Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, November 4, 2013

Bubble Anyone?

Stock Market Technical Analysis Blog

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In the market today we had a modest up day which in itself is nothing special  until you consider the fact that SPY bounced up from the top side of its upper channel line on Friday.  Repeating my closing comments of my 10/24 blog where I mentioned that we could easily enter uncharted territory here and see all rules and logic thrown out the window.  Friday's bounce from the topside of the channel raised eyebrows and has certainly increased that chance of something crazy starting here and we have seen conversation across the grapevine that Ben may actually be considering a hyperbolic bubble as his last hurrah before he exits.  

It has become pretty obvious that the Fed will not be able to turn off the QE steroids without causing substantial damage to the market possibly in the 15% range.  The argument that he may be about to fiercely bubble the market up that 15% from here then pull the QE plug which will then likely drop the market 15% but in reality it would just take us down back to where we are at now. Problem solved, no biggie right?  

It sounds crazy but with the incredible manipulation going on the past few weeks it looks like Ben is up to something.  If you really think about it this might be the only way he can get himself out of the corner he has painted himself into.  Disregarding the fact that stock market bubbles have a history of not ending very well, it's quite possible that may be what's coming or at least Ben may be trying to figure out if he could succeed in such a venture.  

Taking a look at the charts above:
  1.  7-day intraday chart of SPY showing its climb back up toward the Prop-toberfest tractor program's high
  2. 120min bar chart of VIX showing we how missed a bullet over the past few days as the red line crossed down through the blue line instead of bouncing up from it. This was possible because the red line of the VIX was coming down at a fairly steep angle due to the tractor program running on the SPY for so long.
  3. Day candles of SPY showing a hammer
  4. Week candles of SPY showing a hanging man early in the candle after closing as a shooting star last week
  5. SPY bouncing with a little too much air between the lines 
  6. VIX in an EMA pushdown situation now
  7. SPY - a close up view of Friday's eyebrow raising bounce up from the top side of the upper channel line
  8. VIX now descending
  9. SPY -  a bigger view of Friday's top side line bounce in the SPY
  10. VIX taking aim for its lower channel line again
  11. SPY still ridiculously overextended from its 100 day EMA
  12. SPY major EMA lift getting a little long in the tooth
  13. SPY now has the upper float turnover channel line at the tractor program high with its turn up not even close to the 15 EMA line
  14. SPY ADX - plus, minus line divergence can be interpreted as sellers backing off but buyers still hesitant to come in 
  15. SPY shows it bounced back up into its 5th Gann ray sector Friday, with MACD re-opening
  16. SPY is still well out of the congestion of the traditional large SMAs
  17. SPY passed back above the previous week's spike
  18. SPY Fibonacci - will take a couple days before I post another Fibonacci set.  Noteworthy is the fact that the SPYs volume should have been up in the 175 million range if today's move was genuine buying and not manipulation. It instead came in at an anemic 80 million
  19. SPY 2-year chart shows it bouncing up from the top side of the two year blue line secondary channel
  20. 25 year chart of S&P
  21. 2-year chart of NASDAQ - a very important chart to examine as the Nasdaq has been climbing from its lower channel line to its upper for an entire year and is now stalling at the upper line.  Well known that it has been the leader for the bullish sentiment
  22. 2-year chart of DOW showing it is at its upper line of its horizontal blue channel

Trade well my friends