A Whole Lot of Nothing ~ The Risk Averse Alert

Thursday, March 17, 2011

A Whole Lot of Nothing

That well-summarizes today. A whole lot of nothing, at least technically speaking.

Then, after today's close, the G7 — most emphatically those treasuries in the trans-Atlantic — saw this a fitting moment to signal a sense of panic re: the Japanese Yen. Let the swindle begin.

Apparently, "the Bank of Japan is typically reluctant to intervene." And their reluctance was reported this morning in response to last night's Dollar/Yen crash, blaming it on "speculators."

Yet, alas, comes the spin from Dennis Gartman, saying, "They intervene when the markets are unstable. And when the yen moves from 80 yen to the dollar, to 76 yen to the dollar in 30 seconds that’s instability – that will probably trigger intervention."

What well-schooled swindler insatiably starved for capital would not salivate at a BoJ possessing "all the firepower they need?" We will see where this leads.

Returning to an unchanged technical backdrop pointing to prospect that, over coming days major indexes could fall below their respective 200-day moving averages, and decisively at that...

NYSE 5-min

Assuming the third wave down from February 18th top has been unfolding over the past ten days ... we might suppose that, the first wave of this third wave down completed at Tuesday's open ... and the second wave of this third wave down presently is forming.

Now, we have a recent instance of a second wave unfolding whose development might provide a template to the second wave forming right now. We see it forming last week right up to last Thursday's sharp decline at the open. Critically, this is a second wave within the presently unfolding third wave down from February 18th top — it is just one lesser degree than the second wave thought forming right now.

The manner in which last Thursday's sharp drop at the open was disguised (yet well-signaled by RSI's struggle to maintain a buy-side bias above 50) is the similar effect we might look forward to over the next day or two. Then in the cross hairs would be a rapid decline taking out respective 200-day moving averages, all in a matter of a day or three next week.

As long as underlying technical conditions remain supportive of a view supposing U.S. markets are fated to imminently follow Japan's, then if a whole lot of nothing today followed by a whole lot of nothing tomorrow is what it takes to confirm complacency's pervasive presence while a few more bucks are raised on the backs of suckers, then so be it.

Fast Money
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