End of the Week - S&P 500's Daily & Weekly Charts:

http://stockmarketchartanalyst.blogspot.com/

This will be one of the most interesting weeks this Quarter! By the opening bell on Wednesday, we will know the outcome of the mid-term election for the US House and Senate. It will be interesting to know the new balance of power there, but the market may or may not react much because it has already baked that outcome in. It's clear that the Democrats will lose a number of seats in both houses of Congress. The most important task for them to complete before the end of the year will be to decide if the Bush Tax Cuts will be continued, eliminated, or some kind of compromise is made to extend some (or all) of them.

Also on Wednesday at 2:15pm ET, we will hear what the Fed is going to do in the way of Quantitative Easing - Part 2 (QE2). The amount of QE2 they decide upon will be critical to how the market reacts to it. Not enough, say under $500 Billion, and the market probably will react in a negative way. Too much, say over $1 Trillion, and the market may not like that either. Anywhere between $500 Billion to $750 Billion is what the market is hoping for. And to hear the details of how the Fed will go about it will also get some kind of reaction from the market.

We are still in the middle of third quarter Earnings Reporting season, and it is also a very busy week on the Economic Calendar. So how the market moves this week will be decided by the outcome of the mid-term election, what the Fed decides to do with QE2, and the reaction to all of the week's Earnings and Economic Reports.

The Daily Chart shows a lot of Volatility last week, but by the end of the week the Index only closed up by 0.18 Points, and only up 0.02% I've been mentioning the Bearish Divergences on the CCI, STO, and MACD Histogram for a few weeks now, and with diminishing Volume every day last week, and large downticks on these three indicators, it looks to me like the market is running out of steam. But...the market was in "wait and see" mode the entire week waiting to see the outcome of the mid-term election, and what the Fed will do about QE2 next Wednesday. Basically, the Index churned (or consolidated) in an uptrend all week, and that is quite often Bullish. A close above the closing price from the previous Friday (10/18/10) with a tall white candlestick with above average Volume would be a breakout into Blue Sky Territory, and would obviously be Bullish...So would be a close above the 200Day Moving Average on the Weekly Chart, that currently sits at 1194.20



The Weekly Chart appears to be running out of steam. Volume has diminished the past three weeks, and the CCI has downticked the past two weeks. It is still in very Overbought territory in the mid-90's, and the fast line of Stochastics is now below the slow line. And the MACD Histogram also downticked last week. The Doji candlestick that formed this week may very well be a reversal signal this time, since the intra-week high last Monday finally tagged the 200Day Moving Average early in the session, and then pulled back hard the rest of the day to form a Bearish Shooting Star candlestick on the Daily Chart (see the daily chart above). A close below the low of the week from last week would be confirmation that the Doji candlestick formed last week was indeed a reversal signal.



I see a possible Bearish Double-Top Chart Pattern developing on the Daily Chart:



IF there is to be a Pullback, the Fibonacci's 61.8% level on the Weekly Chart is 1136.88 but there are some minor levels of Support to break below before it can get down to there.



The Commitment Of Traders (COT) chart is showing Large & Institutional Traders have been moving to the Short Side for a while now. These kinds of traders are hardly ever wrong. It is the Small and Individual Traders that are usually behind the curve.



It is a very busy week for Earnings Reports and the Economic Calendar. There are too many S&P 500 companies reporting this week to name them all, but the most important Economic Reports due out this week are signified by gold and red stars. A gold star report has the potential to move the market a small amount, and a red star has the potential to move the market in a big way. One of the most important reports due out this week besides the FOMC Announcement on Wednesday at 2:15pm is the Employment Situation report for the month of October, which is due out on Friday an hour before the opening bell:

http://online.barrons.com/public/page/barrons_econoday.html



I posted a number of very interesting news articles last week. Too many to list all of them here. They are posted on my Twitter page. Many of these articles discuss how effective will QE2 be, plus there are a number of articles about the economy in general and more about the Foreclosure-Gate fiasco.

My Twitter Page:

http://twitter.com/chartaholic

Happy Trading! next week...
It should be an exciting one!...
Stay Nimble...It could go either way...
zigzagman/chartaholic

End of the Week S&P 500's Daily & Weekly Charts + News:

http://day-trading-the-stock-market.blogspot.com/

Here is Technical Analysis of the daily and weekly charts for the S&P 500, plus a number of interesting news articles I read throughout the week...

The daily chart is Bullish for the most part with a positive Parabolic SAR and closing very close to Monday's close today...But there are still those nagging Bearish Divergences in the CCI and the MACD Histogram...The most notable thing happening on this chart is the Golden Cross...That's when the 50day Moving Average crosses up through the 200day MA, and is considered Very Bullish...But I think this kind of indicator is overrated because it is such a lagging indicator...It is considered a Buy Signal by some traders, but I use the CCI for my Buy Signal, which happened in early July and late August when it crossed up through the -100 line...The other thing to notice is that Volume diminished every day this week, but it appears that Volume isn't such an important indicator like it used to be, since the market has had a number of rallies on low Volume this year...Volume used to be THE most important indicator of them all...



The Money Indicators (Chaikin Money Flow, On Balance Volume, and Accumulation/Distribution) are all looking very Bullish, but CMF is lagging a bit because Volume was declining this week...



The weekly chart is still looking Very Bullish, but I'm expecting a ton of resistance at the 200day Moving Average at 1195.38...The CCI downticked on an up week, which is not ideal...And Stochastics remain very overbought, but most people don't realize how long it can remain so...Look at the previous two times it got above the 80 line...It stayed there for weeks on end, so I don't put much importance on STO except for when it gives a clear Sell Signal, which it hasn't yet...The MACD is Super Bullish...The only thing I don't like is the angle of ascent since the bottom in late August...It's waaayyyyyyy too steep, just like it was from February until late April, and I still foresee a HUGE dump just like the last one IF the right catalyst comes along...Could that be bad blood after the G20 meeting this weekend?...Or maybe the foreclosure-gate fiasco could really take off and hurt the big banks and mortgage brokers badly...There are a number of articles about this subject below the charts in the news section...



The Money Indicators on the weekly chart are SCREAMING Bullish...



