Delaying The Inevitable As We Creep Closer To the Edge

We saw a brief glimpse of the bears this afternoon. Glad to know they are still out there. In a little more than an hour they sucked up 7 S&P points. Nice! Only, of course, to have almost all of it POMOed back in the next hour.

A slightly damaging Beige Book from the Fed sent a tremor thru the markets.Oops: Beige Book Sees "Widespread Signs Of Deceleration" from Zero Hedge and Fed's Liar Book (Beige Book) from Denninger cover the announcement quite nicely. If you want the "Just the facts mam" version, there is always Calculated Risk Fed's Beige Book: Continued growth, but "widespread signs of a deceleration". From ZH, "This is not what the market wanted to hear: "Reports from the twelve Federal Reserve Districts suggested continued growth in national economic activity during the reporting period of mid-July through the end of August, but with widespread signs of a deceleration compared with preceding periods."" - Nuff said.

Let's throw on top of that European Credit Stress Returns With Vengeance - Irish, Portuguese Bond Spread at All Time High - Yen Soars - Gold Hits All Time High from Mish."Another name for the risk aversion play is the deflation play. There is plenty of room for the dollar, treasuries, gold, and German government bonds to rally while the rest of the commodity complex drifts lower." Sounds sensible to me (except I think everything deflates except gold, food and ammo).


ZH has one post that sums up a lot of things in Albert Edwards: "Equity Investors Are In A Vulcan Death Grip And Are About To Fall Unconscious"  where the truth rears it's fugly head in, "It is now well known that the former Fed governor was manipulating the stock market on a day to day basis, as his statement that "if the stock market continues higher it will do more to stimulate the economy than any other measure we have discussed here" makes it all too clear that the Fed does not care about inflation or unemployment but merely Dow 10,000 hat sales, and will do everything in its power, even if that means collaborating with Chicago hedge funds in dark pools, to get stocks to go up. Yet how long until investors finally realize that stocks are not only a lagging indicator but a manic-depressive one at that." I have been screaming for well over a year now that the market is all "they" have left between "them" and total anarchy, nothing else matters and saving the markets is what it is all about. How bout that battle at 1040 and the subsequent rise on that solid GDP number? Debt? What debt? GSE? What GSE's they are not even included in the federal budget? Shall I move on to states, municipalities, pensions, Social Security, Blah, blah, blah.....

For those of you that like to refernce P/E and it's levels as some sort of reliable value indicator you may want to read P/E Expansion & Contraction from Ritholtz. "History teaches us that valuations typically become extremely attractive at the end of Bear markets. The P/E ratio — as well as the dividend yield, enterprise-value-to-free-cash-flow ratio," is well stated and in the purdy chart in the post you'll note P/E is about 2/3 of the way to where recessionary periods typically bottom (sub 10). I'll add that P/E is a joke in the stimulus driven, fraudulent accounting and market manipulated environment we are currently experiencing. Anything fundamental can be thrown out with the bathwater.

To put it all in a nutshell let's look at the must read 50 Mind Blowing Facts About America That Our Founding Fathers Never Would Have Believed. This one puts a lot of small (really large) facts on one place and will make you cringe.  A few of my favorites from the post: (comments in brackets are mine)



#6 Americans now owe more than $849 billion on student loans, which is more than the total amount that Americans owe on their credit cards.(and how many of those are working now?)

#11 Having one out of every eight Americans enrolled in the food stamp program is now considered "the new normal" and Americans continue to drop into poverty in astounding numbers. (and they are borrowing from this program to pay for another!)

#22 The Florida State Department of Juvenile Justice has announced that it will begin using cutting edge analysis software to predict crime by young delinquents and will place "potential offenders" in prevention and education programs. (this appears to be a trend now - pre-crime baby! Just come and get me now I guess.)

#27 Today, Americans are losing their homes in staggering numbers.  One out of every seven mortgages was delinquent or in foreclosure during the first quarter of 2010. (count the houses on your street and do the math)

#37 A recent Department of Justice guide for investigators of criminal and extremist groups lists "constitutionalists" and "survivalists" alongside organizations like Al-Qaeda and the Aryan Brotherhood.

