News consolidation and at resistance

The normal way to play resistance, and this is coming from the technicals masters of support and resistance channels, Stock Traders Daily...is to respect support and respect resistance until they break.

ES has resistance in the low 1140's, if it break above 1145 1146 area, I will have to take some lumps on puts, and go back to observing.   Otherwise, this farce of a wave 2 frog boil will soon end.

Big moves usually come 1 to 3 days after an important moon like the fall equinox, but moons don't always work.   We will see.

And here great news----I am sure we get more truth in the news with consolidtion and control of the media by the financial behemoths.

http://www.msnbc.msn.com/id/39343715/ns/business-media_biz/

Wave 2 Socio Observations

As confidence returns I note the following of the last week:

More accidents on the road, I guess people driving faster and more distracted by all the important things happening.

Girls dressing up with more extroverted clothing.

One "lay person" stating the economy is picking up.

The price of wines have gone up around 15% to 20%, they must be trying to regain margin.   I didn't see anyone buying the nicer wines though.

An associate stating that I am putting all my money into the Australian Dollar.

Wave 2's are fake-out moves.

It has been a heck of a frog boil, went further than I would have though. 

Europe is about to open, they do game the ES futures, and HBB has some late night gamesters to also partake.  

Fear Factor, TNX, and Yeehaw!

Early Sept, Fear Factor (FF) had a big out of the BB dip, and then Dabama rode to the rescue with a series of POMO me now Pumps.

Same action is now in play, but let's just see is Pomo works again, or whether they let things tank a bit to justify QE2. 

Remember, when the FF signal is going down, that represents more Fear.   The FF does trend and pattern pretty darn well.   In this world of financial gaming where "hot money" is pushed around quickly to ramp some segment and dampen others, and to game stops and create fear, a compound indicator like the FF takes some of the game out of HBB. 

And check the ES chart, on that backtest, I went heavy short futures but now even playing options for increased leverage.   I had sold my Sept puts this morning at top prices, and when I bought puts back, I went for November because I hate theta burn.

Please drop a comment.   And esp. if you have any strategies or particular stock picks with great patterns, Jing them in.

AUD/USD Looks like going down from here

Please read the notes in the chart.  And sign up if you wish for me to keep posting. I need to see 100 followers by end of October to encourage me to keep going on this.   Cost nothing, makes your aggregated reading list easy to see when someone has done a new post.    That's a no brainer.

Advetising/News Going Down

Boatload O' Charts

Not to go full on bear on ya' but here are some bearish looking charts IMHO.

Like this stuff?   Sign up as a follower, AND drop a comment.   Basically a ghost town in here for comments, and I am looking to improve my trading and opportunities by spending so much time providing what I think is good, free, and for the most part, content you ain't going to get anywhere else.

And check the Holy Grail TNX ratio indicator half way down.

401K Funds, on a non-reversible "conversion" to annuities

We wrote about this several times, and one reason why I am not contributing any more money to any 401K, tax deferred, or tax advantaged account.    Because the Economic Hit Men are setting their sights on getting control of that money.  

It's between $4T and $7T depending on who you ask.

And Treasuries will be part of these "Annuities".   The propaganda machine is ramping up the rhetoric.  In this article

The experts were speaking at a two-day hearing on lifetime-income options for retirement plans hosted by the U.S. Labor Department's Employee Benefits Security Administration (EBSA) and the Treasury Department.From this vantage point, it seems like a done deal, and the only questions remaining are those dealing with safe harbor rules, fiduciary requirements and the in-the-way details.

 http://finance.yahoo.com/focus-retirement/article/110756/annuities-may-be-coming-to-401ks?mod=fidelity-managingwealth&cat=fidelity_2010_managing_wealth

HBB Banging the Tape Around

Well as the tape bangs around, why not have a strategy to profit from that?

I bought QQQQ 49 puts and calls yesterday.   Then set "Stink Ask" prices to sell them off at....not too stinky, just likely to get hit on a big banging move by HBB.   Even the currency wars have the oomph to move the market quickly and deeply. 

