Sunday, January 31, 2010

How Is Your Short ETF Performing?

Are you a leader or a follower? Will the followers catch up or under perform? Here is a sampling of a few The TL and fibs are kind of an average (ball parked) for you to see. I'm not surprised to have seen the deep pullback in SKF (the only one that really made any effort). With the emerging markets strength and then China's news, I'm not surprised to see EEV in the lead. I am surprised to see SRS the laggard. That one should be in the lead, but maybe it is just not time yet. I'm planning on making a mint in SRS this year. I guess we'll just have to be patient and wait. Be careful with these. They can bite.

Saturday, January 30, 2010

Cause AGirlieGirl Wanted It

No - not me. She did not want me darn it. 

I added some tunes. I did not put on autoplay, so you get to control the action. I will gladly take requests so leave them in the comments section or email.

Hell, we may as well enjoy the ride down as much as possible. 


Friday, January 29, 2010

Rorschach Revisited - A Helicopter?

Johnny, what do you you make of this? Looks like the market picked the wrong week to quit hopium. Anyway, the Rhorschach inkblot says the correlation between the dollar and the markets may be alive and well. I don't know bout you but it looks like a helicopter dropping money to me.

Morning Post

Minis up 5 and climbing. Boy does CNBS have the cheerleaders out this am touting growth and prosperity. sounds good if you are a moron. Remember they are salesmen, not prophets. What's that saying about lipstick on a pig (all except Becky of course)? Our first morning with Benjamin back at the helm for another four years looks to be getting off to a prosperous start. I guess the markets take to the idea of furthering the reflation trade.

E-mini 60m - That green support line going back to June was unexpectedly tested again. That was the missing 5th wave I am suspecting. I was a day early jumping into the small long position, but that is fine. Got out with small gain and now ready to reload again. Let's see what happens at the 50% line in the sky blue channel and then at the top of it as well. The yellow wedge target is just outside the top of the blue channel near 1123. Resistance at 1103, 1112 and then up around 1127 should be your stopping points and then the retracements are 38% 1101, 50% 1109 and 62% 1117. I believe a base has been built and I'm not looking down (yet).

SPX 60m - Now you know why I like the daily indicators to trade off of. Take a peek at the divergences here and see how ineffective they have been to this point. Sure, they are screaming a turn is coming but not the tradeable point of the market. This is a good chart to see the fibs, s/r and the trend.

Gold - Is about to bottom out and reverse I think. Within $20 of the 38% retracement and double converging channel support. Might be time to buy some more tungsten gold soon. $1066 is the 38% retracement. When that eventually cracks, 1020 is the next stopping point.
Oil - As I showed in the chart yesterday am, oil is at lower channel support completing a 23.6 retracement at $71.60. Daily S Sto bull cross and divergence in RSI may mean the bottom is in.
Dollar - Sister Christian is "Motorin" right on up the charts in what I am calling the 3 of C of the ABC correction.
Natgas - support has cracked and a lower low has been set. It may be channeling down and might be time for a small pop after giving up over a dollar (down 15%) in the past few weeks.
EUR/USD - still beow 1.40 and looks like it will get even weaker if the dollar is gonna continue Motorin.
EUR/JPY - Finally took out the LT support level of 126.71. 124.24 is the next level. It may be channeling down.

GL out there. GDP is strong like bull! (like bullshit if you ask me). Keep on playing their game, cause you can't beat 'em. I'm looking for a corrective to begin soon. My daily chart has not given a buy signal yet. the MACD hist reversal yesterday really pissed me off. That and the S Sto cross looked good, but as I noted RSI and a few other factors were not there. They will be soon I believe.

Have a great weekend.

Thursday, January 28, 2010

More Of The Same?

TD at Zero hedge put it best, "Ben Shalom Bernanke reconfirmation now guaranteed. Sorry America - your senate has failed you. Enjoy the asset bubble and the coronation of the opaque US balance sheet as the biggest receptacle of toxic assets while you can - the next implosion will be the last." It will be the last. there can not be an exit strategy to get out from under the mountain of toxic assets they have accumulated. What is the best part? There is so much more toxic crap out there we either know or do not know about it really did not matter if they anointed Howdy Doody to run the Fed. End game is what it is. How did he get all of these votes you ask when apparently the public wants no part of him running the show anymore? Hypocrite Bernanke and his Political Pandering; Bernanke Buys Votes

The most disturbing news of the day is It's Official: Democrats Succeed In Pushing New Debt Ceiling To $14.3 Trillion Who wants to be a party pooper? We have bubbles to reflate! I guess this is where the new job stimulus is gonna come from? What, are they gonna subsidize employment? Will it be used to continue the short squeeze ramp job? Lord knows the PPT just got a huge shot in the arm. Bottom line is this is just another 1.9T (with a T) that WE have to pay back. The Debt to GDP ratio measures the financial leverage of and economy. Below 60% is good. So, if we are levered above 100%? This was the last straw.Chart from Learn more about Debt/GDP here.  

Denninger finally got on the MM issue with Money Market Funds: No Longer Safe I repeat this topic cause I want it drilled into your head. "Investors no longer can reasonably rely on daily liquidity for these funds as a consequence of this change.  While under normal conditions daily liquidity remains available it is precisely under abnormal conditions that an investor is likely to most need access to this money instantly, for example to meet a margin call or for other emergency funding requirements." They have taken away your right to get your money. Get it? 

In case you forgot we had "elevated" jobless claims again this morning. What gets ignored (unless ZH pushes Liesman to cover it as best he can) is any analysis inside the numbers (don't look behind the curtain). Mish is always around to help (he does some great stuff on Thursdays).  4 Week Moving Average of Initial Unemployment Claims Rises 3rd Straight Week "From the report, there are 5,350,477 workers on emergency benefits, and another 4,669,250 workers on regular benefits. Thus 10 million people are out of a job who want to work, and that does not count the number of people who have exhausted regular and emergency benefits. Recovery? Where?"

"I am not suggesting that anyone purposely altered the numbers — but when the goal is no longer objective reporting of info, these things happen. And when you can’t trust the front page of a paper to do basic math, you can’t trust ANYTHING in it." said Ritholtz at The Big Picture. Who can you trust these days?

Let's see how long it takes them to get that 1.9T back into the markets. I'll put the over under on a week (give or take 6 days) and remember, I have not called a top yet. Here's to a stimulus subsidized job coming to your place of business soon (whether they are needed or not). 

Take care.


Morning Post

I took nothing away from the populist cheer leading effort last night. Nothing new or surprising. More stuff today on the earnings calendar. Jobless report was another stunner IMO. While we are not losing jobs at an increasing rate anymore, we're still dumping over 400k per reporting period. Think about that number for a minute. Remember the first time the number climbed above 300k? That was bad, now 400k+ is just ho hum. Don't worry, the market will accept this as good news most likely.