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Here are the most interesting news articles I read this week...The first one HAS TO BE the most important one of all...I don't trade Commodities at all and never have, because I heard a long time ago how Gold and Silver have been manipulated so much, and this article PROVES it...Truly and amazing read, in my opinion...It just shows us how extremely crooked the markets have become:

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CORRUPTION: Retiring CFTC Judge: We Covered Up Market Manipulation

NEW DEVELOPMENTS IN THE CFTC SCANDAL: On September 17, 2010, CFTC Administrative Law Judge, George H Painter, issued a "Notice and Order" announcing his retirement from his position. In this notice Judge Painter wrote of a conspiracy at the highest levels of the CFTC (within the ENFORCEMENT DIVISION) where a long time judge of 20 years has been conspiring with past CFTC Chairs to RIG THE ENFORCEMENT OF THE LAW by NOT finding ANYONE guilty of market manipulation. Here are Judge Painter's own words:

http://www.thedailybell.com/1461/Retiring-CFTC-Judge-We-Covered-Up-Market-Manipulation.html

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MORE CORRUPTION: Congressional Staffers Gain From Trading in Stocks

At least 72 aides on both sides of the aisle traded shares of companies that their bosses help oversee, according to a Wall Street Journal analysis of more than 3,000 disclosure forms covering trading activity by Capitol Hill staffers for 2008 and 2009.

http://online.wsj.com/article/SB1000142

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MORTGAGE-GATE: Mortgages Were Fraudulently Pledged to Multiple Buyers at the Same Time

Bank of America alleged in a court filing this June:
It appears as though many loans and other mortgage-related assets have been double and even triple-pledged to various constituencies.

http://www.washingtonsblog.com/2010/10/mortgages-which-can-legally-only-be.html

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Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof?

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles — and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

http://seekingalpha.com/article/221344-homeowners-rebellion-could-62-million-homes-be-foreclosure-proof?source=yahoo

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NY Fed, BlackRock and PIMCO Pressure Bank of America to Buy Back $47 Billion

Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the matter said.

http://jessescrossroadscafe.blogspot.com/2010/10/ny-fed-blackrock-and-pimco-pressure.html

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Mortgage Crisis Set to Kick Into a Higher Gear

Specifically, the question is how many mortgages were overpromised and overpledged -- sometimes two, three maybe five times, maybe umpteen times -- to back securities? How many fraudulent mortgage-backed securities now sit on Fannie and Freddie’s books? At the New York Fed? Who will be on the hook for those securities?

http://www.foxbusiness.com/markets/2010/10/19/mortgage-crisis-set-kick-higher-gear/

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How the Foreclosure Fiasco Threatens the Economy

It might seem like a respite for struggling homeowners, but the sudden snags and slowdowns in thousands of foreclosure proceedings could prolong the housing bust well beyond its fifth year--and spell deep trouble for the broader economy.

http://finance.yahoo.com/news/How-the-Foreclosure-Fiasco-usnews-610419413.html?x=0

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If This Is True...... KaBOOM!

If this is true it's not just systemic, it's not just common, it was the premise and basis of the entire securitization game - and "game" is the correct word for it, as the allegation made here is that the entire thing was a gigantic scam.

http://market-ticker.org/post=169779

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NY to hold lawyers accountable on foreclosures

The chief judge of New York's courts on Wednesday imposed a new rule requiring lawyers handling foreclosures to verify that all paperwork is accurate.

http://finance.yahoo.com/news/NY-to-hold-lawyers-apf-671089494.html?x=0

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SO IT BEGINS -- Bank of America Accused of Racketeering in Class Action Foreclosure Lawsuit

This is not going to end well for the banks. The trial lawyers have been unleashed. Best new job in America -- foreclosure class-action attorney.

http://dailybail.com/home/so-it-begins-bank-of-america-accused-of-racketeering-in-clas.html

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Weakness In Bank of America Is Telling You Something

Stocks don’t lie, people do, reminds Guy Adami and I think weakness in BofA is trying to tell you something. It makes me wonder if the S&P is a little frothy. I don’t believe we can have a sustained meaningful rally in the S&P as long as the banks continue to underperform.

http://www.cnbc.com/id/39779193

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Tab for Fannie, Freddie could soar to $363B

The government spelled out Thursday just how much the most expensive rescue of the financial crisis will end up costing taxpayers — as much as $259 billion for mortgage buyers Fannie Mae and Freddie Mac.

http://www.msnbc.msn.com/id/39776628/ns/business-us_business/

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The Big Wall Street Banks Have Found A New Way To Strangle The American People: Predatory Property Tax Collection

It turns out that the big Wall Street banks have found a dirty new way to make loads of cash from U.S. homeowners, and they really, really don't want to talk about it. So what is this dirty new business? America's biggest financial institutions have become property tax collectors, and it is extremely lucrative. From coast to coast, the big Wall Street banks are buying up thousands upon thousands of tax liens and are making a killing by socking distressed homeowners with predatory interest, outrageous penalties and almost unbelievable legal fees.

http://theeconomiccollapseblog.com/archives/the-big-wall-street-banks-have-found-a-new-way-to-strangle-the-american-people-predatory-property-tax-collection

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Foreclose on the Foreclosure Fraudsters, Part 1: Put Bank of America in Receivership

After a quick review of its procedures, Bank of America this week announced that it will resume its foreclosures in 23 lucky states next Monday. While the evidence is overwhelming that the entire foreclosure process is riddled with fraud.

http://www.huffingtonpost.com/william-k-black/foreclose-on-the-foreclos_b_772434.html?ref=fb&src=sp#sb=832484,b=facebook

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Now We're Talking: BREAK 'EM ALL UP!

If the government does not hold the fraudulent CEOs responsible, who is supposed to stop the epidemic of elite financial fraud? The Obama administration's answer is the fraudulent CEOs themselves. You can't make this stuff up.

http://www.huffingtonpost.com/william-k-black/foreclosure

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An Early Stress Test For The Financial Stability Oversight Council

How much damage to the financial system should we expect from what is now commonly called the foreclosure morass, the still-developing scandal involving document robo-signing (and robo-dockets), completely messed up mortgage paperwork and high-profile inquiries into accusations of systematic and deliberate misbehavior by banks?

http://baselinescenario.com/2010/10/21/an-early-stress-test-for-the-financial-stability-oversight-council/

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Nasdaq %Above 50-day SMA reaches overbought levels $NAA50R - Don't Ignore This Chart!

