September 2013


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the-federal-government-shuts-down-for-the-first-time-in-17-years

Let’s see how long they hold out for. There are going to be any number of political careers reduced to ashes on this one. The Futures are trading higher currently…

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So once again we have the threats of government shutdown. Not going to happen on a sustained basis.

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October

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With October upon us, can the market make new highs, or is it just a stretch too far currently?

pe130929

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It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.

Mark Twain

The COT index number is +13.1%. This down from last week, but, we still have two weeks where the buying power of the commercials supports the bull side. Of course that the Fed decided not to “taper” in September provides a bullish impetus.

Technicals

Are very bullish. The 5day is almost at support in an uptrend. The support is at $170.4o. There is every chance that Monday, the market opens slightly weak, and then trades hard back higher. The 10day/20day are not in play this week unless the market sells-off and keeps selling, then look for support at $169.2o

Further the market made a new high. True it didn’t hold it, but that does not invalidate the pattern. Of course we are trading at the breakout point.

The approaching debt ceiling, sequester, etc, are all non-stories. We have had them almost on an annual basis, and nothing has come of it. All that we would be looking for would be a short-term top. This is a difficult game to play of course.

Internals weak

The market internals are weak with less and less stocks making new highs. This is a divergence within the market. Some analysts are calling for the market to fall based on this metric.

Bonds

With the Fed refusing to step away from bond purchases, the 10yr Note has traded off of the yield high of recent weeks. Lower Bond yields, if you feel that that is what is in the pipeline, would make stocks more attractive again. So the bond market is at odds with the internals. Further the COT traders do not buy individual stocks, they buy the index futures. Therefore I am not placing a high weighting on the internals per se.

Economic data.

Continues to be patchy, sometimes good, sometimes not-so-good. The market isn’t really trading on economic data. The market is trading [still] on the Fed.

There are no particularly attractive trades this week.

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spy

The chart pattern is signalling [assuming no major change into the close] that the bottom has been found and that the market is ready to trade higher.

There is the usual political noise, but it is just that, white noise and can [and should] safely be ignored.

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CUP-articleLarge

Who would have thought yacht races could be anything more than a snooze fest. Well once NZ kicked out to an 8-1 lead, I pretty much thought it was all over. At 8-4 I was hooked, willing a comeback, that still seemed unlikely. But today, boom, Oracle win it all. One of sport’s great comebacks and made for compelling viewing.

Unfortunately the Kiwi commentators simply couldn’t commentate in a non-partisan fashion. While I accept if you are an NZ’er you will support the Kiwi boat, the litany of excuses and bitchy comments became quite offensive.

There has been a massive groan about 40yr old Boeing technology. Really? I mean really? 40yrs old. Which, [apparently] gave all the speed advantages to the Yank’s [well there was 1 Yank on the crew], however, the boat speeds were almost identical…so boat speed…really? Maybe, just maybe, the Aussie skipper and British tactician were, gasp, better?

But the faster boats were much more entertaining to watch.

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spy

Well the chart pattern was busted. That for a rule based trade should mean that you have been stopped out. Is this an argument for a short position? Potentially on a closing price, but I don’t see it yet. Possibly I am blinded. I still see the long trade working out, and this break, a false break down.

If the bulls are to potentially win, then there needs to be a strong closing price with some momentum.

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The bounce has begun. Nasty dip early chasing those stops…now however the market is trading higher.

spy

Tomorrow, again, we may trade lower, this is a classic bull pattern. So far, everything seems to be setting up for a push back to new highs and the sustained breakout.

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The current sell-off is low volume. We are at a multi-time frame support area, this is a buy point with a stop below the lows.

spy

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