The New Generation Of Banging Hardtechno

karls4y3ntan

S&P 500 took major technical mutilation today as money continued to pour out of stocks and into the safety of bonds.
Provided you follow bonds then you know that massive buying in bonds has been going on for sometime now.
The question that we all couldn't figure out was why were institutional traders continuing to buy bonds in such giant numbers.
We believe we at the present are aware of the answer by doing technical study on different markets and searching for connections between them.
This inter-market investigation of relations between diverse charts has given us some fascinating insight into why institutions have been buying bonds for the last 4 months.
It has to do with timber.
No I am not a single fry short of a happy meal. Actually perhaps I am but that's not the focus here [link widoczny dla zalogowanych]!
When the cost of lumber drops, bonds in general go up. If you ponder it, it makes wonderful sense.
Lumber prices drop when demand drops. In a recession large ticket items like home construction are hit bad as no one can afford to buy a house or even a car. This drop in demand for lumber makes the price of lumber drop also. As home construction and the financing of homes, with equity lines, make up such a vast percentage of our GDP [link widoczny dla zalogowanych], the drop in home construction implies awful things for our economy and stock market and good things for bonds.
What thoroughly gets me livid at myself is that I didn't notice the textbook Fibonacci 50% retracement on the S&P 500 on Monday. I should not have gone long anything until I was persuaded it broke through this major level.
In this video I look carry out technical analysis on SPY in 4 time frames and tell you why I think you should go to cash and stay out of this market or enter into a bond ETF fund.
On the weekly chart of SPY we have a Bearish Engulfing candlestick. What also is disconcerting is that we are extremely close to closing the neckline and forming a Bearish Head and Shoulders Top. Also the 21 week MA line support has been broke and is now acting as short term resistance. The 8 week MA line has smashed below the 21 week moving average line, however the 13 week MA line has not. The 13 week moving average line is very close to crossing below the 21 week moving average line and if it does, the short sellers will pile in.
The daily chart took further excruciating technical damage today confirming the Bearish Engulfing candlestick that was created yesterday. The 8 day moving average line was broke today. The 13 and 21 day MAs are so cramped together that we might see a break of both in the next 1 or 2 days [link widoczny dla zalogowanych]! That would be especially bearish. The vital support level that needs to hold on the daily chart is $109.21
The hourly chart on SPY looks very awful. The vital support level of 111 was broke. When this support level was broke, traders all ran for the exit. Volume picked up on the sell side as a greater and greater number of stock traders jumped out of the S&P 500. Panic thoroughly absorbed everyone. What too looks really awful is that the 8 and 34 hour MAs have dropped below the 55 hour moving average line.
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