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Just a small fish swimming in shark-infested waters. I have a BS in Chemical Engineering and a deep interest in science and investment management. My investment strategy was designed based on fundamental, technical and intermarket trends. Asset allocation follows this plan, which mostly focus on... More
  • Short-term Update: What's Going To Come Out Of The ECB Meeting? Not Enough, Says The Hanging Man 0 comments
    Jun 29, 2012 1:48 AM | about stocks: SPY, TLT

    According to technicals, the output of this European meeting will be...


    nothing spectacular for the bulls.

    An image with a thousand lines speaks a million bears...

    (click to enlarge)

    Quick bearish observations:

    1. The market is playing a short-term symmetric triangle, which may mean downward continuation.
    2. The FED speculation rally (which began fiercely with a candlestick pattern that has a close enough resemblance of a morning doji star) did not surpass the 62% Fibonacci resistance.
    3. The 38% Fibonacci support could not hold the disappointment slide.
    4. It is highly probable that the market is just starting the third impulsive fractal inside a third ugly downward wave.
    5. The last candlestick is a "hanging man". What a way to scare the bull army eh?

    Ross: [cutting the rope on the tree] Why did they hang him so high?
    Cogburn: I do not know. Possibly in the belief it'd make him more dead

    - True Grit (movie)

    In short, technicals are confirming what we already know:

    If the meeting output is not good enough, we are going down (which goes in accordance with the hypothesis I discussed in previous articles). If that turns out to be the case, the bond market will let us know in the coming days/weeks how much stress is needed for the politicians to yield and for the central banks to stop saving their bullets for later.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: SPY, TLT
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