tag:blogger.com,1999:blog-61357672101885260782024-02-18T22:18:43.135-05:00pebblewriterpebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comBlogger477125tag:blogger.com,1999:blog-6135767210188526078.post-65887482957420014392020-03-31T10:51:00.000-04:002020-03-31T15:58:01.344-04:00Charts I'm Watching: Mar 31, 2020<div dir="ltr" style="text-align: left;" trbidi="on">
Futures are off slightly as we approach the open, recovering 25 points from the overnight lows as the algos resume control.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAt5pz7lw-ptdoZwYqIEXYCrrrbO7HYpqajZ3wHuovOEtY4uKyDUmVDlkkbB3_ZCMTb58k1bNewOa6lqGhtBQQ03evHxKKSOSsyKIKGV6g1kywqwp41B4BI1JsuAfYFkv8ZzGwTjr_KfqF/s1600/2020-03-31+ES+15+0910.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAt5pz7lw-ptdoZwYqIEXYCrrrbO7HYpqajZ3wHuovOEtY4uKyDUmVDlkkbB3_ZCMTb58k1bNewOa6lqGhtBQQ03evHxKKSOSsyKIKGV6g1kywqwp41B4BI1JsuAfYFkv8ZzGwTjr_KfqF/s640/2020-03-31+ES+15+0910.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
VIX continues to call the shots, as it has dropped through both the
red neckline and the SMA20. Yet, it continues to bounce every time
SPX/ES approach a breakout point, suggesting that the bounce might have completed.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhoigNjIGzJMNczIcOx7UFyDqlpLmTmfxTMjyLonMDTByDv8REqJmwkcSY_qt8PeEs4mxiifSIy6RscHGbMLsBPB9KYjx1Uil3RWJcCnMRAfNCw_d-kAIgHEIcrLXDjrIkOac94aq_b-PL/s1600/2020-03-31+VIX+5+0910.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhoigNjIGzJMNczIcOx7UFyDqlpLmTmfxTMjyLonMDTByDv8REqJmwkcSY_qt8PeEs4mxiifSIy6RscHGbMLsBPB9KYjx1Uil3RWJcCnMRAfNCw_d-kAIgHEIcrLXDjrIkOac94aq_b-PL/s640/2020-03-31+VIX+5+0910.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>For its part, SPX has yet to break above the purple trend line from 2016 and, like ES, avoided making a higher high yesterday.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXg7PBfYMrNmK8n2jeW2Vf47_NJI52m_blVVNBj2xnltHIl8P10_VynCxBSN1i-oIHUMCeXudywP8K-bDqUsF7QsVmttWL8ZK_LxN4i4p3Iv6AOpBnPesKX6ss_IqQNwgSHZw3tMjlZmbl/s1600/2020-03-31+SPX+5+0915.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXg7PBfYMrNmK8n2jeW2Vf47_NJI52m_blVVNBj2xnltHIl8P10_VynCxBSN1i-oIHUMCeXudywP8K-bDqUsF7QsVmttWL8ZK_LxN4i4p3Iv6AOpBnPesKX6ss_IqQNwgSHZw3tMjlZmbl/s640/2020-03-31+SPX+5+0915.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
As expected, USDJPY has edged back above its SMA200, providing an extra nudge for stocks…<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjc5HrFavU6QYdvFDb-mq9dcxREX1UN-X3BloaBchf_hqIz_s6HTlmPxx-rNAQPWGgUYyZ4CqY5NME5WZ4J-uxswbir-34tB2tv7ihGv3rVZpsJFeIZXJftfonnoXp583VLCoJZhKiBByC9/s1600/2020-03-31+USDJPy+5+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="990" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjc5HrFavU6QYdvFDb-mq9dcxREX1UN-X3BloaBchf_hqIz_s6HTlmPxx-rNAQPWGgUYyZ4CqY5NME5WZ4J-uxswbir-34tB2tv7ihGv3rVZpsJFeIZXJftfonnoXp583VLCoJZhKiBByC9/s640/2020-03-31+USDJPy+5+0900.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
…and putting a little bounce in DXY’s step.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCsseovI-T0hFH8GBGfgjbgNhnpT7L_WoVyp9Mm7_bCcV-gAWr1gffpPY_4jxOtp5B97IcJRhbRv8VIS7Y7UvDPFcNuDF29iZwuqVi-ZIxfEmRa0B8g54Gpf7le0oU48IW6UrGMGguczxn/s1600/2020-03-31+DXY+daily+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="983" data-original-width="1582" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCsseovI-T0hFH8GBGfgjbgNhnpT7L_WoVyp9Mm7_bCcV-gAWr1gffpPY_4jxOtp5B97IcJRhbRv8VIS7Y7UvDPFcNuDF29iZwuqVi-ZIxfEmRa0B8g54Gpf7le0oU48IW6UrGMGguczxn/s640/2020-03-31+DXY+daily+0900.png" width="640" /></a></div>
<br />
<br />
<figure class="wp-block-image size-large"></figure>
EURUSD is contributing as it continues to decline after failing to retake its own SMA200.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjV5cOwBGuYZUbUTIZBMmMHlFd2DKwLGdZH_-XjqWRazfUc_2L6IWP8IvmcwqT5TECsSP_BZTlMLwIumkxTQp3RD02zF1jhA7q08vTDvlFODoixMjiyGXlfXzXlX-CT2C9nyTNBVLgAtMHm/s1600/2020-03-31+EURUSD+daily+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="991" data-original-width="1584" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjV5cOwBGuYZUbUTIZBMmMHlFd2DKwLGdZH_-XjqWRazfUc_2L6IWP8IvmcwqT5TECsSP_BZTlMLwIumkxTQp3RD02zF1jhA7q08vTDvlFODoixMjiyGXlfXzXlX-CT2C9nyTNBVLgAtMHm/s640/2020-03-31+EURUSD+daily+0900.png" width="640" /></a></div>
<br />
The 10Y remains below the 1.272 support…<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEja-xHrpNEtctsRWswJQRcOqiSQGUTzJX1oViEJvMyvDUPLdcdiufwWcZwuUWqDTEHndlY97btL-LfUIHTzzY_TdhEPiyuAlENUkixHHlrS4INGXaIs7bC8U2Y7AHwr3cu2D8LwOIVacHSX/s1600/2020-03-31+TNX+daily+0910.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="930" data-original-width="1600" height="370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEja-xHrpNEtctsRWswJQRcOqiSQGUTzJX1oViEJvMyvDUPLdcdiufwWcZwuUWqDTEHndlY97btL-LfUIHTzzY_TdhEPiyuAlENUkixHHlrS4INGXaIs7bC8U2Y7AHwr3cu2D8LwOIVacHSX/s640/2020-03-31+TNX+daily+0910.png" width="640" /></a></div>
<br />
<br />
<figure class="wp-block-image size-large"></figure>
…squeezing the 2s10s back to a neutral 47 bps...<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEI43LgdIGbS_qaE6mJcng6aAVONPjazNT4GrV5qwtleCk3VwOd88iPZ0uayiakWG3SjBKsD34PrFbbYzMhSxHLSju7ect1ybOMN7Nu5pzexJTE1QzC7ctKciNlkMOOMhhyeruaJviDi_0/s1600/2020-03-31+2s10s+0915.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="922" data-original-width="1600" height="368" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEI43LgdIGbS_qaE6mJcng6aAVONPjazNT4GrV5qwtleCk3VwOd88iPZ0uayiakWG3SjBKsD34PrFbbYzMhSxHLSju7ect1ybOMN7Nu5pzexJTE1QzC7ctKciNlkMOOMhhyeruaJviDi_0/s640/2020-03-31+2s10s+0915.png" width="640" /></a></div>
<br />
...with the 2Y still
hanging on for dear life. A reminder, this is one of the last
substantive support levels for the 2Y. The coming breakdown will likely
widen the 2s10s, making any further equity gains difficult.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1NFN77ZTC2VaPpS-Hq7xzemI1gNax3_tfUQM_7a41ccbHQmF_Edkr3JgGWAeFKacfkKv_YPnrj2XcLoYb3sMOECKStoK3X1U4QtX1FzTj0DWOPN1j73phPLWdd8mUvfRhflt4psNaS0OR/s1600/2020-03-31+2Y+0930.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="941" data-original-width="1600" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1NFN77ZTC2VaPpS-Hq7xzemI1gNax3_tfUQM_7a41ccbHQmF_Edkr3JgGWAeFKacfkKv_YPnrj2XcLoYb3sMOECKStoK3X1U4QtX1FzTj0DWOPN1j73phPLWdd8mUvfRhflt4psNaS0OR/s640/2020-03-31+2Y+0930.png" width="640" /></a></div>
<br />
<br />
<figure class="wp-block-image size-large"></figure>
<figure class="wp-block-image size-large"></figure>Gold continues to be a model of restraint, backtesting its red channel again as it plans another assault on 1708-1735.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJdl32q9F8bDqB13GwmYkcclcXU6jJhS-yKatZW9AFxouZC40cZbbYpMsLFaBrx18rFhy8XKrEWCKXulZY1NpkqQmXcLOQKim3Yo9r6Cg3_49G5bRF-8OPmn7Ws0XCMXaIHBO3MFfnkud5/s1600/2020-03-31+GC+daily+0930.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="948" data-original-width="1600" height="378" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJdl32q9F8bDqB13GwmYkcclcXU6jJhS-yKatZW9AFxouZC40cZbbYpMsLFaBrx18rFhy8XKrEWCKXulZY1NpkqQmXcLOQKim3Yo9r6Cg3_49G5bRF-8OPmn7Ws0XCMXaIHBO3MFfnkud5/s640/2020-03-31+GC+daily+0930.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
Trump and Putin reportedly put their heads together yesterday to plan
a rescue for oil prices. But, CL has yet to exhibit much of a bounce
and remains mired at the lower end of our 20-26 range. Perhaps it has
something to do with all that surplus oil sloshing around, searching for any storage
facility with extra capacity. <br />
<br />
While higher oil prices would certainly help stocks – an important
goal for many, none more so than Trump himself – they would constitute a tax on
the many unemployed/beleaguered consumers who are wondering how to
make ends meet while they await their government checks.<br />
<br />
For many of those in high-priced areas such as major coastal towns,
of course, those checks can’t come fast enough and won’t cover
rent/mortgage payments – a topic for a future post.<br />
<br />
Gas prices continue to loiter at the bottom of that falling channel, though the bounce off the recent lows is looking tired.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7Ko10uoaqdNP4fnEb3kXVseaUcFJu_o__iVYWdzhFojiFxc0Sm6ellF6sHg0CZr2vc2KnLenMfjzcjbIN51k2DEwOayWxp3nVaqUphFWMogd54KRFgc94C7qawKCENUMGCknmuy6fxYX0/s1600/2020-03-31+Rb+daily+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="997" data-original-width="1600" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7Ko10uoaqdNP4fnEb3kXVseaUcFJu_o__iVYWdzhFojiFxc0Sm6ellF6sHg0CZr2vc2KnLenMfjzcjbIN51k2DEwOayWxp3nVaqUphFWMogd54KRFgc94C7qawKCENUMGCknmuy6fxYX0/s640/2020-03-31+Rb+daily+0900.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
In the absence of any miraculous medical breakthroughs, it still
looks like yesterday’s highs will continue to hold and ES/SPX’s
trajectory will be lower, perhaps to the bottom of the rising purple
channels around 2350 as early as tomorrow. That should be the next
line in the sand, with ES 2155 and SPX 2138 still our next preferred
downside targets.<br />
<br />
While we’re in forecasting mode, I’m told that this site should be
working normally sometime later today. If you’re reading this on
pebblewriter.com, you’ve already figured that out. I’ll repost on
pebblewriter.blogspot.com …just in case.<br />
<br />
I’m going to take some time and update our COVID-19 forecast which, sadly, continues to be on target. More later.<br />
<br />
<br />
<br />
UPDATE: 3:25 PM<br />
<br />
As we stumble into the final hour, things aren't looking very bullish. Never underestimate the power of a last-minute VIX smackdown, but there are quite a few warning signs flashing red.<br />
<br />
First and foremost, the 2Y just dipped down to .191, the lowest it's been since the US lost its AAA in 2011.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvYhwiEjF6S6t1uWJJbClGLAkm7pNvup9u10VuH4fbSxfcKioN_NI3pUBoeITuaOw1axbE7uWJkjkOypTDYYM5tnzK8DEwGtj3AQ7zzeHdX6lR51eZHqns2LcXPiOedp10BKYGcOfpAYmw/s1600/2020-03-30+2Y+1500.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="941" data-original-width="1600" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvYhwiEjF6S6t1uWJJbClGLAkm7pNvup9u10VuH4fbSxfcKioN_NI3pUBoeITuaOw1axbE7uWJkjkOypTDYYM5tnzK8DEwGtj3AQ7zzeHdX6lR51eZHqns2LcXPiOedp10BKYGcOfpAYmw/s640/2020-03-30+2Y+1500.png" width="640" /></a></div>
<figure class="wp-block-image size-large"></figure>
It quickly snapped back to the .22 support, but this is a very big deal according to our 2Y model.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGFg0LurajTPLQGZNM7JJYD_CWja3FhJs0RcMzrxuzUEJzYxBfvo0BIu7RqNneFT5N4tXvvFHpuTpemXNDxKjSRc-NtWjKOEabgXmLkGthwOquANqAyQw4zzmOdUxJFHqXZOCZNOhHCXSR/s1600/2020-03-31+2Y+v+ES+wkly+1526.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="941" data-original-width="1600" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGFg0LurajTPLQGZNM7JJYD_CWja3FhJs0RcMzrxuzUEJzYxBfvo0BIu7RqNneFT5N4tXvvFHpuTpemXNDxKjSRc-NtWjKOEabgXmLkGthwOquANqAyQw4zzmOdUxJFHqXZOCZNOhHCXSR/s640/2020-03-31+2Y+v+ES+wkly+1526.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
The other pretty big deal continues to be the oil market collapse. Sure, it clawed its way back to the channel bottom, but for how long? The next lowest support is the Nov 2001 lows at 17.12.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCFmwVsF5DKxsOVvLvFyrxmr0zAnPnAIDRGHrrd4O5xah1ofua8Q5ZDHpvQAF4Z7xFzHBE6lKlYR_-0zb8ylj9CK2Umo2suZU6y5CLwNrKVbe3_7pdHASwskYRxsB8y8xk3ENWiA1nZ_L0/s1600/2020-03-31+CL+v+SPX+wkly+1514.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="998" data-original-width="1576" height="404" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCFmwVsF5DKxsOVvLvFyrxmr0zAnPnAIDRGHrrd4O5xah1ofua8Q5ZDHpvQAF4Z7xFzHBE6lKlYR_-0zb8ylj9CK2Umo2suZU6y5CLwNrKVbe3_7pdHASwskYRxsB8y8xk3ENWiA1nZ_L0/s640/2020-03-31+CL+v+SPX+wkly+1514.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
Then there's DXY which, thanks to USDJPY and EURUSD, is having a hard time staying aloft.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYoz9c2o2Kz0GCfxWpJsiWCAMXpDHQydImPuVQG1blIai_vduxRv9koAd446J6vNIWZAX39vcm0mXXin0McES91vsuIiy7b-LEkfdXCHTzDrIrWfojGqww-p9xman4_leFk5hXdLw0Odlg/s1600/2020-03-31+DXY+daily+1519.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="983" data-original-width="1582" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYoz9c2o2Kz0GCfxWpJsiWCAMXpDHQydImPuVQG1blIai_vduxRv9koAd446J6vNIWZAX39vcm0mXXin0McES91vsuIiy7b-LEkfdXCHTzDrIrWfojGqww-p9xman4_leFk5hXdLw0Odlg/s640/2020-03-31+DXY+daily+1519.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNcXPAg6IF2PKwG4jasHa5VU677maU-xxvjeY0qmk0w0rLnDU6NRGisGfmLfycE-ZoGSUQExSdfSbVsRs5kE9Sw6UksBbjBP7mnJID-fkl4GQMX7J-2cs1Q3ApYXZko4iQ8QrWaVI2gQe5/s1600/2020-03-31+EURUSD+daily+1518.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="991" data-original-width="1584" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNcXPAg6IF2PKwG4jasHa5VU677maU-xxvjeY0qmk0w0rLnDU6NRGisGfmLfycE-ZoGSUQExSdfSbVsRs5kE9Sw6UksBbjBP7mnJID-fkl4GQMX7J-2cs1Q3ApYXZko4iQ8QrWaVI2gQe5/s640/2020-03-31+EURUSD+daily+1518.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
<figure class="wp-block-image size-large"></figure>
Although the USDJPY could still go either way, the BoJ apparently hasn't signed off on a wholesale devaluation of the yen.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSaiCxETaullBnOldd2ZMZJNCj9tuys7Phd_fXFNsQcPZdLRukj-WRz5Ggg4Kdtsa6azVHfm4k2XyAtUboV5xcvCK0TxZDc4k_xk_4hKRMNVwsMApOj9gPFbug1pwBbZ7vLDKpz94raIYZ/s1600/2020-03-31+USDJPy+daily+1517.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="990" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSaiCxETaullBnOldd2ZMZJNCj9tuys7Phd_fXFNsQcPZdLRukj-WRz5Ggg4Kdtsa6azVHfm4k2XyAtUboV5xcvCK0TxZDc4k_xk_4hKRMNVwsMApOj9gPFbug1pwBbZ7vLDKpz94raIYZ/s640/2020-03-31+USDJPy+daily+1517.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
This leaves poor little VIX with some very heavy lifting to do. As the month- and quarter-end rebalancing winds down, can it continue to offset a very grim economic outlook which, according to Goldman, includes a -34% Q2 GPD read.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTl0jeA8-vk5Jh54JfWAVCte73hseNWe1HBdJeoOeWC11sqL1Ir17it-cUTG1HT6qTP7OrPotLAqsNegXNIoAtyhf8p9wxJJ6eyInR83-fqwBhfz-GsBWaF_v-DyKMkZVxUq1oUo1UZtt3/s1600/2020-03-31+VIX+15+1520.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTl0jeA8-vk5Jh54JfWAVCte73hseNWe1HBdJeoOeWC11sqL1Ir17it-cUTG1HT6qTP7OrPotLAqsNegXNIoAtyhf8p9wxJJ6eyInR83-fqwBhfz-GsBWaF_v-DyKMkZVxUq1oUo1UZtt3/s640/2020-03-31+VIX+15+1520.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
The worst of the economic data has yet to roll in, but in the days ahead we'll get ISM, EIA inventories, factory orders and payrolls. It won't be pretty.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXvHQyp1Vg7x8jNjDNuSjgKyxcDvC84QUJH73y6hwb8uG1h0GjvnRVdURhwnI0weR7JgTpA1ZyZXCc5BzUGcbxiSLx1DMPwyS5A9IXZNdxCEEO4gYj9SLIBSAZ7xu88uipEQEWHItfbIDC/s1600/Screen+Shot+2020-03-31+at+3.57.17+PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="835" data-original-width="1080" height="492" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXvHQyp1Vg7x8jNjDNuSjgKyxcDvC84QUJH73y6hwb8uG1h0GjvnRVdURhwnI0weR7JgTpA1ZyZXCc5BzUGcbxiSLx1DMPwyS5A9IXZNdxCEEO4gYj9SLIBSAZ7xu88uipEQEWHItfbIDC/s640/Screen+Shot+2020-03-31+at+3.57.17+PM.png" width="640" /></a></div>
<br />
ES and SPX - which have clearly rolled over - might be able to hold support at the close, but I wouldn't trust them overnight regardless of where they close - not on a bet.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgCqo5dA9GO5si_qUAMXrHDyK1EIyMsyOyfthQPU0XoHSvTrMzuhAqIH73cokZalSLPLZD5_oUJz-S7MbyNHAE3LUw8SDPEUoSCGAOpYHHQgwbB8TpCffPC3XElvS0ObBY_06ZeBbrQvvs3/s1600/2020-03-31+ES+15+1542.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgCqo5dA9GO5si_qUAMXrHDyK1EIyMsyOyfthQPU0XoHSvTrMzuhAqIH73cokZalSLPLZD5_oUJz-S7MbyNHAE3LUw8SDPEUoSCGAOpYHHQgwbB8TpCffPC3XElvS0ObBY_06ZeBbrQvvs3/s640/2020-03-31+ES+15+1542.png" width="640" /></a></div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQaZcbqI3mI_JbzOJsTezsiCaCW1zxAnsJE2Y2o-0gzBPPgb9NN17jsw8DuTcKgO8ehs1icL17ogTZGosnyqSRX7MhaYjxae34zDr2fWW3_KAykUohN7eCVMKwsfvgAdtxsbB9pUm2Bfqg/s1600/2020-03-31+SPX+5+1540.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQaZcbqI3mI_JbzOJsTezsiCaCW1zxAnsJE2Y2o-0gzBPPgb9NN17jsw8DuTcKgO8ehs1icL17ogTZGosnyqSRX7MhaYjxae34zDr2fWW3_KAykUohN7eCVMKwsfvgAdtxsbB9pUm2Bfqg/s640/2020-03-31+SPX+5+1540.png" width="640" /></a></div>
<br />
<figure class="wp-block-image size-large"></figure>
<figure class="wp-block-image size-large"></figure>
GLTA.<br />
<br />
<br />
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-45908652000577497472020-03-30T09:26:00.002-04:002020-03-30T16:08:33.733-04:00Algos: Still Ignoring Reality<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="color: #0b5394;"><i>Yes, pebblewriter.com is still being worked on. At least, that's the last communication I got from Hostgator. Apparently, their level 2 techs are all working from home and are not permitted to speak on the phone with customers -- meaning all communication is being done by email. It's hardly ideal, but it's what we have. With any luck, tomorrow's post will be back on a properly working website. For those who are trying to subscribe or renew a subscription to the site, this is not possible until the site is 100%. Email to pebblewriter.com is also kaput. If you need to contact me, please email pebblescribe-at-gmail-dot-com.</i></span><br />
<br />
<div style="text-align: center;">
* * *</div>
<br />
Futures have been all over the map overnight, ramping from 2445 on yesterday's open to as high as 2567.50 a few hours ago. <br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhc69C7mJFg_pYUr-BxM8S2u2chEHxcK-KuK5ix8Tpx_g7DGDJjQvHTM-VLRmtdrb6ubywP-R8avcZ8ocAo72VP077GDkghEcQC6sGXtCW4hA6ujuh0l-XTExDnqbB4Lqngp4bM79_iMGVu/s1600/2020-03-30+ES+15+0905.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhc69C7mJFg_pYUr-BxM8S2u2chEHxcK-KuK5ix8Tpx_g7DGDJjQvHTM-VLRmtdrb6ubywP-R8avcZ8ocAo72VP077GDkghEcQC6sGXtCW4hA6ujuh0l-XTExDnqbB4Lqngp4bM79_iMGVu/s640/2020-03-30+ES+15+0905.png" width="640" /></a></div>
<br />
Perhaps significantly, ES failed to retake the yellow neckline at 2568ish despite the usual smackdowns in VIX and 2s10s. The 2s10s dropped back through the white TL support which has been the last line of defense for bulls...<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZdlRfGCIbfbtmE7BFQ1E_ZVqoJv6u50v-WFel069jLgNxqJBn8IlfaC0TTzNM5QlvGsNVuXhZWxuE9gB90QlfWD9nodQbrOtLF6856VXbfZvuZopvpqyfTt7UfigIxYiL7nL78GZUn168/s1600/2020-03-30+2s10s+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="922" data-original-width="1600" height="368" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjZdlRfGCIbfbtmE7BFQ1E_ZVqoJv6u50v-WFel069jLgNxqJBn8IlfaC0TTzNM5QlvGsNVuXhZWxuE9gB90QlfWD9nodQbrOtLF6856VXbfZvuZopvpqyfTt7UfigIxYiL7nL78GZUn168/s640/2020-03-30+2s10s+0900.png" width="640" /></a></div>
...and, VIX is threatening another breakdown - this time marked by the SMA5 200 and a TL from last week's lows.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjx1xI4heKXA8iQz6tAFXjQ6iRMbq5AjXYka2qKEi_oKj1PP73ppFBgcNsKQYvBTnOEPVZx_1rLhqKUm_P91pcGpT_vNqCr8lJO2gYO-h-gQ8gFUkH0KQN2G0Z8WJBSK4qKws5Myas0ud2j/s1600/2020-03-30+VIX+15+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjx1xI4heKXA8iQz6tAFXjQ6iRMbq5AjXYka2qKEi_oKj1PP73ppFBgcNsKQYvBTnOEPVZx_1rLhqKUm_P91pcGpT_vNqCr8lJO2gYO-h-gQ8gFUkH0KQN2G0Z8WJBSK4qKws5Myas0ud2j/s640/2020-03-30+VIX+15+0900.png" width="640" /></a></div>
<br />
We might assume that our 80.30 target -- reached two weeks early -- continues to be the line in the sand for another leg down.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLUtDzYIgNk0cssCTF1VPG-e4Eo7m3a2erIFkEXadiKfvpv_iEk_tKq1VV3xmU6sPUdgxRjvcS5dlTUmWFeCLvOHXLOU_cXxmpsKRno2yITHXQ4rKY1Oly12SSq5Z3cDRFMGeH1y5_Fu88/s1600/2020-03-30+VIX+wkly+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhLUtDzYIgNk0cssCTF1VPG-e4Eo7m3a2erIFkEXadiKfvpv_iEk_tKq1VV3xmU6sPUdgxRjvcS5dlTUmWFeCLvOHXLOU_cXxmpsKRno2yITHXQ4rKY1Oly12SSq5Z3cDRFMGeH1y5_Fu88/s640/2020-03-30+VIX+wkly+0900.png" width="640" /></a></div>
<br />
It makes sense since: (1) the economic picture continues to worsen; and, (2) neither SPX nor ES ever quite reached important Fib support - our 1.618 targets at ES 2155 and SPX 2138.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg87R_XbaF_DCNXwUdCOHXYpFdM-sAt_5fP7O0D3No3Rp3jRQc8WfKiUxFOAkufe6U1Cp2FNmQSx20CITVeSVDOMfTZ5wg1YCLM-YRfrRNgwMKLrEpsNxzfxctNvOOelOKgqjmeS87Xs1GL/s1600/2020-03-30+ES+daily+0905.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg87R_XbaF_DCNXwUdCOHXYpFdM-sAt_5fP7O0D3No3Rp3jRQc8WfKiUxFOAkufe6U1Cp2FNmQSx20CITVeSVDOMfTZ5wg1YCLM-YRfrRNgwMKLrEpsNxzfxctNvOOelOKgqjmeS87Xs1GL/s640/2020-03-30+ES+daily+0905.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtFb7ojYDz_InZPng8iXkY6aThcwtavXiUUFQOpFFyH-jRbOC3hxzCiIowp9ZFugYIvSdmeIqrZCQNGsY_uhA4vcoNE97OkS0VZwKgQ7WA-MawLNnTIDIsT2UJWbl2x0eXu1kuWhdHkg0r/s1600/2020-03-30+SPX+daily+0830.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtFb7ojYDz_InZPng8iXkY6aThcwtavXiUUFQOpFFyH-jRbOC3hxzCiIowp9ZFugYIvSdmeIqrZCQNGsY_uhA4vcoNE97OkS0VZwKgQ7WA-MawLNnTIDIsT2UJWbl2x0eXu1kuWhdHkg0r/s640/2020-03-30+SPX+daily+0830.png" width="640" /></a></div>
<br />
If ES' and SPX's white channels are yielding in favor of the slightly less aggressive purple channels (channel tilting) then we can look for a .618 or .786 retracement of last week's lows.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLmeuqByBCeNnx8cDt9s7sGMvz8vZGFVs6VHGe49ANHGCDav1QFjZO0XuCmL8BvYtY8J2uaB01o36NXggGbuhZjL9pf7qS4Pw3JQHVzNY727JQXJ6iYujmRXj00noVWrcjft7BchWsgnBd/s1600/2020-03-30+SPX+15+0830.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLmeuqByBCeNnx8cDt9s7sGMvz8vZGFVs6VHGe49ANHGCDav1QFjZO0XuCmL8BvYtY8J2uaB01o36NXggGbuhZjL9pf7qS4Pw3JQHVzNY727JQXJ6iYujmRXj00noVWrcjft7BchWsgnBd/s640/2020-03-30+SPX+15+0830.png" width="640" /></a></div>
Once the neckline is topped, however, both would have room to run.<br />
<br />
For now, the algos continue to follow VIX's lead. A drop through the SMA5 200 would point to a test of the SMA20 and red neckline at 58.60. A drop through it would unleash the bulls for another leg up.<br />
<br />
Working against that outcome: CL continues to falter, dipping below 20 several times overnight.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlnn1C-O2dP-mHBEmGdytuw8vJYEuNwhvMGwv8sbNydQ1CgQhe1GomWB00AiBwUTpROxE3bBRrsnaYTY_7wW09DJqjejOYqsQ5mrZWQfIYPuNka-pipv-QP37jG4YNh7Y2W_Sm9W7GEA-m/s1600/2020-03-30+CL+60+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="924" data-original-width="1565" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlnn1C-O2dP-mHBEmGdytuw8vJYEuNwhvMGwv8sbNydQ1CgQhe1GomWB00AiBwUTpROxE3bBRrsnaYTY_7wW09DJqjejOYqsQ5mrZWQfIYPuNka-pipv-QP37jG4YNh7Y2W_Sm9W7GEA-m/s640/2020-03-30+CL+60+0900.png" width="640" /></a></div>
<br />
Remember, the white line at the bottom of the chart is critical support -- reached, in this case, several <i>years</i> ahead of the what our cycle model charts indicated. A <strike>slowdown</strike> shutdown of global economic activity will do that to you.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqTHzfYcltV_cByyrOV3pv9AMiHI9vFzrbGPAEL8Wmj6rWH7Xu5wJA8vTSWFdWMMuwdlmpkOedwtJ0KWnbGqXwMUZNaHul5ozgfSaC1ZsVbWuXSaawXWeDgUr1xBTg3EmwiSFRCzDnikRz/s1600/2020-03-30+CL+wkly+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="998" data-original-width="1576" height="404" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqTHzfYcltV_cByyrOV3pv9AMiHI9vFzrbGPAEL8Wmj6rWH7Xu5wJA8vTSWFdWMMuwdlmpkOedwtJ0KWnbGqXwMUZNaHul5ozgfSaC1ZsVbWuXSaawXWeDgUr1xBTg3EmwiSFRCzDnikRz/s640/2020-03-30+CL+wkly+0900.png" width="640" /></a></div>
<br />
RB, which saw a nonsensical bounce last Wednesday, is coming to its senses this morning. Like CL, it is walking on eggshells in terms of support.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiotFxsoz94vYx_rH5kYXHx0XOIQT0ey6sbEluZH2yYlfusQKNf3uXG-lwYBGNcT4_kNU6932pNMe_0H8jYszmHO5zoFx4qRpWMhXcOBg-fMrvbiis1pzv40si1RwJfsau8RLx7aXH_cqVA/s1600/2020-03-30+RB+daily+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="997" data-original-width="1600" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiotFxsoz94vYx_rH5kYXHx0XOIQT0ey6sbEluZH2yYlfusQKNf3uXG-lwYBGNcT4_kNU6932pNMe_0H8jYszmHO5zoFx4qRpWMhXcOBg-fMrvbiis1pzv40si1RwJfsau8RLx7aXH_cqVA/s640/2020-03-30+RB+daily+0900.png" width="640" /></a></div>
<br />
<br />
Getting back to the bond market... The Fed appears to have finally figured out what our yield curve model has been saying for the past year or two: a breakout above critical support in the 2s10s would decimate stocks just like it did in 2000-2003 and 2007-2009.<br />
<br />
While the 2Y has dropped through support again...<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMcXntwqeEmo9oi3wF57L42MakGq6MvlUCd4nmd2rvUbMsbMvP8K9kDknFonLn3bBSBrlP2RFDw71L7Lny70keMZ53uEPKzTTAmQdIs0dZKqtqUzcUif3F84EZt-bNUzTIP6ROiknXDA5X/s1600/2020-03-30+2Y+0910.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="941" data-original-width="1600" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMcXntwqeEmo9oi3wF57L42MakGq6MvlUCd4nmd2rvUbMsbMvP8K9kDknFonLn3bBSBrlP2RFDw71L7Lny70keMZ53uEPKzTTAmQdIs0dZKqtqUzcUif3F84EZt-bNUzTIP6ROiknXDA5X/s640/2020-03-30+2Y+0910.png" width="640" /></a></div>
<br />
<br />
...the 10Y is more than keeping pace... <br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhbVlwlkHlg_4Sv2lo_5AJbDtoWn4lMv1eyP5ATY11aiYRWC_nI7ukwJrlsz0UVp0p-hlaPXt1f81OiNNhy-mwCjAQMCeWF1TGv0Q_AikgVbww3DbLS9lKLdtN64W_yLadO6zPAbt0yGbS/s1600/2020-03-30+ZN+wkly+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="888" data-original-width="1600" height="354" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjhbVlwlkHlg_4Sv2lo_5AJbDtoWn4lMv1eyP5ATY11aiYRWC_nI7ukwJrlsz0UVp0p-hlaPXt1f81OiNNhy-mwCjAQMCeWF1TGv0Q_AikgVbww3DbLS9lKLdtN64W_yLadO6zPAbt0yGbS/s640/2020-03-30+ZN+wkly+0900.png" width="640" /></a></div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEha3HrMFdXhR1BviTRjpzMW-OW9LMCD7KCfX83qwxWnAf8ctpCYiALq3-KcyByF1811Vx1H_vMAAPAgm0BWJuYJ2EhUtjMmIa_-fVoUhBUoFrtGA5FoljTGjzMSw9jc5aeqtUypBS1PT43Y/s1600/2020-03-30+TNX+wkly+0910.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="930" data-original-width="1600" height="370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEha3HrMFdXhR1BviTRjpzMW-OW9LMCD7KCfX83qwxWnAf8ctpCYiALq3-KcyByF1811Vx1H_vMAAPAgm0BWJuYJ2EhUtjMmIa_-fVoUhBUoFrtGA5FoljTGjzMSw9jc5aeqtUypBS1PT43Y/s640/2020-03-30+TNX+wkly+0910.png" width="640" /></a></div>
...allowing the 2s10s to decline sharply.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_J_Rlfj2lIQJUqlIfmlkcsTMMWgQXTOn1yASOG01lZkrZsI3rAF9ZfsrTk0vDNRSCVwi_3JWZEUWH8UkPgBpFvyjXlUvlP2Z3f38bVrx89tXuOeVcAiFhXhuYize_0XR_O0Q6Wp5qw6LB/s1600/Screen+Shot+2020-03-30+at+9.16.57+AM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="390" data-original-width="785" height="316" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_J_Rlfj2lIQJUqlIfmlkcsTMMWgQXTOn1yASOG01lZkrZsI3rAF9ZfsrTk0vDNRSCVwi_3JWZEUWH8UkPgBpFvyjXlUvlP2Z3f38bVrx89tXuOeVcAiFhXhuYize_0XR_O0Q6Wp5qw6LB/s640/Screen+Shot+2020-03-30+at+9.16.57+AM.png" width="640" /></a></div>
Of course, a drop back below the 1.272 Fib at 8.16 should also be expected to spook algos. So, this is a move that cannot really help the bulls longer term unless the 2Y were to spike higher - unlikely in the current central bank cash-for-trash environment.<br />
<br />
On the currency front, USDJPY found its footing overnight at its SMA20 and bottom of its formerly broken white channel and backtested its SMA200 - now at 108.306...<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUgZyAsYAGKnM1miOjJ9oObTK04-mlZZXnk_APP2rDMexAHkxxXz_H6QaN7rXD07i-9LqdaOFSZT2OBxq_i6NZ0C3K_AWPXIX-xvArrORytYIr6wZ6yCH65Upn0kC6t5OoFrTJ-Y1lXppt/s1600/2020-03-30+USDJPY+daily+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="990" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUgZyAsYAGKnM1miOjJ9oObTK04-mlZZXnk_APP2rDMexAHkxxXz_H6QaN7rXD07i-9LqdaOFSZT2OBxq_i6NZ0C3K_AWPXIX-xvArrORytYIr6wZ6yCH65Upn0kC6t5OoFrTJ-Y1lXppt/s640/2020-03-30+USDJPY+daily+0900.png" width="640" /></a></div>
<br />
...which, along with EURUSD's temporary push above its SMA200...<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiw_QE92_bSlAT2aRHwqlJauzEt2u70m1DoB978dFJACffXauHf2JnVph2MLBRNyOhzJXmdrlOcUf90YHxNmKEv1Mc7zwh3o3ymqeZV0oiHbwUdhN9U0-PlIAvGjY4lVMD1ZpzIqd0JPHKA/s1600/2020-03-30+EURUSD+daily+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="991" data-original-width="1584" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiw_QE92_bSlAT2aRHwqlJauzEt2u70m1DoB978dFJACffXauHf2JnVph2MLBRNyOhzJXmdrlOcUf90YHxNmKEv1Mc7zwh3o3ymqeZV0oiHbwUdhN9U0-PlIAvGjY4lVMD1ZpzIqd0JPHKA/s640/2020-03-30+EURUSD+daily+0900.png" width="640" /></a></div>
<br />
...enabled DXY to bounce before even reaching its SMA200.<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYMxbxRxxKa56o9I9c9YAsoGlTO2pkZc53NujUxQQDWpEM9Ric2CBdWM_1wtuEa5BKGlixGN-eByuhPp-00QAkB2CHvoE7F42vUnA_hkgUhXYr05Kfagy7gOSqgW62nla0CPvCNB7nQgvH/s1600/2020-03-30+DXY+daily+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="983" data-original-width="1582" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYMxbxRxxKa56o9I9c9YAsoGlTO2pkZc53NujUxQQDWpEM9Ric2CBdWM_1wtuEa5BKGlixGN-eByuhPp-00QAkB2CHvoE7F42vUnA_hkgUhXYr05Kfagy7gOSqgW62nla0CPvCNB7nQgvH/s640/2020-03-30+DXY+daily+0900.png" width="640" /></a></div>
<br />
The algos might be forgiven for being slightly confused. There have been so many supportive actions on the part of bonds, currencies and VIX - but, not yet enough to force a breakout. The implication is that they are being tasked with delaying the next leg down rather than engineering another leg up. This jibes with our belief that month- and quarter-end rebalancing is driving much of the upside.<br />
<br />
As always, I'm open to being proven wrong. But, at this point, the bulls are behind the eight ball - with a handful of gimmicks tasked with offsetting some compellingly bearish economic reality. Trump acknowledged that things won't be better by Easter, though he falsely maintains the virus will "peak" by then.<br />
<br />
Unless one of the treatment protocols being experimented with proves successful in the next week or so, the virus will be much worse by then. Our model has been right on track and continues to indicate deaths (2,484 as of yesterday) will reach 10,000 by Friday or Saturday and 100,000 by Easter.<br />
<br />
On a positive note, Italy has seen a slowdown in the daily rate of growth in cases and deaths. Over the past few days, cases have grown at 7% per day and deaths at about 10% per day. Unfortunately, deaths have topped 10,000 and the mortality rate (deaths as a percentage of total cases) now stands at 11%.<br />
<br />
It would be nice if the US could look forward to such a slowdown. But, in the absence of widespread lock-downs and given the continuing shortage of testing kits, this is hardly likely. Studies show that up to 50% of infections are from those who have few or no symptoms. Without widespread testing, we will see the lag between Italy and the US - originally 11 days and now down to 7 - continue to quickly erode until the US takes the lead in deaths.<br />
<br />
UPDATE: 3:00 PM<br />
<br />
ES has pushed above the neckline and is testing the SMA20, though SPX has yet to register a new high.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXqvwhyphenhyphen3e80O_DzveBDbXsVPs8BvY4KgUsHr652JU7yEjWDKvYnFd9UImv-VnYf6FPURre4fw3kljIV1dqCoLiKZYP3Espl89JhY4a9y3jLI5CiYN6vuVGbY-GjHjyyqVnEX3tNkuOe6YS/s1600/2020-03-30+ES+15+1454.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXqvwhyphenhyphen3e80O_DzveBDbXsVPs8BvY4KgUsHr652JU7yEjWDKvYnFd9UImv-VnYf6FPURre4fw3kljIV1dqCoLiKZYP3Espl89JhY4a9y3jLI5CiYN6vuVGbY-GjHjyyqVnEX3tNkuOe6YS/s640/2020-03-30+ES+15+1454.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoC5_0V7OyiccyVzNzQB9ju1nn38N1_VVH9ZtqrJGej9D9XE4Ex4I8xBCfvFr1QEjNOI0FL_Vb9y8gx8YqxdFUvx0utASC01b2747Iutxmy6OgVVkJrZUJ8Lu1mOfivXFP3PopST0jwXm8/s1600/2020-03-30+SPX+15+1458.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoC5_0V7OyiccyVzNzQB9ju1nn38N1_VVH9ZtqrJGej9D9XE4Ex4I8xBCfvFr1QEjNOI0FL_Vb9y8gx8YqxdFUvx0utASC01b2747Iutxmy6OgVVkJrZUJ8Lu1mOfivXFP3PopST0jwXm8/s640/2020-03-30+SPX+15+1458.png" width="640" /></a></div>
VIX has broken below its SMA20 and neckline, but not yet the typical cratering that we often see in the final hour.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_DR7rB8ZcnIITnRsp_Bw9RRHOfPQF6q-8E_kZMxpw9dnl7o-cOOKUrF23JfdzjXxaowxTCC9TkEr1KT0cQmvUKLzm7wuu82a_zqlsCUQWHkEAf1QnjsvxMCaKiZPpl-h9vmPW_VrPEy-7/s1600/2020-03-30+VIX+15+1459.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_DR7rB8ZcnIITnRsp_Bw9RRHOfPQF6q-8E_kZMxpw9dnl7o-cOOKUrF23JfdzjXxaowxTCC9TkEr1KT0cQmvUKLzm7wuu82a_zqlsCUQWHkEAf1QnjsvxMCaKiZPpl-h9vmPW_VrPEy-7/s640/2020-03-30+VIX+15+1459.png" width="640" /></a></div>
<br />
CL and RB are rebounding somewhat, but lower lows and lower highs foro both so far.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcXfCTAF-LoFrRc13kyCtRJ7rcPUP5E9NRjuEnqknG5ZQWA3d8F967BxDx57tZ1Hcj3V3S5rZKIuqRsMf9xEHts_sC897BmMd-v5dBUrWhenFWlSjjh52C58rz2J9glrP3cvpU6Uzbtren/s1600/2020-03-30+CL+daily+1500.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="924" data-original-width="1565" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcXfCTAF-LoFrRc13kyCtRJ7rcPUP5E9NRjuEnqknG5ZQWA3d8F967BxDx57tZ1Hcj3V3S5rZKIuqRsMf9xEHts_sC897BmMd-v5dBUrWhenFWlSjjh52C58rz2J9glrP3cvpU6Uzbtren/s640/2020-03-30+CL+daily+1500.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtFKIoIwCB27gycOUkKCT-nNfDtevY5Ym8Xz3KMXr_J6NoIliurB4Bd1fRF0wOgRXah6lVWebgkzN08Mh2W_6zATtZIN08YunWSNT0T241twO77zW5vu3_3i6zLc-xSWgIOHtOQujUWGMk/s1600/2020-03-30+Rb+daily+1500.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="997" data-original-width="1600" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtFKIoIwCB27gycOUkKCT-nNfDtevY5Ym8Xz3KMXr_J6NoIliurB4Bd1fRF0wOgRXah6lVWebgkzN08Mh2W_6zATtZIN08YunWSNT0T241twO77zW5vu3_3i6zLc-xSWgIOHtOQujUWGMk/s640/2020-03-30+Rb+daily+1500.png" width="640" /></a></div>
<br />
<br />
This leaves USDJPY, which failed to retake its SMA200 and DXY, which has yet to backtest its. Bottom line, this still looks like a stall and not a breakout to new highs, especially when you take the near breakdown in 2Y and breakout in 2s10s into account.<i></i><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8LoJ3vTwrqgT_KAvZBc4n5WWn_C2qtSqAFPdYWt-lObm_UP2B64AWPVyXMT6HgQ5jJvB3TyIvOHX2i07VGmTIznBFMTR1MLw3_nZ84ITYtDKAMZeA6KK8QPEoqvOLbEqyTjIpUYRbWpTE/s1600/Screen+Shot+2020-03-30+at+3.05.12+PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="393" data-original-width="782" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8LoJ3vTwrqgT_KAvZBc4n5WWn_C2qtSqAFPdYWt-lObm_UP2B64AWPVyXMT6HgQ5jJvB3TyIvOHX2i07VGmTIznBFMTR1MLw3_nZ84ITYtDKAMZeA6KK8QPEoqvOLbEqyTjIpUYRbWpTE/s640/Screen+Shot+2020-03-30+at+3.05.12+PM.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoqBY0SjgJYoof53vFvlHMEQuQ22319AXP4fkq72YQWCY44aolqnWASJ1usMZ736nJ7v9wpEDmS8XHa-S9g7IRlexbpkemfNUkGKuMvLsNkiDh89tuUTYC_lh_R5X_hH85nN22eYxDIc_R/s1600/2020-03-30+2s10s+1500.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="922" data-original-width="1600" height="368" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoqBY0SjgJYoof53vFvlHMEQuQ22319AXP4fkq72YQWCY44aolqnWASJ1usMZ736nJ7v9wpEDmS8XHa-S9g7IRlexbpkemfNUkGKuMvLsNkiDh89tuUTYC_lh_R5X_hH85nN22eYxDIc_R/s640/2020-03-30+2s10s+1500.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5FcRyIhZ3cE7aJXn_OD9AD3n7boYuGStbd0s0A2NQ9gg76q0VybVdlcvOs2FhmLE1GCeqNG-PthonIBgZR1zPA06L34yq0ZJfGdBIytv0mEOEFBbD-Xq-BzkN38LV_TF8mgAgP1nZzv5R/s1600/2020-03-30+2Y+1500.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="941" data-original-width="1600" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5FcRyIhZ3cE7aJXn_OD9AD3n7boYuGStbd0s0A2NQ9gg76q0VybVdlcvOs2FhmLE1GCeqNG-PthonIBgZR1zPA06L34yq0ZJfGdBIytv0mEOEFBbD-Xq-BzkN38LV_TF8mgAgP1nZzv5R/s640/2020-03-30+2Y+1500.png" width="640" /></a></div>
<i><br /></i>
<br />
For traders with a strong constitution and the ability to hedge overnight, this is another selling opportunity. <br />
<i><br /></i>
UPDATE: EOD<br />
<br />
SPX studiously avoided a higher high, thanks largely to USDJPY's last second breakdown which offset the VIX dip at the close. In other words, TPTB are working to keep the bounce contained (for a change.) This doesn't mean it won't ramp higher overnight, but it's a good sign (or a great head fake.)<i></i><br />
<i><br /></i>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0cGA3SQOCpd__IY2zyluHy07mENml4n8KV1zRTlaHrgdBU3-__84iWiXtC0znBtTtbyxezHRdIJHiSfdbeumWJIh7TRB9J87LdQKsRu_qvFdVNV-dX5TJBtHdoqaNenY-AOFDNUSNJgMk/s1600/2020-03-30+SPX+5+1559.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0cGA3SQOCpd__IY2zyluHy07mENml4n8KV1zRTlaHrgdBU3-__84iWiXtC0znBtTtbyxezHRdIJHiSfdbeumWJIh7TRB9J87LdQKsRu_qvFdVNV-dX5TJBtHdoqaNenY-AOFDNUSNJgMk/s640/2020-03-30+SPX+5+1559.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJdAkobIus3KhA5OtcjJJmBuXUMnU3CyKN25O_fVuC-pRwIJAgy2qSNENjtDNw17EdlBRG0TQqAZLYD0Z-jGg7VeIyIZXrDr1Ohi5PJVzniVAhRCMLDEQi5xFQkDfuh2F06ULP0_wN8ICz/s1600/2020-03-30+USDJPY+5+1558.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="990" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJdAkobIus3KhA5OtcjJJmBuXUMnU3CyKN25O_fVuC-pRwIJAgy2qSNENjtDNw17EdlBRG0TQqAZLYD0Z-jGg7VeIyIZXrDr1Ohi5PJVzniVAhRCMLDEQi5xFQkDfuh2F06ULP0_wN8ICz/s640/2020-03-30+USDJPY+5+1558.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiweotPrTYIj0emlIQnck8rT-kFKGBmUOqLI89UEDpADouv1_NCjTGiUjcD6G75Q3Kv-yNHOmr_mWK1v56PGI6-f048Nm9gOjs5xReYRL-2ilM9kXrSbL2DFEpMHlULElP6rsGu1DSUa5tE/s1600/2020-03-30+VIX+15+1600.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiweotPrTYIj0emlIQnck8rT-kFKGBmUOqLI89UEDpADouv1_NCjTGiUjcD6G75Q3Kv-yNHOmr_mWK1v56PGI6-f048Nm9gOjs5xReYRL-2ilM9kXrSbL2DFEpMHlULElP6rsGu1DSUa5tE/s640/2020-03-30+VIX+15+1600.png" width="640" /></a></div>
<i><br /></i>FWIW, ES even backed off its SMA20 and made a lower high... <br />
<div class="separator" style="clear: both; text-align: center;">
<i><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzjBIaLw7QiXE_XeZy-VZ_8T1t2CRdwvNfyv0rUxdjRyRLNTEmroPYKWXF89bjC-buaVoiB3KGzOe4JYJG80PSa2MAzfMPA8CNJBg40OOXA7jDHKo8mF6xxQSJDdFGx8t2YVsnKO2Rcsyt/s1600/2020-03-30+ES+15+1600.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzjBIaLw7QiXE_XeZy-VZ_8T1t2CRdwvNfyv0rUxdjRyRLNTEmroPYKWXF89bjC-buaVoiB3KGzOe4JYJG80PSa2MAzfMPA8CNJBg40OOXA7jDHKo8mF6xxQSJDdFGx8t2YVsnKO2Rcsyt/s640/2020-03-30+ES+15+1600.png" width="640" /></a></i></div>
...while VIX found a little TL to backtest.<i></i><br />
<div class="separator" style="clear: both; text-align: center;">
<i><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXluBJ4PvSgL4Mlsbv6T73emnONgsq7Dt7HyRCUfDrnr0itak-tcgVXiJEpjCVPPYZeu_ia0dupy4-i_xPFkjCNO_9Dbf2mEtxkAp60jLAvtvzbNfZ08v4-0JKCisVv2UJkiQxwLhcIlII/s1600/2020-03-30+VIX+15+1607.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXluBJ4PvSgL4Mlsbv6T73emnONgsq7Dt7HyRCUfDrnr0itak-tcgVXiJEpjCVPPYZeu_ia0dupy4-i_xPFkjCNO_9Dbf2mEtxkAp60jLAvtvzbNfZ08v4-0JKCisVv2UJkiQxwLhcIlII/s640/2020-03-30+VIX+15+1607.png" width="640" /></a></i></div>
<br />
<i></i><br />
<i><br /></i>
GLTA.<i><br /></i>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-53919711955489591022020-03-27T11:02:00.000-04:002020-03-27T16:02:10.977-04:00Hostgator Strikes Again - Market Sinking<div dir="ltr" style="text-align: left;" trbidi="on">
While I'm waiting for Hostgator to undo the damage they did when they "upgraded" pebblewriter.com, here are the relevant charts for the day. I hope to be back on the main site by the end of the day.<br />
<br />
<div style="text-align: center;">
* * *</div>
<br />
The IH&S that ES completed yesterday failed overnight, but we’re still waiting to see whether the rising white channel bottom - currently 2487 - will hold.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_qPidBm2kwZZACHnEKHG4v2IHiU6RZ6LYbMm6gsqSusjSoaPOGP6CHUDI1jiC7AUv4Z0rptVtQLVXES2Bl7Go-Tqk_IZPbB45PLQ3jmcOyrnLkpFx1eiyd9jNV4dHvy6-kZZgR-TYEY38/s1600/2020-03-27+ES+15+1000.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="395" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_qPidBm2kwZZACHnEKHG4v2IHiU6RZ6LYbMm6gsqSusjSoaPOGP6CHUDI1jiC7AUv4Z0rptVtQLVXES2Bl7Go-Tqk_IZPbB45PLQ3jmcOyrnLkpFx1eiyd9jNV4dHvy6-kZZgR-TYEY38/s640/2020-03-27+ES+15+1000.png" width="640" /></a></div>
