Saturday, May 30, 2009

Delaying The Inevitable

Ok, so now some of the green shoot believers are starting to claim that things are improving and will be just peachy for years to come. I'm not going to waste any blog space on the ones that insist on ignoring the truth and pump BS up the collective asses of the general public. Not here, not ever. Folks, I will continue to stand on my soap box and preach of the immenent doom to come, because it is coming.

Could I be wrong? Well sure, I could be wrong, but I'm not. The cause of all of the green shoots are mostly false signals of a recovery that will fail IMO. Will everything totally collapse? Probably not. Can things get worse? For sure and they will. Take a gander at these article exerpts that point the compass S, not for South but for Suck.

I found THE ABSOLUTE RETURN LETTER From Absolute Return Partners at the Pragmatic Capitalist. This is a fantastic piece that emphasises the problems in the housing sector and quantifies (very well) the impending collapse of the sector and the American consumer.

In a piece from Phil's Stock World titled Friday - The Good, the Bad and the GDP (via a guest post at Zero Hedge) is a wonderful article that all my readres will appreciate. A documented case for crude oil and commodity rally fabrication and their impending bust. "We’ll find out shortly to what extent the GDP supports any of the 88% rise in oil prices since Q4. I don’t suppose we’ll have an 88% rise in GDP - in fact, they are expecting a 5.5% decline but that would be a 0.6% improvement from the preliminary reading of -6.1% so the global markets are partying in anticipation of this blessed event. Oh here it is: Down 5.7%!"

Is a commercial real estate bust inevitable? is a little article that discusses the potential impending commercial real estate crash and how they might be able to derail it for a year.

And for good measure how about a couple of items on market manipulation. Manipulation: How Markets Really Work does a wonderful job of explaining the PPT and other interventions that are used to screw all of us. Goldman Sachs Principal Transactions Update: Collapse In Agency Program Trading Volume by Tyler at Zero Hedge discusses how GS and others manipulate the market and explains the volume spike Friday (and at the end of every day for that matter). MARGINAL MATTERS…. from Pragmatic Capitalist you get a link to a wonderful Barrons article that explains how future earnings will be tough to come by. "With commodities and raw materials skyrocketing combined with a weak economy it’s likely that corporate margins will continue to be squeezed which means lower profits and a stock market that will have trouble moving substantially higher."

After being away for a week, nothing has changed. There are so many articles to post that I was not sure where to start. Since this post was so long I'll spare you the rant tonight, sorry for those of you that look forward to it.

Thursday, May 28, 2009

SPX Channel Update

I added a parallel trend line to cover the two tops that blew out the top. It fit almost perfectly.

Shanky's in NYC

On vacation with the family. I'll be back in action Saturday. Plenty to report from up here. Hope everyone is doing well and profits are up, up, up for all my trading friends.



Monday, May 25, 2009

Not Good. Not Good At All

Holiday is over folks. Hope you enjoyed it. Time to get back down to business. Sadly things did not magically improve over the weekend. The best news is that "O"binhood signed a bill that will halt "No Notice Evictions" in which tenants are give is little as 15 minutes to leave, with nowhere to go, and nowhere to put their belongings. This is a pretty sad story that actually got better. Very unusual for these days and times.

Now to the bad news (which today is considered good news by CNBS. Listen for the spin machine to turn these stories into feel good hallelujah situations). Lets start with a post by Mish addressing Jobless Graduates Face Dismal Jobs Market. Mish summarizes, "Graduates hoping to become Wall Street wunderkinds or commercial real estate tycoons better be thinking about Plan B. Other than those with specialties in bankruptcy, the Plan A jobs simply are not there. Moreover, those who waste too much time pursuing jobs that are not available are likely to end up in Plan C, working at Starbucks."

Nouriel Roubini (in a must read IMO - I could have done a whole P3 post on this) is telling us "Don't Believe The Optimists" in this post from Forbes. Nouriel says,"According to the consensus, the recession will be (1) over by the middle of 2009 (i.e., in a month or so); (2) positive growth will return by Q3 and be as high as 2% by Q4; and (3) the recovery of growth in 2010 and beyond will be rapid, sustained and close to potential growth, with no risk of another economic downturn. All three elements of the new optimistic consensus are flawed." in a wonderful article that should scare the hell out of all of us, but I get some strange satisfation from.

Now let's have some fun. Tyler at Zero Hedge does a great job keeping up with David Roesnberg's updates. In David Rosenberg: "600-840 On The S&P" Tyler's conclusion goes like this, "Putting it all together: $50-70 in S&P mid cycle earnings, slap on 12x and you get 600 - 840 as a sensible S&P500 target. As Rosie concludes: "we know what the range of outcomes can look like: 600 to 840 on the S&P 500. On March 9th, there was much more upside; today at 892, quite the opposite."

And to put the cherry on top, no well rounded post would be complete these days without a little discussion of impending socialism. Zero Hedge has a nice vid on Geitner denying that every American taxpayer is getting it in the end. Geithner Dismisses GOP Socialism Charge as 'Ridiculous'.

Well, how's that for a welcome back post from the holiday weekend. Folks, the red alert is still alive and well and I plan on continuing to sound the alarm. Good luck this week. I'll be vacationing in NYC this week with the family, but I'll try to do some work and get a few posts out while there.

Saturday, May 23, 2009

SPX Channel - Still In Play

Look, it is still working. Look at the last hour of action. A bounce to the 25% line and pullback to close at the 50% line. Some of you don't like it, but at this time these trend lines are hard to ignore. I have been able to use these trend lines to time intraday moves as the price and indicators interact with them. Brown rectangles are gaps. Blue rectangle is the 50 to 61.8% retracement zone. Red diagonal trend line is the LT support line of this corrective phase. I may come back and give some more analysis later, but it is a holiday weekend. I have added this to my $SPX 5min Chart stockcharts where it will be more functional, but I have not updated it at this time. My 30m chart will be best for it so look there later. Have a great holiday.

UPDATE: My 5 and 30m charts have this channel included now.

About Memorial Day

I thought I would bring you some links about this great holiday.

It is a celebration of remembrance for the brave service of men and women who gave their lives for their country. Originally, Memorial Day honored those who had died in the Civil War. Now, it honors those who died in the Spanish-American War, World War I, World War II, the Korean War, Vietnam and Desert Storm. From Sunnie Bunniezz, also has kids stuff.

Memorial Day is a United States federal holiday observed on the last Monday of May (May 25 in 2009). Formerly known as Decoration Day, it commemorates U.S. men and women who died while in the military service. First enacted to honor Union soldiers of the American Civil War (it is celebrated near the day of reunification after the civil war), it was expanded after World War I to include American casualties of any war or military action. From Wikipedia.

The "Memorial" in Memorial Day has been ignored by too many of us who are beneficiaries of those who have given the ultimate sacrifice. Often we do not observe the day as it should be, a day where we actively remember our ancestors, our family members, our loved ones, our neighbors, and our friends who have given the ultimate sacrifice:

Here are some things you can do:

by visiting cemeteries and placing flags or flowers on the graves of our fallen heroes.

by visiting memorials.

by flying the U.S. Flag at half-staff until noon.

by flying the 'POW/MIA Flag' as well (Section 1082 of the 1998 Defense Authorization Act).

by participating in a "National Moment of Remembrance": at 3 p.m. to pause and think upon the true meaning of the day, and for Taps to be played.

by renewing a pledge to aid the widows, widowers, and orphans of our falled dead, and to aid the disabled veterans.

More information on this can be found HERE.

Please say a prayer for the fallen and do something to remember them. Perhaps the best thing you can do is take the time to explain the importance of this holiday to a child so the fallen soldier's legacies and the true meaning and importance of this holiday does not get lost.

