there is a worriesome chart pattern in ES, on the daily chart, its almost a 'step off' pattern, could lead to significant downside progression if the current pattern isn't rescued, leading to break of 1380.
ES Journal Archive (2006 - 2008)
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the interesting aspect of it, the new parallel trendy comes in at 1410-11, the gap the Vol keeps mentioning.
its fits in with the macro economic gloom, gripping the country/globe in reference to the situation with the US and dissappoint with FED policy.
its fits in with the macro economic gloom, gripping the country/globe in reference to the situation with the US and dissappoint with FED policy.
Just a little night scalp that has the chance to become more.
Is this the same Dean that I used to trade ym with back in the chatroom ?
The only question is Spec, are they going to be nice and let the shorts first get the gap fill before the year end ramp ?
my gut is telling me, most are worried with the situation,
oil/gold/war/dollar/
fed policy, a 50 basis cut wasn't expected, sometimes the markets prefer the expected in terms of stability. He could have done 25 /25/ 25, it really undermines the dollar and confidence in the US and its spending propensity.
with the cut, he undermined the asian bond holder position, how can you continue to spend and then undermine your bondholders. He really didn't need to cut 50, and could have preserved the gradualists approach and kept long term rates low, long term rates backed up for a short time, they should drop back down, if he doesn't cut at the next meeting, and reaffirm his gradualists tendencies.
Maybe he did not want to be like greenspan the way he waited until after the $hit hit the fan.
the ideal trade is:
long bond/notes
short equities
long gold
long oil
short dollar
short lumber
ala stagflation trade..I'm not sure if its just me, but I sometimes can sense, a global sentiment/psych vibe. The global sentiment pscych vibe seems to be entering a winter of discontent, almost as if a severe psychological breakdown is about to occur.
I'm usually very optmistic about things.
the rationale is as continue middle eastern strife, propels Oil higher, continued war spending fuels, loss in dollar value, ultimately leading to a break in equities, as the savings rate goes up, traditional methods of asset allocation will shift to a higher bond/equity ratio's. The main driver being lack of domestic profit growth.
Higher oil prices eventually crimp domestic profit growth. The increased revenue from Oil/petro dollars can be put in interest yielding instruments but those instruments need to be hedged against loss in currency value, leading to dollar decimation.
support
to shift attention away from domestic issues, I think War with Iran will breakout next year.
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