Monday, August 24, 2009

Morning Update/ Market Thread 8/24

Good Morning,

Equity futures are up slightly this morning after breaking out above resistance on Friday:

Bonds are down, the dollar is roughly flat, gold is flat and oil is up slightly.

There is no economic data out today but the rest of the week will be fairly busy. We will see both consumer confidence and sentiment, we’ll see the revised GDP for Q2 that previously came in at -1.0% (consensus now -1.5%), we’ll also see durable goods and new home sales numbers in addition to the weekly sales and job data.

Friday’s move upwards was on higher volume and should be respected. However, there is a confluence of Fibonacci levels just above current levels and by 1,060 the resistance will be stiff again:

The next pivot points are at 1,041 and then 1,061 with support at 1,018.

Here’s what the people I respect and follow believe:

McHugh believes we are in wave 3 up of c up of B up. What will follow the completion of B up is the large wave C down (wave A down was the prior portion of this bear market A-B-C). Thus, he believes that we are getting closer to what he calls the “devastating” wave C.

Jim Shepherd’s model has produced a deflationary spiral signal.

Tony Caldera believes that we are within a month of a primary wave B top, that the bullishness levels are consistent with a major top and that primary wave C down will likely produce the same level of losses, -58%, as primary wave A. Just so you are aware, if we top at 1,100 and then roll, we would target the 460ish level on the SPX. He believes that wave C is likely to complete in just 10 months time.

These are experts who I respect – you won’t see quotes around the word expert when I refer to them! They are the ones who have been most correct over the past several years, although nobody is 100% perfect, especially in the era of grand governmental and central bank manipulation.

Me? The rally is way overdone, signs are beginning to show themselves and we are coming up on the season... Of course Goldman/the government/the market will have to get overwhelmed with reality first, so it'll likely take longer than most believe!

Enjoy your post opex Monday…

I Don't Like Mondays - Bob Geldof & Bon Jovi: