The collision of global markets and social mood

Wednesday, April 16, 2014

Noise And Jitters Or Worldwide Stimulus

One of the best narratives of the last 36 hours was found on Zero Hedge this morning.

Futures Soar 40 Points In Hours On Hopes Of Futher Economic Weakness

Could it be that the out-of-nowhere short covering rallies of Monday and Tuesday afternoon were brought on by speculation or rumors of new worldwide stimulus efforts by Japan, China, and the ECB?

I myself had thought it was due to a Yellen-Fed rumor. The idea of another worldwide stimulus is far more intriguing.

Here's the bottom line for me: until the S&P gets above 1872.53, it's noise and jitters. I see a falling wedge in play (what is it with wedges lately) that targets lower prices.

After those lower prices, however, I will be a buyer. Let's hope we get the same intensity of buying then.

I'm beginning to target the 1763-1777 area for a final low. There is a confluence of Fib targets there along with the all-important 200-day moving average at the lower end. 1737.92 remains a hard stop for this scenario.

1763-1777 could be quite interesting from a time perspective, too. Getting there could put us in the April 20-24 window of the Cardinal Grand Cross. Now that the full lunar eclipse/full moon has shown us short covering rather than a crash, perhaps the Grand Cross could show us a lasting bottom for several months.

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