Tuesday, June 5, 2012

Morning Charts and Commentary 06/05/12 $SPX $ES

So the waiting game begins as the EU summit and G7 talks commence. Will Germany do the unthinkable (and unpopular with their citizens) and bail out the rest of the euro zone (wanting all their gold as collateral)? I lay the odds that they try and defer to the Fed one last time.

Those two (Germany and the Fed) appear to be the only hope now (which is not saying much cause this effort will be futile as well). So will it be euro bonds or a banking cartel/union or what? Who knows WTF they will come up with this time to extend and pretend. All I know is that it will not work. Why? Shall we go back to my old 'do the math' thesis? Just check the chart out and read this post (Spain Caves - and begins to beg) from Zero Hedge.

As the news rolls in this morning, it appears my lack of faith is being confirmed. With GS noting there is nothing really new in the 'EU's new growth package" and Japan nixing the G7, it appears that dark times are rapidly approaching (again - see the chart above).

Folks, this is truly and end game scenario. They have extended and pretended and kicked the can and printed and borrowed and printed and borrowed and broken every law in the books and nothing has worked. The global debt crisis has only worsened and the end of the charade that all will be well and the nanny state will support you indefinitely is finally ending. It is about to get really ugly out there.

As noted for years here preparing for such an unthinkable event is difficult. Buying into a global financial collapse, the death of monetary systems, the theft that has and will continue to occur is very difficult to do. No one knows the exact date and time. No one knows if they will be able to print their way out of this mess for one last stick save. The only thing that I am 100% convinced of is that it all will collapse and global default is coming which will trigger the CDS market which will bankrupt the system at which point I believe your savings and investments will be at great risk of theft and loss (think MF Global).

I've only pulled this out once (November highs), but I think it is appropriate now. I talk a lot of doom and gloom but don't press the panic button often at all. Let's put it this way. I pulled the panic button out of the desk drawer this morning and is is now sitting right next to my keyboard for easy access.

Minis 4hr - Green falling wedge. Price has finally reached my third target area near 1260. 1260 held nicely and just below looms the November low gap from 49 to 59. Sorry the chart is a bit messy, but this happens at tops.

Daily SPX - Critical support area has been reached. Double fib confluence and price support were tagged yesterday at 1265. As noted 1220 area would be the next stop before my 1170 ultimate target. I've hit the trifecta so far. The superfecta would hit at 1220 and the pick 5 would be at 1170 (for you dog racing fans out there).

I'll grind a bit in the chartbook to see if there is anything ground breaking you need to know about. I'll get up andother chartapalooza soon and as usual pst charts during the day in the commentary and on twitter and FB. Right now things are pretty much on cruise control waiting on the EU and the Fed to make a move (or not) at this support level. Markets don't just go straight down and a corrective may be due of some sort. It appears that the ultimate top is set and a move above 1340 from here would be out of the question. I think you need to be getting your ultimate exit plans out of the file drawer and start executing the beginning stages.

GL and GB!

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