Robert McNamara is gone, finally bringing peace to thousands of Vietnam Veterans… may there never be another one like him! He was nothing but a central banker/ military industrial complex shill responsible for the death of thousands of Americans. He will not be missed by me.
Equity futures are down pretty sharply this morning with the dollar up, bonds up, and commodities down. This is a more normal trade from my perspective as the world realizes that prospects for growth are not there – we are experiencing parabolic collapse of prior out-of-control growth instead:
Of course the Bankruptcy judge in GM’s case is going to approve their plan to create a new company, axe the debt in exchange for stock, screw the workers wages and benefits down, ignore the money laundering that took place passing billions of taxpayer money through to the banks, and make the taxpayers (you and me comrade) 60% bag holders in a company that doesn’t stand a chance – still.
And what’s going on with program trading and Goldman over at the NYSE? Strange things going on there, Zerohedge is covering that one well and it should be interesting to watch. I’ll cover it more as we learn a little more.
The economic calendar is fairly light this week, we have non-manufacturing ISM coming out at 10 Eastern this morning, but the data is fairly light the rest of the week, International Trade and Consumer Sentiment on Friday.
The technical landscape is beginning to look pretty bearish. The key level to watch right now is 880. Should that level break, the obvious head & shoulder’s pattern on the 60 minute chart will be confirmed. Should that happen, the downside target would be about 810ish which would be a 50% retrace of the “green shoots” rally. Here’s the 60 minute SPX, you can see that pattern clearly – there may be a sloped neckline which may be in the Sethonian 888 region:
Of course the 30 and 60 minute stochastics are oversold and we could very well experience a bounce off the neckline area. If the H&S is in play, I would expect it to break, come back up to retest and then fail.
On the daily you can see the colossal damage that was done last Thursday. Note that the 200dma is also in the 888 region and that will lend support at the neckline. The daily stochs are coming down out of overbought towards oversold:
Expect some monkey business in this area, it’s an important one. The consensus for the Service ISM is 46.7… that may be a little high, we’ll see, it should be interesting. Heck, I say just surrender now and get it over with already!
Cheap Trick – Surrender: