Monday, January 14, 2013

Morning Charts 01/14/13 SPX /ES

Talk about staring down the barrel of the gun and not flinching one bit - Well, maybe that is a slight exaggeration. If it were you or me and the credit/debt monster was knocking on the door we'd be running out the back fast as possible. Our congress and the current administration on the other hand, they got this one. No fear. Balls of steel and all, they are ready to stand firm and tackle this debt crisis.

Well, that sounded good on the surface didn't it? If I can write crap like that I got a future at any MSM outlet I prefer. Let's rephrase the above - the lying, stinkin and cheating assholes in DC are not gonna do one darn thing to address the systemic budget/spending/debt problems we face. Not one damn thing. They will rely on the printing press backstop that they know (at the very least) will be mandated.

Let me see, as a representative of the people it is your job to do the impossible, but since you are a heartless, corrupt, self-serving bastard who's more into insider trading and setting up the rest of your career with some globalist corporate behemoth, you defer to the easy way out and simply print some more. Who gives a shit right? Kick that can baby. In another 2 to 4 years it won't be your problem anyway. You will be out of there. Mission complete, you got your severance package, a fattened stock portfolio and a cushy corporate position will all be set.

And the markets are acting accordingly. They/it knows the debt ceiling will not be an issue. They/it is signaling that the passage (although an - as usual - 11th hour event - for dramatic purposes - everything is a show now) will go off without a hitch. As usual the consequences (like with the representatives above) are immaterial. Just keep the beast's heart beating at any cost. It looks like they will drag out the DC issue (and price as well) to a possible sell the news event.

Earnings on the other hand may have a say in the matter. HA! They would if FASB and reality were allowed to be represented (I've already given you my low hurdle analyst speech). Remember in early '09 they changed the rules and now corporate reporting is nothing more than a game of make believe. Need a beat? Here are the tools. Just make it look good. Don't worry about regulation or paying any corporate taxes. You just do what is necessary to make your numbers and make everything look rosy. Is it any wonder that corporate insider selling is increasing?

And one more thing - one of my very good friends has the esteemed Chuck Evans as his uncle (I know his dad very well also). To this good friend I must say that (and I've told you this before) your uncle is a corporate shill lying sack of shit - read this post (US Economy to Grow 2.5% This Year: Fed's Evans) and then call him up and tell him he either needs to lessen his dose of psychiatric drugs or get the hell out of the Fed. Cause The Real Interest Rate Risk: Annual US Debt Creation Now Amounts To 25% Of GDP Compared To 8.7% Pre-Crisis. Economic growth my ass - yea, at your expense and mine as YOUR uncle turns your ass into a perpetual debt slave to save (not the country mind you) his corporate elite friends collective asses.

Now we've go the morning rant out of the way and my blood pressure up, let's get on to the markets.

Tops and Bottoms 2 years - First- you have to see this chart at SC and not here - follow the link to the left. Tops and bottoms since the '08 low have been very easy to call. They have been a function of QE ending and beginning. Not rocket science. TA has helped in predicting the exact timing, but the stopping and starting of easing has been the real trick. This time they have changed the rules. They are so deep in their own shit now they can not stop easing anymore - QEternity it has been dubbed.

It used to take a paltry $25 billion or so a month to levitate the markets. That has morphed into a cool $85 billion a month and the promise of no end in sight. The chart below tells the technical story of each top since the demise in '08. Please note the building technical case for this being the worst top in the series. Also note the three rising wedge formations - each larger but also each lessening in steepness. But wait, they are spending 3 times as much - shouldn't the markets be rising even faster? STB has been discussing the diminishing returns of QE for years now. They can't carry this farce out much longer. Also, compare the various indexes all in one place.

Weekly SPX - You all know I love this chart - We should call it the Wedge of Death. How bout those extended weekly negative divergences to price. They are nearing the end of their rope folks. Double top with crumbling internals - never a good thing. 

Even with all of the above I must caution you that they are in total control and will be till this thing breaks, and when that happens all hell WILL break lose. That is double negative weekly MACD divergence above. For the laymen - the market is about to poop its pants and puke at the same time. They see the charts just as well as we do. the Fed is combating ($85b a month) the markets natural tendencies to turn now.

Minis 60m - There are two channel options blue and green. I added the blue on the breakout to new highs last week. Blue busted support last night and here we sit at green support. One nudge from a missed earnings report and the bears may treat Mr. Market the way Alabama did Notre Dame in the national championship game. I'll be watching the 1456 area for support keys. If that goes I think we finally visit the open lower island gap area (in gray).

Minis Daily - Pink rising channel to double top. you gotta be looking for a disaster here or soon. Upper pink channel resistance struggling but still holding price.

I remain cautiously very bearish expecting something to bring this market down sooner than later. Till then I will wait for the market to tell me what to do and not force anything. I continue to be in scalp long or short only mode and expect to remain that way for some time. It looks like the bears will get the ball at some time this week.

Have a good week.

GL and GB!

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