<br />
<br />
With ES and SPX back above their SMA10s, the momentum has been with the bulls. <br />
<br />
However, VIX has broken above the red TL from a week ago, giving the green light for lower prices.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgvYjngd98OzdovmVk14sNx2NlutmDxLZE8U4E6_EuKAh0zrmpnA4Ia4AgA6LgMdAfp5f2uMfixtb-7hXNTiiintJ5TKkH62oPsurddAZVzISx9Mg7yPmbSOxQJge5jF2a-FaOY5wdkAOP/s1600/2020-03-27+VIX+15+0900.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgvYjngd98OzdovmVk14sNx2NlutmDxLZE8U4E6_EuKAh0zrmpnA4Ia4AgA6LgMdAfp5f2uMfixtb-7hXNTiiintJ5TKkH62oPsurddAZVzISx9Mg7yPmbSOxQJge5jF2a-FaOY5wdkAOP/s640/2020-03-27+VIX+15+0900.png" width="640" /></a></div>
<br />
CL is also probing lower, with the same effect.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhg9n1u7a35U5ser1H_vKrvyziwCexbNgqyRfVztWPQZWvP3yeoL6mDsdKVUJMoNnHxn2p5QIeOF1rA6-QE9Na85cGLMBa4-tjPCagKTpCudkAzrz_AFdvWIH_83FGV2jTiLlW7_1Qe1rn_/s1600/2020-03-27+CL+60+0845.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="924" data-original-width="1565" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhg9n1u7a35U5ser1H_vKrvyziwCexbNgqyRfVztWPQZWvP3yeoL6mDsdKVUJMoNnHxn2p5QIeOF1rA6-QE9Na85cGLMBa4-tjPCagKTpCudkAzrz_AFdvWIH_83FGV2jTiLlW7_1Qe1rn_/s640/2020-03-27+CL+60+0845.png" width="640" /></a></div>
<br />
<br />
And, as we discussed, USDJPY has dropped down to backtest its SMA200.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiC3Ymp-QnA5tCaYr5Q4D8ui4lnhaNfzjtJX-r5ofrm0jBEC7_n_HBmMo0J2GjtqXxA21wVg6vUkUE1eNJlkwTyMflC_AgdWllYivoJBif1GVmWWbJ4jdJDJDib08wc2zY3YFM6voepti6x/s1600/2020-03-27+USDJPY+daily+0845.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="990" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiC3Ymp-QnA5tCaYr5Q4D8ui4lnhaNfzjtJX-r5ofrm0jBEC7_n_HBmMo0J2GjtqXxA21wVg6vUkUE1eNJlkwTyMflC_AgdWllYivoJBif1GVmWWbJ4jdJDJDib08wc2zY3YFM6voepti6x/s640/2020-03-27+USDJPY+daily+0845.png" width="640" /></a></div>
<br />
<br />
Bottom line, everything that VIX, USDJPY and CL have done so far have been bearish, but ES has not yet broken trend. If/when the rising white channel breaks down, we can say the trend has shifted. A drop back through the SMA10 (ES 2418 and SPX 2452) would be confirmation.<br />
<br />
<div style="text-align: center;">
* * *</div>
<div style="text-align: center;">
<br /></div>
<div style="text-align: left;">
UPDATE: 11:25 AM<br />
<br />
CL is testing former lows and USDJPY has dropped through its SMA200. This has allowed SPX to find its
channel bottom -- though ES has not quite reached its.<br />
<br />
I suspect we'll
see ES' white channel break down and the purple channel I just added take over very soon - something we call "channel tilting." Lately, of course, these sorts of things have been happening after-hours. </div>
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiY7Soj5TKPhyphenhyphenC4Fr3UIok3ypJCXeg42_MQ5kGIh-LkvWey8pXGYGQMNsJW8fVrPtKqxk5H2g1f5ifYRb-KtUUeZg41TgRVjmojoHGri97tD2SgTiRflaw0k-O80sspR8sNPi2oU04V-FoV/s1600/2020-03-27+ES+15+1125.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiY7Soj5TKPhyphenhyphenC4Fr3UIok3ypJCXeg42_MQ5kGIh-LkvWey8pXGYGQMNsJW8fVrPtKqxk5H2g1f5ifYRb-KtUUeZg41TgRVjmojoHGri97tD2SgTiRflaw0k-O80sspR8sNPi2oU04V-FoV/s640/2020-03-27+ES+15+1125.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrtKjNsuWI1U07cVioHmpbPUhsVowqUnraSO-2f-LhxoWC6wcKzC56m0NmDA4Hvk3pZBFcWRrL4sBVAo0XA6pGXTs9qIn7wFTCwdiufKLhXsU11wzKgDB9bqmMtPh_jGse02yZ7SxuliMr/s1600/2020-03-27+SPX+5+1125.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrtKjNsuWI1U07cVioHmpbPUhsVowqUnraSO-2f-LhxoWC6wcKzC56m0NmDA4Hvk3pZBFcWRrL4sBVAo0XA6pGXTs9qIn7wFTCwdiufKLhXsU11wzKgDB9bqmMtPh_jGse02yZ7SxuliMr/s640/2020-03-27+SPX+5+1125.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIb2PdmiWj6uJH4N5V1mIJjr1WEn-QEg7ER3o27kqsLz6NQjHDE3LxxrgELvpZltSixR5XmxidsdDUfP89Ry2HwLoVsHNK_5Vmu7mU9wbHz5j2IZHCSLsWbHDmib94Mj5m7jxoRB22AxZU/s1600/2020-03-27+USDPJY+daily+1125.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="990" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIb2PdmiWj6uJH4N5V1mIJjr1WEn-QEg7ER3o27kqsLz6NQjHDE3LxxrgELvpZltSixR5XmxidsdDUfP89Ry2HwLoVsHNK_5Vmu7mU9wbHz5j2IZHCSLsWbHDmib94Mj5m7jxoRB22AxZU/s640/2020-03-27+USDPJY+daily+1125.png" width="640" /></a></div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8Y_R6s0m7iIyRtpqIBZk7eOQzFp4SuSNLeaNwf6KEuTO5eyE9ZBUAutRKWw3AgoY-IoP7eCJT-9ff2gZRNghGPzmDj7e9ikRtQXk3BAbxxGyjVKKKash7qsbv8SQFVvvz0l1YcgyYGMrI/s1600/2020-03-27+CL+60+1127.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="924" data-original-width="1565" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8Y_R6s0m7iIyRtpqIBZk7eOQzFp4SuSNLeaNwf6KEuTO5eyE9ZBUAutRKWw3AgoY-IoP7eCJT-9ff2gZRNghGPzmDj7e9ikRtQXk3BAbxxGyjVKKKash7qsbv8SQFVvvz0l1YcgyYGMrI/s640/2020-03-27+CL+60+1127.png" width="640" /></a></div>
VIX is coming in for a backtest of its falling red TL - very important to what happens next.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNIs7GMr1lpYc_dFkNUpKVA6voY1AP4F9bv23Dh6ot5uyL0LCSVfzscu13iC_SLuwlBJ5i5RCHuz_M-oBFmPCxCfaVVQW3x0GIUKgQeF7iy2zTvOGrnTphnBONChQ03o_VjYhglucnVSMw/s1600/2020-03-27+VIX+15+1127.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNIs7GMr1lpYc_dFkNUpKVA6voY1AP4F9bv23Dh6ot5uyL0LCSVfzscu13iC_SLuwlBJ5i5RCHuz_M-oBFmPCxCfaVVQW3x0GIUKgQeF7iy2zTvOGrnTphnBONChQ03o_VjYhglucnVSMw/s640/2020-03-27+VIX+15+1127.png" width="640" /></a></div>
<br />
<br />
<br />
UPDATE: 3:40 PM<br />
<br />
ES pushed briefly above its neckline but has faltered. Odds are it'll close right at it or above, forcing traders with directional conviction to decide whether to assume the risk of holding short overnight. The alternative is a close at the SMA5 200 where it intersects the channel bottom (2515-2522) on the close.<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTAcKinPrTfQzbYxZQubx7m_eKY8AH3dz2YknTv2wEKTVylN0DiIAjtvZLs_OGqFyWwbTOyQ4Wk1wK_IyUPvwrqK0D2v16APs6I0vrLD-xOBzZT8dyKZ5enyWkUcPA0x4wagyMtUrbZVFZ/s1600/2020-03-27+ES+15+1542.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="993" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgTAcKinPrTfQzbYxZQubx7m_eKY8AH3dz2YknTv2wEKTVylN0DiIAjtvZLs_OGqFyWwbTOyQ4Wk1wK_IyUPvwrqK0D2v16APs6I0vrLD-xOBzZT8dyKZ5enyWkUcPA0x4wagyMtUrbZVFZ/s640/2020-03-27+ES+15+1542.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjW3P0aDlX1rzFXfkKOLcxkGh-9MJ6Tzb14eokRsHIjsITYDQdSS5bpRCZJX7SGQJnlqpZC0Dux5atT_JaFp5p2_6iA0EREhqPL4I9ZibTfwkNW7sFNd_IM6_b8ZpmmTDuOR8yfeEivYSEn/s1600/2020-03-27+SPX+5+1542.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="912" data-original-width="1600" height="364" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjW3P0aDlX1rzFXfkKOLcxkGh-9MJ6Tzb14eokRsHIjsITYDQdSS5bpRCZJX7SGQJnlqpZC0Dux5atT_JaFp5p2_6iA0EREhqPL4I9ZibTfwkNW7sFNd_IM6_b8ZpmmTDuOR8yfeEivYSEn/s640/2020-03-27+SPX+5+1542.png" width="640" /></a></div>
<br />
CL is offering no help, testing the recent lows for a triple bottom.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGNx3VjkLwQ_N7BARWOTULFUNSE7S5iFF9hCr17o-Q1K0oOXDtARddxxmbpwdy4CXOyVKZXxriP0AwvJkq2OLTOq-PJdkV374T6-w9Wc2y-brLQZlkRqBQu0rNAY5oY0yCvYXoLVWUgCsB/s1600/2020-03-27+CL+60+1542.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="924" data-original-width="1565" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGNx3VjkLwQ_N7BARWOTULFUNSE7S5iFF9hCr17o-Q1K0oOXDtARddxxmbpwdy4CXOyVKZXxriP0AwvJkq2OLTOq-PJdkV374T6-w9Wc2y-brLQZlkRqBQu0rNAY5oY0yCvYXoLVWUgCsB/s640/2020-03-27+CL+60+1542.png" width="640" /></a></div>
<br />
USDJPY is melting down into the close, which has sent DXY below its SMA200 as well.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIwjVXjVZtEj3YlWlHqJJZ6mNk7hrpXvJT_wW8oqzv73Nz7nkZlvRhpJJF9QvqIOQtghxN4jWByY4IrfbaWmQzNg_eT_fEXqOU6Po-DZ53gCgUayoJQCmYEUg3ttA1XUn5zt4o6v2J4kC_/s1600/2020-03-27+USDJPY+daily+1544.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="990" data-original-width="1600" height="396" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIwjVXjVZtEj3YlWlHqJJZ6mNk7hrpXvJT_wW8oqzv73Nz7nkZlvRhpJJF9QvqIOQtghxN4jWByY4IrfbaWmQzNg_eT_fEXqOU6Po-DZ53gCgUayoJQCmYEUg3ttA1XUn5zt4o6v2J4kC_/s640/2020-03-27+USDJPY+daily+1544.png" width="640" /></a></div>
<br />
Although the 2s10s has dropped below 48 bps, check out the 2Y - back below the latest support and threatening a drop through the critical 22bps level. This does not bode well for a continuation of the bounce.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgR5Ih1t4jkz2-mc_IYPcoRc1mV8zQDmxWX-oo_SSr_Q_LLG_5depTio4y47hwmvi4eEXCWOrOfv4XkrC1B1zQbbKdFjmAtzR0giyXQ0ZjAdPJprKJuSH6fI97UHEeA9qglbb76gZIu-9h0/s1600/Screen+Shot+2020-03-27+at+3.46.28+PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="393" data-original-width="789" height="318" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgR5Ih1t4jkz2-mc_IYPcoRc1mV8zQDmxWX-oo_SSr_Q_LLG_5depTio4y47hwmvi4eEXCWOrOfv4XkrC1B1zQbbKdFjmAtzR0giyXQ0ZjAdPJprKJuSH6fI97UHEeA9qglbb76gZIu-9h0/s640/Screen+Shot+2020-03-27+at+3.46.28+PM.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4p1UnPCQKgDjD3MN7HE0BIChicq8wD49_RqxZm4CYQreAluGjH67hlKvg3I_p_bXNhwM0XuT_-OT9trMXvPbe5mf7T2qxWcOYtU-TfQmwckTedzcnKk_7TlAu5ClYpnv0VamCTzmh-0NZ/s1600/Screen+Shot+2020-03-27+at+3.46.41+PM.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="302" data-original-width="1052" height="182" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4p1UnPCQKgDjD3MN7HE0BIChicq8wD49_RqxZm4CYQreAluGjH67hlKvg3I_p_bXNhwM0XuT_-OT9trMXvPbe5mf7T2qxWcOYtU-TfQmwckTedzcnKk_7TlAu5ClYpnv0VamCTzmh-0NZ/s640/Screen+Shot+2020-03-27+at+3.46.41+PM.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicJ-jZH59j5OHm9rWiiRMACWYDMMQ67JAh3vuXOezsIW6bSDWTb6kwhW8fw62cESDgfqsyRF7zDUoYhht64pmoo5H9CaCZVK_0-lE7CICPSokHD4BXGYp8LcJiRTESsPy-YIthSjwVyGtY/s1600/2020-03-27+2Y+1545.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="941" data-original-width="1600" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicJ-jZH59j5OHm9rWiiRMACWYDMMQ67JAh3vuXOezsIW6bSDWTb6kwhW8fw62cESDgfqsyRF7zDUoYhht64pmoo5H9CaCZVK_0-lE7CICPSokHD4BXGYp8LcJiRTESsPy-YIthSjwVyGtY/s640/2020-03-27+2Y+1545.png" width="640" /></a></div>
<br />
VIX is also not inspiring much confidence as we head into the close.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRfjEWUh_ikCNZt1zuks7yyEuGM2kbG1amHhq3x1LYXsQa7L-WN3dWOPBZfdS97ihb3iMR7Z01jzhRKVBGISiMlIu8K9MUO4-oMREgC1Ra-jw702e810nHaKgWG8TAvR0I8DGxwDf5iUPl/s1600/2020-03-27+VIX+5+1545.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="937" data-original-width="1600" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRfjEWUh_ikCNZt1zuks7yyEuGM2kbG1amHhq3x1LYXsQa7L-WN3dWOPBZfdS97ihb3iMR7Z01jzhRKVBGISiMlIu8K9MUO4-oMREgC1Ra-jw702e810nHaKgWG8TAvR0I8DGxwDf5iUPl/s640/2020-03-27+VIX+5+1545.png" width="640" /></a></div>
Bottom line, we're setting up for a very weak close and additional downside.</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-55825793830595845232016-08-04T11:34:00.000-04:002016-08-04T11:34:00.783-04:00A New Analog: Aug 3, 2016<div dir="ltr" style="text-align: left;" trbidi="on">
I love analogs. I love the way they clearly lay out a very tradeable
path, slicing through all the noise and the head fakes. Our first was a
doozy, correctly forecasting the 21% Jul-Oct 2011 correction with
deadly accuracy [see <a data-mce-href="http://pebblewriter.com/learn/analogs/" href="http://pebblewriter.com/learn/analogs/">HERE</a>.] <br />
<br />
Our most recent one, posted in Mar 2015, forecast the 12.5% correction that would occur almost five months later [see <a data-mce-href="http://pebblewriter.com/a-new-analog-mar-27-2015/" href="http://pebblewriter.com/a-new-analog-mar-27-2015/">HERE</a>.]<br />
<br />
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2016/08/2016-08-03-analog-2015.png" href="http://pebblewriter.com/wp-content/uploads/2016/08/2016-08-03-analog-2015.png"><img alt="2016-08-03 analog 2015" class="aligncenter size-large wp-image-46511" data-mce-src="http://pebblewriter.com/wp-content/uploads/2016/08/2016-08-03-analog-2015-1024x555.png" height="346" src="http://pebblewriter.com/wp-content/uploads/2016/08/2016-08-03-analog-2015-1024x555.png" width="640" /></a><br />
<br />
Although
I dislike day trading, it's become a necessary evil. Gone are the days
when a weak close practically guaranteed a weak opening the following
morning. It's just as likely, if not more so, to result in a gap
higher. Strong closes are almost as treacherous.<br />
<br />
So, it's always fun when a new one appears on the horizon and we get a chance to take some longer-term positions.<br />
<br />
First, let’s take a look at the REALLY big picture for the last 20 years. <br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAFKXM_nl4W_UNFmpFjpFAB3GI2KsPdVoFu7_DudhjdG52cReHsDRZTeE1eeWFpBvJK6txuarKjY_b0UiQX5_k9IHa9ncgIR-GlbU_C7Uu0K_-uVvA3Hpb1Wbmn7hY4fCjQzEAPjOe1OTS/s1600/2016-08-03+SPX+weekly+1030.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="346" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAFKXM_nl4W_UNFmpFjpFAB3GI2KsPdVoFu7_DudhjdG52cReHsDRZTeE1eeWFpBvJK6txuarKjY_b0UiQX5_k9IHa9ncgIR-GlbU_C7Uu0K_-uVvA3Hpb1Wbmn7hY4fCjQzEAPjOe1OTS/s640/2016-08-03+SPX+weekly+1030.png" width="640" /></a></div>
<br />
<br />
<br />
Notice how SPX:<br />
<ul>
<li style="padding-left: 30px;">completed a backtest of the huge white channel midline in late 2014</li>
<li style="padding-left: 30px;">reached the top of the rising red channel (within the white channel) in late 2014</li>
<li style="padding-left: 30px;">reached the top of the rising purple channel in Feb 2015</li>
<li style="padding-left: 30px;">despite reaching those channel lines, SPX continued rising to the yellow 1.618 (2138, actually reached 2134) in May 2015.</li>
</ul>
After reaching 2134 and tagging the top of the rising purple channel
again, SPX had all kinds of problems. But, the downside was contained
to the 1.272 extension at 1823.<br />
<br />
In fact, 1823 has been backtested <em>seven </em>different times — including the time they <em>failed</em> to contain it on Jan 24, 2014 (it fell 85 points in 9 sessions, popped back up in 4.) The following times — Apr 11, 2014, Oct 15, 2014, Jan 20, 2016 and
Feb 11, 2016 — they held it to within 13 points. <br />
<br />
Two things should be
quite obvious from this. First, having not cared one bit about 1823 as
resistance on the way up, they wanted to make damn sure it served as
solid support in the event of any declines (SPX should have
reversed strongly at 1823, as it completed a huge
<a href="http://pebblewriter.com/learn/harmonics/butterfly-pattern/" target="_blank">Butterfly Pattern</a> set up by the plunge from 1576 to 666 between 2007 and
2009.)<br />
<br />
Second, it’s the clearest indication of market manipulation one could ever hope for. You simply don’t get severe intraday reversal of the sort that
occurred on those days without some heavy interference (Bullard hinting
at QE4, USDJPY spiking, oil futures doubling in price, etc.)<br />
<br />
<a href="http://pebblewriter.com/wp-content/uploads/2016/08/2016-08-03-SPX-daily-1043.png"><img alt="2016-08-03 SPX daily 1043" class="aligncenter size-large wp-image-46569" height="346" src="http://pebblewriter.com/wp-content/uploads/2016/08/2016-08-03-SPX-daily-1043-1024x555.png" width="640" /></a><br />
<br />
But,
none of that will come as a surprise to regular readers. We’ve
documented market manipulation on a regular basis for the past five
years. The reason I mention it is because it has a direct bearing on
what to expect from the “market” going forward.<br />
<br />
<br />
<i>continued at <a href="http://pebblewriter.com/">pebblewriter.com</a></i>…</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-19675876028666464392016-08-04T09:29:00.001-04:002016-08-04T11:12:47.735-04:00Website Still in Maintenance Mode<div dir="ltr" style="text-align: left;" trbidi="on">
Posting over here this morning as the website isn't yet quite right. Apparently some code got garbled in the transition. I'm on the phone with my hosting company, and it could take a while longer.<br />
<br />
First, some charts I'm watching...<br />
<br />
USDJPY has not recovered, but is merely bumping along after having seen its rising white channel and falling white channel <u>both</u> break down.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim_nyLnV9kD3e6IMGqV1vM0H-Xx8ik2CBVgvDvka0-WSTnGNmnDtR3_KBtXaXhV5vCg1_7Pr_an9NYXZf0OGJm0Fk5UcyAprb5Bep51gKbBhwtc_np_mmE-XPm9N5buNy9JbDOIwQk4DeJ/s1600/2016-08-04+USDJPY+60+0625.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="355" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim_nyLnV9kD3e6IMGqV1vM0H-Xx8ik2CBVgvDvka0-WSTnGNmnDtR3_KBtXaXhV5vCg1_7Pr_an9NYXZf0OGJm0Fk5UcyAprb5Bep51gKbBhwtc_np_mmE-XPm9N5buNy9JbDOIwQk4DeJ/s640/2016-08-04+USDJPY+60+0625.png" width="640" /></a></div>
<br />
CL, on the other hand, is carrying the entire load of propping up stocks. It rallied over 5% off yesterday's lows -- which was a remarkable feat of manipulation even for CL. It came in the wake of a 1.4MM barrel build in inventory versus the 1.4MM barrel contraction that was expected.<br />
<br />
This ramp took CL out of the falling channel it's been in since Jul 18 and back above the SMA200, which was music to the algos' ears. The algos don't care, of course, whether or not the rise was a manipulation (it was) or whether it would last (it shouldn't.) All they think they know is that oil is recovering, which is exactly what whoever manipulated it higher intended.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih9gn7N4ITWduHw88Koy4aumcH_cp4tn8fdUfCRrIuyCEmVDBBWJWt85li4at90-RI8X3s9mgueU9Y2_x-oscVrnFEYEZZF5bP6S4eXKBS2Bgawtmv02HvQdlczpBSq1BOnnWqf5CEZ4xF/s1600/2016-08-04+CL+60+0630.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="368" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEih9gn7N4ITWduHw88Koy4aumcH_cp4tn8fdUfCRrIuyCEmVDBBWJWt85li4at90-RI8X3s9mgueU9Y2_x-oscVrnFEYEZZF5bP6S4eXKBS2Bgawtmv02HvQdlczpBSq1BOnnWqf5CEZ4xF/s640/2016-08-04+CL+60+0630.png" width="640" /></a></div>
<br />
Our targets remain unchanged from yesterday. We have channel support for ES and SPX coming in right here.<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdc6XgOLqTHsfAVU_dCuCRNlmQ8CgFnUia1hSOUqArY8TbFiVbytzbXyikNDSAa_YOWO4pv0dF1azokThC2avfFGZ6MXM7Rx8-raBII-PFdYJmDaVe2lFehOv7TJE6kkzTOQe8eTgf0UVM/s1600/2016-08-04+ES+5+0710.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="362" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdc6XgOLqTHsfAVU_dCuCRNlmQ8CgFnUia1hSOUqArY8TbFiVbytzbXyikNDSAa_YOWO4pv0dF1azokThC2avfFGZ6MXM7Rx8-raBII-PFdYJmDaVe2lFehOv7TJE6kkzTOQe8eTgf0UVM/s640/2016-08-04+ES+5+0710.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHXYDDp-3d3wL02FkQrISr-4qvY6XaCLopSPGCYp9-j9WsAZahPWOAsbHNvZ7diTHv_7g71tCXSEtTXol4tPnxslwdhkQAsyFF9TMh9P-hrvXn0y5E5ss4Y0cK-TfmHrfAJjuQoyKnbFkV/s1600/2016-08-04+SPX+5+0711.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="346" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHXYDDp-3d3wL02FkQrISr-4qvY6XaCLopSPGCYp9-j9WsAZahPWOAsbHNvZ7diTHv_7g71tCXSEtTXol4tPnxslwdhkQAsyFF9TMh9P-hrvXn0y5E5ss4Y0cK-TfmHrfAJjuQoyKnbFkV/s640/2016-08-04+SPX+5+0711.png" width="640" /></a></div>
<br />
Will it bounce? Keep an eye on CL. It's back below its SMA200 (40.77), and USDJPY is heading to the bottom of its rising white channel. So, it would appear that they're going to let the red channels fail sooner or later.<br />
<br />
If you see CL suddenly spike above 40.77, you'll know it's going to be "later."<br />
<br />
UPDATE: 11:07 AM<br />
<br />
Will they or won't they? SPX is sitting at a deep retracement of this morning's initial plunge. Sure, it got there through nefarious means. But, that doesn't mean things can't get even more "nefarious-er."<br />
<br />
If it's going to sell off some more, this is the time & place -- especially with the euro close coming up.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwwiDs30iRlRZdK1K_nbX8ry0cHkxWv8ERKxu_HLuKPT0WweuZO0_poeJX56_YB8qemRdNZtlNdbNDC7SSNzUXBGBBheKNY4fw3wfNVhzg3sCPphfRcz1lCZdkZw_Sbt84oslSKUEKFOIP/s1600/2016-08-04+SPX+5+0807.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="346" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwwiDs30iRlRZdK1K_nbX8ry0cHkxWv8ERKxu_HLuKPT0WweuZO0_poeJX56_YB8qemRdNZtlNdbNDC7SSNzUXBGBBheKNY4fw3wfNVhzg3sCPphfRcz1lCZdkZw_Sbt84oslSKUEKFOIP/s640/2016-08-04+SPX+5+0807.png" width="640" /></a></div>
