Morning Audibles 3.22.10 - No you didn't wake up in a TIME WARP

You're not waking up in a time warp. I'm simply RE-POSTING my thread from February 27, 2010 here so one might see it upon reflection. At the time, I was calling for a little mini bounce in the Euro (to backtest some levels). I wasn't sure to what degree it might bounce but I offered some hints (and a timeline). I also suggested that the dollar and equities were going to be caught in the vortex of this movement, & that vortex would likely extend through March 16th, and OPEX Friday. Below, you'll see that I'd suggested a level of 137.65 to be "backtested" by March 16th. In fact, 137.53 was the level that FXE hit on 3/16/10. A failure to break through that level led to 3 straight RED CANDLES. As such, the Euro is now likely headed down towards the 129.22 level (by my estimation, by May, as indicated).


Unless you live on another planet, you probably know what this means with regards to the dollar, and equities in the process. Of course, if you watch television, they'll make up different reasons for what and why is happening. If you choose to believe them, be my guest. Meanwhile, my REPUBLISH of my February 27, 2010 thread.


--- FEBRUARY 27,2010 - WEEKEND EDITION ---


Not much in the way of sports this weekend except for the BIG GAME between the US & CANADA for the Gold Medal in Mens Ice Hockey in the Olympics.


Also, the NFL combines have started so its time for football fans to get a sneak preview at the April draft prospects, and how their beloved teams may re-shape themselves during the offseason.
Next week, the first "spring training" games start in the Citrus & Grapefruit Leagues, and, of course, the selection committee, next Sunday, will set the field for March Madness after the completion of the conference tourneys (which begin next week).

I thought I'd stick a little to business this weekend (or, UNFINISHED business, as the case may be). The UNFINISHED business has to do with the timeline needed to backtest some levels in all markets, and if indeed the rally from the March '09 lows is complete and re-testing, OR, if markets have another "leg up".

I thought I'd start a little with the EURO here (because it has recently been the center of attention with regards to the debt problem in Greece and other Euro zone countries). The Euro has been hammered recently, but the question is, is it positioned for a "technical bounce" here? If so, how high is that likely to extend, and how much does that effectively PUT ON HOLD moves in other markets?

I'm going to apologize in advance the "graphics" & annotations on the chart I'm using. It's really the only chart I use that does a good job of "locking on" to price levels and other geometric stuff like that. First, the chart, afterwards, I'll narrate a little further my annotations into a story line.




I started out all the way back at the October '08 lows (a period when everyone remembers the rush to the "safety" of the dollar during the credit debacle). I like to use PIVOTAL moments like that because I think they tend to reflect raw sentiment. The "sentiment" or "strength" indicators (like RSI & MACD) are usually good reflections of that. The first thing you notice from that time line is that the UNWIND (back IN to the Euro) happened rather quickly thereafter. Even though the Euro made many subsequent waves both up and down, the December '08 OPEX period was where the main thrust part of the move ended. As the market continued to show nervousness through the March '09 lows, the Euro reflected that yet again. Then, as it bottomed, together with equities, it was as if it was decided in that moment that the dollar would act as the "currency du jour" for the carry trade all through '09. 

That idea showed signs of being tired in the June '09 time period, and again in the September '09 time period (3P&ADH maybe? - just prior to the dome). But it was if the market said, in September, "hell yeah! lets just ride this baby out a little farther!. Finally that upper trend line (from December '08) was taken out to the downside as equities were weak in the latter part of January '10, but I believe the Euro is still responding to the levels which were established clear back in the fall of '08. On the chart, I've made those wedge patterns BOLD.

Oftentimes one can use WEDGES such as this as "time" indicators. Time expires when the wedge expires, and the price level at the expiration dictates as to whether or not it's currently OVERSOLD or UNDERSOLD. Against all odds, many times the price will magically revert to those prices so as to complete the picture.

It should be as clear as day (in looking at the FXE chart) what I expect the Euro to do and more importantly WHEN I expect it to do it by. After that, it's a matter of looking for the NEXT POSSIBLE gravity point. Using FIBONACCI levels (from the high of FXE @151.27), it has already taken out the lesser FIBOS to the downside. the current two levels in question are:

.09 = 137.65 (which has already been taken out, but hasn't been backtested)
.1457 = 129.22 (which has yet to be reached, often DOES when a previous level is taken out)

Therefore, the "latter" number is my target. It should be clear on the chart that I anticipate that level could be reached on or about the first week of May 2010. (You can see the "price channels" I've drawn to reflect that possibility)... But the question is... "A little backtest first?"  (perhaps back up to around the 139 level, which would complete the longest existing wedge pattern AND cover the February 4th chart gap in the process). Place your bets!

VERY IMPORTANT NOTE: In drawing your own conclusions, note also the lines which are not bolded. They represent destination & resistance points as well. As of Friday, FXE appeared to be poised to break out of the most recent declining wedge. That is often done with a very sharp and decisive move. But it could do that and simply "wither" thereafter. 137.65 is also an important FIBO number and it corresponds with the next declining wedge price channel. That could be reached as early as next Tuesday or Wednesday. In the end, FXE may never stretch as high as the 139 lever OR fill that 2/4 gap. Failure to extend much past 137.65 without extending further will likely mean that everyone will just have to sit around and drum their fingers until the "gravity switch" from the BOLD WEDGE expires. What I like though is how the subsequent wedge lines seem to point to a 129.22 conclusion in May... For those of you who have been following some of my other charts & conclusions, that idea corresponds with some levels in the dollar, and in gold that I've discussed before.

The broader picture, immediately, of course, is that any STRENGTH in the Euro in the next week or two will likely be reflected, at minimum, in a failure to muster a rally in the dollar. It also probably means that equities may remain buoyant until this plays out. I want to be clear that I don't expect this to happen in a straight line. In fact trading might be very choppy here (because to those focusing on "shorter term" patterns it might all seem confusing). 

Remember the MACRO picture as well. Greece has until March 16th to come up with its deficit proposal. If you believe in "market manipulation" theories, it would be easy to conjure up a scenario where Euro shorts are SQUEEZED OUT OF TOWN here on rumors that Germany is going to take a "hardline" approach to this. I expect to see a bunch of headlines on Germans grumbling about Greeks and Greek "austerity" measures.

It's all a show, and don't worry, CNBC will do their best to tell you what happened AFTER it happened, and fit the news story to the price movements. 

199 comments:

CV said...

I'll remind everyone as well that the GAZILLION March 2010 calls on UUP at the 24 and up strike price have now all expired worthless...

So the coast is clear...

The squid must have been the writer of those calls (which were mostly purchased in the September-October timeframe of last year...

A few weeks ago, when the 24 strike looked like it might be attainable, Goldman put out a BUY recommendation on the Euro (with a caveat for a STOP LOSS under 1.35)...

So they managed to keep the 'tools' distracted just long enough (until the options expired)... Now I'm sure that they'll be underlining the fact that they DID, IN FACT, put a "stop loss" on that...

Ladies & gents, that's what "GOD'S WORK" looks like!

mcHAPPY said...

Nice time to revisit the near past, CV. Good post. Looking forward to the EUR:USD at 1.30 followed by a bounce and the start of the "Great Slope of Hope".

CV said...

@McHappy

Of course, CNBC or the other media outlets won't see it that way...

Here... I'll write CNBC's headline for them now so they don't have to rack their puny brains...

"Dollar Rises showing 'confidence' in healthcare bill"

What an effin' dog and pony show...

CV said...

Thousands rally against Putin, dozens detained

It isn't just Greece people...

OBAMA - Are you listening? Or just watching basketball?

CV said...

While we're having fun... remember these headlines?

March 10 (Bloomberg) — The worst of Greece’s financial crisis is over and other European nations won’t follow in its path, said former European Commission President Romano Prodi.

“For Greece, the problem is completely over,” said Prodi, who was also Italian prime minister, in an interview in Shanghai today. “I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”

"Greek Prime Minister George Papandreou, during a trip to the U.S. yesterday, said President Barack Obama supported the measures that Greece is taking to put its public finances in order."


Well, Prodi & Obama seem to think everything is fine... Now, everyone back to their brackets...

CV said...
This comment has been removed by the author.
McFearless said...

Retail sharp as always, I already had a meeting this morning, they didn't even realize the HC vote was last night.

CV said...

@ben

Are you following GOLD here?

Eur/Gld trade seems sweet at this point...

CV said...

Hey maybe we'll finally have a HIGH VOLUME day (because stocks are down)... LOL

McFearless said...

C,

I've still been watching silver closer, and the break back down below $17. I remember you and Karen were all over that Eur/Gld trade though. Nice one.

From the previous thread, as I'm sure this is going to get discussed today, just some thoughts I had this morning when I woke up:

Some Historians credit the Plague with ushering in modern medicine and the end of "other" forms of treatment, a time when 1/3 of Western Civ. died.

Today being personally healthy is thought to be a natural condition, an entitlement we are born with in the United States, one that only a bad doctor can mess up. I think this speaks volumes about the social mood. I'm reminded that Medicare and Medicaid were also launched at the TOP of trends in social mood and therefore the markets in the 60's. I don't think events like this happen mid-trend.

karen said...

morning! haven't been able to catch up with last night's AT post or comments.. thank you 2small2baill for posting correct link to my hotel finance article.. You can check out any time you like...

McFearless said...

It doesn't really seem that the futures markets have been a very good indication of what the cash are going to do, at least not lately.

Any thoughts on this?

AmenRa said...

McF

I still watch the futures but their ability at determining direction is waning. Sometimes I think it is a setup. I'll watch the cash market instead.

CV said...

@McF (9:43)

Here's my best guess...

It DOES seem to me that the futures will point to taking out certain fibo levels... I posted this last Friday...

---

I'm going to start with some basic FIBO levels from this weeks high on the SPX of 1169.84.


.008 = 1160.48
.013 = 1154.63
.021 = 1145.27


---

So, since the 1154.63 has now been taken out, it would appear that we're on course for at least 1145...

I think the CASH is just following the ALGOS... There was a gap down today... Some of the move back up after the open was closing a portion of that gap...

The CASH is just shutting doors, the FUTURES are where we're going... JMHO

CV said...

also...

78.6% retraces seem, to me, to be the norm these days...

It appears that the algos have caught onto the 61.8% ratio...

Lloyd doesn't want to leave any 'pennies' on the table in doing Gods work...

Leftback said...

JOHNNY hour. Should see what this market wants to do by 10.30 or so.
We are flat apart from our hedge of the long bond which we may keep on most or all the way into the next jobs report...

To the people who asked about munis, I would say, don't buy here. Wait until they really need the money and spreads have blown out. It's not about defaults so much as better opportunities coming later. Cash and Treasuries are king right now.

McFearless said...

Also, AT's second Scribd document, and the second page, that right there is a P3er's worst nightmare come true.

I think we'd consider that the Japan scenario if we were looking for some sort of fundamental description.

McFearless said...

I find no compelling reason to own muni's here outside of the theory that taxes are going up, but of course, the tax status of muni's is already being threatened, so do you really want to put your money on that?

If you buy a muni fund, I'd guess 99% of the time you have no idea at all what you own, and it's hardly a simple muni in most cases. Study the financials and the transactions of EANAX as an example, that fund uses strategies that could completely blow it up at any moment.

CV said...

Buy a muni, and do your part to contribute to the bloated pensions of retired public workers...

Because WE ALL KNOW... Trash collectors have the RIGHT to retire on 6 figure salaries and free healthcare...

karen said...

Another must read NLY blog post: Leading Indicators and Breaking the Money Supply Log Jam

"The level of excess reserves at the banks has continued to climb into 2010, and through February stood at nearly $1.2 trillion (with a “t”). The normal amount is somewhere around $1.2 billion (that’s a “b”) during the last 30 years or so, and the previous record was that tiny blip you see in September of 2001, which was about $19 billion. We think we know a few reasons for the cash hoard: under-reserving, uncertainty about future delinquencies, regulatory and policy uncertainty, as well as a lack of loan demand from deleveraging consumers."

CV said...

@karen

Except for those occasional "risk on" days, where it's used to jack up C, FNM, FRE, & AIG common 30%...

Then the profits from those trades can be skimmed to pay bonuses...

Leftback said...

Lend money only when no-one else is lending....

Nobody has any idea what a muni means any more, especially the local small time business crooks who run the states and cities who got sold something by Wall Street and can't read the fine print. Fraud is rampant.

Brian the Broker's Shapely Assistant Tawny said...

It's going up JOHNNY, you are SO STRONG. BRIAN told me you were...

McFearless said...

I don't know what to think of excess reserves in disequilibrium. We don't really have any data to review. I haven't read the NLY thread but will, but the chart everyone is all hung up on goes back to 84 I think. I've often found myself to be odds when I read about excess reserves because the way they are often described is not the way I believe our system "works"...imo.

Mish lined up the following:

1) Lending comes first and what little reserves there are (if any) come later.
2) There really are no excess reserves.
3) Not only are there no excess reserves, there are essentially no reserves to speak of at all. Indeed, bank reserves are completely "fictional".
4) Banks are capital constrained not reserve constrained.
5) Banks aren't lending because there are few credit worthy borrowers worth the risk.

McFearless said...

Today is strange, no calls or emails yet about HC. I would have thought for sure I'd be getting a stock from retail that is about to "explode" off this news.

I guess it's only 10:30 though.

karen said...

FYI, on AIG from Barron's:

LATE FRIDAY, THE INVESTMENT vehicle controlled by former American International Group (AIG) CEO Hank Greenberg, Starr International, reported cashing out of most of its AIG stake via a forward-sale agreement with UBS. The filing stated that the 10 million shares were effectively sold at about $27.80 per share, a discount to AIG's closing price of 34.80.

CV said...

Just covered that little gap at 1163 on the 5 minute charts...

I say the SELLOFF can commence sometime around now...

CV said...

Johnny hour over in one minute...

CV said...

@McF

Buy CORNELL

Sell KANSAS

Anonymous said...

Looks like the S&P is bouncing off that 1150 support area, at least on the first go. -AT

AmenRa said...

They're still buying 2's, 5's, 10's, and 30's. Per LB comments from another thread "We never correct when they sell 2s, we do see sell offs when they sell the long bond!!"

Mannwich said...

But gas prices at $3 makes TOTAL sense? How?

http://www.calculatedriskblog.com/2010/03/dot-vehicle-miles-driven-decline-in.html

CV said...

Wait until BUCKY gets moving...

Brian the Broker's Shapely Assistant Tawny said...

Oooohh, JOHNNY, you ARE strong.... so MANLY.

Brian the Broker's Shapely Assistant Tawny said...

JOHNNY, you are so BRAVE. After saying in March you'd NEVER BUY A STOCK AGAIN. BRIAN told me you would show your true colors...

CV said...

Stocks in U.S. Gain as Health-Care Shares Climb on Overhaul Bill's Passage

So there you have it... I didn't think it would take long...

Must be pretty easy being a financial journalist...

CV said...

Here's the WEATHERMAN version...

Stocks are up based on a rally in umbrella company shares because there's rain in Washington & new York today...

CV said...

Oh...& here's Bill Miller covering all bases...

U.S. Stocks Outlook Is ‘Quite Positive’ for Legg Mason’s Miller

"March 22 (Bloomberg) -- Legg Mason Inc.’s Bill Miller said he has a “quite positive” outlook for U.S. stocks and favors technology and financial companies because of their valuations."

“Given how strong the market has been in the last month, I would not be at all surprised to see the U.S. market pull back in a 3-to-5 percent range"


So there you have it!

Leftback said...

They are buying sunglasses too because the future is so BRIGHT.

Bill Miller said...

Some have called me a Momo Monkey.

Nic said...

