. QE3 is an open-ended approach where the Fed plans on stimulating the economy until the cows come home, even though this approach has limited gusto. The banks are not lending, there is no velocity of money, the Fed is simply pushing on a string.

As Bernanke took the podium at 2:15 PM EST, the SPX printed its high for the day, and for the year at 1463.76.  Note the red rising wedge and negative divergence red lines that created a spank down for price but the RSI, MACD line and money flow wanted to see price come back up for another look at the high.  Price could not make it the whole way back up but the high at 1464 may be revisited after tomorrow's open. SPX 1460 is S/R, right where price closed.  Resistance above is 1464 and a very strong ceiling exists at 1468.  Support below is 1457, 1455, 1453, 1448, 1446, 1444, 1441, 1440, 1438, 1435, 1431, 1429 and 1427. Retail Sales are very important at 8:30 AM since they will hint at back-to-school sales and also provide early projections on holiday sales.  Consumer Sentiment is at 10 AM which will likely result in a market pivot point.  Price may favor the sideways channel thru 1457-1464 tomorrow into the sentiment number. Look for the test of 1464 and see if negative divergence exists if it prints. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.
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8 comments:

  1. AnonymousSeptember 13, 2012 at 7:28 PM

    KS, what is the target for the Russell now that it has negated the H & S top from earlier this year? Thanks. Long TZA and sinking fast!

    Steve

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    1. Keystone SpeculatorSeptember 14, 2012 at 6:26 AM

      Will take a look in the coming days. Small caps will run higher on the uber QE3 bazooka as traders seek risk. A pull back should occur now, so the approach may be to take the losses in shorts and then flip to the long side. Very tricky, however, since CPC, VIX, TRIN on shorter term basis, all continue to point to a market top. The next week or two should be intense for markets.

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  2. ArnieSeptember 13, 2012 at 7:52 PM

    Just placed a SDS order, should be good, as a decent retrace of this uber bullishnes created over the past week or so by our wise CBers all over the world needs to burn off a bit, before the up trend can continue. Unlimited money until forever ends. What a concept. Ben has officially gone crazy and the powers that be just elected obama (imho, simply because he's been giving those powers free money ever since he himself became president, whereas Romney pretty much has told he'd fire Ben... Well then, the choice is simple: either keep the free-money man for another 4 yrs in his oval office or go with the bogey man who may actually cancel all these wonderful stimulus programs that flow straight into their big pockets...!?)

    ps: the only thing that could hurt obama is if food and gasoline prices sky rocket. THAT, people will feel and he will be punished for that, but he'll probably open the SPR to easy down prices for a few weeks. That's how you do it!

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    1. Keystone SpeculatorSeptember 14, 2012 at 6:27 AM

      TRIN is on your side wanting a pull back Friday or Monday, it may be a few days, or only a few hours, so when it falls probably best to take the money on the SDS trade should it arise.

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  3. WeaverSeptember 13, 2012 at 8:33 PM

    I thought it was going to be a lousy day to be on the road. In the end, I'm kind of glad I missed all the nonsense. Just catching up now. KS, you always said QE3 would happen in concert with more European and Chinese easing. That's exactly what happened - deflation or not. As Arnie notes, this has more to do with Obama's re-election. (Arnie, I left behind orders to add to my shorts today. They were filled, of course. Where does the SPX go from here?)

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    1. Keystone SpeculatorSeptember 14, 2012 at 6:30 AM

      Yes, big surprise yesterday. QE1 and QE2 focused on the deflationary spiral we were falling into. Now Bernanke is focusing on jobs, but it handily provides cover to goose the markets, then he can keep his job. The global move is coordinated, at least for the last year or more, it remains a surprise about the extent that Bernanke went to.

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  4. AnonymousSeptember 14, 2012 at 6:21 AM

    There is no difference between Obama or Romney. They both serve the same people. This whole Obama vs Romeny or dem vs rep. is all a charade for the public.

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    1. Keystone SpeculatorSeptember 14, 2012 at 6:32 AM

      You are exactly correct Anon. Keystone refers to them as demopublicans and republocrats, they simply take turns at the helm. The problem is that there are not enough independent thinkers in the U.S. now, so people want to be polarized to either dem beliefs or repub beliefs. The two-party system is one of the things destroying the U.S.

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