The Nasdaq %Above 50-day SMA ($NAA50R) is trading near the prior 2010 highs. This indicator surged to the mid 70s in January and again in April. Prior moves to this area signaled overbought conditions that led to a pullback.

http://blogs.stockcharts.com/dont_ignore_this_chart/2010/10/nasdaq-above-50-day-sma-reaches-overbought-levels-naa50r.html

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The Stock Market's Long Decline Has Begun

The Fed's campaign to boost the risk-trade in equities by destroying the dollar has reached its limits. Now gravity will take hold as stocks enter a Long Decline.

http://www.oftwominds.com/blogoct10/long-decline10-10.html

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Three Words: NO ECONOMIC STANDING

If a loan is assigned to different tranches and/or different trusts, with each tranche or trust having its own series of credit enhancements and insurances, this means the possibility of multiple levels of insurance for the same loan, which goes to prove what we have been arguing for years: that upon securitization, the mortgage loans were insured with multiple layers of insurance so that when the loan went into default, those in the placement chain could reap untold profits by having the same risk paid over and over and over again through multiple claims or reserves. Anyone who read through the SEC v. Goldman Sachs lawsuit knows this.

http://market-ticker.org/post=169722

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Inside the Illusory Empire of the Banking Commodity Game

Banking and fraud were born into our global word as Siamese brothers, inseparable since birth. And just like Siamese brothers, if ever separated, they would likely die together as well.

http://www.theundergroundinvestor.com/2010/10/inside-the-illusory-empire-of-the-banking-commodity-con-game/

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PIMCO-Viewpoints: The Fed Feels Compelled to Experiment

This week’s release of the minutes of the September 21 meeting of the Federal Open Market Committee (FOMC) points to an activist Federal Reserve that is in policy experimentation mode – an institution that feels compelled to take additional measures to energize the American economy yet is uncertain ...

http://www.pimco.com/Pages/TheFedFeelsCompelledtoExperiment.aspx

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David Malpass Gets Most Of It: The Fed's An Ass

Congress will face a runaway train on taxes and spending when it reconvenes after the elections. The solution is to restrain both—especially to stop the $6 trillion tax increase scheduled to take place on Jan. 1—in order to restore business confidence and help job growth.

http://market-ticker.org/akcs-www?post=169640

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A "Watershed Event" for Bernanke: The Fed Is "Pushing Water with a Fork

When he declared "inflation is running at rates that are too low" last week, Federal Reserve chairman Ben Bernanke did a lot more than just pave the way for more quantitative easing, says Todd Harrison, CEO of Minyanville.com. The Fed chairman's use of the "d-word" (deflation) is "an admission of defeat" by the central banker, Harrison says. "It's a watershed event."

http://finance.yahoo.com/tech-ticker/article/535517/A-%22Watershed-Event%22-for-Bernanke:-The-Fed-Is-%22Pushing-Water-with-a-Fork,%22-Harrison-Says

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Hussman Funds - Weekly Market Comment: The Recklessness of Quantitative Easing

With continuing weakness in the U.S. job market, Ben Bernanke confirmed last week what investors have been pricing into the markets for months - the Federal Reserve will launch a new program of "quantitative easing" (QE), probably as early as November. Analysts expect that the Fed could purchase $1 trillion or more of U.S. Treasury securities, flooding the financial system with additional bank reserves.

http://www.hussman.net/wmc/wmc101018.htm

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End The FED. Get The Gold.

How can we end the Federal Reserve System? Prior to 2008, this question would have been entirely hypothetical. It is still entirely hypothetical, because the Federal Reserve System is in charge of monetary policy; the Congress of the United States is not.

http://news.goldseek.com/LewRockwell/1287324000.php

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CBO Releases Official Numbers On Obama's Spending Record: In Two Years, An Increase of 21%

Perhaps you missed it, but then so did the Washington press corps. Late last week the Congressional Budget Office released its preliminary budget tallies for fiscal year 2010, and the news is that the U.S. government had another fabulous year—in spending your money. We didn't expect President Obama to hold a press conference, but why are Republicans so quiet?

http://dailybail.com/home/cbo-releases-official-numbers-on-obamas-spending-record-in-t.html

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Tax Cuts Won't Cut It - by Peter Schiff

Congressional Republicans and Democrats are engaged in a heated debate over which Americans deserve not to have their taxes raised, with both claiming that some form of tax cut will stimulate the economy. The primary point of divergence is what type of cuts will be most likely to get Americans spending, and whether the wealthy will wastefully save their extra cash or use it to create jobs. This debate is academic. If a stronger economy (rather than pre-election posturing) is really the goal, then tax cuts alone will fail.

http://news.goldseek.com/EuroCapital/1287429142.php

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The Financial Tsnuami Second Wave is on the Way

The spectacular, unrelenting rise of gold, silver and other commodities are signs that those who understand the unfolding financial calamity are taking defensive measures to protect the purchasing power of their wealth. Gold and silver have been the unanimous choice through history as the most basic forms of money in any kind of advanced society. The metals market is not being driven by little retail investors, but by Big Money heading for the exits from the FiatMoney Casino.

http://freeoklahoma.blogspot.com/2010/10/financial-tsnuami-second-wave-is-on-way.html

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45.5 TRILLION DOLLAR LOSS

This is not just $45.5 Trillion in fraudulent assets (mostly Teir 1 assets for banks) but tacking on all the derivatives we end up with a number in the QUADRILLIONS!

http://www.roadtoroota.com/public/410.cfm

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THE SUBPRIME DEBACLE: ACT 2 | PRAGMATIC CAPITALISM

There’s trouble, my friends, and it is does indeed involve pool(s), but not in the pool hall. The real monster is hidden in those pools of subprime debt that have not gone away. When I first began writing and speaking about the coming subprime disaster, it was in late 2007 and early 2008. The subject was being dismissed in most polite circles. “The subprime problem,” testified Ben Bernanke, “will be contained.”

http://pragcap.com/subprime-debacle-act-2

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And my favorite story from last week still holds true...IMHO

Has The Fed Come To Their Senses Yet?

We all know that this recent stock market rally that began on August 25th, 2010 has been manufactured by the Federal Reserve Bank and the prospect of QE2 (quantitative easing). Since that time the stock market has rallied higher by nearly 13 percent. However, the U.S. Dollar Index has declined by nearly 13.0 percent since its June 7th, 2010 high. This tell us that quantitative easing has already been going on. If the U.S. Dollar has lost 13 percent and the stock indexes have rallied 13.0 percent what have investors really gained as stocks are denominated in dollar terms? It has really been a zero sum game and many people are hopefully realizing that.

http://www.inthemoneystocks.com/n_rant_and_rave_blog_single.php?id=10192

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One of these days...Sooner than later...This house of cards is going to FALL...

GOT GOLD?...

