What a surprise!
This article is all over the net this weekend, I cut and pasted a portion of the Zerohedge commentary below. Below is also a link to Zerohedge if you want to read the full story.
The bottom line is that Goldman and I are on the same page. The spike low to the mid to low 1290ish is the line in the sand as to what will call the Market direction will be near term.
I would guess by the selling Goldman (see posts below) was doing that they expect that level to break. Although when articles like this circle around so quickly I become a bit suspicious. Like any knitting club the little ‘ole ladies like to talk doom and gloom so the “Markets potentially breaking” rumors circle a lot faster than the “buy the pink clouds and blue skies” rumors.
I also think the 1322 is a real dilemma for the Market. It is cutting back and forth around it creating a wedge, not really sure what it wants to do. The drawing shows a few scenarios but really anything can happen. We could bounce around this wedge for some time until its +70% is filled and we are much closer to the apex, then a false breakout and then head the other way (not shown in my artist rendition of the future but fairly typical price action).
No one knows and I would strongly question anyone, even a Goldman advisor that tells you they do. The best way is to judge price with an open mind keeping all probabilities in mind and play the one that appears to be unfolding.
Also, I think last weeks crash in the Saudi market is an important event. I think they are anticipating an uprising there and those in the “know” ran for the exit. Although this might send crude to $300, it might also surprise everyone with huge capital flows into US equities. This is something I will be watching very closely.
Tim Mack
A clip of the Zerohedge article:
Goldman's Noyce On How To Play The "Large S&P Correction Coming" Through FX, (And All The FX Charts That Matter Next Week)
Submitted by Tyler Durden on 03/05/2011 13:51 -0500
Chart Patterns Displaced Moving Average Equity Markets
In addition to all the traditional technical observations on all the key crosses from Goldman's only must read technician John Noyce, which include the EURUSD, the EURCHF, the AUDUSD, the NZDUSD, and the AUDNZD, the NOKSEK, and the GBPUSD, and a quick look at 2 year USD swaps, Noyce's key technical observation has to do with a pattern emerging in the S&P vis-a-vis trendlines. To wit: "There are a few signals on the daily chart of the S&P which argue that a larger correction could be developing." The key support line according to Noyce: 1,291-1,294 on the S&P, below which the next support is the 200 DMA, which is all the way down at 1,174. The key catalyst: a market that is riduclously overbought at 129 days above the 55-DMA (128 as of the day of Noyce's report which was on Thursday).
Link to the full article:
http://www.zerohedge.com/article/goldmans-noyce-how-play-large-sp-correction-coming-fx-and-all-fx-charts-matter-next-week
