Tee 'Em Up - We'll Knock 'Em Down

As the top churns the news becomes more unrealistic by the day. Let's just jump right in.

The WSJ has Geithner Pushes for Tough Global Capital Rules. When is this moron on a power trip gonna get a clue? We should not be kissing butt, but we sure as hell don't need to be pissing off anyone right now. "U.S. officials have called for tougher capital requirements for months, but Mr. Geithner’s detailed proposal comes as many European leaders have shifted their focus on bank regulation to things such as limiting the size of banks and caps on bonuses. So the U.S. proposal could be controversial and set up a clash of top regulators as fault lines form over the best way to supervise banks." You see Timmay is so deep in the pockets of the corporate financial behemoths that he is not taking an agenda to the meeting for us, he's taking one to protect the banks and allow their "to big to failness" the grow even larger. WTF is this guy thinking?

Perhaps everyong but Timmay has read this, Prag Cap brings us THE STIMULUS CAN’T SAVE THE STOCK MARKET…. This is my kind of article, "In fact, you could argue that much of what governments have done have actually made the problems worse. Unfortunately, we haven’t solved the problem of excess debt and all the stimulus does is prolong and delay the eventual day of reckoning with this mountain of debt. Comstock does a wonderful job of detailing these long-term issues." Now you are talking. Someone telling it how it is. "It is unlikely that we’ll solve these problems until we admit we have a problem, bite the bullet and begin focusing on the real problems that got us in this mess to begin with. Printing more dollars and encouraging more reckless lending is not part of that solution…." Talk about ringing the bell - give that man a prize.

At Trim Tabs they are following the Fibonacci retracements for insider selling moving from 31 times to the full 61.8x retracement exiting August. As usual, TD and the gang dig up the truly dreadful stuff we all love to read. In Insider Selling/Buying Ratio Doubles to 61.8x TD has, "TrimTabs earlier disclosed that the ratio of insider selling to buying had averaged about 31x for August, with $6.3 billion of insider sales matched by only $210 million on insider buys." You'd think you should hear this news somewhere other than on Zero Hedge.

The Big Picture has Personality, Emotion, and Trading Performance. "In that study, we found, no single set of personality traits was significantly correlated with favorable trading outcomes. Rather, it was emotional reactivity overall that seemed to best predict profitability." I suggest you read this. With all the emotion I read in the chat rooms and get in emails it could only help. Behavioral finance is cool shit. Really.

FT.com brings The global consensus is starting to crack to the table. Ok, I read this and thought I was reading a CNBS script. Nothing in this article sounds correct to me. "The novelty is wearing thin. The eager anticipation and diplomatic hoopla that attended the London summit has given way to a certain weariness ahead of this month’s gathering of the Group of 20 leading nations. Back in the spring, leaders of the biggest economies could claim to have saved the world. What on earth do they do for an encore?" Encore? Fucking encore? Saved the world? And "That said, officials preparing the summit fear it will be something of an anti-climax. In part, that is inevitable. When the leaders last met, many saw a risk that the global financial crisis could yet trigger a 1930s-style depression. For once, a summit communiqué actually mattered. But the point of maximum danger has passed." What? The point of max danger has passed? What the hell is this dude smoking? Apparently he believes in the finance fairy and that all the off balance sheet assets that have been GAPed away will never reappear. Sorry, the usually reliable FT screwed the pooch on this one. Please remove all cool-aide from the building immediately.

And one last post from ZH, cause I can not resist - A must watch vid that will leave your jaw on the floor - Congressman Pete Stark Explains Leverage, Tells Reporter To "Get The Fuck Out"

Look for my morning post.

GL trading.

Is Thar Gold In Them Thar Hills?