Have a great weekend everyone!...
zigzagman
Tom

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End of the Week - S&P 500's Daily and Weekly Charts + A Recap of Important News:

http://stockmarketchartanalyst.blogspot.com/

This article agrees with everything I've been saying about the rally that started in September...That it's totally BOGUS, rallying on mostly bad news, and is nothing more than manipulation by the government's economic reports so that the Fed must intervene again with another round of Quantitative Easing (QE2), because they claim that the economy remains to be weak, and the recovery needs another jump start...It didn't work last time...What makes them think it will this time?...

We all know that this recent stock market rally that began on August 25th, 2010 has been manufactured by the Federal Reserve Bank and the prospect of QE2 (quantitative easing). Since that time the stock market has rallied higher by nearly 13 percent. However, the U.S. Dollar Index has declined by nearly 13.0 percent since its June 7th, 2010 high. This tell us that quantitative easing has already been going on.

If the U.S. Dollar has lost 13 percent and the stock indexes have rallied 13.0 percent what have investors really gained as stocks are denominated in dollar terms? It has really been a zero sum game, and many people are hopefully realizing that.

Read more of this article here: http://www.inthemoneystocks.com/n_rant_and_rave_blog_single.php?id=10192

Due to all of the negative news about Mortgages and Foreclosures, the banks were much weaker than the overall market this week...And things could go from bad to worse very quickly, since all fifty states are investigating improper handling of mortgages and foreclosures...

The proposed fine in one state for each robo-signed mortgage is $25,000. and there are MILLIONS of them nationwide!...

After watching this interview titled "$45 TRILLION LOSS", even the non-believers will have a hard time arguing that the massively corrupt banking system can avoid the crash...

http://www.roadtoroota.com/public/410.cfm

And since the banks have been underperforming the overall market lately like this article shows, what do you think will happen when the $hit starts hitting the fan over the real estate debacles of Sub-Prime lending, attempting to figure out who really owns Mortgages, Robo-Signing of Mortgages, and Foreclosure-Gate?...The Financial Sector will take a HUGE hit, and drag the rest of the market down with it...

http://blogs.stockcharts.com/chartwatchers/2010/10/a-look-at-the-financials.html

This article also explains the risks to stocks in the Financial Sector:

Bank stocks keep falling as mortgage fears mount...Fears about depth of mortgage losses ripple through markets; no one knows what loans are worth...

http://finance.yahoo.com/news/Bank-stocks-keep-falling

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Here is a look at the daily and weekly charts of the S&P 500 at the end of the week:

The daily chart appears strong, with neither one of my Sell Signals given yet, but there is still a Bearish divergence on the MACD and it's Histogram...The CCI is starting to look a bit toppy too...Volume this week was way above average, and may be a sign that a top is near since tops and bottoms are usually set on above average Volume...If a pullback happens, Support Levels are at the 15 Moving Average at 1157. and then a big one at 1130. IF it pulls back past 1120. there is no major level of Support all the way down to a minor one at 1090. and then NONE below that to where the market bottomed in late August...



The weekly chart is still very Bullish, but a near-term top may be coming soon, since I expect a huge amount of resistance at the 200 day moving average, that currently sits at 1196.52 Stochastics reading 95 for both the fast and slow line shows that the market is very Overbought at this time, and the fast line has just crossed down through the slow line for the first time in many months...Look what follows when this has occured in the past...It has historically been at the beginning of a major pullback...

I mentioned a while ago that the weekly chart is looking a lot like it did just before the big crash that started in late April of this year...It's moved up "too far - too fast", without any pullbacks to setup any levels of Support...And look what happens when this type of thing occurs...The market can take back ALL of it's gains TWICE as fast as it gave them...



Third Quarter earnings season is in full force next week, with too many S&P 500 companies reporting to name them all...The Economic Calendar for next week is fairly light, with the important reports of: Industrial Production at 9:15am ET on Monday...Housing Starts at 8:30am on Tuesday...And Weekly Jobless Claims at 8:30am, plus the Philadelphia Fed Survey at 10am on Thursday...Seven Fed Presidents also speak throughout next week...



If I were Long the SPY or SSO at the end of last week, I would've been locking in profits because of the huge amount of uncertainty about the Mortgage and Foreclosure issues that are just now becoming a leading area of concern...And all hell could break loose at any moment as these investigations move forward, taking the Financial Sector down fast and furious...

IF that happens, my favorite trading vehicle will be the Inverse ETF for the Financial Sector - (FAZ)...The Inverse ETF for the S&P 500 - (SDS) - will also be in play...

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Here are what I consider to be the most important news articles put out this week:

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Many of them try to answer the question - will Quantitative Easing 2 be successful this time, or not?...The consensus appears to be that QE2 will not be effective this time around...The market has been rallying on bad economic news the past few weeks, because that increased the likelihood the Fed will have to implement QE2, or in other words, manipulate the market again...

The other major topic of discussion this week has been about the Attorney Generals of all fifty states starting investigations into the way mortgages were handled SINCE THE 1980's!...This may end up affecting all of the major banks and a lot of other types of companies in a negative way if widespread wrongdoing can be proved...

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Fed Minutes show support builds for Treasury bond purchases and higher target for inflation

The Federal Reserve is leaning toward taking two steps to boost the economy: Buying more Treasury bonds to drive down loan rates, and signaling an openness to higher prices later to encourage more spending now.

http://finance.yahoo.com/news/Fed-leans-toward-twostep-plan-apf-18814925.html?x=0

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Fed President Hoenig - More Fed easing likely won't help economy:

Kansas City Federal Reserve President Thomas Hoenig, who all year has steadfastly opposed the Fed's super-easy monetary policy, fleshed out his stance against further easing on Tuesday, saying it would do little to aid recovery and could spark inflation.

http://finance.yahoo.com/news/More-Fed-easing-likely-wont-rb-1191732964.html?x=0

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Time Loves A Hero:

Markets are praying that time will tell us … that Ben Bernanke was a monetary legend from heaven, and a hero to the masses who are starving for a macro-reflation, specifically as it relates to the housing and labor markets. But, if the ‘cost’ of creating jobs is a price-inflation spiral … then there could be ‘hell-to-pay’ in the markets, particularly in the fixed-income arena, and Boom-Boom’s legacy could be one of the ‘anti-hero’. Of course, there is a decent chance that even the most heroic of efforts by the Federal Reserve could FAIL to generate the ‘desired’ outcome, leading to an increasingly ‘devilish’ debt-deflation.

http://www.ritholtz.com/blog/2010/10/time-loves-a-hero/

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The Fed's New Plan To Save The Economy Could Lead To "Titanic Trouble", Says Westwood's Alpert