E-mini 60m - It is either a channel or an unformed wedge. Looks to me like the minis have broken a downtrend after tagging supports at 1081 and meeting the lower market support line (green). The question is whether this is an ABC corrective or something larger. Form and the indicators will tell us that, so be patient while the market climbs here. 1111 and 1127 are the two resistance levels I see on the minis. Watch that possible upper channel line.

SPX Daily - Back inside the lower BB after tagging the red support line and making a nice retracement of the move off of 1028. 1114 is the 50ma, support and the 50% retracement sit near there as well. If we have completed a 5 and this is a corrective that would be a likely area for top. 1131 is another good spot that may be attainable. With the bull cross on S Sto, MACD hist reversing, CCI divergence and RSI possibly getting in the game there is a chance for stronger upside from these oversold levels. The 60m chart had some nice divergences coming into yesterday. I will note that ADX is not participating yet.

Gold Daily - This chart goes back to the '08 low of 688. IMO that is a nice channel up (gray). the green channel is diving into the lower gray support line, the 38% retracement (yellow line) and the sky blue resistance/support line. This is massive support IMO coming soon. If that cracks it is all over but the crying. If it holds the possibility of a pop back to 1227 is pretty good. Daily indicators say oversold and support will hold. Weekly indicators say more pain to come. 1082 is pretty good support here. 1066 to 1068 should be it near term.

Dollar - Movin on up. Weekly chart says it can run some more, but it is getting NT toppy. My target remains 89 to complete what I think is an ABC corrective before much further weakness. The EWT people see a super strong 5 wave move here. It is possible if there is a flight to safety (LOL). I say currency devaluation is the only game in town. While I have speculated the dollar with a 4 handle I think $68 is looking better. No, I'm not kidding.Now, that may be a few years off tough. We'll have to see.

Oil - Continues to roll over from overbought conditions. After nearly three weeks of falling is it time to stop? I think so. Take a look at this daily chart. Support at the lower yellow channel TL and the indicators looking to turn. S Sto bull cross. MACD hist turning up and RSI with a small divergence. If this lower channel line should crack, the 38% retracement lies at 65, so that would be the max NT.

Natgas - Cracked the support line I have been speaking of for a few weeks and took out a support level as well. 38% retracement is $4.67. The 50% support at 4.24 looks the best right now as there is a support level and gap there as well. EIA NATGAS report at 10:30 today.

Enough for now. GL out there. I'm log SSO and looking to add some QID and TNA at appropriate spots.

Wednesday, January 27, 2010

Newsworthy Items From Today

I suppose the S&P climbed a little more than 5 points on the good news that the one month treasury yield turned negative, or was it that the new home sales declined sharply in December, or was it that the FOMC is not gonna raise rates cause things are not as rosy as expected, or was it cause Geitner an Paulson testified that neither knew shit about the AIG deal, or was it the release of the AIG schedule A, or the suspension of MM withdrawals, or O's speech tonight? I don't know what it was. I do know that the good news is that the markets will rally on any news is BACK! Wooo Hoooo! What a great day!


New Home Sales Decline Sharply in December was the first thing out of the shoot this morning. "The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 342 thousand. This is a sharp decrease from the revised rate of 370 thousand in November (revised from 355 thousand)." Everyone knows that demand had been pulled forward thru "stimulus" packages designed to kick start the home buying spree that will bring us out of this melee. Wrong! Guess again Mr. Smarty Pants. You can force a horse to water, but if he does not have a job he can't pay for a friggin house (especially one he can't get a loan to pay with!) Add to this post DataQuick on California: Record Notices of Default filed in 2009.

"NO, you can not have YOUR money, sorry." Yup, that is what they are going to say in the next crash when you show up at the teller and want to make a withdrawal. No, I'm not kidding. Suspending Money Market Redemptions Is Now Legal; SEC Approves New Money Market Regulation In 4-1 Vote Welcome to Pottersville! I guess it is not such A Wonderful Life. so instead of giving you 97 cents on the dollar in a run on the banks, save your gas money. IMO, we all should have seen this one coming. IMO, this is a HUGE tell that they know some sort of systemic event is coming. What other reason would they have to in act this? Uh...just in case? This is really fucked up.

As only Denninger provides FOMC Statement 1/27 In English The important part is things are not getting better and they will leave rates right where they are for some time (the banks have not made enough money yet). 

Oregon's Death Spiral; Business Owners Say "I'm moving out" This is just stupid, but may be a sign of things to come. Overtaxing the rich and hitting their bonuses hard. Face it. I believe it is coming for all of us. Do you care to explain how we will pay off the deficit (that we know of)? Wake up if you think there is any other way to get money for programs other than it coming out of our pockets. They may be biting the bullet early ahead of the curve. Yes, I agree that cutting waste is priority number one before raising taxes, but that will cost jobs immediately - whether directly or indirectly. Jobs cost revenues. Thus the rock and hard place issue arises. Soon you will see state privatization. We'll be paring off against each other. Just wait - you heard it here first. 

Do you trust anything you hear out of China? I don't. Here is an enlightening look into what may be the truth on their economy and what's been going on over there. On China’s Overinvestment, LOL and you thought we had a bubble. Our building are sitting empty because our businesses have gone out of business. Their are empty because they built them, just to build them. Look out when they implode. They will be coming after their treasury holdings and that will then be the end of us.

Are there signs of things getting toppy in the market (other than the obvious)? Sure, try Margin Debt Increases By 30% In 2009, Currently At $231 Billion  "The NYSE's most recent disclosure of margin debt indicates a surge in trading in margin accounts, where total debt shot up to $231 billion as of December, up $58 billion from February or 30%, and also an increase of 4.5% from November. This is an indication that "animal spirits" have surged by about the same amount as the broader market since the market lows: in other words, speculation is now rampant, and, to make things even better, is very much on margin, or leveraged. And we all know what happens when levered speculative bets turn out not quite as expected. For those who may be confused, Dow Jones provides a useful primer of how a margin call feedback loop tend to make things ugly, fast.

I will not listen to O tonight. Honestly, I can't stand to see his face or hear his voice. You know how you feel about someone that has lied to you constantly? Yeah, that feeling. LOL, and he is president? What a sad state of affairs we are in. I'll catch the highlights/low lights in the am on the news.

GL out there. I'm sure the PPT will be out in force in the am to celebrate our fearless leader's SOTU speech and the glorious recovery we are experiencing. God Bless America!

Freedom Watch Judge Napolitano with Gerald Celente - A freak show, socialism, fraud and war - OH MY!


Morning Post

Roubini sees slow growth is the first thing that caught my attention reading thru the news this morning. Very busy day and the markets might not do much in waiting for Barry's state of the nation speech tonight. Following up on last night's post Chief TARP investigator to open two AIG probes. I'll tell them what they need to do with those probes if they need an idea.  

I have NO CLUE what happened to the formatting of this post. I'm tired of trying to get the gaps out (kind of looks like some of our SPX charts doesn't it?), so screw it. 

Earnings Calendar - A ton today, but MSFT and AMZN tomorrow might create the biggest buzz.

Economic Calendar - New Home Sales at 10:00, FOMC and Barry tonight lead a busy day. The Pertolium report at 10:30 may be interesting.

SPX daily - Indicators never confirmed the buy signal. The RSI hook turned into a flat and it still has room to go to bottom if it wants to. MACD HIST is still negative and trending down (although at a slower rate). S Sto is embedding. Looking for a divergence in CCI. Price is still playing just outside the lower BB indicating oversold conditions persist. Price seems to have found a home at the 50% retracement off of the 1030 low to high just above the red support line. 


SPX 60m - Great head fake here yesterday. Follow MACD hist to the turn and you will see the hour of reversal. CCI remains bottomed out. This stopped the RSI, MACD and S Sto advances in their tracks.

E - mini - What I think is a possible channel down here running into support from the green TL that has supported the market going back to July and traveling under the 50 to 62% retracement area (gray box).

Interesting day with all the news to come. FI holders better look out cause the FOMC language on rates will be newsworthy. I do not think they can raise rates here. You see they should have raised rates 3 years ago so they have worked themselves into a rough spot. they will have to raise rates sooner than later and with China being the first to do so, I think we will not be far behind. This will rock the markets when it happens.

I think we consolidate in a triangle here at support and make the 4th wave. I want to see how the indicators trend out before making any more prognostications. Upper limit is the 1115 area and the lower limit is  1082 my wave 5 target. I'll add the possibility that this is 5 of 3 and we still have 4 and 5 of 1 to come.


Tuesday, January 26, 2010

Banging On The AIG Deal

Want to read an interesting take that may give you some insight into the AIG scam/bailout? Try AIG: Collusion Of Epic Proportions Between Goldman's US Treasury Branch And Goldman Sachs Proper I thought is was a good read. It actually made me sick to my stomach. If what GS pulled off was that savvy, we are truly screwed and the inmates are running the asylum. 

Follow that up with Oh, So The Fed *DID* Hide Documents? from Denninger. "Additionally, Barofsky said he is reviewing the cooperation of the Federal Reserve with his staff's attempt to conduct an audit of the AIG transactions. Some of the documents recently turned over to the Oversight panel "were not provided to the SIGTARP audit team during the course of the audit."" you really think they will ever truly turn over everything? What rose colored glasses scenario do you think will happen with this fiasco? All documents will be turned over, every phone call documented, a complete accounting for all cash involved and sworn testimonies from all involved will just appear? I don't think so. When you rip someone off for $18bn plus and have set up the play for years and you have the government in you back pocket, Naaaah, I don't think this ends in any satisfactory manner for anyone other than GS. 

Then you throw Timmahh into the mix (I think he gets thrown under the buss). Questions Geithner Cannot Escape compliments the two posts above and ties it all together. I suggest you read them all and have a hefty bad near your chair in case the overwhelming desire to puke your guts out occurs. Will you be angry. I sure as hell hope so. I guess it is a matter of national security that we need to commit fraud and conceal evidence and lie to cover up how much money was stolen from the taxpayers on Obama's watch. That's right, I said it. This all happened on Obama's watch. Oops, was that a racist statement? that will be the claim du jour in a year or two. Be ready for it. (Hell, is Barry even eligible to be president? Was that the biggest part of the heist? Think about it?)

The best video of the day is AIG Spbpoena from CNBS. This morning Senator Jim Bunning just railed the system. I loved it. This may help with some of your anger management issues after reading all of the above. 

Prag Cap brings you Cry Wolf Part 4 - ooops - I mean ROBERT PRECHTER: THE MARKET IS ENTERING THE NEXT BEAR PHASE. Hey, maybe the 4th time is the charm. RP totally chickens out on giving a projection when we all know he could have given a window based on his principles very easily. Me thinks he's been stung one to many times this past year. My thoughts on EWT, it has it's moments of brilliance, but not when Hotchberg is counting. Stick with Kenny or Daneric, they do it for free and run circles around the guys making millions (friggin ass backwards like everything else in this country). Lord I hope they are right this time. Me - I have not called a top yet. I want to this time more than any other. I'll be patient, trade it like the top is in and let form confirm the top. The other thing about EWT that is 100% certain - they will always get the count right AFTER the fact!

If you need a return to econ 101 and want the most creative and entertaining history lesson ever please see Hayek vs. Keynes - Straight Outta Compton from Zero Hedge. It is a classic. 

GL out there. It is so comforting to know that our government, the treasury, the fed and the banksters have everything under control and we can trust them implicitly with or future. I'll sleep well tonight!

Morning Post

Good morning. If you have not contacted your representative (Senate - House) and told him/her not to vote for Ben I encourage you to. If you support Ben, then good for you.

Earnings calendar - Yahoo after hours today.

Economic calendar - The biggie is Consumer confidence at 10:00 looking for 53.5 up from 52.9. (I am not going to comment on the possibilities of revisions to these numbers.

I suggest that you read The Second Phase of the Global Economic Crisis is at our Doorstep.

E - mini daily - The minis have met my 1085 target and the lower green TL well ahead of schedule. The green TL also measures out well for the light gray triangle. The indicators here are bottoming, but they are not quite ready to give a buy signal yet. I'm gonna watch to see if the sky blue channel has some merit and the interaction with this support line. Next stop would be the backtest of the upper (sky blue) bear market top TL.

SPX daily - The indicators are close, but not there yet. So some more weakness is expected, but possibly not much. When it turns I'll prognosticate the pop. Right now I have 1131 as the max, but remember I have not called a top yet. RSI has a hook but is not horribly oversold. MACD has a lot of room till a turn and hist is not reversing yet. S Sto is in the bottoming zone but it can embed. CCI has turned and I would look for a possible divergence to price. ADX might be at a buy point.

SPX 60m - All indicators turning up with possible buy signals, but they can reverse and embed. This chart says the bears need to tread with caution. Retracement levels for a pop can be seen here. Watch those to ma's and the upper BB level as well.

We might have a 5th wave left to complete which should get you to 1085. Not sure if the market goes into hibernation here with the vote for Ben just around the corner and the FOMC meeting tomorrow. If this is a 5 down and then we have the ABC corrective for 2 of 3 you can expect some choppy consolidation trading for the next week. Please remember to contact your representative on the Ben vote one way or the other at the conveniently provided links above.


Monday, January 25, 2010

Around The Rim (And Down The Hole)

Busy earnings day and AAPL hits it out of the park. We don't own a mac yet, but we can't get off of iTunes. With the kids getting iTouches for Xmas, maybe the 1,000 songs/apps they have purchased since 12/25 put AAPL over the top (or my account under the bus?) Apple earnings jump on strong iPhone sales. The action of AAPL has been volatile with a surge to 208 and subsequent pullback to 200.

Looking into earnings some disturbing trends are being uncovered. With 20% Of S&P Reporting, YoY Ex-Fin Revenue Growth Is... Negative  - I've been speculating what's going to happen in a revenueless business environment. It will catch up eventually. Beating depressed low bar estimates is great, but when that bar starts getting lowered again (or at least quits getting raised) look out!

