Weekly View Assesment of The Trend

What matters for equities is earnings and not GDP growth. US GDP growth projections are being cut, but earnings projections have been little affected so far. Investors and analysts are hoping that, to the extent the soft patch in US GDP growth lasts for only a few quarters ( and who cares about the part time workers without benefits ) and does not spillover to the rest of the world, US companies will be able to protect their revenues and profits (thanks to the Republicans ). Indeed, this is what happened during 2Q, when US companies were able to deliver strong top line and EPS growth even as US GDP grew at only a 1% pace.

The macro picture has deteriorated in recent months, but it has not collapsed. This has reduced the margin for error in terms of corporate earnings.

The market has been volatile, but it has remained resilient because we just aren’t seeing the weakness in corporate earnings. Persistent macro weakness and a few more earnings seasons will likely change that as corporations move to adjust expectations heading into a more difficult environment and the analysts subsequently play catch-up.

The Bulls saved the collapse on low volume this summer and the Bearish Head and Shoulders is in question.

Political comments by CNBC Analysts are in agreement that Investors and Corporate leaders are in a " nervous " mood. What the don't tell the public and viewers is that the majority of these people are republicans or independent high net worth individuals that never voted for this President and all they care for is lowering their taxes. CNBC maintains a republican bias and advocates a self serving anti-democratic view and anti-social-economic equality for many years, and that is odvious to anyone watching this channel. The obssesion with the Bush Tax Cuts continues in CNBC.

Payrolls Day Review

Not a bad day . Four winners before the Open plus 6 more during the Day Session. Plus a winning Open Position.

As with the Manufacturing PMI report, however, the details point to a far less rosy picture than the headline figure and market reaction suggest ;

Aggregate hours worked were flat.

All the employment gains were part-time — full-time employment, as per the Household Survey, plunged 254,000.

Those working part-time for “economic reasons” surged 331,000 — the biggest increase in six months.

While private payrolls were better than expected, 10,000 of that +67,000 tally reflected returning construction workers who had been on strike.

Manufacturing employment was down 27,000 and total goods producing jobs were flat — hardly signs of a robust economic backdrop.

The diffusion index for private payrolls actually fell to 53.0 from 56.7 in July — a seven-month low. It was 68.0 at the April high, which is consistent with an economy slowing down to stall-speed.

The labor market gap widened with the all-inclusive U6 unemployment rate rising to a four-month high of 16.7% from 16.5% in July. This is why the odds are stacked against a sustained acceleration in wages.

Keep in mind that markets did not have much time to digest the US jobs reports Friday before markets closed, and could well take back gains next week upon reflection on the above details. Volumes in the stock market rallies were exceptionally thin, further undermining out belief in the rally.

Wishing all of you a wonderful Labor Day Weekend. If you have a full time job with benefits, consider yourself very lucky and enjoy it before the Chinese Communists take it away, complements of our Republicans politicians under pressure from their Corporate constituents( a.k.a Free Trade Bullshit Continues).

Labor Day Trade Wins Again

Long from 1054.25 , Open Position Gain + 49.25 points per contract:

My Subscribers were alerted to this High Probability / Low Risk Trade and now they are enyoing the fruits of their labor.

There is a tendency for the first day of the month to be higher. Seven of the last 9 first days have been up. The first day of the month is when a lot of new capital is available for investment.

It closed the month of August 10.75% above the low for the month. I have found that when we close in the bottom 20% of the range for the month, the next two months have a tendency to be up.

There were other clues that made this trade succesfull. August 31st was an NR6 , Daily Doji and that sets up another low risk breakout trade.

The Market's Dilemma

Weekly Long Term Picture looks sideways and the fundamentals look very uncertain.

It is a traders market and Buy and Hold does not apply.

Beware !

GDP Report Day - Review

The Long Term Trend Line from the March Low held on friday and now the 1040 Level becomes the major Line In the Sand between Bulls and Bears.

The Clue was in the 20-Day Low:

The fact that new NYSE 20-day lows declined despite the S&P trading 0.7% below last Tuesday’s low indicated we would see a close back over Wed 1054.50 close by next Tuesday at the latest.

Typically you’ll see an expansion of new 20-day NYSE lows when the SPX trades below the previous day’s low given that this is a much more sensitive measure than the 52-week high/low data. When this doesn’t occur, it’s a supportive sign for stocks, and the S&P has a strong record of posting a subsequently higher close within the next four sessions. Of the last 30 occurrences, all 30 led to a higher SPX close (above the setup day’s close) within four days… It worked again this time.