God bless our troops!

History Channel Memorial Day

Thursday, May 21, 2009

I'm Declaring The Top is In (Ballsy Isn't It)

Some idiot has to step out there and do it. So let it be me. Chart can be viewed here. While you are there check out the weekly and daily indicator charts. I know I am taking a risk in this manipulated screwed up market, but the weekly and dailys are there.

The market action over the past couple of weeks has been different to say the least. I believe the banks are as done with their deleveraging pump and dump as they can be (the ones left out at this point are toast IMO). Timmay, Ben and "O"binhood may get me in the behind with a few last surprises, but I don't care anymore. I've begun moving things to cash and setting protective measures. I am not buying short just yet. This is not a wholesale move, but the beginnings of one.

The EWTers have several opinions and I keep seeing P3 showing up as one. Here is my opinion (yes I have one believe it or not) on that - This fall will either be a large retracement to the 800 - 767 area or the big one (Lizbeth! I'm comin.) We'll have to see how it is forming around 800. IMO the banks either have one more quarter of manipulated earnings in them or they are toast. We'll have a good grip on it when we get there.

When we get near the bottom pay close attention to the EWT count. If it looks like a 3 could show up be prepared cause it's gonna hurt. The best places to watch for all of this action are at Kenny's and Dan's sites.

For those looking for the 200dma touch, bless you. You may get that touch, but it will be at a lower high as it continues its decent. This may drag out the fall another few weeks and the touch will occur as the waves play out, but alas at a lower high. IMO it will take a whipsaw in the dailys to make this happen and the weakness in the 60m moves of late might not have the strength to pull that off. I have been on the 936 - 955 bandwagon, but I just fell off. This top call may be premature (not that kind of premature), but it is what I see and feel.

This is my opinion and you need to do what you do best. Don't take my word for anything. This thing could shoot to 1050 next month (and frankly it would not surprise me if it did). IMO this is "their" last shot a saving America as we know it. They've thrown everything at it including the kitchen sink. Has it worked? Well it has slowed down the deterioration of this great nation, but IMO it has not really fixed any problems (in fact they may have dug the hole deeper if possible). If you don't like what you are reading here, you can go listen to the green shoot discussions on CNBS, but don't come a whinin back here. I'm covering my ass.

If It Ain't Broke....

See channel post below. And a note to those of you that keep giving it a "Bad" rating please explain in comments so I can adjust or fix it. To me it's been a darn good road map. Like NAILING THE BOTTOM TODAY! That ain't bad, it's SUPA BAD! Right on!

SPX Channel Close today

I don't know how but it works. Look at the last 4 hous bouncing around between the 50 and 75% lines. Added the red trend line which is the lower trend line from the whole move up playing out thru this formation. Blue box is 50 to 61.8% retracement zone. Indicators here on the 30m and on the 60m say we go up from here. Looks to me like SPX could possibly be setting up a descending triangle. I don't like that call, but it is what I can make of it right now. Johnny, what can you make of this....

From this morning:

OK, so the top got violated without any lubricant, but that is alright. Why are all these trend lines still valid? SPX gapped thru the top line, gapped thru the 25% line and tried to put on the breaks at the 50% line. I'm gonna still keep an eye on each line as they have proven pretty reliable for this whole move down. They may not mark the "end all" pattern, but the lines are proving somewhat reliable IMO. Let's see what happens with the bottom!

Wednesday, May 20, 2009


We had puppies 4 weeks ago. Cavalier King Charles Spaniels. Just thought I would share this.

watching dad play 4 wks

sweet puppy 4 wks

One of my puppies 4 wks

See, I do have a soft side (sort of). They are cool! Really great pets.

OOPS - Cali Voters Just Say NO To New Taxes

Green Shoots? We Don't Need No Stinkin Green Shoots

If the top is not in it may be next week. I'm a little nervous about what could happen if they pull the rug out. Market action is changing up here and the suckers are getting sucked in as volume declines on the last few pushes up. I think the pros are exiting (or not supporting each other as much any more).

A few weeks back I noted I would be looking for a top the week of the 28th around 936. We'll see about that. Elliott Wave gurus are looking for a higher high or one more pop up. In this manipulated market one more short squeeze may be in order, but they can't hold off the shorts forever. IMO most of the banks have completed as many secondary offerings as they can at these elevated prices and their window of opportunity is closing.

I still believe that there will have to be some sort of "external" source to really kick the market down (China or any one of the plethora that exist). Another factor would be fear. The public has witnessed the previous fall and will not want to participate in this one, thus mass exodus.

NOTE - There are two theories

1) A significant sell off (roughly 50% of this move up) then a move to a new high before the big sell off
2) This is the big sell off and market goes to new lows (seriously)

Here is the best example of how these "green shoots" have been working for you, me and Joe The Plumber and why they will fail in the long run. A simple short story that puts it all in one neat little package.

Saks Unwilling To Issue 15% CRE-Backed Notes, To Raise Convertible Instead

Have a great day!

CPC and The Breakout - Is a Top In?

Is a top in? Correlating the CPC, a few major indexes, the VIX and the SPXA50 (S&P stocks above their 50 ma) sure looks like we got a winner winner chicken dinner. BUT in this wacky manipulated market who the heck knows? Overly bullish CPC's have in the past been exceptional indicators of tops and bottoms as the chart clearly shows.

The Negative divergence as compared to market action is another indicator that the tide has turned. The chart also shows how the options market has acted irrationally (at least compared to trends indicated) here recently (black triangle showing bullish consolidation). This chart can be found in my chartbook on Stockcharts. There is a link to the left.

Notice on the indexes the wedge patterns nearing their end and the relationship of each to its 200ma. IMO the VIX needs to correct to its 200ma which is rising.

Note - I will update this chart periodically to save additional posts. I will add UPDATED to the title if i do.

GL today.

Tuesday, May 19, 2009

Updated SPX Channel Update

She got violated slightly, but a nice sell off occurred to bring price back into the channel. At this time I'm looking for at least the 50% line. I believe the EWTers are looking for worse possibly something near the bottom. I do not agree based on the daily indicators right now. This move will need to cause a whipsaw on the dailys for lower moves than the retracement to happen IMO. We'll see.

Monday, May 18, 2009

Another Sign of P3 (But Maybe Sooner Than We Thought)

Most of you are aware of my seemingly endless quest for P3 catalysts. They are everywhere. While only a few of my posts have had P3 in the title, most seem to point towards the fact (IMO) we're headed for some really troubled waters. I expect the P3 in the title to begin to pick up steam soon.

This weeks edition of the P3 watch comes from Tyler at Zero Hedge. In a "Guest Post: Tax Revenues Tanking" David Galland, Managing Editor, The Casey Report presents a great case on just how bad our government's income stream really is.

"We continue to stand by our December forecast that the 2009 budget deficit is more likely to widen to levels between $2.5 and $3 trillion rather than the CBO’s $1.8 trillion forecast. We also believe that inflation could start setting in as early as Q3 of 2009 and will accelerate sharply by 2010. Treasury Rates will start climbing and the era of cheap money will end, making it harder for overleveraged consumers, businesses, and governments to service their debt." is just one example from a well written study of just how bad things are getting.

This is the earliest predition on impending inflation I have seen. It may be a bit aggressive, but I get it and can agree. When we are struggling to get our "well capitalized" banks to lend at the lowest rates in history, what's going to happen when rates begin to skyrocket. HA! You think our credit defaults and foreclosures are bad now wait till you get a load of what's gonna happen then.

Oh, remember there are trillions on the sidelines right now waiting to be invested. When savings interest rates begin to climb, what do you think is going to happen to the appetite for risk? That's right, mass exodus to the land of low risk and high rates and the market gets pummelled. Maybe this is another reason for the (what I believe is) artificially inflated market. They know this is coming and are trying to keep the market on life support as long as possible.

