Tuesday, September 27, 2011

09-27-2011 outlook

As expected the market had an upside bias.  For most of the day the market was mixed/flat (Dow, S&P up, NAZ and Russell down).  The surge in the last hour exceeded our expectations.  So what about today?

Gold may have found a near term bottom.  The news out of Europe should support the market (of course by next week who knows about any plans being discussed in Europe).

The bias remains up and the final hour surge probably means we gap up to open the day.  I expect the shorter cycles may have built enough down side pressure to cause a pull back at some point during the day, but the day should be up at the end of the day. A level of 1180 would not surprise during the day.

The primary change from yesterday is the 2.8TD cycle should turn up during the day and support the upward bias. This leaves the 5.6TD cycle as the sole down cycle.

Here is the SPX swing cycles:

GL traders.  Do your own analysis.  Feel free to share views.


  1. Just some notes:
    Phil Davis noted that the market has approached S&P 1200 6 times in 8 weeks only to fail. He tend to believe it will fail again but is watching various indices.
    Trader Dan feel Gold/Silver buyers will not enter the PM market in a large volume until the volatility calms down.

  2. Hm Joe did this say this wasn't the kind of market to hold things overnight lol. I didn't bet on this bounce but if I did this close would be scaring me! I shifted more towards cash about 0.95 days early but I don't mind :)

    P.S. German court says they need a whole new constitution before they can approve the EFSF expansion.. not sure how the media "missed" that one all day.

  3. Doctrader - thanks as always for the info.

    Morla - well I thought we would get a pullback a bit earlier than we did. I got a feeling this European bailout thingie has a ways to go before it is locked in.

  4. From what I've read it requires an actual referendum of the German people, meaning people other than politicians and bankers would need to approve of this idea.

  5. Morla - from seeking alpha -

    As the German high court ruling provided no real clarification to the markets, it signaled that the Parliament should have a much bigger say in future bailouts.

  6. The Judge himself insists he's being clear:

    "Dr Vosskuhle said that the improvisation of far-reaching policies had become "dangerous", and warned against schemes to circumvent the rule of law with backroom deals. "Germany has a great affinity for the rule of law. People expect the political class to obey the rules."

    He reminded leaders that the court had set clear boundaries to EU bail-outs in a ruling earlier this month, although it gave the go-ahead for the package of measures agreed so far.

    "Our judgment makes clear that the Bundestag cannot abdicate its fiscal responsibilities to other actors. And no permanent mechanism may be created that entails taking over the liabilities of other states," he said."

    "The sovereignty of the German state is inviolate and anchored in perpetuity by basic law. It may not be abandoned by the legislature (even with its powers to amend the constitution)," he said.

    "There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit – which might be politically legitimate and desirable – then Germany must give itself a new constitution. A referendum would be necessary. This cannot be done without the people," he told newspaper Frankfurter Allgemeine."


  7. those were 2 separate quotes my attempt at formatting failed.

  8. Morla - thanks for the additional information.