1. The market actions confirms we are building a short term bottom as we are quite bearish in sentiment terms but we did not have anything close to a capitulation for a real bottom yet. The expectations for Jackson Hole WE are high and mixed as the talking heads claim that a QE3 of 500 bil is expected – well if that were true market would be higher and we would be in a steep drop next week as I rather do not expect a steep measure yet. Rather a QE 2.5 small version but the stars look very benign starting with the New Moon on 29th with a conjunction to Venus and a trigon to Jupiter we can expect a brief rally of 1-2 weeks max. Could also be something looking good from Europe but that will be just one of many useless temporary fixes who do not solve the core problems. SPX needs one close below 1119 to finish the 5 wave and most likely by tomorrow we will get it – might be a good time to lighten up on shorts in the 1100-15 area with close stops below 1090 for a 100 point rally even up to 1240 is possible ( that is just something real pros might try as getting back in is always a tough mission.
Gold should make a short term top around the 1900 level (today) and pullback towards 1730-50 before resuming the trend to the 2000 and 2300 thereafter
One of the insane moves is again the firing of the S&P CEO and replacing him with one of the biggest liars from Citi a truely bankrupt organization. I was astonished about the timing of the downgrade as mentioned in earlier posts but still expected it for the 4th Quarter. America is in best case a single A country anyway.
S&P Board Fires CEO For Telling The Truth, To Be Replaced With COO Of Citibank
2. The next wave down will again be triggered by financials going bust in Q4 after the current downmove ends around 1000 ( in 4 weeks from here most likely ) and starts a bigger rally. It will not be Goldman but even they are in trouble but rather BAC, Citi or some EU banks as the building pressure will burst ( actually rather implode) some balance cheats in Q4
News Blankfein Hires Prominent Defense Attorney Send GS Stock Tumbling, Gold Futures Soaring Over $1900
For a perfect ending to a schizophrenic day we go to Reuters which has just reported that Goldman’s CEO has hired high profile defense attorney Reid Weingarten. The market is not waiting to find out the details, and GS stock is tumbling. What has alos happened is that gold futures punched through $1900 for the first time ever. $2000 is the next target, and will likely be taken out within the week.