Turkey Hangover, but the Market is in the Cycle

For at least a month we have been watching a large cycle develop, as I mentioned  Wednesday, this is one of those opportunities we only see a few times a year and most of us made our preparations for this a week or two ago, they should pay off over the coming weeks, maybe months.

Today is a noise day, run mostly by computer algorithms as the humans are in the Hamptons or wherever the Wall St. folk are off to, they aren't at work today so what happens is largely irrelevant unless you are a RIMM long (one of the few stocks we like long on a longer term basis) as it opened up about +12% today, right now about +10%.

We predicted the rise of the Euro based on the accumulation seen there and as you know the market has a strong correlation with the Euro, DESPITE two failures in the last week to agree to terms to fund Greece before they are the first industrialized nation in over 65 years to default on their debt and despite the Euro's nasty reaction very early Wednesday morning this week, look at where the Euro is now (which means the $USD is under pressure which is another theme we saw in $USD distribution)...

 The green arrow is the start of FX trade this week, note the EUR/USD put in a bottom last Friday and you may recall this post from last Friday in which for once, I knew we were there and wasn't going to be bothered spending the weekend trying to pick out clues from the charts...

"I liked today's end of the week, it didn't leave me with an annoying question in my head that I knew I'd spend hours over the weekend trying to solve. The market showed some real changes in character, even though that process has been underway for weeks (which should give you an idea of what we could be dealing with) and did so on an op-ex day."

Here's the EUR/USD since the start of trade this week, just a closer look, the major dip in the Euro on the 21st was the Euro-Group failing to come to an agreement on Greece, but as I have always maintained, "Once Wall Street sets up a cycle, unless the market sees Armageddon, they are going to run it"; it simply costs too much money, there are too many profits at risk, and too much time setting it up not to run it and this is a pretty big one.

Apparently it doesn't even matter that the consensus is Consumer Sentiment is so bad and the Consumer Credit situation that most people think Black Friday (today) will be a flop, as you know the market runs on forward looking sentiment, not real time reality in most cases, yet the EUR/USD is still closing in on the very psychologically important $1.30 level which many CNBC pundits said we'd never see again and the market is turning up, which many pundits also thought we wouldn't see.

If you own one of our favorite longs, RIMM, you might feel a bit different this morning. This is what RIMM looked like just before the open.

 On a daily chart RIMM's base is visible, so is the breakout and in the green box is the bid/ask in pre-mrket with a big gap up for RIMM on the open, this one has a lot more to go, but I wouldn't chase it if you are not already in, let it come to you, it will.

And why did we like RIMM?

This 2 hour (very long) 3C chart shows massive accumulation at the base, many stocks are seeing accumulation or have as the cycle formed, but not this size, this is beyond the cycle, this is at least an intermediate bull move, maybe even a primary-which is another thing we predicted in September, "The beaten up stocks will be the ones to fly while the high flyers lie AAPL will be the ones to come down".

In any case, after seeing a dip on the European open and then recovering (probably Greek based), ES (S&P Futures) is up, but missing a bit of confirmation which may or may not matter for today as the algos are running things, I wouldn't expect to see any heavy underlying institutional trade today, but we'll watch just in case an opportunity pops up we can't resist.

ES falls on the European open, looking better now.

I'm going to take a look around, be back soon