Decent breakout on Feed Long, Taking good volume

Nailed it!

Sold at top, bought at bottom.   Nice for a change.

And the "Quasi Cuty" Girls "getting picked on"  Indicator.....sign of a top.

Paris might be able to get into France, but not Japan....they don't like those drug users.

Top O' the Channel to Ye'

Correlations have been flipped on their head, this from Forex.com

CORRELATIONS CORNER: A Changing Tide?

Below is a correlation matrix of currencies/major asset classes presented in 3 time frames: Year-T-D, Month-T-D, Week-T-D.

At times, we will also present specific overlaid charts outlining major correlations as well as divergences between either two currencies or currencies against major asset classes.

*In bold/highlighted in yellow are positive and negative correlations x>+,- .80 or highest correlations if none exist x>+,-.80

WEEKLY (9/13/2010 to 9/20/2010)

           Familiar correlations have weaned off in the past week as various asset classes have diverged from assumed longer term relationships. This is mostly reflected in the week-to-date US equity/yen cross correlations which have been almost nonexistent after the BOJ’s historic intervention last week and sees the S&P 500 track tighter with spot oil prices and AUDUSD. It also suggests a change in tide towards hard assets and commodity based currencies as the new ‘safe havens of choice’ in an environment that sees various central banks attempting to weaken their currencies for export related benefits. The result sees gold hitting record highs this week and AUDUSD reaching yearly highs.

·         S&P 500 tracked highest in FX with EURCAD with a -.87 correlation coefficient but overall moved almost in lockstep with spot oil prices at +.91. Noteworthy is AUDUSD with a +.83 correlation coefficient.

·         US 10 yr yields in FX land most highly correlated this week with USDCHF at +.97. Of note is the +.80 correlation with EURCHF, providing evidence of the swissy’s continued role as the safe haven currency of choice over the yen and the dollar.

·         The Oil/S&P500 relationship has been an interesting one and sees a +.91 near term relationship. Oil prices also tracked tightly with AUDUSD at +.96 reinforcing the short term shift towards commodity related securities as preferred safe havens.

·         In FX land, commodity based currencies tracked tightest as AUDJPY and CADJPY share a +.98 correlation coefficient.

Security	S&P500	DJIA	XAUUSD	Spot Crude Oil	US 10 yr. yields	USD Index	EURUSD	AUDUSD	USDJPY	AUDJPY
S&P500	1.00	0.98	-0.31	0.91	-0.15	0.24	-0.39	0.83	0.01	0.35
Spot Crude Oil	0.91	0.80	0.05	1.00	-0.53	-0.10	-0.13	0.96	-0.23	0.14
AUDUSD	0.83	0.72	0.23	0.96	-0.62	-0.32	0.05	1.00	-0.46	-0.11
NZDUSD	0.66	0.51	-0.05	0.83	-0.73	0.00	-0.37	0.76	-0.29	-0.02
EURGBP	0.44	0.46	0.33	0.44	-0.19	-0.52	0.37	0.64	-0.64	-0.45
AUDJPY	0.35	0.40	-0.54	0.14	0.55	0.74	-0.41	-0.11	0.93	1.00
CADJPY	0.17	0.26	-0.50	-0.06	0.68	0.71	-0.31	-0.28	0.97	0.98
USDJPY	0.01	0.10	-0.57	-0.23	0.71	0.78	-0.39	-0.46	1.00	0.93
EURJPY	-0.11	-0.03	-0.35	-0.29	0.69	0.59	-0.13	-0.48	0.97	0.88
US 10 yr. yields	-0.15	0.05	-0.59	-0.53	1.00	0.64	-0.26	-0.62	0.71	0.55
USDCHF	-0.16	0.04	-0.44	-0.52	0.97	0.45	-0.08	-0.55	0.55	0.39
GBPJPY	-0.18	-0.12	-0.37	-0.34	0.63	0.62	-0.20	-0.55	0.97	0.86
EURCHF	-0.31	-0.14	-0.02	-0.54	0.80	0.06	0.34	-0.48	0.34	0.19
XAUUSD	-0.31	-0.44	1.00	0.05	-0.59	-0.96	0.93	0.23	-0.57	-0.54
EURUSD	-0.39	-0.45	0.93	-0.13	-0.26	-0.87	1.00	0.05	-0.39	-0.41
USDMXN	-0.41	-0.37	-0.13	-0.43	-0.10	-0.09	-0.22	-0.30	-0.54	-0.73
USDNOK	-0.49	-0.36	-0.62	-0.75	0.76	0.72	-0.45	-0.89	0.73	0.46
USDCAD	-0.70	-0.71	-0.14	-0.66	-0.06	0.09	-0.25	-0.64	-0.14	-0.42
GBPUSD	-0.73	-0.79	0.47	-0.53	-0.01	-0.23	0.50	-0.56	0.30	0.11
EURCAD	-0.87	-0.92	0.70	-0.61	-0.27	-0.68	0.68	-0.44	-0.45	-0.68