We can't fund it, we can print our way out of it and we cant buy our way out of it. It is only a matter of time that the failed auctions get worse and the Fed can only buy so much stuff. Taxes revenues are down and this trend may continue. In my last post I mentioned California and the Governments plan to tax their way out of that mess. Right now, that appears the only way. Obinhood is already working on the life insurance side for some additional billions. What's next?

SPX Channel Update

Got gap fill and closed right at 61.8% retracement from the high to low. It tried to obey the 25% line at 905 but could not resist going higher. MACD on the 30m may have a little more to climb, but other indicators are starting to embed. The STO on the 60m is embedding as well. SPX blew thru and closed above its 50ma on the way up, but it is out the top of it's BB right now. SPX also set a higher high on this run, so on any pullback we need to watch for a possible higher low. I do not expect this move to violate the top of the channel, but you never know in this wacky market.

Entitlement - Coming To A Corner Near You!

Here is the problem, The number of "underprivileged" greatly outnumber the "privileged", and we have champion of the "underprivileged" in office. The economic landscape is providing the perfect canvass for economic reform that will forever change all our lives.

"O"binhood and his merry men are working their magic for the masses. Once the handouts begin and wealth redistribution is tasted by the masses they will never be voted out of office. As the wealthy have pillaged the country to stuff their coffers, the quality of life for the rest has been dismantled. The promise of the American dream has been erased in two years.

I first noted what I saw as Obinhoods first big move in Remain Calm Shanky. Breathe And Count To 10 where the first antitrust moves were announced. I believe that the credit card crisis and the perils in California will set the stage for broad strokes in "relief" to the general public.

In Credit Card Defaults At Record Highs But Worst Is Yet To Come Mish covers the most recent and staggering default numbers for the industry. These default rates are really something and will get worse. Credit is the lifeblood of all Americans and many small businesses, and without it the general public really can't buy anything.

Mish battles the Keynesian Camp in Obama Budget Chief Promises Free Lunch, Says "Economy Almost Bottomed Out", where he takes down several Ivy Leaguers and their free lunch theories on socialized health care and its affordability at this time.

I believe the key driver to Obinhood's dream will come from the sensational issues California is facing. How things get fixed there (right now they are looking to tax the rich to give to the poor) may just bleed over to the rest of us in some screwed up policy the Obinhood's merry men will put into law. In California's Budget Deficit: What The Hell Is It? Mish addresses the topic of taxation and how it is not the right way to solve the problem.

Folks bigger government is uppon us and unless we can place our own operatives in Obinhoods group of merry men we're screwed. The more O promises to redistribute the wealth the more "underpriveledged" voters he will amass (not to mention all the illegal aliens they are bringing in to reinforce their defences with). Get out your checkbooks and hang on. The world you know is about to change forever. IMO of course.

(I know it was a Mishfest tonight, but weekend news was not that hot. Sorry. Let's see what GM has to bring this week and what "good news" spin I can slash and burn there!)

Friday, May 15, 2009

SPX Channel Update

Added a falling diagonal/wedge and the gap from 877 to 879 (lower brown box) and moved the retracement zone to reflect new low. Was that low right at the channel line? Yea, looks like it. Anyway, I am not all that positive it holds, but we'll see. as for the diagonal, that last low may have been an E point for a revrsal (may being the operative word). I don't really like the lower trendline of the diagonal either. I think it needs to be lower to get to my target. We'll see next week. Did anyone hear that GM is going to file for bankruptcy? That one may have been leaked better than the stress tests.

Have a great weekend.

A Must Read From Richard Russell

DEEP THOUGHTS FROM RICHARD RUSSELL is and article on Pragmatic Capitalist that contains some recent exerpts form the latest Dow Theory Letters. It begins, "Now, I believe, we are in a primary bear market that will ultimately “clean house.” It will deleverage business, consumers, traders, nations and every other area that has been leveraged. The process will be extremely painful, as all bear markets are, and in the end it will bring stocks, assets, real estate, back to around the basic values that existed prior and just after WW II." I'll bet you click the link to go read the rest. Oh, give me a GOOD check before you go.

UPDATE - I think he's nuts. We'll see lower lows, but the SPX from '39 to '45 had a range of 7.50 to 13.50 and the DOW ranged from 160 to 90. Don't think so. If you chart the history of the DOW and lay a lower trend line on it (which I do not think will be broken), I can see the DOW sub 4,000 possibly stopping at support from '94 - '95 at 3.913.

Thursday, May 14, 2009

And You thought You Were The Only One Still Short

Tyler at Zero Hedge gets the best stuff. You shorties and doomsdayists and people that think this whole mess is manipulated will love this one. "Mark Patterson: "It's A Sham. The Banks Are Insolvent"". I could break into some more Nature Boy here, but I'll spare you. The title says it all, but what I like most is this dude has shorted the market 7 SEVEN times on the run up and is holding still. WOW. I know I can identify 5 tops in the run up, but seven? Anyway, he's speaking my language. Wooooooo!

UPDATE - Daily Telegraph Removes Mark Patterson Interview

The P3 Holy Grail! Bilderberg This Week.

Dig this, "On a more specific note, Estulin warns that Bilderberg are fostering a false picture of economic recovery, suckering investors into ploughing their money back into the stock market again only to later unleash another massive downturn which will create “massive losses and searing financial pain in the months ahead,” according to a Canada Free Press report." I feel like The Nature Boy, Rick Flair, screaming WOOOOOOOO! What a joyous moment.

I have always held just shy of the conspiracy envelope for a purpose. I would have scared all of you away. I have always tried to validate any claims of manipulation or government intervention to the best of my ability. Rarely do I just spout off. What I want you to know dear reader is Bilderberg is real. Here is the Wiki link. It is not a fictional thing created by a bunch of conspiracy theorists.

Now, what is reported out of the meeting is left to speculation, because this is the most secretive meeting in the world. "The secretive group operates under “Chatham House rules,” meaning that no details of what is discussed can ever be leaked to the media, despite editors of the world’s biggest newspapers, the Washington Post, the New York Times and the Financial Times, being present at the meeting."

So what has been leaked that they will be discussing this meeting? Are you ready for this? "Bilderberg is divided on whether to put into motion, “Either a prolonged, agonizing depression that dooms the world to decades of stagnation, decline and poverty … or an intense-but-shorter depression that paves the way for a new sustainable economic world order, with less sovereignty but more efficiency.”

OK, if you are still reading and have not clicked off this page I thank you for giving this a chance. This is the pinnacle of conspiracy theories. This is the big dog. The head honcho. The big cheese. Please read this article on Pension Pulse, "Will Bilderberg sink The Global Economy?". Give it a chance. Hell, anytime that you get 150 of the world's most powerful people together in one place at the most secretive annual meeting on the planet, don't you think something very important will arise out of the meeting?

Here is a link to where their reporter Charlie Skelton will be reporting live from Bilderberg.

Here is a link to the Canada Free Press report.

UPDATE - Times Online Article on Bilderberg. This may be the most tame for you newbies to the subject.

And one more Rick Flair classic.

SPX New Channel Down?

I was looking for patterns and think I may have found something. If the turn is real and SPX topped at 930 then there should be some form of pattern headed south right? I threw a channel on it and some 25, 50 and 75% lines and lookie here. Each interior line managed 3 to four significant touches. This is IMO of course, but might prove to help us identify some key points. The brown box is the 50 to 61.8% retracement zone.

EUREKA Moment (Part 2)

First, let me give a large wad of thanks (and you should too) to Judicial Watch for their activism in many areas to protect us for the O and his marry band of thugs and thieves and the many other evil elements out there.

