Collective Intelligence! DING, Ding, ding…This was originally posted Aug. 30 by William Blount – chatting up a little Elliott Wave: Simply put, they need enough CUSHION to weather the ‘normal pattern’..IF THEY FAIL and we take out the 1632.5 as a first TELL and CONFIRM with new lows for the overall move THEN the (C) is back in GEAR FOR ITS’ 3 OF (C) AS THE FAVORED LEAN CONTINUES TO TRACK…If they SUCCEED then price is still in 2 of (C) or on the way to (B) and the more probable bounce targets of 1651.5 and 1667. FRIDAY held the lows — the 1651.5 was hit, now are we in the endgame for 2 of (C) OR do we head to the 1669+ cash.
President Obama and his minions have, are and will continue to address the Syria situation through all avenues of the media including tomorrow when he addresses the nation with Congress in session. It is said that the Senate is narrowly in the president’s camp and he may not wait for a vote in the House – due to the lack of votes needed.
Jon Hilsenrath -WSJ: The issue of tapering isn’t settled, according to Hilsenrath. One option that has gained popularity at the Fed lately: taper by a small amount (say $10B) and then emphasize to the market how further reductions will be very data-dependent and not automatic. The initial taper should be thought of as a “cautious first step.” According to Fed models, the timing of tapering isn’t all that critical, although it sends an important signal to markets, which could then begin to discount the end of the program earlier than FOMC officials would want.
Today started with 175k ESU and 800 SPU traded on Globex, SPU trading range was 1659.50 – 1653.50. Friday’s regular trading hours (RTH’s), SPU pit session trading range was 1663.80 – 1639.00 before settling at 1653.50, up .5 handles.
U.S. investors pour into European stocks – U.S. investors have pumped ~$65B into European equities in the first 6 months of the year, the most since ’77; the investment represents a big vote of confidence in Europe – FT
Today’s pit session gapped 5.5 handles higher to 1658.70 – 1659.50, marking the intraday low before another slow and lengthy grind up to 1671.50 by 1:45. The [DJIA] was up 75 points, testing the 15,000 psychological level in the opening minutes before adding another 105 points, printing a high of 15,088. Once again the equities were absent of any major pullbacks today.
What was fueling the rally? The carryover momentum from last week’s rally and the absence of sellers, the strength in the overseas markets and all headlines that mention Syria…and this one went a long way to help push the indices higher mts2 (09:28) RTRS – RUSSIA SAYS WILL URGE SYRIA TO PUT CHEMICAL WEAPONS UNDER INTERNATIONAL CONTROL IF THAT WILL AVERT MILITARY STRIKES. MORGAN KRUPETSKY: *SYRIA SHOULD GIVE UP WEAPONS IF IT WILL AVOID STRIKE: RUSSIA. Sam_E posted: the only thing that the market likes better than the smell of greed is the smell of fear. and they know there is a president on the run over this syrian thing. they will likely push it up for all they can in this short period window.
Whoa! Game (pun intended) changer? Roger_Volz posted (10:43) Syria welcomes Russia’s proposal for Damascus to put its chemical weapons under international control: Foreign Minister Walid Al-Moualem.
The early look on the closing imbalance showed (14:35) MiM – MrTopStep Imbalance Meter showing 79%, $350M to the sell side. At 2:45 the SPU was trading 1669.50 area when the closing imbalance showed a moderate $400M to the sell side. The cash close traded 1670.30 area before settling at 1669.10, up 15.6 handles on the day.
People who still do not know why taper now must see this: http://vimeo.com/72371984
The following are updated expectations from Friday, following the jobs data summary / comments – overall these show almost no change to prior expectations.
CS – Sept taper, -$10b MBS and -$10b Tsys or Opt2 of -$10b Tsys, -$5b MBS
Moodys – Sept taper of -$10b Tsys
MS – Sept taper of modest amount w/explanatory language
TD – taper is on; BMO- Sept 18 taper if next data don’t disappoint
RBS – Sept taper of -$10b Tsys and -$10b MBS, cld be trimmed if ylds rise
SG – small Sept taper; Wrightson- Sept taper is on
HFE – Sept taper is on; Jefferies- Oct taper more logical
BAML – “more likely to wait (to Dec) but it remains game-day decision.”
FannieMae – Sept taper likely; FTN- Sept taper, did not say size
Goldman – Sept taper, perhaps a dovish taper
RBC – Sept taper
Nomura – SepT taper
Goldman’s Hatzius: “While the August employment report was a moderate disappointment, we believe it is probably not weak enough to prevent the FOMC from tapering in September. However, it does raise the likelihood of a “dovish taper,” which could include a small size of the overall adjustment to purchases, and which we think would likely coincide with an enhancement of the forward guidance.
