Before the Open (Sep 12)

by admin on September 12, 2011
in Before the Open

Good morning. Happy Monday. Hope you had a nice weekend.

The Asian/Pacific markets closed down across the board. Hong Kong lost more than 4%…Australia more than 3%…all other down at least 1%. Europe is currently getting hit hard. Losses are in the 2-4% range. Futures here in the States point towards a large gap down for the cash market.

I don’t have anything to add to my weekend comments. The overall trend is down (it’s been down since early August). The short term trend is down. All the key groups such as the financials and oil the semis are trending down.

Here’s the 60-min S&P chart I’ve been posting for two weeks. Last week started with a big gap down, but the index was in the middle of its range. Hence it had a cushion to work with. This week will also start with a big gap down, but there’s no cushion because prices closed Friday near support. Today’s open will take out the last two reaction lows and put the index near 1125.

Right now Greece is in the world’s crosshairs. If they default on their debt, we could wake up and see the S&P down 100. If they get bailed out, the opposite won’t happen, but we will get a nice relief bounce.

One of the problems during the financial crisis here in the States was how connected everything was. Once one domino fell, the entire system unraveled. If the same connectedness exists now, a similar scenario could play out. My S&P target remains at 1000 for now. More after the open.

headlines at Yahoo Finance

today’s upgrades/downgrades

this week’s Earnings

this week’s Economic Numbers


33 Responses to “Before the Open (Sep 12)”
  1. RichE says:

    EZU1: Looks bullish at the moment.

  2. Aussie Jay says:


  3. Howard Weinstein says:

    McHugh once made a statement something to the effect that once a pattern
    gets established and everybody in the media knows about it somehow it
    fails to materialze. I am referring to the Head & Shoulders pattern
    which is the current rant among all the EWavers. I stayed flat over
    the weekend because I had a feeling something like this might happen.

  4. RichE says:

    This doesn’t make sense. The EUR/USD is up, the UUP is up, and the SPX is up. Drachma to EUR to USD to SPX?

    ESZ1: currently short.

  5. AussieJS says:

    is it a quad witch
    a german dax bottom
    small 2 of wave 5 down
    a normal gap fill as daytraders like
    is a a gigantic big bad black bear with pink pokerdots

  6. RichE says:

    ESZ1: I’m FLAT, but this dip doesn’t look supported.

  7. AussieJS says:

    im eating big bad bulls for breakfast
    short at piviots

  8. RichE says:

    EZU1: I’m waiting for 1145 go short.

  9. RichE says:

    ESZ1: Darn! Shoulda stayed SHORT.
    S1(1137) R1(1146.25)

  10. RichE says:

    EZU1: short S2(1131)

  11. AussieJS says:

    i didnt try to milk it

    piviot to piviot —world scalps on all six indexes i trade

  12. AussieJS says:

    have u switched over to the new contract,RichE………..ES.Z1

  13. RichE says:

    ESZ1: Looking to short 1142.5

  14. AussieJS says:

    im going to sleep

  15. RichE says:

    I’m going to lunch.

  16. RichE says:

    EZU1: looks like S3(1127.75) may hold.

  17. PeteM says:

    For those with a non-daytrading perspective (swing or longer term), I call your attention to today’s trading thus far at 2:30PM (EDT) in the context of Jason’s comments last week regarding the SPX movement since the AUG low at 1101. I referred to it as a “flag formation”. Jason remarked that if the trading continued much longer without a downside break, it might evolve into a longer term sideways trading range. I think he may prove correct, absent a sharp sell off today/tomorrow.

    The implication is that, while we could go slightly lower (but hold 1101-1120), what appeared to be a “flag” formation could morph into a “triangle” formation – as just one possible pattern. Furthermore, if 1101-1120 support holds here, it may prove to be an opportunity to get long for a swing trade with an upside target of at least SPX 1160-1175. From an EW analysis perspective I would see this type of behavior as more confirmation that we are undergoing a 3 wave decline from the MAY 1370 top. However, regardless of EW analysis, the longer term trade is to use any rally under this scenario as an opportunity to get more agressively short above 1160, in my opinion.

  18. PeteM says:

    One final comment for today. The trading today has the look of an “ending diagonal” which may be ending (or has already ended at SPX 1137). A break above 1151 would appear to confirm that and suggest a test of SPX 1158-1160.

  19. RichE says:

    What good news just happened?

  20. PeteM says:

    The battle now should be between the bulls & bears to see if the bulls can close the day above the lower “flag” trendline or if the bears close trading at or near the day’s low and hold short overnight

  21. AussieJS says:

    no just woke up—this looks like normal opts ex action

    big hedgie market makers like to have a few runs at a strike before moving on

    there are a lot of puts out there so a little sideways/up would not suprise

    but what would give a added boost was if the german dax has bottomed–its fallen 2/3rds of 09 dead cat bounce–tonite gave a doji bottom

    the dax controls the ndx

  22. PeteM says:

    aussieJS – and by the way, weekly RSI in deep oversold area with MACD looking overdone to downside as well.

  23. RichE says:

    Geez, that’s from S2 to R3.

  24. AussieJS says:

    apparently the rumour today was italy asked china to buy its bonds

    what has that awesome dead cat been up to now

  25. RichE says:

    See ya’ll tomorrow.

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