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Further to my post of January 28th, which focused on Weekly charts, I'll take a closer look at near-term support and resistance levels on the shorter Daily timeframe for YM, ES, NQ & TF, as shown on the charts below.
Overlayed on each chart are Bollinger Bands, monthly Volume Profile POC (horizontal yellow lines), 50 sma (red), 200 sma (pink), and a Volume Profile for the one-year period (POC is red horizontal line).
Price on YM is currently trading in between its upper Bollinger Band and middle Bollinger Band, above both POCs, and above both moving averages (which are in a bullish Golden Cross formation). Using these parameters, I'd put near-term resistance at 12761, and support at, first, 12499, then 12377, and, finally, 12195 (one-year POC).
I wrote on Friday that it was the calm before the storm. But given the size and nature of the overextended / overbought market, the sell-off has not been that severe, at least not yet.
Greece will default no matter what. Question is when. One report is saying that it will happen in the early March. (http://www.examiner.com/international-trade-in-national/greece-plans-orderly-exit-of-the-eurozone ) But I think early April is more likely. Germany is tired of handing out money to Greece and they are only buying time. Question remains of contagion. Have LTRO been able to provide a cushion to the European banks from the coming shock? Next in line is Portugal and Spain. But short term trading in Wall St. is devoid of fundamentals. It is all about set up. So today SPX gaped down in the open but reduced the gap at the close. It was all about squeeze the short and keeping the bulls interested. If you look at the variances between Euro/USD, AUD/USD and GBP/USD, you will see that it is more of short squeeze than a rally.
I had an interesting discussion with a friend the other day when he asked me if I spent anytime on Facebook. I answered that I didn't "do" Facebook since I was too busy. (There are a host of other reasons of course, but that's another topic).
I asked him why he Facebooked and he suggested that he did it to keep in touch with people and to network a bit. I told him that I had read an article recently that had stated that research is beginning to show that Facebook makes people depressed. To my surprise, he totally agreed.
Seriously? Is that a question that we, as self-directed investors should have to answer. Yet the question is asked everyday in almost every financial media outlet. And most of the answers lack depth and sound reason. Moreover, the probability of choosing a successful stock is always 50/50. Why do you think monkeys throwing darts at the WSJ stock section performed almost as well as the professionals. Remember, it's a game that is controlled by marketing. Think about it. The message is so powerful on the major media outlets that they, the media, actually make you think the financial professionals that grace their airwaves and their respective companies can outperform the market. Yet, look at the facts
Data released today shows that consumers are buying less, but paying more, even though their personal income has risen, as shown on the three graphs below.
Consumer personal spending has been, generally, declining since it peaked in August 2011. Since "consumer spending accounts for a majority of overall economic activity, and is one of the most important gauges of economic health," it remains to be seen whether this will have any effect on the buying mindset of the equity markets that has been in play for the past couple of months.
Even occasional readers are acquainted with my near-obsession over the gold miners ETF symbol GDX. I have been closely following an analog I discovered for GDX, and last week I printed it out, took pencil in hand, and clumsily scratched out what seems to be the turning points of the analog.
Below is the 2007-2008 timeframe. Please note these letters have no special meaning, except to order and identify the turning points. For the love of God, don't mistake this for some kind of attempt at Elliott Wave (cough, cough).