S&P 500 Market capitulation Vs Exhaustion Oct 28 Double bottom.

After watching our double bottom come in the daily chart I see that the market has confirmed its previous bottom yet fail to see it as the turning point for a recovery.

Yes, there is alot of joy over the fed cuts, and possibly they are going to be priced into today’s rally off the bottom. I have posted a chart showing the volume, which is decreasing for the push down.
On the daily I was looking for a reversal bar yesterday, and a retracement to 942 over these next few days, 50% retrace on last swing h/L.

If we have an overly exhuberant market it would not suprise me seeing a retrace to 1008.

The 972.5 mark will be the 60% retracement for the ambush set up. An ambush occurs when the price retraces 61.8% and then reverses through the lower 50% retracement mark.

There is price divergence on the daily also looking at the last low and previous swing low, in fact the volume would make you think the previous move down was the end because of exhaustion vs capitulation. I prefer the capitulation side better. Cleaner recovery. This way it could be a long time till the market recovers.
8 million will be a sell off extraordinaire, a capitulation, that is what I am looking for as a capitulation in the classic sense Vs. the pitter patter decreasing volume on the daily giving us exhaustion. ON 10/10 when the pundits on cnbc said it was a capitulation I laughed because of the lack of a true sell off in terms of Volume, not price…..when they are in line then capitulation occurs. It is much lower in this market and with the intervention levels we are seeing I don’t know if we willl see it happen.

Consumer confidence at low, Fed to cut wed.

Stocks came roaring out of the gate this morning with The Dow up 300 points, but the rally lost momentum when The Conference Board's Consumer Confidence Survey came in with its lowest reading since the monthly surveys began in 1967. The Federal Open Market Committee (FOMC) is meeting today and tomorrow. Their Policy Statement is due for release at 11am tomorrow and it's widely expected that we'll see at least a 50 basis point cut in the Fed Funds Rate.

S&P 500 day trading emini futures coach oct 2 SP500 educati

Sp500 day trading coach

Point of control 849.75

Crash levels to 758.25

break out level above 860 and 880.50 major resistance.

This channel is holding. Probably taking it up into the FOMC meeting and then will take it down.

S&P500 day trading coach emini futures education Oct 28 levels

We can see that we are getting a descending triangle with the present area of support being the lows.

We could get a reversal bar off of the support from 825 with a retrace to 860 then a break down to new lows.

Our Breakdown level is 758.25

Fed funds rate moving, fed buying stocks and Dollar has taken off.

Overnight, the Nikkei lost almost 500 points, reaching a 26 year low. But, as was the case on Friday, U.S. equity markets did not fall as sharply at today's open. We'll see a stream of economic reports this week and The Fed's FOMC is meeting Tuesday and Wednesday... their Policy Statement is scheduled for release at 11am on Wednesday. Most analysts expect a cut in the Fed Funds Rate of 50 basis points, but don't expect such a move to calm market volatility just yet.



It will take more time for the market to digest the impact of the government action we've seen this month, including the Troubled Asset Relief Program (TARP). The TARP was originally designed to buy troubled mortgage securities from financial institutions, but instead the first $250 billion is being invested (sunk) in bank preferred stock. Mr. Paulson determined that buying bank stock would be an easier and much faster way to get capital to them than trying to convince the banks to sell him their bad paper at pennies on the dollar. Now he's hoping the banks will use this capital to make loans to "Main Street". Time will tell if it was the right move. Looking pretty dismal so far as all the moves up are sold off by institutional investors. The Market Makers are showing their position.



Also, heads up on the dollar as we are about to hit some resistance on its raise to the top of the currency bucket. Also realize that the Yen is at a major resistance point on many currency fronts. Asia markets have lost half of their values this year. We are watching days where some markets are loosing 5% or more. This money is all flooding into dollars.

This international meeting will be a little rally hoax and expecting bigger declines.

Oil and gold will keep declining with this pressure.

S&P 500 day trading emini futures education coach Oct 27 sp500

S&P 500 day trading coach emini futures levels for October 27th.
855 is the point of control
837.25 is area for break down watch for volume pressure on approach.
819.75 is major support then 801-3. If we get to this level the sell off could reach capitulation levels. Looking for 8 million.

Greenspan - I was wrong but I was right Fed and Debt

In his prepared testimony to U.S. lawmakers, the former Fed chairman Alan Greenspan, called the credit crisis a "once-in-a century credit tsunami" that will result in a significant rise in unemployment. He further elaborated that the results have turned out to be much broader and more damaging than anything he had imagined, it was unexpected, a surprise. He was quick to point that economists are fortunate if their predictions are 60% accurate.
First, he poses the question, "what went wrong with global economic policies that had worked so effectively for decades?" Then he answers, "The breakdown has been apparent in the securitization of home mortgages."

Perhaps, this means that for the last 10 years the nation has been living in the 40% twilight zone, as I don’t recall any economists vocalizing eminent danger from the shaky mortgage products that Fannie and Freddie were dumping on the bond markets. We heard plenty about the "irrational exuberance" over rising home prices but a strange silence about the way they were being financed. How can a condition in the making of this magnitude slip under the radar of the nation’s brightest economic minds?

Now Greenspan points back, "In 2005, I raised concerns that the protracted period of underpricing of risk, if history was any guide, should have dire consequences…" If he means the underpricing of credit, he forgets that it was he who kept interest rates low, adding fuel to the financing frenzy…thus the housing boom.

The futures market is pricing in a rate cut of 50-75BP at their next FOMC meeting. That will lower the Fed discount rate to at the most 1.0%, leaving little room to move.
Now we have a problem, the credit crisis was allowed to fester and grow in a low interest rate environment and when the Fed wants to stimulate more lending and borrowing, they only have a 1.50% margin to work with. How can you lower rates below 0.0?

Mr. Greenspan is not the only public figure who is expressing surprise at extent of the credit collapse, and in the next breath has taken credit for forewarning its coming.