Monday, December 9, 2013

Friday's purposeless spasms in the early going did nothing to diminish the weight of the pattern shown, implying more slippage over the near term to at least 1189.90.  The breach on Friday of a low analogous to the one at 1212.80 we'd been using for the December contract gave the futures some lift by running  stops below that number, and although that could delay their descent, it seems assured nonetheless.  The foregoing notwithstanding, I'd turn bullish as all get-out if buyers were to pop this vehicle above the 1268.00 external peak shown. This benchmark should sound familiar, since we used it last week.

Stocks rallied sharply on last week’s unemployment news, but shouldn’t they instead have fallen?  In the past, it has not been changes in the unemployment rate per se that caused stocks to rise or fall, but rather the perceived impact of those changes on Fed policy. In the bizarre, inverted world of Wall Street tiny-think, “bad” unemployment news was always greeted with high-five exuberance, since it argued implicitly against Fed tightening.  To be sure, last week’s news was good as far as Wall Street was concerned: The 7% jobless rate announced on Friday was the lowest since 2008. But could those who helped goose the Dow Industrials 200 points have forgotten what Helicopter Ben said last summer – i.e., that the Fed would end its quantitative easing program if U.S. unemployment got “in the vicinity of 7%.”  Of course, there are the usual mitigating factors to be considered that could alter the actual turn of events. For one, because Bernanke’s job is to say what he means without necessarily meaning it, we shouldn’t hold him too closely to his word. And for two, the phrase “in the vicinity of 7%” leaves some wiggle room, Under the circumstances, it’s conceivable that unemployment could fall all the way to, say, 6.7%, before the Fed feels obliged to invoke the dreaded Tapeworm. (“Not on my watch!” Janet Yellen might say, were she not merely one more Fed lackey who moves only when her strings are pulled.) DaFacto Tapering We’ve asserted here numerous times that the odds of a Fed Tapeworm are about the same as a Martian invasion. But we’re going to qualify that, as follows: However the Fed reacts to this (literally) too-good-to-be-true gusher of unemployment news, it will happen in such a way as to leave everyone wondering whether the Fed

As has occurred with increasing frequency in recent months, the markets have opened Sunday evening with a timidity that belies their underlying, rabid demeanor. All DaBoyz need to trigger the short squeeze that would officially kick off this season's 'Santa rally' -- I hate that phrase -- is some mote of news that could be construed as remotely bullish for stocks. (Said news evidently won't be coming from Wal-Mart or other retailers that target the down-and-out, however.) My guess is that the futures will reach the 1814.00 target (see inset) overnight. That wouldn't leave much for night owls to trade, but the target can be shorted nonetheless using camouflage. Please note that even a small overshoot of perhaps 1.00 point or more would be warning bears to get out of the way ahead of the opening bell.