Interesting people move in FX this week.
Google just poached Philip Brittan, Bloomberg's former global head of FX, to head up their new data initiative. Talk is pretty thin at the moment but seems to be focusing on the possibility of Google taking on the big boys, ultimately revolutionising the provision of institutional quality real time market data and analytics.
If they want to use their deep pockets to have a crack at cheap / free data that's absolutely fine by me.
Very interesting hire, anyway ...

AmenRa said...

http://www.smithers.co.uk/page.php?id=34
US CAPE and q chart

With the publication of the Flow of Funds data up to the end of 2009 (on 11th March 2010) we have updated our calculations for q and CAPE, which show very little change from our previous calculations.

Non-financial companies, including both quoted and unquoted, were 52% overvalued according to q at the end of 2009. Net worth is virtually unchanged from Q3 to Q4. Domestic net worth fell through dividends ($83 bn.) plus net equity buy-backs ($95 bn.) being greater than net domestic profits after tax ($164 bn.), but this was offset by some small upward revisions to asset values. There was a small increase in the value of US foreign investment abroad ($27bn.), but this was less than the amount of foreign earnings retained abroad, probably due to currency adjustments.

The listed companies in the S&P 500 index, which include financials, were 50% overvalued according to our calculations for CAPE, based on the data from Professor Robert Shiller’s website. (It should be noted that we use geometric rather than arithmetic means in our calculations.)

Data for our calculations of q are taken for 1900 to 1952 from Measures of Stock Market Value and Returns for the Non-financial Corporate Sector 1900 - 2002 by Stephen Wright published in the Review of Income and Wealth (2004) and for 1952 to 2009 from the Flow of Funds Accounts for the United States (“Z1”) published by the Federal Reserve. Data for our calculations of CAPE are take from the data published on Robert Shiller’s website.

CV said...

"Miller said his fund boosted holdings in financial shares in January and February. He also favors consumer discretionary stocks, which are “over discounted,” he said."

So that's it people... MACYS GUF because of Bill Miller and his 16 billion...

Mannwich said...

And the melt up continues unabated. You cannot stop it, you can only hope to contain it.

McFearless said...

Bill Miller on valuation.

Amazon

1990's.

Enough said.

CV said...

@Amen

Yeah but can't you see... Bill Miller says they're a BARGAIN!

CV said...

What CV doesn't understand is why doesn't the SQUID just get on the other side of the trade from Bill Miller...

Nic said...
This comment has been removed by the author.
CV said...

@Nic

WOW... a "3 V" rating on that one! :-)

CV said...

In any case, we're sitting RIGHT ON 61.8% from todays low back to 1169.84...

SQUARE SMACK DAB ON...

Nic said...

Wot's a 3V?
I'm busy checking out the android phone now hehe

Leftback said...

Nic showed her TOP there, but then - she thought better of it....!
Missing Karen's shoes today, and Karen's legs...

LB is just watching the show today. UFB.

Nic said...

I do have that sinking feeling at this level, its true.

CV said...

@Nic

IM VVV HO... 3 "verys" in that one...

AmenRa said...

With of the hype about Google leaving China it hasn't lead to a selloff.

AmenRa said...

led

Nic said...

My top?? hehe

CV said...

Nice TOP Nic :-)

Leftback said...

T-Bill auctions complete at 14 bps on the 3-month bill and 23 bps on 6-mo. There just might be a run to safety at these levels....

Existing homes tomorrow. New homes Wednesday.
Time for a punt on the short side...?

Leftback said...

SPX 1175 has been a historical number of significance.
Might be a good backstop for the time being.

Nic said...

Rosie mentions S&P homebuilders this morning as the the most expensive part of the market.
https://docs.google.com/fileview?id=0B7not0MAZdrXN2Q4YzU4NDQtYmFhNS00NmI3LWI2OTgtMzgzNDZkMTViMGI3&hl=en

Leftback said...

Homebuilders and retailers..... all the result of a squeeze of epic proportions, quite likely a fully orchestrated one that contravenes RICO statutes. Historians will show that this market was criminal in nature.

Think of all the COLD STEEL that has been experienced around here the last few months... unnatural.... eventually normalcy will be restored.

NowhereStreet said...

"I'm busy checking out the android phone now hehe"

Now youre talking! :D Android pretty fair stuff. (iPhone watch your back .. again). And pretty decent top also. lb called it first, not my fault.

CV said...

@LB

Instead, they're playing RICO Suave

karen said...

for a quick, fun, look at the retail stand: jcg and lulu.. i have no idea why investors regard lulu as more worthy than jcg, but whatever.

karen said...

another severely overvalued hot stock: nile

CV said...

@karen

"i have no idea why investors regard lulu as more worthy than jcg, but whatever."

---

It's because they all read this blog and heard AHAB was getting into Pilates...

AmenRa said...

If China is about to announce a trade deficit then what does that do to the case about currency manipulation? article at ZH: http://www.zerohedge.com/article/stunner-china-set-announce-record-trade-deficit-march

CV said...

@Amen

They must be counting "paper copper" trades by Chinese farmers as IMPORTS... :-)

karen said...

a case could be made for a six month H&S top in APA..

DL said...

Prechter was on CNBC on Friday.

He’s bearish, but didn’t provide a timetable.

He did say, however, that 12-18 months from now, stock prices would be significantly lower:

Video:

http://tinyurl.com/yfk4oay

karen said...

perhaps it would be better called a three mountain top..

CV said...

@Amen

Or, more likely...