<br />
<i><br /></i>
<br /></div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-48648693109633881522016-08-03T16:43:00.005-04:002016-08-04T01:41:13.307-04:00Upgrading pebblewriter.com<div dir="ltr" style="text-align: left;" trbidi="on">
If you're reading this, you've probably figured out that pebblewriter.com is going through an upgrade. There's no great time to do this. I've actually been meaning to do it for several months, but -- Brexit, new all-time highs, BoJ, etc. -- no shortage of reasons to wait.<br />
<br />
The changeover should make the site faster, and will accommodate some nifty features I've had in mind for a while. But, there could be some hiccups during the transition. If the site goes down any time during the next day or two while everything transfers over, I'll continue posting here.<br />
<br />
Thanks for your patience!<br />
<br />
<br /></div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-27074340176936432382015-11-03T01:07:00.001-05:002015-11-04T01:38:43.578-05:00Banks' Wipeout Ratio - An Update<div dir="ltr" style="text-align: left;" trbidi="on">
<i>reposted from <a href="http://pebblewriter.com/">pebblewriter.com</a></i>: <br />
<br />
<a data-mce-href="http://pebblewriter.com/the-wipeout-ratio/" href="http://pebblewriter.com/the-wipeout-ratio/" target="_blank">In April 2012</a>,
I calculated the size of banks' derivatives positions relative to their
capital to show how small an upset it would take in the derivatives
market to wipe out banks' Tier 1 capital.<br />
The results were pretty
alarming. It would take only a 0.18% decline in the value of their
collective $240 trillion derivatives portfolio to wipe out their Tier 1
capital.<br />
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio.png" href="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio.png"><img alt="Wipeout Ratio" class="aligncenter size-full wp-image-31949" data-mce-src="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio.png" src="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio.png" height="351" width="640" /></a><br />
S&P's
announcement this evening that it had placed big US banks on Ratings
Downgrade Watch got me to thinking. Have banks improved their financial
stability, or are they still perched on the eve of destruction?<br />
<br />
First,
it should be noted that it isn't that easy to find Tier 1 capital
anymore. The OCC now reports Total Risk-Based Capital, which includes
Tier 2 items such as subordinated debt, asset revaluation reserves,
undisclosed reserves and hybrid (debt/equity) capital instruments.<br />
<br />
The
upshot is that Total Risk-Based Capital is bigger than Tier 1 alone
(from 5-18% bigger.) Regardless of whether or not the padding is
warranted, we'll ignore it for comparison purposes.<br />
The 2015Q2 results can be seen in the chart below. Things have improved, but only slightly.<br />
<br />
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio-2015-1102.png" href="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio-2015-1102.png"><img alt="Wipeout Ratio 2015-1102" class="aligncenter size-full wp-image-31953" data-mce-src="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio-2015-1102.png" src="http://pebblewriter.com/wp-content/uploads/2015/11/Wipeout-Ratio-2015-1102.png" height="362" width="640" /></a><br />
<br />
JP
Morgan and Bank of America significantly decreased the size of their
reported (nominal) derivatives portfolios. And, each has roughly
doubled their Wipeout Ratio.<br />
<br />
Citibank and Goldman Sachs, on the
other hand, barely decreased the size of their derivatives portfolios.
And, their Tier 1 Capital increased only slightly. So, their Wipeout
Ratios improved marginally.<br />
<br />
The fact remains that, seven years
after the financial crisis, the four largest banks are still extremely
vulnerable to a fluctuation in the value of their derivatives.
Theoretically, a 1/4 of 1% decline in the value of their derivatives
would wipe out their capital.<br />
<br />
Fortunately for them and their
shareholders, the regulators don't require them to mark derivatives to
market anymore. They're also able to net out (supposedly) offsetting
positions without providing much, if any, proof that such offsetting is
appropriate. From JP Morgan's financial statements:<br />
<blockquote>
<i>U.S.
GAAP permits entities to present derivative receivables and derivative
payables with the same counterparty and the related cash collateral
receivables and payables on a net basis on the balance sheet when a
legally enforceable master netting agreement exists.</i></blockquote>
In
other words, if you have an agreement with the next Bear Stearns, AIG
or Lehman wherein you promise to make each other whole when TSHTF,
there's no need to burden us with all the details. It's enough to say
that there's no net exposure.<br />
<br />
If any of these deceptions helps you
sleep at night, God bless. The banks will gladly hold even more of
your money and pay you next to nothing. Or, <a data-mce-href="http://www.zerohedge.com/news/2015-10-28/nirp-panic-over-half-european-2-year-bonds-trade-record-negative-yields-italy-paid-i" href="http://www.zerohedge.com/news/2015-10-28/nirp-panic-over-half-european-2-year-bonds-trade-record-negative-yields-italy-paid-i" target="_blank">maybe they'll start charging you</a> for the privilege, as in parts of the eurozone.<br />
<br />
Bottom
line, S&P is probably making a big deal out of nothing. Though
global derivatives still exceed $1 quadrillion (that's 1,000 trillion or
$1,000,000,000,000,000) and the capital of the biggest, strongest banks
in the world are 0.25% away from being wiped out, there's really
nothing to worry about.<span style="font-size: small;"><span data-mce-style="font-size: 16pt;">*</span></span><br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<i><span style="font-size: small;"><span data-mce-style="font-size: 16pt;">*</span></span> until there is</i></div>
<div data-mce-style="text-align: center;" style="text-align: center;">
<br /></div>
<div data-mce-style="text-align: center;" style="text-align: center;">
<span style="font-size: small;"><span data-mce-style="color: #0000ff; font-size: 16pt;" style="color: blue;"> * * * * *</span></span></div>
<div data-mce-style="text-align: center;" style="text-align: center;">
<br /></div>
<div data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #0000ff;" style="color: blue;">Like what you see? For an instant $250 <br />discount on new Annual Subscriptions</span><br />
<span data-mce-style="color: #0000ff;" style="color: blue;"> just enter the coupon code "Two-Fifty"<br />when you subscribe.</span></div>
<br />
<div style="text-align: center;">
<span data-mce-style="color: #0000ff;" style="color: blue;">Details and sign-up at: <a data-mce-href="http://pebblewriter.com/membership/sign-me-up/" data-mce-style="color: #0000ff;" href="http://pebblewriter.com/membership/sign-me-up/" style="color: blue;" target="_blank">SIGN ME UP!</a></span></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-12392263693545711922014-10-27T09:06:00.002-04:002014-10-27T09:16:19.050-04:00Charts I'm Watching: Oct 27, 2014<div dir="ltr" style="text-align: left;" trbidi="on">
pebblewriter.com is down for maintenance today, but should be back up in the next 24 hours or so.<br />
<br />
Friday continued the melt-up, with USDJPY/NKD boosting SPX up over the SMA100 and almost to the SMA50. Today is the official last day of POMO, so one would expect TPTB to prop up the market in an effort to demonstrate how it's able to stand on its own two feet. With lots of economic news, the EZ bank stress test results, a FOMC announcement coming up and the latest case of ebola to pop up in NYC, it could shape up as another volatile day.<br />
<br />
As always, keep an eye on USDJPY <br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggGdLXHbNDHcLwTcVVmhjhuW3ZaHuY0wZiv9_wei9hyphenhyphenuomyltduonQku4mwwPFaj9pBlZ_JoONMn5wP-0DeUNKddlmmHlZB9LdAvc8bfq6WfouCBS47G9mGISir56a6F7taV0YSPnmIwVp/s1600/2014-10-27-USDJPY+v+ESPX+0600.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggGdLXHbNDHcLwTcVVmhjhuW3ZaHuY0wZiv9_wei9hyphenhyphenuomyltduonQku4mwwPFaj9pBlZ_JoONMn5wP-0DeUNKddlmmHlZB9LdAvc8bfq6WfouCBS47G9mGISir56a6F7taV0YSPnmIwVp/s1600/2014-10-27-USDJPY+v+ESPX+0600.png" height="382" width="640" /></a></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-69661585016804197162014-03-20T09:14:00.002-04:002014-03-20T09:57:52.490-04:00Charts I'm Watching: Mar 20, 2014<div dir="ltr" style="text-align: left;" trbidi="on">
pebblewriter.com is back online... additional updates can be found<span style="font-size: large;"> <span style="color: blue;"><a href="http://pebblewriter.com/">HERE.</a></span></span><br />
<br />
<div style="text-align: center;">
<b><span style="color: blue;">* * * </span></b></div>
<br />
USDJPY has either completed its run or has formed a flag pattern that signals higher.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuSBlVihM0ftSv-bWgu8BD0PC5FStNl9Fy1wt6DTiUQoG-QYwVBHf0Ye4E7HP86cQe7-KdvbIkJ3HIwB3Tk5o3xFkD9yB1a3AtrcqSGvS2yMCfUPuc5bWsih2i0HULTkxsIHSHgYKfb2ns/s1600/2014-03-18-USDJPY+60+min+0607.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuSBlVihM0ftSv-bWgu8BD0PC5FStNl9Fy1wt6DTiUQoG-QYwVBHf0Ye4E7HP86cQe7-KdvbIkJ3HIwB3Tk5o3xFkD9yB1a3AtrcqSGvS2yMCfUPuc5bWsih2i0HULTkxsIHSHgYKfb2ns/s1600/2014-03-18-USDJPY+60+min+0607.png" height="390" width="640" /></a></div>
<br />
ES had a nice move yesterday, but needs to move south of the rising white channel in order to confirm our downside case.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd43KJMZtDM2SshA9uSG7ScKYYgZqD-kAZRJ0iv7t1shYIkMzyYWuEC_fJyaDjiTCnFLTtQ7SpRvDk0bVmYE3WrL1196Yu6MuMgrn8z_JzupOB0j3OSjAUFo3EQiXReLHDqfGv4bX1L1xR/s1600/2014-03-18-ESM4+60+min+0607.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd43KJMZtDM2SshA9uSG7ScKYYgZqD-kAZRJ0iv7t1shYIkMzyYWuEC_fJyaDjiTCnFLTtQ7SpRvDk0bVmYE3WrL1196Yu6MuMgrn8z_JzupOB0j3OSjAUFo3EQiXReLHDqfGv4bX1L1xR/s1600/2014-03-18-ESM4+60+min+0607.png" height="440" width="640" /></a></div>
<br />
<br />
<br /></div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-11657441343595815442014-03-11T13:18:00.000-04:002014-03-11T13:19:31.830-04:00Sayonara Abenomics<div dir="ltr" style="text-align: left;" trbidi="on">
~<i>reprinted from <a href="http://pebblewriter.com/" target="_blank">pebblewriter.com </a></i><br />
<br />
Those who have followed this blog for any length of time know about
our focus on the Japanese economy and the yen. I <a href="http://pebblewriter.com/update-on-nkd-dec-26-2013/" target="_blank">presented this chart in December</a>, which shows the impact on stocks of the last three USDJPY
reversals off a trend line (or top of a channel, depending on how
bearish you are) it recently tagged a 4th time.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2014/03/2014-03-10-USDJPY-v-SPX-2008-2013.png" href="http://pebblewriter.com/wp-content/uploads/2014/03/2014-03-10-USDJPY-v-SPX-2008-2013.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-large wp-image-19591" data-mce-src="http://pebblewriter.com/wp-content/uploads/2014/03/2014-03-10-USDJPY-v-SPX-2008-2013-1024x577.png" src="http://pebblewriter.com/wp-content/uploads/2014/03/2014-03-10-USDJPY-v-SPX-2008-2013-1024x577.png" height="360" title="2014-03-10-USDJPY v SPX 2008-2013" width="640" /></a></div>
<br />
The
latest out of Japan is the BOJ deciding to hold easing at current
levels (60-70 trillion yen or $590-690 billion.) This surprised many,
given that exports have fallen off a cliff on the eve of a 60%
consumption tax increase (from 5 to 8% on Apr 1.)<br />
<br />
<a data-mce-href="http://www.reuters.com/article/2014/02/20/us-japan-economy-trade-idUSBREA1I2D820140220" href="http://www.reuters.com/article/2014/02/20/us-japan-economy-trade-idUSBREA1I2D820140220" target="_blank">This article</a>
from Reuters sums up very well the problem Japan faces: trashing the
yen can't undo the systemic economic imbalances of a stagnating economy
with way too much debt on its hands. Japan exports have leveled off,
producing <a data-mce-href="http://www.bbc.com/news/business-26510495" href="http://www.bbc.com/news/business-26510495" target="_blank">record trade deficits</a> (in spite of a weaker yen), while the cost of imports continues to rise (thanks to the weaker yen.)<br />
<br />
Japan's CPI conveniently leaves out <i>fresh</i>
food, which has soared over 17% since the Nov 2012 assault on the yen
(Japan imports 40% of its food.) Is it any surprise that consumer
confidence is moving in the opposite direction?<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.43.20-AM.png" href="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.43.20-AM.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter" data-mce-src="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.43.20-AM.png" src="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.43.20-AM.png" height="286" title="Screen Shot 2014-03-11 at 8.43.20 AM" width="640" /></a></div>
<br />
And,
fuel prices have soared -- exacerbated by the continuing fallout (pun
very much intended) from Fukushima. The consumer, who also faces next
month's 60% tax hike mentioned above, is already getting crushed by QE.
So, why not scrap it?<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.47.37-AM.png" href="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.47.37-AM.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter" data-mce-src="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.47.37-AM.png" src="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-8.47.37-AM.png" height="286" title="Screen Shot 2014-03-11 at 8.47.37 AM" width="640" /></a></div>
<br />
If they do, rates will skyrocket. Outstanding debt is 242% of GDP, and <a data-mce-href="http://www.bloomberg.com/news/2013-12-21/japan-unveils-record-budget-even-as-abe-trims-new-bond-sales.html" href="http://www.bloomberg.com/news/2013-12-21/japan-unveils-record-budget-even-as-abe-trims-new-bond-sales.html" target="_blank">annual debt service</a>
(23 trillion yen) is already greater than 50% of tax receipts (43
trillion.) With QE of 60-70 trillion yen, the BOJ is essentially
monetizing all of Japan's debt directly or indirectly (issuance of 41
trillion yen is anticipated this year.) In short, QE is the only thing
keeping rates "manageable."<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-7.24.18-AM.png" href="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-7.24.18-AM.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter" data-mce-src="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-7.24.18-AM.png" src="http://pebblewriter.com/wp-content/uploads/2014/03/Screen-Shot-2014-03-11-at-7.24.18-AM.png" height="285" title="Screen Shot 2014-03-11 at 7.24.18 AM" width="400" /></a></div>
<br />
In
sum, the BOJ is in a box from which there is increasingly no escape.
They can make ends meet by issuing much more debt to fund the 43% of
expenditures not covered by tax revenues. Issuing that debt keeps rates
low enough to be able to pay the interest. But, a rock bottom yen
bites the consumer in the ass and, in the end, means tax revenues go <i>sayonara</i>, increasing the need for more debt... Wash, rinse, repeat.<br />
<br />
As BOJ's Kuroda put it in his latest "let's play make-believe" press conference:<br />
<blockquote>
<i>When
the sales tax hike was raised to 5 percent from 3 percent in April
1997, Japan's economic growth turned negative in April-June but
rebounded in July-September. But, the Asian currency crisis erupted in
the summer that year and <a data-ls-seen="1" data-mce-href="http://uk.reuters.com/places/japan?lc=int_mb_1001" href="http://uk.reuters.com/places/japan?lc=int_mb_1001">Japan</a> fell into a recession as it faced its domestic banking crisis in the autumn.</i></blockquote>
He
assures us that this time will be different, but I think it's wishful
thinking. I think Japan is very much on the path to default or
depression, and there's no amount of debt issuance that can alter that
outcome. When the money spigot turns off, the primary beneficiaries of
Japan's QE hot money (Thailand, Singapore, Philippines, Malaysia,
Korea... not to mention China, Japan's biggest trading partner) will go
tapioca. The Asian currency crisis will come roaring back in a big way.</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-84411882146882590312013-10-23T13:24:00.000-04:002013-10-23T13:42:54.123-04:00Mucking About<div dir="ltr" style="text-align: left;" trbidi="on">
<i>~reposted from <a href="http://pebblewriter.com/">pebblewriter.com</a>~</i><br />
<br />
ES came within .09 of our interim target from Monday [see: <a data-mce-href="http://pebblewriter.com/charts-im-watching-oct-21-2013/ " href="http://pebblewriter.com/charts-im-watching-oct-21-2013/" target="_blank">CIW Oct 21</a>] and is reversing nicely, though we're a day behind the schedule <a data-mce-href="http://pebblewriter.com/charts-im-watching-oct-17-2013/" href="http://pebblewriter.com/charts-im-watching-oct-17-2013/" target="_blank">discussed on the 17th</a>.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-ES-60-min-0640.png" href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-ES-60-min-0640.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-17567" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-ES-60-min-0640.png" height="391" src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-ES-60-min-0640.png" title="2013-10-23-ES 60 min 0640" width="640" /></a></div>
<br />
The
implications are that this sell-off might be a little less deep than I
originally thought. Still, as we discussed yesterday, it should be steep
enough to flesh out the red channel within a few days.<br />
<br />
The dollar reverted to the pale blue .886 before falling back to a <i>higher</i>
low, having been rebuffed by the falling wedge's lower bound. It'll be
interesting to see whether the equity plunge is frightening enough to
produce a real dollar rally -- or merely slow the bleeding.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-DX-4hr-0709.png" href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-DX-4hr-0709.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-17572" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-DX-4hr-0709.png" height="447" src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-DX-4hr-0709.png" title="2013-10-23-DX 4hr 0709" width="640" /></a></div>
<br />
SPX's
90-pt plunge in late June (1654 to 1560, in yellow on the chart above)
produced a dramatic spike in DX -- which then continued to rally <i>with</i> stocks until they had recovered their losses. For now, at least, the dip below the critical 78.725 has been averted.<br />
<br />
I'm
often asked why, if the larger harmonic patterns are so clear, one
should muck about with the smaller patterns, channels, etc. The rally
from 1640 to 1754 demonstrates the value quite well. The 110
points, alone, would have been a 6.7% return -- not shabby for a
12-session holding period. <br />
<br />
Yet, as the chart below shows, there were
several reversals that were fairly "by the numbers." The purple .786
(yellow .618) provided a 20-pt reversal, and the purple .886 another 11
points.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgK5HHxMjDICzoryjlRv8f8ZYI5QhwRi_yAKyjK6EjT-E3sPJMo5bKm7HbGkY61djVjJHrJOTXdGXqFeSzC8UjzWDtGgdDu28eLYRAZntZtCBsQ6M5dmUUcc7nUaqNl_VWVhWTjcuvqIHND/s1600/2013-10-23-ES+60+min+w+ylw.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="390" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgK5HHxMjDICzoryjlRv8f8ZYI5QhwRi_yAKyjK6EjT-E3sPJMo5bKm7HbGkY61djVjJHrJOTXdGXqFeSzC8UjzWDtGgdDu28eLYRAZntZtCBsQ6M5dmUUcc7nUaqNl_VWVhWTjcuvqIHND/s640/2013-10-23-ES+60+min+w+ylw.png" width="640" /></a></div>
<br />
<br />
Adding in those extra 62 points alone (the reversals <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">and</span>
their retracements) would have boosted the 6.7% return to about 10.5%.