Via Tyler at Zero Hedge, the post "FOIA Disclosure Busts Paulson, Geithner And Bair", I get the personal satisfaction double dip. I get possible proof of "leverage" used by the government (see my last post and just add this to it) and a list of the banks that may make the list of survivors of this bailout mess. Oh Happy Day!

In the article "Judicial Watch Forces Release of Bank Bailout Documents", you get all sorts of good juicy stuff (even CNBS mentioned this today - surprise, surprise, surprise a Gomer used to say). The documents retrieved by judicial Watch are posted in the article at ZH.

Now, for the banks that made the cut (that's kind of funny isn't it - made the cut)

Among the banking CEOs who were forced into a pre-envisioned arrangement were:
Ken Lewis (BofA)
Vik Pandit (Citi)
Lloyd Blankfein (GS)
Jamie Dimon (JPM)
John Thain (ML)
Robert Kelley (BONY)
Ronald Logue (SS)
John Mack (MS)
Richard Kovacevich (WFC)

So there you have it, a safe list so to speak. We can begin whittling down the list of who might not make it now.

Hope and "Change" You Can Count On

During my moment of bliss (market down = my blood pressure down), thought I would go looking for some more "good news" about our administrations fine actions after the "antitrust" issue the other day.

Did not take long. On my nightly journey to my usual haunts Zero Hedge (is always the first visit), then Naked Capitalism, Mish, Calculated Risk, Pragmatic Capitalist and finally Seeking Alpha (all have links here), I attain a wealth of news (correction - news is a bad word that denotes a lack of truth) blog posts (much better) that have scoured the blogosphere and reliable sources to assimilate the days actions in a concise easy read that contains actual opinions that are not "governed" or "restricted" by some superior special interest group or employer with an agenda. In other words, you won't find shareholders at annual meetings challenging their ethical agenda.

First let me start with Mish's articles on the problems in California and then we'll get to the "Change you Can Believe In" part (we are sooo screwed).From the files of "what you won't see on CNBS", Mish in "California is a Complete Basket Case; Treasurer Requests Tarp Funds; LA Mayor Declares Emergency" documents that the problems in California may be finally getting out of hand (no shit). "Assuming the hikes do not pass, California will be $29 billion in the hole, and counting, with the important phrase being "and counting" is a classic Mishism. The 7th largest economy in the world is on the event horizon of the black hole of doom and they are looking for us to bail them out. Some speculate that the left coast will all simply fall into the ocean one day cause of the San Andreas Fault, hmmm, I think I just thought of a way to save us $29 billion (and counting).

In a previous article "California, Please Send A Message!" Mish discusses the losing proposition of increasing taxes to pay for this mess. "The idea that one can borrow money from lottery proceedings to balance the budget is of course preposterous. And anyone voting for $16 billion in higher taxes either has holes in their head or is a direct recipient of the money." Did you hear that? Did you get it? I bolded what I believe the overriding problem is and will continue to be under this administration. Bueller, Bueller, anyone.....

Which leads to this - Comic relief time.....(she's from Florida not CA)

Now the really meaty part of all of this. How does YOUR administration react to the problem? Do they A) Support the state and its right to independent decision making, B) Tell 'em to go ___ themselves, or C) Offer help, but but only if things are done "their" way with no questions asked?

I'll leave you in suspense no longer. The answer can be found in this delightful article from IBD (via Zero Hedge) "A Carelessness Now Bordering On Lawlessness". DIG THIS, "Such a federal ukase (the word derives from czarist Russia; how appropriate) to a state legislature is a sign of the administration's dependency agenda — maximizing the number of people and institutions dependent on the federal government." Ouch, so much for my blood pressure. (shake my head in disgust, bang my head on desk, head in hands in total disbelief) Folks, if you thought the nationalization of the banks was bad (yes, they are essentially nationalized and if you don't think so get a life), when the government starts blackmailing the states to promote their socialist agendas it is not a good thing (and if you think it is go away and never read this blog again).

I won't go on any longer here, but more is to come I guarantee. I'm stopping short of really teeing off on the O and his group of merry men. Guess they get the low blood pressure reprieve, this time.

Wednesday, May 13, 2009

Decisions, Decisions and More Maipulation?

I'm struggling with calling for more upside here given the daily indicator's positions and the requirement of a whipsaw to get them going back positive again. SPX sitting on 61.8% retrace from the 866 low to top right now. The 100ma and 888 support are just below. Just filled a small gap at 889 on the 5m chart. Lot's of crap right here. Nothing to stop it between here and gap support at 878 which takes us to 875. At those points the count is toast IMO, but I'm NOT a counter and did not stay at a Holiday Inn last night. I'll mess with anything, but not counting. That is for Dan and K Meister.

At the time of that post (Toot, Toot on 5/7) I was drunk on the 200ma theory and deep in the manipulation theme (not that I have left it). Looking at the FAILURE (finally) of the 60m indicators to pull this one back up again I'm thinking we're headed south here in a larger way than most think. Breadth and other items don't look good. Looks like we're leveling out for lunch here.

Not willing to call a TOTAL breakdown from this point given my EUREKA post yesterday. Unless the banks need a slightly lower price to get their additional shares out the door they will support it here (or at whatever agreed upon price they want the shares at). $DJUSFN is breaking down, no doubt about that IMO. GS and bank movement may signal some discourse in among the ranks! Is someone going to get left out to dry? In the EUREKA post the first article was about the FDIC planning for a big failure. So maybe we need to figure out who the last one to the share dilution window was and that is our great short opportunity. Why not eliminate the competition? They are a bunch of greedy back stabbers.

Bottom line is I'm leaning on a pretty sizable pullback here based on the SPXA50, the Weekly STO bear cross, the Daily RSI trend breakdown, trend lines giving away left and right and several other indicators. Gotta call what I see here. I have not bought (or should I say sold) this yet and am not willing to rule out a whipsaw of great magnitude. It is just a tough damn call. 6 months ago I'd be pot committed on these signals, but I am ZERO in at this point (not for long though). Unbelievable.

GL everybody.


From my blog post on 5/7 -

"The turn here should be real, but it will also be real short. Those pesky support lines on the indicators may have one bounce left in them, but maybe not. I just don't see how it can continue. 890 target by 5/13 then push back up to 938 to 962 for back test of rising wedge before larger move down to 836 - 800 range (then the very healthy run up to 1015 to 1021 my targets now). Right now I am looking for this first wave to end on 5/28 at the latest and could go as high as 962, but I like 936 on the week of 5/28."

Well, it looks good so far. See my post 890 Target For This Pullback. So far so good, but will I be right from here? Looking at the daily's they will need to whipsaw and based on the EUREKA post below the banksters may not ready to let it fall just yet. We'll see. Hate betting on a whipsaw.

Tuesday, May 12, 2009

A Possible EUREKA Moment!

While reading a nice article at the Pragmatic Capitalist called "FDIC PLANNING FOR HUGE BANK FAILURE?", (now why would I be reading something like that?) I found a doozy of and article in the foot notes by J. S. Kim at The Underground Investor called US Bank Shares - The Pump is Almost Over, Get Ready for the Dump. Oooh, even better! You know I could not resist a title like that.

Kim has written an article that helps explain a lot of things. Mainly, why the banks are so overvalued. This really has flipped a switch for me as to when the pump will end and could be a great road map to playing and timing the market turn. The post also adresses ideas like, "Bank of New York Mellon Corp., Capital One Financial Corp., U.S. Bancorp and BB&T Corp. will sell shares to repay U.S. aid after stress tests showed they don’t need additional cushion against a deeper recession. If there is a better example of an oxymoron, I don’t know one." You know, some things are so obvious you just miss 'em, and this simple thought flew right over my pea brain.

