1430

1430 was the S&P year end target by JPMORGAN and Goldman for 2012.
We got 5 hours to get there !!!!!!!

Mercy!!

I guess we are at the mercy of these hard headed politicians-
Bye Bye market- geez- when will this end!

The Rest of year

Hope that everyone had a peaceful and warm holiday. News out this morning on the retail front is that this has been the weakest holiday season since 2008. Funny enough Monday I went to the mall for a household gift and text my wife and said the mall is empty! that should have told me that sales weren't brisk at the brick and mortar. I expect January and February retailers will have huge sales to balance their lack luster holiday sales.
Since volume has been extremely low the last couple of weeks, I don't expect much to go on here till the New Year as we have the fiscal Cliff issue dealing with. Now we could get a huge spike if some news comes out but I am thinking non of the market movers are doing anything till be get some resolution on taxes.
In the meantime have a peaceful and spiritual New Year.

WOWOWOWOWOW

DOW Futures was down 500 points- Fiscal cliff news

Bonds

Bonds negative here with oil- that was writing on the wall the last two trading days-

Expect more downside

GOLD

As mentioned yesterday I would not be in Gold and Bonds. Gold is down $30 almost 2% today

Upward

Well I guess I got stopped out of this move I am sitting on last friday. As I was expecting while long the QQQ an upward tick in the market solely based on the Fiscal cliff talks would get a compromise and that we were so close the the 78 retracement I believe new highs were in the making.
Since the week has started we have had two trend days up back to back which is extremely rare and more than likely can be contributed to the Fiscal Cliff talks. Lets see what shakes but as of now we are news driven mode again. I would not be long bonds or gold here but who really knows what the politicians will finally agree to.

How Volkswagen is run like no other car company

Any efficiency expert would tell you that VW is too vertically integrated, has too much overlap and duplication, and has way too many brands. VW, meanwhile, keeps growing bigger, stronger and more profitable.
The give-away that Volkswagen Group is run differently from every other car company lies with the fact that it employs a staggering 549,300 people globally. Fortune magazine lists it as the eighth largest employer in the world, behind giants such as Walmart and the Chinese post office. VW has almost as many full-time employees as General Motors (213,000), Ford (164,000) and Fiat-Chrysler (197,000) put together. While those three behemoths collectively built 19 million vehicles last year, VW "only" built 8.5 million.
Efficiency experts will tell you that on an employee-per-vehicle basis, Volkswagen looks hopelessly inefficient. Financial analysts will tell you that the company woefully trails its competitors on a revenue-per-employee basis. But VW will tell you that it makes more money than any other automaker – by far.
While VW's stated goal is to become the world's largest car company by 2018, it's already there if you measure it by revenue and profits. Its revenue of $200 billion is greater than every other OEM. Last year's operating profit of $14 billion is the kind of performance you expect from Big Oil companies, not automakers.
Last year's operating profit of $14 billion is the kind of performance you expect from Big Oil companies, not automakers.
How can this be possible? How can VW look so uncompetitive from a productivity standpoint, yet out-earn all of its competitors?
Ah, that's the magic of VW's corporate structure. While business schools teach future MBAs that centralized operations can cut cost by eliminating overlapping work and duplication, VW maintains strongly decentralized operations with lots of overlap. While business schools preach the benefits of outsourcing to cut cost, VW is very vertically integrated.
Anytime a car company buys a component from a supplier, that supplier has to charge a profit. If an automaker can make those components in-house, it gets to keep that profit. VW is building a lot of components in-house.
To dominate you need multiple brands, and VW has more than anyone else.
If an automaker truly wants to dominate the market, it has to accept a certain amount of overlap and duplication. It just goes with the territory. To dominate you need multiple brands, and VW has more than anyone else, which admittedly overlap at the edges. But to VW they are more than just brands.
All of VW's brands (VW, Audi, Seat, Skoda, Bentley, Lamborghini, Ducati, Porsche, Bugatti, MAN, Scania, and VW Commercial) are treated as stand-alone companies. They have their own boards of directors, their own profit & loss statements, and their own annual reports. They even have their own separate design, engineering and manufacturing facilities. Yes, they do share some platforms and powertrains and purchasing, but other than that they're on their own.
Back when GM was great, it too was a holding company that owned nine stand-alone car companies.
Back when GM was great, it too was a holding company that owned nine stand-alone car companies (Chevrolet, Pontiac, Buick, Cadillac, Oldsmobile, GMC, Opel, Vauxhall, Holden). In the 1960s GM had over 700,000 employees, was very vertically integrated, and was the most profitable corporation in the world.
GM's vaunted president and chairman, Alfred Sloan, who led the company from 1923 to 1956, always fought against centralized operations. He kept GM very decentralized until the day he retired. Then the MBAs got ahold of it. In the 1960s they started implementing "efficiencies" and "synergies" and it's been downhill ever since. Their top-down, command-and-control system of management simply choked the company. It still does.
Meanwhile, VW is operating right out of the Sloan handbook. And its corporate structure gives it an enormous competitive advantage. No matter how much VW's competitors try to rationalize, cut cost, outsource, or partner up with one another, they're never going to overcome VW's advantage. I wonder how many of VW's competitors are even aware of what they're up against.

Good out

Good out of longs on wednesday as yesterday proved to be very weak. Today before open we are looking at AAPL being crushed!
Should be interested to see if we round out a bounce today or not

Out all longs

Out all longs before the FED QE4 announcement today. Seem it was a non event but perception is everything is the upcoming days. Today was also a very light volume day and I am wondering if the fiscal cliff news is overshadowing the QE4 news.
Let's be honest here QE1,QE2,QE3 didn't do much but artificially inflate prices in the marketplace. We are still in an environment of declining margins, high employment and massive government debt and non the the QE plans help alleviate those top issues.

I don't think big money will do much till the new year as it is very dangerous to take any positions here more than a short trade.

QQQ-Update

Finally up nicely from call mid last week- We have resistance up here today on the S&P but I am staying long for now

Anaemic Volume

Today the market was ASLEEP!!!
The volume was 40% lower than the 10 days average and today was the lowest volume day of the year for options!
I guess we are on another pause till this fiscal cliff passes!! We thought after the election we would be on the track again but I guess not. Nothing the small guy can do till the big money get back in the market!

AAPL

AAPL is gaping down  just over 9 points to start today's session.  This will bring it into the 530 gap area from 11/19/12. 527.68 will fill the lap from that day.  A key Fibonacci retracement sits just below at they 524.50 level.

Is AAPL a SCREAMING BUY down here?  Who knows! 

AAPL was crushed yesterday, and was hit Tuesday as well, so the stock is pretty short term oversold and getting a ton of negative chatter (for example: the run is over for good; it will never see the highs again; it's a broken stock; blah blah blah).  I have no idea if this is the case, but I do know that only a few months ago, it was the super stock and those same people were saying how it would be at 1000 by Christmas.  My point?  Don't listen to the crap out there, trade the charts.

Even if you aren't an intra-day trader, don't trade stocks, or you are not comfortable with trading a stock like AAPL due to price and/or volatility, there are still lessons to be learned watching how it trades around these Key Decision Areas such as the levels mentioned above.

Long-

Building a small long position on the QQQ here-

Shaked me out

So the market shaked me out of my longs late tuesday them decided to make a V reversal after hearing Obama talk about tax cuts and the Fiscal Cliff yesterday.
Before the open we hit 1416.75 which was some resistance and will be looking if we can get through this area on any buying.
In the mean time I am all flat and waiting to get back on board as long as there is no choppy trading which has been frequent these days.

Downside

Traders working the downside early this morning- looking for that 1378-80.75 area for some meaningful support

Before Open

Well seem like getting out yesterday at close below 1400 seem to be the right call before the open. 45 before the open we are down on the futures and looking for support @that 1391 level early on.
Yesterday was tuesday and we didn't get our usual turn around tuesday play that that tells me we are biased here to the downside for the moment.
Let's see how we play into mid day.

on the upside the number to get through is still 1408

1403

1403 is the magic number for me to stay in my current longs at the close- of we close above I will still ride my long positions I have but below I will cash out.

I still believe in my upward bias mode for rest of year but we could be in for a pullback before we remount again.

BINGO

officially +40 point on the S&P since friday's buy.
Sometimes you just have to take the opposite side of these tv talk heads even without a setup.

Proves they are always late or wrong!

BINGO!!

WOW- market moving up nicely from my 1345-50 zone- Premarket we are at 1372 with resistanace @1376.
I will be taking 1/2 off within the first hour for a whopping approximately 28 points.

BINGO!

GONZO

First trade after a week off and BINGO - rock and rolling + 13 points on the S&P.
If we close above 1360.50 that would be very positive!!

Days Off- Buying here

Took a couple days off but wow the market crashed and burnt-
Today is options expiration and today is a no trade day for me but I am legging into some SPY calls and Futures at the 1345-1350 level for a medium term hold.

Weak day

Though this is a weak day as long as we close above 1410 the structure should still be ok to go higher- BUT is we close lower than 1410 that would look extremely damaging and would mean we would visit sub 1400 next week. The number I am looking at is around 1392 for next week if that scenario happens.

Up Up and Away

As noted yesterday while they are claiming all doom and gloom my bias here is to the upside. Who knows last week dip below 1400 on the S&P could have been the buy into years end but we will have to see.
Look for some resistance at 1425 on the S&P if we can get there today.

Sandy

After two days of closure the markets are now open. It will be a couple of days before the market players get back anywhere near 90% as New York is running on a skeleton crew now. Also with the elections next week I expect the markets to just chop around.
Though lots of folks think the market is due for a significant pullback I believe they are jumping the gun and we go higher after election and Sandy recovery

Futures off the cliff-

Yesterday  posted about the bad numbers of earnings but today it seems to be manifesting in the futures for sure-


Stock index futures fell on Tuesday on concerns the slow global economy will continue to dent corporate revenues, with a trio of Dow components appearing to confirm investor worries.
United Technologies Corp (UTX) reported a 3.3 percent decline in third-quarter earnings and cut its sales forecast for the year, citing weak demand from airlines and an uncertain economy.
Fellow Dow component DuPont (DD) reported a lower-than-expected quarterly profit on Tuesday and announced 1,500 job cuts as part of a cost savings program designed to offset falling sales around the world. Its shares dropped 5.4 percent to $47.10 in premarket trade.
3M Co (MMM) fell 2.7 percent to $90 in premarket trade after the diversified U.S. manufacturer reported a 6.7 percent rise in third-quarter profit, but the company cut its profit forecast for the full year as acquisition costs and a strengthening dollar hurt margins.
"It was ever so modest and ever so subtle but there was a shift to the markets really starting to trade on U.S. economic and U.S. company fundamentals and the market didn't seem to care much about what central banks were doing or what was going on in Europe," said Keith Bliss, senior vice-president at Cuttone & Co in New York.
"Then all of a sudden - wham - we get weaker earnings this quarter and it refocuses everybody's attention on the global economy."
Adding to the global economic concerns was a fall in Spanish bond prices after Moody's downgraded five of the country's regions including economically important but deeply indebted Catalonia.
S&P 500 futures fell 16.1 points and were well below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dropped 112 points, and Nasdaq 100 futures declined 25 points.
According to Thomson Reuters data, 33 S&P 500 companies are scheduled to post earnings on Tuesday. Of the 123 S&P 500 (^GSPC) companies that have reported earnings through Monday morning, 60.2 percent have topped analysts' expectations, shy of the 62 percent average since 1994 and below the 67 percent average over the past four quarters.
Earnings are expected to fall 2.4 percent in the third quarter from a year ago. Even more disconcerting to investors, top-line expectations have been more discouraging, with 61 percent of companies having missed revenue expectations.
Apple Inc (AAPL) shed 0.6 percent to $630.01 in premarket trade. The company is expected to make its biggest product move on Tuesday since the iPad's debut two years ago, launching a smaller, cheaper tablet into a market staked out by Amazon.com Inc (AMZN) and Google Inc (GOOG).
Whirlpool Corp (WHR) advanced 2 percent to $88 after reporting a higher-than-expected quarterly profit, helped by price increases and tight cost controls, and the world's largest appliance maker raised its earnings outlook for the year.
RadioShack Corp (RSH) tumbled 15.5 percent to $2.02 in premarket after the consumer electronics chain reported a much wider-than-expected quarterly loss, hurt by weak margins in its smartphone business.
The U.S. Federal Reserve's policy committee is also set to begin the first day of a two-day meeting on interest rate policy on Tuesday. The Federal Open Market Committee is likely to hold off from taking fresh steps at the meeting, opting to review the impact of the significant action it took last month and keep a low profile in its last gathering before the November 6 general election.

Earnings

Facts:
Barely 40% of large companies have been able to top analysts' consensus for the third quarter. This is the worst top line showing since the first quarter of 2009

GOOG Halt

wow Halted down 9%.
Should bounce when it opens-

GOOG earnings leaked early

GOOG earnings just leaked out early before they were suppose to. Earnings were to be announced after market close. Earnings came in below expectations

Decline of stock trading

Wall Street’s smaller stock traders are throwing in the towel as their fees fail to recover from a three-year slump in equity volume and a shift to computer-driven transactions.
ThinkEquity LLC, the San Francisco-based investment bank, said yesterday its stock-trading business will close. Oscar Gruss & Son Inc. halted merger-arbitrage operations on Oct. 12. Rodman & Renshaw LLC, which acquired brokerage Hudson Holding Corp. last year, told regulators in a September filing that it didn’t have enough capital and would stop trading.

Commissions are drying up for brokers who complete trades by phone or sell research as money managers buy and sell fewer securities and execute more transactions electronically. Average daily volume for U.S. equities has dropped 36 percent since 2009. The average fee to trade a share of stock fell 31 percent in the period, according to Investment Technology Group Inc.
“It’s an impossibly tough business,” Greg Wright, chief executive officer of ThinkEquity, said yesterday in a telephone interview. “There aren’t enough commission dollars today for the number of market participants so there will be further consolidation.”
Nomura Holdings Inc. (8604), Auriga Holdings LLC, Pritchard Capital Partners LLC, WJB Capital Group Inc., Ticonderoga Securities LLC and Kaufman Bros. LP have also fired equity traders or shut their doors this year.
With most stock trading handled by computers, the sales staff who work the phones for small securities firms generally make money by sending investment ideas to money managers. They trust the investors to reciprocate by paying for trading services or sending cash later.

Sales Ethics

“It doesn’t really take much talent to buy 100,000 shares of Wal-Mart,” said Sean Gambino, who trades consumer stocks for Schottenfeld Group LLC. “There’s a code of ethics that says, ‘I’m using their information, they’re giving it to me, I’ll trade through them.’”
Regulations that went into effect in 2007 increased competition among exchanges and drove brokers to boost their use of algorithms to execute client orders. Brokers who trade manually charge about twice as much as those who use algorithms, or software systems that break blocks into smaller pieces, according to Tabb Group LLC. Money managers pay about 7.3 cents to trade $100 of stock, down from 10.6 cents three years ago, ITG data show.
“Commissions are set by the customer and unfortunately they’re setting them lower each quarter,” said Tommy Pritchard, who left his eponymous investment bank in April to join Imperial Capital Group Inc.

Trading Less

Pritchard, a firm that once employed as many as 60 people, profited more from investment-banking fees than trading, he said. It closed in June as the pace of stock offerings by energy companies slowed, Pritchard said.
Investors are trading less even as stocks rise. Average daily volume for U.S. equities fell to 6 billion shares in the third quarter from 8.7 billion a year earlier and 9.3 billion in the same period of 2009. The Standard & Poor’s 500 Index has gained about 16 percent this year.
Equities firms split $10.9 billion in fees last year from asset managers, the least since 2006, according to data compiled by Greenwich Associates. Asset managers consolidated more of their trading with larger brokers to ensure they kept getting research, advice and access to deals, the firm said in May.

Difficult Environment

“A lot of people were hoping that we’d get a better recovery than we got and went out and invested,” said Packy Jones, chairman of JonesTrading Institutional Services LLC, a Westlake Village, California-based broker. “Now with the volumes drying up, it’s been difficult for a lot of these brokerage firms to make money.”
The decline in commissions has hit even larger firms. Goldman Sachs Group Inc., the fifth-biggest U.S. bank by assets, collected $5.91 billion of revenue from equities trading in the first nine months of this year, down 10 percent from a year earlier as commission and fee revenue tumbled 18 percent. The firm handles “the vast majority” of client trades electronically today, a change from 10 years ago when most were handled by phone, Chief Financial Officer David A. Viniar said in February.
Interactive Brokers Group Inc., which sells computerized trading services to individuals and hedge funds, has benefited from the trend. It had pretax profit of $741.1 million last year, the most since 2008, according to data compiled by Bloomberg. Steve Sanders, senior vice president of business development for the firm, said he’s gaining business as institutional clients pay more attention to costs.
“A good deal of this industry’s business has been through personal relationships,” Sanders said. “That’s changing. I don’t think people can justify the higher costs anymore.”
Tom Laresca, who traded non-U.S. stocks for New York-based Rodman & Renshaw, said sales staff there relied on relationships with money managers that went back years or decades.
“It was much easier five years ago,” Laresca said. “It seems like everybody’s fighting for the same dime these days.”

Again Citibank !!!!!!!!!!

Just like yesterday when I saw the citibank number and questioned it, this morning CEO Pandit just stepped down immediately. There is fire somewhere here, who knows what but why would you quit right after so called excellent numbers after having a rough road since 2008.

Something is up !!!

Watching carefully

Took a week off to do some important stuff but my time will be limited in the next few weeks blogging. Watching all morning but the markets are so far chopping and with this being options expiration week we might have to chop out the week.

Citibank beat earnings ! I wonder how did that happen? Oh well we will see in a few upcoming quarters if it is real

What Business is Wall Street in? by Mark Cuban

Wall Street doesn’t know what business it is in. Regulators don’t know what the business of Wall Street is. Investor/shareholders don’t know what business Wall Street is in.

The only people who know what business Wall Street is in are the high frequency and automated traders. They know what business Wall Street is in better than everyone else.  To traders, whether day traders or high frequency or somewhere in between, Wall Street has nothing to do with creating capital for businesses, its original goal. Wall Street is a platform. It’s a platform to be exploited by every technological and intellectual means possible.
The best analogy for traders  ? They are hackers. Just as hackers search for and exploit operating system and application shortcomings, high frequency  traders do the same thing.  A hacker wants to jump in front of your shopping cart and grab your credit card and then sell it.  A high frequency trader wants to jump in front of your trade and then sell that stock to you. A hacker will tell you that they are serving a purpose by identifying the weak links in your system. A trader will tell you they deserve the pennies they are making on the trade  or the rebate they are getting from the exchange because they provide liquidity to the market.
I recognize that one is illegal, the other is not. That isn’t the important issue.
The important issue is recognizing that Wall Street is no longer serving the purpose  what it was designed to .  Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings.  What percentage of the market is driven by investors these days ?
I started actively trading stocks in 1992. I traded a lot. Over the years I’ve written quite a bit about the market. I have always thought I had a good handle on the market. Until recently.
Over just the past 5 years, the market has changed. It is getting increasingly difficult to just invest in companies you believe in. Discussion in the market place is not about the performance of specific companies and their returns. Discussion is about macro issues that impact all stocks. And those macro issues impact automated trading decisions, which impact any and every stock that is part of any and every index or ETF.  Combine that with the leverage of derivatives tracking companies,  indexes and other packages or the leveraged ETFs, and individual stocks become pawns in a much bigger game than I feel increasingly less  comfortable playing. It is a game fraught with ever increasing risk.
So back to the original question. What business is Wall Street in ?
Its primary business is no longer creating capital for business. Creating capital for business has to be less than 1pct of the volume on Wall Street in any given period. (I would be curious if anyone out there knows what percentage of transactions actually return money to a company for any reason). It wouldn’t shock me that even in this environment that more money flows from companies to the market in the form of buybacks (which i think are always a mistake), than flows into companies in the form of equity.
My 2 cents is that it is important for this country to push Wall Street back to the business of creating capital for business.  Whether its through a use of taxes on trades(hit every trade on a stock held less than 1 hour with a 10c tax and all these problems go away), or changing the capital gains tax structure so that there is no capital gains tax on any shares of stock (private or public company) held for 1 year or more, and no tax on dividends paid to shareholders who have held stock in the company for more than 5 years.  However we need to do it, we need to get the smart money on Wall Street back to thinking about ways to use their capital to help start and grow companies. That is what will create jobs. That is where we will find the next big thing that will accelerate the world economy.  It won’t come from traders trying to hack the financial system for a few pennies per trade.
And solutions won’t come from bureaucrats trying to prevent the traders from hacking the system. The only certainty when bureaucrats step in is that the law of unintended consequences will smack us all in the head and the trader/hackers will find new ways to exploit the system that makes them big money and even more money for the big institutions that develop products for the other institutions that are desperate to play the game.

Regulators have got to start to recognize that traders are not investors and vice versa and treat them differently. Different regulations. Different tax structure.  Different oversight. Individual investors and the funds that just invest in stocks and bonds are not going to crash the market.  Big traders who are always leveraging up and maximizing the number of trades/hacks they make will always put the system at risk.  We need to recognize that they do not serve much of a purpose other than to add substantial risk to the global economy.  That their stated value add of liquidity does not compensate the US and World Economy nearly enough for the risk of collapse they introduce into the system.
Wall Street as a whole needs to be in the business of creating capital for companies and selling shares to investors who believe they are shareholders.  The Government needs to create simple and obvious incentives for this business and extract compensation from the traders/hackers for the systemic failure risk they introduce.
There will be another flash crash, and probably a crash far worse than the May 2010 flash crash simply because there are too many players looking for the trillion dollar score. They can’t all win, yet how many do you think wouldn’t risk everything, even what is not theirs, for that remote chance to score big ? Put another way, there is zero recognition of the  moral hazard attached to every trade. So why wouldn’t traders take the biggest risk possible ? 
There is value to trading automation. It is here to stay. There is absolutely NO VALUE to High Frequency Trading. None. We need to bring our markets back to their original goals of creating capital for business.  It’s impossible to guess how many small to medium size companies have been held back from growing and creating jobs and wealth because of lack of access to capital from the stock market. It’s not impossible to know that our economy has suffered because Wall Street equity markets are no longer a source of equity for helping companies grow, it is not a platform for hackers and that needs to change. Quickly.

Adam Parker

Adam Parker, chief US equities strategist at Morgan Stanley sees the S&P 500 plunging to close the year at 1,214. Weak earnings, multiples contracting, and a downward shift in sentiment will pave the way for a rough fourth-quarter in his view.
Given the poor global macro economic environment the strange thing is that this should be regarded as controversial but then the never ending free flow of money from the QE program has left us in an unreal world that could easily turn into a nightmare…

Although he didn't mention it I am 100% sure he is now convinced Obama will be re elected and that's why he has this stands. I am sure if he thought Romney would win he would have said new highs on the S&P...


Funny how Wall Street acts like they are not political :)

CNBC

I dont watch it anymore but was just flicking through just now and watched like 5 minutes of FAST MONEY, guess what they were harping on ??
1425!!! they must have been reading the blog.

CNBC is always so late to the game it is not funny!

1425

Though today is a non event day because of the holidays the traders must hold the 1425 level to keep the positive bias intact

Dow drops 100 after Fed official's warning

NEW YORK (AP) — A quiet day on Wall Street turned into the worst sell-off in three months after a Federal Reserve official said he doubted the bank's effort to boost economic growth would work.

Charles Plosser, president of the Fed's Philadelphia branch, told an audience Tuesday that the Fed's effort to support the economy would likely fall short of its goals. And if the Fed looks ineffective, it could undermine future Fed action.

The speech probably startled some investors who had faith in the Fed's latest plan, said Jack Ablin, chief investment officer Harris Private Bank. The plan includes buying $40 billion in mortgage bonds each month until the economy improves.

"So many investors have bought into the illusion," he said. "And it was like Plosser pulled up the curtain on the Wizard of Oz."

The Standard & Poor's 500 index lost 15.30 points, its fourth straight decline, to close at 1,441.59. The 1.05 percent drop was the worst for the S&P since June 25.

The Dow Jones industrial average lost 101.37 points to close at 13,457.55. Caterpillar tugged the Dow down, losing 4 percent. The world's largest maker of bulldozers and other heavy equipment said late Monday that slower economic growth around the world dampened its earnings forecast. Its stock sank $3.86 to $87.01.

Stocks enjoyed one of their biggest rallies of the year Sept. 6 after Mario Draghi, the president of the European Central Bank, laid out a plan to buy unlimited amounts of government bonds to lower borrowing costs for Europe's debt-burdened countries.

A week later, Fed Chairman Ben Bernanke announced the central bank's open-ended mortgage bond-buying program and pledged to hold interest rates at super-low levels into 2015.

The S&P set a four-year closing high of 1,465 the next day, Sept. 14, but has drifted lower since and fallen back almost to where it was before Bernanke's announcement.

On Tuesday, a batch of encouraging economic reports gave the stock market a nudge in morning trading. House prices rose in major cities for a third straight month, and a gauge of consumer confidence came in surprisingly high.

More surprising than those two economic reports was the Richmond Federal Reserve's strong reading on regional manufacturing, a recent trouble spot, said Phil Orlando, chief equity strategist at Federated Investors.

"Look at that. There were three data points on the economy and we crushed them," said Phil Orlando, chief equity strategist at Federated Investors.

But sagging profits could drag on the stock market in the coming weeks, Orlando said. Caterpillar joined a growing collection of companies have lowered their earnings forecasts. FedEx, a bellwether of world trade, said that shipping has sunk to recession-like levels. Railroad giant Norfolk Southern has also warned that falling shipments and sinking coal prices will likely drag down its earnings.

Wall Street analysts now estimate that corporate profits will sink this quarter from a year earlier. That would be the first such drop in three years.
The Nasdaq composite index dropped 43.05 points to 3,117.73. Google's stock touched an all-time high in early trading, clearing $764, but closed the trading day at $749.16.
Apple, the largest public company in the world, lost $17.25, or 2.5 percent, to close at $673.54. It has lost more than $26 in two days. Apple is the biggest component in the S&P but is not included in the Dow, helping explain why the S&P suffered a greater percentage decline than the Dow's 0.8 percent.
The closely watched Standard & Poor's/Case Shiller index of national house prices increased 1.2 percent in July compared with the same month in 2011. Prices rose from the previous month in all 20 major cities tracked by the report for the third month in a row.
The Conference Board said its gauge of consumer confidence shot to a seven-month high in September, trumping forecasts by a large margin. People surveyed said they were more optimistic about the job market.

The Federal Reserve's manufacturing index, which surveys companies in the central Atlantic region, increased after shrinking for three months as businesses turned more optimistic. Companies said they anticipate more orders and shipments even as employment dips. The index turned positive in September after a negative reading in August.

Treasury prices rose as traders shifted money into safe assets. The 10-year Treasury yield, the benchmark for mortgages and other loans, dipped to 1.67 percent, down from 1.71 percent late Monday.

Not expecting much here

With the Jewish holidays tomorrow I am not expecting much today or tomorrow. Not much giving in the market only if you are a market scalper.
It seems like as we head towards the elections we are dwindling down on the market and I expect we will more with meaningful volume after the election is over.