Too early to tell. I do have a H&S labeled in this chart with a target of 126, but not counting on it or calling it (yet). The weekly vol is picking up which is good, but the indicators have not busted yet to my satisfaction. The triangle it is popping out of now is worth around 10pts to 1003 to 1005. The daily RSI is already at 70 and the S Sto is almost topped. It did gap perfectly thru the upper trendline and has set a series of higher highs and lower lows. I'm gonna wait and see what happens around 1003 and the neckline in black. Sho nuf looks good tho. Maybe a little too good if you know what I mean. It is set up to bust a nut, but proceed with caution.

From the FT - Gold edges nearer $1,000. "The dollar’s recent slide against other currencies has helped underpin gold. Nevertheless, traders and analysts were doutbtful about the prospects of a substantial rally in the gold price beyond $1,000."

Interesting article I found on Steve Quayle's site (yes, I look in strange places for stuff). The 1-3-6 Rule and Gold Begins to Move by John Galt at Shenandoah.

UNG getting bitch slapped this am. Ouch.

GL Trading

Chart better viewed HERE.

Morning - Let's set Up the Fall Shall We?

Let's set up wave 3 today and tomorrow with a nice corrective 4 up and 5 down and then the 2 corrective. The bulls are gonna fight back I believe. Yet another muted news reaction to the IMO bad employment numbers. When you come in "somewhat better than expected" as reported by CNBS but are still cranking out 500k + numbers, things suck. No way around it. Remember this is a lagging indicator and jobs means nothing in the overall scale of things.

Chart one - Daily /ESU9. Notice the channel? That is the GSEC channel (as discussed previously) Well, it is purportedly petering out. When this breaks down, I'll concede the top is in. That is P2. I would like to point out that that tiny little light blue blip on the chart is the channel we are in now (chart 2 below). Not much in the overall scheme of things. I'm looking for something much more noticeable to start P3.



Chart two - /ESU9 15m. Notice the channel? Wave 1 down as they are calling it (I'm not there yet). First note the top of the channel is right at 1015 now (the 200ma monthly SPX is at 1018). What I also want you to notice are the two strange red lines running thru the chart. The top one is the 50% line of the GSEC and the lower is the 75% line. While not always accurate, the do have relevance when trading inside of larger formations like the GSEC. Notice the interactions with these trendlines here.



I'm gonna call flat to up today as the corrective move off of the last top continues and we set up the 5th wave of this move down. I'm not all that comfortable with the call, but the 30m and 60m indicators are bottoming which might provide some support. /ES fibs are at 50% 1009 and 61% 1014. I do not see the market going back over 1015 for some time but not under 974 either as we churn thru 4 and 5 of 1 of 3 and then have the 2 of 3 corrective. Matter of fact, you can take a week off if you like.

Remember - If you missed the supposed "top" - no biggie. We are in a 1 down. 2 down will retrace a good portion of 1 and provide a good entry point (I use these as places to enter a second half of a longer swing trade or to exit a bad miss). Just so you are in for the 3 down you will get the meat of the move. So, don't freak out. Be calm and patient and set a strategy (and please always use stops).

I'll be posting on VIX, gold, dollar, oil and UNG (again) later today. No news last night as it was a crappy day, so I took a break.

I almost forgot - college football kicks off tonight. Sveeeet!

GL trading.

Time For Another Thank You Note

Somehow my friends at Zero Hedge decided to include me in their new blogroll. TD and the gang are more than kind to include me. My readers know that I rarely do a post without including some sort of more than worthy post from TD, Marla and the crew. To be truthful, without them and the many other blogs I "borrow" material from my blog would be, well, just another blog.

The Internet is a wonderful place full of great people and more knowledge than you can shake a stick at. It is a microcosm of the good things left on this planet. Here race nor religion nor nationality matter. It culminates in a commonality that we should try to embrace off of the web. However, that is easier said than done. Sadly we have been molded by our individual experiences and the piss poor likes of CNBS, and we have developed some serious character flaws (I blame all of mine on years of Crudlow - thank goodness I have never liked Crammer).

