The McClellan Oscillator is in overbought territory, and the VIX is near its lower Bollinger Band on the daily chart. So, those are cautionary signs for the bulls this week.
The IWM finally broke decisively above its October 6, 2008 gap, though it took 3.5 months to do so after I first posted the chart back here. The IWM may be intending to fill its TARP gap like the QQQQ has done. To do so, it needs to hit 70.63, which is another 10% up from here.
DIA has not broken out of its range yet. To see why, just pull up a monthly chart of XOM and take a look at its December candle. Nasty, right? XOM did manage to rally a bit on Friday, and if it can extend the momentum, that might be an indication that the wave of redemptions that has hit mutual funds is easing up.
Now that Christmas is in the rear-view mirror, let’s see if businesses go back to slashing labor costs. The UPS guy will be making less overtime pay, and department-store Santas have been given their walking papers, so if the payroll data holds up, then that might be a sign that something good is happening on the jobs front. And if something doesn’t happen soon, the Democrats are toast at the mid-term elections in November. Their campaign slogan will be: “We didn’t bring your job back from China, but we’re giving you free health care.” That will work about as well as the Republican’s “Recession? What recession?” slogan did in 2008.
Take a look at the IYT’s intra-day chart from Friday. The pattern is not an exhaustion gap, but it looks similar with that early-morning peak. It may have just printed a double-top with the December 15th peak. If it sticks this week, that would be a bearish omen.
The XLF’s 50-day moving average is threatening to cross below the 100-day. It’s not a death cross; just a gravely-ill cross.
Like it or not, Iraq is part of the American Empire, and I was amazed when the Iranian army seized one of our oil wells in Iraq recently. It isn’t often that somebody tries to bite off a piece of US turf. What was even more amazing was how the media down-played the event. Why would they do that? I think they were trying to help the president save face. But there is no way around the fact that the Iranians gave Obama a slap in the face. The Iranians have pulled out, but don’t be fooled – that was a significant event, and it’s a good idea to read George Friedman’s piece on the subject. In short, if the Iranians think an Israeli or US attack is coming, they have tactical incentives to begin the festivities themselves.
Note: President Bush got a nice slap from the Russians when they captured four US Humvees during the Georgia invasion in 2008. As far as I can tell, the Russians never gave them back. Here is the most recent info that I found on the subject from the BBC:
“…a senior Russian commander, Gen Anatoly Nogovitsyn, said four captured US Humvee armoured vehicles would remain in Russian hands as ‘trophies’.”
Matt,
I think George Friedman is way off base. Iran feels that as Iraq is negotiating oils deals it may be offering up disputed areas. The message was intended for Iraq & foreign oil companies not the U.S. govt.
Another possible cause is that the current Iranian regime may also be looking to distract from it’s internal issues. A military response from Iraq / U.S. would have been a god send.
Iran will collapse from internal forces, not external.
After 30 years this revolution is long in the tooth, I doubt it survives much longer. Anecdotal reports showed the security forces being attacked by protestors contrary to the recent uprisings.
My $0.02
10% short.
Futures Prices
Market Last Change %
Crude Oil 78.37 +0.32 +0.41
Natural Gas 5.835 +0.149 +2.62
Corn 408.5 +3.75 +0.92
Soybeans 1008 -1 -0.10
30yr Bond 114.875 -0.34375 -0.30
10yr Note 115.71875 -0.40625 -0.35
NY Gold 1112.4 +7.6 +0.69
NY Silver 17.565 +0.125 +0.71
Emini S&P 1123.0 +1.0 +0.09
Emini Nasdaq 1872.75 +4.75 +0.25
Emini Dow 1047 +4 +0.04
Airlines- Now I have an excuse to tie your
hands when you board and strap you into
a seat. I will make traveling with us miserable.
Hussman reiterated his bump warning, El-Erian expects a 10% decline as well. Open question is: From which level?
New bull market for the new year? Famed bond investor El-Erian of Pimco says don’t bet on it
http://abcnews.go.com/Business/wireStory?id=9429488
Thanks After.
Julie, it is not about capturing terrorists, it is about intimidating the own population.
KD is infuriated as well – though he has never been subjected to processing of criminals (in former times called visitors) at the U.S. border
http://market-ticker.denninger.net/archives/1794-Starve-The-Beast-Airlines.html
more TLT @ 89.34
i see vix up 92 cents…
Nice link Yerk on the El-Erian piece. While I certainly agree, we have to remember that he is trumpeting his view because his bets are already in place and every day that stocks go up and Treasuries fall from here, he lags his peers. So if PIMCO has been long Treasuries for months now, they’re feeling the bite pretty good…
That is like the “10% correction” thrown about by many lately…from WHERE? If we reach my Fib analysis TOP of 1180, that will only take us back to 1062. But from here (1125), we’ll get to 1000 on the $SPX. Big deal. Shorts are looking for a BIG down move, not 10%. Either way, if you are short right now and think there is only a 10% correction coming, you are going to be having some serious sleepless nights until that correction starts and you are likely to cover quickly. If you believe a larger correction is coming, then sleep well and hold on to your positions.
My 2 cents…
It looked like another fail at SPY XXX.99 so I doubled down on SDS at 34.15 with a tight stop. Raising stops for a no risk trade on the 2nd half now.
julie,
look at the airlines today (underneath delta’s chart)
http://www.google.com/finance?q=NYSE:DAL
SPY filled its morning gap and is tip-toeing up. URE didn’t fill its gap and is moving on up toward a double top where it could flop.
SKF filled its gap and promptly resumed its move down.
ICE has been zooming to the moon.
The high-end charts sure look bullish.
Julie
Thanks for the LBR trading rules. I made note of her comment on Taylor’s Trading Technique. I downloaded it and for a 60 year old book it is really amazing.
String
Looks like 1125 is grinded away, no selling pressure. Next stop 1145, 1070-80 support on the downside.
String,
Agree with you about the Taylor book.
Yerk,
You’re right. It’s about intimidating your own
people.
Has the FED moved into the Weimar mode?
NDX down .01, woohoo -g-
still have my nas short via hqd.to
note VXX is up a bit…
A year in review http://uneasysilence.com/archive/2009/12/14660/
(some funny piece)
Obama’s Three-Day-Late Press Conference
http://www.mediaite.com/online/obamas-three-day-late-press-conference-on-flight-253/
this aint the guy who people elected last november
Travelled Japan for a week. What did I see after 20 years of Government projects, ZIRP and an enormous build-up of government debt?
New roads and bridges. Everywhere,
Every building and factory looked like it was built 1980-1992. Serious overcapacity in factories.
Everyone in Tokyo is wearing all black. Everyone.
Zombie. Destroyed by mad economic policies.
To be continued…… The policy of new government is more of the same, but more in the terms of direct handouts instead of new bridges.
The Japanese entrepreneur has been killed and he is not coming back.
This will not end well.
Larry,
Thanks for the Japan report.
Matt
K,
Hope you got your raise.
K,
Thanks for the Delta link.
his response (leaving a few private details out)
We have a new CEO and we are looking to hold expenses in all areas, sorry.
looks like i will have january off for personal development and own business expansion