This is getting tedious

The S&P gets to 2,100 and we short /ES Futures at 2,100 (with tight stops above the line) and Russell (/TF) Futures below the 1,200 line and Nikkei (/NKD) Futures below the 20,000 line and then, tomorrow or Friday, I’ll tell you how much money we made shorting and you’ll say “why do I never catch these great trade ideas” and I’ll say it’s because you’re not patient enough to wait for the pattern to reset itself and just make the obvious play.

This is the 11th time the S&P has been over 2,100 since May and, so far, it’s been like a little money machine for us all year long on the short side.  I know this time may be different and the last 10 times may have been different too, which is why we stop out if we don’t get confirmation from the other indexes that things are toppy but, when it works – it’s good for $250, $500, $1,000+ PER CONTRACT in the Futures at $50 per point to the downside. 

As usual, the Dow is at 17,850 (/YM) so that’s a confirming line we like to watch but the Nasdaq is now leading us higher at 5,156 but that’s still, unfortunately, shy of our November high of 5,163 so let’s not call this time different until we see that beat and THEN we’ll look for the July high at 5,231.  That’s right, we’ve done all this before and nothing is different this time at all!  

Markets move higher given belief the ECB will cut interest rates Thursday. This belief trumps a host of bad economic data so far this week. Tuesday bulls ignored a substantial drop in manufacturing activity as manufacturing reports showed substantial declines. The PMI Mfg Index declined to 52.8 vs prior 54.1 and the ISM Mfg Index imploded to only 48.6 vs prior 50.1. Construction Spending did improve modestly to 1% vs prior 0.6%. But at the same time retail store sales slumped 10% year over year on the wacky Black Friday holiday shopping.

Other problems are front and center as Puerto Rico makes a last minute payment to creditors averting a default but it’s only a temporary solution. Next up is what’s taking place in South America’s most important economy—Brazil. It will release data tomorrow showing the economy there is entering depression.  So yeah, there’s trouble we can’t ignore, or can we?