Market Ping Pong with Europe

The deal is done...no it isn't...it is done....no it isn't. Up 500, down 500, up 500, down 500. Some one is making alot of money in this market but most are running to the sidelines because they have nothing to hang on to.  My numbers say it is still too early to call a downtrend and we are working off an overbought condition. The Put/Calls ran super high today at 1.22 a level we saw at the bottom before the save Europe rally started.   

Stocks closed at 11657 or at the 20 week average. That was the breakout on 10-21 and was then resistance and now is support. That is also my line in the sand you may also call it the pivot point.That is the critical area that this battle is being fought. A close below that number would turn the trend down again

US bonds returned to an uptrend as 10 year yields fell to 2.02 and 30 year to 3.03. The dollar has rallied enough to reverse it's trend to neutral and is now above its 200 day average. Will Europe be saved now or will it take a Lehman type sell off to get their attention.  If that is the case the dollar goes ape and the asset market (risk trade) comes unglued.

The big question is do they want to save Europe now or let it go and catch it at a much lower area, similar to the US market in late 08 and early 09.  I would say they want to catch it lower and will create a much more lasting low down the road when all parties have sobered up and bite the bullet. If they don't do it now they will just have to keep doing this game of ping pong  over and over. Call me crazy but this is no way to run an economy. Just get it over with and move on.

Mikey

Closing Prices

US Stock Indexes
DJIA 11657.96 297.05 S/P 500 1218.28 -35.02
NYSE Comp   7337.14 -227.89  NASDAQ   2606.96 -77.45
S/P Midcap 858.68 -29.25 Russell 713.89 -27.17 
DJT 4766.07 -126.50 DJU 441.76 -8.38  
US bonds and interest rates
US Gov rates: 6 mo .0453%  2 yr .2343% 5 Yr  .9198 10 yr 2.02  30 yr 3.03
IEF (US10 yr) 104.54 +1.24 TLT (USLT)119.45 +3.87
MUB (NatlMuni)106.16 +.66 CalMuni (NCA)8.97 -.02
Preferred (PFF)36.51 -.59 HYG (High Yield)87.17 -1.58
BND Total Bond Index 83.62 +.51
Commodities
Commodities Indexes (DBC) 27.39 -.33 (USCI ) 60.84 -.52
Gold 1711.60 -13.60  Silver 32.73 -1.62 Copper 3.50 -.13
Platinum 1607.60 -44.20 Nickel (JJN)28.04 -.38
Oil92.19 -1.00 RBOB 2.61 +.02 Nat Gas 3.78 -.16
Grains (JJG) 45.53 +.08 Livestock (COW)30.83 +.45  
Cotton (BAL)61.31 -2.28 Agg complex(JJA)54.43 -.23
US Dollar Index and World Currencies
Euro 1.3643 .0140  Pound 158.18 -.0138 Swiss Franc 1.1135 -.0121
Yen 1.2577 -.0025 Aussie 1.0329 -.0210
Dollar Index 77.39 +.80
World Debt markets
BWX(Intl Treas)60.36 -.46 PCY(EmerMkt) 24.46 +.03 IBND(Intl Corp) 33.44 -.39

All Markets Current Trends

World debt markets

US Bonds: 11-1 current trend up
US Natl Muni Markets:: 10-27 current trend neutral
Intl Treas Bonds 11-1 current trend neutral
Intl Corp Bonds 11-1 current trend neutral
Emerging Markets Debt: 10-27 current trend neutral

US High Yield 10-21 current trend up
US Preferred Stocks 10-27 current trend up

Commodities

Commodity index (Broad based) 11-1  current trend down
Gold: .10-27 current trend neutral 
Silver: 9-22 current trend down
Copper 8-8 current trend neutral

Platinum 9-19 current trend down
Palladium 9-7  current trend down

Nickel 11-1 current trend down
Grain complex 9-19 current trend down   

Sugar 10-31 current trend down
Cotton 10-21 current trend down
Livestock 9-27 current trend up
Coffee 9-21 current trend down

Lumber 9-23 current trend down
Agg complex 9-16 current trend down

Oil 10-18 current trend up
Gasoline 10-31 current trend neutral
Natural Gas 7-28 current trend down

World Stock markets

US Stocks: 10-11 current trend up
Europe 11-1 current trend neutral
China: 10-26  current trend up
Brazil 10-24  current trend up
Japan 11-1 current trend down
India 11-1  current trend neutral
Russia 11-1 current trend neutral

Emerging Markets: 10-26 current trend up
Total world markets 10-24 current trend up 

Currencies markets

US Dollar Index 11-1 current trend neutral
Aussie Dollar 11-1 current trend neutral  
Euro 11-1  current trend down
Brit Pd  10-27   current trend up
Swiss Franc: 10-27  current trend neutral  
Jap Yen 10-31 current trend down
Canadian Dollar 11-1 current trend down
Mexican Peso 8-3 current trend down

Brazilian Real 10-27 current trend neutral
Indian Rupe 8-9 current trend down

Trend changes:

World Stocks: Europe to neutral India to neutral, Russia to neutral
Currencies: US Dollar to neutral, Aussie to Neutral, Canadian $ to down
Commodities: Nickel to down
World Debt : US Bonds to up, Intl corp and Intl treas to Neutral

Intermediate Term Trends

Oil: Down
Gold: Up correcting
Silver: Down
Commodities: Down
US Bonds: Up
World Bonds: Down
Emerging Debt: Down
Emerging Markets: Down
Dollar: Neutral
World Stocks: Down 
US Stocks Neutral


US Stock Market Trends

Mikey Short term up  10-13 11478

Mikey Intermediate Trend: Neutral   10-21 11808
Mikey Long term Neutral 8-4-11 11779
NYSE 10-14 Current trend up 

