Compressed Markets - When Will They Burst?

Tech is Holding this Market Down

That’s right, the leaders of tech, Apple (AAPL), Google (GOOG), Amazon (AMZN) and Baidu (BIDU) are holding this market hostage. They simply can’t catch a bid. The Nasdaq is in total breakdown with no end in sight. The technicals are screaming a rally is about to break out with massive positive divergences on the 60 minute and daily charts. Investors are all expecting the rally to come any second and have loaded up with longs. Look at the Put-Call ratio, it’s at a complacent .60, when it should be in the stratosphere!

The Dow and S&P are ready to go, but without all the major indexes stepping up to the line, this market is stagnated. It’s really beyond comprehension that a market can be this compressed and not explode. Monday was the perfect opportunity for the Bulls to take charge, there was no economic news, no dire major catastrophes, nothing to keep them down. It seems the Bulls are either afraid to make a move or they expect someone else to do it.

click to enlarge

The only thing holding up the markets is hot air, the hot air of the hellish abyss that awaits below. And is it prophetic that the S&P hit a low measuring 666 on Friday, and that level is holding? It’s a good thing, because below that there’s literally no support until all the way down at 480! Need I remind you that I predicted back on November 12 of 2008, that 666 would be the bottom? Wouldn’t that be a hoot if it ends up that way? It would be a monster call, made party on technicals, and partly tongue in cheek.

As I write this post, it’s just after midnight, Tuesday morning, March 10 2008. And the futures are green across the board. It started that way Monday too, only to gap down at the close, then rocket up, then see-saw the rest of the day. Will it be déjà vu all over again? Or will this boiler burst? If it does burst, it will be worth several 100 points on the S&P.

Disclosure: no positions

Comments

[J. D. Swampfox:]

Congratulations on your 666 call. Looks like we have a rally now. Bear market rally or new bull? I expect the former...after all technicals can go only so far... wanna try to call the upside too?

Mar 10 03:18 PM

[Erick Tippett:]

These markets are compressed beyond understandable levels with no explosion because they're dehydrating (money rushing out and nothing-credit crunch-coming in!). It's
as simple as that and with multi-trillions in deleverag-
ing remaining, who can hazard a quess as to when this will end?

Mar 10 03:20 PM

[twitee:]

oversold market, with warren buffet pumping the market the day before to cover his $50,000 since sephtember 08.

The next low for S&P 500 is 500.....unless dollar drops agains all other currencies.

Mar 10 03:52 PM

[turnkey:]

RUMORS AND MANIPULATION
Amid extreme market volatility in 2008, the SEC and other securities regulators announced plans to crack down on rumor-mongering that threatens financial institutions.
Since then, the SEC has opened a group of related investigations into the possible manipulation of the securities of six large financial issues involved in the recent market turbulence, Walter said. The companies were not identified.
In October 2008, the agency required large hedge funds, broker-dealers and other large investors to file statements under oath regarding trading and market activity in the securities and credit derivatives of financial firms.
SEC staff have been analyzing the data and focusing on claims that credit derivatives such as credit default swaps were being used to manipulate equity prices. Walter said that investigation has been split into "six separate investigations, which are proceeding as expeditiously as possible."
(Reporting by Rachelle Younglai and Karey Wutkowski; Editing by Tim Dobbyn and Brian Moss)

Mar 20 01:14 PM

[turnkey:]

That means you Zach Bass - There is a petition that calls you personally to the SEC's attention.

Mar 20 01:14 PM