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Charts courtesy of stockcharts.com

Tuesday, October 4, 2011

First Bailut Rumor Of the Quarter

Those of you who lived throught he great bear market of 2008 will remember this crap: break a key technical level, and then watch as the market sharply reverses in the last hour based on yet another rumored bail out. This was nearly a daily occurence in January 2008, and it is becoming routine now. I meant to put up the new pivot points on yesterday's chart and forgot, so today i put them up with no annotations/ This morning we broke S1 decisively, leading wither to a huge drop or a huge rally. We did get a rally, which crapped out about midday. leading us right back down when the rumor hit. Volume was huge today, so this could be a key reversal day, and until proven otherwis i will treat it as such, meaning I will again start looking for buys, then start pulling the trigger if we get a follow through day.  Yeah, it sucks to have the market manipulated like this, but it is happening so often it is now normal, so I guess I better get used to it.

Stockcharts still hasn't updated the WTIC chart, so I had to go back to USO. Notice we nearly tested S1 before the big reversal. S1 should provide pretty strong support here, and the middle pivot is going to be resistance. From here, that is a decent trade.

Gold has been in a small bounce after it's recent big move down, but that ended today. This also almost tested a pivot point, in this case resistance, and now has the 200dema as first support. It will probably test it, If the latest bailout rumor turns out to be true, this will probably drop like a rock, at least for a while, with S1 a long way down from here. 
The yield on the 10 year treasury appears to be in the midst of a trend change. The RSI and MACD are both moving up, diverging from price, which has just finished establishing a higher low. It may take a while, but this appears ready to start grinding it's way up.
 
The USD index chart also has not been updated yet, so I had to go to UUP. It is interesting that this was at R1 when it reversed. It seems that whoever it is in charge of rumors knows how to read charts. I will bet they caugh a ton of shorts off guard.

I am a little frustrated with this crap, but i should not be. It has been the status quo for a few years now, and only serves to prolong the bear market (and probably will lead to a crash). It i clear to me that all the stops will be pulled out, and nothing will be spared in TPTB's efforts to save the banks. Ultimately, I believe they will fail.

I will have the new highs update shortly.

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