Being from Georgia this headline from Mish caught my eye, the rest of the post caught my attention. Hoschton Georgia Dissolves Police Department One would think in a country that is sure to face some serious rebellion within the year, uh, police may be important. How about with 18% unemployment that crime may become an issue? States and cities are desperately trying to balance their budgets and making some dramatic cuts. Just take a peek at what the Governator and Illinois are doing. Tax revenue is waaaay down. Just wait till Big Brother comes down from on high and starts hitting up the taxpayers left and right. the states will really be SOL then and so will we. This will get really ugly. (Hoschton is just north of the ATL - I had to look that one up)

More shenanigans in the reported numbers from Big Brother? ANOTHER revised number you say? No, kidding? It caught Mish's and Denninger's attention (and since you know I am large into manipulation), so I bring it to you. Mish has Charts of the Day: Durable Goods and Goods Employment In General and Denninger has Durable Goods "Mistake" Or FRAUD? You can't make this shit up, but THEY CAN!

Prag Cap brings us DICK BOVE: WE ARE ON THE PRECIPICE OF A POLITICALLY DRIVEN EQUITY CRASH  "Dick Bove, an analyst at Rochdale Research released an alarming report yesterday detailing the dangers of a politically driven market.  In his opinion, we could be on the verge of a market crash driven by the President’s financial reform bill and growing anti-business sentiment:" Combine this with Charles Nenner's interview here and you get a good mix of disaster preparedness. Of course Ritholtz had this to say about the Bove article - Most Irony-Impaired Wall Street Research Title. Ever.

Ritholtz has NY Fed Wanted National Security Exemption for AIG and Zero Hedge has Use of National Security Book Cooking Exception Not Looking So Paranoid After All I'm telling you that this thing is gonna blow up and the people will not be happy. IMO, EVERYTHING is out of control in Washington and it will all come out in the wash sooner or later. The fraud, lies and insider rigging has been rampant. This time it has gotten so big they will not be able to cover up this pile of poo. Someone will get strung up for this eventually.

That is enough for now. Do your homework and be prepared. Screw gold, ammo, water and seeds will rule the day in a year or two. 


Morning Post

Financial Terrorism? That is what Denninger is calling it and I agree with his assessment 100%. In Financial Terrorism? You Decide some great questions are asked."Is not a threat to destroy financial markets along with acting intentionally and directly opposite what you claim needs to happen an act of financial terrorism?" is one of them. Please read this if you have not. Zero Hedge covers it here - Chasing Red Liquidity Herrings.

The reason I open with this is because it supports my theory that the markets are manipulated and that the Creature From Jekyll Island is running the show (with a little help from their evil twin GS). How can I continue to call for higher highs in the face of all of this mess? It is simple, the GAME IS RIGGED. They are playing Russian Financial Roulette with our financial future. These meat heads play the game backwards though. They start with a fully loaded clip work backwards. It is only a matter of time before they actually pull the trigger. The Brown election actually took a round out of the clip, so at least there is one empty chamber.

 Don't forget we are still in earnings season. Lots of companies report this week. Earnings calendar HERE. The Barron's Economic Announcement Calendar is HERE.

On to the charts. Impressive move south last week that you had to be on Mars to have missed. Looking at the daily SPX, some of the indicators here have not reached oversold status yet. The futures indicate they won't get there either (E-mini up 7 at this time). This run has blown out the lower Bollinger Band, crushed the 50 ma and closed two gaps. that is a lot in such short a time. It has also completed a 50% retracement of the last run up off of the 1031 low. I would like to point out that while sellers greatly outnumbered buyers last week, the volume was not all that impressive.

SPX 60m - This chart on the other hand is dramatically oversold and to me does the best job of showing how the recent trends in price swings was crushed. 1087 to 1090 is a strong support area. At this time I'm not sure what wave structure is. Is this a 2 or a 4 is the big question. I think it is a 4. Given the length of 1 I do not expect much more weakness for some time to come. Think about it. 4 up, a short 5 down,  then you have to trace out an ABC corrective, so it may get dull again for a week. The Bernanke confirmation vote may keep a bunch on the sidelines. Let's look for a retrace to the 1111 to 1115 range then we'll go from there. I have not called a top yet. At this time I expect the 1131 range for the to of 2 if we are in P3.

Gold- looks oversold on the indicators and may be consolidating at this support level. This could be a C up here.
Dollar - Set a new NT high last week. This may be a 2 of a 3. I will be long again large for the 3 of 3.
Oil - Oversold and near a lower support/channel line. I'd look for a pop back to 77/80.
Natgas - Still traveling up the support line. Indicators have divergences to price which is not good. Good support at 5.32.

GL out there and take care.

Friday, January 22, 2010

E-mini Overview - Where Are We Headed?

Where are we now and where are we headed?

Weekly chart - Sky blue channel down. Top bear market TL was broken in early November. The (pink) P2 (bull market) wedge off of the March lows has played out almost to the very end and the most significant break of the lower support line is happening now. the indicators on this chart show just how overbought the minis are and how close we are to a trend change in the market.

Daily chart -Here you see the pink P2 wedge and the 50% to 61.8% retracement zone (gray box from 1127 to 1235) much better. The convergence of the upper TL, the 50% retracement and the end of the wedge all combine to make a powerful reversal point (esp when combined with the overbought conditions)  New to this chart are the recent divergences to price in the daily indicators (yellow lines). These have a high degree of accuracy in predicting turns.

Daily drill down - Same chart as above covering the C leg of the ABC P2 corrective. Here the new lower green support line is introduced. I believe this is the target for this move. Second target is the backtest of the bear market top TL. The big question will be does it fail at that point or will the bull market continue from there? I do not think it will, but the possibility has to be mentioned. The fibs for this fall off of the "B" 865 low in July are - 38% 1039, 50% - 1006 and 61.8% - 973.

60m chart - Here you get to see the structure of the top better. One thing to notice here is the volume dramatically increasing. I see a possible channel forming (dark blue) that may hold the first wave down of P3 or the final corrective down of P2. The minis did not set a higher high like SPX on Tuesday the 19th. Not sure if this is significant or not. The low of 1101 looks like it completed a 5 wave structure. The removal of the 1127 and 1112 supports and marking new lows was pretty convincing a trend change may be upon us.

30m - Off of the 1148 top it is hard to grasp a count. I would suspect this is a 3 ending here and we had a long 2. I like the channel (sky blue) and what appears to be a falling wedge ending in an oversold situation. the only thing that detracts from those two formations are the devastated support points. If she stops here 1121 is both the wedge target and the 61% fib for a possible retracement.

Support points from here- 1084, 1068, 1028, 1013, 976, 948, 925, 878 and 865.
Fibs - for this fall off of the "B" 865 low in July are - 38% 1039, 50% - 1006 and 61.8% - 973.
Fibs - for this fall off of the P1 665 low in March are - 38% 963, 50% - 906 and 61.8% - 850.
I do not see any diagonal support lines that may come into play at this time.

