Monday, June 4, 2012

Afternoon Delight 06/04/12 - Desperation Time

Late today Egan Jones spanked the Queen on Jubilation Day or whatever elitist pomp celebration day it is. Nothing against the royals and the history over there. I get it, it's cool and I respect it. I'm all about God bless the Queen and all that. It's just that I'm a bit tired of the elite right now and the Queen kinda exemplifies a group of people on this planet I don't feel like paying homage to right now.

Anyway, Egan Jones pooped on the UK today downgrading them from AA to AA-. The nerve of those people. On Jubilee Day, while no one is looking and most are deep in the pints, WHAM, you got served. Of course in all fairness the PPT steps in over here and the markets actually rally on the downgrade. Makes plenty of sense to me.  Sure, I get it. Rally on downgrade, the new normal.

In Brussels ... We Have A Problem you finally get to see a chart that clearly explains  a portion my "the math does not work" these I've been ranting about for years. Let's look at this chart from the Zero Hedge post from Bridgewater. When you look up the definition of 'funding gap' in Websters this is the new picture you will see. The two little bars on the left is what they got. The two big bars on the right are what they need (for now).

Remember last week Bill Gross warned that the global monetary system was near reaching its breaking point. Oh, and don't forget Raouls Paul's Scariest Prediction Ever where 2012 and 2013 will usher in the end game. (If you remember STB has been on an it can end at any moment and it should not last past the first quarter of 2013 call for over a year now). Mish covers the Japanese markets hitting 28 year lows after 9 straight weeks of losses (the longest such streak in 20 years). I guess that's what a 240% debt to GDP ratio will get you. Things suck really bad across both oceans, and you have to get that thru your head.

Denninger is warning you to gt out of the futures market now. He warned about trading this market with massive overnight swings and your stops getting abused (sound familiar?). The robots control the flow. This is no longer a carbon based market but and algo/HFT driven machine. The human element is no longer in control.

DOS Monthly Chart - I posted this in the commentary earlier.  It should be clear below green diagonal support and 11641 it will be game over with support and the 200mma at 10684 will be the last straw. Afer that gravity takes over.

Minis 4hr - As usual after tops and with massive holes to fill to the downside, my charts gt a bit messy when I have to back them out. Get used to this. Note price stopping at LT 1264 support just above the gap from 1249 to 1259 (that was from the LTRO2 move off the November lows). That narrow yellow diagonal is the first of three possible support diagonals off the 2008 lows coming into play (Uh, Heloooo). The green falling wedge is obviously the primary pattern driver right now.

GL and GB!

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