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TechMan

EU ended week 2 of an on-going correction. There's no strength from EU, as some had speculated last week, and technical patterns indicate probable further downside. It's also probable that we may see gap-down early next week.

In Asia, Shanghai had just concluded the month of March with a 7% correction. While China looks oversold, there's no sign of reversal. Crashes do happen particularly when the market's oversold. And, after the on-day wonder of poking its head above last summer's post-Fukushima high, Japan had quickly reversed. After more than 20% surge in just 3 months, Nikkei at 10200 appears to be too much to overcome all at once.

Back to the Land of The Free… Except for the "Bernanke Pop" on Monday, the SPX continues to close below 3/19/2012 high of 1414. And, many had already noted ubiquitous Head & Shoulders formations on the hourly RUT, SOX, SPX, WLSH, etc..

Right now, the world's major markets are out of synch. It's perhaps time for synchronization. I'd like to see a wave of selling starting from Asia to Europe overnight and turns into a tsunami by the time we open.

TechMan
QUOTE (TechMan @ Mar 28 2012, 02:31 PM) *
QUOTE (TechMan @ Mar 28 2012, 12:37 PM) *

Apple "Turnover" will mark the beginning of phase 2.




On its way while we wait.




TechMan

Oops... Should've been "SYNC" but the auto correct didn't kick in. I guess "SYNCH" will do.

Actually, I was thinking more of Carl Jung's "Synchronicity" this morning than Synchronization. When the unexpected expects you...


Islander
Your suggestion that AAPL could be a trigger for a correction is apt, since it is out on a limb. I moved to cash Friday, keeping only a small position.

But the US melt could still be a still be a move with legs.

The LTRO in the EU has been providing liquidity that is leaking over into US listed stocks. The DAX, CAC and Shanghai show buyers are dubious of their respective markets, and that they probably prefer the Amercian ETFs ( with stops). This is the source of the relentless buying pressure behind the slow grind up. My Bloomburg shows that institutional buying is nil historically, and the hedges are licking their wounds. B Beranake is posed and high on his list is more bonds
and maybe MBS.

The market is looking for more stimulus and feels that there is at least a 50% probability the Fed will keep the pedal to the metal until fall. Equities are still the best
safety play open. Later in 2012 things look less sanguine.

Best, Islander
TechMan

Islander - I agree with your longer term thesis, as you've so "aptly" pointed out that a QEs driven market that's been in motion tends to stay in motion. However, an imminent technical correction seems inevitable. And, since every reversal has to start from the VST basis, we'll take it one step at a time.

Regards.




jjc
I was thinking sinc(s) [frequency domain].





jjc
Techman I think you are spot on when you state "things are out of synch"; that goes for the major US indicies as well. The NDX and RUT have appeared to peak and are well on there way to an April Low, While the DJI and SPX have some work to do a wee bit north. SPX should peak out early this week (monday?), DJI will linger.

The interesting thing I see happening is the NDX (and more specificly AAPL) should bottom out just about as the DJI has peaked with money coming out of the Long end of the Treasury to fund the levetation.

jjc
QUOTE (jjc @ Apr 1 2012, 02:25 PM) *
Techman I think you are spot on when you state "things are out of synch"; that goes for the major US indicies as well. The NDX and RUT have appeared to peak and are well on there way to an April Low, While the DJI and SPX have some work to do a wee bit north. SPX should peak out early this week (monday?), DJI will linger.

The interesting thing I see happening is the NDX (and more specificly AAPL) should bottom out just about as the DJI has peaked with money coming out of the Long end of the Treasury to fund the levetation.


their, there,... patato, patatoe... or is it patatow?
CRUISENAL
http://www.amateur-investor.net/Weekend_Ma...Mar_31_2012.htm


Interesting analysis!




QUOTE (TechMan @ Apr 1 2012, 10:19 AM) *
EU ended week 2 of an on-going correction. There's no strength from EU, as some had speculated last week, and technical patterns indicate probable further downside. It's also probable that we may see gap-down early next week.

In Asia, Shanghai had just concluded the month of March with a 7% correction. While China looks oversold, there's no sign of reversal. Crashes do happen particularly when the market's oversold. And, after the on-day wonder of poking its head above last summer's post-Fukushima high, Japan had quickly reversed. After more than 20% surge in just 3 months, Nikkei at 10200 appears to be too much to overcome all at once.

Back to the Land of The Free… Except for the "Bernanke Pop" on Monday, the SPX continues to close below 3/19/2012 high of 1414. And, many had already noted ubiquitous Head & Shoulders formations on the hourly RUT, SOX, SPX, WLSH, etc..

Right now, the world's major markets are out of synch. It's perhaps time for synchronization. I'd like to see a wave of selling starting from Asia to Europe overnight and turns into a tsunami by the time we open.


