Friday, September 23, 2011

Market Update - SPX and DXY

SPX got to 1102 in premarket futures. Cash will follow there, if not today, early next week. We will have a retest of 1100. First retest is a bounce, second is a go-through. Let's see what happens...

DXY is stalling at flat on the year. Brief pause I say. Much more to come. This freight train will run over everyone standing in the way. No formidable resistance until 81.30 - year high.

I have to vent about extreme stupidity coming out of G20 leaders. They scrambled to issue a communique about how urgent and dire the situation in Europe is, and how coordinated their actions to combat the problem will be. The only coordinated action I saw was printing of the statement. What are they waiting for? It is stuff like this that unnerves the market: lack of progress, action, and brains. Where are all the smart people? Staying short...

Get ready for an epic day next week!


  1. Enjoy your blog. You have some good insights into the market. Just curious, when you say get ready for an epic day next week are you now looking for a deeper push below 1100 than you posted in your Sept 15th trade roadmap? In that you mentioned 1080-1090. Not asking for predictions but with commodities dropping does that change the outlook in your eyes.


  2. JZ, I am still looking for 1080 to be the bottom. Obviously, I do not possess the crystall ball. In my July 22 prediction I said that I do not see SPX trading below 1130. It did go below by 29 points.
    The reason I said "epic", because it will be an intraday reversal off that level, with 30 - 40 point SPX daily range (traveled both ways), accompanied by huge volume, and probably putting a hammer candle on daily chart. A lot of traders have their bids resting at 1070. Market likes to tease them by front running and stopping a few points above and making them chase higher. That will create a feeling of them missing out on the trade, thus their chasing will push SPX back above 1100. HFTs will sniff the bottom once SPX is above 1100, program buying will kick in, and the rest will be history. It will be a fast and furious short-term bottom, like most of them are.
    Commodities sell-off is anything less than breath-taking. I think that many hedge funds who were in them will be looking for safety of dividend-paying SPX to ride into the end of the year. It actually adds to my thesis of short-term bottom being near.