Wednesday, October 15, 2014

Morning Charts 10/15/2014 SPX /es

MOAR! I've been harping about the next potential round of QE since the Syria FF dip. STB's biggest fear. When they are cornered. When their system is dying. When it's all they have left to stay alive (even in a dying cause - even of it means complete destruction of the US), moar will be promised and potentially delivered.

I was a day early on the call for moar
"Actually, it may well be QE5, or QE6 depending on how one counts Operation Twist and the extension of QE3, but what matters is that the countdown to whatever it is, has begun courtesy of none other than one of the Fed's biggest doves, the head of the Fed which spawned Janet Yellen, San Francisco Fed's John Williams"

If inflation trends were to fail Williams says - well have you checked rates lately? ZIRP is working its way into the common markets with the 30yr sub 3%. Of course there is no inflation - last time I bought a gallon of milk my CC almost got rejected it was so damn expensive. Remember the STB tuna rant. The breakfast bar rant. The snickers rant. No inflation here as long as the way you calculate things suits your needs. (hint - they do the same with employment)

It was so easy to call tops on the way up. Just look for the end of QE and POOF! go the markets. People thought I was so smart calling the '10 and '11 tops weeks and months in advance noting how terrible the subsequent months would be. I would have gotten my Q1 '13 call spot on a year and a half in advance if they had not QE4eva'd (STB's best ever tweet - "unprecedented manipulation" the moment it was announced)

All you had to know was when QE was ending. As for the bottoms - you got it - the first Hilsenrath rumor or the beginning of the next round of QE and BOOM! off to the races. Back then all they had to do was mention or promise QE was coming and the shorts got slaughtered and the race was on. Well, here we go again, except this time the markets figured it out a few weeks in advance. QE is about to end, markets are failing and they are already calling for moar. Guess what's gonna happen when the next round of QE is announced?

Up, up and away - for a moment at least. The last bull trap. The suckers rally. The move to the ultimate top where you pull everything. The moment I've been waiting for for years where I go balls deep short. The ATH may be set, but this top will be the most painful taking most off guard. For those already out, so be it. This is not a game of chicken. Take some risk capital and play the rips if you like, but no more. If you decide to stay in, think bug meets windshield. I've been telling you to take profits all the way out of the system.

You have been warned. Remember, as I have warned, they take it all back and in a hurry. I told you to take profits back in July. They have an election and Christmas season to get through - January is setting up to be a real bitch if they can save it here. Do not forget how many greedy sucker sheeple there are out there waiting for that moment, the moment of the STB "event" where they all head for the gates at once. They closed the "gates" for a reason. I think we're within 6 months of things getting really ugly - IF they manage to turn things around here. 

Side note - Ebola hits home for STB (sort of) - Bentley the Cavalier King Charles Spaniel is in isolation - I own two Cavies (Sir Winston and Spencer) and think the world of them. They are possibly the coolest sweetest dogs on the planet. I hope things work out best for him.

On to the lie - 

SPX 15m - For a more detailed description see yesterday's post - I got a little warm late yesterday talking bout double bottoms and positive divergences with a few other upwards caveats. They've blown through several bullish setups so far, another would not be a surprise. There is still a chance they have to move lower (the missing 4 and 5 - following the 1,2,3 (5-3-5) move we've already had. As noted I like to count in 3's and not 5's if I'm counting (which I hate). 

This chart says it all for me. Falling wedge, underthrow, bust up and break resistance, price falls to a double bottom backtesting busted resistance the whole way down, sets decent short term positive divergences and Williams is talking QE. If this setup fails to deliver, they got real problems.

If earnings go south, QE will come faster than stink on shit.

More to come below. 

Have a good day. 

GL and GB!

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