A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection
Creditcane currently inflicting pain on the bears. Time for a 180.
SPXBullish short day. 1041.83 (fibo .09 from high) waiting for retest. Back above the SMA(21) but below the SMA(233). Midpoint above EMA(10). Closed above the weekly 3LB mid. New high on daily 3LB (reversal is 1027.37). QE2infinity.
DXYBullish short day. Midpoint below EMA(10). The 85.11 (fibo .1459) has been violated. Back below the 76.4% retrace. Tested the 61.8% retrace (passed again). No daily 3LB changes (reversal is 84.72).
VIXBearish short day. Midpoint below EMA(10). Closed below weekly 3LB mid & monthly 3LB mid. "Fear is here so don't get fooled on market pumps. Repeat ad nauseam." Back below the SMA(55) and the SMA(21). Tested the SMA(89) and passed again. No daily 3LB changes (reversal is 45.79).
GOLDBullish long day. Below the SMA(21) and below the SMA(55). Midpoint below EMA(10). "To hell with fiat! Say it again! I'm gold and I'm proud!". No daily 3LB changes (reversal is 1240.70).
EURUSDBearish short day. Midpoint above the EMA(10). No test of the fibo .1855 at 1.2336. The test of the 1.1571 (the .236 fibo level) is on hold again. Now above the trendline (11/27/09-3/17/10). No daily 3LB changes (reversal now 1.2557).
JNKBearish short day. Possible dark cloud cover but the first day is candle body is too small. Tested the 50.0% retrace (passed). Back above the SMA(233) and the SMA(55). Midpoint above EMA(10). No daily 3LB changes (reversal is 39.38).
GSBullish long day. Rope broke on hanging man from yesterday. Midpoint above the EMA(10). Still no test of the 2.058 fibo (using low) of 144.98. Still wants to test the 1.618 fibo (using low) of 124.12. New high on daily 3LB (reversal is 131.08).
10YR YIELDBullish short day. Midpoint now above EMA(10). Still below all SMA's. Daily 3LB reversal up (reversal now 29.27).
WTIBullish short day. Back above the SMA(21), SMA(55), but below the SMA(233). Midpoint above the EMA(10). Daily 3LB reversal up (reversal is 71.98).
LUMBERDoji day. Still above the SMA(21). Midpoint above EMA(10). Still having trouble retaking the weekly 3LB mid. No daily 3LB (reversal is 183.60).
61 comments:
hey Ra,
thanks for the great charts, as usual
where is everybody?
peace and love
So, when does QE2 really happen?
Does Ben start now, before the numbers get worse? Or does he wait until people scream "mommy, it hurts" down around S&P 600?
Let's think about how people will react if he starts now:
(a) Some people will say "yes, we needed more QE, because we're obviously about to double-dip."
(b) Some people will say "you're extending the problem instead of fixing anything".
Obviously, Ben doesn't have to worry about currying group A's support, since they've already given it. Regarding group B, he'll say: "As you can see by the GDP numbers from 09Q4 through 10Q1 and 10Q2, QE did turn around the economy. So, using more of our tools actually does accomplish something. The evidence proves it." Ben's critics will know they're being snowed. But, what can they do or say in response? The blogosphere is full of Ben's critics. But, we have zero power. So, he can ignore us.
Next, let's think about how people will react if Ben waits until the double-dip to act:
(a) Some people will say "it's about time."
(b) Some people will say "you tried this before and all it did was artificially extend the problem." This time, because Ben waited, Ben's critics have the Fed's own data to prove it.
This line of analysis suggests Ben won't wait much longer before starting QE2. That way, there's less evidence that QE1 was a joke.
Now...what am I missing? How do you guys look at this?
Here's another angle: Dems are going to lose seats one way or another. How does that affect Ben's timing?
If Ben waits to act, the next class of Congress Critters will come in and might not like Ben making fools of them just as they enter office. If Ben acts under new management, these newly elected critters will have to "put on a show" for their constituents back home.
In contrast, if Ben acts now and pisses off some Critters, well...heck, a bunch of them are going to be gone after this year anyway. So, why not piss them off now and meet the new Critters next year. And those new Critters will prefer that, because they'll be able to say to their constituents "it was like that when I got here".
Now, what I didn't consider was: do Ben's actions affect the election results? Tough one...
Another question... Let's say Ben waits to act until we're back to "mommy, it hurts" territory. Without QE2, what's the *latest* we'll be back at S&P 600?
Without QE2, I can't see us making it into 2011 without an S&P 600 print. I.e., I expect "QE2 will arrive by 10Q4 at the latest".
