09/17/2012: Had insomnia...timing couldn't have been better. What a snoozer for the most part. Reminded me of a Neil Young line when he was introducing a song on the CSNY 4-Way Street live album (a two record vinyl set....I'm old.)
"It sorta starts off real slow and then fizzles out altogether"
Market kinda leaked downward for the day with financials finding the WPP, and then the market making a run north from there to make a VWAP run into the close. Notice that SPY and FAS bottomed at tracked levels together, not IWM. What does that say about risk in the market? No specific opinion. One day does not a trend make in OP EX week...canary in the coal mine...maybe? For all intents and purposes the action of the last couple of days looks like a big ol' bull flag.
Headline risk now looks to have shifted from the Euro-orgy, to the Islamic Inferno and the Sino-Nippon conflict-that one could make for a real mess.
9/18/2012: Housing numbers today, better than expected...what was market reaction...Simon and Garfunkel (Sounds of Silence) moment.
"Good" news, not being bought or sold. OP EX week. Not really much to expound upon today.
- IWM closes on the Weekly Pivot.
- Financials ride the Quarterly R1 for most of the day
- SPY rides the weekly pivot for most of the day finishing in the top half of the range
- TLT finishes a few hairs above the Weekly Pivot
09/19/2012: Groundhog Day III...'nuff said. No real buying in the market rumors/news not particularly of the concrete variety (haircuts in JCP's now). Short covering on heavily shorted stocks. Tight range with only the bonds making consistent progress retracing the Bernanke news.
The one REALLY interesting move so this week...oil. With the news of endless printing in Japan Europe and the US, as well as Mideast tension, oil drops almost 10% by Wednesday night....just shaking out the weak longs? Or, is it a sign of things to come....shhhhhhh....recession....deflation...uuugh. Bennie's beard should start turning gray. Next big support on USO is between 33.50-33.80
The Quad Witching hour is upon us. I'm thinking, some more volatility.
09/20/2012: Yeah, a bit more volatility today. Not particularly good economic news starting with Chinese PMI last night. Higher initial claims (which usually get revised further upward). Philly Fed was better than expected though paultry. So we gap down for a 1/2 hour, and then....
IWM bottoms at the March 2012 swing-high line I left on the graph, which was also with in spitting distance of the daily S3. If you remember from last weeks blog I said that these three lines would likely corral the weeks price action....SFSG. SPY also bottomed near the daily S3 which corresponded with a fib. retracement I'm tracking....ahhh the confluence of levels again.
From their it was onward and upward. With SPY actually closing it's gap to finish higher by $.01USD, and IWM losing a bit of steam finishing in the middle of it's range. Soooooo....bad to middling economic news was bought. We're going higher it seems. BTW, look at TLT. Last three days, just sell the open and forget it.
Mmmmhhhh....Dow up 8 of last 9...spy closes 146.74 146.62 146.70 146.71...frickin' Groundhog WEEK so far.
09/20/21: ....and, if you were to add back the $.7795/share dividend to the spy closing price, we're back at .....drum roll please................................$146.70ish!!!!! Yes it was a Groundhog Day week.
We also found out that the Obama Administration has mandated no surprises out of Europe until after his corona....I mean, election, although Greece later denied it. I wonder if the bond market will stand for that?
Anyway, the last "week that was" chart:
Remember, SPY looks deceptively bad today...you want to know what its relative performance was, look at the IVV. The IWM closed within $.15 of the weekly pivot. Financials were weaker this week, and bonds regained some ground. Macro economic information domestically was mixed with housing looking as strong as it has since '09. Also, don't forget, the SPY went through re-balancing today so volume indications are completely out of whack.
For those of you not familiar with him, Bill Cara (http://caracommunity.com/), with whom Vad is associated, does a complete, if not mind-numbingly extensive, "Week in Review" that is usually published on Sundays. At introduction he gives a summation of the macro-economic data both good and bad from the most recent week as well as the preceding, with a forward look as to the week ahead. I can usually feel the vitrified brain matter leaking out of my ears if I try to understand the whole thing.
All in all a week of either, consolidation or distribution...I'm leaning on the side of consolidation with upside yet to go.
The week that is:
Looking at next week we can see IWM basically treading water having peaked out at the Yearly R1 on the 14th. Could see that assaulted again this week. Tight range this week, which like tight Bollinger bands, usually means expansion coming.
SPY same thing...look at either SPY or IWM on daily it looks like a bull flag
The Qs: They hit the yearly R3 last week, that's impressive, how skewed is that because of apple?
Anyway...my prediction for next week:
And another thing...
Last week I mentioned how my prediction "accuracy" or the lack thereof, inserted bias into my thinking, and that price action is all that matters. So I'd thought I'd expound a bit on bias, and where it comes from.
Of course we'll use my Taoist background from which I basically parrot everything I've been taught. There's nothing particularly original or organic that comes out of my mouth unless I consumed too large a quantity of adult beverage.
Anyway, the last verse (81) of the Tao Te Ching first two lines are as follows:
True words are not fine-sounding;
Fine-sounding words are not true.
Fine-sounding words are not true.