Outside Pressures from Syrian Crisis

Markets have a tendency to be influenced in different degrees. A person who has a sprained ankle is much more susceptible to an additional sprain situation than a completely healthy ankle. Similarly, the chronic or perhaps terminal health of the bond markets has raised rates. This is a contagion that will eventually spread to stocks. The stock market is vulnerable and will be affected by the degree of anxiety that influences will create. The Syrian crisis has reached prominence in a very short time frame. This is similar to another ankle sprain to an already stretched ligament weakened appendage. There
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Is the Market off the Juice?

The slow methodical rally last Monday pushed through resistance areas like a bulldozer in low gear. Not a typical type of action for a bullish move but rather a typical manipulative action of massive computers. The bonds were actually in a divergence as they were in the plus column as well as stocks. They did not allow a pullback to get us a good entrance for a long position. They were technically oversold in the short term with the 128 ’12 area being a major support. Each and every day I correlate the S&P with tick throughout the day. Tuesday the
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The Whipsaw

The holiday weekend showed that Syria is now a political tool. Congress is to vote on the situation rather than Obama taking the lead. It has delayed the process and the market responded with a holiday rally. However this influence will diminish as time goes forward. Therefore any rallies associated with Syria will probably be short lived. The situation with Russia could have more dramatic implications than any other situation of Obama’s presidential career. Putin has demanded proof of Syria using chemical weapons. It seems that Putin is trying to draw Obama into a gun fight. The market will not
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Tape Action

As of mid-week we still had not seen a 30 point down day which means the pressure is intense. It may take a catalyst for a true selling pressure to win over the manipulators. The bonds gave a big yawn last Wednesday at the 10 Year Auction. It is one of the most benign movements seen in the backdrop of a 10 year auction. I am beginning to wonder if these auctions are losing their influences as they have had in previous months. Yes the Federal Reserve is the big buyer so therefore much of the mystery is reduced. It is
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Strong-arming Fibonacci

The entire month of July had not had a 30 point decline in the S&P futures as of Monday. We closed on the first day of July at approximately 1606. The only way that a market can act the way this July has been, is by incredible manipulation. I personally do not understand why it is so critical that the stock market be held at this all time high numbers. This is a bubble of bubbles and reminds me of the summer of 1990, just before Iraq invaded Kuwait. The market was slow, volume was light, and then a monumental
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Lowering the Volume

The beginning of our trading week was knocking on the door of 2013 highs in the S&P futures. The number of S&P contracts traded Monday represents less than 50% of normal average volume. We were into 15 days without a 30 point correction and I expected a sharp 1 to 2 day correction in the magnitude of 30 to 50 S&P points. The adage used by traders are that the current prices are floating on air with no foundation underneath. The bonds were trying to stabilize as each bear raid was met with buying on Tuesday. We were able to mount
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FOMC Prompts Highs

It is important to note that the internals of the market were weak. A large percentage of the day the tick registered minus even though we had a plus print on the S&P Futures. The light volume signifies that traders are waiting and institutions are on the sidelines. I have no doubt that the Federal Reserve is trying to maintain the recent S&P gains before the notes are released. However, the action shows a deteriorating rally which could create a vacuum on the down side. There was a presence that saved this market from a large move downward Tuesday. The early morning saw
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Crushing the Bonds

The first day of a new month generally has a buy bias but the lack of energy this afternoon indicators that the continuous buy programs of this morning are gone. The bonds are trying to gather some momentum as each rally seen over the past several weeks has been met by a  flurry of selling. They were closing the pit session nearly at the Monday’s highs, which is encouraging for a market that has been beaten so severely. We could have seen a full reversal day in progress as the early Tuesday morning saw buy programs perpetually generating higher S&P 500 prices.
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