With the foregoing in mind, maybe Ben won't consider the political angle for his timing. Either way, he will likely introduce QE2 before the next class of Critters takes office.
(Secret: I'm rambling here to preclude the possibility of Wes coming back tonite and being similarly disappointed with the lack of comments...) ;-)
One more item: I'm short HYG. If Ben starts buying Treasuries, what happens to HYG? I can see arguments for and against it rising. (E.g., "printing eases debt burdens for all and thus increases the likelihood of HYG's underlying bonds paying off until maturity" vs. "printing means we should all demand higher interest rates / lower prices on our bonds")
Further still, consider: Does Ben also start buying crap corporate bonds directly? (Why *wouldn't* he?)
Maybe the only winning play in "QE2" is "long commodities"... maybe even LEAPs?
dude... i remember, long ago on TBP, i asked you about your handle, you told me that you were 'once a conservative', now you are wavering about being a non-conservative, in any case...i am apolitical, i thought your handle meant you were an ex-"convict", i mean it was early days in the financial melt down and only a few Lehman guys had been arrested.....he, he, he...seriously, though, that is what i thought...
LOL:
http://www.zerohedge.com/article/artists-rendering-ben-bernankes-desktop
Wes,
>> i thought your handle meant you were an ex-"convict",
LOL!
>> 'once a conservative',
>> now you are wavering about being a non-conservative,
Well, yes, I can't be counted as a "proper" conservative any more. I want to soak the top 1% with taxes. I want to re-introduce FDR banking regulation and re-hire relatively aggressive, untrusting regulators. And I can barely stand to listen to the likes of Murdoch/Palin/Beck/Rushbo etc.
But, if "liberal" is supposed to mean "run deficits", "bail out the states and public unions", "agree to Bernanke QE to the banks", and "continue the wars which probably became unwinnable back in 2005", and "more corporatocracy", then I'm not that either.
wunsacon:
Sometimes there isn't much to say.
Wes: Why don't you contribute some QOTD's here?
“Americans are faced with the choice between the stupid party and the evil party. And that once in a while, the two parties get together, and they do something that’s both stupid and evil – and this is called bipartisanship.” – Thomas Woods
I'm going to keep this thread running through the weekend (because the political conjecture [vis-a-vis, QE2] is probably worthwhile)...
Not that the topic has to be all about that this weekend (you can talk about anything you wish)...
But frankly, with regards to trading, it's a DEAD ZONE...
Looks to me like bulls (or should I say, "low volume algos") may have enough TECHNICAL control to keep the coyote suspended in mid air for a few more days at least and maybe even probe slightly higher...
Just the latest in the never ending parade of 11th hour pardons from the governor (which your grandkids will get the bill for)...
Thanks Obama... (for bringing "slavery" [DEBT] back to this country)... How ironic is that?
Bubbas and Bubbettes:
Wife and I and the pups are getting ready to spend the weekend outside, but this article on the credit card (consumer credit) numbers is interesting. I knew some of this was happening, but now I have a little better handle, and after reading the article, I would guess we are in slightly worse shape than I was giving the credit holding consumer "credit" for.
If that confuses you, this will clear it up.
http://finance.yahoo.com/banking-budgeting/article/110020/credit-card-debt-its-worse-than-it-looks?mod=bb-budgeting
Credit-Card Debt: It's Worse Than It Looks
>> I'm going to keep this thread running through the weekend (because the political conjecture [vis-a-vis, QE2] is probably worthwhile)...
Thanks, CV.
I'm already "conjectured out" on the subject though. So, I'd like to read what others suspect.
(While I'm only "net short" instead of "100% short", I worry about QE2 a bit, because an announcement of QE2 might trigger a "face ripper".)
http://www.cnbc.com/id/38168490
"Equity investors pulled nearly $12 billion out of mutual funds for the week ending July 7, nearly matching the entire month of May, when the Standard & Poor's 500 [.SPX 1077.96 7.71 (+0.72%) ] fell 8.5 percent and dropped into correction territory off the April 23 high.
Though some mutual funds reflect institutional investor holdings, they are considered a strong barometer of retail investor behavior.
So with $11.6 billion leaving the market in one week, investment pros are suspect about the quality of the rally.
"This looks like a short-covering rally," says David Twibell, president of wealth management for Colorado Capital Bank in Denver. "You have a big up day, decent follow-through, but not much volume, not much conviction, and it's hard to find a catalyst for any of it."
I'll make my contribution for the weekend and hope not to upset anyone.
My thoughts on QE 2, QE 2.1, QE 3, and QE 1.618
who cares......