Shanky's targets? I think this move possibly makes the lower green TL near 1085 in the first week of February. At that point we either bounce back to new highs or it completes 2 of 1 of 3. How severe does this fall get? Maybe the possible "bow tie" top rolls on over at a controlled pace till August when it really lets go. Two possible options I see for a bear market top TL (sky blue) backtest are 1013 in late Feb or 948 in late may. I believe the backtest of that TL will mark the end of 1 of 3. It just seems logical at this point. I don't have a crystal ball, but those intersections look good. If anything they may be too steep (or not steep enough). We'll know more as this form develops. One thing for sure is that after 865, there is a big dark hole to the last bottom.One other prediction - EWT will do a much better job on the way down than it did on the way up. I'll be counting again!

GL and have a great weekend.

Out DAMN Spot

Bubble, bubble toil and trouble. Barney Frank and cronyism are being defeated. With Brown's election the shock wave has reached Cali. The Tide Has Turned: Barbara Boxer Joins Feingold And Many Others Opposing Bernanke is a representation of the roaches scrambling for cover. I told you election year would be interesting and the incumbents would begin to squirm to keep their power positions.The jockeying for position has begun in earnest. Now that did not take long.

The patient has finally made it into surgery. We have held the economy in triage keeping it on life support (life support is expensive). Now, will the surgeons be competent enough to revive the corpse that is so bruised and battered? This will not be an outpatient procedure. It will be a long and costly surgery (what isn't these days?).

First step, congressional liposuction! Let's remove the lipstick from the pig and some of the excess fat (Bawney, Pelosi and several others) and see what we have left to work with. I'm not suggesting we'll be able to create a Miss. America, but somewhere between Miss. Teen Sc and there will do just fine.

Second Step, amputate the Fed. It appears that Ben won't get the necessary votes to continue as lead council for the Capos. Cut the head off of the beast and dispatch it back down the hell hole it came from. seal the sum bitch under 500 tons of concrete where it will never be released on this earth again.

Third, brain transplant (or a major lobotomy). The lies and corruption of the current administration. replace them ALL and make Ron Paul President (sadly his recent CIA comments may make him a target for the CIA - see the time line in this link - scary stuff)

Fourth, major arterial reconstruction. Regulate the shit out of the bastards. By severing the main artery and reconstructing the flow of  funds thru the system money may actually make it to where it needs to go. This is akin to getting enough oxygen to the appropriate parts of the brain (which has been a problem for several decades now).

Fifth, major organ transplant. We need to regrow the right parts of the body and replace the old cancer infected ones. Senate, house and treasury are all cancer laden organs that need either transplant or to have the tumors removed so they can function properly.

More steps on this medical diagnosis and more detail to each procedure are to follow. Please feel free to leave your ideas in the comments section.

Mowning Post (Elmer Fudd???)

Is momo changing? Did the green team lose the handle and now the red team is picking up the ball? So, are the recently experienced highs the already priced in respectable earnings season we are experiencing? Is the market telling us where we are going at this point? I guess the fear of some sort of REGULATION the market makers may realize the party is over. The pain will be great (especially for the banksters) as we corral the out of control bubble pumping financial industry. The good news is that this purging is necessary for a better future. FINALLY we may be facing the light and the healing may begin.

Mohammed El A of PIMPCO made some good points on CNBS this am about the coming wegulatory pewiod. I'm sowy I missed most of what he said, cause I was laughing so hard at the fact he sounds like Elmer Fudd. Like perfect. I'll find the vid later. He welly stwuggles with his awas. Capitwal wequiments. LOL - sorry. Needed a laugh this am.

UPDATE: As Pwomised. "We have embawekd now on a pewiod of incweased dewisking, taxing and wegulating banks." I'm not knocking the dude ethnically, just pointing out a similarity I found between him and fwunny cawtwoon chawacta I know. Don't get me wong, I think the dude is brilliant.

The earnings calendar is stoked again today. I have not looked into the numbers, but CNBS is pumping MCD, GE and GOOG as having done well on the earnings front yet the futures are down. This may be one of those moments where you learn that TA is for real. It has an uncanny ability to pwedict things. The topping chawts will not wun on fowevea. A cowection is a must as the market is waaaaaay ahead of its self. Is this the biggie? I'm not sure, if it is not this time it will be the next.

SPX daily - Awe the daily indicatows finally aligned with the staws for a significant move south. We got a good start yestewday. The biggest key to me is that RSI has finally taken out the 50 line that has been suppowt since eawly November. Now there is one more huwdle - the red lower suppowt line that has held up RSI since the low in Mawch. $NYMO is cwanking down and even the ADX gave a beaw cwoss. The daily indicatows have woom to wun south if they can. On the chawt you can see (green box) the wower BB and 50 ma support. 1131 shouwd now be resistance.

SPX 60m  - Bottoming but may embed. We are ovewsold on a ST basis. That can not be awgued. I like the 1053 number as the ultimate tawget for this fall. If it makes it thewe in a nice 5 wave pattern I may concede the top is in. This wegulation issue weally has the mawkets spooked I think. Maybe losing the Bwown election in MA shook the system so bad that WEAL change is finally coming. The other thing I would like to point out is that the wange of this top is neawly the same as the last range bound pewiod.

Dollar - about even with the close yesterday after a volatile drop and rally this am. Will the fall contiwue or was this just a small cowection to further highs? Wooks to me like it was a 4 and we will enter a 5 up soon to take the dollar to 78.80.
Oil - Continuing to fall. 9 days now and over $8 per bbl. There is TL/lowa channel support at $73.
Natgas - As mentioned, tentatively on a support line. Might have had a mini bweak out westewday. Indicators may be weversing mid-stream. I'd exercise caution hewu.
GOLD - bad day yesterday and may have more pain to come. If it cwacks support at 1073 wook out!
EUR/USD - Sitting on the 38% retracement of the climb off of the Apwil wows. If it bounces here look for an ABC.
EUR/JPY - At support, but wemembw I warned about a possible channel down. This is big support here.

Good wuck out thewu and have a gweat weekend!

Thursday, January 21, 2010

Good News?

After an exciting start to the day that had everyone hopping, the day would up quite uneventful from 11:00 to the close as SPX and other indexes sat on support and would not budge. For the bears the good news was the dip was not bought up with any fury (yet). for the bulls, there was no good news other than a strong support level. Does anyone recall that the unemployment report was this am? (LOL- what an afterthought that has become).