The stock and bond markets have soared in recent weeks on the expectation that the Federal Reserve will soon embark on "QE2"--a new "quantitative easing" plan in which the Fed buys debts like Treasury bonds and mortgage bonds in an attempt to inject more cash into the banking system and restart the economy. But this QE2 voyage could "set a course towards Titanic trouble," says Daniel Alpert, managing partner at Westwood Capital.

http://finance.yahoo.com/tech-ticker/the-feds-new-plan-to-save-the-economy-could-lead-to-titanic-trouble

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Bernanke's QE2 Heading for the Shoals

Quantitative Easing 2 will fail, for the economy has been desensitized to liquidity and cheap credit.

http://www.oftwominds.com/blogoct10/Bernanke-QE210-10.html

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Don't Expect Miracles from QE2: Minton Beddoes Sees "Years of Very Slow Growth"

"I don't expect the quantitative easing to work miracles," says Zanny Minton Beddoes, economics editor at The Economist, which recently issued a special report, How to Grow. "If you look ahead, you see years of very slow growth, possibly stagnation, in a lot of the rich world."

http://finance.yahoo.com/tech-ticker/dont-expect-miracles-from-qe2-minton-beddoes

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Would QE2 Have a Significant Effect on Economic Growth, Employment, or Inflation?

Recent speculation that the Federal Open Market Committee (FOMC) may purchase an additional large quantity of government debt to stimulate economic growth, increase employment, and prevent deflation has prompted considerable debate over the effectiveness of additional quantitative easing (QE2). This synopsis analyzes some of the central issues in this debate.

http://research.stlouisfed.org/publications/es/10/ES1029.pdf

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The Futility of QE2: What Bernanke SHOULD Do -- Daniel Gross

Federal Reserve Chairman Ben Bernanke, speaking at a conference on Friday morning, says that the high unemployment rate and low inflation signal a need for further easing, but the Fed is still weighing just how aggressive that easing should be. The most likely scenario is that the Fed would purchase hundreds of billions of dollars worth of government bonds.

http://finance.yahoo.com/banking-budgeting/article/111037/the-futility-of-qe2

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Krugman: The Reason Government Spending Hasn't Saved The Economy Is That There Hasn't Been Any Government Spending

Paul Krugman goes back on the attack, arguing that the reason the economy is sputtering despite the stimulus is that the stimulus didn't actually include a big surge in government spending.

http://finance.yahoo.com/tech-ticker/krugman-the-reason-government-spending-hasnt-saved-the-economy-is-that-there-hasnt-been-any-government-spending

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Here are some articles about the Mortgage Mess and ForeclosureGate...

The MERS Edifice Quavers....

In the mid-1990s mortgage bankers decided they did not want to pay recording fees for assigning mortgages anymore. This decision was driven by securitization—a process of pooling many mortgages into a trust and selling income from the trust to investors on Wall Street. Securitization, also sometimes called structured finance, usually required several successive mortgage assignments to different companies. To avoid paying county recording fees, mortgage bankers formed a plan to create one shell company that would pretend to own all the mortgages in the country—that way, the mortgage bankers would never have to record assignments since the same company would always “own” all the mortgages.

http://market-ticker.org/akcs-www?post=168845

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Bank Shot

The banking authorities were shocked - shocked - to discover last week that an awful lot of mortgage paper in this country is not quite in order... appears to contain, er, irregularities... seems less than kosher... frankly, exudes an odor like unto dead carp or, shall we say, a heap of dead carp the size of the building at 3900 Wisconsin Avenue, N.W., Washington, D.C. Any day now we will hear that... mistakes... were... made.

http://www.zerohedge.com/article/guest-post-bank-shot

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Freeze on questionable foreclosures could undermine fragile recovery in housing market

Allegations of possible mortgage fraud against financial giants GMAC, JPMorgan Chase and Bank of America read like a corporate thriller: forged documents, faked Social Security numbers, phantom titles, disappearing paper trails, "robo-signers" and mortgages sliced and diced so many times that nobody really knows who owns them.

http://finance.yahoo.com/news/Foreclosure-freeze-could-apf-3924319053.html?x=0

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The Great Mortgage Mystery

The big question from the mortgage meltdown isn't why so many distressed homeowners are defaulting on their loans. It's why any of them are still making payments.

http://finance.yahoo.com/news/The-Great-Mortgage-wallstreet-3947452112.html?x=0

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CLOUDED TITLES … IT IS AS OMINOUS AS IT SOUNDS!

“Over the course of 12+ years, Mortgage Electronic Registration Systems, Inc. (MERS) has thoroughly unleashed a confusing mess of concealed electronic data, supplied by virtually all of the major players in the American financial arena…coupled with an intricate network of document preparers, it has virtually caused clouds on over 62,000,000 titles to property in every state in the United States.”

http://cloudedtitles.com/

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And here is an assortment of interesting news items that came out this week:

On The Coming Middle-Class Anarchy (Caution!...Contains very colorful language...)

Brian and Ilsa—the nice upper-middle-class retired couple, who always follow the rules, and never ever break the law—who don’t even cheat on their golf scores—even when they’re playing alone (“Because if you cheat at golf, you’re only cheating yourself”)—have decided to give their bank the middle finger.

http://www.zerohedge.com/article/guest-post-coming-middle-class-anarchy

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Poll: Economists lower expectations for growth through 2011, saying economy still 'sensitive'

Top forecasters say the economy will grow this year and next at a slower pace than previously thought, weakened by governments and consumers spending less so they can pay down debt.

http://finance.yahoo.com/news/Poll-Weak-economic-growth-apf-126103023.html?x=0

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Government Prepares To Seize Private Pensions

The government is preparing to seize the private 401(k) pensions of millions of Americans while enforcing an additional 5 per cent payroll tax as part of a new bailout program that will empower the Social Security Administration to redistribute pension funds in a frightening example of big government gone wild.

http://www.infowars.com/government-prepares-to-seize-private-pensions/

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How to Prepare for the Bond Market Bust

The biggest thing this past decade should have taught retail investors is to beware when everybody piles into any one asset class. When this happens, the chances are pretty good that a bubble has developed, and recent history shows that sooner or later, bubbles burst.

http://finance.yahoo.com/news/How-to-Prepare-for-the-Bond-usnews-3480704538.html?x=0

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Chris Whalen Predicts Death Of The Fed - And The Banks

As we have said before and we'll say again, the FOMC's zero rate policies imply that the dollar and all assets denominated in dollars have no value. Stocks, bonds and other financial assets depend upon income to make these obligations money good. Without a positive return, there is no reason to hold dollar assets.

http://market-ticker.org/post=168962

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Is The Stock Market Rigged?

