S&P500 - Analysis and Trading

[MRC & Co]

Re: S&P 500

That is the question Broadway, I wouldn't be surprised to see this continue on early into nxt wk, with mid-late wk a break down out of the range on S&P.....we will see.

ha ha, well that was some crazy price action in equities. Did the exact opposite of what I thought (though bonds behaving exactly as I thought, just no correlation breakdowns due to data slightly on the side of positive, though breakdowns are extremelly mixed but still not as bearish as leading indicators were pointing).

Markets look like they are ready to try and muddle along in the near-term.

Best trade out there I think is a long USDJPY on an 83 handle, still a lot of spec positioning to squeeze and exporters are hurting more than they are letting on. May not require 'brutal' moves as the jawboning would lead you to believe.....

 

[Timmy]

Re: S&P 500

Couple of articles, both from Jon Hilsenrath in the WSJ:
This about 4 hours old;
Richmond Fed's Lacker Wants High Threshold For More Fed Action
http://blogs.wsj.com/economics/2010...-for-more-fed-action/?KEYWORDS=JON+HILSENRATH

This newer, (maybe a couple of hours ago?):
Outlook Clouds Fed Move
Officials Disagree Over Threshold for Further Action to Boost Economy
http://online.wsj.com/article/SB100...5491813115042140.html?KEYWORDS=JON+HILSENRATH

Still reading both of these articles, but looks like nothing fresh expected from the next FOMC (Sep. 21)

 

[Joules MM1]

Re: S&P 500

vid

a traders perspective.....

http://mrtopstep.com/2010/09/15/bullish-pattern-ascending-triangle/

 

[MRC & Co]

Re: S&P 500

Markets look like they are ready to try and muddle along in the near-term.

Best trade out there I think is a long USDJPY on an 83 handle, still a lot of spec positioning to squeeze and exporters are hurting more than they are letting on. May not require 'brutal' moves as the jawboning would lead you to believe.....

Well equities are muddling along and USDJPY perfect, exporters were hurting bad!

 

[Joules MM1]

Re: S&P 500

nice smell of singed shorts, painfully slow, extremely low sell/buy ratio, strong adv over decliners, massive number of new highs versus new lows.....the aussie muddled the spx climbed.....all vagueries aside the numbers are clear and so is the price action....is there anyone in the short term interest rates shed that doesnt know what the fomc is going to do.......unlikely

 

[Joules MM1]

Re: S&P 500

.....with the smack-down in the 30 year note recently would not surprise me to see a flatline (failure to make new highs) in the tlt and 30 year bond as some liquidity gets respilled into us equities.......that's even with the steamroller that is gold.....

 

[Joules MM1]

Re: S&P 500

http://www.zerohedge.com/article/ny...t-year-advance-september-short-covering-rally

twas a nice updraft into the fomc annoc and an outside down move post, but, looks can be decieving and i'm sure if we got messrs Roubini, Prechter and Faber in one room to ramp the audience we could get the spx to reach above 1500 on that meet alone.....interestingly that means we have 3 major instruments in step over a very short period, which is unusual...ie gold/bonds/equties....pos liquidity flows all around....bonds have often been inverted....i'd also expect a slug-fest upwards on the xjo too.....looking for those weekly highs

 

[sammy84]

Re: S&P 500

That previous point of resistance at 1130 has turned out to be a nice point of support. Fridays price action was promising. From around 10 30am it was a nice trending day into the weekend. Unfortunately it was an inside day though so doesn't mean a hell of a lot either.

If 1157 breaks we could see another short squeeze. I'm pretty bullish still....anyone else of a different opinion?

 

[sinner]

Re: S&P 500

That previous point of resistance at 1130 has turned out to be a nice point of support. Fridays price action was promising. From around 10 30am it was a nice trending day into the weekend. Unfortunately it was an inside day though so doesn't mean a hell of a lot either.

If 1157 breaks we could see another short squeeze. I'm pretty bullish still....anyone else of a different opinion?

We could continue up, but breadth not seem to be joining in for the fun and put/call ratio showing the move up is largely unhedged (especially the last 7 odd trading days, but this might have something to do with the large opex in September) so this move up is exhibiting the behavior you see at broader market tops.

If you follow the Summation Index (upper oscillator), stocks have been bullish since mid-July.

Caveat emptor.

 

[Timmy]

Re: S&P 500

Good size jump in the TED spread:
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND

 

[Broadway]

Re: S&P 500

Good size jump in the TED spread:
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND

View attachment 39140

Did this happen before last nights crappy jobs number? I guess they might have anticipated the ADP number.

 

[Timmy]

Re: S&P 500

Did this happen before last nights crappy jobs number? I guess they might have anticipated the ADP number.