#42 If the U.S. government was forced to use GAAP accounting principles (like all publicly-traded corporations must), the annual U.S. government budget deficit would be somewhere in the neighborhood of four to five trillion dollars. (that's with a T and most likely excludes the GSE's)
 
That is enough for now. Kinda depressing if you ask me. That may be why I have been a little slack in posting some of the post market stuff. If is beginning to get to me the closer we get to the edge. Delaying the inevitable is all they are doing. Failure to accept reality and to correct crony capitalism is simply becoming a joke at this point. Bottom line (broken record here) is that it is all so out of control and so broken that all they can do is try and hang on cause either way it crashes miserably. There is no recovery. There is no double dip. It never ended and when it happens you'll know. We'll all feel it, see it, experience it and live it. Listening to CNBS spew their venom all morning is enough to make you sick. Money managers DON'T GET PAID unless you are invested, so they preach the promise of never ending appreciation and the fear that you will NEVER make your retirement goal if you leave the markets that are having this TEMPORARY blip that is an anomaly cause there will be no double dip on the never ending trip of 9.6% per year annual returns. That my friends is the epitome of the games they play with psych and perception. Lies, all lies, and don't get me started on Barry. that is a whole nother rant coming soon. Barring global default, massive devaluation and an overhaul of the government and the laws the Socialist state is not far away.What? You think they are gonna give up their wealth and power so you can have your freedom? Wake the hell up!

GL out there and thanks for the support!

Morning Post, SPX, S&P 500, E-mini

Will someone please tell the moronic fund managers to wake the hell up before it is to late? Greed and self preservation are powerful forces. You witness both when they charge you exorbitant fees so they can make horrific decisions managing your funds in this environment. It is a sad, sad, sad situation when when the "best and brightest" are some of the most corrupt and compromised ignorant fucks on the planet. Everything is a giant Ponzi scheme that will eventually come crumbling down.

As for the markets - I hate correctives. They churn you to death. They are counter trend. They are stupid. They only delay the inevitable. Were churning one out now. I don't think the markets get above the daily 200ma at this time near 1116. The upper daily BB is there as well. There is a chance that was it, or a pop today to a slightly higher high will be it. Some are calling for 1130 to 1150. At this time I think both are a reach but possible in this stimulus POMO driven POS we call a market. Greece and the PIIGS are making some noise again. Who the hell would have seen that coming. You'd think $120b would last a while. Global financial contagion is alive and well. They can only put it in remission for so long.

Daily SPX -The blue wedge may be the play. We're at E touch and a throwover here is possible, but that is all I am willing to give it. Possibly the black wedge. I think it may want to consolidate in the end of the wedge going into October. I really think the bulls (no matter the stimulus are toast at this point. I think we're about to get a wave of revisions that no market can hold off. My bearish stance can only be fended off by stimulus and POMO manipulation at this point. Treasuries will become the next leverage point for the markets (Fed).

So, maybe a throwover and some strength, but I just have a gut feeling the big move south is coming soon. The count looks more like a minor 2 ending here than the intermediate C I think we're in. Something is going to have to happen to make this more bearish count stick. The market is all "they" have left between them and anarchy, and with the elections only months away "they" can not let the markets slip (thus the call for consolidation in the blue wedge or the pop to the 30 range where we remain in a roughly 90 point range bound market thru November.

I still like the pullback to 80 call. Maybe the jobs number of Greece puts pressure to get us there. The 30m chart looks to be bottoming, but the MACD is not there. Minis 30m is climbing. The black wedge looks to me like a 4th wave, so pop to top and possibly then weakness this afternoon or tomorrow and Friday.

GL and take care.

Morning Post, SPX, S&P 500, E-mini

I hope everyone had a great holiday weekend. So much fun to get away and relax. So suckish to have to come back to this reality.

Economic Calendar -

Not really sure where to go with the post this morning. There is really nothing on the calendar to move the markets till Jobs on Thursday. The EU is apparently beginning to show signs of crumbling again. Global tensions are high. Barry still wanting to spend more money.

So, where are we? Is this just a minor corrective early in 3 of 1 of 3 or are we still playing out some larger 5-3-5 ABC 2nd wave that has more upside to come? A case can be made for ending upside here, as well as one that could take the SPX as high as 1050. Based on the minis, I could reside comfortably with this being it for the upside as price here should roll over and then possibly continue to consolidate. Sadly the low volume ramp playground still exists.

SPX 30m - I think it is time for this chart to cycle down. There is a chance it may want to set a divergence, so be wary of a pullback to pop scenario that sets the table. If not just let that 30m cycle. I think the tide should be going out now. Sadly the bears tend to need a little help and unless something happens in the bond markets or with some currency pairs this could be a really dull week.

The way I see the minis is that they are wedging (yellow dashed top and bottom) and have made the potential E touch high and may simply collapse from here. Well, that is the set up of this 4hr chart that is very toppy. Sadly, I don't think that works out as you can see that the last 5 wave move up (which I think we're completing 1 now) off the 1002 low looks pretty similar to this move and the daily and weekly indicators say more upside is to come.

