Oil beginning to threaten SIFs

Discussion in 'Index Futures' started by nitro, Jul 6, 2007.

  1. nitro


    Estimate a probability of 60:40 we have seen the LOD. SPX ends up at 1485 EOD. All the bulls have to do is turn the dial two clicks to the right on their TWAP and it is pandimonium buying into close.

    #11     Jul 26, 2007
  2. nitro


    SPX dangerously close to first major support level of 1450ish, or the 200 day MA.

    The only other major support levels is 1400 to 1425 SPX, depending on how you draw your DOW theory trendlines.

    Until then, at least the charts have not been technically damaged, and it is still technically a bull market on the long time frames.

    #12     Jul 27, 2007
  3. nitro


    QM + 1.875!!!!

    SIFs are wild. The volatility is incredible.

    #13     Jul 27, 2007
  4. nitro


    For those that believe that Bernanke may lower IRs to help the mortgage businesses, NQ is telling a very different story. IMO, NQ sharply lower is reacting indirectly to QM nearing $80. Since tech is extremely sensitive to IRs, and IRs are sensitive to oil, NQ is giving you it's vote on the direction of IRs (higher).

    IMO, NQ is reacting logically. Seeing the disconnect between YM ES and NQ though is not logical. Something has to give, and IMO it is NQ that is acting correctly on market information, and ES and YM green are liquidity demand based.

    Short term, I don't want long, although I am still bullish by EOY because I think QM gets slammed to just a nose under $70 a barrel, to say nothing of the fact that oil futures themselves are predicting lower oil by being in contango. But I still maintain that you have to be defensive with QM near $80, and a short term retest of 1450 SPX smells right.

    #14     Jul 31, 2007
  5. nitro



    Overseas markets getting whacked. Bonds screaming higher in a flight to quality. Question is, how much of that is predicting the FED will ease?

    I don't know, I just don't see how the FED can ease here. Way too early IMO, to say nothing of how they justify cutting with QM near $80 a barrel and the dollar in the garbage can. But who knows, the pressure may be too great.

    First chart damage has been done by crossing the 200 in SPX. That is minor, but when taken together with bad news no longer being seen as an opportunity to buy dips, it leads one to believe that there is plenty of lubrication to set off a nasty sell off.

    I don't see how the market can avoid testing 1425 SPX. That is a huge warning signal but does not do terminal chart damage the way losing 1400 SPX would. If SPX loses 1400, I expect an emergency meeting at the FED and they will probably close their eyes and ease. SIFs will have pandemonium buying that day, with perhaps the biggest single point gainer (not percent) in history.

    #15     Aug 1, 2007
  6. I agree with nitro.

    Fun to watch.:)
    #16     Aug 1, 2007
  7. nitro


    I'm actually impressed with the way the SIFs have held up with the shelling they are taking. Thing is, it is hard to extract information from that since the seller could just be working through temporary liquidity.

    Still, 1440 SPX seems to be the rock of Gibraltar on wild swings back and forth. However, I doubt it can maintain the shelling unless a catalyst helps SIFs out. Still looking at 1425 SPX attack.

    #17     Aug 1, 2007
  8. nitro



    Some close!

    nitro :eek: :eek: :eek:
    #18     Aug 1, 2007
  9. nitro


    Still no chart damage. 1425 is the first target where we can say there has been preliminary damage, and again 1400 SPX is the support of all supports.

    VIX close to 25 as expected and I expect it to rise since I think 1425 has to be tested to get all weak longs out.

    QM losing a chunk. I expect it to go lower, below $70, where the threat to SIFs will be considerably less than if it continued higher to $80 or $85. If so, the FED will find it easier to ease, although the effect on the dollar will be to further weaken it. But I think that is the least of evils from its point of view.

    Technically, there is zero reason not to buy massive dips like this, as long as we stay above 1400 SPX.

    I wish I had realtime data for ABX, the symbol that gives CDS spreads.

    $/Yen as expected.

    #19     Aug 3, 2007
  10. Hi nitro. I am one of the old fashioned traders, still believing in supoort/ resistance levels and all this "antique" stuff the young boyz are not listening anymore to...Because nowadays there are "Algos" replacing human sense...If your assumption on SPX is right - target 1425 - this might correlate by coincidence with breakout of DOW JONES through 12.800 resistance back in late April 2007...If we go back to these levels - isn´t it funny how markets are working and testing former resistance levels... :D :D :D
    #20     Aug 3, 2007