Uber Bear Sees S&P at 800, Just Not Yet

Bob Janjuah, the bearish contributing strategist at Nomura in London, has long predicted the S&P 500 index will head towards 800, a level not seen since the aftermath of the collapse of Lehman Brothers. With the S&P 500 closing on Monday at 1,456, Janjuah has been forced to review his timing.
"My stop loss on my risk-off 'short S&P 500' trade, initiated on 21 August at an S&P 500 level of 1425, has been triggered," said Janjuah in a research note in which he outlined why he is still a long-term bear.
"It was extremely informative to see that post the QE-infinity announcement, which drove the S&P above 1,450 on the day of the Fed action on 13 September, and after an opening high of 1,475 on 14 September, the S&P sold off and got down to a 1,450 low last week! And then - confirming that 1,450 was an important level, and is now a critical pivot point for the S&P - mutedly bullish price action on last Friday activated the stop loss," he wrote.
Given underlying concerns over growth, debt and policymakers' phlegmatic reaction to the debt crisis, Janjuah believes any upside from here will be limited to a 10 percent gain. He stands by his 800 call.
"Until and unless the S&P 500 index (^GSPC) demonstrates a weekly close below 1,450, I believe it is premature to go aggressively short risk - tactically at least - at this precise moment," said Janjuah, who believes that could happen with months, or even weeks.
"The important message now is to accept that, in my view, risk assets are in a bubble, which of course can extend, but which can reverse sharply and suddenly. Up here, 'valuation metrics' are not going to help much." Janjuah believes 10 percent to 15 percent losses for equities could come in a "heartbeat."

U.S. money managers fear fiscal cliff over weak global growth

FROM USA TODAY:  NEW YORK -- Japan's main stock market hit a four-month high Wednesday after the country's central bank eased monetary policy to shore up fragile economic growth, but the positive momentum ground to a halt in Europe.

The Bank of Japan said it was increasing its asset purchasing fund to 55 trillion yen ($700 billion) from 45 trillion yen to counter the strength of the Japanese currency. A strong yen makes it more difficult for Japanese companies to compete in international markets.

The Bank of Japan's move comes just days after the Federal Reserve revealed it will purchase an average of $40 billion a month in mortgage-backed securities until the U.S. economy shows significant improvement. The Fed's goal is to lower long-term interest rates and encourage more borrowing and spending. The Fed also said it plans to keep its benchmark short-term interest rate near zero until mid-2015.

Stock markets, which tend to respond favorably to actions targeting economic growth, rallied sharply last week following the Fed's announcement. However, Wednesday, outside of Asia, where Japan's Nikkei 225 stock index rose 1.2% to 9,232.21, its highest close in more than four months, the response to the BoJ move has been far more modest.

"Perhaps we are seeing investors suffering from a bout of central bank fatigue, or perhaps it is a dawning realization that, even with policymakers dispensing cash left, right and center, there is still a slowing global economy to deal with," said Chris Beauchamp, market analyst at IG Index.

And it's not the biggest worry, according to the September Bank of America Merrill Lynch's Fund Manager Survey. For the first time in 18 months, not even Europe's debt crisis is the No. 1 "tail risk" that worry global money managers. (A tail risk is a rare event that could cause stocks to suffer a disproportionate drop.)

The new megarisk is the looming fiscal cliff in the U.S., according to the survey. The realignment in the pecking order of Wall Street anxieties serves as a warning to Main Street investors wondering what could trip up their investment portfolios at a time when stocks are as high as they've been in almost five years.

The fiscal cliff is a potential growth-crimping one-two punch of rising taxes and government spending cuts set to kick in Jan. 1 unless Congress acts to avoid it. The Congressional Budget Office says the U.S. economy will suffer a recession in 2013 if lawmakers fail to act.

In the September poll, 33% of money managers, who invest $681 billion for clients, said the eurozone's debt crisis is their top fear, down from 48% in August. Eclipsing Europe and ascending to the No. 1 global fear was the fiscal cliff, which got a 35% vote.

Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research, says, "The upcoming election is putting these fears into sharper focus."

In the short term, investors likely will focus on government and private data that shows whether the economy is gaining strength. On Wednesday, the main piece of economic data out of the U.S. are reports on new starts for residential housing and existing home sales figures.

Ray Dalio- Cautious words

FED launches QE3!!!!!!!!!!!!!!

Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment appears to have slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective. To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative. The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases. To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and preferred to omit the description of the time period over which exceptionally low levels for the federal funds rate are likely to be warranted.

FED-

FED looks like they pumping up stuff- QE3!!!! WoW- We are doomed without the FED

ATHN

This looks like it wants to tag $100. With the FED decision @ 12:30 I doubt we move much till then.

IPHONE!!!!!!

Been so busy over the last week I missed the hype on the release announcement of the new Iphone which is happening today. Everyone knows I am a APPLE Guy but that is one device I have never known from them. A matter of fact I am a HUGE android fan and I just got the new Galaxy S3 and think it is way better than my previous HTC Thunderbolt. I am interested to see what the new IPhone has but whatever it has or don't I can predict it will oversell its previous editions just on the basis that it will now be 4G LTE compatible with VERIZON.

1426 in PLAY

Market makers trying to get to that 1426 mentioned here Tuesday- Lets see if they can pin it before tomorrows important numbers-

1426 in Play

Market makers trying to get to that 1426 mentioned here Tuesday- Lets see if they can pin it before tomorrows important numbers-

1426 in Play

Market makers trying to get to that 1426 mentioned here Tuesday- Lets see if they can pin it before tomorrows important numbers-

20 mins to go

20 mins to go and we trading @ 1403.75 - WOW How exciting -

Lunch time!

So it is lunch time and where are we trading? 1404!!! This is just too crazy right now- Market players must be really waiting till both conventions are over-

REALLY!! 1404 Again

Fifteen minutes before open and we trading at where? You guess it 1404. This number is so magical since I mentioned it over a month ago. A battle between the bulls and bears are happening here. I hope REAL volume comes in after all these political conventions are over

1404 AGAIN

Minutes before the open we are still trading at the 1404 area , an area that has been in force for the last 2-3 weeks. Since the holidays have past I am looking for the volume to increase and push us in a solid direction. Support is @ 1361 so the bulls must hold this area or more than likely we will test that number very soon. On the upside we have 1426 that is resistance.

NO VOLUME-

Yesterday we tracked the lowest volume of the year in the markets- we aren't going anywhere at all- we still trading around the 1404 area mentioned last week YAWN!!!

1404

we trading around this level all day- I believe it hold and we go higher but as of now it is slooooooow going.

Update

So yesterday I mentioned the 1417 level for the bulls and we failed to reach that level in the regular trading hours but as usual in these days of computer generated trading we did hit that 1417 in the overnight session! This is what has been happening for the last few years and that's why it is difficult for the average trader to make money because the big guys use quants and execute trades in the overnight sessions. Anyways since we tested that level overnight and rejected it we now have to look at a test of yesterday's lows and see if they hold. If we don't hold them and bounce that would signal a deeper correction to come. level to watch on the low side is 1404

Update

So Gold has been getting a bid since the Soros news came out. Also BINGO on APPLE with new highs. Right now he market is still in lala land and you must be extremely patient with positions. Yesterday I read that only 11% of hedge funds are outperforming the indices and that tells me going into the end of the year there might be a rush in with heavy volume for those manager to show something for them to get their usual exorbitant bonuses, it is all a game! The reason why we are in lala land is because most funds are just sitting on their hands as their is not mush volatility anywhere that warrant them to take risk. Elections should prove some movement either way! As long as the republicans think the have a chance to win I think the market will thread higher but it Obama is re elected get reading for lots of the slow drift upwards to be sold. Lets see if the bulls can get to that 1417 level today on the S&P. We trading at 1407 before the open so we would definitely need some action to drift us up in this low volume environment.

Paulson and Soros buying Gold

Hedge-fund managers John Paulson and George Soros boosted their gold holdings during the second quarter, a sign that some high-profile investors were still banking on higher prices for the precious metal despite its lackluster performance this year. John Paulson's Paulson & Co. Inc. raised its stake in SPDR Gold Shares GLD +0.60% , the world's largest exchange-traded gold fund, by 26% during the three months ended June 30. Paulson & Co. held 21.8 million shares, valued at $3.3 billion at the end of June, according to a quarterly securities filing released late Tuesday. The fund also increased its holdings of gold-mining companies, holding a combined 98 million shares, up 3.5% from the previous quarter and valued at $1.9 billion. Paulson's gold ETF and mining-company holdings together accounted for 44% of its U.S.-traded equity assets, from 33% the previous quarter. Soros Fund Management LLC more than doubled its stake in SPDR Gold Shares during the three months ended June 30, according to a filing, to the highest level since the end of 2010. The hedge fund held 884,400 shares, valued at $137.3 million at the end of June, from 319,550, or $51.8 million, the previous quarter. Soros Fund nearly cashed out of gold during the first quarter of 2011, reducing its shares of SPDR Gold Shares by 98%, to a stake valued at less than $7 million. The fund continued to pare its position, to a low of 42,800 shares during the second quarter of 2011, before rebuilding its stake in the quarters that followed. Benchmark gold futures fell 4% during the period covered by the funds' securities filings, as the European Central Bank and the U.S. Federal Reserve refrained from implementing new monetary-easing measures despite slowing global economic growth. Easing policies can raise concerns about inflation down the line, drawing investors looking for a currency hedge into precious metals. Through Tuesday's close, benchmark gold futures were up 1.4% in 2012, and down 15% from September's record high.

