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The bulls still have some hope here, because by my count, the ES S&P futures have had 4 higher lows over the past 4 weeks. The magic number for the bears is now 4361. Take that out and the streak will be emphatically broken, and the Great Face pattern will break down.
Looking upward, there’s a ton of resistance between 4412 and 4420. If they clear that, the bulls have a shot at a real rally. $149 billion in Fed cash to Primary Dealer MBS purchase settlements are under way this week, so we need to be on the lookout for a sharp rally at any time here. Not guaranteed of course. They’ve gotten pounded on their leveraged fixed income portfolios in recent weeks and they’re bleeding. The may just use the money to pay down debt. I cover this ongoing story every week at Liquidity Trader. New subscribers get a full 3 months risk free trial to follow that.
Overnight we had a 5 day cycle buy signal on the hourly oscillators, so this is the bulls best shot. Failure is an option, and if that happens, the bottom will probably drop out today or tomorrow.
Yesterday, I noted the similarity between the current pattern, and the pattern that unfolded at the top of the market in December January. It implies a 500 point short term decline from the current level. Here’s how it looks on 4 hour bars.
Do you see it?
As investors and analcysts it’s so important that we take this as seriously as Wall Street commentators. After all, it’s only money, and in a few trillion years we will all be one, in the singularity of the collapse of the universe.
Ooom.
Of course, this is just for today. For the bigger picture see
Beware! The Market Has Followed My Script
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