During the Globex session on Sunday if any retracement occurres it will find support at 1054.25, which is Friday's I B High and with the confluence of the previous VAH 1055.50. This 1054 level is also the 38.2 Fibonacci retracement from Friday's High. You can Bank on it !

Monday , August 30th

As predicted above the market retraced back to 1054.75 that is only two ticks from 1054.25 ( Prev I B High ) and is also the 50% Fibonacci retracement from Globex High. The 1055 is the Pivot. Sold 1055 in the 6th Hour . That was the Line In the Sand. The target is 1010

Position was exited during the Globex session for a 10 pts profit.

Tuesday - August 31

BUY Stop 1054.25 . Filled Long 1054.25 - Open Position + 27.50 Pts

Setup : N R 6 and Doji

Wednesday September 1st : Long from 1054.25

Summertime is Beach time and Diving in the Blue Ocean

What a week at the beach !, diving and cruising before it gets all polluted. Saw it coming years ago when the big Oil companies saturated the Gulf Coast with oil rigs and the politicians gave them the green light by accepting their bribes. Too late now.

On the markets:

The SPX will trade above 1200 again before Labor Day

If the devastating path that Obama has us on isn't changed soon, the U.S. will face the same debt problems as Socialist Europe, and being a debtor nation, who in the hell is going to buy our debt when there is little confidence that we can support it.

That is not a problem for China because they are not facing a sovereign debt collapse like Europe is now, and the U.S. will be in a few years under the status quo. China sees it coming and has been shortening its maturities on the U.S. treasuries that they hold, and Japan is now the primary holder of our U.S. long term debt. The initial reaction to the EU sovereign debt default is to buy the USD, Gold, Treasuries, all of which we see now, and we could also see the foreign capital seek temporary haven in U.S. equities. The EU bailout of the banks [although they say Greece] is expected to do no more than postpone for a few years the inevitable debt collapse in Greece, Portugal, Spain, and possibly Ireland.

The ES will climb up to 1121 - 1130 this week , that is the top of the May 10 Gap and the Hourly down trend line. By the way that 1051.25 Low on last Friday 5-21 was the low made on NFP ( Payrolls ) Day February 5th, before the N.Y. Open. The Day session Low that day for the ESH10 ( March ) was 1040.75.

Trade well and go to the beach before it is polluted. !

There are many reasons why I will never trade Energy or Metal Futures

Back from some fine diving in the coral seas,

But, here is the most important reason among many why I will never trade Energy or Metals Futures.

The following market manipulation facts have been known to me and many of my pit traders friends for a long time:

US Futures Regulators Fine Banks for Irregularities

Published: Friday, 30 Apr 2010 5:31 AM ET

US futures regulators fined Morgan Stanley $14 million for failing to report a big block oil trade and fined Moore Capital $25 million for attempting to manipulate palladium and platinum futures.

The CFTC also ordered UBS Securities to pay a $200,000 penalty tied to the Morgan Stanley settlement.( another guilty manipulator )

In the Morgan Stanley case, the CFTC said a trader from the company arranged a block crude oil trade with a UBS broker for Feb. 6, 2009, but the two agreed to delay reporting the trade until after the market closed. In clear violation of NYMEX rules

NYMEX rules require block trades to be reported within five minutes of execution.


The CFTC fined Moore Capital Management — one of the largest and most consistently profitable hedge funds — for trying to manipulate the settlement prices of Platinum and Palladium Futures contracts on the New York Mercantile Exchange, from at least November 2007 through May 2008 by entering trades in the last 10 seconds of trading in a manner designed to exert upward pressure on the settlement prices.

The practice is known as "banging the close."

The biggest market manipulation charges from the top U.S. futures regulator were in 2007, when BP Products North America agreed to pay $303 million in sanctions for attempting to manipulate the propane market in the north-eastern United States in 2003-2004.

This is the same Oil Company that is responsible for the recent huge Oil spill in the Gulf of Mexico this year. This oil pollution is going to destroy the fine beautifull beaches of Florida and ruin many fisherman and scuba diving operators in Florida and the Gulf of Mex.

More prove and evidence of Market Manipulation:

Earlier this year, the CFTC fined UBS $130,000 for exceeding spot-month position limits in natural gas, heating oil and platinum futures contracts between 2006 and 2008.

In 2004, Enron Corp was fined $35 million for manipulating the natural gas market, among other charges. Last December, CFTC sanctioned MF Global Inc $10 million for supervisory violations.