Kim summarizes, "In a pump and dump scheme, there is always a phase II. Note the urgency of many financial institutions to complete their secondary public offerings of stock and debt as soon as possible. This urgency is a classic sign of a pump and dump scheme as it signifies that the rapid rise in current bank share prices have been built on zero fundamentals and is thus unsustainable. Now that the pump scheme is largely in play already or in some instances, has even been completed, get ready for phase II - the dump." The classic sell high buy low move.

Finding the top might be as simple as waiting for all the secondary offerings to be completed. As each offering is completed I would assume the stock should peak or flatten off till the group is finished, thus creating really some good shorting opportunities IMO.

UPDATE: This is not a P3 event IMO. Just a possible cause for a much needed (manufactured) correction of the run off 667. Earnings manipulation will continue for a quarter or two for the financials and this action may create another short squeeze opportunity. IMO of course.

TBT - Time For A Pullback?

I'm not saying it is, but it looks like it is getting very toppy here. I'm long and will consider selling if the treasuries look like they will make a move. With what I believe is an inflationary period coming soon, I'll most likely hold and add on any weakness.

VIX 5m Consolidation (UPDATED)

Which way do we go?

VIX AT Top Trend Line (Again)

Larger 60m chart that gives a better overall picture of where we may be headed.

Have We Topped?

No guarantees that we have topped for this rally but it sure looks good. Almost as good as it did on April 20th when we fell 40pts on the SPX (only to continue the rally another 100+ points from there). Plenty of support below SPX and above on the VIX (see post below).

Is America about to go broke? (From MSN)

Good morning, thought I'd bring along some cheerful news this morning. We're not broke yet! Let's add two little problems to the dilemmas I've been covering, social security and medicare. Not one, but two 800 pound gorillas in the room.

Can't wait to see how the O deals with these two. Republicans have the cajunes to cut both, but the O meister will want to fully fund and increase benefits for the masses as he continues the drive to the socialist state that we are becoming.

I foresee a cut in SS benefits and an increase in medical coverage to the poor. That's right, take our hard earned money that we paid into the system and support the families with 25 children that want a free ride and (best of all) ENCOURAGE THIS ACTION FURTHER because it's OK to be a worthless leach on society cause we'll take care of your lazy asses. More wealth distribution folks. This is even better news because we're all gonna be poor as hell one day, so let's get this problem fixed now so we'll all have coverage when we get there. Glad we got that going for us. See, I can bring along tidbits of good news too!

Scott Burns did a decent little article on MSN on this. (VERY surprising to see anything critical or anti-establishment coming from a GE owned entity, Scott may not be working there next week). The point of the article IMO is, "When Social Security and Medicare costs exceed their revenues, the Treasury will have to borrow money to cover the shortfalls. When that happens, today's stunning deficits will look small. That's why our future contains inflation, not deflation." Click on the title of the blog for the link and enjoy.

Thus I own and have been buying TBT since the low 40's and may continue to add to the position, BUT (yes another BUT) when do they eventually outlaw shorting anything in this market. Yes, I believe there is a good probability that is coming as well. More on this rant later.

Now, let me clarify something in a sort of disclaimer. Some can not work or afford to pay their way. I get supporting them and making their lives worthwhile, but to those that abuse the system - screw 'em. (BRIEF RANT - you want to save $$ and deter crime and give people impetus to work and not take advantage of the system - make prisons prisons - that simple IMO). I actually care. I am the executive treasurer for my local United Way and serve on numerous other boards. That means I give a shit, but this path that Robin Hood (The O) and his merry men (spineless congress) are taking is gonna really screw us up.

Have a great day!

Monday, May 11, 2009

More P3 (Impending Crash) Evidence

Part 1 -

I told you China was full of it and could not be trusted. To all the Cramerites out there that are buying his waterfront property in Arizona, I told you so. Mish to the rescue again in Chinese Deflation Picks Up Steam; Recovery a Mirage . "Thus "stimulus" (here and in China) is guaranteed to fail, leaving still more overcapacity when it does." kind of says it all. China's got to create 20 million jobs a year - that ain't happening folks and as long as we're not buying they are screwed (shhh - don't let them in on that little secret). All this radical commodity frenzy is about is a bunch of hooey. OK, so for P3 China is out of the equation and their recovery (and future purchase of treasuries) is IMO less optimistic than ours.

UPDATE: More good news from China. In China’s Export Decline Worsens, Hampering Recovery you'll read about, "The collapse of world trade has cost millions of jobs in China and dragged growth to its weakest pace since at least 1999. Surging lending and a 4 trillion yuan ($586 billion) stimulus package are yet to establish solid foundations for an economic recovery, the central bank said last week." and more.

Update 2: I continue to pummell China

Part 2 -

I tried to get Meredith's vid off CNBS, but Blogger did not like the embed code and I'm not geek enough to fix it, so go visit Calculated Risk to check it out. I'm not going to elaborate other than if you listen to Meredith she lays out the ground work and timing that leads to P3 (the impending crash) perfectly. She ROCKS!

This video actually made me feel better. I love it when a plan comes together. I just hope we're all able to survive the impending doom.

Remain Calm Shanky. Breathe And Count To 10

It just keeps getting better and better every day.

I really do not believe what I just read on Mish's blog. Breathe Shanky, Calm down buddy. This might be one of the most outrageous inconceivable idiotic worst timed actions in presidential history. GET THIS - The O Meister is going after anti trust legislation during the heart of the worst economic crisis in history (IMO), like we've got nothing else to deal with right now.

In Obama Encourages Antitrust Complaints; Expect Nightmare of Litigation you get this, "The Obama administration warned corporate America on Monday that the government will more aggressively investigate big firms that hurt smaller competitors, contending that lax enforcement by the Bush administration contributed to the current economic troubles." - Are you freaking kidding me? No way. No fing way. With all the fraud going on in government (sorry - scratch that) in the financial institutions this is what he chooses to pursue? WTF? Are you kidding me?

OK, so let's cut GOOG and INTC off at the knees. Where the hell do they come up with this stuff? We thought Bush was bad. I really don't like where this is headed. Not as much for the action but as for the timing of the attack. Oh, I get it, there must be 50,000 attorneys out of work and this should about take care of that group. This is really gonna help things at this time! Go get 'em tiger. Two of the largest employers in the nation that generate billions in revenues in taxes. They support communities and peripheral businesses around the globe.

This is a BIG RED FLAG event IMO that will further distract the media and sheeple from the Geitner, Bernanke and Paulson fiasco that constitutes the biggest fraud in American history. Maybe the goal is to tie up the court system for 8 years till they all get out of Dodge. I hope this pisses you off as much as me. The timing of this action is beyond belief.

(Disclaimer - I did not vote for the man and I am not a Democrat - I'm more of a write in vote for Ron Paul kind of guy - so I'll leave party politics out of this for now.)

VIX to 25? (Or To 0 For That Matter)

The more I read, the more upset I get. This is getting to be a joke. If what ALL of the bloggers, websites and non-domestic media outlets are reporting about the corruption in our financial system is true (OK - let's be fair - say 50% is true), then the U.S.A must be the laughing stock of the world. America must win the award for the most idiotic bunch of morons and greedy bastards award. The public is handcuffed by Hope and Change, a spineless congress, the FED and a multitude of characters that are consumed by one thing and one thing only, power. We are sooooo screwed.

I almost forgot the chart - annotations are there. Self explanatory stuff. But it could go to 0, who knows?

Sorry for not linking any articles. I'll give you one must see vid that I got from Tyler at Zero Hedge. REMEMBER - this is NOT ANOTHER SNL skit like the one traveling around this morning. It may seem like one, but it is not. This one threw me over the edge. Best I don't post any more. This is getting out of hand and those that know me don't want to hear me rant.