No summer action still

CNBC just reported that yesterday was the second narrowest day of the year. Boredom!!

AAPL

AAPL looks like it is on a mission running into the release of the Iphone5 which should happen in October. I would not be surprised if this CULT stock gets to new all time highs by then.

Analysts: Stock Rally might be setup for Bigger Collapse

Despite the current stock market rally, the market remains volatile and investors should remain cautious as the rally might be setting the market up for a bigger collapse, analysts warn, according to CNBC. "I think we're in choppy waters and that continues. You’ve got to remember to sell if you own the stock market now," Charlie Morris, head of absolute return at HSBC Global Asset Management, tells CNBC. The Standard & Poor’s 500 Index went above 1400 this week, while European stocks reached a four-month high, and Asian stocks achieved a three-month high. When the current rally fades, which might be this week, the market will be ready to collapse, experts warn. Editor's Note: The Final Turning Predicted for America. See Proof. "Watch out for the end of this week," says Sandy Jadeja, chief technical analyst of City Index, according to CNBC. "If we start seeing a negative close by the end of the week, that would suggest that next week, and the week after, we'll start pushing to the lower side." Despite being bullish, Jadeja is worried about the divergence between current prices and technical indicators. Dan Geller of the Money Market Index says the recent rally is irrational. "The rally on Friday after the release of the employment figures and the consumer confidence index really has no economic merit," he tells CNBC. In a note to clients, according to CNBC, Barclays equity strategist Barry Knapp writes that the underlying economic factors — including slowing growth and political uncertainty — remain the same as they were in the second quarter when stocks dropped. "We remain unconvinced that investors should chase the low volume 'wall of worry' August rally." The stock market's choppy behavior since late June, with at least as much falling as rising, indicates the market is churning rather than building a sustainable rally, according to Barron's. Plus, small-cap stocks are well below their June peak levels, although large-cap stocks are reaching higher highs. Another troubling sign, Barron's reports, is that money is not flowing into stocks in significant volumes. Stocks seem to rise only when stimulus from central banks seems possible. Read more on Newsmax.com: Analysts: Stock Rally Might Be Setup for Bigger Market Collapse Important: Do You Support Pres. Obama's Re-Election? Vote Here Now!

Obvious Summer Dulldrums

Monday we had a 11 point range on the S&P yesterday we had only 6 points forming on the daily chart one of the smallest candle in months and today we are only in a 5 point range! Holidays for most big traders before their kids head back to school, expect much of the same lethargic mode till second week of September when most are back .

Calls!

Selling my SPY calls from tuesday + 38%

Knight

Wow looks like it might be NIGHTS out for KNIGHT Capital

Bumpy Ride

Bumpy ride before the open with news over the Eurozone turning around the futures some 250 points lower from its high on the DOW. S&P futures truned around 26 points to the downside. As I have been saying for awhile these markets are just trading on the new from the Eurozone and till they clean it up it will continue.

Bill Bross on Equities

The bond king says stocks are dead. Bill Gross, Pimco’s co-founder and co-chief investment officer, says stock investors should think again about the age-old “buy-and-hold” investing mantra. He says consistent, annual returns are a thing of the past. “The cult of equity is dying,” Bill Gross wrote in his August Investment Outlook. “Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ or any run have mellowed as well.” Gross points out stocks have averaged a 6.6% annual gain on an inflation-adjusted basis since 1912. But he labels that rate of return as an “historical freak” that isn’t likely to be duplicated anytime soon, due to slowing economic growth around the globe. From Gross: “The 6.6% real return belied a commonsensical flaw much like that of a chain letter or yes — a Ponzi scheme. If wealth or real GDP was only being created at an annual rate of 3.5% over the same period of time, then somehow stockholders must be skimming 3% off the top each and every year. If an economy’s GDP could only provide 3.5% more goods and services per year, then how could one segment (stockholders) so consistently profit at the expense of the others (lenders, laborers and government)?” Gross wonders how stocks can keep appreciating at a 6.6% annual rate in this “new normal” economy, in which GDP growth remains stubbornly low. U.S. second-quarter GDP, reported on Friday, grew at a meager 1.5% rate. That growth rate is well below historical standards, and is partly why the unemployment rate remains stuck above 8%. “The legitimate question that market analysts, government forecasters and pension consultants should answer is how that 6.6% real return can possibly be duplicated in the future given today’s initial conditions which historically have never been more favorable for corporate profits,” Gross says. He says it cannot, “absent a productivity miracle that resembles Apple’s wizardry.” n addition to being pessimistic on stocks, Gross is also down on bonds. “What you see is what you get more often than not in the bond market, so momentum-following investors are bound to be disappointed if they look to the bond market’s past 30-year history for future salvation, instead of mere survival at the current level of interest rates,” Gross says. With lower expected returns for stocks and bonds, the average American is the big loser in this new investing environment. “The commonsensical conclusion is clear: If financial assets no longer work for you at a rate far and above the rate of true wealth creation, then you must work longer for your money, suffer a haircut on your existing holdings and entitlements, or both,” Gross says. Investors looking for a “magic potion” that will solve the world’s problems shouldn’t hold their breath. Policy makers in the past have tried to “inflate their way out of the corner,” he says. There is rampant speculation that the Fed will embark on another significant bond-buying program to juice the economy. Rumors of QE3 have flooded the market for quite some time, and some investors are hoping the Fed will announce something at the end of its two-day policy meeting, which concludes on Wednesday. ECB President Mario Draghi boosted expectations last week when he said the central bank would do “whatever it takes” to preserve the euro. His bold comments raised the bar for Thursday’s meeting. But Gross isn’t optimistic any of these central-bank policies will have positive long-term impacts. “Unfair though it may be, an investor should continue to expect an attempted inflationary solution in almost all developed economies over the next few years and even decades,” Gross says. “Financial repression, QEs of all sorts and sizes, and even negative nominal interest rates now experienced in Switzerland and five other Euroland countries may dominate the timescape.

REGN

stock looks like it wants to go higher- I am not playing it personally just one I got on radar.

Machines are not perfect

Firmly machines are made by man! Why the uproar and confusion when trading machines go haywire. This morning blimp is nothing new and it is expected as long as we use machines more and more in the financial system. As usual who gets hurt is the small guys.

Calls

Buying some SPY Calls for a trade- we look like we forming a bull flag- Not much going on so buying options

FACEBOOK

Man oh Man- Zuckerberg went Public when he knew facebook was on the decline on growth- Sorry for those who bought thinking it was the next GOOGLE. I think Facebook will be single digits in a year!!

Nothing

Well it has been a YO-YO summer. Futures are back to where they were Sunday night so we have gone nowhere all this week. Can we say Trading range!!!

1331

Bulls got to hold this 1331 area

US Economy Going From Bad to Worse: Roubini

A robust and self-sustaining U.S. recovery is not on the cards, and we should now expect below trend growth for many years to come, according to Nouriel Roubini, the economist famed for his bearish views. Economist Nouriel Roubini, founder of Roubini Global Economics. Roubini, best-known for calling the 2008 economic crisis, outlined five reasons the bulls have been wrong and argued that an American economic cold will lead the rest of the world to catch pneumonia in a post on the Project Syndicate website. "Even this year, the consensus got it wrong, expecting a recovery to annual GDP growth of better than 3 percent," the founder of Roubini Global Economics wrote. "And now, after getting the first half of 2012 wrong, many are repeating the fairy tale that a combination of lower oil prices, rising auto sales, recovering house prices, and a resurgence of U.S. manufacturing will boost growth in the second half of the year and fuel above-potential growth by 2013." Roubini believes the U.S. economy will slow further this year and next as expectations of the "fiscal cliff" keep spending and growth lower - and uncertainty about the outcome of the presidential election dogs markets. The fiscal cliff could knock 4.5 percent off 2013 growth if all tax cuts and transfer payments were allowed to expire and spending cuts where triggered, according to Roubini. "Of course, the drag will be much smaller, as tax increases and spending cuts will be much milder. But, even if the fiscal cliff turns out to be a mild growth bump - a mere 0.5 percent of GDP - and annual growth at the end of the year is just 1.5 percent, as seems likely, the fiscal drag will suffice to slow the economy to stall speed: a growth rate of barely 1 percent," he wrote. The U.S. consumer, which drives plenty of the global economy as well as the U.S., will not be able to keep spending when $1.4 billion worth of tax cuts and extended transfer payments come to an end according to Roubini. "In 2013, as transfer payments are phased out, however gradually, and as some tax cuts are allowed to expire, disposable income growth and consumption growth will slow. The U.S. will then face not only the direct effects of a fiscal drag, but also its indirect effect on private spending," he wrote. The problems in the euro zone, a slowdown in China and emerging markets, added to the chance that oil prices could be driven higher by tensions over Iran's nuclear program, will also add to America's economic woes, Roubini argued. He warned the Fed will not be able to ride to the rescue this time. "The U.S. Federal Reserve will carry out more quantitative easing this year, but it will be ineffective: long-term interest rates are already very low, and lowering them further would not boost spending," he wrote. "Indeed, the credit channel is frozen and velocity has collapsed, with banks hoarding increases in base money in the form of excess reserves. Moreover, the dollar is unlikely to weaken as other countries also carry out quantitative easing." Roubini also argued that earnings growth is now beginning to run out of steam, after buoying markets earlier in the economic cycle. The second-quarter earnings season has so far presented a mixed picture. "A significant equity-price correction could, in fact, be the force that in 2013 tips the US economy into outright contraction. And if the U.S. starts to sneeze again, the rest of the world - its immunity already weakened by Europe's malaise and emerging countries' slowdown - will catch pneumonia," he warned.

