SP Futures Hourly Chart at 3 PM and Short Term Indicators After the Close

As a reminder, tomorrow is a stock options expirations, so manipulation of the tape in the short term at least is the order of the day. This may explain some of the recent bounce in equities despite the poor economic news.

We also get some interesting economic data including the long term TIC flows, Capacity Utilization, Industrial Production, preliminary Michigan Sentiment for May, Empire Manufacturing and of course the CPI.

If we get a solid break to the downside, expect a marked increase in 'hysteria.' This will be the time for a trader to keep a cool head. Rants are fine if they help you release stress, and they can be fun, but ranting does not put money in your bank account and can turn into an emotional crutch, a bad habit that distracts you from seeing valuable information with a clear head.

The short term indicators have been updated after the close, and a daily SP 500 chart with the moving averages has been added. The SP 500 is at a key support level.

Here is the daily SP 500 Chart with an Important Observation on the Moving Average

SP Hourly Futures Into the Close of Trading

Today's economic data helped to crush the green shoots speculation and the long short squeeze in support of the banks' secondary stock offerings.

I am bearish, and think a test of the lows is in the cards. But the influx of narrow money and collaborative effort between the banks and the Obama Administration makes shorting a perilous activity, especially in these low volume markets.

A 'trigger event' of almost any intensity will burn this market to the ground, so the long side is beyond consideration here at least for us.

So what does that mean? We're weighted slightly to the short side but waiting for the short term Sell Signal from our indicators.

RIP - L. William "Bill" Seidman

Former FDIC Chairman and CNBC Chief Commentator L. William "Bill" Seidman died Wednesday in Albuquerque, N.M., after a brief illness. He was 88.

In a recent public appearance, Bill continued to tell it as he saw it, without mincing too many words. He was also a frequent commentator on Bloomberg Television. His perspective will be missed.


William Seidman on culprits of the financial crisis
By George White
November 10, 2008 at 4:50 PM

L. William Seidman, former chairman of the FDIC and the Resolution Trust Corp., was the lunch speaker at the Securities Industry and Financial Markets Association's Summit on the Troubled Asset Relief Program Monday afternoon. As chair of the FDIC during the last financial crisis, Seidman started off by reassuring the audience that the crisis would pass, but he quickly focused on the seriousness of the situation.

"These things do go by," he said, "but that's not to take away from the fact that this is the worst financial crisis since the Great Depression. In one sense it's worse than the Great Depression, since it's far more complicated for governments to handle." (Hey didn't Greenspan call a bottom last week? LOL - Jesse)

Seidman then went on to list the main reasons (in no particular order) for the crisis:

1. The Securities and Exchange Commission for loosening capital requirements
2. Fannie Mae for entering into subprime lending
3. Rating agencies for rating paper with which they had no experience
4. Robert Rubin and Alan Greenspan, who went to bat to prevent the commodities exchange from regulating derivatives (add Phil Gramm and wife here)
5. The Federal Reserve for increasing the money in the system and refusing to regulate mortgage brokers
6. Securitization and himself

"The nuclear weapon of this situation has been securitization. This was invented by myself and the RTC, so I add my name to this list as well," Seidman said. "The exception is that we kept a piece of it ourselves back then; that part was lost when others started doing it."

Bill is being far too humble and self-effacing by naming himself for merely developing the concept of securitization as part of his work at the Resolution Trust Corporation during the S&L crisis. Taking the blame for what followed at the turn of the century is like blaming the inventor of television for CNBC. Wall Street is capable of perverting almost anything into a vehicle for financial chicanery and fraud.

Fiscal Meltdown Will Test the Bond and the Dollar to the Breaking Point

Don't blame the Democrats alone for this. Instead blame a political system that is corrupted by Wall Street and lobbyist money, and a mainstream media dominated by four corporations feeding a stream of managed news and perception spin to gullible US households.

The day of reckoning is nearly at hand, in which the currency crisis in the US will shake the financial foundations of the global economy.

"Outlays are rising at 17% YOY the fastest nominal pace since late 1981. With receipts falling 14.6% YOY their fastest drop in at least 40 years the gap between their growth rates is also the widest in the record.

All these rates are accelerating and are threatening to push the deficit to more than 50% of receipts and - at $1.1 trillion and rising - to more than 10% of private GDP."

Thanks to Sean Corrigan at Diapason Trading for this chart.