Ghost Ships Haunt Christmas
The nation’s retailers expect this Christmas season to be flat with last year’s, which was the worst in 42 years. And they will be hiring far fewer seasonal workers – maybe 100,000 fewer this year. Wall Street Journal story here. Now we know why the Shanghai Composite has topped out, the Baltic Dry Index has been declining, and all those ships have been mothballed: retailers in the USA have very low expectations for the Christmas shopping season.
Here’s the staffing formula: figure out how many extra workers you hired last Christmas as the world was ending. Then SUBTRACT 100,000.
Can you imagine? Retail jobs will be 100k below the Apocalypse – AFTER the feds have injected trillions of dollars into the economy.
Bulls Impaled by Stupid Spike
Yesterday, I was skeptical about the “Super Spike” that Joe Terranova predicted on CNBC’s “Fast Money” Tuesday night. Today, Terranova got a spike all right – a Stupid Spike jabbed right into his eye. SPY did indeed find its October 6th gap to be “a formidable barrier” as I mentioned yesterday.
And now SPY has printed a pattern that looks suspiciously like a double top, which you can see clearly on the 60-minute chart. The first peak is at the exhaustion gap at the open on September 17th and the second peak is at the FOMC spike on Wednesday. SPY left behind a small gap on the morning of the 16th, and that gap provided support on the 21st. So that level, the 105.75 area, would be the neckline of the double top. If SPY pierces that level on healthy volume, the pattern projection gives a target of 103.30 with a 100% extension.
However, a further extension is possible because this sell-off has caught many traders leaning the wrong way. Everybody on Fast Money Wednesday pooh-poohed the sell-off, so it looks to me like there are a lot of trapped bulls who will likely be selling into any bounce. So, SPY might be able to fill its September 8th gap down at 102.07, and that would be an excellent place to look for a substantial bounce. Gap support is often an excellent entry point to buy a pullback. Just look at how SPY bounced off its July 30th gap when it dropped down to test it on August 17th.