The collision of global markets and social mood

Friday, February 27, 2015

Friday Market Update -- 5s Vs. 30s: Now Greenspan Is Onto It

ES Futures:
Tight range overnight, in levitation above yesterday's session lows.

News:
It's a good thing that Greenspan is back to writing books rather than trying to confuse everyone. In fact, with the lucidity of his appearances now, it seems he may be trying to atone for his sins of deliberate obfuscation while Fed chairman.

Regardless, he just spilled a lot of truth serum in his latest interview on CNBC. It's must-see tee-vee as he admits that the markets have been juiced by none other than the Fed as the economy remains in a "Great Depression"-like condition. Buybacks may goose EPS yet do nothing for the economy.

The coolest part was when he chimed in on the action in the 5-year note versus the 30-year bond, because this is something I brought up back in January.


Anyway, give it a look. Hat tip to Zero Hedge for finding it.



FX:
Quiet after yesterday's action in the euro and USD. Maybe the euro bounces for a month or so before hitting new lows. Maybe not. All I know is that it's nowhere for me now. My interest may soon be shifting back to long Aussie soon.

Treasuries:
Rollover has shifted the volume into the June contract with a huge discrepancy in price in the 30-year bond. Overall, the treasury complex did not have such a great day yesterday after Tuesday's strong gains.

Energy:
Crude broke 48.43. It snapped back well enough, but must tip its hand soon. NG corrected violently into an area that I like, but did so with huge volume. Here too I am less inclined to step in until the structure clears up. There are just too many competing scenarios.

Metals:
Gold feels like crude and NG -- drifting. Better trades will come.

S&P Outlook:
Window dressing still feels active, but perhaps a crack or two has appeared. 2103.20 held for the second day in a row, this time by a mere 56 ticks.

This pullback does not feel impulsive, yet I wonder if it could be a developing "B" of an "A-B-C" of "3" -- or -- a developing "A" in an "A-B-C" of "4" which could mean a larger pullback. Confused?

Here's a diagram:

Here's a chart:


This is a rough idea of the "3" scenario. Not enough time to do the other one, but you can figure it out. Definitely do not use this chart for timing (like with options).

Special Situations:
Volume is drying up as the Facebook is nearing its 83.70 Fib extension target. Monthly volume has gone from a rally high of 2 billion to this morning's reading of 444 million.

The same is occurring in Apple which printed highs in 2012 on 2.3 billion shares and is approaching multiple Fib targets and multi-decade trend resistance on 1 billion shares as of this morning.

This is what NASDAQ 5,000 is built on. Time to watch Greenspan finally admit how the game is played.

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