Loose-Cannon Mode
Obama’s announcement of a spending freeze last night shows why the market has sold-off: The Massachusetts Massacre has thrown the Democrats into “loose cannon mode” where they flail around wildly trying to figure out what the voters want.
I would be shocked if our government ever actually reduced its spending. Clearly they (both Republicans and Democrats) are going to spend, and spend, and spend – right off the cliff of national bankruptcy.
So, I don’t think the budget “freeze” itself will have much of an impact on the economy, and is probably just a trial balloon for some last-minute edits to tomorrow’s State of the Union speech.
But the market does not appear to have much confidence in our new “Random Style” of government.
SPY bounced off the 1091 area. Waiting to see if it holds.
Close to tops on SDS.
Tops played out, bounce played out… SPY 15min stochastic positive but since its MACD is not, will use the 5min as direction indicator.
Matt,
Agree wholeheartedly with your “Loose-Cannon Mode”. Out of control.
Yesterday, URE gave a 9/36/15 buy and has not given a 9/36/15 sell. It had a good counter-move (fade) this morning.
I feel like JG.
SPY has bumped up against BOTH its 5min and 15min 36MA. Don’t see that often so I’m not sure how that will play out except the 15min MACD is trying to cross.
To the Moon? So far, nice correction.
According to my SPY chart, this will be the 3rd attempt for SPY to hit the upper trendline. 3rd time the charm?
That’s on the 5min.
Loose-cannon confusion still high, at least some numbers emerge again. Support 1080 – which held overnight, resistance 1095-1100, bias is down unless we get a clear breach of the resistance.
GEORGE ..looks like bounce to 1115 then we see how severe the correction will be …i want to sell rallies now near 1115 http://1.bp.blogspot.com/_TwUS3GyHKsQ/S15IwMFQ5oI/AAAAAAAADs0/zzMd1C2ji6A/s1600-h/spx.png
Phil,
1105 is the first resistance area. And the 1115 is resistance right at your target.
1103 is the top of the resistance channel line. So, 3 resistance areas to overcome.
SPX hitting the first resistance area 1103
Second attempt was turned away too.
exactly at 1100 futures
On the higher timeframes there is some semblance to the July reversal but bulls should be mustering more momentum.
Last chance for SPY to bounce here.
Last chance? How many chances will it get by 4pm?
Hey K!
Let’s hope a lot!
The market looks like it is waiting for Super Wednesday before deciding on its next direction. Tomorrow, we have Apple unveiling the iSlate, an FOMC announcement, and the President’s State of the Union speech.
SPY has morph’ed into a rectangle on the 5min. And we know how those end…
http://i50.tinypic.com/1689bns.jpg
Bit of a belly-flop into the close. Not very encouraging for the bulls.
It will be interesting to see if they sell off the President or not.
Good day today. More tomorrow.
George, nice commentary today and nice hedline essay Matt.
Is any EWT follower on here counting this rectangle as an a-b-c-d-e Wave 4 looking for a wave 5 down to complete the structure? I was too busy with patients to swing trade the rectangle, but I’m sure George made a small fortune.
And I vote that “yes” the market will sell the Prez tomorrow, but watch out for that FOMC statement. ZIRP can definitely stoke the market! Or maybe they’ll finally admit that rates ‘could, maybe, possibly’ rise someday in the distant future in a galaxy far, far away…
I am not an idiot…I can spell headline…
But my left pinkie can’t seem to hit the “a” key…
2thfixr,
Yes, a good day today. About time this market started moving intraday, excluding gaps.
The rates are lower than whale poop and have been for too long. Enables a nice carry-trade just like Japan’s zero rate for 15 years – or whatever. I get the feeling the administration wants that to happen to suck some coins out of foreign rates.
Another bubble ready to happen, or as I read recently on a webpage someone posted, “a bug looking for a windshield”.
Do you know how to tell if a motor cyclist is happy? They have bugs on their teeth.
Then they go to 2thfixr to get them scraped off.
http://2.bp.blogspot.com/_rufrpeKdZ38/S1-STk12AbI/AAAAAAAAGEo/7U2RCuRxk_w/s1600-h/spx1.png
K,
Nice chart and perspective.
http://highchartpatterns.blogspot.com/2010/01/all-you-need-to-watch.html
see you tomorrow after 2pm… remember AAPL event at 1PM eastern.. and all the rest Matt mentioned.
Yep, good stuff that could make the market jiggle for jing.