About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Friday, August 01, 2014

SPX Daily Chart -- Cliffhanger

As expected the SPX did register an interim top in Jul. No genius here as there were a fair
number of people looking for a near term top. The fates conspired to engineer a most interesting
end to the week. Thurs. had a raft of heavy profit taking that saw the SPX fall sharply. Selling
continued today until the market hit key support levels, and then like magic, the SPX caught
bids and set off a short squeeze. At the end, The SPX rallied above that "golden" support near
the 100 day m/a and also closed very near major trend support around 1930. Quite a feat!
Here's the chart: SPX Daily

Despite the sharp recent sell -down, the market remains in the groove it has followed since
Sep. 2012 when the big QE 3 program was set up. All the sell offs since then that reached
trend support and the 100 day m/a produced near term oversolds that turned into solid dips
to buy. The Street wants you to feel this way come Mon. Had the SPX blown through all
this support, no end of technicians would have flipped bearish. No way to send people off on
holiday.

So, over the next week or two perhaps we get to see whether despite receding QE and the
prospect of an eventual  end to ZIRP, players want to resume pushing the market up on a
strong course or whether the guys decide to take it easier and acknowledge rising risk.

The market is in a clear short run downtrend and is mildly oversold. it is also unstable
despite today's close above the low.

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