To all you Democrats who are calling for trade sanctions & tariffs... "See we can report ANYTHING WE WANT because we're communist and you're only WANNABE COMMUNISTS"... So we'll just say we're broke and can't buy any more of your Treasuries...

Back off!

Bluff called... MOVE ON... Go back to buying stocks!

AmenRa said...

Karen

Stop trying to confuse my pattern matcher software :-)

Anonymous said...

Received my weekly update from Neely. That guy still has no idea....he's pointing out the obvious: that 1200-->1275 is massive resistance longer term. Thanks for nothing Glenn Neely....

-AT

CV said...

The "Scaramanga TOP" (The Man with the Golden Gun - 007)

Sean Connery said...

Extra nipple sighting...!!!

AmenRa said...

CV

Also they could increase wages instead of letting the renminbi adjust. But this also could be China letting us know that there is less demand for Tsys.
They could also let the renminbi adjust by increasing the wages of Chinese workers.

karen said...

Andy, what is he saying about gold for curiosity's sake?

AmenRa said...

damn I need more coffee...

CV said...

Actually it was Roger Moore...

CV said...

@I-Man

Maybe the new company policy is that they will only permit blogging on BULL sites...

Leftback said...

This one is for Ben and I-Man, LB thought of you immediately...

http://globaleconomicanalysis.blogspot.com/2010/03/sunday-funnies-2010-03-21-all-in.html

bob said...

CV,

I got that, the triple top. It took me a while.

Sean Connery said...

Roger Moore was the beginning of the end...

CV said...

The collapse of Lehman was the "beginning of the end"...

It's worked out pretty well thus far...

karen said...

we've seen some very appalling PEs but WSM really has me confused.. and clearly the CEO is not seeing a dbl dip..

Leftback said...

Anyone think we see a 79 handle on DXY again? Or are we done with that and in a range bounded by 80 and 81 for now?

CV said...

@karen

You're right...

Not seeing a 'double dip' at all!

I-Man said...

Nice link, LB... sent that to all my guys that I work for.

CV said...

@LB

I see dollar strength...

karen said...

dollar down, crude up.. rolling my eyes..

DL said...

CV @ 12:41

My employer doesn't permit blogging on porn sites, or terrorist Jihad sites.

I-Man said...

@ LB

Re: your 12:58

I think its a bit to soon to say...

karen said...

i doubt the dollar breaks 79.50.. but i'll be watching..

I-Man said...

The monthly DXY chart is what I and I watching.

CV said...

@DL

Well then, what do you call the equity markets?

Snow White & the Seven Dwarves?

karen said...

the next jerk up in the dollar could cause some serious whiplash..

McFearless said...

We'll see a 79 on the DX when it gets into it's second wave, but it still hasn't completed a full one up yet.

@DL

"He’s bearish, but didn’t provide a timetable."

That's because he doesn't know. He's got no basic timetable now, even in the pay service the "bottom" comes now and btwn 2014 I believe.

McFearless said...

I do not think the deflationary environment that we are in will allow the dollar to stay range bound for any meaningful period of time. It'll go one direction or the other (insight!), but sideways isn't the one I'm expecting.

Tiger's Wood said...

Tiger, can we go play some tournaments?

Getting a bit tired of what you call the "Masters"....

DL said...

McFearless,

Thanks for the comment.

How about this:

I will predict that, sometime in the next four years, we'll see a 20% decline in the market, and in exchange for that prediction, you send me a check for $100...?

CV said...

@karen

UUP is working on an ENGULFING after 3 days of green candles with slight gaps...

If you ask me, the dollar is slowly nudging itself towards making a big move to the upside...

McFearless said...

LB,

Great cartoon. Sad but true.

Mannwich said...

I think SRS is going to zero while CRE goes to infinity.

CV said...

@McF

"Sad but true"

You can't handle the TRUTH!

Nic said...

I would not want to see DXY below 80.60 pivot

karen said...
This comment has been removed by the author.
karen said...

but, nic, i am seeing the dollar belwo 80.60.. 80.537 was the low so far today..

CV said...

CV can't handle the TRUTH that his NCAA Brackets are TOTALLY BUSTED... (I had Villanova & Kansas playing for the title)...

...and that Maryland got beat by a 3 pointer at the buzzer yesterday...

I'd been counting on the NCAA Tournament as a distraction for watching SPXGUF...

Doh!

DL said...

Karen @ 1:18

I agree about SRS going to zero.

(However, they'll just issue more shares at a higher price, and start the game all over).

Nic said...

sorry I'm on the DXM10 contract

McFearless said...

DL,

To Prechter's credit, I find anyone making inflation trades right now to be doing nothing different than RP when he says a bottom is btwn now and then...we'll get inflation someday.... I'd argue a lot more people are charging monthly for that advice.

For me, I don't get the objection to his calls like this for several reasons:

1. Time is the least predictable element in the Wave Principle. Form is unfailing with 13 patterns. Price level is second most predictable.

2. People that hate the fact that he's given a several year range are objecting that he didn't have a handle on the extent of this bear market BEFORE IT STARTED. As I recall virtually nobody saw this period coming like EWI did, just like very few saw this rally coming last February when he told people to cover all shorts and gave a minimum upside of 1k on the S&P. Yes he's been wrong twice now about his top of P2 call, but the value of covering shorts in February, also on his advice, has thus far been far more value than any disvalue from the top calls.

Now, as for that $100, is there any sort of write-off I can get?

Mannwich said...

