“It is easy to ignore the storm if you look at the opposite horizon.  When the storm reaches your location there can be no more ignorance.”

I hate to tell you, but the storm has reached your location and it is a Category 5 hurricane. The levees are leaking. Ignore it at your own peril. The 6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking, granite countertop upgrading, home equity borrowing days are coming to an end. The American consumer will not go without a fight.  More>>

Bonddad: Let's first look at the macro-level picture to put the latest action in perspective.  More>>

"The worst is yet to come in the U.S.''
-Kenneth Rogoff, former chief economist at the International Monetary Fund  More>>

Do you remember a time, only a short while ago, when virtually anybody could start a hedge fund? It seemed so easy: billions of dollars were being thrown around like confetti, even at first-time managers. You could make money with your eyes closed. Or so it seemed.  More>>

We missed a lot of action in the September e-mini S&P (ES) yesterday, as it got within 1.5 points of the 1307.50 level, then slid towards the lower trendline of the rising wedge we’re watching. This morning, ES moved below the line (1277.75) and a close below would signal an end to the month long uptrend. Support @ 1257.25 (new), 1248.50 (pivot), 1235.25, 1227.25 (new) and 1222. Resistance @ 1271.50 (new), 1277.75 (trendline), 1286.25, 1291.75 (pivot), 1298, 1307.50 and 1321.50.

The September e-mini S&P (ES) is back to the middle of the rising wedge we started watching Tuesday, after coming within 7 points of breaking below yesterday. Another move above 1307.50 could panic the shorts and get ES to 1321.50. Again, look at the Nasdaq 100 e-mini (NQ) as a bellwether. Until it exhibits weakness, ES will tag along to higher levels. Support @ 1291.75 (pivot), 1286.25, 1276.25, 1271.75 (trendline), 1256.75, 1248.50 (pivot) and 1235.25. Resistance @ 1298, 1307.50, 1321.50, 1332.75 and 1343.25.

From Paul Krugman: Greenspan: not a mensch >>More

Here's something you may not have considered: The massive losses taken by Wall Street Banks and Brokers is going to wipe out their profit for the next few years. About $500 Billion in write downs have already occurred. Best estimates for the total that will get written down range from $1 trillion to $2 trillion dollars. >>More

The September e-mini S&P (ES) had a nice bounce late in the day yesterday, but was unable to close above the 1286.25 level.  Overnight, it was unable to test 1291.75.  ES is closing in on yesterday’s low of 1274.50 and the trendline that forms the lower end of the bear flag / rising wedge (1268.50).  A close below the trendline should bring the lower pivot of 1248.50 into play.  Support @ 1276.25, 1268.50 (trendline), 1256.75, 1248.50 (pivot), 1235.25 and 1222.  Resistance @ 1286.25, 1291.75 (pivot), 1298, 1307.50, 1321.50, 1332.75 and 1343.25.

Charts from Bonddad:  More>>

"If they are too big to fail, make them smaller," former Nixon Treasury Secretary George Shultz said.  More>>

Tim Knight: Awww, hell, it's too late to do a post, and I've for a stack of newspapers to read. In the meantime, I found this handy shorthand guide to stock investing:  More>>

The September e-mini S&P (ES) couldn’t stay above the 1291.75 pivot for long, closing 1 tick below yesterday and now below the 1286.25 level. We will start watching the lower end of the bear flag / rising wedge we mentioned yesterday as a breakdown level – currently 1265.50. On Monday, we mentioned MACD (momentum) to see if it could get above 0 for the first time since June 5. Yesterday’s close got it back above 0. Support @ 1276.25, 1270, 1265.50 (trendline, new), 1256.75, 1248.50 (pivot), 1235.25 and 1222. Resistance @ 1286.25, 1291.75 (pivot), 1298, 1307.50, 1321.50, 1332.75 and 1343.25.

Big Picture: Back in July, I noted that we had exited many energy positions, and would like to see Oil pull back to $105-110 to re-enter them.  More>>

This post is by Jim Fitch of Some Assembly Required.  More>>

The September e-mini S&P (ES) managed to break out yesterday above the 1291.75 pivot and is still above 1300. Even with that move, the current technical setup is far from bullish. One could argue it’s a bear flag, or a rising wedge (reversal pattern). See the chart below (Source: TradeStation). ES was unable to close above the 1307.50 level yesterday, lets see if it can stay above 1298 today. Since our comment on the 5th that the e-mini Nasdaq 100 (NQ) could be a directional bellwether, it is up over 6%, while the ES is up just over 3%. Support @ 1298, 1291.75 (pivot), 1286.25, 1276.25, 1270, 1256.75, 1248.50 (pivot), 1235.25 and 1222. Resistance @ 1307.50, 1321.50, 1332.75, 1343.25 (new) and 1350.

Bonddad: Let's start with a really long-term look at the market -- a 5 year look. This will give us an indication of where we are in the bull/bear cycle.  More>>

At this point, you would have thought the Efficient Market Hypothesis would have died a quite death. But as is its wont on Wall Street, myths, bad theories, and old information linger far longer than one would expect.  More>>

The September e-mini S&P (ES) closed 2 ticks above the 1291.75 pivot, but its difficult to call that a breakout.  Let’s see if ES can close above it today.  We are watching MACD (momentum - click here for a definition) to see if it can get above 0, which point to an uptrend.  A move above 0 would be the first time since June 5 that it’s been in positive territory.  Support @ 1291.75 (pivot), 1286.25, 1276.25, 1270, 1256.75, 1248.50 (pivot), 1235.25 and 1222.  Resistance @ 1298, 1307.50, 1321.50, 1332.75 and 1350 (new).

The September e-mini S&P (ES) is setting up for range expansion as is gets close to breaking one of the trendlines that form the current triangle formation.  However, this is not a textbook formation, so an expectation for direction is difficult to determine.  The trendline levels are the 1291.75 pivot and the 1256.75 level.  See the chart below (Source: TradeStation).  Support @ 1256.75, 1248.50 (pivot), 1235.25, 1222, 1209.75 and 1204.  Resistance @ 1270, 1276.25, 1286.25, 1291.75 (pivot), 1298, 1307.50 and 1321.50.