Bill L.'s  Instablog

Bill L.
Send Message
Methodology: setups require certain criteria to be met before trades can be executed, which include weighted statistical studies on several indicators of price, breadth, volume, and sentiment . Amount of risk taken is proportional to how many indicators are aligned. I mainly trade market... More
My blog:
Seeking Alpha Instablog: Updated Frequently
  • Thursday, August 30, 2012 - Short Term Update  3 comments
    Aug 30, 2012 4:45 PM | about stocks: SPY, DIA, QQQ, TLT, FXE, UUP

    Bottom Line:

    The aggregate indicator picture is that of a market that topping, and has room to run lower. The big wildcard obviously is what will Ben Bernake say tomorrow at the Jackson hole meeting.

    (click to enlarge)

    Price Action:

    SPX - Short Term

    (click to enlarge)

    The SPX has been contained within the resistance support areas I laid out several days ago. The SPX is arguably been in a 30 point range now for about 20 trading sessions. Based on size of the range and the amount of time consolidating, should we break to the downside reaching the second support area at 1355 should be doable.

    SPX - Medium Term

    (click to enlarge)

    Backing out a little further we can see that reaching the second support area will also mean breaking the upward sloping trend channel that has been intact since the June 4 lows.

    SPX - Long Term

    (click to enlarge)

    Backing out further still, we can see that complacency has reached levels that have often lead to multi-week corrections of over 10%.


    The aggregate technical picture is one of a weakening market that is set to decline. The problem being it has been so for few weeks now, but has been held up with promises of further easing. All eyes now turn to the Jackson Hole meeting tomorrow. My personal expectation is that there will be no new program announced since "operation twist" is still in effect and is running until the end of the year. Typically the Fed will hint, act, then watch to see what the effects are. Previous programs have often had a few months break in between as the Fed has watched to see what the effects were. Seeing as how "operation twist" is still affect, it would be a break of their pattern of behavior to announce a new easing program while the current using program hasn't even ended yet. Furthermore, the Fed has typically acted once there was at least some evidence of deflation creeping up in core inflation, the CPI, etc. Currently that is not the case. But then again, this isn't an "invisible hand" type Fed... more like a Fed that wants to make the market go up with an "iron fist."

    "Know your enemy, know his sword."

    Talk again soon,

    -Bill L.

    Disclosure: I am long SPXS.

    Stocks: SPY, DIA, QQQ, TLT, FXE, UUP
Back To Bill L.'s Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (3)
Track new comments
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Good summary. "Iron fist" it certainly has been for quite awhile now.
    31 Aug 2012, 01:17 AM Reply Like
  • basehitz
    , contributor
    Comments (1541) | Send Message
    Price discovery in all financial markets has been disabled by the Chairsatan. No longer is the focus fundamentals. Even technicals don't follow traditional rules. Instead, markets are almost singularly focused on money printing, and perversely seem to want bad economic news to justify more currency debasement.


    This Fed Chairman should go down as the worst in history.
    31 Aug 2012, 09:10 AM Reply Like
  • shortist
    , contributor
    Comments (23) | Send Message
    Did you lower you stop?
    31 Aug 2012, 11:37 AM Reply Like
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.