Use the web to your advantage. Grow, learn, make friends and use your knowledge to help others. TD and the gang exemplify this. They speak the truth and spread the word in an effort to (in my opinion) save this once great nation. (TD - If you would like to clarify that it would be appreciated). You should as well.

Read and heed I like to say. Their advice and reporting are exceptional and more timely now than ever. You should visit ZH and all the blogs on my blogroll as often as you can. I promise you will be better off than if you did not. I sure am.

Thanks ZH for the listing and for all you do,

Shanky

UNG Time (About Time)!

UPDATE: New UNG chart at 3:15.

NOTE: As I did this post I had to move the fibs DOWN three times to keep up with the fall. Amazing.

First let's visit the United States Natural Gas Fund Site HERE. This is where you need to read to understand this investment if you have not read about it. There you can find the NAV of UNG as of the close yesterday $8.70 and price closed at 10.27. That would be a 15.29% premium to NAV. That has to correct. That will keep downward pressure on the price. I'm not gonna rehash the rest of the story.

First chart is UNG and Oil. The historical price relationship should be restored eventually. How this happens is any one's guess. Right now I'm thinking Oil will be doing most of the work.



The next chart is a new 30m chart I threw together today realizing we all needed a little better drill down than I was providing. All I can say is that UNG appears to be oversold based on all indicators and has been for some time. The move over the past three days looks capitulative to me. Too steep and totally parabolic right now. The problem is I am not about to recommend a buy. I just can't. If you should trade it, please, 10,000x please use stops and have a strategy.

It will correct at some time in the future and that will be a good winner, but if you have been averaging in all the way down you are in deep shit. I started buying at 23 and got out at 19. Have not touched it since. Don't plan on trying to catch this falling knife. You bottom fishers waiting, I have one question - Do you feel lucky? Well, do ya PUNK?

Good Morning

Channeling down as can be seen in the 30m /ESU9 below. Small pop down on the disappointing ADP report this am. So what if they missed by 60k. Whats 27%? Hell, Ford missed by 50% and that really did not mean shit either. I am surprised CNBS reported it. Pay no attention to the man behind the curtain.

Daily chart - Broke thru lower rising wedge tendline and back testing the top trendline of the last triangle break out and the 61% fib off of the 978 low. SPX runs into lots of support from 980 to 965. Lower BB at 980, 38% fib at 974 and then the 50ma below at 965. Then the 50% fib is at 954 and 61% at 934. The ONE THING that gives me caution about the daily chart, even though the RSI trendline is busted, is that the RSI is sitting on 50. ADX is about to bear cross.

The 60m chart - Indicators almost bottomed out and blown out bottom of lower BB. I no longer pay much attention to the 60m indicators as they have been very unreliable of late, but they are near the bottom and should embed.

I expect some follow thru from yesterday. If this thing gets some momo look out. If this is the end of a 3 and we have a 4 corrective, 5 should take us right to 980/974 range. That would end 1 of 1 of P3. Holiday weekend coming up and some are speculating some big bank issues then. Might make a good set up for a 3 down on Monday!

Kenny has his C top and Dan has his P2 top called. Still grinding over my no top call. Thanks for all the positive emails and comments. They are appreciated. As Aidyn noted, calling the top is not important, making $$ is. I am short and playing it as the top is in and you should too. THE STRUCTURE OF THE FALL is the most important thing to pay attention to now.

I'll be doing the long promised UNG post this am.

GL trading!

Am I Conceding The Top Is In? (And My Best Chart Yet!)

Am I calling a top? Believe it or not, no. Not till the lower wedge line is pierced will I be a believer. For the 100th time, I am playing it as the top is in, but not calling one. This is the hardest decision as a prognosticator I have had to make yet. Tops are supposed to make you grind, and I am grinding now. Maybe the true "top" was in April and everything since was the "blow off" sucker rally. The pump and dump is done. That really makes a lot of sense. That should be the call I make here and now. That is what my gut is saying.

