Charts I’m Watching: Jul 1, 2014

SPX just completed combo Crab and Butterfly Patterns at the purple 1.272 and white 1.618 at a channel midline.  It’s a Tuesday, and a big POMO day.  But, under normal circumstances there would be a reaction here to at least 1961-1963.

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These days, “normal” means sideways until the close, followed by a 7-pt dip around 3am which is quickly reversed on nonsense ADP numbers at 8:15 tomorrow morning.

I spoke to an old friend the other day.  Paul and I go back to the 80s when we were baby brokers at Mother Merrill.  Neither of us could remember a phase like this, when even the slightest dip was immediately and aggressively bought and algorithms turned charting the daily price action into an exercise in drawing a straight line.

We were pretty sure there hadn’t been a time back then when the worst GDP print in 5 years produced only a 2-pt dip, followed by a 13-pt rally like last week.  And, we were almost certain that banks used to lend money, not just speculate with government funds on securities whose actual value need never be reported.

Paul was on-board with the whole NKD/USDJPY algo idea.  But, we both came to the same conclusion: even if Yellen, Dimon, Blankfein, et al held a joint press conference and announced they were, in fact, manipulating the market higher, would anyone care?  I can’t see Occupy Wall Street braving pepper spray over daily all-time highs.

The reality is that anyone who might even consider shorting might as well have a bright red target on their back.  They’ve been driven out of the “market,” which I’m fairly certain was the plan.  Who knows?  Without shorts, maybe the government and MSM will even go back to telling the truth about the economy once in a while.

UPDATE:  1:00 PM

And, there, in the 20 minutes it took to jot that down (and, that dramatic 1.79 point plunge) a new alltime high!  Thanks, USDJPY.

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Charts I’m Watching: Jul 1, 2014 — 1 Comment

  1. I must admit, I’ve seen some pretty impressive pattern failures this year, that deep crab in June, PRZ SPX1950-55 never got near B and yesterday another large Shark pattern blown away. As you say, something stinks on Wall Street…