Tuesday, September 18, 2012

Morning Charts 09/18/12 SPX /ES

So what have they achieved over the past few weeks to solve the horrific issues of the global economic and financial distress the world is experiencing? What have they done since June that stopped the slide in the markets and brought about a 200 point rally in the SPX? With imminent financial destruction staring them in the face and global political unrest rising, what resolution did they come up with that would substantially correct the underlying fundamental issues facing the global financial and economic malaise?  At the end of almost four years, what have our glorious politicians and central banks done to put us on the right track?

QE3 and an extension of the ESM and EFSF was all they could come up with. Sorry guys, throwing more money at the problem is apparently not going to work. Bolstering and continuing programs that have done nothing to address structural or root issues have not and will not do anything but placate markets and worsen the fundamental issues that we should be trying to correct.

I guess none of that really matters when you can print to infinity on one hand and control (cough) inflation on the other. Look at the right hand and pay no attention to the left. You are almost as well off now as you were in 2007 is what they are saying. Well, according to market valuations that is correct. According to reality, that is horrifically wrong.

I've pointed to this before. This is a little secret that your cheery adviser will not tell you. Although your portfolio values are all rosy, have you taken a look at the underlying  value of the dollar? Did you know that since the roaring tech bubble top in 2000 your dollar has fallen in value? Did you know that your purchasing power has shrunk by 35%. And the Fed tells you there is no inflation as they promise another round of QE destroying what's left of the global reserve currency.

I keep telling you to get out of the dollar. Buy gold, buy silver, buy a tractor, buy anything but get out of your dollars. This trend is not ending and still has a long way to run. One question, what is the cheapest way to make your debt more affordable if you control the currency? Ta Da! You devalue that currency. So they increase the debt and decrease the underlying dollar making the debt more affordable. Print and devalue, this is the Fed's brilliant policy to end this great depression.

We used to bitch a lot about the Chinese manipulating their currency. Well, who is the master manipulator now? Fair is fair and cheating is cheating, we've devolved to their level to make our economy appear to be stable at best. The raw economic statistics are astounding with 50 million on food stamps, 23 million unemployed and so on. Hell, Obummer loves those stats. The dems love more on the dole. It increases their voter base. Why should they screw up their best wet dream ever?

So here we sit with totally dysfunctional leadership heading into the next round of congress that absolutely must cut one trillion in spending this year to balance the budget. Ya think that's gonna happen? Earnings season is setting up to be a disaster. The EU is crumbling. Warships are massing in the gulf and MENA is burning. All of this mind you is happening leading p to the presidential election and all they want to address is gay rights and abortion.

What's the term? Hell in a handbasket? I think that's right.

As for the charts, the charts have been ready for months and my final two signals came in last week technically marking the neighborhood of a major (if not the major) top. I continue to yield to the Fed and their raw market manipulation which has served me well. I hate it. You hate it. It is the hand we are dealt and must play as they control every aspect of the markets now.

As for my pending top call, I have to decide when and where to defy the Fed and team manipulation. At this time the Fed has shot its last bullet and the economy, earnings and the EU will show their weight in the argument sooner than later. I believe I have to pull this trigger soon. Upside to1502 2007 resistance is still possible. If I do call a top here that is the worst I can miss it by I believe.

Minis 4hr. Rising blue wedge off the June lows is overthorwing. A nasty set up. All catalysts are used up now other than raw price intervention.

I believe it would behoove me to get back into the chartbook and start updating some things at this time. As you can tell updating it over the past month or so was a mute point and thus I have not touched much. The charts are ready. There is no magical TA bullet to make a rigged market turn. There is no more Random Walk theory. there is only the Fed and the CB;s driving the bots that control 70% of the trading providing false liquidity and the illusion that a real market still exists.

Get your money out of dollars and into real assets folks.

GL and GB!

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