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Friday, December 13, 2019

Market Update 12/13/2019 Europe Leading, China Leading, and conflicting charts

Markets continue higher, heading into EOY window dressing, and News is propelling it. Also short squeeze Friday, and I didn't see this one coming. Thought it may be different this time, but no....

The Headlines:

1. Last weeks jobs number hype and hysteria. This doesn't really reflect the state of the economy.

2. USMCA - on the table, but still needs to be re-negotiated. 
See: Pass USMCA Coalition drops stance on passing USMCA - thehill

3. The ECB - Christine Lagarde

4. The FED - keeps rates unchanged as expected. This took the $VIX down, and markets up as predicted.

5. British Election = Brexit deal likely
Looks like a relief rally, but there's still a lot of uncertainty around what a Brexit deal is going to look like. Even Bloomberg is left asking why markets are up, because the liberals lost. Boohoo!
See: My call for European Stocks to lead, last week.

6. China Trade rumors - buy the rumor, sell the news
I called this trade from my Twitter feed 3 days ago:

Funny, I've been talking about how news headlines are being used to manipulate US futures markets, and then last week I watching watching Lou Dobbs interview, with Peter Navarro, and he asked if China is behind it. See the Video - Starts at 1:55 in - linked

I'm keeping the china chart close to my chest.
I already have too many charts in the public charts area, and it's becoming more of a distraction than it's worth. I find it's easier, and more effective to spend my time charting in the morning, and then alert to what I'm seeing, from my twitter feed, than updating the pubic charts area, and spending a lot of time writing these blogs. I haven't even had time to look at the $SPX this morning, but I have some charts to show you.

$DOW Key critical support is 27,500 - see the bear trap, where it broke below my pink support line.

Some Elliott Wave Theorists thing we're off to the races here in wave 3, and the DOW could easily run to 29000, but I still believe the entire run off last years low is a running wave (B). You can also see the breakout above the pink line on this chart, same as the above chart. 

$INDU - This messy chart shows today's breakout above the 28.2 level, and that becomes short term support, but in order to get to that 29,000 target by the end of the year, it would have to break above the top of the channel on this 2 year view. If it is wave 3 then that's possible. Wave 3 can break above the top of the channel, and continue trending above the top if the channel higher. It could consolidate above the 28,200 level, and take out the target in Feb, but now we're getting way ahead of ourselves, and we'll see how things progress. I'll add these charts to the public charts area, so you can watch this play out for yourself.

 $SPX - 10 yr chart: Considering the fact that we haven't even seen as much as a pullback on the $SPX since the 2018 reversal, and we just back-tested support at the breakout point @ 3045, and money is being printed like there's no tomorrow, this rally can and probably will continue. 

  $SPX DCS 2 year view - The DOW obviously lagging, and the chart looks nothing like this!
I'm seeing major resistance at my red arrow. Support is 3100. This is a good example of how confusing it can be when you compare one timeline to another!

My best guess is we at least get a pullback here, and fund managers will be closing their books (for 2019) soon, and probably want to lock in some profits. ST support looks like 3010ish, if it's going to back-test the breakout point.

$SPLV - The Low volatility $VIX - This holds a lot big overbought names, and looks like it's being liquidated as the smart money sells to the retail investor.

I blogged on this index a week or two ago, and it looked like bullish consolidation in a range. This is the chart I was referring to on Twitter, as the golden goose, but now I have 2 wildly conflicting charts. This used to lead, now it sits atop the top of the upper channel, and that's the stop hunt.

This is definitely one to watch - Support looks like 56 - not the greatest looking chart, but I did find the channel. Looks like wave 4 of 4, especially with the sideways action.

Here's another view, which looks really bullish, but to see sideways consolidation in this position, is a little odd. It's either bullish accumulation, or bearish accumulation

I'm out of time. Good luck, and Merry Christmas

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