Source: Bloomberg

MONTHLY (8/20/2010 to 9/20/2010)

The slightly longer term monthly correlations sees the usual suspects continuing to track closely with equities. AUDUSD remains on top with a +.91 correlation coefficient with the S&P 500. Yen cross/US equity market correlations have dropped off slightly due to the short term divergence between the two but still remain quite strong as AUDJPY still moving in line with the S&P500 with a  +.78 coefficient. The commonality here is the Aussie which shows the high yielder being the preferred currency for risk seekers.

·         S&P tracks highest with AUDUSD at +.91

·         10 Yr yields and CADJPY tracked best as they shared a +.76 monthly correlation

·         Spot crude oil tracks best with NZDUSD with a +.80 relationship

·         In FX land, monthly correlations confirming weekly relationships as commodity currencies AUDJPY and CADJPY remaining on top with a +.95 positive correlation coefficient

Security	S&P500	DJIA	XAUUSD	Spot Crude Oil	US 10 yr. yields	USD Index	EURUSD	AUDUSD	USDJPY	AUDJPY
S&P500	1.00	0.99	-0.21	0.58	0.74	-0.20	0.60	0.91	0.35	0.78
AUDUSD	0.91	0.90	-0.22	0.67	0.66	-0.43	0.67	1.00	0.23	0.75
AUDJPY	0.78	0.80	-0.26	0.55	0.76	-0.10	0.46	0.75	0.82	1.00
NZDUSD	0.76	0.72	-0.42	0.80	0.55	-0.34	0.46	0.84	0.12	0.58
US 10 yr. yields	0.74	0.76	-0.37	0.49	1.00	-0.04	0.36	0.66	0.54	0.76
CADJPY	0.69	0.72	-0.32	0.42	0.75	-0.05	0.48	0.64	0.85	0.95
EURUSD	0.60	0.58	0.09	0.28	0.36	-0.62	1.00	0.67	0.10	0.46
EURJPY	0.59	0.62	-0.10	0.32	0.61	-0.15	0.63	0.54	0.84	0.89
Spot Crude Oil	0.58	0.55	-0.20	1.00	0.49	-0.28	0.28	0.67	0.22	0.55
EURCHF	0.58	0.62	-0.25	0.30	0.73	-0.19	0.62	0.55	0.47	0.65
GBPJPY	0.43	0.46	-0.16	0.29	0.55	0.08	0.32	0.38	0.93	0.85
GBPUSD	0.38	0.37	-0.02	0.30	0.33	-0.25	0.59	0.49	0.39	0.55
EURGBP	0.37	0.36	0.13	0.05	0.12	-0.51	0.67	0.36	-0.22	0.06
USDJPY	0.35	0.40	-0.19	0.22	0.54	0.23	0.10	0.23	1.00	0.82
USDCHF	0.16	0.23	-0.40	0.12	0.57	0.38	-0.21	0.03	0.50	0.36
XAUUSD	-0.21	-0.21	1.00	-0.20	-0.37	-0.25	0.09	-0.22	-0.19	-0.26
EURCAD	-0.41	-0.42	0.60	-0.36	-0.53	-0.23	0.21	-0.40	-0.29	-0.44
USDCAD	-0.83	-0.81	0.33	-0.50	-0.68	0.39	-0.75	-0.87	-0.29	-0.71
USDNOK	-0.84	-0.80	0.02	-0.50	-0.51	0.58	-0.85	-0.87	-0.02	-0.53
USDMXN	-0.85	-0.85	0.12	-0.48	-0.70	0.28	-0.67	-0.75	-0.39	-0.71

