spx 17th to 21st oct 11, page-11

i never believe this basic hype: charts dont lie.....of course they do! What's a head-fake in a chart if it isnt a lie? Maybe scale is the most deceiving part......

anyways......outside down day.....we must recover most of it be friday or get a down week, we should recover most of it by friday......selling from the start clearly no urgency to get long and the play was hinting in two forms, first the xjo lacklustre sit/swap at the high and the artificial/superficial overnights in the US upto res and then peel down from 1233.......a dirty chop day and i watched mst of it on a 10 second chart while comparing 15 min charts on the VXO/TLT/TRAN/NDX and all were either inverse or failing to offer a constructive buy signal........

the one chart that, still, is a screaming daily sell signal, is the TED and interestingly we now have two days within four where the TED has diverged albeit on a small % basis .....this is not a reason to get bullish with such a small divergence and the overall contraction did not diverge against the recent weekly lows, again, not a reason to get bullish but hints that, at least on short-term basis, we may get enough to last us through to january

there is a small alternative to what most pro traders, who i observe, think is going to happen when they say that the usual christmas rally is already on......and that is that we may go into a B wave lower-low, something ellioticians will be frothing over and that may have begun today already......as i noted earlier there were pro's already attempting to pick an intraday low this morning on positive tick and that's exactly what makes up a B wave ......not that i've followed (cough) that ew stuff much.......even without volume studies, there are particular actions on the lowest time frames that strongly indicate a testing of supply, a purge or an obvious strong push to force weakhands to give up what strong hands want.....when those signals appears and pro's see them on what vaguely looks like confirming indicia then they'll take the cues and pull the trigger......of course, that has nothing to do with the context of the price action......another B wave phenomena .......imo, ime

overall vols remain light

the daily TRIN is oversold, however, the 10 m/a of that is in the neutral/overbought level and the summation over days is probably a comprehensive key to current inside action rather than the exclusive daily cues

.....another thing, anecdotally, i read on a CME groups front page of their pov including the word "optomistic" from their vantage......took a double-check on that! Huh!

we are not done downside.......'must go down to get up' is a saying that never wears thin

thanks to 'mrmarcus' for his input on that saying

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(who'd have thunk this?):

http://www.bloomberg.com/news/2011-10-17/cartier-in-japan-signals-luxury-rebound.html

Cartier in Japan Signals Luxury Rebound
Q
By Andrew Roberts - Oct 18, 2011 9:00 AM ET