Yesterday, I pointed out how the market continues to be bought at the 50 day moving average, after painting 3 consecutive bullish hammers on the chart, and it looks like the market is set to gap back up above that support, after yesterday's weak performance.
DOW - to gap back above the 50 day moving average. That is bound to trigger buying programs.
$SPX
Bloomberg Psyop Chart, Complete w/ Scripted Interview
When I saw one of Bloomberg's people pointing to the chart above, and then having a scripted interview with one of their own people about it, I immediately knew it was a PsyOp.
First thing I did was try to recreate their shitty looking chart:
$SPX - Bloomberg Chart Recreation:
1. First thing I did was try to recreate the - what's supposed to look like a bullish - channel in yellow, which isn't a parallel channel at all. You can kind of already see that in the pic I took (above), but for some reason it looked parallel on the TV. Regardless, it's not a bullish channel. I'll show you a couple examples of the actual (possible) range in a moment.
2. The area of consolidation they've painted green, is supposed to look like a parallel range, and a bullish range. After all, why else would they choose to use a green range to show what is clearly a bearish head & shoulders pattern? LOL
Next thing I did was to try to find an actual range, and I found a couple interesting ones!
First The Bear Case
There actually is a parallel range that the market has been trading in for the past several months, and the bear case would be that we have been consolidating at the top of that range for several weeks.
I suppose the catalyst for all this consolidation was the idea that better than expected earnings would be the catalyst for a breakout, but so far we haven't seen that. In fact instead we've seen investors hiding in gold miners, and other so called safety trades.
Just yesterday, I was watching Fast Money, and one of the traders was pushing the $GDX at the 33 level, and I do kind of like it here, as it approaches the 50 day moving average.
$SPX Bear Case
$SPX Bull Case
The bull case would be that the market has already broken out, and is headed for the top of the pattern.
An upturned megaphone pattern.
To add to the bull case:
1. Home Depot had a big earnings miss yesterday, yet it closed on a bullish doji reversal candle, and why is that? Because $HD is a heavily weighted component of the rigged $SPX. It must be bought.
2. Fast Money is also recommending miners, because that's the new safety trade. That keeps the $VIX from breakout out, and that's what it's all about.
3. Who is going to stick around to sell this market after Memorial Day?
Take Care, AA
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