Sorry, karen. I can't help it. This is getting beyond ridiculous. Hey, maybe CRE IS a great investment right now. If they can just re-lever everything again and repackage the steaming bag to spin it off to enough greater fools, maybe it's a great buy?

I should just go all-in as many crap REITS that I can find.

Anonymous said...

"karen said...
Andy, what is he saying about gold for curiosity's sake?
March 22, 2010 12:39 PM "

Karen....I just got the S&P count for a month. I was sort of looking for answers in that market due to my own confusion. Gold is a bit easier for me to understand, so not getting that service. You have to buy that guys products separately....what a biz!

-AT

DL said...

People who buy SRS or FAZ are like salmon swimming upstream. A few eventually do make it, but ultimately they all die in the process.

Mannwich said...

Thanks for the reminder on that, DL. I think BOTH may be at zero again soon, and FAZ did a reverse 3:1 split not too long ago. Don't look now, but it's almost in single digits again!

Mannwich said...

Or was it a 4:1 split? Can't remember. Wasn't that long ago though.

DL said...

McFearless,

I'm always interested in what Prechter has to say, as long as its free.

But as you say,

"Time is the least predictable element in the Wave Principle"

Let me add:

In the long run, we're all dead.

Mannwich said...

@DL: Hey, wasn't that Keynes who said that? So you're now a Keynesian? I guess we're all Keynesians now.

DL said...

Mannwich,

I do actually believe in running deficits during recessions. But Keynes also said that we should run surpluses during periods of economic growth.

Nic said...

DXY pivot is closer to 8030 I think

Mannwich said...

So do I, DL. The problem is there's no longer any political will to stop deficit spending (or ZIRP, QE, and other gov't interventions that distort reality) even during the times of growth. I'm with you there.

Mannwich said...

CRE prices INCREASE 1%. So I was right - CRE to the moon and SRS to ZERO!! Wow, how can CRE be increasing again already? I see empty space everywhere I look here. I realize that we're still 40% off of '07 levels but I thought we'd at least flat line for a while before going up. Another bubble inflating?

http://www.calculatedriskblog.com/2010/03/moodys-cre-prices-increase-1-in-january.html

CV said...

@Manny

Don't EVER call me a Keynesian!

CV said...

@Jeff

dot coms have ZERO revenue didn't stop the NASDAQ from going to 5,000...

CV said...

"having"

Leftback said...

Bear anxiety and Mannwich apathy growing...

These have been tough times for bears but you have to stay sane, calm, cool and collected. What goes around, comes around....

Having said that I am flat today, which helps!

CV said...

Of course, WHO was Treasury Secretary at the time?

Larry Summers!

DL said...

A "flat bear"...?

karen said...
This comment has been removed by the author.
karen said...

deja vu day! look at spx or spy on Jan 19.. mondays are given up days.. Tuesdays, not so much.

CV said...

@DL

You should probably be going 10x long right now, so you can squeeze all you can out of that last few percent...

CV said...

Macys up 40% in one month...

Nothing WRONG with this stock market...

Markets are 'efficient', right?

DL said...

CV @ 1:49

I'm pretty "flat" myself... since I think we can get a 5% correction any time.

Of course, with my luck, it may not start until we get to 1190.

Mannwich said...

@cv: Wow, is that right? I hadn't looked at Macy's in quite a while. How can that be? Are people out in droves buying crap they don't need again?

But LB's right. Mannwich's apathy level at maybe a TOP (at least I hope so). Maybe we're getting closer? Who knows. Off to the gym for my health insurance spite workout.

CV said...

KD on HC

karen said...

So, as far as I can understand it, this bill affects me in no way until perhaps 2014.. so millions of uninsured will still be uninsured i take it..

http://online.wsj.com/article/SB10001424052748704117304575137370275522704.html

Leftback said...

A "flat bear"...?

You try being steamrolled a few times...

karen said...

So, CV, I think he's sensationalizing the issues..

DL said...

Karen @ 2:05

And odds are pretty high that in 2013, the president (whomever he/she may be) will be making significant changes to the bill.

Leftback said...

Not entirely flat. LB is long Karen's ankles.

Mannwich said...

@karen & cv: I think KD long ago went off the deep end on many issues, hence his waning credibility.

Mish doing the same with his daily bashing of the Unions. Has become as predictable as Lou Dobbs was with his illegal immigrant bashing on CNN.

CV said...

@karen

As always...

However, this bill is nothing more than a new form of tax...

If it ever comes down to having to dole out out the money (actually pay for health care costs), the next step is for the government to find a way to kill off the unproductive citizens...

DL said...

LB @ 2:07

After the experience of 2008-2009, I've seen enough steamrollers to last a lifetime.

DL said...

Mannwich @ 2:09

If Mish had to work 9-5 for someone else, he would have a different attitude about a lot of things.

DL said...

CV,

Don't forget about that "cadillac tax" that goes into effect in the year 2018.

karen said...

don't look now but the dollar (uup) is getting up..

CV said...

@DL

I suppose you're PROUD of the way the government is acting and the solid path to prosperity that they're writing into law for out future generations to enjoy...

bob said...

A very trusted, intelligent person I know claimed last year that the goal of HC reform was to kill the local chambers of commerce. Their raison d'ĂȘtre was health insurance coverage for small business. Local lobby effectively defeated.

The oldest local chamber here just merged with the newer 'corporate master chamber' the biggest member of whom is BCBS.

Any comments on your local chambers lately?

