A Chartist Summary

A few testimonials first:

-I'm still holding puts from yesterday, but I was able to buy 10 contracts of the 500 call at 4.90 and sell at 5.50 - 20 minutes later. A quick 600 dollars. The market seems to be hesitating, so maybe we'll still be able to cash out those puts.-MR

-Nice trades on the 500 call twice today, Floyd, on .50 moves. The market just flat lined most of the day-GCC

By 2.30 p.m. it appeared the market had almost fallen asleep, and by 3 p.m. I calculated the Dow had moved from the theoretical high of 9874, to as low as 9700, yet all in short tight whipsaw and hesitant moves. The traders that wrote above were able to day trade the market, watching the tight moves. Trading was simply hard to do. The moves were too tight, and there was not enough volatility.

We're leaving both signals open.

The first trading day of October the NASDAQ has been up a number of years, and can trigger market movement. Heres' a comment from our www.bluechipoptions.com service, appropriate to index trading:
"Tomorrow the ISM manufacturing index data is announced, gauging the strength the manufacturing sector. This should be a key report as it studies: 1. Production levels, 2. New Orders Placed
3. Inventory levels 4. Supplier deliveries and 5. Economic environment.

This report reflects sentiment of the health of the market: inflation and labor conditions, and historically a "trigger report." We should note that the ISM index is showing the first signs of expansion in 19 months, up 52.9 in August vs. 48.9 in July, and strong gains in manufacturing sales.

But what stands out is that manufacturers aren't stocking up, and are using "just in time" thinking, keeping pared down inventories. This is part of why unemployment continues high, indicating that current production needs are developing to a pared down supply chain, and that more jobs are being done by those that are "left" employed."

As one studies their economic calendars for the week note:

*The "real" Gross Domestic Product final 2nd quarter (annualized) are being released this week. During Emperor Bush's terms we would always find major "corrections" in GDP, correcting optimism with a realistic number, but always when the "real" annualized reports came out, which are not as well followed by the market. Under Obama, of interest, we are noting real GDP #'s typically do not show much correction to prior data. Only if they do this week will we see a market that responds.

*The Real Gross National Product, or GNP, "reflects the goods and services produced by the labor and property supplied by U.S. residents, and includes net income from the rest of the world, which the GDP does not track.

This report correlates well with the ISM report that shows production and income have ramped up. Again, these are all good signs of "end of recession," and we should begin analyzing if a higher unemployment rate may now become a norm in our society.

And....FDIC Is Broke, Taxpayers At Risk, Says FDIC Chairman

So, with what the market did yesterday, here's a chartist summary:

1. On indices slower MACD is crossing faster MACD, a sign of sell off
2. Every bullish % indicator is struggling with crossing under its 20 day exponential moving average. This includes, for example, $BPNYA and #BPCOMP, the NYSE, and the Nasdaq concurrently.
3. Oil continues to show signs of breaking down.

And here's what our emotions around numbers are saying:

1. The market has been doing so well, it's likely it will cross 10,000.
2. We want the market to cross 10,000. We want to think we are all doing better.
3. Lots of indicators show strong growth, and "they" tell us we are coming out of a recession.