New Swing Position

Sunday Night Globex Session:

SOLD 1110 E-Mini S&P500 ( ES )

Now trading at 1087.75 ( 9:45am Tuesday morning )

Financial Press Overview:

In the absence of key economic data releases and few corporate announcements, today's trading remained largely under the influence of the direction of the US dollar, as well as under comments made by Federal Reserve Chairman Ben Bernanke.

Speaking before the Economic Club of Washington D.C., Bernanke reiterated the Fed's intent of maintaining interest rates at low levels for an extended period of time. It appears the Fed was compelled to reiterate its stance on interest rates as the market had become jittery after last Friday's stronger-than-expected employment data which had widely been interpreted as a potential early signal that rates may move higher sooner than expected. The jobs data had also sparked short-term strength on the otherwise long-sliding US dollar.

The comments made by the Fed Chairman served to quell the US dollar rally, generating a loss on the greenback against a basket of major currencies. Dollar weakness in turn prompted some early strength in equities and commodities. Interestingly, equities were not able to keep up their rise; the market rolled over in the afternoon. This prompted some market analysts to comment that even the prospect of low interest rates over an extended period of time was not able to entice buyers in this market that looked 'tired'. In contrast, some analysts however believe that given the slow pace at which the economy appears to be recovering, higher interest rates are not in the cards for the near future.

Gold was not able to profit from the sliding US dollar, likely also a result of comments made by the Fed Chairman in his speech today. Bernanke was quoted as saying that 'The Fed is committed to keeping inflation low and will be able to do so....,' adding that inflation 'appears likely to remain subdued for some time.' These comments likely impacted gold today, reducing its appeal as a hedge in inflationary times.

Another Brilliant Observation

The Obsession with Volume Profile continues but NO trade setup !

You're going to like this Synonimous ( Z_Bob)

The EURO Leads the way down..

The EURUSD has made a significant close below a key Daily Trend Line ( not shown on this chart)

Here is why this is an important correlation in intra-market analysis.

Weekly View Assessment of The Trend

Correction In the chart: #6 - Small Businesses pissed-off at the President on his lack of follow-through with the Economic Stimulus Plan.

Back in 2003 when the weekly UP trend began the price never traded below the Blue MA. My expectations for this trend is the same unless there is another financial extraordinary news or the unemployment continues to kreep up or the Dollar starts trending up ( not before Helicopter Ben hints at rasing rates) or a combination of all.

Looking back to the beginning of this advance, there have been a total of nine breadth surges of better than 9 to 1 up volume vs. down volume which have occurred during the early weeks or at the start of each new rally. These predictive days have already been proven correct. They have no upside limit though so higher highs can still be ahead.

Three weeks ago there was another breadth surge. This time it was a 16 to 1 up vs. down volume rally on the NYSE. Watching for a second such day to confirm a bullish signal based on this indicator.

The target for this rally is still SPX 1119.31, only 1.1% higher based on Friday's close. A decisive close above SPX 1119.31 would point to a run to the next resistance level, at SPX 1226.

Unemployment Report Stuns Wall Street but doesn't fool some traders

The Jobs Report stunned Wall Street Friday morning at 8:30am ET. From the trenches, the traders bought the news quickly, many were short ( bearish Daily signal ) and had their stops loosses orders placed above the previous high. This was a classic short squezzed.The Futures spiked up 15 points on the S&P sending shorts running for cover. ( UUUPS ! Ouch ! ,they were DEAD wrong ! LOL )

While this number was tremendous, it also has to be looked at as slightly suspicious. Why?

Mainly due to the fact that we are going into the Holiday Season and a large jump in workers which off set losses was due to temporary jobs. In other words, retailers hiring for seasonal employment going into Black Friday and Christmas ( Low pay NO benefits). This hiring helped reduce the amount of net lost jobs in a major way. There you have it , a very deceiving Jobs Report Mr President.

In addition, 100k people decided to stop looking for work. This comes off the top as once they stop technically looking for work, they are not counted in the unemployment rate which dropped from 10.2% to 10%. Why do people stop looking for work?

Well at some point, especially into the holidays, people tend to throw in the towel ( while others commict suicide) Either it gets too frustrating and depressing to continue to not find work or the holidays are a time to spend it with the kids, wives and extended family, rather than being out hitting the pavement. In any case, the number was very misleading.

Bearish Signs In the Cash Index SPX

There is a high probabilty that prices will drop next week.Will look for a short entry in the $ES_F on Sunday night Globex session.

Payrolls Day Review

NO open position at this time. Performance Record available upon request. My E-Mail is private and classified. Follow me on Twitter: Eagledives, Have a good weekend.