SP 500 Dec Futures Shorter Term Chart - Symmetrical Triangle

The SP 500 December Futures contract is in a fairly obvious symmetrical triangle as noted on the chart below in blue. The triangle is part of an uptrending channel.

Symmetrical triangles are generally continuation patterns, which means that the probability favors the contract breaking to the upside, and continuing to follow the upward trend.

There is a possibility that the price will break down and out of this triangle, and that would be a trend reversal. That possibility is a greater now than it was back in September when we last had a correction within the trend channel because of the shape of the correction now as a triangle. In September it was a fairly well defined bull flag continuation pattern.

I put the odds of continuation at roughly 65-35. For the flag it was 75-25 at least, maybe more like 80-20. I tend to be conservative because of this thin markets and the permissive attitude towards short term price manipulations. The regulatory environment in the US and the UK in particular is a disgrace.

We may likely see a resolution of this on Friday with the Non-Farm Payrolls report, but it may take another full weekend and a few more days to work out. The results of the economic data and interest rate statements before Friday from Europe and the tenor of the US presidential debate will affect this, potentially quite a bit.

I am planning for either outcome.

John Ralston Saul: It's Broke, How Can We Fix It?

This is a video of a talk given on 26 August 2012 at the Sydney Opera House.

The reference to the 'empty chair' on the stage during the opening remarks is in recognition of Chinese author Liu Xiaobo who remains incarcerated by the Chinese government for voicing a desire for political reform.

John Ralston Saul is president of PEN International, which is a global association of writers, and one of the world's oldest human rights organizations.

In his talk Saul refers to NGO's. A non-governmental organization (NGO) is a legally constituted organization created by natural or legal persons that operates independently from any form of government.

The talk gets rather 'conceptual' at times, so do not be too concerned if you struggle with it. I did as well. About the time he said, "you probably think that I am being rather vague and romantic" the engineering and managerial side of my brain was saying, 'that's an affirmative.'

But I think a few times he was trying to demonstrate our ability to make choices and 'think out of the box,' and that sort of thing does not always mix or segway well in a public lecture where hard issues and potential solutions are intermingled with abstractions.

But overall his talk is brilliantly insightful, and worth listening.

John Ralston Saul, CC (born June 19, 1947) is a Canadian author, essayist, and President of PEN International.

As an essayist, Saul is particularly known for his commentaries on the nature of individualism, citizenship and the public good; the failures of manager-led, or more precisely technocrat-led, societies; the confusion between leadership and managerialism; military strategy, in particular irregular warfare; the role of freedom of speech and culture; and his critique of contemporary economic arguments.

As an author he is best known for the 'philosophical trilogy' Voltaire's Bastards: The Dictatorship of Reason in the West, The Doubter's Companion: A Dictionary of Aggressive Common Sense, and The Unconscious Civilization.

Gold Daily and Silver Weekly Charts - There and Back Again

Gold and silver had an early pop into tougher resistance, but then got hit hard later on in the morning almost to unchanged, and then managed to recover a little into the close. An intraday chart showing the sharp early morning rally is shown below.

I had expected a much stiffer gut check on the longs, and we may still get it. I do not expect any breakout through resistance here to be easy.

But if we get the breakout and stick it, and the bears panic, look for a swift run to the next line of defense where the big shorts will once again attempt to make a stand.

 Looking at the chart it seems pretty straightforward.  There have been three major attempts to break through it, with this being the most recent, after the big blow off top. 

I think this resistance will be broken, but I cannot say if it is this time or not.  This is why I am holding off on drawing a broader trend curve to the gold chart in particular.  Coming off the long basing we saw at support surely helps on this attempt. If it is enough, who can say except in retrospect?

Someone seems very keen on stopping out any rallies below 1800, and the markets being what they are, with little regard to position limits and the integrity of the play, it could be quite a challenge at each major step of the way higher. 

Here are a few events this week that may affect the markets.

On Wednesday we will get the US Non-Manufacturing ISM number, and the ADP employment report.

On Thursday the Banks of England and the ECB may have something to say about interest rates, and very early on Friday there will be the release of Eurozone GDP.

The event of the week may be the Non-Farm Payrolls Report on Friday before the stock market open in NY.

The action in the metals markets will probably be more of a war of attrition than a blitzkrieg.  But I have an abiding feeling that at some point the status quo will break down, and that may be, as the kids say, epic.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Indecisive Day

A typically phony trading day that started out gangbusters but then quickly faded away to close nearly unchanged.

The Manufacturing PMI came in 'better than expected' which provided a little sugar rush.

Bloomberg TV is in panic mode, promoting the candidacy of Mitt Romney and his economic cause in the last month before the election as well they might given his self-inflicted slump at the polls.

I am still long bullion and short stocks. I did not tinker with that position today but I can see a question of balance coming as the new quarter grows a little older perhaps.

Let's see what happens.