But, more importantly, the harmonics alone don't tell the whole story.<br />
<br />
Consider
our forecast from July 15, when SPX was about to register a new
all-time high. Based on harmonics, I expected a reversal at 1712 (it
came at 1709) and subsequent rally to 1765, followed by a 45-point
retracement on the way to 1823 -- all by late August.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-07-15-daily-fcst-A-EOD.png" href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-07-15-daily-fcst-A-EOD.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-17574" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-07-15-daily-fcst-A-EOD.png" height="395" src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-07-15-daily-fcst-A-EOD.png" title="2013-07-15-daily fcst A EOD" width="640" /></a></div>
<br />
A
buy-and-hold investor would have done reasonably well with that
forecast. SPX came within 6 points of that 1765 target before reversing
yesterday -- a modest 4.6% gain from 1682. There's nothing wrong with
4.6% for three months (about 18% annualized.)<br />
<br />
However, by simply
paying attention to the channels, we were able to spot the trend shift
in early August that signaled a deeper dip than originally anticipated.
That deviation provided an additional opportunity of 54 points (27 X
2.) The September dip from 1729 to 1646 provided another 166 points of
potential return.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-4-hr-0848.png" href="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-4-hr-0848.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-17579" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-4-hr-0848.png" height="447" src="http://pebblewriter.com/wp-content/uploads/2013/10/2013-10-23-4-hr-0848.png" title="2013-10-23-4 hr 0848" width="640" /></a></div>
<br />
Suddenly,
a 77-pt or 4.6% potential return becomes a 297-pt or 17.7% return
(about 70% annualized) -- from simply tossing channel analysis into the
equation. By considering many other chart patterns, coincident
developments in other securities and currencies, analogs, RSI channels
and other, more traditional technical analysis, we've been able to do
even better.<br />
<br />
Let's be clear on one thing: it is highly unusual for
anyone to catch the absolute top and bottom of every major move. We've
done better than most, but I still miss a lot more than I care to
admit. But, that's not important...because, it's not our goal.<br />
<br />
Our
goal is simply to catch "most of the moves most of the time." This
means developing the very best forecast we can and following it until it
stops working. Sometimes, it works for days or even weeks. And,
sometimes it works for all of five minutes.<br />
<br />
The key is
acknowledging when it's not working -- which means (1) having a discrete
price level or chart pattern that provides a clear signal, and (2)
setting aside one's ego and admitting that the forecast was hogwash in
the first place (by far the harder of the two!)<br />
<br />
<div style="text-align: center;">
<i>continued on <a href="http://pebblewriter.com/">pebblewriter.com</a></i></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-61862083447806355962013-08-02T12:23:00.003-04:002013-08-02T13:58:17.262-04:00Just Like Old Times<div dir="ltr" style="text-align: left;" trbidi="on">
Welcome to the old pebblewriter. If you found your way here, you know that Hostgator -- the outfit who host pebblewriter.com -- is down this morning. I have no idea when they'll be back up, but I'll post here until they are. I'm getting status reports here: https://twitter.com/HGSupport<br />
<br />
A reminder, I will wrap up at 2pm today and will be on vacation Monday through Wednesday of next week. I will post an updated forecast either this evening or tomorrow, assuming the servers are operating again.<br />
<br />
<div style="text-align: center;">
<span style="color: blue;"><b>* * * * * </b></span></div>
<br />
Here's where we are so far this morning...<br />
<br />
I shorted on the opening at 1706.10, then went long at 1700.78 with an interim target of 1712 as detailed last week.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-8NyRGegQcVucw-StlTqZNxGZ7p46vTuGHJceWt_sytGnZPw04zcKDtYz3I9YmNrCR1TxqhWYhI0-oGXMIAA1NAmaKl21HkIqG1WFLLBKEVSbfOzN23OO2rV29mVeRzjLTgF8Y6kiN3hF/s1600/2013-08-02-15+min+0921.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="406" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-8NyRGegQcVucw-StlTqZNxGZ7p46vTuGHJceWt_sytGnZPw04zcKDtYz3I9YmNrCR1TxqhWYhI0-oGXMIAA1NAmaKl21HkIqG1WFLLBKEVSbfOzN23OO2rV29mVeRzjLTgF8Y6kiN3hF/s640/2013-08-02-15+min+0921.png" width="640" /></a></div>
<br />
<br />
<br />
I posted several currency charts earlier this morning. Here are the updated versions:<br />
<br />
The dollar, which had poked up above the falling white channel midline in a rising wedge, broke down from the wedge this morning. While the recent .786 tag could have been a significant bottom for DX, I continue to suspect the .886 at 81.11 is in the cards for Monday Aug 5.<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrq1OCxYKOqZCCy-vAUtB0uDYtBcBdyVh922dq5c7HEnw7jvQQ6s0A9rn2U5MbtGf3IM9IJdhl-YTimIa3Jqd1IJOrAWc2lLmID-4LY6vF2RuR__xvIY-3hfDo3d-wq3USW8wtImaGXzkg/s1600/2013-08-02-DX+60+min+0622.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="406" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrq1OCxYKOqZCCy-vAUtB0uDYtBcBdyVh922dq5c7HEnw7jvQQ6s0A9rn2U5MbtGf3IM9IJdhl-YTimIa3Jqd1IJOrAWc2lLmID-4LY6vF2RuR__xvIY-3hfDo3d-wq3USW8wtImaGXzkg/s640/2013-08-02-DX+60+min+0622.png" width="640" /></a></div>
<br />
Aug 5 shows up as a potentially significant date in many of my charts, including the USDJPY. It marks the intersection of two important channels, as well as the recently broken neckline and the pale blue .886 at 100.12.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiECdYQbeL7J-DY_nuRe2reobGWh6G3A3ld7QWcn_16KzskRBrnz7_Mz0EOuRoezjzISo0g9eyvwjfm-B6Pn9A6wDmYpJzNA8L4Ebbkfa53C9l-Hk1W6p2Mc2pWpvDbQY745fYT9YtrZCZC/s1600/2013-08-02-USDJPY+4hr+1022.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="408" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiECdYQbeL7J-DY_nuRe2reobGWh6G3A3ld7QWcn_16KzskRBrnz7_Mz0EOuRoezjzISo0g9eyvwjfm-B6Pn9A6wDmYpJzNA8L4Ebbkfa53C9l-Hk1W6p2Mc2pWpvDbQY745fYT9YtrZCZC/s640/2013-08-02-USDJPY+4hr+1022.png" width="640" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<br />
The EURUSD shows the greatest potential risk, with a recent .886 tag having occurred at the top of a falling channel and rising wedge.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0Ojw_a2j6ID_-sXDMQn4f4jNFSGLuUuTfExE6CIIK8m-qS6WzWaLncPVk4Mx2i0bPp6HWHAwS5SwWlpVCRljPNT_XjXZJn2ax5WRhCTnpnvQSZxs2kiQIWCWvnQjh5j4FOeTyhascXJ7o/s1600/2013-08-02-EURUSD+4hr+1029.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="408" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0Ojw_a2j6ID_-sXDMQn4f4jNFSGLuUuTfExE6CIIK8m-qS6WzWaLncPVk4Mx2i0bPp6HWHAwS5SwWlpVCRljPNT_XjXZJn2ax5WRhCTnpnvQSZxs2kiQIWCWvnQjh5j4FOeTyhascXJ7o/s640/2013-08-02-EURUSD+4hr+1029.png" width="640" /></a></div>
<br />
Given all that, it's quite possible the 1712 target won't be reached until Monday -- if then. There continues to be great downside risk to this rally built on QE and ramp jobs. I would go to cash for the weekend, but would continue to play the long position unless we reach 1712 or stop out. <br />
<br />
I'd leave stops around 1698, but would close out the long on any significant weakness. It has backtested the 1.272 and should be positioned for another leg up. But, it's also running on fumes...<br />
<br />
I have to leave you now, but will post later this afternoon or evening.<br />
<br />
GLTA.<br />
<br />
<br />
<br />
<div style="text-align: center;">
<span style="color: blue;"><b>* * * * * </b></span></div>
<br />
<br />
As a young boy, I spent many hours listening to my grandparents' music collection. One of my favorites was Guy Lombardo and his Royal Canadians. His music still brings a nostalgic smile to my face...<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/vjBcW9J52B0?feature=player_embedded' frameborder='0'></iframe></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-21372459620475255952013-07-02T11:56:00.000-04:002013-07-02T12:09:37.320-04:00Fireworks Ahead!<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: center;">
</div>
<span style="color: blue;"><i>NOTE: Only about half the discounted annual memberships are left. Many of you have memberships expiring this month. If you plan on upgrading or extending or haven't completed your order yet, don't forget it's first come-first served. <br /><br />The sale will be announced outside the membership tomorrow if any memberships are left at the discounted price. This will likely be the last sale before the Fund goes live and memberships to the current website will no longer be accepted. <a href="http://pebblewriter.com/membership/sign-me-up/" target="_blank"><span style="color: blue;"></span>CLICK HERE</a><br /><br />Also, I intended to post the May and June performance last night, but ran out of time. I should get it posted later this afternoon. Check back <a href="http://pebblewriter.com/performance/" target="_blank">HERE</a>. I have put together a page describing the basic investment philosophy and strategy underlying this site that some might find interesting:<a href="http://pebblewriter.com/membership/my-philosophystrategy/" target="_blank"> HERE</a></i></span><br />
<br />
<br />
<a href="http://pebblewriter.com/here-we-go-again/" target="_blank"><i>Reposted from pebblewriter.com...</i></a><br />
<br />
Everything is going according to plan this morning, with all currency pairs approaching their targets from last week.<br />
<br />
The
dollar is back to the white channel midline where exciting things
happen. The last squirt higher led to 84.595 on May 23, the day after
SPX topped out at 1687.<br />
<br />
This time, however, there's a falling purple channel and the .786 Fib line to consider.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtH3ptNzeB59icFuUoSAd8aDTg7m6VtIOggnZ9hyphenhyphenRLT19_fvVSNbldpOrMgR9bFlDkkE7yVPKVC_EpZ-G5NTbK6faISlCpRpa2FD_EG3_Nktwq07rj4Jr4Yup1zBNL1tdCet6TBF5ywxKP/s1351/2013-07-02-DX+daily+0616.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="462" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtH3ptNzeB59icFuUoSAd8aDTg7m6VtIOggnZ9hyphenhyphenRLT19_fvVSNbldpOrMgR9bFlDkkE7yVPKVC_EpZ-G5NTbK6faISlCpRpa2FD_EG3_Nktwq07rj4Jr4Yup1zBNL1tdCet6TBF5ywxKP/s640/2013-07-02-DX+daily+0616.png" width="640" /></a></div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
A close up reveals that DX is also pushing up through the red channel .382 line.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-DX-4hr-0618.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-DX-4hr-0618.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14838" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-DX-4hr-0618.png" height="463" src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-DX-4hr-0618.png" title="2013-07-02-DX 4hr 0618" width="640" /></a></div>
<br />
While the EURUSD is approaching the .786 retracement of its rally from
the 1.2795 low, the red channel midline and the bottom of the light blue
channel.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-0624.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-0624.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14842" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-0624.png" height="463" src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-0624.png" title="2013-07-02-EURUSD 0624" width="640" /></a></div>
<br />
A close up...<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-4hr-0622.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-4hr-0622.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14841" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-4hr-0622.png" height="463" src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-EURUSD-4hr-0622.png" title="2013-07-02-EURUSD 4hr 0622" width="640" /></a></div>
<br />
The USDJPY is closing in on our 101.59 target at the .786 Fib.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-USDJPY-daily-0634.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-USDJPY-daily-0634.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14846" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-USDJPY-daily-0634.png" height="462" src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-USDJPY-daily-0634.png" title="2013-07-02-USDJPY daily 0634" width="640" /></a></div>
<br data-mce-bogus="1" />
The
e-minis, which back-tested the bottom of their purple channel at the
white .500 Fib yesterday, took another run overnight but fell short --
reaching only the top of the falling red channel.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-ES-daily-0628.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-ES-daily-0628.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14844" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-ES-daily-0628.png" height="463" src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-ES-daily-0628.png" title="2013-07-02-ES daily 0628" width="640" /></a></div>
<br />
We'll
see if SPX has enough juice left to take its own shot. The first test this
morning will be pushing through the top of the red channel -- at least
intra-day -- at about 1621.50.<br />
<br />
UPDATE: 9:52 AM<br />
<br />
SPX reached the red channel and is debating whether to push through or take a breather.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-60-min-0652.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-60-min-0652.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14848" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-60-min-0652.png" height="463" src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-60-min-0652.png" title="2013-07-02-60 min 0652" width="640" /></a></div>
<br />
Recall, the cluster of targets we discussed last week includes:<br />
<blockquote>
<blockquote>
<blockquote>
<ul>
<li><i>the gap fill at 1629.22</i></li>
<li><i>the IH&S target at 1631.67</i></li>
<li><i>the red .786 Fib at 1634.10</i></li>
<li><i>the grey .618 at 1638.72</i></li>
</ul>
</blockquote>
</blockquote>
</blockquote>
SPX
came within 3 points of filling the gap yesterday, but ran into the
same channel top and fell back to close at the bottom of the grey
channel in the 5th such stop-clearing exercise in a week and the 9th
close at or near the daily low in a fortnight.<br />
<br />
It also tagged the .500 grey Fib (of 1687-1560) yesterday, where it (so far) reacted less than it did at the red .618.<br />
<br />
So, the red pattern is assumed to be the one in charge, with a <a data-mce-href="http://pebblewriter.com/learn/harmonics/gartley-pattern/" href="http://pebblewriter.com/learn/harmonics/gartley-pattern/" target="_blank">Gartley Pattern</a> completion at the red .786 (1634.10) the next major Fib target on the radar.<br />
<br />
UPDATE: 10:15 AM<br />
<br />
A
close up shows two smaller patterns also pointing to the 1631-1635
range if SPX can poke through the red channel top. Note also the
presence of the pink .618 here -- contributing to the pause.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-15-min-0714.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-15-min-0714.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14851" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-15-min-0714.png" height="463" src="http://pebblewriter.com/wp-content/uploads/2013/07/2013-07-02-15-min-0714.png" title="2013-07-02-15 min 0714" width="640" /></a></div>
<br data-mce-bogus="1" />
We've
had a few pieces of economic news this morning. First, the Fed is set
to vote on Basel III this morning. While significantly watered down, it
could still be construed as a speed bump on the road to global
financial domination.<br />
<br />
Also, Census released the <a data-mce-href="http://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf" href="http://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf" target="_blank">factory orders survey</a>
for May. The managed (a.k.a. seasonally adjusted) version came in
slightly higher than expected, at +2.1% versus 2.0% consensus and 1.3%
for April.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/07/Screen-shot-2013-07-02-at-7.43.02-AM.png" href="http://pebblewriter.com/wp-content/uploads/2013/07/Screen-shot-2013-07-02-at-7.43.02-AM.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14855" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/07/Screen-shot-2013-07-02-at-7.43.02-AM.png" height="161" src="http://pebblewriter.com/wp-content/uploads/2013/07/Screen-shot-2013-07-02-at-7.43.02-AM.png" title="Screen shot 2013-07-02 at 7.43.02 AM" width="640" /></a></div>
<br data-mce-bogus="1" />
<br />
There is bound to be some concern that the slight beat undermines support for QE (does anything else matter?)<br />
<br />
This explains why the less-managed, de-emphasized, and <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">not</span> seasonally adjusted number, at <b>+5.4% month-over-month</b>, is the better number for a change. Remember the good old days when they massaged the numbers to make things look <i>better</i>?<br />
<br />
<div style="text-align: center;">
<span style="color: blue;"><i><a href="http://pebblewriter.com/here-we-go-again/" target="_blank"><span style="font-size: small;">continued on pebblewriter.com...</span></a></i></span></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-46690534869104025262013-06-26T15:16:00.001-04:002013-06-26T15:21:18.665-04:00Update on Gold: Jun 26, 2013<div dir="ltr" style="text-align: left;" trbidi="on">
<i>reposted from <a href="http://pebblewriter.com/">pebblewriter.com</a></i>~ <br />
<br />
It's been over a month since I last focused on gold. The equities markets have kept me working overtime, and I assumed our <a data-mce-href="http://pebblewriter.com/update-on-gold-may-15-2013/" href="http://pebblewriter.com/update-on-gold-may-15-2013/" target="_blank">May 15 forecast</a> had long since jumped the tracks.<br />
<br />
At
the time, gold had plunged 270 to 1321 per ounce in only 4 sessions,
bounced at 1321 (the day after our bottom call) to within 13 of our upside
target, and was returning for a second bounce -- or not. From that
post [<a data-mce-href="http://pebblewriter.com/update-on-gold-may-15-2013/" href="http://pebblewriter.com/update-on-gold-may-15-2013/" target="_blank" title="Update on Gold: May 15, 2013">Update on Gold: May 15, 2013</a>]:<br />
<blockquote>
<blockquote class="tr_bq">
<i>Now,
at 1373, it has reached a critical juncture that should result in
either a sharp rally to 1560 or a plunge to 1141 in the coming month or
so.</i></blockquote>
</blockquote>
GC was closing in on the .786 retracement of the
the rise off the 1321 bottom. Playing the bounce was a low risk trade
as long as one used trailing stops.<br />
<blockquote>
<blockquote class="tr_bq">
<i>Long positions
could be played from the .786 (1357) or .886 (1340) as long as stops are
watched very carefully and updated frequently.</i><br />
<i></i></blockquote>
</blockquote>
<blockquote class="tr_bq">
<blockquote class="tr_bq">
<i>The downside case
is probably stronger. If the current plunge continues past 1321, there
are only a few key levels of support before things get really nasty:</i></blockquote>
</blockquote>
<blockquote>
<blockquote class="tr_bq">
<blockquote>
<ul>
<li><i>horizontal support at 1302-1309</i></li>
<li><i>potential Fib targets of 1276 (the 1.272) or 1219 (1.618)</i></li>
<li><i>Fib support at 1141-1157</i></li>
<li><i>Fib support at 947</i></li>
</ul>
</blockquote>
</blockquote>
</blockquote>
The
bounce came a few days later at the .886 (1336) and despite gaining 84,
couldn't clear the big white channel midline, much less the smaller red
channel (white in previous charts) it had been in since last September.<br />
<br />
When
the big red channel from 1999 broke down on Jun 20, GC plunged again.
It failed to catch a bid at the first support level, but is approaching
the second one this morning: the yellow 1.618 that completes the<a data-mce-href="http://pebblewriter.com/learn/harmonics/crab-pattern/" href="http://pebblewriter.com/learn/harmonics/crab-pattern/" target="_blank"> Crab Pattern</a> at 1219.10.<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiO3JwpPA5MSKAWTK9pWlEVf2h_NE2aX7CiC2wEmHbsMs6p53aVjPoZoqW0ycUXdNDnh7v6E3SG_NGRkEgS5agcKXK7VJp-gbP74er9kCvxg2hILgHSQqKsXMAJ7mhNoCormRvE_MaSBeWl/s1600/2013-06-26-GC+daily+MCU+0924.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiO3JwpPA5MSKAWTK9pWlEVf2h_NE2aX7CiC2wEmHbsMs6p53aVjPoZoqW0ycUXdNDnh7v6E3SG_NGRkEgS5agcKXK7VJp-gbP74er9kCvxg2hILgHSQqKsXMAJ7mhNoCormRvE_MaSBeWl/s640/2013-06-26-GC+daily+MCU+0924.png" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
<br />
This
seems like an opportune time to update the forecast, as gold's price
action continues to provide valuable clues as to investors' expectations
about QE, the value of the dollar and inflation. Are the many calls
for gold to fall below $1000 per ounce well-founded?<br />
<br />
Probably
not. We should get a decent bounce beginning at or near 1219 today that
could take prices as high as 1320 or so by July 5-8. A continued rally
through the red midline would mean additional gains to 1357-1385 by
mid-July.<br />
<br />
But, there's a better chance of a plunge to 1155 instead --
and it need not respect the <a data-mce-href="http://pebblewriter.com/learn/harmonics/crab-pattern/" href="http://pebblewriter.com/learn/harmonics/crab-pattern/" target="_blank">Crab Pattern</a> about to complete, especially if today's equity rally falters (gold certainly isn't buying the More QE! snake oil.)<br />
<br />
Remember
that 1155 is the .618 retracement (in white below) of the huge rally
from 681 in 2008 to last September's 1923 all-time high. Around July 15,
the bottom of the big white channel and the bottom of the red channel
intersect there with the bottom of the big purple channel (it replaced
the red one that failed on Jun 20.)<br />
<br />
This is the same price target we identified in our <a data-mce-href="http://pebblewriter.com/update-on-gold-april-15-2013/" href="http://pebblewriter.com/update-on-gold-april-15-2013/" target="_blank">April 15 Update on Gold</a>.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/06/2013-06-26-GC-5yr-daily-0940.png" href="http://pebblewriter.com/wp-content/uploads/2013/06/2013-06-26-GC-5yr-daily-0940.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-14510" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/06/2013-06-26-GC-5yr-daily-0940.png" height="374" src="http://pebblewriter.com/wp-content/uploads/2013/06/2013-06-26-GC-5yr-daily-0940.png" title="2013-06-26-GC 5yr daily 0940" width="640" /></a></div>
<br />
We
can speculate about what circumstances might provide for a floor. The prevailing wisdom
these days is yet another round of QE -- or at least inflation of some
variety. With interest rates on the rise, that seems likely enough.