Do the manipulators have any more tricks up their sleeves? Who knows? Hard to imagine they don't. The world is crumbling down around us. The "good" news is beginning to be ignored. China is backing out, more bigger banks are failing, the treasury is out of money, the FDIC is bankrupt, the Fed is monetizing debt, unemployment is maintaining a steady 500k clip, 40% of the homes in America are under water, the consumer is dead, GS can front run the world and no one cares, the national debt is insane, even CNBS's constant parade of bullshit is not working any more (today was priceless - they had no clue what to do all day - fuck them) and we have the worst administration running the show in history.

Am I being stubborn? Yup, my worst trait. Like a spoiled child I want my 1050 to 1121 target in October. Should I be happy that I got within 11 points and one month of the lower target range? FNA Absofreakinglutely. That is better than most if I am not mistaken and I ain't paid to do this shit. Should I be happy that I stared all my permabear buddies down and stuck to my guns all the way up? Yup. I did good or you would not be reading this mindless masturbation I am having with myself right now. I am churning inside. I'll hate missing "the call", but at least I will be playing it right.

If the top is in. Let's rock this party. FAZ me to the gills. WARNING - If the top is in, you are now on the ride to hell in a hand basket. You know they say to be careful what you ask for? Here it comes. There is no telling the misery and total destruction this could bring. Anarchy in the streets, soup lines, wars - this is gonna suck and suck for a long time. I anticipate at least TWO market closures on the way down. When they start running for the gates, they will all run at once. More on all this later.

Since we're topping I'll throw this in. I enjoyed the ride up, kind of, well, not really. Thanks for taking it with me. I appreciate all my readers very much. The ride down should be really interesting (for lack of a better word). If you thought I ranted during the market going up, wait till this country is getting ripped apart. I'll really be pissed.

On to the best chart I have done yet (and does a nice job of marking the top I refuse to call)-

I love what I have done with this chart. My daily indicator chart on steroids. Pay attention to the ADX. The large vertical red lines are all keyed by ADX sell line bottoming out.

Look at the coincidences with the other indicators (and the SPXA50 just below). PPO, RSI, MACD, there are NO FALSE TOPS HERE. Only 4 on the chart to choose from and they all worked. The only questionable top was in April when this run should have ended, thus furthering my argument that all gains since April have been bullshit manipulation and are not real (thus will be evaporated).

Right now SPX is in a channel down that I will post in the am or you can see here.

Chart best viewed HERE.

GL Trading.

Morning Post

The most encouraging thing for the bears is the recent trend of lower lows and lower highs. Keep this in mind if SPX should get to the 993 range. Curious to see if SPX forms a descinding triangle here. There are all sorts of various support points from 1015 thru 975. On the daily chart it looks like the turn may be for real this time as S Sto and MACD have bear crosses with a negative and slightly falling MACD hist. This fall does not have any momo so my hopes are reserved (but that could change). The lower trendline on RSI might hinder the fall. If that breaks then it has to get thru 50.

SPX closed on the lower trendline, but it should crack that at the open. On the daily SPX chart the lower BB is at 981, the 50ma is at 963 and the fibs are 38% 974, 50% 954 and 61% 934. I'll note the BB 20ma is at 1010.

On the 60m chart you have a little different scenario. SPX closed on the lower trendline and the 38% fib off of the 974 low. The upper trendline of the last triangle sits just under 1000 here. the fibs from the 974 low are 38% 1016, 50% 1009 and 61% 978. S Sto has bottomed on the 60m chart and should embed a little. The rest of the indicators look sick and might have a day or two of fall left in them.

The 30m indicators look to have bottomed but could embed.

/ESU9 has us in a falling wedge which fits most of the above. I do not like the lower trendline and expect it to reset today. Set to open slightly down. Lets see if the trendlines fight back. If not, it could get ugly.

GL Trading!