The dollar is up almost $2.50 this week, and the SPX is up 17 points from the open Monday. The EUR/UDS has fallen from 1.34 to under 1.30.
The Bernank speaks at 9:30 (or 10 not sure). That could be a market mover.
Geomag storm ongoing.
On the debt ceiling, after listening to the Pauls it sounds like it will be raised. the markets will like that, and I am now considering moving my top from February to this summer. That would make this assumed fall (if it should/could actually fall) only a corrective. The most disturbing thing I got from the Pauls many comments is that they will raise the debt ceiling IF they cut spending. Does that not sound like an acceleration of the wealth transfer? Maybe this is a step in the right direction, but it does not sound that way on the surface to me. I'm still digesting this thought from the shower this morning.
The POMO/Bear battle is raging. There have been a slew of very quiet downgrades this week. I thinks earnings (begin in earnest Monday with AA) will disappoint for the most part for various reasons. We all heard the retail numbers yesterday. The markets are showing some extreme divergences on the daily chart. Bullish sentiment is thru the roof. My CPC chart is at extremes.
B1Ferris asked last night, "What do you think of the weak performance on a heavy POMO day?". That is a great question. We're nearing the end of the rope, but POMO and manipulation rule. We (broken record) must follow the Fed's lead at least till their game is up. Maybe they let the market breathe here for a bit. They may not have an option if earnings are bad, the dollar continues to advance and the states (almost all facing tremendous budget shortfalls) need additional help sooner than later. I think the answer is that there is tremendous selling pressure, and that Turbo's dire statement yesterday was the tell. Give us the money or we're totally screwed is basically what he said. How could the markets not totally collapse and flash crash on that statement is beyond me. That said, I think POMO may only have limited effect from here as selling pressure should grow. Upside from here should be limited.
The markets should have put in some sort of near term top or the top. Other than POMO I see no news events (other than manipulated BLS numbers that even Gallup has issues with those) that can help form here. Pressure in the EU is growing and they are even setting standards for a bank failure. This should be the year it all ends. We'll have to see if and when things begin to accelerate. GS has released a 1500 SPX target, so we may want to take note of that number. It may be another long year for the bears. See the wedge below. The last two major tops came after a divergence of the weekly TRIX and it has not even bear crossed yet. When I first put that target box up I got a lot of grief. We're in it now. I don't think I will have to adjust it. Oh, and GS's 1500 target is wrong unless we get a great a great overthrow. You tell me where that is going to come from?
GL and GB. Have a great weekend.