We'll stick a pin in the idea of a mid-July market calamity that
necessitates Fed intervention.<br />
<br />
<div style="text-align: center;">
<i>...continued on <a href="http://pebblewriter.com/">pebblewriter.com</a></i>...</div>
<div style="text-align: center;">
<br /></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-22202528073037065932013-06-05T02:23:00.000-04:002013-06-05T02:32:33.839-04:00The Hindenburg Omen<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: left;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs3ThYOId33elnil0J_KWi__HQtsBDZMm-qEllsNjqgdrls6eG3V4gBLPtb5ALT0fGTKZ8HzZyXXRV3y0YfbIii6g0GDGkzM69BHuCaUOZmkpPYUGTMQOrOCqPDFv-sC88nfhgbOFe29T8/s1600/Screen+shot+2013-06-04+at+11.02.06+PM.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="263" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs3ThYOId33elnil0J_KWi__HQtsBDZMm-qEllsNjqgdrls6eG3V4gBLPtb5ALT0fGTKZ8HzZyXXRV3y0YfbIii6g0GDGkzM69BHuCaUOZmkpPYUGTMQOrOCqPDFv-sC88nfhgbOFe29T8/s320/Screen+shot+2013-06-04+at+11.02.06+PM.png" width="320" /></a></div>
<br />
<span style="font-size: small;">Major crash? Minor correction? Somewhere in between? </span><br />
<br />
<span style="font-size: small;">Did you know it fired off yet <span style="text-decoration: underline;">another</span> signal today?</span><br />
<br />
<span style="font-size: small;">
</span><span style="font-size: small;">Don't be a Barti-dunno. For the latest skinny on just how
ominous this bad boy is, head on over to Albertarocks. </span><br />
<br />
<span style="font-size: small;">He’s been studying it for years, and would love nothing more than to clue you in, too.</span><br />
<br />
<span style="font-size: small;">
</span><span style="font-size: small;">Check out the latest <a href="http://albertarocks-ta-discussions.blogspot.com/2013/06/hindenburg-omen-now-official-second.html" target="_blank">HERE</a>.</span></div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-41968323410340314602013-05-20T17:22:00.000-04:002013-05-20T17:22:08.241-04:00Charts I'm Watching: May 20, 2013<div dir="ltr" style="text-align: left;" trbidi="on">
<em>Pebblewriter.com is being transferred from GoDaddy to Hostgator. But, it takes a couple of days for the content to propagate to various servers around the world. So, some</em><em><em> of you in Asia, parts of Europe, the Caribbean, India and the Middle East are not able to see posts made over the past 24-48 hours.</em> </em><br />
<br />
<em>For the next couple of days, I will update this site alongside the pebblewriter.com site so you're not left out in the cold. I will also repost a couple of recent posts that were lost during the transition.</em><br />
<br />
<em>Please note that the address of the site has changed slightly: <a href="http://pebblewriter/">http://pebblewriter</a> rather than https://pebblewriter.com (the "s" which signifies SSL is no longer necessary, as membership payments are now processed directly by PayPal.) </em><br />
<br />
<em>I</em><em><em>f you get an error message when accessing the site, simply go to the address bar and remove the "s" and then refresh the page. </em>While you're at it, this would be a great time to edit your bookmarks, etc. </em><br />
<br />
<em>You might notice that once the few remaining bugs are
ironed out, the site will run much faster and more reliably. Disqus
doesn't play well with SSL, so comments will now be easier to make,
append and edit.</em><br />
<br />
<em> </em><em>I have already been impressed with Hostgator's excellent customer service. The propagation hit my server about 10 minutes prior to the opening bell this morning. My email and a couple of administrative pages weren't working properly. I called the 800 number and got right through. Ten minutes later, everything was good to go.</em><br />
<br />
<em><br /></em>
<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #0000ff; font-size: 20px;" style="color: blue; font-size: 20px;">* * * *</span></div>
<i>~reposted from pebblewriter.com: </i><br />
<br />
Nothing
much has changed since Friday's close. There's a slight negative bias,
which could be nothing more than consolidation after Friday's rally.
We'll play along on the downside, with the understanding that 1673 is
still on the table. In other words... tight stops.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-PVG8nnt_ldiO5scvbv3Umsly7MfJZJlxx6Sg_x-23W4D8kYYSpzZ7Nn_ffVM_HYknxm14JgXB2GyF8CGEkAwrqSD98nMDcNjYyNkkOfEexzZfBoy1urNvBAJy5NFACrmLxHMt3YZqXE-/s1600/2013-05-20-15+min+0630.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="406" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-PVG8nnt_ldiO5scvbv3Umsly7MfJZJlxx6Sg_x-23W4D8kYYSpzZ7Nn_ffVM_HYknxm14JgXB2GyF8CGEkAwrqSD98nMDcNjYyNkkOfEexzZfBoy1urNvBAJy5NFACrmLxHMt3YZqXE-/s640/2013-05-20-15+min+0630.png" width="640" /></a></div>
<br data-mce-bogus="1" />
Price
has been on a tear, but the underpinnings of the rally have been fading
the past several days -- as seen on the 60-min RSI chart.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-60-min-RSI-0648.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-60-min-RSI-0648.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12895" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-60-min-RSI-0648.png" height="406" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-60-min-RSI-0648.png" title="2013-05-20-60 min RSI 0648" width="640" /></a></div>
<br data-mce-bogus="1" />
We
went to cash at the close Friday because of the conflict between
short-term and long-term patterns such as are displayed in the
currencies. The euro and dollar have hit short-term targets, but have
more room to go before the tide turns.<br />
<br />
UPDATE: 10:10 AM<br />
<br />
SPX just pushed above 1667. I'm going to switch to the long side with stops<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;"> at</span> 1667 in the expectation that it's headed to 1673. <br />
<br />
Note
that we're currently above the yellow TL connecting the 1994 and 2002
lows, and at 1667.50 have pushed above the top of the purple channel
itself.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0711.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0711.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12901" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0711.png" height="406" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0711.png" title="2013-05-20-15 min 0711" width="640" /></a></div>
<br data-mce-bogus="1" />
As
I mentioned earlier, this might be nothing more than an intra-day move.
But, we can't ignore the possibility of a breakout here. It's visible
on both the short-term and longer-term RSI charts -- the action
immediately ahead of us will determine which it is<em>.</em><br />
<em><br /> </em><br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-weekly-RSI-0708.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-weekly-RSI-0708.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12904" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-weekly-RSI-0708.png" height="406" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-weekly-RSI-0708.png" title="2013-05-20-weekly RSI 0708" width="640" /></a></div>
<br data-mce-bogus="1" />
<br />
The most logical move, given the degree to which we're overbought, would be a reversal off the channel tops. But, we'll see...<br />
<br />
UPDATE: 12:47 PM<br />
<br />
SPX
got within .16 of our 1673 target and is rolling over. Watch for the
latest even-more-steeply sloped channel (white) to catch it around
1669-1670. A drop back through the top of the purple channel would
argue for 1663 (yellow dashed TL) for starters, <em>maybe</em> lower.<br />
<br />
I'll likely take a crack at an interim short position with any push through 1669.60.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0946.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0946.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12906" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0946.png" height="406" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0946.png" title="2013-05-20-15 min 0946" width="640" /></a></div>
<br data-mce-bogus="1" />
UPDATE: 12:56 PM<br />
<br />
Here we go... interim short here at 1669.60. <br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0956.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0956.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12910" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0956.png" height="406" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-0956.png" title="2013-05-20-15 min 0956" width="640" /></a></div>
<br data-mce-bogus="1" />
Totally jumped the gun on that one. Stopped out with a bounce at the top of
the purple channel. Should have been more like 1669. Too bad, because
the dollar's confirming a drop here -- as is SPX RSI. <br />
<br />
I'll just wait for a push through 1669 itself.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-DX-60-min-0959.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-DX-60-min-0959.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12914" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-DX-60-min-0959.png" height="395" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-DX-60-min-0959.png" title="2013-05-20-DX 60 min 0959" width="640" /></a></div>
<br data-mce-bogus="1" />
To
give you an idea of how silly this has become, the little white channel
slopes up through the red channel which slopes up through (and has, for
the moment at least, departed) the purple channel.<br />
This is, by definition, exponential: increasing at an increasing rate.<br />
<br />
UPDATE: 1:19 PM<br />
<br />
<br />
<br />
<br />
Just got the break. Full short here at 1669. Charts in a few...<br />
<br /><br />
For
the bears, a move back through 1663 is necessary to generate any real
downside potential. Otherwise, this could be viewed as a backtest of
the yellow TL.<br />
<br />
As always, watch for the back test of the broken channel/TL -- in this case, stops around 1670.50 should be safe.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1020.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1020.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12920" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1020.png" height="406" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1020.png" title="2013-05-20-15 min 1020" width="640" /></a></div>
<br data-mce-bogus="1" />
<br />
UPDATE: 2:40 PM<br />
<br />
<br />
<br />
<br />
Got
very close to the yellow TL and bounced. It's not clear yet whether
that was the extent of it. But, I'd expect SPX to at least tag the red
channel midline -- currently at 1663.75.<br />
<br />
<br />
UPDATE: 3:55 PM<br />
<br />
Holding
short into the close. The dollar and euro appear very ready to
reverse, and SPX is still back below the purple channel top, meaning a
reversion to the midline is the most likely scenario.<br />
<br />
There is a good possibility that DX will sell off a little more first -- say 83.609. But, that could easily happen overnight. If not, look for SPX to retrace to 1670-1672 before any additional downside. In other words, a potential gap and crap on the opening bell.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1255.png" href="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1255.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="alignleft size-full wp-image-12931" data-mce-src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1255.png" height="406" src="http://pebblewriter.com/wp-content/uploads/2013/05/2013-05-20-15-min-1255.png" title="2013-05-20-15 min 1255" width="640" /></a></div>
<br data-mce-bogus="1" />
<br />
GLTA. </div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-90994800483900415152013-05-03T17:45:00.002-04:002013-05-03T17:45:52.335-04:00Which Lie Did We Tell?<div dir="ltr" style="text-align: left;" trbidi="on">
Reading the employment reports these days reminds me of the story
told by William Goldman, celebrated screenwriter of such classics as <em>Butch Cassidy and the Sundance Kid</em> and <em>All the President's Men</em>.
He was waiting for a producer to get off the phone when the man
suddenly cupped his hand over the phone and shouted to his assistant:
"Bill, Bill! Which lie did I tell?"<br />
<br />
When we learn that the
government is unable to keep track of the number of its own employees
from month to month, how are we supposed to trust that any other number
that purports to tell us how many folks are employed in offices,
warehouses and saloons across the nation?<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/05/Screen-shot-2013-05-03-at-9.46.09-AM.png" href="https://pebblewriter.com/wp-content/uploads/2013/05/Screen-shot-2013-05-03-at-9.46.09-AM.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12471" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/05/Screen-shot-2013-05-03-at-9.46.09-AM.png" height="67" src="https://pebblewriter.com/wp-content/uploads/2013/05/Screen-shot-2013-05-03-at-9.46.09-AM.png" title="Screen shot 2013-05-03 at 9.46.09 AM" width="400" /></a></div>
<br />
In the "bad news is good news" (more QE) and "good news is good news" world in which we're living, this morning's<a data-mce-href="http://www.bls.gov/ces/" href="http://www.bls.gov/ces/" target="_blank"> jobs report</a> is -- surprise! -- good news.<br />
<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<b><span style="font-size: small;"><span data-mce-style="color: #0000ff; font-size: 24px;" style="color: blue;">* * * * * * * *</span></span></b></div>
<br />
We're
still long from yesterday's low, but coming up on important
resistance. This morning will be about figuring out when to sell. I
suspect 1615-1616 would be nice.<br />
<br />
The dollar shot up on the news to
an important channel line and the .618 retracement of its fall since
Apr 24, but is dropping back. <em>How far</em> it falls could be quite telling.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiucraekmAw_VYoMKMlRtz8nkRQfGcjYNbi91mHzzj4GL1HC_5P100HZmk9SdMj52rmLMAQIn7B-LDgNKXZ88-ElbNV0BKtGzdOoUlUPmeAJHzn1veyBmOxXP1Fb5xxaGjKGhwM-U107sTc/s1600/2013-05-03-DX+4+hour+0605.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="442" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiucraekmAw_VYoMKMlRtz8nkRQfGcjYNbi91mHzzj4GL1HC_5P100HZmk9SdMj52rmLMAQIn7B-LDgNKXZ88-ElbNV0BKtGzdOoUlUPmeAJHzn1veyBmOxXP1Fb5xxaGjKGhwM-U107sTc/s640/2013-05-03-DX+4+hour+0605.png" width="640" /></a></div>
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
</div>
Stay tuned...<br />
<br />
UPDATE: 9:42 AM<br />
<br />
SPX just hit 1616.16. Shorting here, with stops at 1618ish. Charts in a minute... <br />
<br />
<br />
<br />
<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-0644.png" href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-0644.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12457" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-0644.png" height="405" src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-0644.png" title="2013-05-03-15 min 0644" width="640" /></a></div>
<br />
Note
SPX just hit the top of the red channel within the broader purple
channel, as well as the 1.272 Fib extension of the 1597-1536 drop from
Apr 11-18.<br />
<br />
There are still a number of higher potential targets:<br />
<ul>
<li><em>the top of the purple channel, currently around 1646</em></li>
<li><em>the IH&S target of 1650 (now that SPX <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">finally</span> crossed the neckline)</em></li>
<li><em>the white 1.618 extension at 1635.25</em></li>
</ul>
But,
odds are they'll have to wait for a back test of the lines of important
resistance just broken. It's not that the 1.272 Fib line is that
important. There was no meaningful .786 reversal, so this harmonic
pattern is much more likely to extend to the 1.618 at 1635.<br />
<br />
This
was our upside target if SPX was able to break through the resistance it
just did. And, we're at an unusual point on the purple channel -- the
.625 line. The .75 would be a much more common end point.<br />
<br />
UPDATE: 10:29 AM<br />
<br />
Looks
like SPX is breaking out of the red channel, triggering our 1618 stop.
So we'll switch back to the long side for a likely run up to 1624ish.
Stops at 1614ish. <br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-1029.png" href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-1029.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12463" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-1029.png" height="405" src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-15-min-1029.png" title="2013-05-03-15 min 1029" width="640" /></a></div>
<br />
The
red channel is drawn with the best fit on the interior points on the
15-min chart. But, by the time you examine a channel on longer time
frames, all those precise reversals at the channel lines pretty much
disappear. In other words, there's always wiggle room.<br />
<br />
<div data-mce-style="background-color: #00ccff; padding: 13px; border-style: double;" style="background-color: #00ccff; border-style: double; padding: 13px;">
In
fact, I'm going to switch back a short position here at 1618 just to
protect against the possibility that wiggle room is at work here and the
"break out" mentioned a moment ago is a false alarm. If SPX pushes
back up through the top of the red channel, I'd be content with an
interim long position for a trip to 1624 rather than switching sides all
together.</div>
<br />
UPDATE: 10:55 AM<br />
<br />
We've been talking about 1635 a lot lately. There was <a data-mce-href="https://pebblewriter.com/charts-im-watching-apr-29-2013/" href="https://pebblewriter.com/charts-im-watching-apr-29-2013/" target="_blank">Apr 29</a>, when SPX came within one point of making a new high:<br />
<blockquote>
<em>On the other hand, if it dips below 1592 in the morning, it has downside risk to the channel bottom at 1576 [it hit 1581] where it would likely catch a bid and start a run to 1635.</em></blockquote>
On Apr 25, when charting the <a data-mce-href="https://pebblewriter.com/inverted-head-shoulders-pattern/" href="https://pebblewriter.com/inverted-head-shoulders-pattern/" target="_blank">IH&S</a> (before it went circus freak on us) in <a data-mce-href="https://pebblewriter.com/the-best-laid-plans/" href="https://pebblewriter.com/the-best-laid-plans/" target="_blank">Best Laid Plans</a>:<br />
<blockquote>
<i>That
way, the Inverted H&S Pattern would feature a neckline that’s
roughly the same as the purple channel .25 line, and would target the
same price level as the 1.618 extension of the 1597-1536 slide: 1635.</i></blockquote>
But, my favorite reference was in July, 20 2011 in <a data-mce-href="https://pebblewriter.com/ten-lousy-points/" href="https://pebblewriter.com/ten-lousy-points/" target="_blank">Ten Lousy Points</a>, as we were about to nail the call-of-the-year thanks to our <a data-mce-href="https://pebblewriter.com/learn/analogs/" href="https://pebblewriter.com/learn/analogs/" target="_blank">2011 as 2007 analog</a>:<br />
<blockquote>
<i>There
was a Santa after all! The Dow soared 205 points, the S&P; 500
over 21. The next two days tacked on 13 more points. At that point,
SPX was just 10 lousy points from completing an inverse head &
shoulders pattern that might have sent it up 125 points to 1635.</i></blockquote>
<blockquote>
<i>We
all know the rest of the story. Suffice it to say there were a lot of
hangovers those next few weeks that had nothing to do with New Year
celebrations. SPX dropped 120 points in 2 weeks, 230 points in 4 weeks
and 750 points by the following Christmas.</i></blockquote>
There's no real connection, of course. After topping the 2000 high, SPX had just missed -- by 30 points -- completing an <a data-mce-href="https://pebblewriter.com/inverted-head-shoulders-pattern/" href="https://pebblewriter.com/inverted-head-shoulders-pattern/" target="_blank">Inverted Head & Shoulders Pattern</a>
(in purple, below) that would have targeted around 1670. Note that
1670 was also the 1.618 extension of the Crab Pattern that was in the
works (also in purple.)<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-top-double-IHS.png" href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-top-double-IHS.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12469" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-top-double-IHS.png" height="420" src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-top-double-IHS.png" title="2013-05-03-2007 top - double IHS" width="640" /></a></div>
<br />
But,
all was not lost. After peaking at 1576, SPX went on to construct
another IH&S that looked promising. If it completed, it would have
targeted 1635 -- indicated by the dashed yellow horizontal line.<br />
<br />
It
came within 10 points on Dec 26, but couldn't quite close the deal. As
I wrote in July 2011, the rest was history. That 1635 IH&S target
would have to wait...until now.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-IHS-target-in-2013.png" href="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-IHS-target-in-2013.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12470" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-IHS-target-in-2013.png" height="377" src="https://pebblewriter.com/wp-content/uploads/2013/05/2013-05-03-2007-IHS-target-in-2013.png" title="2013-05-03-2007 IHS target in 2013" width="640" /></a></div>
<i><br data-mce-bogus="1" /></i>
<i>continued on pebblewriter.com...</i><br />
<br data-mce-bogus="1" />
<div data-mce-style="text-align: center;" style="text-align: center;">
<span style="font-size: small;"><b><span data-mce-style="color: #0000ff; font-size: 24px;" style="color: blue;"> * * * * * * * *</span></b></span></div>
<div data-mce-style="text-align: center;" style="text-align: center;">
<br /></div>
BTW,
I've extended and expanded the current membership offer through the end
of the weekend. Charter Annual memberships at $1,200 fix your
subscription price for the life of the site. Annual memberships are
slated to increase to $1,800 when this deal is done and $2,500 when the
upcoming fund is launched. Click<a data-mce-href="https://pebblewriter.com/membership/sign-me-up/" href="https://pebblewriter.com/membership/sign-me-up/" target="_blank"> HERE</a> to sign up.<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #0000ff; font-size: 24px;" style="color: blue; font-size: 24px;"> </span></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-73213018650218224612013-04-25T15:43:00.000-04:002013-04-25T15:45:33.469-04:00The Best Laid Plans<div dir="ltr" style="text-align: left;" trbidi="on">
<div data-mce-style="padding-left: 150px;" style="padding-left: 150px;">
<span data-mce-style="color: #0000ff;" style="color: blue;"><i>The best laid plans of mice and men</i></span><br />
<span data-mce-style="color: #0000ff;" style="color: blue;"> <i> Go often awry,</i></span><br />
<span data-mce-style="color: #0000ff;" style="color: blue;"> <i> And leave us nothing but grief and pain,</i></span><br />
<span data-mce-style="color: #0000ff;" style="color: blue;"> <i> For promised joy!</i></span></div>
<div data-mce-style="padding-left: 270px;" style="padding-left: 270px;">
<span style="font-size: x-small;"><span data-mce-style="font-family: arial,helvetica,sans-serif;" style="font-family: arial,helvetica,sans-serif;">Robert Burns, 1785</span></span></div>
<br />
<br />
ORIGINAL POST: 6:45 AM EDT<br />
<br />
The wedges we've been watching on DX and EURUSD are playing out. EURUSD has broken out...<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggW2ciaTiB6N2YaC38EreosrKOJT-nagYTestOLkp1w5cx-mGdO7sEVZZy32XonY9OugzcxDYkj8oxIhCV-2kFOwA6jwXky5RNxJCn0ZrRaGPmvHo8fR_V1UsIU44WEvVh-6OPUmI_TvvW/s1600/2013-04-25-EURUSD+60+min+350am.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="408" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggW2ciaTiB6N2YaC38EreosrKOJT-nagYTestOLkp1w5cx-mGdO7sEVZZy32XonY9OugzcxDYkj8oxIhCV-2kFOwA6jwXky5RNxJCn0ZrRaGPmvHo8fR_V1UsIU44WEvVh-6OPUmI_TvvW/s640/2013-04-25-EURUSD+60+min+350am.png" width="640" /></a></div>
<br />
<br />
...and DX has broken down.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-DX-60min-0355.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-DX-60min-0355.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12099" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-DX-60min-0355.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-DX-60min-0355.png" title="2013-04-25-DX 60min 0355" width="640" /></a></div>
<br />
But,
it's the USDJPY that I'm watching especially closely this morning. It
still hasn't broken 100 since our Apr 8 observation [<a data-mce-href="https://pebblewriter.com/markets/usdjpy/" href="https://pebblewriter.com/markets/usdjpy/" target="_blank">USDJPY update</a>] that it was running out of steam:<br />
<blockquote>
"...<i>there
is growing risk of a downturn as it approaches 100... it appears the
pair might have hit at least interim resistance at today’s high.</i>"</blockquote>
It topped out 3 sessions later at 99.94, and two weeks later is in danger of a larger pullback.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-60-min-5am.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-60-min-5am.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12104" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-60-min-5am.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-60-min-5am.png" title="2013-04-25-USDJPY 60 min 5am" width="640" /></a></div>
<br />
Remember,
weakening the yen was a critical element of the BOJ's stimulus program
that was supposed to generate inflation, boost Toyota sales and send
Japanese investment funds flooding into foreign markets.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-2yr-0535.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-2yr-0535.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12103" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-2yr-0535.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-2yr-0535.png" title="2013-04-25-USDJPY daily 2yr 0535" width="640" /></a></div>
<br />
Instead, Japanese investors are <a data-mce-href="http://www.reuters.com/article/2013/04/25/japan-economy-capflow-idUST9N0BQ00720130425" href="http://www.reuters.com/article/2013/04/25/japan-economy-capflow-idUST9N0BQ00720130425" target="_blank"><i>repatriating</i> their funds</a>
from abroad -- a net Y9.5 trillion ($95 billion) since the first of the
year. Why? As any US investor could tell you, QE might not inflate
economies, but it sure as hell inflates markets.<br />
<br />
The Nikkei 225 is up 65% since last October's lows....<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-daily-0451.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-daily-0451.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12101" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-daily-0451.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-daily-0451.png" title="2013-04-25-NKD daily 0451" width="640" /></a></div>
<br />
...and,
still hasn't even recovered 2/3 of its losses from the 2007 crash. The
Dow and the S&P 500, by contrast, have recovered all of them --
and, then some. So, to many, the Nikkei still seems the better value.