DL said...

CV,

I think they should just pass a law establishing the minimum wage at $100K/year.

Prosperity through legislation.

CV said...

@DL

Yeah... Think of all the stocks Johnny could buy with that kinda loot...

Leftback said...

Best trade I can come up with is a 36 hour PST.... into W/Th auctions. Unusual strength here in 2y, 5y, 7y. Maybe someone knows something?

Brian the Broker's Shapely Assistant Tawny said...

We are here for you JOHNNY, whenever you want to BUY...

CV said...

I say that NOT COMPLETELY IN JEST...

Because IF they actually did pass a law like that... Would Johnny just bank it and pay off his debts?

No sirree... The PPT would start to "run up" the markets, and attract the cash for themselves...

Of course, when it all played out and the game was over, Johnny would still have a mountain of debt, and even 100K as a minimum wage wouldn't help...

DL said...

Personally, I think that a minimum wage of $7.25 per hour is creating enough teenage unemployment as it is.

bob said...

LB

Why go short when there is strength before the auction? Don't understand the logic. What are the mechanics?

CV said...

@DL

Yeah, instead we should pay 2 teenagers $3.50 and hour apiece to do nothing and pocket the extra quarter...

Leftback said...

bob,

Good pick-up. Yes, that's exactly the argument going on inside my brain. There should be selling of 2y today, but there isn't.

One reason may be that JNK isn't making new highs. In other words, spreads can't really get tighter. So there is no selling pressure on the short end here, because there isn't anywhere for the money to go. Dollar strength makes other sovereign debt less attractive, munis are suspect and HY is priced for perfection.

You're right, bob, so I am not doing it, especially as I am short the long end. We may be seeing a steepener again this week.

McFearless said...

"I do actually believe in running deficits during recessions. But Keynes also said that we should run surpluses during periods of economic growth."


Yes, you never hear any of the Keynes cheerleaders say this though, it's always just the first point.

Leftback said...

Not today, we are at 2s10s 269 down from 292 - but that will probably steepen as we go through the week.

Anyone else think home sales will suck?

CV said...

@DL

The single person "poverty line" in this country is around $14,500... It's the point that UNDER and you qualify for all kinds of government assistance...

40 hours X 52 weeks X $7.25 = $15,080...

40 x 52 x $7.00 = $14,560...

Make the employers pay the extra quarter to save the government some money...

Leftback said...

Today, Magic Monday, squeeze into the close.
Tomorrow, JOHNNY HOUR into spx 1175, then sell em Lloyd.
The auction of 2y will be strong.
Crude build again Wednesday, selling of energy.
Recovery towards the end of the week.

McFearless said...

You could probably get a decent mortgage in Detroit earning 15k/yr.

DL said...

CV,

Another thing about minimum wage laws.

The higher the minimum wage goes, the more that part-time work is offered in lieu of full time, and the more "off the books" jobs are offered (including to "illegal aliens").

Leftback said...

Anyone see the JPY strength? Markets are not following EUR:JPY.
That tells me that this is mainly JOHNNYs, not much HF/IB volume.

DL said...

McFearless,

Yeah, why not set up shop in Detroit?

You'll live like a king.

bob said...

LB

I'm still sitting on my hands. I see hot money coming from EUR that will have to find someplace, combined with EOQ window dressing(and end of QE).

Any thoughts on that?

CV said...

@bob

My question is "have the windows already been dressed"?

Leftback said...

USD likely beneficiary of EUR outflows.

What interests LB is the reversal of the traditional yen carry, with AUD, CAD and other commodity currencies reaching the point of no return on their upward trajectories. When that happens, Bucky takes off.

BTW, Nic is our local FX expert and active trader. LB is just the bond guy.

Tiger's Wood said...

My question is "have the waitresses already been undressed"?

bob said...

Given the transparency of the bank BS's (pun intended) no idea. The 105 story must have some CFO's sweating.

mcHAPPY said...

These are fun times on the markets.

Comments on Mish:

mcHAPPY's take on the ranting of unions, is not so much about unions, it is the strain unions put on the system. There is no doubt about it, unions are out for number one - f*ck all y'all otherwise. For unions in this environment to be looking for more benefits or higher wages is ridiculous. The only thing more ridiculous is politicians dropping their pants to take it.

mcHAPPY's personal belief regarding MISH and unions (he has relaxed the last couple of days with a couple of posts on deflation) is the amount of obligations that municipalities and states are technically on the hook for these people. Why should a bus driver be making $100K with full benefits? That is ludicrous.

Stage one of the debt crisis was in the private sector.

Stage two will be in governments of all levels worldwide.

The entitlements have to stop - this is MISH's battle cry. The times are a-changing and current situations/environment are no longer feasible but unions will not change (and why would they! They have it made! Of course, they are going down with a fight.)

mcHAPPY's belief is MISH is banging on the table about this much the same as he was about Real Estate and banks in 2006 and 2007.

Government debt will be the next leg down - while we are still dealing with RRE, CRE, and shotty bank balance sheets.

This is why the next leg down will be painful for EVERYONE.

If anyone knows when this leg starts, please let mcHAPPY know.

mcHAPPY said...

