Channel Guy has some nice little technical Mojo. I am just a Family Guy with some OJ who would like to send a message on behalf of the American tax payers to Goldman Sachs and the rest of the banks. 

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More useless observations based on some more lines drawn on S&P weekly chart.

• Prior to Mar 9, the market was down 8 out of 9 weeks
• From Mar 9, it is up for 8 out of 9 weeks to close at or near where it was 18 weeks ago. How is that for symmetry?
• Blue rising trendline and 941 are converging, neckline for a POTENTIAL inverse H&S all are converging.
• What next? potential sell off to 820 and then a bounce.
• Here is the chart:

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[From the perspective of bears, of course!]

[Updated with NDX chart]

For eight weeks, it seemed like

• all bad news is either “priced in” or good news
• all good news is great news
• economy has “hit the bottom,” and the recovery is just a street block away
• gold is bad, dollar is good, stocks are on a tear, treasuries are strong

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Update 6:50 PM: Everybody on CNBC Fast Money show are Bullish. Jeff is cautious, but bullish. Seems like everybody who was bearish on stocktock has either given up or bullish.

Update: 4:00 PM: Rising trend line resistance held at the close. Even slightly higher close tomorrow will also keep the resistance intact, because the trend line is rising. Strange action in financials during last hour of trading – huge swings up and down. That usually happens when a major reversal is about to happen.

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(now updated)

Darned if I know!

Things that are compelling for (at least short-term) bear case:

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Several times I mentioned here that I follow Jesse’e Cafe American blog.  Jesse is an experienced trader who has proven to be more right than wrong on both sides of the trade.  Here made these astute observations in his blog entries today.

1. This rally is looking increasingly artificial and led by buying in the SP futures, which was the trademark intervention established when Robert Rubin was Treasury Secretary.  This does not mean it cannot go higher, as the markets are awash in liquidity with no productive outlets that can compete with the easy returns of the hot money speculation machine.  It does imply that on news this rally could turn lower with some serious momentum.  ….. For now this rebound in US equities a slow short squeeze probably led by the momentum traders and by the bankers who met with Obama at the White House. We’ll know more when Obama produces the details of his discussions with them in keeping with the transparency he has promised. Or are the bankers to Obama what the oil companies were to Cheney? [Link]
2. The major source of profit for Goldman Sachs was from speculative trading. There will be no recovery in the real economy until the financial system is reformed and banks are restrained into productive functions within our society. [Link]
   

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Would have been shorting all the levered fund, especially the 3-x Direxion. Duh! Probably too late now. But If you shorted or, better yet,  bought deep out of money April puts for April on FAS and FAZ and held on to them till today, you would have done so much better than the market.

Since Jan 1st of this year, FAS went from 25 to 9.5 today;

And FAZ went from 38 to under 10 today.

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First of all, despite being able to predict the selling into early March, I had been burnt badly by being in levered bear funds in the recent bull surge. My money management sucked, big time! And then there are powers that be who finally got some control of the situation. The people in the know got the plan transmitted to them well ahead of the rest of the investment public. However, when Citi said they were “profitable” thru Feb, it is a big clue for the public (and the bears.) Like many, I was too slow to react. In one of the relies I mentioned that S&P may have another hit at the upper BB before retreating. That scenario is looking more likely now. I will post my useless thoughts on the market as a whole later.  But for now, I would like to present my useful take on APOL.

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Congress wagged a finger at FASB and said, “You shall change the mark to market rules.”

FASB may say yes to Congress tomorrow (April 2) and help banks “boost” their profits by 20% out of thin air.

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We all know that the fundamentals are awful. The only thing that was keeping the market above Nov lows is because S&P and most world indices are above their Oct and Nov lows. Not any more.

As of Friday the 27th of Feb (end of the month also, a multi-year low on a weekly close has been confirmed. Confirmation of multi-year low on monthly charts will have to wait till end of March. Thus, the weekly charts gave a screaming sell on Friday. The dumping we saw today may be because of this.

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