This brings us to JPM, "Oh, and yes: for the purists, here is the bottom line: of that $5.3 billion in "earnings", $1.3 billion or double the expected (at least from Barclays) $616MM, came from loan loss reserve releases. Accounting magic wins again." Ahhh, accounting magic. One of the pillars of deregulation and the new normal.
Earnings now is more an exercise than an event. It has gone from a most anticipated frontrunner event to a ho hum yawner where (because of accounting miracles) we all know exactly what's going to happen before they announce. There is no more suspense. They try to create it and act like there is some real drama, but in reality, when you can plug any numbers you want into the spreadsheet, its become another lipstick on pig event and nothing more.
The MSM still needs something to crow about, and the money managers (term used loosely) needs something to tout as the next big winner. The Cramers need something to entertain the mass of ignorance that once was a wise and knowledgeable nation. Crank up the hype machine. It's earnings season.
BARF! As stated here literally for years, do nothing more than follow the Fed and you will win. QE ON = Markets UP. It is that easy. More recently STB's narrowed that formula to listen to nothing more than taper talk. That's the only thing that moves the market. See yesterday for the most recent example of that.
On to the lie -
OK, we finally got a retracement greater than 23%, but that was off of a nothing blow off top move from the 1753 low. Want to impress me and make a more meaningful move? Try a retracement off the November '12 lows where all this BS really started. A simple/normal 38% retracement of that move would take us to 1642. Yes, that's a simple/normal move to 1642, but sounds like the end of the worls doesn't it. HA! That's still 56 points ABOVE the '07 top. LOL, this thing is so overbought.
I have been harping for the past few weeks about the bearish movement and the overbought conditions. All it took was a little taper talk yesterday and a four alarm fire went off. This market is VERY nervous. Everyone knows it should be topping and is in dire need of a massive correction. The problem is that with the underlying everything any correction is going to become a crash. Everyone has one finger on the eject button, everyone.
Minis 60m - All NT and recent support gave way yesterday. Yesterday was, a big deal. It was the first big crack in the dam. Don't panic, but be alarmed. We have to walk these things down one support at a time. Right now the red diagonal of death at 1750 seems like the obvious point they may let it go to, but we have about three other supports to get thru first. I added the yellow falling channel yesterday. I lowered pink support yesterday and even that got blown thru. Beige channel is gone. Upper red rising wedge resistance has been taken back. Green and blue are next hurdles.
Minis 4hr - Here is larger look. The pink rising wedge to potentially end the green rising wedge failed yesterday. Uppe red resistance was taken back. Green rising wedge support is next then the blue long term (like off the '08 lows) resistance is next. Then the red diagonal of death lies with the green rising wedge target line. Not till the 1750 area goes will it be game on for the bears.
You remain calm while they remain desperate. They are at their most dangerous and illogical at this point. Let them make the mistakes and you capitalize. Follow their lead.
More to come below.
Have a good day.
GL and GB!
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