The collision of global markets and social mood

Friday, October 23, 2015

Friday -- Euphoria

S&P E-mini Futures:
Ripping higher.

Euphoria is the news. China's sixth rate cut has followed Draghi's dovish comments and markets are ripping higher world wide.

Marketwatch just labeled it "rally fever."

This fits the B-wave scenario exactly. A rally on "comments" is a rally often destined to be entirely retraced.

Oh, and there's this. Just found on Stocktwits: a day trading Uber driver. Jackpot.

Bernard Baruch's shoeshine boy reappears

"Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day's financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely. Her paper profits were quickly blown away in the gale of 1929." ~Bernard Baruch

AUD in play higher today, EUR still weak on Draghi's comments. NOK pummeled.

Suddenly things don't look so great. Prices falling.

Both WTI crude and NG hit. NG looks like it needs more subdivisions in its wave structure before upside bets.

Gold and silver outshining copper.

S&P Outlook:
So far, especially with today's euphoric rise on yet more comments but inaction by a central bank, the current action continues to fit the B-wave scenario.

B-waves love deep retracements. The 78.6% level, mentioned yesterday, is 2077.43. Today the S&P should get above the 200dma. A close above it -- currently 2060ish -- should open the door to a test of the 78.6.

However, it doesn't have to do it all at once. There could be a fakeout first.

Yesterday's burst of volume looked great compared to many of the lackluster volume readings from earlier in the rally. But it may be a sign that the public is hopping aboard the train.

When compared to the epic volume during the August down phase, yesterday's "big" volume pales in comparison.

1.75 billion on the NYSE vs 1.15 -- 34% lighter.

I'll also be watching the VIX today. It did not make a new low yesterday while the S&P ripped higher.

At this rate, TVIX will be under 5 soon. And I'll have still more.

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