TechMan
QUOTE (jjc @ Apr 1 2012, 03:04 PM) *
I was thinking sinc(s) [frequency domain].



Hmmm… Now I'm thinking about a sink.


TechMan

So, early trading indicates "risk-on", as China has just released its official PMI showing a rebound to a year's high. But, before this official PMI report, we had this HSBC report released on 3/21/12. Which one to believe?

QUOTE (TechMan @ Mar 21 2012, 10:58 PM) *
China factory activity falls for 5th month, according to HSBC flash PMI.


And, then we had this

QUOTE (TechMan @ Mar 29 2012, 03:08 AM) *
... efforts by Alcoa and others to end a world supply glut of aluminum by cutting output may be in vain as China continues to keep its average daily production at record level. Aluminum supply will outpace demand for the 6th straight year.


Meanwhile, rumors of a military coup in China was circulating on the Internet that military forces were taking to the streets of Beijing at a time when the Communist Party is set to determine its new leader. London based The Guardian has reported that China has intensified online censorship by closing 16 websites and arrested 6 people.



viccarter
@ES up 0.43%
@TF up 0.11%

no risk on quite yet
viccarter
ah, yes. just as i spoke had TF had to catch up.

Jinx.
TechMan
QUOTE (viccarter @ Apr 1 2012, 07:42 PM) *
@ES up 0.43%
@TF up 0.11%

no risk on quite yet



When the risky assets go up, the risk is on. That's pretty straight forward. I don't think there's anything to argue about. That's what I saw in the early trading, and that's what had exactly happened. I'm not sure what your point is.



TechMan

It looks like everybody's returned to where they'd started when the betting began except for the Yen. My "refuge" currency, the Yen, got sold off initially and has stayed relatively unchanged for the past few hours. The Yen's weakness has kept ES throwback after the breakout right on the "neckline" of the inverse H&S formation that I had commented on Friday.

It's critical here, and I can "feel" the battle along the line. Not breaking below the neckline after the throwback indicates higher probability of the resumption of the breakout. OTOH, the lower it falls below the neckline, the less likely it'd bounce back.

In essence, the Yen must reverse if the breakout were to falter.



viccarter
QUOTE (TechMan @ Apr 1 2012, 08:02 PM) *
QUOTE (viccarter @ Apr 1 2012, 07:42 PM) *
@ES up 0.43%
@TF up 0.11%

no risk on quite yet



When the risky assets go up, the risk is on. That's pretty straight forward. I don't think there's anything to argue about. That's what I saw in the early trading, and that's what had exactly happened. I'm not sure what your point is.



the point was TF was a considerably lower than ES when the markets opened. that usually indicates weakness coming in ES. after a few hours TF started to catch up, so forget what I said.

I am short RUT index as of close Friday, so observing this with interest.
TechMan
QUOTE (viccarter @ Apr 1 2012, 11:39 PM) *
QUOTE (TechMan @ Apr 1 2012, 08:02 PM) *
QUOTE (viccarter @ Apr 1 2012, 07:42 PM) *
@ES up 0.43%
@TF up 0.11%

no risk on quite yet



When the risky assets go up, the risk is on. That's pretty straight forward. I don't think there's anything to argue about. That's what I saw in the early trading, and that's what had exactly happened. I'm not sure what your point is.



the point was TF was a considerably lower than ES when the markets opened. that usually indicates weakness coming in ES. after a few hours TF started to catch up, so forget what I said.

I am short RUT index as of close Friday, so observing this with interest.


It might've under-performed ES, but it's up. And, like I said, as long as risky assets go up, the risk is on. Their relative performance may have to do with varying degrees of risk appetite, but it's on nonetheless.



TechMan
QUOTE (TechMan @ Apr 1 2012, 11:37 PM) *
It looks like everybody's returned to where they'd started when the betting began except for the Yen. My "refuge" currency, the Yen, got sold off initially and has stayed relatively unchanged for the past few hours. The Yen's weakness has kept ES throwback after the breakout right on the "neckline" of the inverse H&S formation that I had commented on Friday.

It's critical here, and I can "feel" the battle along the line. Not breaking below the neckline after the throwback indicates higher probability of the resumption of the breakout. OTOH, the lower it falls below the neckline, the less likely it'd bounce back.

In essence, the Yen must reverse if the breakout were to falter.


And, T-bills rally continues while the Yen reverses its course and pushes the AUD/JPY toward the line of support that I had previously referenced. Will it make it this time? This also indicates that the equity market's at a very critical juncture.

China should come back on after the "Ching Ming Festival" holiday. That should make it another interesting night. I'm getting my popcorns.

Good trading, boys!

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