@LB

mcHAPPY is a Canadian chap. Everyone is running around lapping up the loonie headed for parity and beyond. mcHAPPY got in to a conversation with a couple of guys about this and of course disagreed that parity would be reached. The next day loonie reached something like 99.15 or something to which mcHAPPY received a link to Globe and Mail referencing all the Canadian economists calling for a continued rally in loonie with the line "you still confident". mcHAPPY replied "very much" and promptly hit delete. If wrong so be it but me thinks my margin of error will be much smaller than theirs.

DL said...

McHappy,

Let me put it this way.

I wouldn't be buying any front-month put options on a bet that the U.S. government is about to default.

Leftback said...

This show will go on for years. Government debt crisis is way off.
McHappy-san, the next leg down will save the Treasury market.
Then there will be more QE to save the stock market.

Rinse, repeat, Japanese-style... got sake?

mcHAPPY said...

@DL

Not talking about the US Federal government - right now. Of course they will not default. Ben would just put a few more zero's in the balance sheets of anyone who needed it.

But what about the other countries? PIIGS, Dubai, Baltic States, Eastern Europe?

Right now the US has to worry about municpal and state budgets - this is what MISH is crying out on.

A few years down the road the US will face the music. Luckily Japan will probably get their first and serve as a working blueprint.

mcHAPPY said...

@LB

No doubt this will go on for years in the US. Other countries around the world and local governments and state governments in the US are on a shorter time table.

CV said...

FWIW - The day the market started selling off from 1150 was two days AFTER re-establishing the trendline from the November lows...

CV said...

Last week, the dollar gave up that trend line, but quickly regained it...

We are now on the 2nd day of regaining that same trend line...

Leftback said...

Consumer deleveraging...

Deleveraging Consumers

Leftback said...

It's quiet.... too quiet... as we head for the 39th up day out of 41.....

Nic said...

LB, I wish I was a currency expert (like macro-man)but just a chartist.
Yens are v interesting though, USDJPY and 10yr yield correlation is at 0.72 suggesting higher for it but if the ECB meetings don't turn into some lower borrowing costs for Greece this week and they end going to the IMF then risk aversion returns to FX and puts upward pressure on the yen and other riskier yield seeking trades.
From a technical view EURJPY looks to be making an inverse head and shoulders on the daily, a pattern I don't like at all but does sometimes work on yen pairs. If it stays symmetrical its a diamond reversal which is much more reliable.

DL said...

mcHAPPY @ 3:19

Yeah, we’ll get blow-ups in PIIGS, Dubai, Baltic States, Eastern Europe from time to time.

Any one who knows when the announcement is going to be made will make millions (in the futures or currency markets).

CV said...

@DL

Doctor Evil will make... "A million dollars"...

CV said...

@LB

At about 10:30 this morning, there had been more than 96 million volume on SPY...

Since then (last 5 hours), about 60 million...

Nic said...

Could be worse, we could be Latvian.

Leftback said...

LB has put on modest shorts. Ladies, don't get excited.

CV said...

"Voters continue to give Congress some of its lowest marks ever.

A new Rasmussen Reports national telephone survey finds that just 11% of voters rate Congress’ performance as good or excellent, a range it’s been hovering in since late 2007.
But 64% say Congress is doing a poor job. The good news is that’s a seven-point improvement from last month’s 71%, the highest negative grade recorded in over 40 months of tracking. The bad news is that 64% is the second worst grade the legislators have earned in that same time period and is up 21 points from late March a year ago.

It’s important to note, however, that this survey was taken Friday and Saturday nights – before the House’s 219-to-212 vote to pass the controversial national health care plan proposed by President Obama and congressional Democrats.

As Scott Rasmussen notes in his new book, "If we ever found a Little League team behaving as poorly as the Republicans and Democrats or the congressman and senators, we’d probably disband the team and go home. Heck, we might even disband the entire league and bulldoze the field.”

DL said...

Nic @ 3:52

I don't know; the Latvian lat had a pretty good run during 2009.

Leftback said...

Iceland is worse off than Latvia. First Ice Save, and economic collapse, and now there is potential for a Massive Eruption.

Hope karen doesn't read this...

Nic said...

Yeah I meant to be a Latvian person. Miserable cold winter, country closed off for swine flu, 20% unemployment,Govt collapse, IMF bailout and austerity measures to make a Greek weep.

Nic said...

Do you think? I thought it was so cool the Icelanders saying stuff you were not paying for the banks.

mcHAPPY said...

The Financial Gods are made at Iceland hence the volcano. Serves them right.

Leftback said...

Agreed, the people who took risk should eat their own losses.
Overall though, we don't know what the results are going to be.

OK, night all, LB is off to play footy, see you in the morning.
And remember, MGUF...

bob said...

WHat about UK stocks? Seriously, they are were the first to devalue their currency. They now stand to benefit from a flight from eur. There is evidence that equity preforms very well after a devaluation. Assuming the bottom on the pound is close of course.

The best point I heard about iceland was the clean up of the banks was going to be a mess. No one could do it without a bias, they are all related to each other.

Hank Paulson said...

Bailouts for everyone

Mannwich said...

This should cause SRS to drop another 20% tomorrow. I mean, what could be better for CRE than mass lease cuts everywhere? As long as they can re-lever ad nauseum, then we can all pretend they're OK, I guess? Right?

http://www.calculatedriskblog.com/2010/03/pressure-on-malls-more-store-closings.html

Mannwich said...

Testing, 1, 2, 3......

Massive retail lease cuts coming. Should be good for another 20% drop in SRS.

http://www.calculatedriskblog.com/2010/03/pressure-on-malls-more-store-closings.html

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