Morning Update: Market Thread 5-11-2009

Futures are down pretty substantially this morning with the /ES being supported right at the 912 pivot point.

On the upside the next higher pivot is 935 although 929 has held so far, then 961 is above that. On the downside, if 912 falls there is much support on the uptrend line in the 900 area. The next lower pivot is all the way down at 848.

Here is a 3 month daily showing that the rally is forming a rising wedge (dashed red lines). Rising wedges are normally bearish and they are a pattern that once the uptrend is broken tend to return all the way to their base:

The dollar is higher, commodities lower, and bonds are higher as well, reversing the rally trend. The KEY FOR ME is the lower boundary of that rising wedge. I am completely neutral until that breaks, then I am bearish. Don’t be surprised if this wedge overthrows the top and makes a run to the 950 area or even the 961 pivot as that is where the 200dma is and it is co-located with the weekly upper Bollinger band. I’m not saying it will go there, but I’m saying it’s a possibility, and remember that this is options expiration week and last Thursday was a down day which increases the odds of an up week. Again, I am doing nothing here until that wedge is broken.

And we must be close to breaking that uptrend because Trichet came out and said that central bankers are seeing that economic recovery is imminent! LOL, this statement by the same people who never saw a problem to begin with and even after experiencing a taste of the trouble that awaits, they still do not understand what’s happening. At least he doesn’t, I’m certain that the central bankers pulling the strings know exactly what they are doing, and they are ruthless.

No economic data today, Ben Bernanke speaks this evening. The important economic data for this week will be the continued onslaught of bond auctions and the release of inflation data, the PPI and CPI. This is important because the markets have been front running inflation and I believe the markets are incorrect, especially when you look at a year over year basis. When you do, you will see crashing oil prices, crashing real estate prices, and a crashing stock market… this despite a roaring rally over the past couple months.

About Nathan A. Martin 120 Articles

Nathan A. Martin is President of Wingman Investments, LLC, and author of the book Flight to Financial Freedom – Fasten Your Finances. He sees people, both young and old, facing a new era where they are forced to be responsible for their own financial success or failure. His message is clear; become financially literate or be a victim of the external forces that are impacting everyone. Nathan possesses an undergraduate degree in Professional Aviation and Business as well as a Master’s degree in Aviation Management and Operations.

A former Air Force and retired airline pilot, his flying took him the world over participating in many operations including the invasion of Panama, and combat time during Operation Desert Storm. Experience has come over 26 years of flight - logging more than 12,000 flight hours both civilian and military, and as the owner of a corporate aviation management company whose focus was aircraft efficiency.

Influenced by his parents entrepreneurial activities, Nathan began his business and investment training early in life and has used that knowledge every step along the way... from business school to his own corporations and personal investments.

Visit: Nathan's Economic Edge

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