Wednesday, February 29, 2012

Afternoon Delight 02/29/12 - Busted

OK, it is finally gut check time for the bulls and bears. Since the beginning of the year I've preached form and patience. Today form may have outruled substance, finally. We've all been watching the LTRO2 coming, the Greece situation and dodging the QE3 rumors (which are sure to spike with any market weakness). Markets can not fall. That is illegal now isn't it? Well, they closed down today (actually on lower lows) and at least spiked thru my purple support.

The biggest joke of the day and the must see chart (so far) of the year is in Ben Bernanke: "The ECB Is Well Capitalized" | ZeroHedge. "In other words, the ECB's leverage is 36.6x. This according to Ben Bernanke is "well-capitalized."" I suggest you not be drinking anything when you look at this, cause it may come out your nose. Question: does anyone out there remember what got us into all this mess in the first place? Bueller? Heeeeere we go again!

So you think Greece is the only problem, or that now the banks are funded (cough) all is well. Guess what? Here comes Portugal and Spain and all the other entitled EU nations with their hands out. Can the US taxpayer afford all of these bailouts so the CDS don't trigger and destroy the global financial elite? I don't think so, but you know they will try and send us all to the poor house at the same time. Check this out - "Spain now needs to come up with another 30 billion Euros in budget cuts on top of the 15 billion promised. Moreover, those cuts need to be spread out over 9 months, not 12." Mish's Global Economic Trend Analysis: Sharpen the Mower: Spain Needs Triple the Budget Cuts and Tax Hikes to Meet EMU Imposed Budget Targets. Two words - Good luck!

I'll digest this tonight, take a peek at the futures and have all sorts of good stuff for you in the morning. We still have the FOMC meeting to come (which may be a non event now after the Bernank's talk with congress today). That still does not mean the QE3 rumor mill can't or won't get cranked up. Remember bad news is good news cause it only stokes the easing fires. QE3 is the only hope (and there is not another). A major development I saw today (hearkening back to the top in April of '10) was More Liquidity Extraction: Fed Resumes Reverse Repos | ZeroHedge. Taking money OUT is not a good thing.

The markets are busted, No question. The last second action taking out my purple support was quite the change in action. Like a total about face. This is the first day (it seems like at least) we've closed on the lows and not up and under my yellow channel support in weeks. Check that spike to 1356 at the close taking out purple support. 1351 is the next major low to look for. I'll give all the support points in the morning if necessary. STB is still not all that excited. I want to see some more proof of this fall (not that this is not the best start yet with all the right ingredients).

I picked the right morning to go chart heavy on  the EUR/USD and the dollar. When they are about to print a gazillion euros, you know there must be some sort of reaction coming, and we got one.

The dollar exploded -

and the EUR/USD accordingly crashed off yellow channel resistance. Again, when you devalue your currency via a hyperactive (see the dollar chart from this morning) printing press, this is a normal reaction. I'm thinking $116 area would be a good target once thru 125.

Random Stuff - 

I suggest you watch and listen carefully to Financial Services Hearing Highlights Feb 29 2012 - Dr. Ron Paul Unmatched Intellect - EndTheFed! - YouTube

Following the Wyoming disaster plan maybe the democrats in Iowa are not all that in touch with reality. Here we go again with democrats walking out. This is wild stuff. The word that comes to my mind that describes then starts with a P. First, why did they leave? "At issue are bills seeking to broaden Iowa’s “Castle Doctrine” allowing individuals to defend themselves with deadly force and a proposal to write the right to bear arms into the state constitution."

Where are they now? "House Speaker Kraig Paulsen met with reporters at about 3 p.m. to say he had spoken by phone with Minority Leader Kevin McCarthy, but received no word as to where the Democrats were or when they would return to the Capitol. House Democrats contact Republican leaders, but offer no timetable for return | Des Moines Register Staff Blogs

Aw hell, they better not go see Act of Valor (STB rates it high, but a real must see for various patriotic reasons). Maybe those Iowa democrats are taking this next post to the Nth degree. You see, we can't wipe our backsides anymore without the government getting involved. You have to be using fluoridated water and TP that was synthetically created as a byproduct of some sort of money wasting solar project that the Obummer administration has kept on life support via some shady funding practices. And lord help you if you flush twice (so eat your fiber).

Speaking of the "P" word, that is what they are trying to turn us all into. Check out 19 Signs That America Has Become A Crazy Control Freak Nation Where Almost Everything Is Illegal or re-title that as, you are a "P" word and are not capable of coherent thinking without government intervention (see wipe your butt above). My favorite examples of the nanny state - #9 in the state of MA it is illegal to deface a milk carton. Really? We pay reps to come up with this crap? How about, #10 it is illegal to wrastle bears in AL (I kind of get that one especially near Auburn). Or, #17 it is illegal to bring a plastic butter knife to school in FL. Read on my friends and hope that this type of oppression is not coming your way.

GL and GB!

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