Futures-Driven Romp from Key Support Levels

It is clear that the computers rule the Markets and the little guy is simply along for the ride.

The Markets got hammered overnight, opened way down, then caught a bid around mid day and finished things off relatively flat.

Fading rumors and key moving averages was the name of the game today.

Apple is going to split – maybe…

China is going to buy all the Gold being sold by the IMF – maybe…

The Apple rumor was the excuse to start buying SPX Futures. They light up like a pinball machine. There was $9 billion in purchases in ten minutes. The odd thing is that there was no buying of the SPY ETF to justify the massive Futures activity. But that has been the norm recently. The same thing happened yesterday morning at the beginning of Bernanke’s testimony – I guess nobody thought he was going to keep Interest Rates low…


The Fed knows how to play the Markets at key technical levels. Greenspan was a master at trading the technicals. There were several key technical levels hit this morning on SPX (SPX is the key index to watch for this stuff). Almost to the penny, SPX tagged the 38.2% retracement (1,086.52 versus today’s low of 1,086.02) from the February 5th low to the February 19th high - .

Also, the 20-day moving average for SPX was 1,087.4 and the 38.2% retracement of the January 19th high to the February 5th low is 1,084.95

So today was simply a short-term oversold Market at critical support levels being reversed hard by a bunch of computer models. Does anybody else see the danger to this when all of the computers decide to SELL at the same time?


At the same time this was going on domestically, the S&P 100 Global Index gapped down to open below the 200-day average and then spent the rest of the day going straight up.


Does anybody still think that the Markets aren’t being manipulated with intent… Asset Price Appreciation as a policy tool. Keep the rich happy with their stock prices going up, keep the poor happy by extending their unemployment to infinity and stick our kids and their kids with the bill, all while looting the US Treasury for the most politically connect “contributors”.

Markets are still in Correction, but the retest of the February 5th lows is in process and my have ended this morning. I noticed that three sectors broke out of multi-month consolidations today and will be looking to start building positions soon if I get the green light.