Key reversal

November 7, 2013

Key reversal day in the works? ES and YM hit all time highs only to have a very strong downside reversal. NQ and EMD broke down from tight multi-week trading range.

Just looks like every rally of any kind is getting sold.

For me, will take a few shots tomorrow and next week, i.e. 'hope' for solid >9th life cat rallies to try shorts with tight stops. Alternatively, will look for lateral overnight movement followed by break of support in the AM session for less preferable entries.

Was looking for NYA to break 10,200 and/or for the Dow to hit or approach the ~16,000 'imaginary' resistance, but the reality is that these indices are testing their obvious resistance 'ranges'. Risky to think that longs and BT*D are anything of a good idea here, IMHO.

Bulls, thoughts? Still looking to BTD now or anytime soon?
 
Just posted on ES Journal, looks like too strong of a technical reversal signal* to defend here even though it's near the 20-day EMA. The stronger defense levels are the 50-day EMA and the lower trend line (there's been a very steady channel in progress for quite a while now).

* on the ES a failed final flag + breakout of the range low all in a single day
 
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Sure seems like a jab down in the works. Selling across all asset classes. The official word was "spooked" by the rate move across the pond but the Nasdaq led this as momo has been weak for a weak. 2 weeks ago the broader market rolled over. The smack down from a retest of the all time high shows where the pros were selling. The question is how much steam does this sell-off pick-up. The central bank seems to fear even a modest correction these days. So who knows. Seems like uncharted waters.. A big sell-off if it were to happen would be very unexpected. So another 5 % mini-correction? Then ramp to new highs in 2014 before we roll over for a bigger dunk in Late Jan/Early Feb?

But yes today's action was not reassuring to managers sitting on big profits. Why blow a stellar year? Take your profits and rebuy at lower levels.


Watch bonds to see if the money flows into short term Treasuries or Bills
 
Can't take down the bull. The action witnessed today is more typically seen at bottoms not tops.

As many have said so oft so recently---bubblesville.......
 
http://www.businesscycle.com/ecri-n...arch-bloomberg-interview-central-bank-actions

ECRI's Lakshman Achuthan explains what's going on with the disconnect between the "Real Economy" and the "Financial Economy", i.e. the "Equities Market". This is the "Wealth Effect Lever" the FED and other Central Banks are pulling confounded by true currency wars amongst nations to boost their crappy economies by competing in the currency devaluation.

You just can't make this stuff up.
 
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