At this time I'm only willing to give the daily 200ma as upside max. 1030 can be in the cards, not willing to go above that number. I really like the markets to consolidate more here. It can also have topped, but I'm not so sure about that. Let's get this corrective out of the way, see how the 30m chart cycles and digest the strength of the daily charts then to see what sort of trend we can come up with. Europe has been quiet, maybe the EUR or the AUD will have some sort of external effect on the markets that will assist the bears.Let's look for a pullback to the 1080 range and then regroup.

GL and enjoy the short work week.

Morning Post, SPX, S&P 500, E-mini

OK, everyone is back to work. Let's celebrate (till the revisions of the revisions come out). Add to that the astounding GDP and we're in a real live recovery (pay no attention to that mountain of debt behind that other mountain of debt over there). Bottom line is that the Fed and government want the market to go up and so it will.

Employment data spiked the minis right to the resistance diagonal and to just under the resistance I have at 1104. Not sure what load of crud Barry is going to deliver in his speech later this morning, but since I can not stand to look at or listen to him, you'll have to tell me what he says.

Writing the below is totally against everything I believe in and know is right.

There has been no retracement to speak of. This move blows price thru the 61% retracement off the 1130 top. There should be some sort of pullback before (puke/cough) further strength. The minis stopped right at the upper diagonal that should be defining the upper range of this move. Is it possible that price (the Fed) wants the new upper diagonal that is formed from the 07 across the top this year near 1150? Based on the weekly chart below it looks to me like we're in C up of the ABC corrective wave 2 of P3. The daily charts are very bullish as well. Chart is best viewed HERE.

OK, there has been zero retracement on the last 50 points of the SPX move up. It will give something back sooner than later. At this resistance diagonal and with the big gap up this morning, some of it should get filled. Do not take your eye off the prize (a real depression), this government induced charade will end, and the more they extend and pretend the worse the back end will be. After GDP and all the support at 1040 this number should have been expected. the lies and deception will be revealed one day, but as I stated yesterday, they want nothing but big + signs in the stock section of your papers over this weekend and a "positive" buzz as everyone gets together this weekend for the holiday. Reality will set in sooner than later. Till then enjoy the ramp. Remain LT bearish my friends.

Have a great holiday weekend and stay safe. Thanks for the views and support.

We Just Have To Deal With It For Now

Reality is that the markets are fully controlled by the Breath of Ben and the data manipulation by those that irresponsibly report it, and the media is under marching orders to report it as optimistically as possible(except for Santelli who keeps missing the email). The fact that we've now entered our 17th Weekly Fund Outflow As Equity Fund Redemptions Accelerate is undeniable. Yet, the promise of further stimulus and intervention in the face of the ever expanding national debt, consumer debt, shrinking tax base and imploding RE and CRE values is enough to make you simply shake your head in disgust.

Please take a quick peek at the National Debt Clock, cipher out your portion (and each child's portion if you have one or more - then compare your portion to those on Barry's payroll with more than 10 children and then multiply your "responsible portion" by a factor of say 3 to get what ya'lls portion really is) while you ponder this most recent ramp in the markets and try not to puke all over yourself.

Other facts that are undeniable .....

The continuous revision and falsification of data based on models that are irresponsible and produced by pansies on the government's dole. Rosenberg Explains Why Yesterday's ISM Was Likely Wrong, To Be Revised covers the 1 in 100 event we just witnessed.

Mish chimes in with Gallup Poll Shows Consumer Spending Pullback, Consumer Confidence Levels Below Depressed 2009 Levels ; Back-to-School Sales Bust Says WSJ Yup, even more data to boost the markets here for sure. Let's take a look, "Finally, those weak sales numbers, even if they stabilize will continue to pressure states in desperate need to get tax revenue back up to 2007 levels. It's not going to happen and states will be forced into additional huge cutbacks in public union wages, employment, pension benefits, or all three." Sure sounds like a good reason to rally the markets to me. If you would like to refer back to the tax revenues portion of the debt Clock they are running in the opposite direction. To get more on this pease see Mish's State Tax Revenues Slowly Rebound ... But

Denninger asks the obvious in Housing Numbers - Are They Being Cooked?  "Here's the problem, obviously - Case-Schiller and other "home statistics" numbers related to price paid are all computed off these numbers provided by the local Realty boards (via NAR.)  If the data in the MLS is bogus then so is the so-called "median sales price" and so are Case-Schiller's numbers!" ZH had Are Existing Home Prices Overrepresented By Up To 40%? yesterday which should be reviewed as well. 