NASDAQ 10-11 Current trend up
DJ Utilities: Current trend up
Transports:10-14 current trend up
Russell 2000: 10-14 current trend up   

IBD :11-1 Market under pressure 11657


US markets short term technical trading indicators:

Mikey5 +2 Mikey10 +32Mikey20 +144(-125 OS, 0 Neutral,  125 OB)

VIX (OB 10 - OS 40) 34.77 ,VXZ 65.37
Mikey Int OB/OS index (80 OB 20 OS)+21
Put/Call Ratio 1.2210 day average .98
Ratio Put Premiums to Call Premium (.34 to 2.5) ..80 10 day ave .90
Mutual Fund Purchase/Redemptions ( 1.5 to .66) 1.07
Stocastic Fast D 10 day 75.80 Weekly 61.66
Bulls 40 Bears 37.9  Bull/Bear ratio 1.06
Daily DJIA MACD  +199.01 Falling/ Positive cross 10-6
Weekly MACD -99.05  Falling/Positive cross 10-24
NYSE New Highs 15 (12/7-10 429) New Lows (8-8-11 1345 ) 40
NASDAQ New Highs 12 (12-7-10, 352 ) New Lows 57 ( 10-4-11, 755 )

Advance/Declines

Daily NYSE Advance-Decline --2132  Nasdaq Advance-Decline --1678
Daily Mikey A/D line NYSE (7-7 37567) (8-8 19199) 29949  
Daily Mikey A/D line NASDAQ (2-18 10095) (10-3-10-15390) -9416
5 day AD NYSE +98 NASDAQ --593 NYSE..(OB +4000 OS -4000)
10 day AD NYSE +1615 (5000 OB-5000 OS) 20 day +10090 (+7000 OB -7000 OS)
% above 200 day ave  28%

below 50% indicates intermediate trend down

Days to option expiration 18




DJI Moving Averages

5 day 11984 up / Price below
20 day 11601 up/ Price above

50 day 11356  up/Price above
90 day 11642  Flat/Price above
200 day 11973 Flat / Price below
20 week 11673 upPrice at
50 week 11900 down /Price below

90 week 11326 Flat Price/above
200 week 10623 Flat / Price above

Daily comments for last 30 days:

10-3 The averages closed right on the edge of the cliff today. The support of the 200 week is at 10662 and the DJI closed at 10655. The brokers and banks are acting just like they did in Sept 2008 when we had the credit meltdown. Long term US bonds closed higher that they did in 2009 and yields are at their lowest levels at 2.74. The market is now at a 52 week low and has wiped out QE2 and is working on QE1 from June of 2010 which started at 10300 in July. That is the result of fake money being pumped in by the Fed to save the banks and corporations. Gold and silver was also aided by this pump and its day is coming too.

10-4 The risk trade awoke today just in time to save the DJI from breaking down. Its a good thing for the market makers because there have been a lot of puts bought and they would have been on the hook. The truth is that 95 out of 100 of these the puts lose just like they did today. They must first make this 10600 level unimportant and then it can break. The threat to the puts is the Fed and Bernanke was out rattling the sword today. The municipal bond market took a hit today with the National fund and the California funds trends turning for up to neutral. Keep your eyes on these trends because the way the banks and brokers are trading credit quality may be a concern and these markets could get ugly with out Federal support.
10-5 The 200 week is the line between a long term uptrend and a long term downtrend. It is an important line and the traders are watching it. The shorts got too excited this last week and the "risk traders" (you know who) pulled it back above the line. The market internals still show an oversold market and the puts got some religion today with Put/Calls running at a calmer .86. It looks to me that they want to stair step this down trend a little at a time.
10-6 Stocks and commodities edged higher on the lower dollar today. The 50 day average on the DJI is at 11262 or about 30 points above the current close. The average is falling so the odds favor the market meeting resistance in that area. The intermediate trend is down and for it to turn up the DJI would have to get above 12000.
10-7 Jobs sell off
10-10 300 point fix Europe rally dollar tanks but gold rallies
10-11 Nearing the top of a trading range. Current trend changed to neutral

10-12 counter trend rally continues IBD calls market in uptrend
10-13 Daily MACD turns positive
10-18 The central banks held the line at the 200 week average over the past 2 weeks and once again the DJI is at the top of a trading range. The support area is now the 50 day average at 11215 which contained the yesterdays sell off. The 20 week is now the resistance area at 11649
10-19  The top end of a trading range and the lower end or breakout in the dollar are holding at these levels. The Mikey 5 is just above the zero line and the Mikey 10 is still an over bought 114. This indicates some near term weakness in creeping into this last 2 week rally..
10-21 The intermediate term was upgraded to neutral and the current trend is still up. Stocks break out above the top of their trading range of 11600 close at 11808
10-24 All three Mikey indicators are overbought. The Mikey5 is at 38, the Mikey10 is at 144 and the Mikey20 is at 136. This is unusual and the last time it happened was July 7 and that was a top. The trends are turning positive for world markets. Brazil current trend is now up along with the total world markets indicator. US bonds are now in current trend down and joined its buddy the dollar. I believe these changes are temporary but the trends must be honored.
10-25 another day another almost solved European crisis another dollar down day  160 points. Ho hum
10-27 Euro Deal made stocks rally World stocks turn up US bonds and dollar in downtrend
10-28 Euro party ends now lets look at something else like phony job numbers that's next week
11-1 Stocks closed down 297 at 11657 or at the 20 week average. That was the breakout on 10-21 and was then resistance and now is support. That is also my line in the sand or you may also call it the pivot point.That is the critical area that this battle is being fought. A close below that number would turn the trend down again. Pt/calls ran hot at 1.22