I cant be sure Broadway. Pretty useless answer, sorry, but I only check that page no more than once a day (& not always even that) and didn't look at it until about 2 minutes prior to my post. Bit late, I know.

If anyone has a better source for the chart of the spread, that would be great.

 

[Joules MM1]

Re: S&P 500

Good size jump in the TED spread:
http://www.bloomberg.com/apps/quote?ticker=.TEDSP:IND

View attachment 39140

yes, a handy bias ref........

http://stockcharts.com/c-sc/sc?s=$TED&p=D&yr=3&mn=0&dy=0&i=t96452030829&r=9566

low, liquidity in, high, liquidity shrinks......

 

[sinner]

Re: S&P 500

yes, a handy bias ref........

http://stockcharts.com/c-sc/sc?s=$TED&p=D&yr=3&mn=0&dy=0&i=t96452030829&r=9566

low, liquidity in, high, liquidity shrinks......

Helps make sense when you view it like this:


My observations on the TED spread on Sept 29 2010:
http://www.forexfactory.com/showpost.php?p=4056524&postcount=594

Prior to the flash crash in May, most market participation indicators started to poop out. Breadth was not playing along, puts were not hedging the upmove (as measured by P/C ratio), and volume based indicators were not supportive of the upmove relatively early in the leg.

Highlighted some similarities above, but further thought on the chart has me thinking...well...further.

Especially on the FTSE (not so much the DAX), the most recent market upleg has been looking each day more and more like a corrective A-B-C wave rather than the beginnings of a new 1-2-3-4-5 impulsive wave. It's readily apparent on NDX and SPX too. Although, in the case of NDX, it has already moved into the equivalent resistance zone shown in the below chart for SPX...which indicates the financials are weaker than broader market (NDX being the non-fin index).

The implications of this wave formation are that a new down-trending impulse would be beginning very soon (if not already begun in some stocks).

Just like April/May, the MFI has already ceased being supportive of the current upleg and heading down as the index drifts up. This isn't a tradeable divergence signal, it's just another clue that something isn't quite right here.

Caveat emptor * 2:


See no reason to be equity long or short, happy flat. Made some nice % on various indices during Sept, will wait to see if the market tips its hand on the USDX or SPX during Oct for another clean setup somewhere on the board. My view is the cyclical USD bull is still in-tact, Bernanke is not bigger than the market, he can't beat it only break it - which is why equity flat is such a great position these days.

I am more interested in buying lumber.

 

[Timmy]

Re: S&P 500

Joules, Sinner - thank-you both very much.

Sinner - thanks also for the link to your comments on Forex Factory, great stuff.

 

[sinner]

Re: S&P 500

Last night was surely the most amusing in months on the markets.

SPY and AAPL flashcrashed (SPY almost perfectly after bumping into resistance as specified above in the last few days) yet when I checked google finance this morning the index had been stick saved to 1184!

What a joke. Surely nobody still believes this market to be a real market of supply and demand. Very glad I spent my night in FX rather than equities. With $6 billion in POMO completed overnight and NYSE cancelling any flash crash trades which seem to be occurring at least once or twice a week in various listings it seems silly to participate.

Courtesy zh:

Also courtesy zh, a quote from the Interactive Brokers CEO:

As indicated in the recent flash crash report by the U.S. CFTC and SEC, internalizers suck off all the customer orders, but when an imbalance develops they are unable to handle it and they throw the switch to route the orders back to the exchanges, which no longer have the liquidity to deal with it. Since the bulk of the volume is now being traded at prices relative to a displayed market that is no longer driven by real supply and demand, sudden imbalances of buy and sell orders will occur more and more often, giving our industry more and more reputational headaches.

Link included, I advise all to read the full quote
http://www.zerohedge.com/article/in...-broken-market-nanex-conclusively-proves-hfts

I seem to recall in 2009 that many, even TH on this forum, bagging out zerohedge for being conspiracy fringe doomsday rubbish. Because apparently if you think the market structure is broken you must be a losing trader with an axe to grind. Funny how things work out.

 

[professor_frink]

Re: S&P 500

Holy iCrap!

 

[ThingyMajiggy]

Re: S&P 500

Damn that Waddell & Reed

 

[sinner]

Re: S&P 500

As per my recent postings that "something isn't quite right here"...

Let's take a look at the non-financials weighted against the broad NYSE. Outperforming on breakouts:


Now take a look at financials weighted against broad NYSE.
Underperforming non-stop since the flash crash:

 

[professor_frink]

Re: S&P 500

just in addition to your post sinner in regards to the financials, following from bespoke highlighting which banks saw CDS spikes as the fraudclosure mess heated up last week:

http://www.bespokeinvest.com/thinkbig/2010/10/15/bank-broker-default-risk.html



Could be an idea to keep an eye on BAC and WFC for any heads up to this particular mess(there seem to be quite a few of them at the moment) getting any worse