It's hard to argue with success.<br />
<br />
But, I'll do it anyway. In
reaching 14,020 a few hours ago, NKD tagged the .618 Fibonacci
retracement of its 2007-2009 crash from 18,365 to 6990.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-wkly-6yr.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-wkly-6yr.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12105" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-wkly-6yr.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-NKD-wkly-6yr.png" title="2013-04-25-NKD wkly 6yr" width="640" /></a></div>
<br />
To
those not familiar with harmonics, this tends to be a big deal. When
SPX reached the equivalent point in April 2010, it plunged 17%. The
DJIA fell almost 15%. The USD, represented by DX, soared 9.3%.<br />
<br />
But,
the yen positively soared. USDJPY started a 17-month slide that took
the pair down 20% from 94.98 to 75.78. NKD, which had just reached its
.382 Fib, shed 23% over the next 4 months, eventually reaching almost
30% in Nov 2011.<br />
<br />
Could the USDJPY's failure to break 100 be
telling us something? You better believe it. I called a top a few
weeks ago because the pair had reached several important Fib levels as
well as the midline of an important channel (in yellow, below)...<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-6yr.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-6yr.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12108" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-6yr.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-6yr.png" title="2013-04-25-USDJPY wkly 6yr" width="640" /></a></div>
<br data-mce-bogus="1" />
...that dates back to 1995.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-20yr.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-20yr.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12109" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-20yr.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-wkly-20yr.png" title="2013-04-25-USDJPY wkly 20yr" width="640" /></a></div>
<br />
There's
no guarantee it won't push through instead of retreating, but the RSI
picture supports the danger of a significant retreat.<br />
<br />
Daily RSI
has backtested the broken yellow channel twice, but the trend is clearly
down -- with the latest push being rebuffed by the purple midline.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-0415.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-0415.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12100" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-0415.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-0415.png" title="2013-04-25-USDJPY daily RSI 0415" width="640" /></a></div>
<br />
And, a close-up reveals that a breakdown has already started.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-CU-0423.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-CU-0423.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12110" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-CU-0423.png" height="408" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-25-USDJPY-daily-RSI-CU-0423.png" title="2013-04-25-USDJPY daily RSI CU 0423" width="640" /></a></div>
<br />
<br />
<div style="text-align: center;">
<a href="https://pebblewriter.com/" target="_blank"><i>continued on pebblewriter.com... </i></a></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-52027499881886595652013-04-24T22:17:00.002-04:002013-04-24T22:17:45.639-04:00Chart Patterns and You<div dir="ltr" style="text-align: left;" trbidi="on">
ORIGINAL POST: 9:15 AM EST<br />
<br />
Last night, the dollar tagged the .786
Fib retracement of its decline from Apr 4. It subsequently sold off
almost to the .618 but, so far, is hanging in a rising wedge.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvbNmSzNw1Zqg4XiMhBCGjBOm2ZB0I7VWg81uVa1nuGgK-gFfCJUJyFIHFJZKgh1ewhL7egRlzBxGA36-yqK-EBRcxYdFu9z_afaTBP4zLDzcWcbSGSr2QkYSPpLeWrLDn1lcZTOdsSCjW/s1600/2013-04-24-DX+60+min+0600.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="466" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvbNmSzNw1Zqg4XiMhBCGjBOm2ZB0I7VWg81uVa1nuGgK-gFfCJUJyFIHFJZKgh1ewhL7egRlzBxGA36-yqK-EBRcxYdFu9z_afaTBP4zLDzcWcbSGSr2QkYSPpLeWrLDn1lcZTOdsSCjW/s640/2013-04-24-DX+60+min+0600.png" width="640" /></a></div>
<br />
<br />
The
EURUSD re-tested the .500 Fib of its rise from Apr 3, and snapped back
into its falling wedge and the (purple) channel that's guided prices
since then.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-EURUSD-60-min-0620.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-EURUSD-60-min-0620.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12061" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-EURUSD-60-min-0620.png" height="448" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-EURUSD-60-min-0620.png" title="2013-04-24-EURUSD 60 min 0620" width="640" /></a></div>
<em></em><br />
<br />
The
e-minis tacked on a few points overnight -- almost reaching the .786,
only to give them all back with this morning's underwhelming <a data-mce-href="http://www.census.gov/manufacturing/m3/" href="http://www.census.gov/manufacturing/m3/" target="_blank">Durable Goods report</a>.
The <a href="https://pebblewriter.com/learn/chart-patterns-2/head-shoulders-pattern/" target="_blank">Head & Shoulders Pattern</a> that was looking pretty good at yesterday's open is
now looking a little iffy, with a right shoulder that's already 15
points higher than the left.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-ES-60-min-0625.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-ES-60-min-0625.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12064" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-ES-60-min-0625.png" height="448" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-ES-60-min-0625.png" title="2013-04-24-ES 60 min 0625" width="640" /></a></div>
<br />
UPDATE: 9:45 AM<br />
<br />
SPX continues trudging toward the .786 retracement (1584.23) of its decline from 1597 to 1536.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-0646.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-0646.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12067" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-0646.png" height="417" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-0646.png" title="2013-04-24-daily 0646" width="640" /></a></div>
<br />
After plunging beneath the channel that's guided it from 1343 to 1597 on Apr 17, SPX rallied and <em>re-joined</em>
the channel yesterday. This was a very bullish development, as long as
SPX remained in the channel all the way to the closing bell.<br />
<br />
Despite
a five minute thrill ride from 1578 to 1563 (the channel bottom) and
back, SPX managed to regain and hold the 2007 high of 1576.09 into the
close.<br />
<br />
It now sits perched on the neckline of an <a href="https://pebblewriter.com/inverted-head-shoulders-pattern/" target="_blank">Inverted H&S Pattern</a> which has either completed or not, depending on whether a
5-minute plunge qualifies as a shoulder. Short answer -- I have no
clue.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-60-min-0702.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-60-min-0702.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12070" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-60-min-0702.png" height="389" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-60-min-0702.png" title="2013-04-24-60 min 0702" width="640" /></a></div>
<br />
Here's what we do know:<br />
<ol>
<li>Prior to Apr 17, SPX had been locked into that purple channel below since 1343 on Nov 16 -- an 18.9% gain in five months</li>
<li>SPX barely paused when it completed two big <a data-mce-href="https://pebblewriter.com/learn/harmonics/crab-pattern/" href="https://pebblewriter.com/learn/harmonics/crab-pattern/" target="_blank">Crab Patterns</a> -- the 1.618 extensions of the 1370-1074 decline and the 1474-1343 decline (purple and white below)</li>
<li>Instead, SPX exceeded the Oct 2007 high of 1576.09 (yellow)</li>
<li>SPX reversed at 1597.35, almost precisely at a trend line drawn between the 2000 and 2007 highs</li>
<li>SPX
fell 3.8%, making a lower low, dropping out of the channel mentioned
above and suggesting a H&S pattern that targets 1474 -- the Sep 2012
high (white pattern)</li>
<li>It roared back into the channel, retracing almost 78.6% of its drop</li>
<li>In
the process, it topped the 1576.09 high and the 1553 and 1555 Fib
levels and almost reaching the 1583 target of an IH&S Pattern</li>
<li>Depending on your interpretation, it <em>might</em> also have completed an IH&S that targets 1621.</li>
</ol>
<br /><div>
<br /><div>
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-big-pict-3yrs1.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-big-pict-3yrs1.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-12077" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-big-pict-3yrs1.png" height="423" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-24-daily-big-pict-3yrs1.png" title="2013-04-24-daily big pict 3yrs" width="640" /></a></div>
<br data-mce-bogus="1" />
<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">What Does It All Mean?</span><br />
<br />
When
I forecast markets, I look for lines in the sand. I try to determine
price levels that, if crossed, would signal a change in trend. When
that trend switches from bullish to bearish, I want to be short. When
it switches from bearish to bullish, I want to be long.<br />
<br />
A channel is one such method that features boundaries rather than absolute price levels.<br />
As long as prices remain in a rising (or falling) channel, we can
expect prices to continue to rise (or fall.) It's rather simplistic,
but it usually works. We can make educated guesses as to future price
targets based on where the channels point.<br />
<br />
Of course, even
well-formed channels (multiple tags on the top and bottom and over a
sufficient time period) can't go on forever. I look for moments when
prices must choose whether to remain in or leave the channel. A tag
of a top or bottom bound or midline usually create opportunities, though
other lines can as well.<br />
<br />
<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">The Real World</span><br />
<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;"><br /></span>
Recall that we shorted SPX at the 1597 high on the 11th [see: <a data-mce-href="https://pebblewriter.com/the-big-picture-apr-11-2013/" href="https://pebblewriter.com/the-big-picture-apr-11-2013/" target="_blank">Big Picture</a>],
riding down to the channel bottom where I went long at 1554, expecting
at least a bounce. We got one on the 16th with SPX rallying up to 1575
-- the channel .25 line.<br />
<br />
We closed our long position, going short
the following morning for the trip back to the channel bottom at 1555.
We tried another long position there, but were quickly stopped out as
the channel was broken -- signalling a bearish trend change.<br />
<br />
So,
we shorted again, playing quite a few bounces down to 1540 where we
eventually went long in anticipation of establishing a H&S Pattern
neckline [see: <a data-mce-href="https://pebblewriter.com/dollar-daze/" href="https://pebblewriter.com/dollar-daze/" target="_blank">Dollar Daze</a>.]<br />
<br />
At
that point, I expected a back-test of the broken channel. We got it,
reaching 1565 on the 22nd but closing beneath the channel's lower
bound. Note that this move completed 5/6 of a H&S, but the right
shoulder was underdeveloped relative to the left.<br />
<br />
Anticipating an
intra-day retracement to 1567 (the .500 Fib) or 1574 (the .618) the next
day (yesterday), I stayed long -- trying without much success to
anticipate the top. Since SPX topped the .618, the next up on the chart
is today's target: the .786 at 1584.23.<br />
<br />
<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">Going Forward</span><br />
<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;"><br /></span>
With all that as preamble, here's what I expect going forward.<br />
<br />
<div style="text-align: center;">
<i>...continued on <a href="https://pebblewriter.com/" target="_blank">pebblewriter.com... </a></i></div>
</div>
</div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-20545774013135671872013-04-15T22:43:00.001-04:002013-04-24T22:22:45.595-04:00Gold Melting Down<div dir="ltr" style="text-align: left;" trbidi="on">
Gold continued to melt down today, shedding another $126 and
continuing the plunge that started on Friday with the critical loss of
the LT channel we discussed last week, the horizontal support at
1520-1535, and the psychologically important 1500 level.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirTzhIas9UWgWKHcNGTHbi-itdCEfsYNypH5FB_qyQa9Q8nx38YWCkUmoKz1d7dxQVnYLncFwa2AF20FDrQvrdpH5p8jbmwHwaxzamQ4Vy4ipQqQqtLBqOETzfxkcka3cB2kaHtZWX6KpU/s1600/2013-04-15-GC+daily+1940.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="340" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirTzhIas9UWgWKHcNGTHbi-itdCEfsYNypH5FB_qyQa9Q8nx38YWCkUmoKz1d7dxQVnYLncFwa2AF20FDrQvrdpH5p8jbmwHwaxzamQ4Vy4ipQqQqtLBqOETzfxkcka3cB2kaHtZWX6KpU/s640/2013-04-15-GC+daily+1940.png" width="640" /></a></div>
<br />
<br />
Gold had a
nice bounce from 1539 to 1590 after reaching the bottom of the channel
and the horizontal support of several prior bounces on Apr 4. In a
dramatic demonstration of what can happen when channel support is lost,
it has since shed almost $270/oz.<br />
<br />
The red channel below represents
my best shot at the new operative channel. It supports the idea of a
bounce at the Jan 2011 low of 1309 -- 3rd on our list of potential
bounce spots during today's onslaught.<br />
<blockquote>
<i>The next best available channel is well below the current one, but supports the idea of a bounce at 1379 or 1359 -- the <a data-mce-href="https://pebblewriter.com/learn/harmonics/bat-pattern/" href="https://pebblewriter.com/learn/harmonics/bat-pattern/" target="_blank">Bat Pattern</a> and <a data-mce-href="https://pebblewriter.com/learn/harmonics/crab-pattern/" href="https://pebblewriter.com/learn/harmonics/crab-pattern/" target="_blank">Crab Pattern</a>
completions shown in the first chart above. If those levels should
fail to hold, the next major support levels are 1309 and 1155</i>.</blockquote>
We
got good bounces earlier today at the first two: the Fib retracements
at 1359 and 1379 But, along came the CME with announcements of
increased margins and that was the end of that.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEix2rXMM0IXf1KxDrgvP46CCrUYDVXhkw9JT2AIerKrTFYYRCDYEhybHazSdvvT1eVyTKY1-8OmsQBda76TZXkGHc3NfwLpGRfVyF7-0O8fhyQ4DeWW4XMCjwfzWBN2gyqHaZ9d3B2mllpL/s1600/2013-04-15-GC+LT+red+only.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="348" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEix2rXMM0IXf1KxDrgvP46CCrUYDVXhkw9JT2AIerKrTFYYRCDYEhybHazSdvvT1eVyTKY1-8OmsQBda76TZXkGHc3NfwLpGRfVyF7-0O8fhyQ4DeWW4XMCjwfzWBN2gyqHaZ9d3B2mllpL/s640/2013-04-15-GC+LT+red+only.png" width="640" /></a></div>
<br />
Please
note, I am not a gold bug. I don't advocate the purchase of gold. I
shy away from most assets that increase exponentially in price --
especially those backed with the kind of religious fervor as is gold. They can drop with just as much enthusiasm.<br />
<br />
The
time may come when inflation is taking hold and it makes sense to
switch everything you own into the metal... but, we're not there yet.
It's a crowded trade, and IMO, today's price action underscores the
risk.<br />
<br />
So, the following is offered in the same spirit as my picks
for NCAA champion, Best Picture, and Westminster Best in Show (the
affenpinscher, really!?)<br />
<br />
There's another channel (below, in
purple) that kinda sorta supports the first, but shows the potential
downside in the event that 1300 can't handle the pressure.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-LT-2-chnls.png" href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-LT-2-chnls.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11707" data-mce-src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-LT-2-chnls.png" height="349" src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-LT-2-chnls.png" title="2013-04-15-GC wkly LT 2 chnls" width="640" /></a></div>
<br />
It's
speculative, for sure. But, I like the fact that it crosses the white
.618 at a key point in time, so I'll leave it up for now.What's
interesting to me is the Fibonacci Fans that can be drawn on this
chart. The ones from 681 low (yellow) have done a pretty decent job of
guiding the bounces on the way down.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-wo-red-FF.png" href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-wo-red-FF.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11708" data-mce-src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-wo-red-FF.png" height="349" src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-wo-red-FF.png" title="2013-04-15-GC wkly wo red FF" width="640" /></a></div>
<br />
And, the ones from the 1923 high (red) have done well at halting several attempts at a breakout.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-all.png" href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-all.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11709" data-mce-src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-all.png" height="349" src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-wkly-all.png" title="2013-04-15-GC wkly all" width="640" /></a></div>
<br />
I could almost believe we've seen the worst of the drop, but I wonder about this potential channel...<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-all-1915.png" href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-all-1915.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11710" data-mce-src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-all-1915.png" height="340" src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-all-1915.png" title="2013-04-15-all 1915" width="640" /></a></div>
<br />
<br />
...and,
the daily RSI -- which suggests at least a little more potential
downside any way you slice it. The bottom of the purple and red
channels probably correlates to 1309, while the bottom of the gray
channel represents something much more ominous.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-daily-RSI-1839.png" href="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-daily-RSI-1839.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11711" data-mce-src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-daily-RSI-1839.png" height="349" src="https://pebblewriter.com/wp-content/uploads/2012/03/2013-04-15-GC-daily-RSI-1839.png" title="2013-04-15-GC daily RSI 1839" width="640" /></a></div>
<br />
So, where do we go from here?<br />
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<i>continued on <a href="https://pebblewriter.com/">pebblewriter.com... </a></i></div>
</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-60257759231870516532013-04-05T16:34:00.000-04:002013-04-05T16:36:17.721-04:00Catching a Falling Knife<div dir="ltr" style="text-align: left;" trbidi="on">
<i>~reposted from <a href="https://pebblewriter.com/">pebblewriter.com</a></i>... <br />
<br />
Looks like we're going to hit our downside target after all, thanks
to a dismal payroll number. I've had 1546.08 as my top choice [<a data-mce-href="https://pebblewriter.com/charts-im-watching-apr-3-2013/" href="https://pebblewriter.com/charts-im-watching-apr-3-2013/" target="_blank">CIW Apr 3</a>, 2:25 update for members.]<br />
<blockquote>
<i>I’m
inclined to stay short for the purple channel bottom at 1546.08 or the
1.618 at 1549.09, with stops at 1558.47ish. But, anyone who doesn’t
mind the extra trading might consider going long here — with the
understanding we might run into trouble at the channel top (small
falling white) at 1558 or so.</i></blockquote>
But, if the downside momentum builds, 1542.57 is definitely in reach.<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTzPrk1CEgypOfm2tLuY8OVgXwM59qYC1Fs6u4M17L8sXQuPDc6PVbnErGbsuLtVhPMJzOkKUJHVSdot1XLyhrJJ5IpdPjQUEbvX4LbFOnwvmTHQL9crhw5dBOcF8zizCIOjOUHAJFPpks/s1600/2013-04-05-60+min+0625.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="432" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTzPrk1CEgypOfm2tLuY8OVgXwM59qYC1Fs6u4M17L8sXQuPDc6PVbnErGbsuLtVhPMJzOkKUJHVSdot1XLyhrJJ5IpdPjQUEbvX4LbFOnwvmTHQL9crhw5dBOcF8zizCIOjOUHAJFPpks/s640/2013-04-05-60+min+0625.png" width="640" /></a></div>
<br data-mce-bogus="1" />
<br data-mce-bogus="1" />
<br />
<div data-mce-style="background-color: #00ccff; padding: 13px; border-style: double;" style="background-color: #00ccff; border-style: double; padding: 13px;">
I'll play the downside on the opening, but be ready to bail at those levels.</div>
<br />
A drop through 1538 opens up much lower prices and essentially busts the channel that dates all the way back to November's 1343.<br />
<br />
UPDATE: 9:33 AM<br />
<br />
I think it's worth taking a shot on any loss of momentum just shy of 1538.57 (lower really damages the bullish case.)<br />
<br />
<div data-mce-style="background-color: #00ccff; padding: 13px; border-style: double;" style="background-color: #00ccff; border-style: double; padding: 13px;">
So I'll take a stab here at 1539.86. Going long again with stops at 1538.</div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60min-0633.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60min-0633.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11290" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60min-0633.png" height="433" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60min-0633.png" title="2013-04-05-60min 0633" width="640" /></a></div>
<br />
<br />
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60min-0633.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60min-0633.png"> </a>Note
that at these prices, SPX has completed a Head & Shoulders pattern,
albeit with a very steep slope. But, it's not verified unless we close
below 1545 or so. Even then, we've had two such (normally very
reliable) bust in the past several weeks.<br />
<br />
If drops like this morning's make you nervous, the market makers have done their jobs. Remember, this morning's plunge is <i>by design</i>. The open interest on the SPY 155 weekly calls that expire <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">today</span>, for instance, is 97,000 contracts.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/Screen-shot-2013-04-05-at-7.24.20-AM.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/Screen-shot-2013-04-05-at-7.24.20-AM.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11295" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/Screen-shot-2013-04-05-at-7.24.20-AM.png" height="349" src="https://pebblewriter.com/wp-content/uploads/2013/04/Screen-shot-2013-04-05-at-7.24.20-AM.png" title="Screen shot 2013-04-05 at 7.24.20 AM" width="640" /></a></div>
<br />
Each
contract gives you the right to buy 100 shares of SPY at 155 through
today. It's the equivalent of SPX 1550. They're currently trading at
12 cents (probably a good deal.) But, three days ago -- when SPX nudged
into the 1570's -- market makers would have been happy to sell you all
you wanted at 2.33.<br />
<br />
A $23,300 "investment" in 100 contracts at the
high would be worth $1,200 -- a 95% loss in 3 days. This is an example
of the typical game played by market makers who just <i>love</i> optimists.<br />
They
love pessimists, too, and just sold a boat load of puts this morning to
those expecting this morning's plunge to keep going to 1500.<br />
<br />
It's
taken me a couple of years to come to the conclusion: if you can get
the kind of results we do without leverage and without options, why take
the risk? It's hard enough to be right on the direction and magnitude
of a move, without having to be right on timing too.<br />
<br />
Even if we
had held long instead of shorting at 1573 on Tuesday, we'd be down a
whopping 1.7%. Beats the heck out of -95%. By shorting, we actually <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">made</span> money.<br />
<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #0000ff; font-size: 18px;" style="color: blue; font-size: 18px;">* * *</span></div>
I met an old friend for coffee yesterday, and we talked about pebblewriter.com and my investment strategy. He asked if <a data-mce-href="https://pebblewriter.com/performance/" href="https://pebblewriter.com/performance/" target="_blank">the results</a> we got this past year weren't simply attributable to a great market. The question took me by surprise.<br />
<br />
The
S&P 500 was up 8.75% between Mar 22, 2012 (our inception) and Feb
28, 2013 (without dividends.) That includes a 12.8% gain from Nov 16 -
Feb 28. I guess the MSM has done a bang-up job of selling this as a
"great market."<br />
<br />
But, the question did get me to thinking. As of
Feb 28, just shy of a year since inception, we were up about 113% in a
theoretical portfolio where we bought SPX at called bottoms and shorted
at called tops.<br />
<br />
Forty-eight percent of our gains came from long
positions and 52% from short positions. In other words, we benefited
slightly more from declines than from rallies. Unlike almost all
long-short funds, we did it by being either long <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">or</span> short, depending on my outlook.<br />
<br />
The major moves during that period were:<br />
<blockquote>
<ul>
<li>Apr 2 - June 4, 2012 (1422 to 1266, an 11% decline)</li>
<li>June 4 - Sep 14, 2012 (1266 to 1474, a 16.4% rally)</li>
<li>Sep 14 - Nov 16, 2012 (1474 to 1343, an 8.9% decline)</li>
<li>Nov 16, 2012 - Feb 28, 2013 (1343 to 1515, a 12.8% rally)</li>
</ul>
</blockquote>
So, anyone who captured <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">all</span>
of those major moves earned about 49% -- much better than the
buy-and-hold approach of 8.75%. They would have had short-term rather
than long-term capital gains; but, anyone with a marginal tax rate below
85% wouldn't have minded.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/Major-Calls-Tops-and-Bottoms.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/Major-Calls-Tops-and-Bottoms.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11298" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/Major-Calls-Tops-and-Bottoms.png" height="449" src="https://pebblewriter.com/wp-content/uploads/2013/04/Major-Calls-Tops-and-Bottoms.png" title="Major Calls - Tops and Bottoms" width="640" /></a></div>
<br />
My
objective is simply to capture most of the moves most of the time. If
49% represents the most we might have earned by capturing <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">all</span> the major moves <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">all</span> of the time, we apparently earned about 64% by playing interim moves -- going long and short.<br />
<br />
Shorting
the market scares some people. When I was a shiny new broker back in
the Middle Ages, all they had to say was "when shorting, you have
unlimited losses." It sure scared me -- which was the point.<br />
<br />
But,
by using stops this past year, we limited our single biggest losing
trade to 1.5%. There's always the possibility of a 10% gap down, but by
using e-minis rather than cash markets and going to cash in precarious
situations, that risk can be greatly reduced.<br />
<br />
What I find <i>really</i>
risky is buy-and-hold investing, where investors hold long through
10-20% declines. If your name's Buffett, no big. But, if you need
money for a wedding/college education/vacation house in a few months,
and that 10% decline turns into 58% (2007-2009), 51% (2000-2003) or even
22% (May-Nov 2011)?<br />
<br />
Everyone's talking about whether the S&P
500 will make a new all-time high, topping 2007's 1576.09. But, after
inflation, it's still down about 25% from its 2000 peak. The real
Nasdaq is down over 50%. For someone planning to retire, <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">that's</span> risk.<br />
<br />
One
final thought...the beauty of our strategy is it provides concrete
decision points. If you buy AAPL at 500 based on the hype around the
new iWatch and the stock falls the following day to 490, should you
hold? What if it falls to 460?<br />
<br />
What if the iWatch is released and
the stock only recovers to 485? Do you sell? Double down? Wait for
the sales numbers? Wait for the next quarterly report? At what point do
you pull the plug?<br />
<br />
Between Harmonics and chart patterns, we're
rarely left without a sense of whether our investment thesis is correct
or not. Even a simple channel will usually tell you if you're on the
right track.<br />
<br />
In early December 2012, we had been following an
analog that had earned us over 10% per month -- forecasting all the
major moves since the previous March. The analog called for a reversal
and move lower from either at 1424 or 1446.<br />
<br />
I tried shorting both
times, giving up a few points before it became apparent the market
wasn't going to tumble. The same thing happened a few weeks later, when
the Fiscal Cliff "solution" sent the market gapping higher after New
Years Day.<br />
<br />
There were multiple potential targets to the upside, so
I have tested the short waters many times on the way up from 1474 to
1573. It's always fun (and more profitable) to be right for a big
score, but by managing my exposure and paying attention to the trends,
I've still pulled in decent returns without taking undue risks (March
update coming this afternoon.)<br />
<br />
I will continue refining the
strategy and trading techniques in anticipation of our new fund that I
anticipate coming out next month. I have developed a distribution list
for those who have expressed interest in getting more info. If you'd like to be on it but
haven't yet contacted me, please <a data-mce-href="https://pebblewriter.com/contact-me/" href="https://pebblewriter.com/contact-me/" target="_blank">CLICK HERE</a>.<br />
<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #0000ff; font-size: 18px;" style="color: blue; font-size: 18px;">* * *</span></div>
UPDATE: 3:50 PM<br />
<br />
The
market has rebounded nicely since this morning's 1539.50 low. Anyone
too wigged out about Cyprus, the NFP number, Korea, etc. should take the
money and run. Forget about the market and enjoy your weekend.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-1250.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-1250.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11303" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-1250.png" height="409" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-1250.png" title="2013-04-05-60 min 1250" width="640" /></a></div>
<br />
But,
60-min RSI just broke out of the most severe of the bearish channels
and SPX should have no trouble reaching 1560 either today or Monday.
