Yessss! They filled up the punch bowl again today. I hope you did what I wrote yesterday. That is, did not do anything. Neither long nor short. I was expecting that SPX will go up today but I did not expect a new high. But hey, we tested 1358-1360 level and that was the ultimate goal. The following is a chart from Uempel .
So let us see how far it goes. It shows resistance at 1360 level.
AUD, the FX proxy for risk assets seems to have made triple top.
/ES or S&P 500 futures showing a double top in the one hour chart.
Although SPX cash index made a high today, Emini made a high yesterday and it did not take out the high yet.
With all my indicators flashing red, I am not chasing this bus. Even if I am wrong, I might miss another ten or twenty upward points, but the risk to the downside is not worth it.
The CBs have flooded the world with fresh liquidity and everything is being done just to create enough fire-wall around Greece. Today’s rumour was the ECB bond swap news story and the momo chasing lemmings took the bait hook line and sinker.
Time is running out for a Greek deal and more and more it seems that by February 23, Greece will declare insolvency. The negotiations with the private bond holders are not going anywhere.
Please read the complete article and you will understand why it is such a hopeless situation. All the liquidity is actually needed to save the European Banks from the collapse after the Greek default. Even if the deal is finalized on Monday the 20th February, it will still include a list of 24 prior actions to be completed by the end of the month, before the aid is disbursed. There is not enough time to put all the ducks in a row.
Coming back to the US markets, I expect that the punch bowl will be taken back tomorrow and the Junkies will be put on a Detox & Cleansing diet from tomorrow till the end of the month. But no front running please. Wait for the confirmation of the trend change. Better still, if you are trapped in short position, you may get an opportunity to get out. There is too much liquidity in the system and unless the default is triggered, good correction will not be forthcoming.
Thank you for sharing my thoughts and reading http://bbfinance.blogspot.com/