VIX Channel Rejection - For Now

VIX rejected at 50% retracement off 38.66 top and at upper channel line. On my daily indicator chart all systems are go for a sell off, I am short now with SDS and SRS, but I have very tight stops and don't trust any move south at this time. In all reality, this fall should take us to the 836 to 800 range, but I'm not all in till I see us under 875. The VIX may be a good indicator to watch, but fear may not be as big a factor as pure profit taking in this sell off. I'll be watching the daily indicators on SPX for confirmation and the 60m indicators for timing trades.

Sunday, May 10, 2009

If you don't believe me...

If you think I am some sort of super nutty moron just spouting gloom and despair, check this article out. You won't read or hear this on CNBS or any of Rupert's fine venues of truth. Enjoy the rally while it lasts - but expect to take a sucker punch is a nice little piece that Tyler has buried in a little side note on Zero Hedge.

"Teun Draaisma, Morgan Stanley's stock guru, expects another shake-out. "We think the bear market rally will end sooner rather than later. None of our signposts of the next bull market has flashed green yet. We're not convinced the banking system has been fully fixed," he said." and "There is at least one more boil to lance before we put this debt debacle behind us. The IMF says eurozone banks have so far written down a fifth of likely losses ($750bn) compared to half for US banks. They must raise $375bn in fresh capital. Good luck."

UPDATE: Erik got me pointed in the right direction and I thought I'd drag this one in from the Pragmatic Capitalist - A 50% SELL-OFF COMING? is a nice post that brings in an article from Barron's where Feliz Zulauf expects a 50% decline. Now, I'm not going that deep just yet - maybe the initial pullback to something in the SPX 800 range.

It goes on mentioning other fine attributes of this recovery that are less than appetizing. Just thought I would throw this out there so you did not think I was totally nuts.

Building The Case For P3 (The Next Crash)

As most of my regular readers know I am constantly trying to put the pieces of the puzzle together for P3. It is not that hard to forecast the impending doom of our economy given the multitude of really bad decisions we've made over the past many years (and especially recent decisions by our faithfully elected officials). In my blog below on the many employment issues that still and will continue to exist (5.7 MILLION out of work and growing) I tried to paint a fair picture as possible using many reliable sources. To build on the employment issue and the impending doom of the consumer, Mish has put together a fantastic writeup on the Vanishing Credit Lines for Consumers and Small Businesses.

OK so the banks that are in such good shape and have all that TARP money (remember they are "well capitalized" and the stress tests said all is well) to lend to help rebuild our economy are now cutting credit lines to the lifeblood of the American economy, the small business? What? Say that again? Oh, they are cutting credit to the general public as well? What? Say that again? So here is another major piece to the puzzle that impending doom is being delivered to our doorsteps. Just read the article and then add the unemployment issue to this debacle and you may start seeing the picture.

I'll add a quick side note here, if the savings rate nationally has gone from negative to over 4% that is another LARGE chunk of money taken out of consumption. Just thought that small tidbit of information fits in context with the credit and employment issues recently being addressed here. Those predicting that since inventories are at historic lows and a hiring boom will come to rebuild and resupply everything are wrong. Sorry. The tax payer is tapped out. The consumer is tapped out. The treasury is tapped out. PIMCO is tapped out. The Fed, well, just how much money will they print and then if they do....we're totally toast. Bottom line is it may be a decade(s) before we become the extreme nation of consumption we were just two years ago. They have put the patient on life support and nothing short of a miracle is going to stop this patient from passing on. Oh, OK, the patient will survive, but it may come out needing years of therapy and might need facial reconstruction to recognize its own self in the mirror in a few years.

I'll not go into the multitude of other issues here just yet. I'm keeping a notebook of links to build the ultimate case for P3. It's coming. I believe new market lows will be set eventually or at least they'll be tested. Just make sure you are ready. Enjoy this pop while it lasts, because by the end of this year or early next year the ugliness returns (IMO of course).

GL this week.

Your permabear buddy,


Friday, May 8, 2009

And SPX Morphed Into a Channel Up

This thing could crack any minute. See the MACD and RSI obeying the trendlines below. the old top blue trendline is still very much in play. Has SPX formed a new RED channel up? Would not surprise me. Most I follow are in agreement that it is shooting for the 200dma, and if you look below this will most likely push the VIX under 30 at which time "they" will bang the drums and clang the symbols and declare the bear market over and the new bull market is upon us. God Bless The U.S.A! I'm gonna go buy a car! (Just kidding about the car thing)

VIX - Morphed Into A Channel Down

Wonder Twin Powers Unite - Form of a Channel. What a waste of a pretty falling wedge. I'm now convinced that the 200dma is what the SPX is shooting for and for the MM's to get the VIX under 30 so "they" can claim victory and the recession over.

Understanding The True Employment Numbers

This post is for those of you that believe things will get worse and want some validation, for those of you that refuse to believe that the numbers are manipulated and should know better and for those of you that may need to realize that the jobs numbers are leveling off and this may be a signal that the bottom is in should get a life.

Many of you suspect the employment numbers are manufactured to reflect the current needs of the market makers. Others think the government officials need to control the "fear factor" regarding the economy and to validate that the bottoming process of this recession is actually occurring. Some of you just read and accept the numbers as real and move on (note: this group most likely does not include you dear reader) blindly accepting the government's official account and believing that all is well and getting better in the land of O.

Lets start with a more positive (if you can call it that) post from Mish where he covers the ADP reports with some great charts and data from ADP. Mish notes that, "This will be the 16th consecutive months of jobs lost with no end in sight."

Seeking Alpha has a whole section titled "Job Stats Not Worse, But Not Good" devoted to the job loss topic. Please read the articles by Durden and Iacono to get the best feel for what's really going on. Iacono states in his post Jobless Rate to 8.9%, Though Jobs Fall Less, "Over the last six months, a total of 3.9 million jobs have been lost and, since the recession began in December of 2007, the U.S. economy has shed 5.7 million jobs." Folks, that's 5,700,000 jobs lost and we're still shedding them at a pace that is not acceptable. The title of the article says enough doesn't it? It should have ended with a question mark IMO.

My favorite post on jobs comes from Tyler Durden at Zero Hedge. In The Real Memo Out Of The Bureau Of Lies And Statistics Tyler mentions, "I will bet one double Quarter Pounder with cheese and bacon that next month, the revisions of the April numbers will be on the order of an additional 85,000 unemployed. My guess is that, discounting the Census Bureau hirings, April saw 680,000 newly unemployed workers."

I'll finish with one for the optimists that point to the bottom of the job loss cycle as the bottom of the recession (depression IMO). From Seeking Alpha a nice little diddy Job Loss Peaks and Stock Market Lows chronicling the past periods of significant job loss and their correlation to market recovery.

My take on all this. We've lost more than 5 million jobs and we're still cranking them out at a > 500k pace with little sign of significant recovery. So WTH are you optimists thinking that are buying this theory that as jobs bottom so does the recession (again - depression)? I know, historical precedent as mentioned in a link above. I get your point, but this is a FINANCIAL DISASTER that is in its infancy IMO. We have not gotten to the inflationary period that totally devastates everyone. Heck, that is putting the cart ahead of the horse by about a year or two (yup I said a year or TWO). This post is about job loss only. I'm not covering the devastation of wealth thru imparted pension plans, investment accounts, 401(k)s or home ownership or the multitude of other issues (insolvent banks for one). When you add it all up wealth destruction compounded by historical job loss and further compounded by the impending inflationary environment, it's not a pretty picture. So you believers in the job loss signals the bottom group, you better be prepared for a hard dose of reality cause just like the market consider this slight bump up as a corrective move leading to further downside. Let's just hope this is a corrective wave in a three wave move down and not a five bagger.

