10/12/2013 Weekend Update

[Cobra]

Fed Government so still no COT report, therefore we don't know if Smart Money has covered or not.

Institutional buying and selling action chart from stocktiming does not show more institutional accumulation than distribution yet. Guess it takes a few more days. I don't read any bull or bear info from the chart.

[Cobra]

II and AAII

II still mostly bullish but not very, so no big deal.

[Cobra]

Summary of the week's stock picks.
viewtopic.php?f=10&t=1081&p=144578#p144578

[user13]

What does everyone make of this?

[Royal Flush]

We are almost back to the top of the channel (large blue arrow) of spike and channel formation. The markets should pull back from this level early next week.

[uempel]

What does everyone make of this?

Moves in the very short term treasuries induced by debt ceiling fight/discussion in Washington. Apparently Fidelity is selling and Pimco is buying. The source of irrationality is not the market, it's the spitfires in the Capitol.

[uempel]

I found these two charts over at schaeffersresearch.

First chart: The strength of earnings signals a go ahead for the bulls (quite a bit of the good earnings are due to the abstinence of investment ).

Second chart: The near all-time high in margin debt hints that we should be cautious with long positions

Go figure..

(Both charts courtesy of schaeffersresearch)

[xfradnex]

http://finance.yahoo.com/news/big-sleep ... 06941.html Doom and gloom.

[gappy]

Capture.PNG

And lots of other fun charts; http://www.businessinsider.com/most-imp ... 13-10?op=1 Like this one.

Capturea.PNG

[Mr. BachNut]

Skew torqued on Friday.
In years past, this would signal for caution.
In 2013, the only spike that followed through was May.
Interesting to note though that the spike in December 2012 for the last government food fight was predictive.
I'll be a bit cautious on the upside this week.

[xfradnex]

SPY -Monday is suppose to be very positive day using my stats (5th out of 730 days). Avg Friday Close to Monday close of 1.28% for SPY (only 13 samples, 9 of 4 close up). I believe in our current situation (debt ceiling) however, anything can happen.

[TWT]

$USDJPY: Potential Triangle wave (B)

[Al_Dente]

XLF banks are strong, albeit overbought and up against gap resistance.
RYF the equal-weighted financials are much stronger, indicating the bank rally is broad based.

[BullBear52x]

Short term trend and internals bulls are having it, the question is will it continue? this is where the odds kicks in.

My read: Bear got one more sell as long as Daily MACD stay in negative. for those who counter trend and nailed the bottom, congrats! and next will hope that the sell coupon fails.

Internals are very bullish, but I'd like to see $NYMO touch the upper band of Keltner channel to say the up move will sustain

Looking at SPX:VIX, a resistance right at 50 DMA, need to see this break out also

or here is also very clear that bulls need more work to do

Here is a look at standard Fibs, a resistance here or a push up could be as high as 78.2%?

[Al_Dente]

This is the second period in a row that the 1-3 yr treasurys showed a >100% increase in short interest.
Traders have been aggressively shorting SHY.
This is old news now.
[Caveat: NY Short Interest data is always stale, but it’s the best we’ve got]

[TWT]

SPX short-term EWP:

The unexpected aggressive advance from Wednesday´s lod strongly suggests that price has established a new swing low, hence instead of selling the rip market behaviour will most likely switch to buy the dip.

Two issues endorse that price should establish a new ATH:

• The 10 dma of $NYUD: After reaching the oversold line, on Wednesday it displays a positive divergence. Hence Odds favour that price has established a new swing low


• The McClellan Oscillator after a double close below its lower Bollinger Band it has recaptured the zero line. In spite of not having displayed positive divergence in the MACD histogram nor in the RSI (5), it looks probable that we do have a breadth thrust that should allow a new ATH.

Lets move on to the SPX 60 min chart:

From last Wednesday´s lod we almost have a straight line with a gain of 57 handles, obviously this move is quite extended so odds favour some sort of consolidation / pullback that will dependent on the news coming from Washington during the weekend.

If we have good news SPX will probably open with a gap, but instead of a gap and go it might be an exhaustion gap.

If we don’t have good news this Sunday, since the deadline for the “debt ceiling issue” is next Thursday and it is probable that some type of an agreement will be reached before the deadline, on Monday we could have the beginning of a pullback with a potential target in the range 1690 – 1678 (Wave B) which will be followed by a wave (C) that will establish a new ATH. This up leg should be either the wave (V) of the EED option or the wave (III) of the ED option.

Friday´s negative divergence of NYUD favours the latter outcome

[RedKite]

TED is unhappy.

And Libor3:Libor ratio is rising a bit.
As other posts above have noted, something is amiss in the credit market. Maybe it's just a blip caused by the Washington impasse, but if the credit market doesn't improve then the main indices won't be going up.

Edit: late addition to this post...
A falling TED might at first appear to be a positive sign, but if you check over the past few years an abrupt fall such as this has been a bad omen for stocks.

[xfradnex]

http://www.zerohedge.com/news/2013-10-1 ... -drop-open. Good TA talk if the Gloom can be ignored.

[uempel]

http://www.zerohedge.com/news/2013-10-1 ... -drop-open. Good TA talk if the Gloom can be ignored.

Pretty good prediction, Dec futures opened around 1686...

[Zane]

thats a huge gap down................this bear got legs?