James´ Insight

Today´s Outlook

Christmas is approaching and we have decided to take a well deserved vacation for the rest of this year. We wish everyone a Merry Christmas and a Happy New Year and we will back with both our trading and newsletters after the 10th of January.

Happy hollidays everyone

Weekly Outlook

Christmas is approaching and we have decided to take a well deserved vacation for the rest of this year. We wish everyone a Merry Christmas and a Happy New Year and we will back with both our trading and newsletters after the 10th of January.

Happy hollidays everyone.

Analysis

Christmas is approaching and we have decided to take a well deserved vacation for the rest of this year. We wish everyone a Merry Christmas and a Happy New Year and we will back with both our trading and newsletters after the 10th of January.

Happy hollidays everyone!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1221.25, bearish below 1221.25
• Current reading is 811
• Interventions: 1, 2, 3, 6, 7, 8, 9 will see active FED intervention for December

Weekly Outlook

Basically you are watching 1221.25 for a turn down. 1200 for an acceleration down to 1141.75 and if 1113.75 breaks kiss it all good bye. There are those that argue that I’m wrong. Which point am I wrong on? Employment? Income? Production? Housing? Taxes? Credit availability? Costs?

Am I wrong about Bernanke? He can spend without limit but there is only one catch…soneone still has to pay the bill and it’s a huge bill to pay.

Analysis

Not much to say today. The market seems to be topping like we expected. A break of 1216.25 and a close below same should start a downleg.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1197.50, bearish below 1197.50
• Current reading is 736
• Interventions: 6, 7, 8, 9 will see active FED intervention for December

Weekly Outlook

Basically you are watching 1221.25 for a turn down. 1200 for an acceleration down to 1141.75 and if 1113.75 breaks kiss it all good bye. There are those that argue that I’m wrong. Which point am I wrong on? Employment? Income? Production? Housing? Taxes? Credit availability? Costs?

Am I wrong about Bernanke? He can spend without limit but there is only one catch…soneone still has to pay the bill and it’s a huge bill to pay.

Analysis

Despite the BUY signals it’s time to look for a top.

Cycle reading is 736. Price on the German Stoxx has broken trend and the retrace back to break of trend has occurred. A few world indexes show reversal. The Canadian real estate market has topped and is rolling over. Oil is approaching $100 a barrel. Taxes in the United States are going up.

Congress can extend the tax cuts for everyone but the number of other proposals that sneak big taxes on the population are numerous. Wave A down is complete, wave B up is near complete and the next phase of this correction is about to begin. Bernanke will fight it with everything he has but the bills are due, in fact over due.

Once the selling begins you can expect the VIX (volatility) to continue climbing. Last week the vix retreated to 18. Eighteen is the magic number. Stay below 18 and the bulls have it, rise above 18 and the bears have it. Seems like a test to me.

We have two prices on the chart that matter; 1252 and 1221.25. Drop below 1221.25 and the market can begin to fail anytime.

A couple of markers as to why I believe we are at a top here:

1) Near a top it is important to look at volume. This is an exhaustion and we’ve seen it before. The boys plow everyones money into the high knowing we are not coming back. Bullish sentiment is high and it’s complete nonsense. You do not put volume near the high of the run.

2) Next marker is the bid. LH’s mark the bid since March and price has been divergent ever since. Not good.

3) Next marker is price above 1221.25. If price were going higher then price should have consolidated UNDER 1221.25 not closed above it. Bernanke is to be commended at his ability to keep the market up but who pays the bill? We do. The masses pay the bill for people at the top. Bernanke has spent or will have spent 5 trillion dollars.

4) Another marker that I’ve been publishing is the amount of monies leaving the market. That trend continues unabated.

5) Underwriting standards are another marker. To find extra fees for a mortgage if you put less than 25% down and your credit isn’t over 740. Are they insane? I think they are insane. Again the masses are being asked/told to pay for the few.

