Monday, November 29, 2010
Update
We now have some order, there are currently 1 min negative divergences in all 3 (Q's , SPY and DIA). The Averages are sitting in a very precarious position. Should they break down on volume, we may be opening a flood gate.
3 comments:
The market is currently sitting about $4-5 higher on than SPY than it should with respect to the EUR/USD carry trade. If the gates open, we could see a pretty good sell off down to that level.
I think sentiment is what you need to be watching now, how the market reacts to news. The Germans capitulated on bond holder haircuts, yet the market hasn't done much. It seems the contagion fears are overwhelming the Irish details and I think this is what is going to be in the driver seat until EURO crosses $1.30 and then we may see a damn break.
Remember 3C showed this accumulation in the dollar awhile back. These guys are acting on stuff we will not hear about for probably a week or two.
We are still dealing with the POMO keeping our market afloat, regardless of news. While POMO is not lifting the market, it is keeping it afloat for the time being. We are well above levels that we should based on many different calculations. This implies that when the dam breaks it could get very ugly as it has been artificially inflated and keep up. We'll see soon enough I'm guessing.
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