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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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...If the dots don't connect, gather more dots until they do...




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Tuesday, November 01, 2011

What's the purpose of life?

Are the markets retracing an uptrend, or are they rallying on a downtrend (are we in bull or bear market)? Is Greece going to hold a referendum or not? Will Europe ever get its fiscal, economic, and financial houses in order? Who is manipulating the markets with rumours regarding Europe? Will the U.S. politicians ever agree on anything before next year's election is over? Will Obama make the rich pay higher taxes? Will the Fed play Santa Clause this year and give the markets QE3? Are there more "MF Global situations" just around the corner waiting to blow up?  Can we trust reported accounting numbers from other banks/brokerages? Where are the FDIC and SEC hiding in all of this? Will these questions ever be answered? I could go on and on, but it all seems so futile and they're rhetorical anyway...

One thing I do know and that is volatility is back...see my earlier post below. With that comes large, unwieldy, non-directional intraday swings like we saw today...the 10-day (market hours only) charts below of the YM, ES, NQ & TF show that price was contained in between near-term resistance and support levels in what could turn out to be a downward-sloping H&S with island-top formation if today's support levels are broken with conviction and held.

The Daily charts below of the YM, ES, NQ & TF confirm that price hit a confluence of Fibonacci and price levels at today's lows...what was near-term resistance is now support...these will be very important levels to be held if the markets are going to resume their trek upwards that began in early October. Otherwise, if these are broken with conviction, they will form resistance once more...this would, of course, send the VIX higher with the promise of more large, unpredictable moves in the equities markets. Furthermore, I'm still mindful that the markets are skating on "thin ice" since they're still trading above unfilled gaps below, as I've mentioned in previous posts.

By the way, today's lows are around the levels that they were at on August 4th, just a day before Standard & Poor's downgraded the U.S. credit rating, which sent prices plunging further.