Thursday, November 8, 2012

Morning Charts 11/08/12 SPX /ES

At this point we're so far down the rabbit hole nothing matters much anymore. It is funny to hear the MSM regurgitate what they are told to say as they worship every word that dribbles from the 'brightest' economic minds of the day. Short minded, owned, ignorant, uneducated, lazy, egotistical, trustful, pick your adjective for the pompom waiving crowd. All they accomplish is printing trash that misleads the sheeple into believing all is well.

Hell, as long as the government is spending like there is no tomorrow (no pun intended) what could go wrong? We're all good. O is gonna be here to support the spending for another four years (no pun intended). As long as the government keeps on printing all is well. What's the problem? It has been proven that with modern technology that money can be created via the clever use of 1's and 0's in a computer. All we have to do is hit CTRL+P and we're all good.

Well, maybe not. This is where the word "fiat" comes in. Trust me, it wont be long till the Fed starts rolling out their own fiat commercials with Catrinel Menghia in them to get you to use their dollars at the rate we're going. Money can not be backed by thin air and work. It has to be backed by something to work.

Is the BOE starting to see the light? This mornings dose of reality Bank Of England Halts QE After "Potency Questioned" brings the QE to infinity approach into question. Funny that London, the place where you can hyperrepothecate (that's a fancy word for making dollars magically appear out of nowhere) money more than anywhere else in the universe galaxy, should be questioning their easing stance. This is not good news for the Keynesian crowd. Are we seeing the crony capitalist ranks start to splinter?

You know how bad everything else is, so let's get to the charts.

Time for an overview - We're living (literally) on borrowed time here.

Monthly SPX - Dire, dire, dire. As I have been showing for a couple of months now the divergence and turn here is unmistakable. This is near perfect storm type stuff. How the Fed/Treasury avoided the 10/20mma cross at 1300 back in June is a  miracle (LOL). Intervention? You tell me.

Weekly SPX - This chart continues to worsen. The long term wedge is now complete. There is no more room to run.

Daily SPX - The last rising wedge of the multi-year formation is now complete. Price now sits on the blue wedge support They can drive price to higher highs from here, don't ever doubt the Fed's ability to manipulate the markets. When (not if) this wedge cracks it will be all over. Watch that blue support diagonal. I'll most likely be shorting with both hands on a break and backtest of this point.

Will they allow the market to correct into Christmas is the big question? As usual I preach patience. I feel that I missed calling the top at this point, but I had to get thru the election. I do not trust anything associated with these markets. Technically, this should be it. I hinted and stressed badly over calling the top (as you may remember) basically all of October. I'm not sure how team manipulation can pull another hat out of the bag with where things are headed especially near term.

Wait for a catalyst that will eventually lead to my "event". I continue to scalp long and short and am not pulling the trigger on any long term holds just yet (other than some SH that is constantly held for portfolio balance of which I think market neutral would be a good place to be here). Yesterday was a good start. A monthly confirming candle would be nice and should set the tone going into 2013.

GL and GB!

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