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‘Oh, What A Relief Rally’,The Market Correction Formula

Brian Shepard

No $CL_F Relief At The Pump

mts marketrecap 330 300x207 ‘Oh, What A Relief Rally’,The Market Correction Formula

Collective Intelligence!

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 mid-morning.

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.

Snippets: And that’s that: The Russians are not leaving; they are just getting ready to move into other parts of “their country” – it seems. Tensions turn into a brawl in the Ukrainian Parliament. This is precisely what the people were revolting against – total government corruption and this constant desire for one side to oppress another. We may yet see this in an ever increasing number of governments on a global scale. Speaking of which: South Korean – United States – Japan issue Warning to North Korea The antics of North Korea are rising with the Cycle of War since the model on Korea turned in 2012. South Korea, the USA and Japan have jointly warned the communist nation yesterday not to take any more provocative steps –  Armstrong Economics.

Crude was trading over $2 higher today $102.50 area a barrel – before fading back slightly. That’s not going to help, no relief at the pump for you!

Fed Chair Yellen keeps her eye on this indicator: US JOLTS: There were 4.2M job openings, highest since Jan 2008 on last business day of February, up from 3.9M in Jan. Hires rate (3.3%) and separations rate (3.2%) were unch.

Or so we thought: Last week the ECB opened the door to extraordinary stimulus measures … Similar sentiment from BoJ and Fed means we have a pretty powerful Central Bank put in place … **Clarification rhymes with copulation: Will they or will they not – that is the question? The ECB and QE? Yesterday the ECB’s Weidmann clarified previous comments – which lent support to the global equities regarding QE measures that the ECB was ready and willing to take if/when needed. Well, that was then … now he said his position on QE remained “unchanged.” If you read the interview, “I said I will apply the same benchmark I apply to the OMT, to the SMP, to any new program of sovereign bond purchases”

Today started with 255k ESM traded on Globex, ESM trading range was 1833.25 – 1843.50. Yesterday’s regular trading hours (RTH’s), pit session trading range was 1834.50 – 1857.00 before settling at 1838.10 down 22 handles. Nasdaq 100 [QQQ] off 5%, biggest 3 day slide since 2011 and fairly painful for a number of traders. Interesting article posted by … HITMANGOLF: long momo tech short spus http://www.cnbc.com/id/101564158

Today’s RTH’s pit session opened fractionally lower to 1837.00 – 1837.50 and chopped around – trying to rally early. After the 1844 area held the upside, 1831.00 marked the low of the day before stepping higher through the midday, topping out at 1848.50. Writing that makes it sound oh so easy … well, if you were patient, it obviously was possible to trade the support & resistance levels provided. Back to reality … the midmorning chop was in moderate to heavy volume as the e-minis were running ahead of their average daily volume for the third day in a row.

From the chat room: Sam_E (09:25) as i said yesterday i dont trust this thing till we see 1832.  Roger_S (09:25) 1835 SPOT slice and dice?  PivotBoss (09:25) Long NQ 93.  iceChat (09:28) More of the recent same in the equity space – all the 2013 leaders under pressure. however there was/is hopeful chatter of a relief rally – if the bulls don’t step up those weak longs will get flipped. more stops under 1930 area.  parker_schwartz (09:34) drinks on me.  Chance_S (09:32) Long 1832.5 scale 1/3 1834.5 offer to scale another 1/3 at 1836.5.  Raphael (09:35) safe to say longs need mid a.m. low sealed .. parker thoughts?  parker_schwartz (09:36) first place i feel comfortable buying in a week.  parker_schwartz (10:23) WB told you bears in must perform and are dropping soap. 1847 was the real breakdown point & where VWAP was all day y’day … Roger_S (10:36) Battle of 1850 cash?

The afternoon session was sideways to higher in much lighter volume when compared to the early to late morning session. After holding the 1848.50 area the equities quietly faded back and holding the 1841 area on the double test and bouncing. (14:00) MiM – MrTopStep Imbalance Meter showed a small sell side imbalance $200M to sell going into the cash close. On the cash close the futures traded 1845.60 area before settling at 1845.00, up 6.9 handles on the day, while the [VIX] went out 14.89, down 0.68 ticks on the day.

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

Thus far, the preannouncements have been surprisingly light.

Plosser says 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 – thats in Fed speak terms. william_blount (14:50) we have a massive deflation problem which govt minions are trying to offset because govts cannot function without inflation. basically we traded NASA for free cell phones and military % for free everything. Someone only needs to read the 1930, 19040, 1950, 1960, 1970, 1980, 1990, 2000 and 2010 govt budgets – it is somewhat horrifying!

The Chicago way … Revealed: Rahm Emanuel’s top donor bought stock in Marriott just before it was awarded huge Chicago contract  http://bit.ly/1qlYGlk

Below here was posted yesterday: At some point the late sellers, selling in the hole hoping to extend the downside price action, will get a bit nervous. That is what the crowd will be watching for, to see if those rallies can breathe or if they will be met with willing sellers. The past few weeks saw a low of 1834.00 on March 27 and that will be a pivotal area with bigger sell stops starting below 1830 area.

Day two of – So much action, in so little time … so we are going to join the crowd and STFR. However, we have now sold off over 57 handles from the all-time record high printed during last Friday RTH’s morning session. We are now steering down Turnaround Tuesday and a retest of william_blount (10:38) 1844.5- 46.5 pretty big deal this year so far and 1857 area sits above.