Huge Gap down

This is the reason I have been sitting on my hands! The news out of the Euro zone is highly volatile and thus we are affected by everything out of the area. Does this provide a bit of a buying opportunity? Maybe but I would be very careful as we are in the summer period when most funds and traders are on holidays.

Schiff Speaks!!!

According to CEO and Chief Global Strategist of Euro Pacific Capital Peter Schiff, the U.S. economy is heading for an economic crash that will make 2008 look like a walk in the park. Stimulus programs can delay this day of reckoning, but only for so long and only at the expense of making the eventual meltdown much, much worse. Schiff, who famously warned investors about the housing and financial crisis in his 2007 book Crash Proof, says the Fed's palliative efforts during the housing meltdown have made the next crisis inevitable. "We've got a much bigger collapse coming, and not just of the markets but of the economy," Schiff says in the attached clip. "It's like what you're seeing in Europe right now, only worse." In this nightmare scenario detailed in The Real Crash: America's Coming Bankruptcy, the current economic pause is actually the beginning of a material slowdown or recession into year end. At that point, the Federal Reserve will unleash a third round of Quantitative Easing — weakening the dollar without jump-starting the economy. As a result of dollar weakness, import prices rise, pressing the margins of corporate America. Lower margins lead to heavy layoffs, sending millions of workers into unemployment during a time when they can least afford it. Banks fail, housing collapses, and taxes are raised in a futile effort to give the tapped-out government the capital to try yet more futile stimulus. "That's when it really is going to get interesting, because that's when we hit our real fiscal cliff, when we're going to have to slash — and I mean slash — government spending," says Schiff. Those cuts will not be at all unlike the draconian austerity measures in Greece, with programs like Social Security and Medicare being dramatically cut or possibly disappearing entirely. The easiest way to put it, is that everything you don't think could possibly happen in America will come to be. "Alternatively, we can bail everybody out, pretend we can print our way out of a crisis, and, instead, we have runaway inflation, or hyper-inflation, which is going to be far worse than the collapse we would have if we did the right thing and just let everything implode," he offers. So what should investors do to protect themselves? Schiff has three suggestions: 1. Get Out of Treasuries The U.S. dollar is going to get trashed in Schiff's scenario. Locking in a yield on a government 10-year bond of 1.5% is a paltry return in the first place. Should inflation tick up to even 5%, a level much lower than that seen in the early 1980s, bond owners would have 3.5% less buying power at the end of every year. If they go to sell the bond, they'll only find buyers at a much lower price than what they paid. 2. Own the Right Stocks With bonds and the dollar bearing the brunt of the pain, Schiff says stocks will outperform dramatically, provided you own the right ones. Exporters and multi-national corporations will benefit from a weak dollar. Better still would be to buy foreign stocks and avoid the U.S. entirely. 3. Buy Silver and Gold Schiff says the recent weakness in these precious metals is just a pause as we wait for the other shoe to drop. Most of those on Main Street haven't even taken positions yet in gold or silver. Once they start dropping bonds and looking for a place to hide, the price of these metals will soar.

Roubini: My 'Perfect Storm' Is Unfolding Now

"Dr. Doom" Nouriel Roubini, says the "perfect storm" scenario he forecast for the global economy earlier this year is unfolding right now as growth slows in the U.S., Europe as well as China. In May, Roubini predicted four elements - stalling growth in the U.S., debt troubles in Europe, a slowdown in emerging markets, particularly China, and military conflict in Iran - would come together in to create a storm for the global economy in 2013. "(The) 2013 perfect storm scenario I wrote on months ago is unfolding," Roubini said on Twitter on Monday. Chinese inflation data released on Monday, suggested that the economy is cooling faster than expected, while employment data out of the U.S. on Friday indicated that jobs growth was tepid for a fourth straight month in June. Roubini said that unlike in 2008 when central banks had "policy bullets" to stimulate the global economy, this time around policymakers are "running out of rabbits to pull out of the hat." Policy easing moves by the European Central Bank (ECB), Bank of England (BoE) and the People's Bank of China (PBoC) last week did little to inspire confidence in global stock markets. "Levitational force of policy easing can only temporarily lift asset prices as gravitational forces of weaker fundamentals dominate over time," he said. Bill Smead, CEO of Smead Capital Management, agrees that there is little central banks can do arrest the global slowdown. Last week, he told CNBC that there is "virtually zero chance" that pump-priming by central banks will succeed, suggesting that policymakers should instead let the economic bust work itself through the system.

NFLX

MArket down NFLX UP!!!! Squeeze

NFLX

Gonzo on this one- Bought @ 71.28 now at $81.52 in two days. Small play so I will let it ride for now

NFLX

Can we say NETFLIX!!!!!!!!!!!

Small long term play

Going in for a very long term play so it is very small in NFLX- Think this stock has gotten beaten down too much but not much technicals yet so playing small

You can't trust the Big boys

Reuters) - U.S. energy regulators have subpoenaed JPMorgan Chase & Co twice in the past three months as part of an investigation into whether the bank manipulated power markets in California and the Midwest, the Financial Times reported on Tuesday. The Federal Energy Regulatory Commission (FERC) on Monday filed a petition in U.S. federal court to require JPMorgan to produce emails as part of a formal probe into JPMorgan power market bidding practices in those areas, the paper said. JPMorgan buys and sells electricity for its own account and others. The filing marked the first time the agency has revealed a formal probe into JPMorgan bidding practices, the paper said. FERC said the bank may have inflated electricity costs by at least $73 million. The documents also pushed into public view the legal maneuvering between the government and JPMorgan attorneys as the commission seeks 25 emails that the bank argues are privileged, the paper said. Officials at JPMorgan were not immediately available for comment.

Gold

Finally getting some positive trade signal on GOLD again. We didn't get down to my 1508 level but anywhere below 1540 was an excellent buy.

GOLDMAN call

Goldman out saying stocks will move slightly lower for 2012

RAMP

Wow what a ramp up in the markets. commodities especially with a 5.7% gain on Oil. this is end of quarter stuff especially in front of the July 4 holidays which usually is a bullish few days.

JPM Losses from AP

Spoke about this that the $2Billion will be around 3-4 times in the end read below!! Shares of JPMorgan Chase & Co. tumbled Thursday as a published report said that the bank's losses on a bad trade may reach as much as $9 billion — far higher than the estimated $2 billion loss disclosed last month. In May, JPMorgan said the loss came from trading in credit derivatives designed to hedge against financial risk, not to make a profit for the New York bank. The New York Times, citing sources it did not identify by name, said that the losses have grown recently as JPMorgan has been unwinding its positions. The newspaper said its sources were current and former traders and executives at JPMorgan, which is the largest bank in the U.S. by assets. The New York Times story cites an internal report that JPMorgan made in April that showed the losses could reach $8 billion to $9 billion, in a worst-case scenario. But the newspaper added that because JPMorgan has already been unwinding its positions, some expect that the losses will not be more than $6 billion to $7 billion. A JPMorgan representative declined to comment. At the time of the loss, JPMorgan CEO Jamie Dimon apologized to shareholders. And just days after the loss was disclosed, Chief Investment Officer Ina Drew left the company. Drew oversaw the trading group responsible for the trade. JPMorgan has lost about $23 billion in market value since the losses came to light on May 10. The loss has heightened concerns that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis in the fall of 2008. In a hearing before the House Financial Services Committee last week, Dimon was dismissive when asked if JPMorgan's losses could total half a trillion or a trillion dollars. He replied bluntly: "Not unless the Earth is hit by the moon." While Dimon avoided putting an exact number on the bank's trading loss, he did say that JPMorgan will have a solidly profitable quarter. JPMorgan plans to give more details related to its losses when it reports second-quarter earnings on July 13..

Health care Law

Another "does it really matter" Law in my opinion. A lot of BLAH BLAH. Only good news here is for the hospitals I have no idea about about hospital stocks but these should get some bidding on them off this news.

AAPL weak

AAPL below its 50 MA- not a good sign for sure

Crazy

Crazy we are trading @ the 1306 all day (sept based. we got 10 points lower for some real support @ 1295 which is 200MA but this 1305/6 area holding for the moment. Nothing much going on with the fluid news out of Eurozone and some big name investors talking about US markets will get his if they dont sort out Greece in days!

Levl to watch

Support should be at 1306 but the all important 200MA is 1295

I saw this coming!!

