Monday, November 7, 2011

Morning Post 11/07/11

First let me thank everyone for attending the Shanky Emergency Summit last night. The conversation was great and very informative. If you care, go read the comments from last night. All the regulars were there sharing links, charts and their opinions of the markets.

Well tomorrow night the asteroid passes closer to the earth than the moon. (Huge asteroid headed for close encounter with Earth - Yahoo! News)The apocalyptic thoughts that come with the possibility of a collision are dreadful. We've been promised by the experts that it will not hit earth and we're all safe for another 100 years or so till it makes its return trip.

I'm not sure that the same can be said for the asteroid that is know as the debt bubble. Instead of one large rock, this one hit the atmosphere and fractured into about 10 large chunks. They are landing all over the globe and not in safe places.

Just like the real asteroid, the experts have promised that all will be well and that you and your money are safe. Well these experts (global leaders and the financial masters of the universe) are losing street cred pretty fast. Wall Street Journal Lays It Down: "Merkel And Sarkozy Have Lost Credibility" | ZeroHedge. It is about time that someone is finally calling BS on the magical all will be well we can fix it charade that is the euro zone. Guess what? It won't be long till someone calls out the US, Japan, China and every other nation that has been pulling your strings either.

As brutally beat into the ground here at STB, liquidity is the issue. The big bets and debts have lost their backing. The multi-levered instruments of financial destruction that drove the spectacular yet unrealistic growth over the past 15 years are about to implode. The clues of the big money grab are all around. MFG, HSBC, treasury sales, overnight lending maxed out, BAC further dilution, banks not allowing you to close accounts are just some of the many examples that exist.

Switching here to the another hot stove event right now, the US debt ceiling vote, which is on 11/23, just be ready. This puppy is about to explode.

An the one event that I think no one is making a big enough deal over - the potential for a was with Iran. Watch oil over the next two weeks (and go fill up your car now).

Summing up where I have been for some time now - STB looking for one last pop here if it can to set double top and divergence, then we get a major move south. That can be the move or not. That move south needs to start pretty soon. I have been speculating they would crash the markets to make the debt ceiling vote more accommodating and allow for a larger raise. This would then allow for the Fed to move in with a massive easing.

The Iran war possibility within the next two weeks could help this cause, because you know the administration (that needs a war badly) would then invoke some sort of bullshit clause to bypass the Constitution and congress to be able to spend whatever they like when they like (so nothing would change essentially).  This war has to happen before they bring the reactor online, so be ready for it.

Weekly target chart - Book it to 1040, mega stick save with massive QE and then the final rockets burn out, or does it just implode? Right now implosion looks like the best option, but you never know.

Minis Daily - That red rectangle I have been showing for quite some time looms large above. I don't think it gets there, but you never know. If I get the move back near 1290, then my call for a pullback and move up to set divergences will come off perfectly.

Minis 30m - Pinched between 1256 resistance and lower wedge support. If 1256 goes a move to backtest (again) the busted green channel support would be the first target then double resistance from the old yellow channel resistance (yellow) and the upper wedge diagonal (blue) should be the max. On the bearish side, if the blue support goes here you better look out, cause this next fall is going to be spectacular.

SPX Daily - The question is how many more rumor driven unsubstantiated short squeeze ramps can they manufacture? This chart looks very tired. Upside is possible, but it will be limited and a struggle from here. To much resistance and overbought are not good combinations.

Remember the reason for the season!

GL and GB.

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