Other than GS's blow out, the big news to me was the O's speech basically attacking the banksters. As Denninger puts it - To President Obama: FOLLOW THROUGH NOW! The O has been a man of many unfulfilled promises and I'm quite surprised the market did not laugh off his (what should be idle) threat. I have no reason to trust the man. For once, I fully agree with the O. We saved their asses and they should be eternally grateful. It will be interesting to see1) how aggressively they push back and 2) who is actually running the show up there. Will they hold us hostage again? What leverage (financial blackmail) will they use to sway congress from even getting to a vote on this. This begs the question; was it all just rhetoric for the masses? If anything I will consider it a nice gesture and possibly the first brick laid in the foundation of an actual recovery. Naked cap also has“President Obama: It’s Not Just the Words!” Krugman is on this page as well. Washington's Blog - I'll Believe It When I See It (In the Fine Print) (this is getting rather humerous now - boy our president must have a ton of credibility!)

Another positive development is the delaying of Helicopter Ben;s confirmation. This is quite possibly the second brick in the foundation of recovery (of course a full audit of the Fed would be nice and abolishing the Fed would complete a whole wing of our ficticious recover hose we are attempting to build here). I think this is a must read from Zero Hedge. Scandal: Albert Edwards Alleges Central Banks Were Complicit In Robbing The Middle Classes As I am speculating the rhetoric and finger pointing for the blame is going to get very heated in this election year and the blame game hot potatoe will a fun one to keep track of. 

With Brown winning Massachusetts, this has been the best news week since like 2007. I'll report the good stuff to. I'll actually shout it from the roof if and when it happens. That may be three bricks in the foundation! (we got a long way to go.)

Back to reality.....

We got a lot of problems. One that gets little focus is the pension issue. In Escalating Pension Crisis Will Bankrupt San Diego Mish brings to life an enormous issue. You see underfunded pension obligations was a big issue before the crash and is now even worse after the crash and CDS debacles. If you thought unemployment was bad, wait till you get a bunch of retirees that can't afford shit cause corporations and governments neglected their fiduciary duties to get the pension pot right (uh - they had TWO bubble scenarios to get this done). "The core issue is unsustainable pension benefits. The system is broke. Toying around with little cuts here and there will not help. And as bad as things look now, they will look even worse after another stock market plunge. Unions in general are attempting to hold the status quo as the day of reckoning rapidly approaches. The realization phase for unions will be brutal." Now there is another crime, the unions misleading their members that all is well. It ain't and how sad it is that the members don;t get it yet after two years of this crap.

Calculated Risk is one of the few blogs that actually took the time to mention the (un)employment report this am. Weekly Initial Unemployment Claims Increase - Zero Hedge hit home the most important fact (as always) in Initial Claims Misses Estimate By 42K, Emergency Compensation Explodes By 652K Over Last Week "The combination of initial, continuing claims and EUC for the most recent period is a record 10,701,794 Seasonally Adjusted  or a whopping 12,021,880 Non-Seasonally Adjusted. The double dip is here, and unfortunately for Obama, he is all out of stimulus bullets." The way the administration is attacking this problem you have to ask, does employment really matter?

The most shocking story I read was last night  - Democrats To Seek Stunning $1.9 Trillion Increase In Debt Ceiling To $14.3 Trillion  That would be the icing on the cake now wouldn't it!

And for you market timers Deutsche Bank On China: "First Rate Hike Coming In The Second Half Of March"  I've been pointing to March for some time as the end of P2 (nope, I have somehow not called a top yet). I'm not a hopium addict. I just think they have another trick or two up their sleeves (remember they do control everything). All the signs are there and even price now. Maybe reality will slap me in the face and I will wake up. When China raises rates (I suspected they would first) we either must follow or get out of the way. When rates go up the market will implode.

In case you did not already know this - Ron Paul: After ‘CIA coup,’ agency ‘runs military’

Have a good one and GL!

"Based on the lower low, the futures and the daily indicators I have to vote for further weakness. 1118 to 1115 would be a good spot to look for." - who said dat this am? SPX low 1115.08.

Short ETF Roundup

I do not advocate playing these by their charts, but rather by the indexes they track. This chart is to show the conglomeration of the heard and to attempt to possibly gain sight on where the heard may be headed. EEV leading out of the gate presumably on all of the China news. SKF pulls up fast into second cause O is gonna put the screws to the banks news. DUG rising into third on oil issues. QID and SDS bring up the rear. I can only have 6 max indexes per chart. I may do a 3x chart as well (it should look just like this one).

The black TL and the S/R lines are a ballpark average as well as the fib. They do not apply to any specific ETF. Let's see if this heard stays in a pack or if we can get a defined leader. I do believe this chart may be helpful in identifying the stronger/weaker shorts.You can see where DUG took and early lead but lost it. UUP is not on here, cause it is the big leader in the race of the shorties.

This chart is lives in the Short section of my chartbook here. I have not charted the shorts in some time (wonder why), but I will be updating the individual charts soon.

Morning Post

So we all knew GS would knock the cover off of the ball. The earnings calendar is packed today. AXP reports after the bell. The (un)employment number was worse than expected and rocked the minis about 6 points.

So let's put the pieces together. Jobs suck, banks are not lending, consumer is not spending, business spending is down, but the markets is soaring. Simple, it is called an earnings trough. Market falls to rock bottom. Estimates are set at historically low levels. Companies beat the low bar estimates. The market rewards them. We're comping to '08 numbers still. This trend will end though. The economy will catch up to the earnings next quarter. Missing on revenues for how ever many consecutive quarters will catch up to these companies as well. The coffers are shrinking (definitely not growing).

SPX 30m - Will it move back to 1150 and become range bound or does it have other ideas.After nailing my pullback target, is this a corrective up before further weakness? A 38% retracement has been completed. Based on the lower low, the futures and the daily indicators I have to vote for further weakness. 1118 to 1115 would be a good spot to look for.

Dollar - going nuts with room to run up.
Oil - Pulling back, but still in bullish uptrend channel. Should have further weakness.
Gold - Should be headed south with support at the 1084 level.
Natgas - Pulling back with support at 5.36. Tentatively traveling up a support line. Be careful if it cracks.

10 yr - trending up but at resistance. Not sure how mcu more gas it has in the tank.
EUR/JPY - At a support area. I think this area will possibly break as there is the possibility of a developed channel now headed south.
EUR/USD - Tanking in responce to the dollar's strength. 1.38 to 1.34 is the 50 to 62% retracement area.

GL out there. It is a crap shoot. Juiced earnings but bad jobs numbers. Go figure.

I Don't See Any Problems. Do You?

It is perfectly normal for the SPX not to react at all to pretty severe moves in the dollar, gold, oil and the 10 year treasury. Perfectly normal. Nothing to see here. Move along.

Wednesday, January 20, 2010

A Mini P3 Rant And SPX Weekly Chart Update

Do we get P3? Hell yeah we get P3! Most know that I believe every bit of gains since April are all a farce. IMO they are purely manipulated numbers driven by backdoor deals pumping QE funds into equities forcing massive short squeezes and using HFT to drive the markets up. For some reason EWI and most TA purists don't get this.

The market is all they have left. RE and CRE are and will be toast for some time to come.The banks and AIG are insolvent. Consumer spending is gone as credit crunch, increased savings and unemployment rule the day. The treasury is at it's ceiling. States like Cali are insolvent and more are to come. China and our foreign allies are no longer purchasing treasuries at a rate that will support our needs.