What it does <i>then</i> matters a lot, but I suspect our forecast is still intact.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-RSI-1251.png" href="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-RSI-1251.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-11304" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-RSI-1251.png" height="409" src="https://pebblewriter.com/wp-content/uploads/2013/04/2013-04-05-60-min-RSI-1251.png" title="2013-04-05-60 min RSI 1251" width="640" /></a></div>
<br data-mce-bogus="1" />
I'll hold long unless we reach 1560 today, at which point I'd probably go to cash. Stay tuned.<br />
<br />
UPDATE: 4:05 PM<br />
<br />
Nice
safe close, back in the loving arms of both the purple channel and the
white channel. I'll update the forecast later this afternoon, but I
believe we're in good shape re the forecast.<br />
<br />
Oh... and
congratulations to anyone who bought SPY 155 calls at 12 cents earlier
(they traded up to .38 shortly before the close.) Take the money and do
something nice for somebody deserving. Karma and all that...<br />
<br />
More later.</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-30791191139327581562013-03-22T16:05:00.001-04:002013-03-22T16:11:09.557-04:00Anatomy of a Market Top<div dir="ltr" style="text-align: left;" trbidi="on">
<i>reposted from <a href="https://pebblewriter.com/" target="_blank">pebblewriter.com</a>~</i><br />
<br />
The 2000 top shows just how "messy" tops can be. Here's the finished
picture in perfect hind-sight. It's a very crowded chart, but every
single pattern had a say in how the top unfolded.<br />
<br />
SPX had zoomed from 442 to 1478 in about 5 years, a not-too-shabby 234% gain for an annually compounded 27%.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ6ene6pSleW_3W2IWa2k9pKGAR8QVVUZgkRH7Xr7grNZ3dEu9EYFF-25Pn9_nD6zDhUzSm7quHC_ptmDFoAiBBqFC3b-bzWocBFThBI_ZpXdLlFIy_fGq9RDts7fsNIJPsg3C-DT2i6bw/s1600/2013-03-20-2000+top-all.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="424" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ6ene6pSleW_3W2IWa2k9pKGAR8QVVUZgkRH7Xr7grNZ3dEu9EYFF-25Pn9_nD6zDhUzSm7quHC_ptmDFoAiBBqFC3b-bzWocBFThBI_ZpXdLlFIy_fGq9RDts7fsNIJPsg3C-DT2i6bw/s640/2013-03-20-2000+top-all.png" width="640" /></a></div>
<br />
<br />
Once
SPX broke out of the falling purple channel, it had "permission" to
pursue several harmonic patterns in the works. SPX shot up 66 points in
that one day -- blowing through every Fib level between .618 and 1.000.<br />
<br />
It
finally came to rest at 1458, completing a Bat Pattern at the purple
.886. But, the small white 1.272 was just above at 1477, as was the
rising purple channel midline and the 1.272 from a much larger pattern
seen below.<br />
<br />
An <a href="https://pebblewriter.com/inverted-head-shoulders-pattern/" target="_blank">IH&S</a> target waited at 1497 - tantalizingly close to a
nice round number of 1500. And, the all-time high of 1478 from two
months earlier beckoned.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" height="425" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" title="2013-03-20-2000 top big picture" width="640" /></a></div>
<br />
SPX
got up to 1477.33 before reacting, falling to 1466 over the next two
days. Close, but not quite. Someone watching closely might have
noticed the Flag Pattern it constructed, targeting 1562. Someone else
probably pointed out the biggest <a href="https://pebblewriter.com/learn/harmonics/crab-pattern/" target="_blank">Crab Pattern</a> target of all -- the 1.618
extension of the 13% correction from 1420 to 1233 from Jul-Oct 1999.<br />
<br />
On
Mar 21, 2000 SPX shot up through the channel midline, the cluster of
Fibs around 1477 and, importantly, the 1478 high and raced up toward
those higher targets.<br />
<br />
On Mar 24, it reached 1552.87, which cleared
the IH&S target at 1497, the purple 1.272 at 1519 and the last
remaining Crab Pattern at 1535. What ultimately stopped it? The .75
line from the big purple channel dating back to Jul 1999 -- almost to
the penny.<br />
<br />
Total move: 17% and 227 points in 20 sessions. Could it happen again? Stay tuned.<br />
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<b><span style="font-size: small;"><span style="color: blue;"><i>* * * * * * * * </i> </span></span></b></div>
<br />
<i>Join pebblewriter.com, one of the most successful [see: <a href="https://pebblewriter.com/performance/" target="_blank">results</a>] new investment blogs on the planet, for daily in-depth market coverage, analysis and forecasts. For more information, <a href="https://pebblewriter.com/membership/sign-me-up/" target="_blank">CLICK HERE.</a></i><br />
<i><br /></i>
<i><br /></i>
<br />
<br /></div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-54372392030710288092013-03-21T01:36:00.003-04:002013-03-21T02:40:46.900-04:00Charts I'm Watching: Mar 20, 2013<div dir="ltr" style="text-align: left;" trbidi="on">
<i>~reposted from <a href="https://pebblewriter.com/">pebblewriter.com</a>:</i><br />
<br />
9:00 AM EDT <br />
<br />
The ECB's vow to do "whatever it takes"apparently translates
into strong-arming the Russians into bailing out Cyprus. Still no break
out on the EURUSD, though.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRS65Kn0YZnOlU7DF7twRJVARS7aTg7qCwUrIQMaTv8RGuWV7IK-XXDfCaR10Xj7JME_hBV-PGjIMUjGaVTUJDXPDXo-QXqov8S7A0b2lXhD76l4rYYpq1Qq5k_0en5nLmRIaWVYDGjCsW/s1600/2013-03-20-EURUSD+60+min+0610.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="424" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiRS65Kn0YZnOlU7DF7twRJVARS7aTg7qCwUrIQMaTv8RGuWV7IK-XXDfCaR10Xj7JME_hBV-PGjIMUjGaVTUJDXPDXo-QXqov8S7A0b2lXhD76l4rYYpq1Qq5k_0en5nLmRIaWVYDGjCsW/s640/2013-03-20-EURUSD+60+min+0610.png" width="640" /></a></div>
<br />
<br />
It
makes sense to play along with the upside on SPX, but keep stops close. Not sure whether this rally will have legs. The dollar looks
like it's finding support here.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-DX-60-min-0629.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-DX-60-min-0629.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10765" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-DX-60-min-0629.png" height="425" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-DX-60-min-0629.png" title="2013-03-20-DX 60 min 0629" width="640" /></a></div>
<br />
<br />
UPDATE: 09:33 AM<br />
<br />
Just reached the .786 of the move
down from 1563.62 (purple) and the .886 of our proposed path to 1576
(white.) Full short again, stops at 1561ish. Revised charts in a few...<br />
<br />
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-15-min-0633.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-15-min-0633.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10766" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-15-min-0633.png" height="425" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-15-min-0633.png" title="2013-03-20-15 min 0633" width="640" /></a><br />
UPDATE: 09:55 AM<br />
<br />
The daily chart tells the story. The most prominent features include:<br />
<blockquote>
<ul>
<li><i>large 1474-1343 <a data-mce-href="https://pebblewriter.com/learn/harmonics/crab-pattern/" href="https://pebblewriter.com/learn/harmonics/crab-pattern/" target="_blank">Crab Pattern</a> completion at 1555.57 (yellow)</i></li>
<li><i>large 1370-1074 Crab Pattern completion at 1553.39 (red)</i></li>
<li><i>small 1530-1485 Crab Pattern completion at 1559.32 (white)</i></li>
<li><i>small broken rising wedge -- at 1563 top</i></li>
<li><i>long-term TL and channel top (white) at 1560</i></li>
</ul>
</blockquote>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-daily-0655.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-daily-0655.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10770" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-daily-0655.png" height="399" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-daily-0655.png" title="2013-03-20-daily 0655" width="640" /></a></div>
<br />
UPDATE: 11:10 AM<br />
<br />
SPX continues to <i>position itself</i>
for a run at 1576. The 5-min chart shows a small potential Crab
Pattern with a 1.618 at 1577 and a Flag Pattern targeting 1576.<br />
<br />
It
has broken back above and backtested the purple channel midline and
retraced nearly .886 of its drop from 1562 and a little more than .786
of the drop from 1563.62.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.blogger.com/blogger.g?blogID=6135767210188526078" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10773" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-5-min-0812.png" height="430" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-5-min-0812.png" title="2013-03-20-5 min 0812" width="640" /></a></div>
<br />
While it's positioned for 1576, there is no more certainty than when we first broke 1555 on the <i>Mar 14</i> overnight ramp job. The large, bearish patterns listed above have still not produced the kind of sell-off they normally do.<br />
<br />
And, it's all because of the <strike>Fed's</strike> <strike>media's</strike> <strike>cheerleaders'</strike> TPTB's determination to be able to tout a swell new all-time high for the S&P 500.<br />
<br />
In
addition to the little Crab Pattern (purple) that targets 1577 and the
flag pattern targeting 1576, there's an obvious effort to construct an <a data-mce-href="https://pebblewriter.com/inverted-head-shoulders-pattern/" href="https://pebblewriter.com/inverted-head-shoulders-pattern/" target="_blank">IH&S pattern</a>
targeting 1580. It could benefit from a lower right shoulder, but
bulls must beware of crossing back beneath the purple channel midline.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-SPX-5-min-0837.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-SPX-5-min-0837.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10777" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-SPX-5-min-0837.png" height="430" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-SPX-5-min-0837.png" title="2013-03-20-SPX 5 min 0837" width="640" /></a></div>
<br />
The
S2 shoulder isn't quite legit, BTW, as the neckline doesn't quite
connect on the left side. But, the S1 shoulder is quite a ways down
there. So, if the pattern plays out, be prepared for some serious chop.<br />
<br />
UPDATE: 1:00 PM<br />
<br />
With
the FOMC announcement a little over an hour away, let's resume our chat
about the big picture. If it seems like we're "lost in the reeds" as
one reader so aptly put it, it's because we are.<br />
<br />
The large <a data-mce-href="https://pebblewriter.com/learn/harmonics/crab-pattern/" href="https://pebblewriter.com/learn/harmonics/crab-pattern/" target="_blank">Crab Pattern</a>
completions promised a good-sized dump last week at 1553/1555. Instead
we've inched higher. Why? These patterns completed in the middle of
harmonic no-man's land: the gap between an .886 retracement and a
double-top.<br />
<br />
The .886 retracement (of the 1576-666 crash) produced a
9% reversal back on Sep 14. Since then, SPX came screaming back to
retake the 1576 all-time high -- but slammed into the Crab Patterns and a
very important channel line along the way.<br />
<br />
Now, it doesn't know what to do.<br />
<br />
Double
tops usually produce reversals, too -- sometimes meaningful ones as we
found out on October 11, 2007, when SPX scooted up past the 1552 top
from 2000 by a whopping 24 points before dropping 58%. <br />
<br />
The 2000
top itself shows just how "messy" tops can be. Here's the finished
picture in perfect hind-sight. It's a very crowded chart, but <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">every</span> <span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">pattern</span> on there had a say in how the top unfolded.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-all.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-all.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10781" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-all.png" height="424" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-all.png" title="2013-03-20-2000 top-all" width="640" /></a></div>
<br />
Once
SPX broke out of the falling purple channel, it had "permission" to
pursue several harmonic patterns in the works. SPX shot up 66 points in
that one day -- blowing through every Fib level between .618 and 1.000.<br />
<br />
It
finally came to rest at 1458, completing a Bat Pattern at the purple
.886. But, the small white 1.272 was just above at 1477, as was the
rising purple channel midline and the 1.272 from a much larger pattern
seen below. An IH&S target waited at 1497 - tantalizingly close to the
nice round number of 1500. The all-time high of 1478 from two months
earlier beckoned.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10782" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" height="425" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-20-2000-top-big-picture.png" title="2013-03-20-2000 top big picture" width="640" /></a></div>
<br />
SPX
got up to 1477.33 before reacting, falling to 1466 over the next two
days. Close, but not quite. Someone watching closely might have
noticed the Flag Pattern it constructed, targeting 1562. Someone else
probably pointed out the biggest Crab Pattern target of all -- the 1.618
extension of the 13% correction from 1420 to 1233 from Jul-Oct 1999.<br />
<br />
I
don't know what the catalyst was, but on Mar 21, 2000 (that date sounds
awfully familiar) SPX shot up through the channel midline, the cluster
of Fibs around 1477 and, importantly, the 1478 high and raced up toward
those higher targets.<br />
<br />
On Mar 24, it reached 1552.87, which cleared
the IH&S target at 1497, the purple 1.272 at 1519 and the last
remaining Crab Pattern at 1535. What ultimately stopped it? The .75
line from the big purple channel dating back to Jul 1999 -- almost to
the penny.<br />
<br />
Total move: 17% and 227 points in 20 sessions. Could it happen again?<br />
<br />
<i>continued for members</i>...<br />
<br />
<div style="text-align: center;">
<span style="color: blue;"><b><span style="font-size: small;">* * * * * * * * </span></b></span></div>
<br />
For full access to live market commentary throughout every trading day, subscribe to pebblewriter.com. <br />
<br />
<div style="text-align: center;">
<a href="https://pebblewriter.com/membership/sign-me-up/"><span style="color: blue;"><span style="font-size: large;">Sign me up!</span></span></a></div>
<br /></div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com0tag:blogger.com,1999:blog-6135767210188526078.post-37283089567636834682013-03-18T22:03:00.000-04:002013-03-18T22:25:35.970-04:00Mad Men, Liars & Thieves<div dir="ltr" style="text-align: left;" trbidi="on">
reposted from <a href="https://pebblewriter.com/"><i>pebblewriter.com</i></a><br />
<br />
It's hard to believe the numb nuts running the big show in the euro zone
could be so stark-raving mad. Raising taxes on countries with 25%
unemployment seems positively brilliant compared to the idea of
confiscating 10% of bank deposits -- especially those that are
supposedly insured.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiH5IqdhbnFvopxU2_iuQYoOvbu9spzQP3eJZwXkImY30kGcmL33MX8UA6QgcDcs74jIPZX5U-C9-IlC6p-QJB9R87njNrV_6_RqFHpVacjtCBYvqsMez4xQgVTRe6T_CyfG-sPUUvchEGV/s1600/Merkel.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiH5IqdhbnFvopxU2_iuQYoOvbu9spzQP3eJZwXkImY30kGcmL33MX8UA6QgcDcs74jIPZX5U-C9-IlC6p-QJB9R87njNrV_6_RqFHpVacjtCBYvqsMez4xQgVTRe6T_CyfG-sPUUvchEGV/s200/Merkel.png" width="200" /></a></div>
Get ready for the media interpreters who
assure us "it's only Cyprus" -- which reminds me an awful lot of "it's
only Bear Stearns" or "it's only Lehman."<br />
<br />
The issue, of course, isn't
the size of the depositor base in Cyprus banks. It's the effect this
action will have on depositors in Portugal, Spain and Italy.<br />
<br />
By now, even the most clueless depositors have to be wondering just how safe<i> </i>their deposits are. The smart ones already know. And, the brilliant ones moved their money a long time ago.<br />
<br />
This
bone-headed action also calls into question the ECB's willingness
and/or ability to support troubled nations/banks. If they can't float a
lousy $13 billion to bail out Cyprus, how will they react when other,
larger systemic risks pop back up?<br />
<br />
And, last but certainly not
least, what effect will this action have on the $700+ trillion
derivatives market? It's a spiders nest of complicated agreements
whereby one party guarantees another that credit quality/interest
rates/etc. won't slip past a certain level.<br />
<br />
These private
contracts are bought and sold countless times, to the point where no one
usually knows the true exposure of any given player until it's too
late. When a bank fails, it's very difficult to discern how many
counterparties will be affected. It quite rightly shakes confidence in
the entire system.<br />
<br />
Cyprus is a reminder that the euro zone is not
"fixed." It's a reminder that much more is needed to fulfill the
promise of "whatever it takes." And, it's a reminder that the Fed and
the ECB either don't have as much control as they'd like us to think, or
are losing interest in preventing every little hiccup along the way.<br />
<br />
<div data-mce-style="text-align: center;" style="text-align: center;">
<span data-mce-style="color: #0000ff; font-size: 20px;" style="color: blue; font-size: 20px;">* * * * * * * *</span></div>
<br />
The
dollar may have just completed the transformation we discussed at
length Friday -- reverting back to the risk-off safe haven to which
we're accustomed.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiV3giEDVPpG_TzVePp8ojh3alJBfIIwqaJ1Z8wGBxp92_gV49ajYmiPElbnBPFPRSplrrwK8RYqIf8khBL_EoIxHufIL-n5vE5_D5R1MTFkZgpx1a9-dEsiRbY9a7TokhI6jtdeJCyv70A/s1600/2013-03-18-DX+daily+RSI+0621.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="430" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiV3giEDVPpG_TzVePp8ojh3alJBfIIwqaJ1Z8wGBxp92_gV49ajYmiPElbnBPFPRSplrrwK8RYqIf8khBL_EoIxHufIL-n5vE5_D5R1MTFkZgpx1a9-dEsiRbY9a7TokhI6jtdeJCyv70A/s640/2013-03-18-DX+daily+RSI+0621.png" width="640" /></a></div>
<br />
<br />
The
smallest rising wedge on SPX has clearly broken down and should now try
to establish a channel something like the one drawn below. Look for a
playable bounce here around the midline between 1543.43 and 1546.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0632.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0632.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10673" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0632.png" height="430" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0632.png" title="2013-03-18-15 min 0632" width="640" /></a></div>
<br />
UPDATE: 10:10 AM<br />
<br />
We
got the expected bounce at 1545.13. If the bears can keep the trend going, it
should fail before the next higher channel line -- currently around 1558
-- or the yellow TL up at 1560. But, of course, there's no reason it <i>
has</i> to be more than 1553.39 (the 1.618 extension of the 1370-1074
correction in 2011) or 1552.19 (the .382 retracement of the move down
from 1563.32.)<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0708.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0708.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10676" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0708.png" height="430" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-15-min-0708.png" title="2013-03-18-15 min 0708" width="640" /></a></div>
<br />
As
legitimate as the little white channel above appears, it's merely a
conjecture. A pitch. If Cramer & Co. can convince the average
small investor to ignore the implications of Cyprus and embrace a market
selling near all-time highs, the channel is proof of the absence of
risk in the markets.<br />
<br />
It coincides nicely with the midline of the
larger purple channel that's guided SPX's upside since November. To bulls, this
morning's dip looks like nothing more than a successful test of the
midline.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-0803.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-0803.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10679" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-0803.png" height="430" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-0803.png" title="2013-03-18-daily 0803" width="640" /></a></div>
<br />
Here's
a close-up, showing the tag of the .236 Fib (red) and slight push below
the purple midline. Important for the bullish case: (1) the white
1.272 is even still intact, and (2) prices are re-testing the 1.618 Fib
at 1553.39.<br />
<br />
If SPX pushes higher than 1553.39, it reinforces the
idea that the Crab Pattern set up by 2011's plunge from 1370 to 1074 is
going to fail (8 points would be a failure.) If it drops below, then
the push up to 1563 can be characterized as a momentary blip of
irrational exuberance.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-CU-0810.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-CU-0810.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10680" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-CU-0810.png" height="423" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-daily-CU-0810.png" title="2013-03-18-daily CU 0810" width="640" /></a></div>
<br />
The
technical elephant in the room, of course, is whether or not SPX will
continue to take a run at the previous high of 1576. It's not as though
bulls will throw in the towel over Cyprus. Take the move down from
1563, for instance.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a data-mce-href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-5-min0947.png" href="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-5-min0947.png" style="margin-left: 1em; margin-right: 1em;"><img alt="" class="aligncenter size-full wp-image-10686" data-mce-src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-5-min0947.png" height="423" src="https://pebblewriter.com/wp-content/uploads/2013/03/2013-03-18-5-min0947.png" title="2013-03-18-5 min0947" width="640" /></a></div>
<br />
If
this bounce from 1545 retraces all the way to the .786 at 1559.66, it
will have set up a potential Butterfly Pattern that targets 1575. Look
for the little white channel to turn by the .500 (1554.38) in order to
construct another leg up.<br />
<br />
UPDATE: 1:25 PM<br />
<br />
Where does this morning's dump fit in with yesterday's LT charts from the last post [see: <a data-mce-href="https://pebblewriter.com/do-or-die/" href="https://pebblewriter.com/do-or-die/" target="_blank">Do or Die</a>]?<br />
<br />
<i>continued on <a href="https://pebblewriter.com/">pebblewriter.com</a></i>...</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.comtag:blogger.com,1999:blog-6135767210188526078.post-1352505751006329162013-03-07T10:02:00.000-05:002013-03-07T10:02:30.804-05:00RUT: End of the Line?<div dir="ltr" style="text-align: left;" trbidi="on">
RUT has reached the upper bound of a well-defined channel that dates back to 1998.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-a6BvXK1-Rg_7TZin3pKxTD-0Bcd6hr8Rhtp_jBZ5dQT-bheha0EDoFXdnLQDOkUAgJDXkVOyecqKVa5itEnJyS1CFK_nxF6euF4eValfI-3S5NJBoJnvBwd1BNvBAar_TPF57DQAQjLz/s1600/2013-03-07-RUT+wkly+0623.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="424" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-a6BvXK1-Rg_7TZin3pKxTD-0Bcd6hr8Rhtp_jBZ5dQT-bheha0EDoFXdnLQDOkUAgJDXkVOyecqKVa5itEnJyS1CFK_nxF6euF4eValfI-3S5NJBoJnvBwd1BNvBAar_TPF57DQAQjLz/s640/2013-03-07-RUT+wkly+0623.png" width="640" /></a></div>
<br />
<br />
It
could leak a few points higher in reaching for the top of the large rising
wedge and one potential <a href="https://pebblewriter.com/learn/harmonics/butterfly-pattern/" target="_blank">Butterfly Pattern</a> target, but I suspect RUT has reached a turning
point.<br />
<br />
<em>continued on <a href="https://pebblewriter.com/">pebblewriter.com</a></em>...</div>
pebblewriterhttp://www.blogger.com/profile/11324367600914701000noreply@blogger.com