Moody's downgrade Banks: LONDON/CHARLOTTE, North Carolina (Reuters) - Ratings agency Moody's downgraded many of the world's biggest banks on Thursday, lowering credit ratings of 15 companies by one to three notches. Morgan Stanley, one of the most closely watched firms, had its long-term debt rating lowered by just two notches, one level less than had been expected, and its stock rose in after-hours trading. The downgrade left Morgan Stanley more highly rated than Bank of America Corp and Citigroup but a step below Goldman Sachs Group . Credit Suisse , which last week was warned about weak capital levels by Switzerland's central bank, was the only bank in the group to suffer a three-notch downgrade. But its new A1 deposit and senior debt ratings, however, rank higher than many of its peers. Financial markets have been bracing for the credit rating actions since February, when Moody's Investors Service said it had launched a review of 17 banks with global capital markets operations. These companies face diminished profitability and growth prospects due to difficult operating conditions, increased regulation and other factors, Moody's said. The long-term debt ratings cuts could increase funding costs for Morgan Stanley and other banks, and trading partners may ask for more collateral. But the impact could be muted since the changes were in-line with indications given by Moody's in February on how much the rates were likely to be cut. "The biggest surprise is the three-notch downgrade of Credit Suisse, which no one was looking for," said Mark Grant, managing director at Southwest Securities Inc. "In fact, it was Morgan Stanley that was supposed to be downgraded by that amount and Morgan received only two notches of cuts." In a statement, Morgan Stanley said its ratings "still do not fully reflect the key strategic actions we have taken in recent years," adding: "With our de-risked balance sheet, stable sources of funding, diverse business mix and strong leadership team, we are well positioned to deliver for clients and shareholders." Citigroup also reacted sharply, saying it "strongly disagrees with Moody's analysis of the banking industry and firmly believes its downgrade of Citi is arbitrary and completely unwarranted." Royal Bank of Scotland said the ratings change was "backward-looking and does not give adequate credit for the substantial improvements the Group has made to its balance sheet, funding and risk profile" but called the action manageable. Bank stocks fell on Thursday as investors prepared for an announcement, which leaked to the market as Moody's informed banks that it was coming, according to sources. Morgan Stanley shares declined nearly 1.7 percent to $13.96, while Bank of America shares fell nearly 4 percent to $7.82. The KBW Banks Index <.BKX> was down 2.3 percent. But after suffering only a two-notch cut, instead of three as anticipated, Morgan Stanley shares rose about 3 percent in after-hours trade. In addition to Morgan Stanley, downgraded by two notches were Barclays , BNP Paribas , Royal Bank of Canada , Citigroup, Goldman Sachs Group, JPMorgan Chase , Credit Agricole , Deutsche Bank , and UBS . Falling one notch were Bank of America, HSBC Holdings , Royal Bank of Scotland and Societe Generale . Nomura <8604.T> and Macquarie were included in an original list of global banks, but have already been downgraded. Moody's acknowledged that the lowest-ranked banks have been making changes to improve their profits, but said it is taking a wait-and-see attitude. "These transformations are ongoing and their success has yet to be tested," Moody's said in its announcement. Banks Moody's put in this group were Bank of America, Citigroup, Morgan Stanley and Royal Bank of Scotland. (Reporting by Steve Slater, Matt Scuffham and Rick Rothacker; additional reporting by Ben Berkowitz, Jed Horowitz, Lauren Tara LaCapra and David Henry; Editing by Alwyn Scott, Elaine Hardcastle and Carol Bishopric)

FED day

So we moved high off the 50MA yesterday as was expected as today is FED day and 90% of the time we have a bullish bias into the FED day. So what do we do from here? Well today is NO trade day! after the announcement my best 'guess' would be a higher move after the announcement and then we wait for next week to get the true digestion of the FED move. Most of the big traders will take the rest of the week off and square up next week after everything is analyzed.

50MA

We are right at the 50MA, as said before if we are between the 200 and 50MA the market will remain choppy till be break out below or above both. I will be watching today to se if we can move above the 50 MA

CNN - Article on Net Worth

Americans' net worth collapsed in recent years, but don't blame the housing market for it all. New Census Bureau data shows that median household net worth, excluding home equity, fell by 25% between 2005 and 2010. That decline was driven largely by the plummeting stock market, which devastated Americans' portfolios and retirement accounts. Overall, median household net worth declined 35% to $66,740 in 2010. The median worth of stock and mutual fund portfolios fell 33%, while the median home equity value dropped 28%. "One of the significant factors is housing, of course, but it's not that alone" said Alfred Gottschalck, an economist with the Census Bureau. "It's how business conditions affect stock and retirement accounts." The estimates are generally in line with what other government reports have found. Last week, the Federal Reserve released its triennial study that showed median family net worth overall dropped nearly 40%, between 2007 and 2010. The Fed study surveys a smaller number of people. The Great Recession -- including the housing and stock market collapses -- wiped out nearly 30 years of net worth gains for the typical household. "The median household is no wealthier than they were in 1984," said Scott Winship, economic studies fellow at Brookings Institution. Digging deeper into the data shows that some groups of Americans were hit much harder than others. Asian, black and Hispanic households each lost a much greater share of median net worth, around 60%, than their white counterparts, at 30%. As for median home equity values, Hispanic households experienced a 55% drop, while Asians saw a 43% decline and blacks a 35% decrease. Whites, on the other hand, lost just under a quarter. Age was also a factor, with younger Americans losing a greater share of their wealth than their parents' generation. Households of people age 35 to 44 saw the largest percent decline in median net worth of any age group: 59%. If home equity isn't factored in, they lost 40%. Most affordable U.S. cities to buy a home Senior citizen households, who have a more diversified portfolio of assets, fared better. They lost only 13% of their net worth, and 18% if home values aren't included. The glimmer of good news in the report is that net worth was steadier between 2009 and 2010, according to Census figures. Overall, it decreased only 4% and, if home equity is excluded, it rose 8%. "You see some degree of stability, but no real recovery in wealth," said Rakesh Kochhar, co-author of the Pew Research Center report on wealth.

Nothing CLEAR!

We are sitting between the 200MA and the 50 MA. Right here we are in no mans land and that's why we will have a roller coaster range till we have a clear outlook. Right here is where traders take vacations and that's why I have not been posting as you basically will be guessing and where the market is heading. Only clear thing I can see are that short term cycles have turned over, but longer term cycles are definitely bottoming!! We have to get back over the 50MA for me to get long. If we dip down back towards the 200MA and it holds we look like we will form a nice inverted head and shoulder pattern to get long. intermediate term here I think we can head higher into the range.

1254???

Are we going back to that magic number 1254 that we battled on our way up. Look for this area to provide the first really solid support for a 'POTENTIAL' bounce

1280

1280 should be an area for the computers to trigger buying but who knows it is late friday. getting extremely oversold here.

1284

1284 here- that's the 200MA. Lets see if we bounce a bit or continue this slow selling I warned about yesterday

200MA in PLAY Cont'd

Made a note of the 200MA yesterday on the blog- Looks like the weak Job numbers is going to open us up right at that level- This is a sizeable gap down and "SHOULD" be playable after confirmation for a long. BINGO!!!

Gold Poised for Worst Monthly Run in 11 Years on Europe

Gold futures fell in New York, capping the longest monthly slump since 2000, as Europe’s worsening debt crisis and signs of a U.S. economic slowdown crimped demand for the precious metal. Higher borrowing costs in Spain are putting pressure on Mariano Rajoy’s five month-old government to join Greece, Portugal and Ireland in seeking a rescue that would be the European Union’s biggest. First-time claims for U.S. jobless benefits rose by 10,000 to 383,000 last week, the Labor Department reported today. The Standard & Poor’s GSCI index of 24 raw materials fell as much as 1.5 percent and was headed for its biggest monthly drop since the recession in October 2008. “Gold is behaving like a classic commodity and declining along with the pack,” Adam Klopfenstein, a market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “It’s like the dead man walking.” Gold futures for August delivery retreated 0.1 percent to settle at $1,564.20 an ounce at 2 p.m. on the Comex in New York. The precious metal retreated 6 percent this month, the biggest drop this year as the dollar rallied 5.4 percent. Holdings in the bullion-backed exchange-traded products are set for a third monthly decline, data compiled by Bloomberg show. “Investors don’t have the same strategic approach to gold as before,” Edel Tully, an analyst at UBS AG, said in a report today. “Much of the exposure to gold has been on an intra-day bias of late. The market is too highly correlated with risk for many participants’ liking.” Silver futures for July delivery fell 0.8 percent to $27.757 an ounce on the Comex, extending the month’s loss to 11 percent. The metal’s third monthly loss is the longest slump since 2008. On the New York Mercantile Exchange, platinum futures for July delivery jumped 1.2 percent to $1,417.60 an ounce, helping narrow the month’s loss to 9.8 percent. Palladium futures for September delivery rose 1.2 percent to $613.90 an ounce. Still, prices fell 10 percent in May, the biggest monthly drop since September.

200MA in play

200MA is around 1284 is in place- What will deal it is end of of month, beginning of month stalling. Remember the tendency is for the first 2-3 days of the month to be bullish but i think we hit it very soon!!

Slow Collapse

Slow collapse in Gold, Oil, 20 yr Bonds yields, 10 yr Bond yields, Russell and it goes on . What does it mean????????? STAY OUT OF MARKETS !!!!!!!!! Dont catch a falling knife the heavy big guys are going into cash.