UPDATE: Mish finally got his employment writeup out. It is the best on the web. Read it HERE.

Note: I obviously figured out the linkable post thing, but I am not sure how to make that link send you to a new page and keep this one up. Any hints there from a Blogger expert would be great.

Thursday, May 7, 2009

Candlestick Patterns

UPDATE: I added a permanant link to Stockcharts Candlestick Patterns.

Stockcharts runs daily stock scans that anyone can view. I thought I would look into it to see what the candlestick patterns were saying. Lo and behold I found that there were 906 bearish candle formations to 38 bullish ones. There were 446 bearish engulfing daily candles today. That should indicate the markets willingness to sell off. Check out the data for yourself by clicking the blog title above. Note: you can also view various technical indicators and perf charts summaries as well.

Obama Man Can - This is funny.

Funny as hell. Thanks Donnie!

Nine And Half Weeks... Later (From Zero Hedge)

David Rosenberg (one of the few that has spoken the truth thru this whole debacle) gives his views on the near and not so distant future.

A few excerpts-

"While it may be the case that the pace of economic decline is no longer as negative as it was at the peak of the post-Lehman credit contraction, the reality is that employment, output, organic personal income and retail sales are still in a fundamental downtrend."

"That leaves us with the opinion, as tenuous as it seems in the face of this market melt-up, that this is indeed a bear market rally and one that may well have run its course."


"Keep in mind that the jury is still out as to whether the March 2009 lows were in fact the bottom, as was the case in 1932."

Click on title for link to story. Tyler does a great job at Zero Hedge. I suggest you put him in your favorites if he's not already.

BAC - Wouldn't You Give Them An Upgrade Too?

Topped - If not I quit. It could push for the 17.95 top, but I doubt it at this time (Don't know why - it will go wherever "they" want it to). Please feel free to buy up some shares. This is incredible valuation for long term investors. With a great dividend, no solvency issues, shares that will be massively diluted in a market where earnings growth will be tough to come by all add up to a fantastic investment opportunity to me. Heck, shares are only up 500% in less than a month. Man this is good stuff. The things dreams are made of. Be my guest. No, please, you first. I'd hate to ba accused of front running. Go ahead. Sure it's safe. No problems here. I'd jump in befors Cramer craps all over himself talking about it tonight.

It should see 9 again in this next pullback (If "they" want it to).

SDS Trading System - Not Perfect, but Not Bad Either.

See notes in chart for system. Uses blow out lower BB in combo with STO signal cross for buys and black candle and STO cross for sell signals. It is not perfect, but with some personal massaging and applying the strategy with good TA in the chart it can produce winning results (nothing is guaranteed) as proven here.

890 Target For This Pull Back

The turn here should be real, but it will also be real short. Those pesky support lines on the indicators may have one bounce left in them, but maybe not. I just don't see how it can continue. 890 target by 5/13 then push back up to 938 to 962 for back test of rising wedge before larger move down to 836 - 800 range (then the very healthy run up to 1015 to 1021 my targets now). Right now I am looking for this first wave to end on 5/28 at the latest and could go as high as 962, but I like 936 on the week of 5/28.

The upper chart shows the 60m SPX with fibs and other goodies. Notice the support lines on the indicators. This is better seen on a longer chart (look at 'em on the /ES chart). The indicators are running out of room for significant price increases at this point IMO. The lower chart shows /ES minis from the bottom, the wedge, the top gray line is the larger channel off 1420 top, the 200dma and the resistance line at 943. Nice intersection in the blue shaded area, thus my target and time line for the top and turn of this wave.

GL trading.

Wednesday, May 6, 2009

Insiders Transactions

I got this chart off of Barron's as well. This tells me a story. Dump into strength. The post title is a link to the page.

GETTING TECHNICAL - Here Begins the Bull

"What we can see on the charts is an unbroken series of lower highs and lower lows -- the core definition of a bear market. Further, there is no bullish divergence present in momentum indicators, and that strongly suggests that despite this month's exciting bank movement the bear is not through just yet."

From Barrons - an OK article that validates the need for a correction.

Almost a Quarter of U.S. Homeowners Are Underwater (Update1)

May 6 (Bloomberg) -- A growing number of U.S. homeowners owe more than their properties are worth after prices extended their two-year decline in the first quarter, said.

Yup - recession is almost over. I can feel it!

Parabolic? This is a little too extreme for my taste.

Uh, OK, If it wants to start going straight up it can do that too! I guess the party is on. Everyone is invited! Come on in and buy, buy, buy. The sale just started. Do you smell a rat?

VIX Throwunder Ending Formation?

OK - so translate my VIX post from yesterday and you get that we needed one more pop down and here it is. K was looking for the push to the 32 range and here we are. Now whether the MM's want to push the VIX under 30 is another story. This is a good indicator that we're topping (at least for a brief pullback). May be interesting that this happens right before the buy the rumor sell the news on the stressless tests.

/ES - Breaking the Barriers

Two simple charts to illustrate one simple thing, we've got more upside IMO. The charts are both of /ES Emini S&P 500. The top is weekly and the lower daily. You can see the channel drawn, but what I want you to see are the 25, 50 and 75% lines in the channel. I have drawn the 50% line blue to illustrate how many times it has come into play. Also notice the 25% line (the top line inside the channel) is in play at the the beginning and now it is being broken. To me this signifies the strength of this rally. The black 200sma and the current wedge formation appear headed for a crash with the (sorry not drawn) resistance line at the 943 top all at the same time the indicator trendlines on the daily charts must be broken (now they all can simply embed, but I don't think that is gonna happen). On the weekly indicators RSI will have topped out and this gives the STO signal line time to catch up. Looks to me like we run North in a slow consolidating manor (most likely forming some sort of sucker rally double top) till the 11th or 12th of May or third week then the correction occurs. The fibs for /ES off of a 943 top are 38% - 832, 50% 800 and 61.8% 768. I am expecting a quick violent move back to the 50% trendline at the 800 range before the next move up to top out at the top trendline to end P2 later this year.

Tuesday, May 5, 2009

Which one would you buy TNA or BGZ? Careful, this is a trick question.

OK, TNA up almost 200% in less than 2 months. In a well defined rising wedge with a wedge at the top. Negative divergences showing up and indicators living in a nice overbought zone. BGZ on the other hand is down 60%ish and indicators are oversold. It is in a well defined falling wedge with another wedge ending the formation.

So which would you choose? Well, I'm not sure what the correct answer is. By this I mean both can be correct. BGZ short term and TNA long term. The momo is with TNA and the near term play is with BGZ. I am convinced that BGZ is in an under throw situation and will get a pop here while TNA is in an ending rising wedge and will fall. How much will they move? Not as much as you might expect, because I expect (because of the EWT count of the SPX)them to stay in their respective trends to continue for a little while longer.

BGZ will get its day in the sun, but not till a little more pain is felt by the shorts. Let this structure play out on the SPX and then you can make your move. Don't get sucked in by this brief pullback (if that even occurs). If you play them make sure you have a well defined plan of entry and EXIT before you play with fire. Don't be ashamed to exit a losing position, cause this can save your hard earned cash.

GL Today.

SPX Flag on a Pole?

Looks like a flag on a pole to me. Continuation up here will be limited though IMO. Might set a new high 913ish, but I do not expect any more. Indicators are getting pinched into an overbought corner that will have to break or they all simply embed. Might want the double top before retreat to 866.

Breadth Measures Hitting Historical Highs

Excellent post on Breadth Measures with chart from Quantifiable Edges. Very over bought we are. Hmmm.