Here's a great one from ZH that just hit - TrimTabs Reports Percentage Of Hedge Funds Expecting To Raise Leverage In September Surges "With just one month left in the quarter, most hedge funds continue to underperform the market, not to mention that the vast majority continues to be under their high water mark (most notably Citadel). And with fickle LPs, unbound by lock ups courtesy of the 2008 crash, knowing all too well they can now move their money with the facility of a HFT frontrunner churning AMZN one thousand times a second, threatening redemptions unless something changes in the last month of the quarter, hedge funds are, for lack of a better word, panicking." So, which side of the trade do they lean to?

I must apologize to my readers for a recent inability to accurately forecast the markets. I've been in a bit of a slump, but it is not my fault. I can't just say, "Ben says buy, so go get 'em." I fancy myself as pretty darn good with the track record to prove it, but this bullshit is nothing but manipulated, VOLUMELESS, range bound crap that has NO underlying fundamentals and any technical significance is being wiped away at this time. The friggin markets are controlled and untradeable. If you got it right, more power to ya. To wind up on the right side of the trade these days is more like winning at roulette. Red or Black today? I'll get it back. But right now, calling a long against all the flawed data (to be revised) based on lies and "promises" from the Fed is against my religious and ethical standards.

Thanks for your continued support, donations and the votes on stockcharts. We'll win this battle. It may be a battle we don't want to face, but for the safety and promise of our future it will be some pain we have to take.

Morning Post, SPX, S&P 500, E-mini

Lots and lots of action. Which way will the wind blow these fragile markets today? From what I see this range bound churn is doing nothing but crating confusion and further dividing the bulls and bears. Just like the 52wk high/low and other discrepancies confirming the Hindenburg Omen (for like the 6th time), so are the calls of all the chartists. There are near term calls from 940 to 1140 with a lot like me looking both up and down simply waiting on clarity and trend to return.

With Bernanke speaking at 9:00 there is no telling what knee-jerk reaction the markets will have. Normally I would sat the predictive powers of TA would lead us to be able to predict the result of his speech. These days, my confidence wanes in any predictive power of the charts beyond a 30m time frame.


Economic Calendar - Jobless Claims Come At 472K On Expectations Of 475K, Previous At 473K, Non Farm Productivity Misses Expectations Factory and home sales at 10 and natgas at 10:30. It all goes down at 8:30 tomorrow morning with employment report (which I think is worthless on two fronts 1) it is manipulated as hell and 2) until we seriously crack the 500k barrier on a weekly basis it will be a non event (remember when 300k was a really big deal?).

SPX 60m - The black wedge I have been warning about for a while appears to have ended in a non typical triple bottom at 1040 support. So, was that bottom B or 1? Will this correct to the 1100 level or run to another triple top near 1130?

SPX Daily - Decisively bullish if you ask me. There was a time when this chart would have had me long as all get out and screaming for the bears to run for cover. Sadly given the economic conditions and the fact that the markets are rigged I can not be as bold with my calls these days. So, let's just say it looks like a buy here, but I'm not promising anything. Other than the RSI5 coming up on that downtrend line and RSI14 at the 50 line it looks like the potential MACD bull cross and climbing hist could lead us much higher.

Apparently the VIX and SPX are busted, cause the move in the bond markets is no longer translating to equities. Folks, the VIX and SPX should be moving in OPPOSITE directions. One of two things is about to happen 1) the divergence of SPX price to the VIX signals the SPX is about to skyrocket or the SPX will correct to the TNX where it should be and the VIX goes bananas. This chart to me shows the dislocation with reality the market are in right now. Where should price be based on TNX? Sub 900 for sure. You are witnessing a supported manipulated market that is untradeable for the most part here.

SPX 30m - Here is a better view of the wedge and the breakout. Lets look to the 1100 level and see what happens there. If this is a 3 the bears are in good shape at the next top. If it is a 5 we could be looking as high as 1130 to 40.

So, I'll be watching the 30m chart for a corrective here this morning and then possible strengthening. The jobs data is the wild card, and if the Fed starts screwing with the bonds again and forcing the trade back into the markets the bears could be in trouble for a while.
GL out there!

Morning Post, SPX, S&P 500, E-mini

UPDATE- No post tonight. you don;t want to hear what I have to say. I will say it becomes more disturbing every day watching an out of control Fed and the rogue government taking even more control without regard for anything legal or not. It is horrifying.

Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print! Print!