OIL

New lows for the Year

Housing new Lows

By TESS STYNES U.S. home prices ended the first quarter at the lowest levels since the housing crisis began in mid-2006, according to Standard & Poor's Case-Shiller home-price indexes. During the first quarter, home prices reached new lows, falling 2% sequentially and 1.9% year-to-year. Prices are down roughly 35% from their peak in the second quarter of 2006. The Case-Shiller index of 10 major metropolitan areas was down 2.8% in March from a year earlier. The 20-city index was off 2.6%. Month to month, the declines were 0.1% for the 10-city index, while the 20-city prices were basically unchanged. As of March, average home prices were at levels reached in late 2002 for the 20-city measure and early 2003 levels for the 10-city composite. Demand for homes has been showing some signs of stabilization, as low-mortgage rates, some loosening of credit conditions and improved job growth have pulled some buyers back to the market. However, "while there has been improvement in some regions, housing prices have not turned" said David Blitzer, chairman of S&P's index committee. Despite some better numbers in the latest period, "since we are entering a seasonal buying period, it becomes very important to look at both monthly and annual rates of change in home prices in order to understand the broader trend." During March home prices in five metropolitan markets fell to new lows: Atlanta, Chicago, Las Vegas, New York and Portland. However, this marked an improvement from the nine cities that reported new lows a month earlier. Of the 20 major U.S. metropolitan markets, 12 reported prices were higher than during February, while seven saw prices fall and one market--Las Vegas--was flat. Phoenix reported the strongest annual growth rate, up 6.1%, while home prices in Atlanta saw the biggest year-to-year drop, down nearly 18%. What a Surprise!!!! Just Joking.

Opps

Opps no hold on the 1304/5 area so we gave way immediately. The 1298.50 is the next level I have but as of now we are trading about 1 point below. It will be important level for the close indeed. Crude briefly dipped below $90 !

1304/5

This is the area where we have to hold or we are heading lower

FACEBOOK

Facebook down 12 % hmm- I have never seen such a big offering where the big guys are not interested. In the meantime JPMorgan losses are now 3 times higher people just dont understand this whole game! In the end it will be more like 5 times the original reported figure.

Interesting close

Market close at 1304.8- I made note of the 1303/4 area if we did sell off this morning. The hard thing about today action was that the closed us right at the level so it makes it hard to play for a bounce, I don't think anyone would be poking longs there at the close. I am going to do some charts and see what kind of pattern we are forming here in this sell off. Currently looking oversold but I wont know where to watch till i set up some charts. BINGO on the 1304!!

Weakness

We are still weak and APPLE looks horrible to say the least. Watch 1303/4 area on the S&P IF WE DIP THAT FAR!!! Scaling out puts on S&P HERE +85%!

Weak Cont'd

Weakness was obviously order of the day though we opened in the positive all volume indicators pointed that we were weak and the weak hands showed themselves in the last 2 hours. Don't try and catch a falling knife the first point I would look for some support is 1303 on the S&P. In the meantime my weeklies S&P puts I got in this morning are up 55% for me!!!! Bingo

Weak

Markets looks exceptionally weak here - I would not be trying to catch a falling knife- Actually stepped into some S&P weekly puts small play at the open

GOLD:

Magic number on GOLD is 1504, a number I think we will hit very soon!!!!!

TWM Calls

Going to be taking off the 20% left of my calls off at the open + over 300% BINGO. Sell in may and go away definitely in place. We are getting oversold down here but if we can't bounce then obviously we are looking for a much deeper correction..

JPMorgan Chase acknowledges $2B trading loss

JPMorgan Chase, the largest bank in the United States, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money. The company's stock plunged almost 7 percent in after-hours trading after the loss was announced. Other bank stocks, including Citigroup and Bank of America, suffered heavy losses as well. "The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought," CEO Jamie Dimon told reporters. "There were many errors, sloppiness and bad judgment." The trading loss is an embarrassment for a bank that came through the 2008 financial crisis in much better health than its peers. It kept clear of risky investments that hurt many other banks. The loss came in a portfolio of the complex financial instruments known as derivatives, and in a division of JPMorgan designed to help control its exposure to risk in the financial markets and invest excess money in its corporate treasury. Bloomberg News reported in April that a single JPMorgan trader in London, known in the bond market as "the London whale," was making such large trades that he was moving prices in the $10 trillion market. Dimon said the losses were "somewhat related" to that story, but seemed to suggest that the problem was broader. Dimon also said the company had "acted too defensively," and should have looked into the division more closely. The Wall Street Journal reported last month that JPMorgan had invested heavily in an index of credit-default swaps, insurance-like products that protect against default by bond issuers. Hedge funds were betting that the index would lose value, forcing JPMorgan to sell investments at a loss. The losses came in part because financial markets have been far more volatile since the end of March. Partly because of the $2 billion trading loss, JPMorgan said it expects a loss of $800 million this quarter for a segment of its business known as corporate and private equity. It had planned on a profit for the segment of $200 million. The loss is expected to hurt JPMorgan's overall earnings for the second quarter, which ends June 30. Dimon apologized for the losses, which he said occurred since the first quarter, which ended March 31. "We will admit it, we will learn from it, we will fix it, and we will move on," he said. Dimon spoke in a hastily scheduled conference call with stock analysts. Reporters were allowed to listen. Among other bank stocks, Citigroup was down 3.3 percent in after-hours trading, Bank of America was down 2.9 percent, Morgan Stanley was down 2.4 percent, and Goldman Sachs was down 2.2 percent. JPMorgan is trying to unload the portfolio in question in a "responsible" manner, Dimon said, to minimize the cost to its shareholders. Analysts said more losses were possible depending on market conditions. Dimon said the type of trading that led to the $2 billion loss would not be banned by the so-called Volcker rule, which takes effect this summer and will ban certain types of trading by banks with their own money. The Federal Reserve said last month that it would begin enforcing that rule in July 2014. Some analysts were skeptical that the investments were designed to protect against JPMorgan's own losses. They said the bank appeared to have been betting for its own benefit, a practice known as "proprietary trading." Bank executives, including Dimon, have argued for weaker rules and broader exemptions. JPMorgan has been a strong critic of several provisions that would have made this loss less likely, said Michael Greenberger, former enforcement director of the Commodity Futures Trading Commission, which regulates many types of derivatives. "These instruments are not regularly and efficiently priced, and a company can wake up one day, as AIG did in 2008, and find out they're in a terrific hole. It can just blow up overnight," said Greenberger, a professor at the University of Maryland. The disclosure quickly led to intensified calls for a heavier-handed approach by regulators to monitoring banks' trading activity. "The enormous loss JP Morgan announced today is just the latest evidence that what banks call 'hedges' are often risky bets that so-called 'too big to fail' banks have no business making," said Sen. Carl Levin, D-Mich.

1349.75

1349.75 is the critical S&P number/ area to watch on the close. Breaking there on the close would lead to much lower levels.

TWM

Taking 80% off my TWM calls- up 220% sweet. Gold down huge looks like it is starting to crack as I have been speaking about.

BINGO!! UPDATE

April 10 post :: Some Projections: These are still in place- Only way they get negated is if we hit new highs- Please note carefully that the past two years the market has peaked in April. April 10 Post: If we dont make new highs to negate the projections set up I will be looking for the following numbers to be hit in the following markets: OIL: 95.25 GOLD: 1504. These are longer time frame projections and I am still sticking to my analysis that in a longer time frame we are still in a bear market that will end sometime in 2016 so we go a long way to go. We are still trading around the all important 1270 level, it still needs to be resolved!!! Update> Oil overnight hit 95!!!!!!!. S&P also down 9 points so we will see if we can get Gold cracking also. Stay tuned

Update

There it goes folks- the russell head and shoulder worked !!! I am racking up on that one. I played TWM long with some calls and they are now ringing more than a double- BINGO. Now what to look for next? that all important 1270 level again now comes into place. range kind of distorted so I will use a range of 1270-1272.

Technicals:1405!!

This morning we spoke about the 1405 number on the S&P as an important number for us to watch. at the close we are where?? BINGO 1405. We broke higher out of the 1405 earlier on but we could not muster up the all important volume and I had been watching if we would fall back at that number or even below it at the close but once again the gamers closed us @ 1405. Where does that put us? Well in stalmate and the closing of Europe today will be used as the disguise for the gamers but here is what to watch. 1) volume : if we break tomorrow above today's highs above monday's volume then we have an upward bias, please note it must be Monday's volume and not today, that's the trick here. 2) we watch for what looks like a bearish head and shoulder formation happening on the russell. These are my two important signals for the rest of the week. We will see soon enough!!!!

1405

well the 1405 was barely hit last week so what now? As most folks know my work is 100% technicals and when I get numbers and we don't hit I use them as failures especially if we try at these numbers a total of 3 times. Today is May Day in Europe and therefore I expect a very low volume day and it might take till thursday to resolve where we are going. In the mean time I see articles on sell in May and go away popping up but we will see if it true once again. Remember the market highs last 2 years have been made in the April time frame so it is not time now to be carelessly LONG.

1405

Again the number higher that comes into play is the same old 1405- watch for that number if we trend high into Friday.