If you think the SP500 is not going to be affected by a worldwide slowdown think again. Everyone is slowing down and Bennie can’t fix that.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1197.50, bearish below 1197.50
• Current reading is 534
• Interventions: 3, 6, 7, 8, 9 will see active FED intervention for December

Weekly Outlook

Perhaps the most difficult premarket I’ve ever seen. EVERYTHING is border line.

Weekly 200 ma is 1190, failure is 1175. Price is within the first days range of the month. Price is at the 39 dma. Daily shows a high, a W, and a possible higher low…indecisive at best. Everything is borderline.

Why? In my opinion we are testing the first weeks range in $NYA and we are testing a yearly first weeks range in the SP500 (1182.75). We have spent a year getting to what we normally see in the first few months of the year; a test of the yearly first weeks range.

We entered the current consolidation from above and normally we exit in the same direction; down in this case. Break 1182.75 and 1141.75 comes into play.
Break 1113.75 and it’s curtains for the market because the next stop is 944.

I see nothing to say that the market is trying to build on POMO to the upside, rather I see selling into the money…so far.

Analysis

Yesterday it seems the market reacted because of a vote in Congress on taxes. They voted to extend the tax cuts for lower and middle class but if you earn over $250,000 your tax rate goes to 42% from 35% (that is 42% and not the advertised 39% or 75% more than what everyone was told). Of course this now goes to the Senate that will kill it.

History shows that when a large move is about to occur the market will move in the opposite direction first to clean out the stops (they know they are not coming back). Key prices for today are: 1215.50, and 1209. Failure starts at 1205. The STOPS run to 1190. A close tomorrow over 1227 will issue a SOLID sell signal. The market is on track for a decline early next week.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1197.50, bearish below 1197.50
• Current reading is 118, lost +300. Losing zero would trigger further downside
• Interventions: 2, 3, 6, 7, 8, 9 will see active FED intervention for December

Weekly Outlook

Perhaps the most difficult premarket I’ve ever seen. EVERYTHING is border line.

Weekly 200 ma is 1190, failure is 1175. Price is within the first days range of the month. Price is at the 39 dma. Daily shows a high, a W, and a possible higher low…indecisive at best. Everything is borderline.

Why? In my opinion we are testing the first weeks range in $NYA and we are testing a yearly first weeks range in the SP500 (1182.75). We have spent a year getting to what we normally see in the first few months of the year; a test of the yearly first weeks range.

We entered the current consolidation from above and normally we exit in the same direction; down in this case. Break 1182.75 and 1141.75 comes into play.
Break 1113.75 and it’s curtains for the market because the next stop is 944.

I see nothing to say that the market is trying to build on POMO to the upside, rather I see selling into the money…so far.

Analysis

Ok, people are still withdrawing monies. That’s important going forward because we “should” be in a wave 5 up after yesterday. Fifth waves are notorious for low volume and they are notorious for truncating early or extending beyond reason. It is the volume that has me concerned. The most bearish thing a market can do next to making new lows is making a high that is sold into.

The market is entering a historically positive month, but when the public is withdrawing money and at the current rate I have to look to the cycle chart which already shows a LH off the July high. This is classic fifth wave evidence.

Yesterdays advance was 1.4 billion vs 1.1 billion sell off or a net change of 300M. Not a real strong deal. The NYSE was far more positive with a net change of 450M. Breath on a breakout day ended with ISSU of 3.3 and that number leads me to be cautious about any extreme follow thru and early truncation.

The obvious target is the prior high around 1220. So the prices to watch are : 1206, 1212 and 1220.
Today is most likely a doji. Any price advance/close above 1206 should be a positive into early next week. After Tuesday however the short side should reassert itself.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1187.50, bearish below 1187.50
• Current reading is 118, lost +300. Losing zero would trigger further downside
• Interventions: 1, 2, 3, 6, 7, 8, 9 will see active FED intervention for December

Weekly Outlook

Perhaps the most difficult premarket I’ve ever seen. EVERYTHING is border line.

Weekly 200 ma is 1190, failure is 1175. Price is within the first days range of the month. Price is at the 39 dma. Daily shows a high, a W, and a possible higher low…indecisive at best. Everything is borderline.