A video featuring Dylan Ratigan of MSNBC...One of my favorite financial news reporters...

http://revolutionarypolitics.tv/video/viewVideo.php?video_id=12859&title=is-the-stock-market-rigged

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Consumer Deleveraging = Commercial Real Estate Collapse:

There is a Part 2 to the story of Consumer Deleveraging that will play out over the next decade. Consumers will deleverage because they must. They have no choice. Boomers have come to the shocking realization that you can’t get wealthy or retire by borrowing and spending. As consumers buy $500 billion less stuff per year, retailers across the land will suffer. To give some perspective on our consumer society, here are a few facts:

http://www.financialsense.com/contributors/james-quinn/consumer-deleveraging-commercial-real-estate-collapse

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Soros: Global Economic Downturn Coming in 2011

George Soros, one of the few investment gurus who actually predicted the credit crisis, now believes the global economy is at substantial risk of a downturn in 2011. Soros believes the stagnant economy will result in continued low employment, but an increase in corporate M&A. Soros also discusses the China FX situation as well as the euro crisis.

http://seekingalpha.com/article/229511-soros-global-economic-downturn-coming-in-2011?source=email

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How Hank Paulson's inaction helped Goldman Sachs

Henry Paulson has received widespread acclaim for his bare-knuckled decision-making as the treasury secretary at the peak of the 2008 financial crisis, but former federal regulators say he missed multiple chances to contain the disaster.

http://www.mcclatchydc.com/2010/10/10/101753/inaction-by-treasurys-paulson

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US Debt on the Shoulders of 90 Million People

Now that the federal government’s fiscal year ended on September 30 and they had to “square up” their accounting, we find some very interesting thing...

http://dailyreckoning.com/us-debt-on-the-shoulders-of-90-million-people/

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Global Currency Meltdown

As the recession and resultant stimulus packages add to higher unemployment and increasing public-sector deficits, the government is seeking to boost the value of overseas earnings that are accrued by US corporations. To aid in this effort, the Fed is being pressured to erode the value of the US dollar, thereby making foreign sales more lucrative in nominal terms. But this form of stealth protectionism will fail just as surely as more overt trade barriers.

http://seekingalpha.com/article/230180-global-currency-meltdown?source=email

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Another Perfect Storm Brewing for Markets and the Economy

It's been a textbook case of "bad news is good news" in the past few weeks, entirely driven by QE2 expectations. The expectations are so high that inflation is finally being priced in (see 30-yr bonds, commodities, and gold), and Bernanke would have to do it even if he had a change of religion tonight, or else.

http://seekingalpha.com/article/230278-another-perfect-storm-brewing-for-markets-and-the-economy

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Concrete Market-Based Evidence That the US’ AAA-Debt Rating is Unraveling

Traders in the credit default swaps market are no longer showing the same faith in the USA that major credit rating agencies show. This past quarter, the price paid to insure against a US sovereign debt default recently jumped up nearly 30 percent. That spike in cost made the US the third worst performing nation in the derivatives market, after only Ireland and Portugal. Not exactly good company to be in.

http://dailyreckoning.com/concrete-market-based-evidence-that-the-us-aaa-debt-rating-is-unraveling/

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Biggest bank failure of year closes Premier Bank

Regulators shutter 3 banks in Kansas, Missouri to bring US bank failures this year to 132...Missouri’s largest bank failure of the year brings the closure of Premier Bank, a billion-dollar bank headquartered in Jefferson City with branches in Osage Beach, Chesterfield, Lake St. Louis, St. Charles and St. Peters as well as in Grapevine, Tx.

http://www.missourinet.com/2010/10/15/biggest-bank-failure-of-year-closes-premier-bank/

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And now for some GOOD News!...

Solar-Power Breakthrough

Researchers have made a major advance in inorganic chemistry that could lead to a cheap way to store energy from the sun. In so doing, they have solved one of the key problems in making solar energy a dominant source of electricity.

http://www.technologyreview.com/energy/21155/

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Have a great weekend everyone!...
zigzagman
Tom

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Update - The End of the Week News + The S&P 500's Daily & Weekly Charts:

http://stockmarketchartanalyst.blogspot.com/

The $SPX had another up week, up 18.91 points, up 1.65%...The breakout into blue sky territory on high volume on Tuesday was due to the much better than expected ISM Non-Manufacturing report, and surprise move by the Bank of Japan to cut its key interest rate to virtually zero also lifted stocks worldwide...

The Institute for Supply Management reported that its index of business activity at U.S. service companies expanded again last month, and far faster than analysts were expecting. The ISM's measure of service companies encompasses a wide range of industries including finance, health care and trade.

It was the ninth-straight month of expansion in service businesses, which have been growing at a slower pace in the U.S. relative to the much smaller manufacturing sector. Service providers account for about 83 percent of all private employment in the U.S.

http://finance.yahoo.com/news/Gain-in-services-powers-apf-4070653078.html?x=0

On Monday, the index was in danger of breaking below support at 1130, and the Parabolic SAR showed up as negative for the first time since the beginning of September...IF the ISM number had been bad on Tuesday, I believe the market would've started a fairly serious correction, but again, it was "saved" by another government report (which I put very little faith in, and be on the look out for a negative revision next time this report is released)...IMO...

Friday's up move into blue sky territory on low volume was totally bogus IMO...The Jobs Report for the month of September came in a LOT weaker than expected, yet the market rallied because that opened the door for more Fed intervention in the way of Quantatative Easing (QE2)...

The U.S. lost more jobs than forecast in September, reflecting a decline in government payrolls that shows the damage being done by rising fiscal deficits.

Employers cut staffing by 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed today. The median estimate of economists surveyed by Bloomberg News called for a 5,000 drop. The unemployment rate unexpectedly held at 9.6 percent...

(Oh Really?...and just how did that happen with such a huge loss of jobs?...That's our government and their made up statistics!...lol...See this article that shows the real number according to Gallup is 10.1% unemployment these days...)

Private payrolls that exclude government agencies climbed 64,000, less than forecast, underscoring the concern expressed by some Federal Reserve policy makers that the rebound from the worst recession since the 1930s has been too slow and may require easier monetary policy. Economists surveyed by Bloomberg project unemployment will average at least 9 percent through 2011, which may restrain consumer spending, the biggest part of the economy.

http://finance.yahoo.com/news/Employers-in-US-Cut-More-Jobs-bloomberg-126013039.html?x=0

Now let's think about this for a moment...Wasn't the first round of QE and the TARP totally ineffective in helping the economy to recover last time?...And now they think another round will be helpful?...That, is VERY doubtful IMO...So WHY did the market rally to set new highs on Friday?...That doesn't make a bit of sense to me, but here is an article just out on Barron's that tries to make some sense of it...

