If Bulls Convert, Does That Mean No Low Before Opex?

Brian Shepard
April 9, 2014
mts marketrecap 330 300x207 If Bulls Convert, Does That Mean No Low Before Opex?
mts marketrecap 330 300x207 If Bulls Convert, Does That Mean No Low Before Opex?

Collective Intelligence!

After the S&P 500 gapped five handles higher on the open, concern started growing – another gap in the making? Was it concern over geopolitical concerns ramping up again or was it the homegrown FOMC minutes due to be released? Either way, there was another sigh of relief this morning that the overseas markets were able to extend yesterday’s gains. Where the markets go – following this afternoon’s news is anyone’s guess.

Snippets: These things are really starting to add up: Toyota Recalling 6.76 Million Vehicles Worldwide.

Goldman Sachs Group Inc (GS.N) could shut down Sigma X, one of the world’s largest private stock-trading venues, the Wall Street Journal reported on Tuesday, citing sources. Executives at the brokerage firm have raised the subject of closing the dark pool trading operation, according to the Journal. http://r.reuters.com/pyx38v

william_blount (04/08/2014 – 14:28) 1847.25 important yesterday and today.  *Today’s post open reminder  > william_blount (08:59) NOTHING HAS CHANGED– spill 1847.25 key price — LOW– MUST CONVERT THE OPENING (1850.00-1850.50) if you are a bull.

Today’s RTH’s pit session gapped 5 handles higher to 1850.00 – 1850.50 and quietly traded sideways in the opening minutes. Barry (08:41)  NYSE A-D fairly strong… but moving quickly… needs to settle down. Barry (08:42) wow… is there news? A-D dropped hard – holding the magic 700 zone for now. Barry (08:45)  A-D still falling… it’s do or die here. Barry (08:49) NYSE A-D showing more weakness than we’re seeing in /ES Barry (09:04) I’m thinking if we can make a new LOD here we could go to the daily pivot at 41.50 – BUT right now even with the weakness the momentum on my 60m chart is still up.

Barry (09:07)  If /ES makes a new low and 46.50 becomes Resistance I think the 60m chart will turn negative too. Barry (09:10)  Bears are trying.  Thanks Barry! However, the bulls stepped up and flipped the weak shorts as the equities slowly and quietly went bid - briefly converting the opening range, trading 1852.50 area before fading back to 1847 – an area that we are all too familiar with. william_blount (10:46) bulls need to take out the a.m. high — and they need to do it over lunch to stop this flat tops and rising bottoms. As the European market closed, the equities continued to step higher, a series of higher highs and higher lows until a new high of 1854.70 traded at 11:34. william_blount (11:43) BULLS only need to get a soft SW down for the mid p.m. low and then a favorable reaction to FOMC MINUTES and then we are simply having a NORMAL DAY.

1852.50 area was trading when the FOMC minutes were released. IceChat (13:00) SEVERAL FED OFFICIALS SAID FORECASTS OVERSTATED RATE RISE PACE – Fed minutes: Committee agreed 6.5% threshold was ‘outdated’; vote to remove was unanimous – Don’t mention rate rise in 6-months after QE end – yet … william_blount (13:02) BEARS MUST KILL 1851.5 or they are screwed through last hour high –  they have maximum time of 28 minutes to get that job done … (13:23) 10 handle move from FOMC min release – as Art Cashin would say … Let’s marinate some ice cubes! Mikey_P- (13:28) Do we still get a Thur/Fri pre-expiration low? I like the way Mikey is thinking – but time will tell. In the meantime, the bulls actually need to hold these gains and slowly add to them while converting 1866 area = The YELL to support. Then the bulls can run …

Aside from the FOMC event, the late afternoon session was sideways to higher in much lighter volume when compared to the early morning session and FOMC minutes release. After holding the 1860 area the equities quietly stepped higher. (14:00) MiM – MrTopStep Imbalance Meter showed a small sell-side imbalance, under $100M to sell going into the cash close. On the cash close the futures traded 1865.90 area, up 20.9 handles on the day, while the [VIX] went out 13.79, down 1.10 ticks on the day.

Eco calendar: http://www.investing.com/economic-calendar/

Thus far, the announcements have been surprisingly light.

The following was posted yesterday: Oh what a RELIEF RALLY it was! Now, we will see what is in store for the markets following the 2-1/2 day sell-off and the bears taking their foot off the pedal midmorning.

Of note – Every single market correction since the 1970s has been preceded by a Fed rate hike, double-digit hike in oil prices or significant global crisis – Cyrus.  Oh, that’s all it takes? – Srosen.

Interesting article posted by … HITMANGOLF: long momo tech short spus http://www.cnbc.com/id/101564158

Everyone is worried about the risk of inflation, I think the risk is deflation and recession; inflation risk is way down the road - Mark Minervini    Wednesday Plosser said: buying more assets won’t help correct the “inflation problem” stephen_c (14:48)  Brian deflation problem? Barry (14:48) uh oh, is there an inflation problem?

mts2 (14:49) yes & yes – that’s in Fed speak terms. william_blount (14:50) we have a massive deflation problem which govt minions are trying to offset because governments cannot function without inflation. Basically we traded NASA for free cell phones and military % for free everything. Someone only needs to read the 1930, 1940, 1950, 1960, 1970, 1980, 1990, 2000 and 2010 govt budgets – it is somewhat horrifying!