Source: Bloomberg

YEARLY (1/1/2010 to 9/20/2010)

Year to date correlations are consistent with last week. Short term correlation shifts will need to stay intact for extended periods to see any impact on the year to date correlation coefficients.

·         Y-T-D Equity to FX correlations remain highest with AUDJPY, AUDUSD, CADJPY, USDCAD, and USDMXN

·         Commodity currencies, AUDJPY and CADJPY, still tracking highest with US 10 yr yields at +.72 and +.74 respectively.

·         Y-T-D fx correlations with crude oil remain closest with the S&P 500 and USDCAD  at +.66 and -.63 respectively

Security	S&P500	DJIA	XAUUSD	Spot Crude Oil	US 10 yr. yields	USD Index	EURUSD	AUDUSD	USDJPY	AUDJPY
S&P500	1.00	0.99	0.15	0.66	0.67	-0.41	0.48	0.82	0.53	0.83
AUDJPY	0.83	0.83	0.11	0.60	0.72	-0.29	0.40	0.88	0.77	1.00
AUDUSD	0.82	0.81	0.21	0.62	0.56	-0.49	0.55	1.00	0.39	0.88
CADJPY	0.79	0.79	0.08	0.56	0.74	-0.21	0.33	0.72	0.84	0.92
NZDUSD	0.74	0.74	0.22	0.55	0.46	-0.51	0.57	0.87	0.28	0.75
EURJPY	0.70	0.69	0.03	0.51	0.67	-0.56	0.73	0.66	0.71	0.81
US 10 yr. yields	0.67	0.67	-0.06	0.48	1.00	-0.21	0.32	0.56	0.65	0.72
GBPJPY	0.66	0.66	0.04	0.52	0.61	-0.36	0.43	0.58	0.78	0.79
Spot Crude Oil	0.66	0.63	0.25	1.00	0.48	-0.48	0.41	0.62	0.34	0.60
USDJPY	0.53	0.53	-0.05	0.34	0.65	0.10	0.03	0.39	1.00	0.77
EURUSD	0.48	0.46	0.08	0.41	0.32	-0.89	1.00	0.55	0.03	0.40
GBPUSD	0.45	0.45	0.12	0.45	0.25	-0.68	0.65	0.49	0.12	0.39
EURCHF	0.37	0.38	-0.21	0.21	0.47	-0.39	0.51	0.28	0.28	0.34
XAUUSD	0.15	0.13	1.00	0.25	-0.06	-0.11	0.08	0.21	-0.05	0.11
EURGBP	0.09	0.07	-0.02	0.01	0.12	-0.38	0.54	0.16	-0.09	0.06
USDCHF	-0.22	-0.20	-0.26	-0.28	0.04	0.68	-0.70	-0.39	0.20	-0.16
EURCAD	-0.39	-0.38	-0.11	-0.24	-0.33	-0.43	0.46	-0.32	-0.45	-0.45
USDNOK	-0.71	-0.70	-0.20	-0.58	-0.47	0.73	-0.80	-0.79	-0.21	-0.65
USDCAD	-0.84	-0.82	-0.18	-0.63	-0.61	0.44	-0.51	-0.83	-0.47	-0.81
USDMXN	-0.84	-0.83	-0.26	-0.60	-0.57	0.43	-0.51	-0.79	-0.46	-0.78

Source: Bloomberg

Regards,

Daniel W. Hwang

Senior Technical Strategist

GAIN Capital Group | FOREX.com