When Bad News Brings Good Times

http://online.barrons.com/article/when-bad-economic-news-brings-good-times-to-the-stock-market

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The most important things I see on the daily chart are the negative divergences in the RSI, CCI, and MACD...When the market was rallying hard in September, these three indicators refused to go higher, and actually dropped as the price was rising...This is usually not a good sign...



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The weekly chart has Bullishness written all over it...The Elliot Wave enthusiasts are calling this the beginning of Wave III, and it should top out at around 1450 or so...I think there will be a massive amount of resistance at 1220, which was the top back in late April of this year...But it looks like there is NO resistance up to 1220 now that it has risen above the resistance level of 1150 set it January of this year...

Since the correction I was calling for the last half of September never happened (because the index rose "too far, too fast"), watch the market begin this reversal soon...Pay particular attention to the article below that talks about Insider Selling...

One thing I notice is that the rally that started in September looks very much like the rally we saw from February until late April of this year...up, Up, UP!!!...With NO pullbacks to setup any levels of support...And you can see how that turned out, as the market crashed just as fast as it had gone up...All it takes is the right catalyst to start another freefall again...

Trying to "predict" what the market will do used to be a piece of cake a few years ago...These days, it's nearly impossible to do because of all of the government intervention, and their ability to skew economic reports and then revise them back down a month or two later...

We are in an especially hard time for making predictions because the third Quarter reporting season kicked off in full force last Tuesday when Alcoa reported their numbers...Add to that all of the important Economic Reports due out in the second half of next week, and it will be a combination of earnings and economic data that will MOVE the market...Charts don't move the market...It's the other way around...The Fundamentals (USA/world news, earnings, and economic data) is what moves the Charts!...There are too many S&P 500 companies reporting this week to mention, but here is the Economic Calendar for next week...

http://online.barrons.com/public/page/barrons_econoday.html



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Here are a number of articles I found to be very interesting from last week, and many of them tell us what's REALLY going on in the world and in America...You won't find these types of articles in the mainstream media...

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IMF Admits that the West is Stuck in Near Depression:

If you strip away the political correctness, Chapter Three of the IMF's World Economic Outlook more or less condemns Southern Europe to death by slow suffocation and leaves little doubt that fiscal tightening will trap North Europe, Britain and America in slump for a long time.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8039789/IMF-admits-that-the-West-is-stuck-in-near-depression.html

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The Fiat Currencies Are Headed into Crisis

It's important to recognize what's actually going on with the price of gold, which has broken into new record territory again today – to $1,331 as I write. It is not that there has been a change in gold's fundamentals, because there hasn't. To recap those fundamentals:

http://www.caseyresearch.com/displayCdd.php?id=553

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The Fed is Dead, Maybe by 2012

It’s inevitable: Wall Street banks control the Federal Reserve system , it’s their personal piggy bank. They’ve already done so much damage, yet have more control than ever. Warning: That’s a set-up. They will eventually destroy capitalism, democracy, and the dollar’s global reserve-currency status. They will self-destruct before 2035 … maybe as early as 2012 … most likely by 2020.

http://www.marketwatch.com/story/the-fed-is-dead-maybe-by-2012-2010-10-05?pagenumber=1

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Insider Selling To Buying: 2,341 To 1

Sorry kids, we just report the news... as ugly as they may be. After last week saw an insider selling to buying ratio of 1,411 to 1, this week the ratio has nearly doubled, hitting a ridiculous 2,341 to 1. And while Wall Street's liars and CNBC's clowns will have you throw all your money into "leading" techs like Oracle and Google, insiders in these names sold a combined $200 million in stock in the last week alone (following Oracle insider sales of $223 million in the prior week). Insiders can not wait to get out fast enough!

http://www.zerohedge.com/article/insider-selling-buying-2341-1

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Is the Fed Better…as the Devil You Know?

If Dr. Ron Paul is one of few voices of reason in Congress, then Thomas Hoenig may be the Fed’s Ron Paul. As president of the Federal Reserve Bank of Kansas City and voting member of the Federal Open Market Committee, he’s been the lone vote of dissent against the Fed’s ultra low-interest rates –six times.

http://dailyreckoning.com/is-the-fed-better-as-the-devil-you-know/

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ObamaCare Kicks In - Taxes Sure to Rise

Phase I of the Patient Protection & Affordable Care Act of 2010, better known as “ObamaCare,” officially kicked in on September 23, six months after it was signed into law. This week, we look at the main provisions that went into effect late last month, and what they may mean for health insurers, healthcare providers and you.

http://investorsinsight.com/blogs/forecasts_trends/archive/2010/10/05/obamacare-kicks-in-taxes-sure-to-rise.aspx

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How the Housing Crisis Will End the USA As We Know It

I know that a lot of fans of my writings are expecting another “get in yur bunker and clutch them thar guns and Bibles” type of story but this is, in my humble opinion, a reasonably well thought out picture of America just one to two years from now unless a massive if not tectonic shift in government and the apathy of the citizens occurs within the next ninety days.

http://johngaltfla.com/blog3/2010/10/05/how-the-housing-crisis-will-end-the-u-s-a-as-we-know-it/

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88% of US Stocks Are Now OverBought

As of yesterday’s close 88% of all stocks traded on the NYSE were above their 50 day moving average. We have seen these levels just twice in 2010. In early June the % of NYSE stocks above their 50 day moving average reached 86.27%. In the ensuing month stocks sold off 8.5%. In April the % of stocks above their 50 day moving average reached 88.8% – just a tad higher than yesterday’s closing level of 88.11%. We all know what followed in May. In 2009 the index reached the 88% range twice and remained overbought and the market continued to rally, however, I think it’s safe to argue that 2009 was a bit anomalous. While the economic environment certainly appears to be less dreary than it was just one month ago it also appears that equities have priced in this “better than expected” environment.

http://pragcap.com/88-of-nyse-stocks-now-overbought

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Bernanke Tells the Truth: The United States is on the Brink of Financial Disaster

Yesterday, Federal Reserve Chairman Ben Bernanke delivered a speech before the the Annual Meeting of the Rhode Island Public Expenditure Council in Providence, Rhode Island. In the speech, he warned about the current state of the government finances. His conclusion, the situation is dire and “unsustainable”.