Screw this. This country is falling apart and the SPX futures are up over 10. Ahhhh, the new normalcy. QE II (or simply the rumors of QE II) is the tail wagging the dog.

Economic Calendar -

I only have one chart this morning. Not sure why I bothered to ever post anything else.

Like I said last night, market is range bound between 70 and 40. Any questions?

I can't yell anymore. I'm in some suspended state beyond anger and disbelief. I am literally speechless.

Stick Save - v. 1,250

Amazing. Like 1040 has the clap or something. Run away! Run away! Just like in the vid, the cave is the elusive 1040 level, the bunny is Shalom, all the bones at the mouth of the cave represent the short carnage that have dared to try the opening and the wise man with the warnings in the funny hat with the horns is Tyler Durden from ZH. 1040! Run Away! Run Away! What a joke this market is.

ZH bring us Victory For The Fed As 10K Holds; Volume Surges On Unchanged Market  "Calling this robotic farce a shitshow is an insult to shit and to show." and The Last Minute Ramp Job Dissected, those two explain a lot. They can't battle and hold this level for ever, can they?

Mish has a nice post in 26 of Last 88 Trading Days have been 90% Days (Either Up or Down); 7 More Lean Years in Stock Market? another useful post that assist in dissecting the trading patterns."Today, the 1040 level on the S&P held for about the 8th time on "fabulous" news consumer confidence rose to 53. Bear in mind number in the 70's are typical of recession lows." and more information from Art Cashin on his cycle analysis are worth the look. A few more amusing facts from Mish appear in Movie Attendance Drops to 1997 Level; Case-Shiller Home Prices Rise; Last Hurrah for Housing Did we forget Consumer Confidence and Case-Shiller this morning? What you will NOT hear from Liesman CNBS is, "Case-Shiller is a backward looking index. The increasing number of foreclosures, the complete collapse in new home sales, a massive increase in inventory, and the end of tax credits all suggest we are near the end of the line for this bounce in home prices."

Denninger does a better job ripping the Case-Shiller numbers to shreds in Home Prices Respond To Government Cheese. "There's a lesson in here for the government, in that these sorts of "pull forward demand" games are only of "benefit" for as long as they continue, and as soon as that program ends (and all such programs must end, since the "freebie money" isn't infinite either) you create a worse dislocation than you originally had, as the entirety of the distortion you created now has come back out of the market along with whatever the natural progress originally was!" We shall see that in the months to come. We'll also see the lies in the "revisions" and data manipulation come to life as well. you can only revise and beat (like on GDP) so many times before you get caught with your hand in the cookie jar.


Denninger also has his usual hilarious response to the FOMC minutes in FOMC Minutes For August 10th, "Translation: There was no recovery.  Not now, not before, and certainly not on a forward basis." This one hits home more than some in the past. It the fed spoke the truth, this is what you would hear.


I have often told you that you need to have gobs of cash at home ready for the next run on the banks (that don;t actually have any cash). I don't care if it is in a mattress or cans or a safe (I'd store it and your guns and gold in separate places and preferably bury them somewhere). Well, The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions from The Economic Collapse should drive this point home. "Should we just accept that we have entered a time when the government will watch, track and trace all financial transactions? Is it inevitable that at some point in the near future ALL transactions will go through the banking system in one form or another (check, credit card, debit card, etc.)?" Want to learn what type of transactions you'll get locked up for? Read on.

We all have heard how much money is in the coffers of the banks and big businesses. We have all heard of the potential for M&A activity in the coming months (or currently happening). I am of the opinion that there will have to be consolidation and it will happen at much lower prices (cause the CEO's know how bad it is out there). What does consolidation and M&A activity lead to? Efficiencies, thus reducing redundant jobs is a comin with it. Washington's Blog has a great take on M&A and QEII that you need to look at in Quantitative Easing Won't Help the Economy, But Will Just Create Another Wave of Mergers and Acquisitions. "What's needed has been obvious to independent observers for years: Break up the big banks, prosecute the criminals whose fraud caused the financial crisis, and restore the rule of law and transparency. Until those basic steps are taken, nothing else will work to fix our broken economy."

That is enough for now. As for the market calls, it is getting increasingly difficult to read the charts when you are range bound in a rigged market. I may as well just say support at 1040 and resistance near 70. Eventually the support levels will crack. They are obviously defending the psychological 10k level on the DOW, but how long can they keep this charade up? I believe a crack of that level will be the last straw and you'll begin to see even more MF outflows from the masses. With 16 weeks in the books of cash moving out of the markets, something has to give sooner than later.

GL out there and thanks for your support.