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Brian's Friday recap: Bull census down, anvils on gold, bond levels

Karen Peterson

Sam E paid for his wedding, 4-13-13 plans...On Thursday at (09:48CT) Sam E posted: I have so much stuff at 1592 its mind boggling. The SPM, big S&P tagged the morning high of 1592.50 at 10:28. At (10:25CT) William Blount offered: OK to short now http://t.co/eNjHLsl25B Then the SPM quietly faded back to 1587.80 area by 10:57CT before grinding sideways in a tight, few handle range through the close, settling at 1587.70. Sam E (10:49CT) fibs don't lie, at least not in east Tennessee. Elway put it a bit more succinctly late Thursday afternoon (02:19) - profit taking Friday, [JPM] and [WFC] will shank, retail sales will suck and everyone will be taking profits to buy lear jet fuel by 11a.m. ET.

Collective Intelligence! Slow growth picture … just a few of the recent bad data. Non-farm payrolls data, Michigan Sentiment big miss, softening retail sales - weaker chain store sales – payroll taxes coming to lay an egg? The Fed still stands ready to backstop as the presses continue to roll. April’s POMO schedule http://bit.ly/aBu9yF Repost: The S&P tends to bottom in the last week of February, then has a tendency to rally into the end of the month and beginning of the new month buying. Then the portfolio managers mark the S&P up into the March roll / quarterly expiration as all the new IRA money is flooding in. These cycles / tendencies have one more tendency left and it is well known. SELL in MAY and WALK Away.

[NYT] OP-ED 4-11-13 - Lust for Gold http://nyti.ms/152LPOH Um, I wonder out loud - where all those gold profits go?

Market Intelligence in NY writes “In the very near-term, there has been a lot of “towel throwing” lately as the widely anticipated early-Apr market dip never materialized and rather than fall behind further investors are simply deciding not to fight anymore. The brief rotation attempt that kicked off late last week (out of safety and into cyclical) appears to have petered out and investors are now chasing the same stocks that have been working for months (many defensives hit new highs yesterday including for example Verizon.

This is a scary question for the bears! Will the Pit Bull’s expiration observation kick in? "The market generally makes its low the Thursday or Friday before expiry." For a guide to the S&P market tendencies http://bit.ly/Yias2M

Kathy has had some very good calls! Charts posted by Kathy Garber @tbg4321. Harmonic rotations: CL hold below 91.91 offers short oppty to Butterfly PRZ, w/ intermediate scaling pts (tgts) at 91.12, 90.11 & 89.7, premkt chart posted at (8:03CT): http://screencast.com/t/BDYaYwv85wD At (11:18CT) I just did what I call an "Intraday Training Moment" in my room, here's the short recording: http://structuraltrading.adobeconnect.com/p5b3ihq0bho/ DX has confluence support region at 82.15 http://screencast.com/t/dfSNPpMs7owM

During the Globex session 325k ESM and 1.4k SPM traded on Globex, trading range was 1579.20 – 1589.40. Thursday’s regular trading hours (RTH’s), pit session trading range was 1592.50 – 1581.20 before settling at 1587.70, up 5 handles. The latest AAII data shows the bulls down to 19.3%, lowest since March '09. Bears 54.5%, most since July '10 as the trend, record run continues and the major market indexes registered gains for the fourth consecutive day on Thursday. Also, the NYSE opening imbalance, posted by John Monaco at (08:25CT) was leaning 90% to the SELL SIDE.

The regular trading hours opened slightly higher at 1582.50 -1583.00 ... redliontrader: 15 minutes into cash we have 75 New highs on the NYSE already. OEX P/C sits at 1.6:1 that is neutral. NYSE is -2:1 but climbing toward positive. At 8:55CT the Michigan Sentiment checked in well under survey, 72.3 vs exp of 78.5 tumbles sharply to nine-month low and the big S&P 500, SPM traded a low of 1575.50 in the pit at 9:49CT followed by a new low of 1575.00, double bottom at 10:02. Following [JPM] and [WFC] pre-market earnings reports the [BKX] rallied early, but remained weak and traded 1.5% lower before grinding sideways to slightly higher. As the equities pulled back the 30yr bond was trading well above 147, up over a full point, asset reallocation. Traders chatted about risk off over the coming weekend due to North Korea, Cyprus and the 2-day Eurozone financial ministers meeting, today and tomorrow. At (11:45CT) Jack Broz reiterated: watch the 10YR 132.27 - THAT is the 1.75%. favor buyers as long as above there and remember: i gave you a target at 147.26 in bonds (with support now at 147.06-04). A slow grind higher took the SPM up to retest the opening range at 12:09 before fading back to trade sideways, basically between the 1580-1582 area from 11:15 for the most part until 2:40. 1582.50 area was trading when the closing imbalance showed $1.2 Bil to the buy side. 1583.50 area traded on the cash close before settling at 1581.90, down 5.8 handles on the day. The [DJIA] closed almost unchanged on the day, about 75 points off the day's low and up 2% on the week.

Brian Shepard is a 20-year exchange member of the CME Group.

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