VIX - Falling Wedge, Double Bottom and Consolidation - 5min

El VIXis en una caída de cuña que contiene otra caída weedge (negro) dentro de ella. Parece haber un buen rebote de gato muerto doble fondo y una buena consolidación en el rango 34. El 60 indicadores no son todo lo que caliente para una gira a la derecha ahora, pero este gráfico se ve preparado para una evasión de responsabilidades. La línea de destino y FIBS están allí para ayudarte a ver tan bien. Feliz Cinco de Mayo!

No, I don't speak Spanish! Google translator baby! Feliz Cinco de Mayo!

SKF Chart

I think at this time the black wedge continues to play out. To early to jump on this buss, but soon. the time will be here soon. See my other Short charts in my chartbook.

BlackRock’s Doll Says S&P 500 May Fall 11%, Led By Bank Shares

May 4 (Bloomberg) -- The Standard & Poor’s 500 Index may fall as much as 11 percent, led by financial shares, before rallying to end the year at 1,000, said Robert Doll, BlackRock Inc.’s global chief investment officer of equities.

A “correction” of financial shares could help the S&P 500 erase as much as 100 points, or about half of the rally since it reached a 12-year low of 676.53 on March 9, Doll said. A so- called “correction” is commonly defined as a retreat of 10 percent.

I think Doll's been reading my posts. Robert painted a pretty picture with the conservative estimate of a 10% pullback. You'd think he'd know more about common retracement rules in a 2nd wave. Tell the truth Robert, No need to sugar coat it. I like Dan's end of year window dressing before P3 idea (sorry I did not mention that first - hate it when that happens) and sounds like what Robert's people are thinking.
Well, at least we're on the same page (which should bother me come to think of it). If Dan's target or 933 to 943 and then a 38% retracement, the target for the big pullback should be in the SPX 836 range.

Monday, May 4, 2009

My Thoughts (From a post at Kenny's)

C and get it over with, but I just can't see it playing out that way. Earnings have been mostly positive (earnings trough as I have noted previously) and they will continue to be. Then we have the dead period and more positive (I'm suspecting) earnings next quarter. I'm not seeing anything to stop this train for a while (back to my external source argument for market decline - China - Oil - who knows what). Everything sucks and it's getting worse IMO, but the sheeple see 600k/mo unemployment numbers and zero credit as some sort of good thing that we have bottomed (ROFLMAO). Manipulation is working and will remain that way until "they" want their shorts to come home. "They" can't let this market fall. How else can you explain the XLF being up in the face of massive dilution. Who the hell in their right mind is going to buy a bank stock here.

Anyway, buy the rumor and sell the news is how I am seeing this Stress Test. Pullback to the 875 - 871 trendline or to 875 would be about the wedge target or at least the gap fill from this morning then off to 1021 (My target at this time). I'll also mention that I have a very bullish set of clients that are pissed at me for taking profits at the 836 level and they want more (and shorting some lightly there and they are not out - very small positions - but they are in full agreement and disbelief in the markets's ability to levitate). Calls are picking up to buy. I am capitulating and giving in and even the great K Meister has mentioned the L word in recent days. Who the heck knows. It's a 2 wave.

Gl people. Stick with the trends and the 60m indicators is my only suggestion at this point. Watch for the weeklys to begin to top out (STO is there already). Let's just hope we don't have to wait on the monthly indicators. Geesh, that would suck.

New Swine Flu Tracker on Google Maps

It is worth a quick look. While not that many deaths it is interesting to see how that specific strain spread across the US and the globe. Click it and drag it around. This may be important to know this fall if it comes back.

The FAZ Breakdown (or Throw Under)

I think its got some more to fall but not much. Question is is it a trow under or a massive breakdown with the MM's trying to actually pummel the shorts into submission? Pretty incredible action. Guess they don't want anyone betting against "them". My best guess is that when it does correct up it will be quick and swift. I am also expecting it to form some sort of double bottom or to have a dead cat bounce before the ultimate run up to fill the gap and possibly beyond in P3.

I went short late today

SDS and SRS were the two victims. Maybe I'll be the victim, who knows? I've got liberal stops. I do not expect this to be the "big turn". I have given in and will now be playing the market both ways following the 60m indicators which have been good tools all the way up that I have ignored for the most part. On the chart you'll see the throwover of the wedge I have (or it is touching the top of a channel not pictured here). If I am right, the pullback target is the red 875-871 trendline below or just above it at the 875 support line (roughly 30pts). STO, RSI and ROC appear to be ready. MACD just needs to cooperate. What bothers me is the charts for SDS and SRS don't look quite ready for the move. I prefer to trade on what the SPX is doing and not the individual 2x charts. Wish me luck.

Sunday, May 3, 2009

Top and Bottom Indicator Chart - 2 Years

I gotta new chart. This is an expanded version of my daily indicator chart marking all the tops and bottoms and aligning them with the indicators for the past two years. I think it is an eye opener. Form your own conclusions, but also notice why everyone is screaming for a top soon (if it has not already happened).

Note: You must use my chartbook link to view the chart better in Stockcharts. You can't tell anything from this view. Look for the 4th chart $$ 3 SPX - TOPS AND BOTTOMS - Daily - 2 years.

GL this week.

The P2 Playout (on a busy chart)

This is something I keep to fool around with. Remember this is a basic example of a possible form for P2 that I used some fibs, retracements and tried to fit into a steep diagonal leading to P3. Main two things to look at are the RSI and MACD extremes that are displayed very well on this chart. The declining volume shows how weak this rally is becoming. The pink dashed lines show how this wave P2 will possibly play out. I would expect the overall formation of P2 to remain difficult to count. One thing is that according to EWT this means 4 should be an easy count (and it just might be because after P3 there may be not much left to count). The larger black diagonal is hypothetical. Looking for a pullback in the 800 to 775 range before the larger move up this summer. The pullback may be quick and over in a week or it could be drawn out. I' believe it will be quick lasting a week or two and then the bulls come back in strong. Daneric has a nice chart in his chartbook that shows the form only of how the whole movement of P1 thru P5 might play out. I may add one, but since he's got it (and he's better) use his.

Have a good Sunday.

Friday, May 1, 2009

Sorcery of the doomed

One for the weekend - this one is pretty darn funny.

"I was pretty sloshed as I put another shot of tequila to my now-benumbed lips, but the same thought kept going through my whirling head: Total Fed Credit (also referred to as Federal Reserve Credit), zoomed US$70.3 billion last week! Yikes! $70.3 billion of new credit appeared, as if by magic, in the accounts of banks in One Freaking Week (OFW)!"

And it goes from there. Click on blog title for link to Asia times story. Enjoy and have a good weekend. I plan on winding up like this dude sometime this weekend.

The SPX Diagonal and Retracements

The ending of the diagonal aside, the MACD and RSI on the 60m chart are simply running out of room as their trendlines push them into the stratosphere. Basically they have bled this historic rally for all they can get out of it. Or have they? In a manipulated environment anything is possible. Where there are apparently no rules WTF do you do? Well, I'm not gonna join 'em at this time, but after this "expected" pullback I'll participate on the long run up to the 1,000ish area and will have my air sickness bag in hand, cause the stench of the fraud in the altitude of the market may surely make me spew.

Possible Short Play on Swine Flu - Update

CEO of Smithfield Foods will be on CNBS sometime soon this morning. SFD off 6.5% since post. Not great, but winning.

Update - Either I missed it or they canceled it and did not give a reason.

Swine Flu and Elliott Wave Analysis (Updated)

OK - so Shanky is beating the Swine flu drum and then EWI puts this out? Get a load of it. Conspiracy sites are picking up on the correlation. If this is so, I guess we're all gonna get sick as hell when P3 gets here.