Why? In my opinion we are testing the first weeks range in $NYA and we are testing a yearly first weeks range in the SP500 (1182.75). We have spent a year getting to what we normally see in the first few months of the year; a test of the yearly first weeks range.

We entered the current consolidation from above and normally we exit in the same direction; down in this case. Break 1182.75 and 1141.75 comes into play.
Break 1113.75 and it’s curtains for the market because the next stop is 944.

I see nothing to say that the market is trying to build on POMO to the upside, rather I see selling into the money…so far.

Analysis

The German market is having a tough time with the woes of the EU. Everyone expects Portugal to get a rescue package but it’s SPAIN that troubles the world. If Spain goes, then the trouble for banks is going to make what we have seen so far seem like a warm up exercise. Spain owes everyone.

It’s no longer Goldman to the rescue, now it’s hard cash that everyone wants, not loans that add to debt. If Spain defaults, they take everyone with them.

And when it comes to Bernanke, frankly I’m of the opinion that his interventions cannot mend the market; it is bigger than he is, it is bigger than POMO and he cannot print enough money to right every wrong. POMO is nothing more than a temporary stop gap and then the market behaves like it always has.

It has taken a full year to top out and now we test the first week. This is not bullish. This top has taken 8 full months to form and before that they ran it up only to collapse in an 800 point plunge. In my opinion they are out of tricks.

There is one silver lining: A 18 week reversal pattern was put in just under 1113.75. Trend is 1133 and the top of the first week is 1141.75. Put in strong upside volume at any of those prices and they can turn it around. On the other hand, fail 1113.75 and it’s over in my opinion.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1187.50, bearish below 1187.50
• Current reading is 200, lost +300. Losing zero would trigger further downside
• Interventions: 30, 1, 2, 3, 6, 7, 8, 9 will see active FED intervention for November/December

Weekly Outlook

Perhaps the most difficult premarket I’ve ever seen. EVERYTHING is border line.

Weekly 200 ma is 1190, failure is 1175. Price is within the first days range of the month. Price is at the 39 dma. Daily shows a high, a W, and a possible higher low…indecisive at best. Everything is borderline.

Why? In my opinion we are testing the first weeks range in $NYA and we are testing a yearly first weeks range in the SP500 (1182.75). We have spent a year getting to what we normally see in the first few months of the year; a test of the yearly first weeks range.

We entered the current consolidation from above and normally we exit in the same direction; down in this case. Break 1182.75 and 1141.75 comes into play.
Break 1113.75 and it’s curtains for the market because the next stop is 944.

I see nothing to say that the market is trying to build on POMO to the upside, rather I see selling into the money…so far.

Analysis

A possible last ride for Santa Rally but after that the credit card bill comes due. A doji on the month is warning us that the final bill is due and payable. Price has been hanging out around the weekly 200 ma for 5 weeks now at 1190…not good.

Expect a slight HH and then another correction down. POMO money is keeping it range bound but continued selling into strength is evident.

Europe adopted rules for a permanent crisis intervention fund. In other words they’ll print money as well when the situation warrants it. Wasn’t it just last June that all the banks and sovereigns passed the stress tests in Europe?

1185 is your line in the sand. Break it and run for cover. VIX is moving up at 21.53. Expect larger ranges. The first -300 point day down in the Dow confirms the top.

Initial downside targets: 1178, 1172-70 and a break of 1166 would put us in a downtrend. (this is currently a correction and not a downtrend). I would love to post upside targets but they’ve all been met. 1195 was tested and could possibly be tested again but I don’t see the point of it. 1185 is the break point.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1182, bearish below 1182
• Current reading is 200, lost +300. Losing zero would trigger further downside
• Interventions: 29 and 30, 1, 2, 3, 6, 7, 8, 9 will see active FED intervention for November/December

Weekly Outlook

Perhaps the most difficult premarket I’ve ever seen. EVERYTHING is border line.

Weekly 200 ma is 1190, failure is 1175. Price is within the first days range of the month. Price is at the 39 dma. Daily shows a high, a W, and a possible higher low…indecisive at best. Everything is borderline.