Monetization will continue the reflation/Ponzi trade, but when it fails it will have done nothing more than dug a deeper hole for us to get out of. The carry trade will end and the dollar will get crushed. Deflation is a must IMO to wipe the slate clean which means depression must happen. Inflation will come eventually. When they first raise rates the game is over. That is when they throw in the towel for this round and they begin the process of really trying to save this country from the failed reflation trade. This will be the great battle. (I speculate that they will raise rates this year, BUT will almost immediately send them back to zero for an extended period.)

We have not recovered one bit. It may have stalled but not recovered. All we have done is save the TBTF's thru accounting fraud, zero regulation policies and mortgaging our future (WE did not do this - THEY did this and it will screw us all). The Brown election has kicked off what I believe to be the largest turnover in Congressional history. Incumbents beware. I believe our president needs to look out as well. Rham will be the first to bite the dust from his cabinet as he scrambles to save face and his legacy. The finger pointing from here on out will be very loud. I expect to see the worms squirm to save their seats and the fight should be more than interesting. 

Will the people revolt? Eventually, yes. With pensions destroyed, SS dead, Medicare dead, tax increases to balance budgets, stagnant to continued increasing unemployment, increased productivity (is great for business and the markets but not for employment), zero regulation, enormous bank bonuses, and the death of the middle class; the people will have had enough. We will raise hell and be in the streets one day. They will hear us. I really like the Move Your Money platform. It is a great start to a peaceful revolt. They are screwing you so screw them back. One other way may be to use the power of the internet to organize and have a bill free month (you heard it here first!). Yes, one month where we all decide not to pay ANYTHING. Shut it down. I'm not saying to not pay period, make it up the next month. I am saying to take a month off from payments and see what it does to them. We are in control. We are the power. We can shut them down in a moment if we chose to. Do we need them? Yes we need banks, but not these assholes. Support your local banks!

Our country is teetering on the brink of disaster. Actually we have crossed the line. There is no way out except to for our fearless leaders to perpetuate the fraud and Ponzi scheme that they have gone all in on (and we all know that will not work either). We now have no room for any natural disasters or events that could cripple us further. No room at all. Another $50 billion hurricane would wipe us out. Earthquake in Cali? Terrorist attack on our soil? Maybe the epic Brown victory was the catalyst to start this ball rolling downhill. This is no way to manage your finances. As a planner, we preach about an emergency fund, well we have spent it and more.

Konichiwa Bitches! We are the next Japan so get used to it. The purging will be a deep colon cleanse that will not be pleasant. The rotten feces in our country's gut will take some tome to clear out, so we may have to endure several rounds of treatments.

Have faith though! There will be opportunities to do well in this market (if Barney Frank does not get his way) thru playing the volatility and at the end ther will be a ginormous bull market waiting. The journey to the promised land is upon us. It may not take 40 years, but 5 may do it. Be patient. For those of you that are not traders, actively manage your portfolios. Buy and hold will get you nowhere. Rotate and rebalance and do not be afraid to go to cash. I'd promote the use of ETF's over mutual funds (Alpha? LMAO, the only thing they add is fees and more fees and a portfolio that is so large it is like managing a lumbering elephant thru a china store.) Most importantly, don't get greedy!

On to the chart - 

Since Stockcharts was so kind just to eliminate ALL annotations on this chart I had to draw it again. A profound thank you to the incompetent SC staff and computers. Maybe if you went to work for the government we could get this top issue settled.

SPX weekly shows the topping process clearly. Most know that when a weekly chart tops, it tops. It rarely embeds  like this one. When it does, extreme over bought conditions persist.

Two scenarios presented. 1) ABC and 2) possible A-E triangle formation. Right now we are all on the ABC and the A-E is only a very hypothetical possibility at this time. Some are calling a "bow tie" top (I hate it but I see it as you have seen me draw big circles on this chart in the past). I see a possible diamond top reversal pattern. The SPXA50 is above 400 again which has been a reliable indicator for tops on the way up. Look for it to travel to 100 again soon. Bear market top TL has been met and pierced. 50% retracement of the fall has been passed. Daily and weekly indicators are embedded.

You can see the piercing of the upper bear market TL. Where does it top? I have no clue, sorry. I plan on calling it, but I just don't see it right now. That is why I put a really large black box on the chart. It may have likely topped yesterday (I wanted one more higher high). I have annotated the "Great Wall of Resistance" above price (green rectangle). I am not willing to even consider anything above that (even though some have the potential H&S target above 1300). Most of you know I am watching the red RSI support line closely. A minor RSI support line is cracking right now (red arrow), but I do not believe this one is THE one. This will however set the high for RSI I believe and the much desired and anticipated divergence hopefully can now be set. I thought the divergence had been set and am not sure if the double top in RSI could count, it may, we'll have to see.

The pullback I have been calling for is happening, now, do I still have the balls to call one more higher high? I'm still contemplating that. Jack be nimble. You want to clear that candlestick and not land on it. I may still betting on the manipulators and the PPT, but not for much longer if I do.


Link to the same chart HERE.

Morning Post

Brown is in, let the games begin. In a historic vote, I do believe this will be CHANGE you can believe in. It is time for CHANGE the people are saying and hopefully this resonates thru the country during the next election. We need all those entrenched assholes out of Washington, starting with Pelosi and Frank.

Why does WB have to be on CNBS during one of the most important earnings mornings of the season? Do I need to hear about Kraft for 15 minutes? NOPE, tape it and put him on Youtube.

Well, guess what? SPX set a higher high yesterday. Whaddaya know? Another round of top callers fall by the wayside. Wait till just before interest rates start to climb. The free money tree will quit bearing fruit and so will the market. take the fertilizer away and it all dies from lack of nourishment. They will not be able to hold off till the consumer recovers. They can't afford it. This will be ugly.

SPX daily - Well, they whipsawed the hell out of that one. The key, which way does daily RSI go. Can it take out the top divergence line. I just do not think it will be able to. On the other hand the dashed purple support line that kicked it back up yesterday and the 50 line and the lower red support line are all in play as support. So do we remain choppy and trending up under the divergence? Do we move sideways between the TLs on RSI? Watch for a clear break. As a bear it bothers me that they are creating some room for a sizeable move up if that upper TL is taken out.

As for the price action. Toppy is all I can say. A large wedge with a wedge for a E touch throwover is a bear's dream (unless the PPT is involved and earnings are coming out that have been rigged for companies (esp financials that are insolvent) to beat handily courtesy of QE, accounting irregularities/changes, 0% interest rates and favorable legislation. A narrow channel up may have formed.

I still have to call for a pullback. I am getting more antsy about calling THE top. Everyone you let go by the wayside as a technician adds a little more caution to the next call. This one was the most tempting yet as the near perfect double top really makes me want to bite. BAC is out of the way and that one hurt the bulls. Now let's get by GS, GOOG and AAPL among others.

