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Brian's Tuesday Recap: Doji into big Fed day as GS sets 1750 target, Bob Lang on Mad Money tonight

Brian Shepard

Collective Intelligence!

While much of the talk today may center around this amazing Tuesday streak of up markets, let us remember the market doesn't set up so cleanly. This streak of wins has no statistical significance for the future, just as a flip of the coin could yield 18 straight heads or tails. What are the odds for a 19th? Still 50/50 (considering you have a fair coin). Repeating what Doug Kass says regularly that the “market has no memory from day to day” then we should not anchor ourselves to such random statistics. If you find yourself wanting to be long on Tuesdays just because of this streak then there is clearly something wrong with your overall strategy - posted by Bob Lang. redliontrader pointed out - Doug Kass is wrong … the market (traders and algos) absolutely have memory of day to day.

Don’t miss > I have a segment on Mad Money tonight, Off the Charts -- if you have a chance to watch it - Bob Lang.

FYI: today is the first day the bond/notes roll is doing some business .... keep the roll in mind over the next 4-5 sessions or so. it WILL affect price action -- posted by Jack Broz.

Adding to EURGBP longs here at 0.8498, with 0.8460 stops (both orders), target is 0.8660. http://www.globalfxclub.com/disclaimer 4hr setup http://screencast.com/t/8wmDe6vR  - posted by Michael Wright.

Previously, we had reported the large buyer in the ESM 1550c - he has rolled some up to 1640 and is now rolling up to N 1660 37k have traded by 10:30.

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Posted yesterday - I have my first double matches on gold at this low. This is a major swing low on gold and silver - I cannot stress that enough - posted by Sam E (07:00CT).

Long-term, I'm a bull but it is the short-term that worries me. Although we've been early to turn against this rally (unfortunately), at some point it will have to take a breather. We are sitting at the highest RSI levels on a MONTHLY chart since just before the financial crisis http://twitpic.com/crxtpz posted by Carley Garner.

Posted here on Friday - Increased tensions in the Middle East at a time when President Obama is fighting a triple political scandal ... Things just got spicier. Also, Sam E posted at (07:20) this morning: if we get through a trendline I have at 96.60 you shorts better be real careful on this crude. In all seriousness I think if this pattern plays out cl wants one of 2 numbers, gulp. I am afraid to even say it out loud but you may want to write this one down. 98.88 decent odds. 103.41 better than average odds - my theory on oil is bombs over bankers any day of the week. At (07:21) Roger Volz added difficult short into weekend with mideast tensions escalating - you can say that again...or put another way > Stanton Analytics (07:50) buy the dips DO NOT SELL THE RALLIES UNLESS A SCALP.

We have several events lining up tomorrow - the BOJ, Bank of Japan decision/press conference, Bernanke testimony, FOMC minutes. EU leaders convene in Brussels for a Leaders Summit on Wednesday, but it is a precursor for the more important meeting in June and Draghi has comments/speech Wednesday afternoon. China flash PMIs later that night followed by the European and U.S. data Thursday’s morning, May 23rd. Also, June 22nd the Bradley Model has its turning point or sometime in July http://yhoo.it/18NXaTd  

My dental work is better than my chart work lately... So, I pay attention to the harmonics from Kathy at http://structuraltrading.com  rotations:
Kathy (09:07) ES has reached bearish Bat PRZ 1669.75, premkt chart: http://screencast.com/t/X3FShZia7Y current chart http://screencast.com/t/3k17aYQ7TJhx   
Kathy (09:36) CL testing B pt of emerging bullish Gartley, below 96.2 has 95.86 tgt premkt chart http://screencast.com/t/4zm29mp91w current chart: http://screencast.com/t/n2MRvExM

Today’s S&P 500 trade started with 210k ESM and 1.1k SPM traded on Globex, trading range was 1666.50 – 1661.40. Monday’s regular trading hours (RTH’s), pit session trading range was 1670.80 – 1661.30 before settling at 1664.60 up 1.6 handles. Goldman Sachs' strategy team, which was bearish in 2012, has raised its forecasts for the S&P 500 --- 1750. Be careful with that...

The regular trading hours opened a little over a handle higher at 1666.00-1665.50

Roger S posted (08:55:20): ES is still a percent or so short of the upper daily Bollinger band which lies at 1688. The VIX, at least, does not seem to presage the big up move we'd need to punch that band. The DAX closed at an all-time high today, FTSE made another 52k hi. At (10:33:25): trading 1663-64 area, returning to yesterday’s VPOC 1663 which has been an important rotational spot on several days now, there is a lot of volume here. Comments from the Fed's Bullard backs continuing QE program firms the equities. Fed's Bullard: Adjustable Bond Buying Best Fit for Fed Policy - ECB Would Have To Tweak Bond-Buying Parameters - ECB May Need To Consider Bond-Buying Stimulus - Inflation Below Target In U.S., Europe - Europe Back In Recession, Impact even - Recovery Has Been Slower Than Expected - Fed QE Program Most Like Traditional Monetary Policy. The SPM was trading 1667 area by 11:00 and was testing 1669 area by 11:30 as the and Tony Laporta added the bonds were trading at an intraday highs up 17 ticks indices trading up near their intraday highs if anyone has a clue please share. After a slight pullback the SPM traded up to a new contract high at 1672.00 just after 12:00 CT. After a 2.5-handle pullback the SPM and some sideways trade at 1670.00 the SPM got hit by another buy program that pushed the future up to another new high at 1673.00. After making the new high the SPM sold back off to the 1668.50 area just before 2:00 CT. The SPM hung at the 1669.50-1670.00 are going into 2:30. The SPM was trading 1668.50 when the 2:45 the cash imbalance showed MOC SELL $150mil. The SPM then sold off down to the 1666.50 area. On the 3:00 cash close the SPM traded 1667.19 and then went on to settle at 1665.60, up 1 handle on the 3:15 futures close.

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




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DISCLAIMER: The information and data in the above report were obtained from sources considered reliable. Opinions, market data, and recommendations are subject to change at any time. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any commodities or securities. {jathumbnailoff}