- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
- CHARTISTS MUST PUT ALL BIAS ASIDE AND LET THE CHARTS DO THE TALKING OR WE'LL SEE ONLY WHAT WE WANT TO SEE
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Friday, 19 August 2011

Opex Friday


Opex today so the day is less predictable than it would be otherwise. I have declining resistance and support trendlines on ES, and for what they are worth resistance is in the 1140 area and support is in the 1070-80 area:
I'm expecting to see at least a test of 1100 on SPX by the close on Monday and I'd be looking for some support in the 1085 area if SPX goes lower. What we are also going to see at the end of this week is a cross on the 13/34 weekly EMAs with some confidence, which is an indication that we aren't that close to a low here. It might yet reverse back up hard, but that seems very doubtful:
There's been a lot of speculation about where this (probable) bear market will bottom out and I'd like to add my own WAG to the pile. The 50% retracement of the bull market is at 1018 on SPX and there is strong support, and a potential H&S neckline, in the 1000 - 1020 area. I'm expecting that area to be tested by the time this bear market ends and I've prepared a wildly speculative chart of what might happen if we bounce there:
There's been a lot of brave talk about shorting gold, which has reached as high as 1881 overnight on the futures market. It's too early for than in my view, as we are not yet close enough to the next big resistance level, which should be in the 2000 area. Looking at the 30yr gold chart the two most significant resistance area in that period have been the 500 and 1000 levels. Silver found big resistance at 50 and the best odds for a reversal on gold have to be in the 2000 area. I have a resistance trendline on this log scale chart that should deliver some resistance slightly over 2000:
While I'm throwing round big targets this morning,. I should mention my 26 year channel on 30yr treasury yields (TYX). I've posted this a few times before, but if you look at the chart you can see that the next obvious target for TYX within this channel is under 20. Could it make it? Possibly, under a Japanese style scenario which I'm preparing a post to examine. Meantime it's hard to see a decent floor under bond yields regardless of deteriorating sovereign credit, as the main determinant of bond prices at the moment is fear of holding equities. Food for thought:
I'm leaning bearish today and probably Monday as well. Any bounces should be shortable. I might be late with my post on Monday as I have a hospital appointment in the morning. 

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