This is only the beginning.
The latest data from Obama’s limp, flaccid, faux-recovery just tumbled off the presses, and unemployment is back to 5% (which, let’s face it, is a miracle, since the Labor Participation Rate is 62.9%), so the BLS might as well just say unemployment is 0% and be done with the charade. Tens of millions of people are out of work and will remain so.
The market doesn’t know what to do with this data. In the few minutes I’ve been standing here watching, the ES and NQ have whipped from red to green several times. ZeroHedge has a series of graphics showing that, month after month, the market closes up green whether the numbers are a “miss” or a “beat”, so maybe this is just an algo-circle jerk until the day’s steady gains kick in. Hope springs eternal in the bearish breast, so obviously I’m hoping the obviously weakening economic data could actually create a few red numbers today.
I haven’t posted the full set of charts that I do every morning for a while and these are the companion charts that I use in my premarket videos for Daily Video Service subscribers at theartofchart.net. I posted that on twitter before the open today (@shjackcharts), but if you missed that you can see that here.
On ES I was saying that the outlook remains bullish as long as 2146 remains unbroken, and the LOD so far is 2147.75. If that remains the LOD then the outlook still leans bullish. ES Dec 60min chart:
The bears didn’t have a good day yesterday, with a larger than expected decline on the indices, and clear breaks at the RTH on SPX close back below the daily middle band, the 50 hour MA and the 5dma, and ES losing the key weekly pivot area at 2152.25 that I highlighted as a key close area on a tweet yesterday afternoon. With the historical stats for the last day of September leaning 75% bearish, and the indices resting on key support levels the odds of the ATH retest on SPX that Stan and I have been looking for definitely looking lower, and you can see that reflected in the tone of my comments last night on the charts below.
Overnight though the picture changed entirely, with marginal new lows and 60min buy signals fixing on ES, NQ and TF, and with a triangle confirmed on NQ and a perfect bull flag channel established on TF. On my premarket video for subscribers to the Daily Video Service at theartofchart.net today I was leaning strongly bullish, and I’ve not seen anything since then to change that view. I’m thinking 50% odds or better that SPX trends up today. The direct link to that video is here. Hopefully some of you saw that when I posted that link on twitter before the open today.
Each week in NFTRH we review the multi-currency (weekly) chart and occasionally take a look at various pairs and ratios as well. With the look of things this year (so many items are going sideways) it is hard to fathom how anyone would want to be a FOREX jockey right now.
The multi-index chart shows Uncle Buck, Euro, Canada Dollar and Aussie Dollar going sideways with only the bias varying (e.g. CDW looks bearish and XAD tinged bullish). What a boringly sad crew with the exception of the Yen, which is still in rebellion (breakout) mode and the terribly bearish GPB, which could be making a bounce pattern.
USD-EUR is in an ugly pattern above support. (more…)
SPX made a marginal lower low yesterday as expected and then rallied back into main resistance at the daily middle band, which closed yesterday at 2158/9, with the 5dma and 50 hour MA slightly above in the 2161/2 area. SPX closed a handle above the middle band but in practical terms I count a close less than two handles away from the band as a close on it.
One thing you often see in this kind of situation is a kind of symmetry where unusual setups can repeat several times in a short period and we might have a situation like that here. The last two times that the middle band was tested SPX gapped through it and at the open today SPX has gapped through it again. Both of the last two gaps were breakaway gaps that did not fill that day or the day after. We may see that again today and, if so, that would be a strong start to the ATH retest that we are expecting. SPX daily chart: