Sunday Night

Well I did run my scan and looked at each of the stocks that showed up as candidates in the NASDAQ 100 and S&P-500, I'm setting alerts for each and if the set up is right when the alert triggers, a trade post will be put out immediately. This scan will be run every day or so to look for any new candidates that pop up on the horizon. So far there are about 33 candidates, but each day has the possibility of adding more and the next industries that will be scanned will be tech, bio tech and financials specifically, rather then the averages themselves.

ES opened a little stronger then Friday, but futures have since given that up and are trading with a slight negative bias, the Euro opened fairly weaker then ES and looks to be breaking down below a triangle consolidation.

EURO

 Here's the open for the week and the move lower thus far

 Here's the local triangle that seems to be broken to the downside as of now.

 Here we see a longer term trend of lower highs and lower lows

And the same is evident on a very long term chart.

There aren't enough credit markets open yet to get a god read, but CONTEXT is significantly lower then ES.

 The 3C hourly ES chart shows what appears to be a rounding over of the last bounce, which I would consider a bear market rally, one thing about bear market rallies is that they are strong and impressive, they have to be to achieve the point of them, to sucker new longs back in the market, often then are stronger then most bull market rallies, except in the final stages of a bull market when volatility picks up and we see parabolic spikes just before tops form. The 1929 Crash and following bear market had 5 impressive bear market rallies, some lasting nearly a half year, but in the end, the market still lost nearly 90%, it's an interesting study of bear markets.

 The sub-inntermediate trend is volatile to say the least, but stepping back you can see the classic rounding over.

Looking at the S&P on a larger scale, the same classic rounding over is taking place. Once the rounding top is complete, things fall apart pretty quickly as you can see by the chart below.

The scary thing is that this bear market decline in 2008 started out with the US and global economy in much better shape, unemployment for instance,the F_E_D's balance sheet, China wasn't starting a stagflationary cycle, Europe caught our cold, but wasn't terminally ill and we didn't have as many monster Too Big To Fail institutions back then, they were all created as a policy response to the 2008 fall-out, which means the next time we go sliding down the waterfall, we do it starting from a much weaker position and equity prices that have been manipulated and propped up well beyond their true values through means such as Quantitative easing. Kicking the can down the road can work for a long time, but it doesn't mean it is or ever was a good idea. When the piper comes calling, the bill will likely be more then most expect.

I find the rounding over in the market to be interesting when  compared to the Euro's lower highs/lower lows both in the sub-intermediate trends and the primary trends. Once in awhile you have to step back from the day to day and see the forest, it's too easy to get lost in the lines.

Have a great week!