SPX 60m - Blue channel? Black TL? 1031 support. What stops it? Futures appear to be getting some momo. I have some dashed TL's at 1125 and 1115 for your enjoyment as well on some hypothetical TL's that may come into play.

GL out there.

Tuesday, January 19, 2010

Whuz Up Out There?

U.S. stocks helped by health-care sector is the headline on Marketwatch. "The rally in health-care stocks came as voters headed to the ballot box in a surprisingly tight race to replace the late Edward Kennedy. Democrats would lose their filibuster-proof, 60-seat majority in the U.S. Senate if Republican candidate Scott Brown wins. That could pave the way for legislative compromises that could defer more to the private sector. Read more about the contentious race." I'm sure you all know all about that now, but it deserves to be rehashed as this is a HUGE event. The irony that the bill that Sen Kennedy wanted so bad would be destroyed from his seat. Something tells me the HC stocks will win either way as we really have not other options and this administration (nor any other) is going to do anything to curb the cost of medical care. There is simply too much money in the business and they'll keep our faithful representatives stoked with cash to ensure nothing changes. The peripherals surrounding this election are enormous and what gets slammed thru congress in the next week may have your head spinning (Bernanke re-appointment?).

Why do I believe there will be a big P3? Cause what we have sewn will come to roost and the ensuing cover-up has only made issues worse and is simply delaying the inevitable. Oh, The Truth Is The Banks Are Insolvent? (Still) from the Market Ticker states, "The bottom line?  The banks are still insolvent, Treasury is still lying, the banks are still refusing to recognize losses that have already happened as a direct consequence of their intentional and outrageous conduct and all of this together will prevent any meaningful recovery the broader economy from taking hold." I can not agree more and thus the next Japan we will be. When QE is done, the jobless rate remains constant, the consumer savings rate spikes, the accounting fraud ends, taxes are raised across the board, how the heck are we gonna recover? 

The Pragmatic Capitalist found a doozie that I liked.GURU OUTLOOK: FELIX ZULAUF & THE SECULAR BEAR MARKET it is always a pleasure when you find a "guru" that agrees with your opinion. “we are in the early stages of a deleveraging process, which is marked by a shift from maximizing profits to minimizing debt. It is a multiyear process. The U.S. consumer is in bad shape, and the U.K. consumer is even worse.”  You go Felix! 

FT has a good post on How the big banks rigged the market. "The next stage must be scrutiny of the structural distortions that allow these institutions to rack up such huge profits. Broadly speaking, the leading players in at least three areas of investment banking – wholesale markets, underwriting and mergers and acquisitions – have been operating natural oligopolies." Control, control, control OF EVERYTHING. Lehman was whacked and the smaller competition is being weeded out. I would not be surprised to see them busted up in the future (if and only if we get some sort of honest representation). Until then, I believe it has been proven beyond any doubt that they run the show. 

The Big Picture brings us The Anti-Fed Fact Sheet please read this.

A number that flew under the radar as the markets soared today was NAHB: Builder Confidence Declines in January (aside from the C report this am - how many billions did they lose?).

Look out for the banksters earnings in the am. Should be an interesting day. Before the bell we'll have BAC, MS, WFC and STT just to mention a few. Earnings calendar here.

I have no clue what happened to the font. blogger acted up the whole post and was a pain to deal with. Sorry.

IBM - A Quick Glance

For your consumption a view from the lofty heights of the IBM tower. The tech giant is playing in the tops of the trees at all time highs. Go figure. IBM analyst estimates from Yahoo are here.

IBM Daily- It is only a matter of time. The daily, weekly and monthly are all overbought. This is just nasty. I have drawn the wedge as busted, but there are a couple of options that could extend it a little farther (not much though). Divergences are there. It won't be long till some sort of strong corrective.

IBM Weekly - Overbought? The RSI TL is just about to crack. See the fibs for targets. The diagonal gray TL is something I like to find. That should be a good support point. For you LT holders. If that cracks again. I'd punt.

IBM Monthly - You gonna tell me in this economy that IBM deserves to be at an ALL TIME HIGH and is about to bust out that upper resistance line? I don't think so. Even those monthly indicators are overbought. If you don;t have a trailing stop, you should reconsider that. The lower TL will be hit again. One day in the distant future that wedge pattern will bust as well. I promise. The best bull scenario is that upper TL changes from a wedge to a channel.

Morning Post

Earnings calendar from - - notable today are C and IBM. Of course the market has moved up after C stinks up the joint. Citi's $7.6 bln loss meets Wall Street estimate from Marketwatch. Only in America can losing $7.6 bln be met with applause. This is a really screwed up place. That is good news folks. They MET expectations losing $7.6 BILLION! Reward them. Reward them with massive equity purchases.

Mas election is a really big deal. I am going to put my conspiracy tin foil hat on and speculate the front runner republican loses in a tight race, the dems to hold the seat and for a massive vote rigging case to come out of it.

Economic calendar - -

SPX daily chart - I am not gonna speculate for squat this week with the earnings on deck (unless we get on a good count). I don't like surprises. We all know the market looks super toppy and TA is suggesting a significant turn sooner or later. Sorry that is my style. Is the top in? Who the heck knows. EWI has called it again and maybe the third or fourth time is the charm. For their sake, I hope they are right. I don't think we are there yet, but we could be.

Big red candle on Friday breaking some support lines. I would normally be short at this point. I'll wait for form and the correction to get short if that is eventually the place to be. If there is a 3 down to com I want to be in on it. All the indicators here look pretty bad, but then again, they have been sort of range bound to overbought for quite some time. My best guess is pay attention to the lower fibs and support. I have been calling for the wedge pullback for a while and still stick to it. Yews, I am still looking for another higher high. GL!

Gold - headed down. Possibly in a 1 of 3 down. Ouch.
Oil - 84 to 77 is not good. Esp in one week. May be a bit oversold.
Natgas - Possible H&S playing out taking /NG to 5.20 as part of what looks like a 5 wave correction. this is possibly 3 of 3 here.
Dollar - I think the dollar is in a ABC corrective (contrary to the bigger bulls out there). My target is 89. Nice pop up over the weekend and a 1.10 move up since late last week Another dollar up should not be a problem at this time.
10 year treasury - Moving up pretty strong over the past week taking out some resistance. Should continue.

Monday, January 18, 2010

Gold:USD - 20% Pullback Coming?

Just looking at the chart if you follow the red vertical lines the story is there. the average pullback is 20% and each lasted four months or more. The only aberration was the black dashed line that set the divergence for the massive pullback in 2008 (it still generated a 9% pullback). I'm not sure if the larger blue channel is in play or what I see as a more recent possible gray channel. Given what has happened in the past with MACD at these extremes and the HIST divergence, it does not look promising. Bottom line is that with a 630% run up over 9 years, I would have to think this peak to trough trend is real and should be expected. Target is near 12.95, but it could be worse given the blue fib on this chart. the 38% retracement at 12.88 is close to the prescribed target. GL!