FOMC Day

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Today we get the latest FOMC proclamation at 2pm, followed by a spin session at 2:30pm

You know and I know that The Emperor Has No Clothes, but hey–all those closed business store fronts out there, the hordes of unemployed (and increasing numbers of unemployable) folks, and widespread general dysfunction aside shouldn’t stop ’em from continuing to do their thing and fervently believing the spin.  And for any of us who can’t actually see the emperor’s new clothes, well clearly we are either too stupid or too incompetent to appreciate the splendor of the cloth.  Right?

<rant/>

I have been observing and analyzing the markets for a long time and I believe that there has always been coordinated manipulation to one extent or the other.  It used to be that the markets were allowed to trade naturally for long stretches and then we would see the ‘invisible heavy hand’ come in at critical junctures.  Since 2009, however, the orchestration has become nearly continuous–and while it can be extremely frustrating intellectually for folks who live in a world of rational thought and common sense–the near-constant futures manipulation actually makes it much easier for those of us who just shrug our shoulders and go with the flow to see and predict where the market will likely go.  I have called out in real-time the exact turns here since the recent spotter signal and that is because in the pro’s zeal to engineer the illusion of prosperity–they are relying more and more on black box trading algorithms, and those mathematical models make the market pressure points pretty easy to see for us who are using Stops and Targets.  So, while it is sad on the one hand that America apparently continues to careen towards central government planning under the current regime–at least we are able to prosper here with a great tool to ride the pro’s machinations.  Socialist central government planning has failed in every previous attempt to create a sustainably-prosperous economy, but that won’t dissuade the current kool-aid drinkers from giving it their best try to make it different this time.  So today when the emperor trots outs his New Clothes, try to act suitably impressed–lest any of us be socially or professionally ostracized otherwise

😉

</rant>

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The red channel has served its purpose for a very controlled descent–but this morning we see a breakout to the upside, which is undoubtedly intended to run the bears back to their stops ahead of today’s Fed show.

I think the key line in play here remains the August close at 1993.50, but there is also an open hourly bar gap above at 1999.50–and of course, 11 days worth of accumulated bear stops above 2003.  Normally, I would just yawn here and wait for those bear stops to be run on Fed Day, but we do have a confirmed spotter signal in place and I always am cautious until/unless that signal is invalidated.

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If 1968 is all we get from this current spotter decline, that would be a little disappointing from the apparent technical need for a reset from the recent irrational exuberance that we have seen.  ES 1968 is certainly sufficient to create a higher ST low, and it did touch the top of the ST support void–but for longer-term market viability, it sure would be nice to see a deeper pullback develop to allow a stronger support structure to be put in place.

The weekly chart above shows the road map of the pro’s strategy since 2009.  As I have pointed out many times before, until/unless we get a break of the weekly higher low pattern the current paradigm remains in effect.  However, to my eye, we could use a deeper pullback here to continue the pattern–and an attack on that rising weekly trendline support is where I would go if I were pulling the levers.

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At any rate, the pros are going to do whatever it is that they are going to do–and I remain fascinated and impressed at their amazing ability to place the market at a point of maximum uncertainty just before the proclamation utterance.

The big boy line in play remains 1993.50 and guess right where it is that they have price parked as I type…  🙂

So let’s sit back and enjoy the choreographed show today, which could be kinda interesting this time.  All trends are presently up and the next ST upside target is 2003.  A short-term countertrend sell would come on a move under confirmed support at 1977.75

…my .02

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