http://www.infowars.com/bernanke-tells-the-truth-the-united-states-is-on-the-brink-of-financial-disaster/

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Welcome to the Parabolic Blowoff Reversal Stock Market

When you review the charts with me tonight, you’ll understand why I am concerned about what is going to happen next. The Dow Jones Industrial Average shall be first and the vivid display of the parabolic 10%+ move:

http://johngaltfla.com/blog3/2010/10/05/welcome-to-the-p-b-r-stock-market/

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The Incredible Two-Day Jump in US Treasure Debt

To show you that I am not over-reacting like the hyper-excitable, gun-nut, gold-bug, Austrian school of economics kind of weird guy that I actually am, here is an example of the corrupt, game-playing crap going on with the Federal Reserve and the Treasury: On Wednesday, 9/29/10, the national debt was $13.466 trillion. The next day, 9/30, it goes to $13.561 trillion. Again, “the next day,” 10/1, the start of the new federal fiscal year, it rises to $13.610 trillion!

http://dailyreckoning.com/the-incredible-two-day-jump-in-us-treasure-debt/

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Has the Consumer Recovered From the Last Bust?

There are more than a handful of notable economists and investors who believe that the current credit crisis is really just an extension of a much larger bust that was set in motion more than a decade ago. In essence, the 90′s created a mentality that everything was different. American net worth exploded and the world appeared to be permanently altered for the better.

http://seekingalpha.com/article/228840-has-the-consumer-recovered-from-the-last-bust?source=email

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And finally, for those that may have missed my favorite article from last week's post...

Warning Signs...

Anyone following the markets knows the drill by now...A bad economic report comes out (e.g. consumer confidence) and the market plunges 1%. An hour later, there's a magical reversal and suddenly, we go to new highs for the day, which "sticks" until the close.

When the market starts to act like this - when there's this "invisible hand" that magically levitates things, when people resort to disseminating outright lies about the market or specific companies and do so to counteract actual bad news that would otherwise result in moves down, it is a sign of desperation - there are people with money and power who are on the wrong side of the bet and they are willing to deceive you and rip you off outright to avoid being the one with the bag.

http://market-ticker.org/akcs-www?post=167824

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On a final note, one of my Facebook Friends asked me "is it time to Invest in the Stock Market?"...My answer is the same as it's been for the past few years...I don't "Invest" anymore...Ten years of gains wiped out in 2008-2009...I ONLY Day Trade these days, and NEVER hold anything overnight...That's because I believe a HUGE selloff is going to happen in the near future...There's no telling what will be the catalyst for this selloff, or when it will happen, but from what I can see from reading news articles like the ones I've posted above, it IS inevitable...The only thing I'm "invested" in these days is physical Gold and Silver coins, and I have them buried in the ground in a few safe locations, both in and outside of the country...

Have a great week trading everyone!...

zigzagman
Tom

Update - The End of the Week - S&P 500's Daily & Weekly Charts:

http://stockmarketchartanalyst.blogspot.com/

What a weird week it was...Jiggy is the way I would describe it...A lot of wild intraday swings, without any actual movement by the end of the week...Many of the daily candlesticks were Doji's, which can signal a lot of indecision, or signal the beginning of a reversal of trend...Anyone that bought the top of the spike on Thursday thinking the market was going to run up some more because it was breaking out above the old Resistance Level was in for an unpleasant surprise, since it looks to me like it was just another Pump Before The Dump...

Basically, the $SPX is consolidating in an uptrend after a huge rally the entire month of September...This is usually Bullish chart pattern, and looks like an Ascending Triangle, but the divergences I see in the CCI and the MACD Histogram tell another story...A break below the 1130 level of Support would make the chart pattern a Bearish Double-Top, which should yield down to about the 200MA at 1118...If it closes below the closing price from seven sessions ago (when it dropped for three days in a row), the potential yield down would take it to about the 50MA at 1105...



The "Money Indicators" I use are Chaikin Money Flow (CMF), On Balance Volume (OBV), and Accumulation/Distribution (A/D)...The first two are showing signs of weakness...



The weekly chart shows a perfectly formed Doji candlestick for the week...That can mean a period of indecision, or the beginning of a reversal of the uptrend...



My weekly chart shows that the three Money Indicators (CMF, OBV, A/D) all showed downticks this week...The price is bumping it's head up against the upper Bollinger Band, so any more progress to the upside (if there is any) will be much more difficult...It did close above the 5 Moving Average this week, but if it ever closes below it, this rally will officially be over IMO...Stochastics (STO) is in Overbought territory, and if the fast line crosses down through the slow line, that would be Bearish...All three parts of the MACD look Bullish, but the ADX (black line) is showing the uptrend is losing strength...The DI's of the ADX are converging in a Bullish manner, but the Relative Strength Index (RSI) downticked this week...(more comments below this chart)...



October is historically the weakest month of the year...If I had made some good profits in September, I'd be taking them right about now, and getting ready to go Short again...If the $SPX closed above the close from last week (9/24), that Short position would be a mistake, and I'd Cover it and go Long again...

If I had no position right now, I surely wouldn't be going Long here after such a big move up with only one pullback that set up a single major Support Level at 1125 during the entire month of September...It's because of such a vertical move up the whole month that sets the stage for a very hard fall in October...If 1125 fails to hold Support, watch out below!...IMO

But...The mid-term elections are about a month away, and the market has been propped up by the powers that be so that they don't look so bad before the election...I call the rally during September the "teflon rally", because the market let a lot of bad news slip right off it's back, and rallied hard on the slightest hint of good news, which wasn't that great IMHO...

This article offers a very good explanation for why the market reacted the way it did during the month of September.

And this article and my perceptions are in complete agreement...Here is the concluding paragraph:

When the market starts to act like this - when there's this "invisible hand" that magically levitates things, when people resort to disseminating outright lies about the market or specific companies and do so to counteract actual bad news that would otherwise result in moves down, it is a sign of desperation - there are people with money and power who are on the wrong side of the bet and they are willing to deceive you and rip you off outright to avoid being the one with the bag.

I don't have time to look to see if any important 3rd Quarter Earnings Reports are due out next week, since it's that time of year again soon...We're all packed up, and it's time for a quick vacation to New Orleans for the weekend...Alcoa officially kicks off earnings season when they report on October 7th which is next Thursday...If I have time on Sunday, I'll edit this post to show any Earnings and Economic Reports of importance coming up next week...

Have a Great weekend everyone...
zigzagman
Tom