Why? In my opinion we are testing the first weeks range in $NYA and we are testing a yearly first weeks range in the SP500 (1182.75). We have spent a year getting to what we normally see in the first few months of the year; a test of the yearly first weeks range.

We entered the current consolidation from above and normally we exit in the same direction; down in this case. Break 1182.75 and 1141.75 comes into play.
Break 1113.75 and it’s curtains for the market because the next stop is 944.

I see nothing to say that the market is trying to build on POMO to the upside, rather I see selling into the money…so far.

Analysis

Premarket is indecisive, the monthly is showing a possible doji. Break 1182.75 and then 1175 and we target 1141.75. The weekly analysis says it all at the moment.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1182, bearish below 1182
• Current reading is 154, lost +300. Losing zero would trigger further downside
• Interventions: 29 and 30, 1, 2, 3, 6, 7, 8, 9 will see active FED intervention for November/December

Weekly Outlook

The following three prices offer overhead resistance: 1198.25, 1201.50, and 1205. I originally mentioned that the market is a vertical testing process based on volume. The Fed’s actions and the new financial regulations put a pretty hefty dent in volume, making it hard to project normal market behavior.

Monday we will see if there is sufficient volume to trigger the upside beyond 1205 or if volume simply fails to materialize. Long term, I suspect a further decline to the 1132 area is coming. The downside trigger will start at 1187 and should be confirmed by a closing price below 1175.

This week is Thanksgiving though and normally that is a positive week. I expect 1190 will hold any downside until the week after Thanksgiving.

Analysis

No new analysis today because of Thanksgiving. Please read yesterdays report.

Good luck with your trading!

James´ Insight

Today´s Outlook

• S&P 500 e-minis: bullish above 1182, bearish below 1182
• Current reading is 154, lost +300. Losing zero would trigger further downside
• Interventions: 29 and 30, 1, 2, 3, 6, 7, 8, 9 will see active FED intervention for November/December

Weekly Outlook

The following three prices offer overhead resistance: 1198.25, 1201.50, and 1205. I originally mentioned that the market is a vertical testing process based on volume. The Fed’s actions and the new financial regulations put a pretty hefty dent in volume, making it hard to project normal market behavior.

Monday we will see if there is sufficient volume to trigger the upside beyond 1205 or if volume simply fails to materialize. Long term, I suspect a further decline to the 1132 area is coming. The downside trigger will start at 1187 and should be confirmed by a closing price below 1175.

This week is Thanksgiving though and normally that is a positive week. I expect 1190 will hold any downside until the week after Thanksgiving.

Analysis

That the Euro is having trouble should be known to anyone at this point, with Ireland being latest country in trouble. Now this may sound harsh, but the € problems are actually good for the United States. Our economy is based on the freely flowing capital flows of a market economy. In other words; when other countries see stress, money flows revert back to the United States. This is one saving grace for the US at this point in time. Those flows however do not create a real economy or real demand, they are a stop gap only.

Now on the topic of money flows, Asia has seen far too much capital flow into the Asian countries. The pending disaster is inflation and will hit China hard in my opinion. China will be forced to appreciate its currency; it will not do it on a voluntary basis. In this regard, China hates Bernanke’s QE2. China isn’t ignorant of this fact.

From where I sit Bernanke’s move is a masterful chess move that has genius roots in money flows. The outcome is unclear but it certainly bought a lot of time. No banks: no economy. That is Bernanke’s underlying premise. Frankly he is right; the western world cannot survive without banking.

At the same time I see nothing but sideways going forward with some substantial risks when Bernanke’s money stops. It is the bet of the century.

It will take real demand from a real economy to continue this movement upwards with sustainability and Ben knows that to be true. The entire rally up was staged with the highest weighted stocks: IBM, AAPL, XOM etc. The rest of the market did not participate. The markets second act of going higher would take those issues to nose bleed levels and the manipulation would be very obvious.

We will find out. For now, enjoy the holidays.

Good luck with your trading!