Market trading in no trend no volume fashion today again. Below are some important charts. First presented 30 day charts of Stoxx and SPX. Note we are still trading within those Trend Channels, although markets are losing some steam lately. Just wait out the charts, until we start breaking soon.
Stoxx 50 30 day chart.
The markets have put on a huge rally lately. With correlations at extremely high levls, pretty much all indices have rallied hard, and now start entering the reisistance levels. With short interest at elevated levels, we won’t be surprised if the markets tops out with a false and volatile break to the upside, in an inverted shake out of shorts, before the leg down resumes. For great reading on volatility, check last week’s post from Artemis Capital Management.
Some charts resemble very much the last nasty sell off in 2008. What many forget, is that actually many indices are rather flat compared to mid August levels. We have been building up dynamics for a big move, that should start occuring soon. Full Chartology below.
With Markets falling hard in today’s session, let’s review some important Index Charts. We wrote of the big sell formation last week. We are now trading on those support levels. Will the market fool everybody again, bounce up, and confuse both bulls and bears?
As HFT are dominating all trading, we might just get that flash crash again. Market is sitting on critical levels, especially the SPX. Below charts with important levels to watch. Make or Break, yet again.
SPX sitting on the Edge….
All charts continue.
As we mentioned this morning, the squeeze set up is here, and we expect the move up to be brutal, as many of the permabulls have now joined the bears. Sentiment indicators are reading extreme bearishness, and therefore we expect the squeeze to continue higher. Every pundit is now talking as if Europe is bust, and that is too late. The squeeze is in, and will kill many of the new “smart” shorts. Below some of our most important charts, as of Friday close.
For all Charts, continue below.
Some quick charts before Europe closes. With margin calls and hedge fund momos selling today, market rebounded, and the set up for a big rally could be here. While people sold off stuff in a “slow” Algo Panic, we might just have hit the bottom, at least short term. Despite us being bearish, today’s nice reversal has shaken out weak hands, attracted new “Europe is going bust shorts”. Time for the new shorts to feel the pain on the upside. Some European reversal charts below. Stoxx, MIB, IBEX.
Majority of the European Indices are within the down trend. The down momentum has eased slightly, and we could be retesting some of the resistance levels a little higher. Market is in a buy the news mood, whatever the news is, until people realize reality.
Dax testing down trend channel.