If you carefully follow the timeline of QE, when it was first announced, when it was actually implemented, when it ended (for now) an honest assessment will not allow you to conclude that it was the catalyst for the stock market rally.
it didn't "work" the first time around anyway, let us not forget the whole point of QE was certainly not a 13 month rally in stocks, it was to expand credit again, and to improve housing, but the pool of willing borrowers still magically shrunk anyway, and according to what is going on (or should I say down) in consumer credit, QE didn't work its magic too well. It takes two to tango, and to expand credit....QE is only one side of the equation. Oh, and housing improved because of QE?....riiiiiiight.
lets say we turn out like Japan, are we going to sit around on Survivor Capital until 2020 or longer talking about whether or not QE was going to work? Why don't we leave that to the Phd's.
and really, if QE didn't really do what it was intended I have to ask, what's that saying about the definition of insanity?
Did we mention that Japan had six rallies of 45% or more over 20 years on their way to an overall loss near 90%?
Let me end by explaining QE to a consumer that has debt up to their eyeballs that they can't get out of...and they come to see me, an "advisor", to get some help.
After explaining to them all the magical wonders of QE, I give them my advice on how to help their debt problem, to make QE work for them, it's quite simple really:
Go get AT LEAST three more credit cards. The more you borrow the better in fact. Its. That. Simple.
My name is Ben, I'm a Wizard, and I'm here to help.
"printing eases debt burdens for all and thus increases the likelihood of HYG's underlying bonds paying off until maturity"
how about we just tackle the first part of this statement.
"printing eases debt burdens for all"
this statement flies right in the face of the reality of the last 20 years, printing eases debt burdens for the extremely wealthy amongst us, the top 1%, for everyone else, it in fact helps turn you into a debt slave....this is not an opinion, take a look around at what's happened in the United States...I'm simply stating the obvious.
if we want to treat widely followed patterns like this recent H&S as having a lower probability of outcome as a result of the amount of people watching for it, then we had better beware the 1085-1100 are on the S&P because I've seen it mentioned more than once on every single blog I've been to in the last 3 hours.
Jason Zweig weighs in on Prechter’s Dow 1000 call:
http://tinyurl.com/3x9ndwc
His conclusion:
“In the financial markets, nothing is impossible. But in my view, Dow 1000 is about as close to impossible as you can get”.
Interesting (and potentially relevant) quote:
“Human history becomes more and more a race between education and catastrophe”
Herbert George Wells, (09/21/1866 - 08/13/1946; English author)
http://quotes4all.net/quote_1014.html
"in my view, Dow 1000 is about as close to impossible as you can get”.
Christopher Columbus said...
"the earth is round"
“Human history becomes more and more a race between education and catastrophe”
That's why we should trust our lives in the hands of PhD's... You know, they're the only ones smart enough to avoid catastrophe...
They'll concoct the FIXES...
I just watched an episode of Dr. G: Medical Examiner.
That was pretty wild, glad I don't have that job.
"That's why we should trust our lives in the hands of PhD's"
. . . . . .
Not what I'm saying.
The lessons one learns outside of formal education are, in many ways, much more valuable than those learned within the halls of academia.
McF @ 4:16
Yeah, I’ve watched some of those… then there’s also CSI/Miami, and CSI/L.V., with a lot of those forensic pathology scenes.
Jan C. Garavaglia (http://health.discovery.com/fansites/drg/bio/bio.html) is not the sort of person I would have expected to go into that field.
You might want to start watching re-runs of "Dr. Quinn Medicine Woman".
Obamacare
http://www.talkingpointsmemo.com/images/obama-witchdoctor-muck.jpg
Let's not talk about doctors. I have been in Canada for 7 years and I still cannot get a family doctor which didn't matter when I was never sick but since I got the tick bite and Lymes it is a major drama. I am considering driving over the border to NY state to see a doctor.
In fact it is so bad in Ontario I may as well live in a third world country.
@Nic
Obamacare = DON'T GET SICK...
Not to make light of your situation...
If TPTB would *stop* subsidizing jobs to sell homes and slice/dice/re-sell the mortgage obligations -- jobs that require almost no education -- maybe some people would actually spend a few years to learn medicine. Then, doctors and nurses would become more plentiful and the price of health care would come down.
So, c'mon, no one besides McFearless has ever speculated on QE2 timing??
Most of y'all trade based on technicals instead of fundamentals. So, maybe that's the answer to my last question...
To be honest Wunsacon,
I could never see how QE2 would be approved politically. Then I was listening to Niall Ferguson on the radio today talking about how the US has really only two choices; inflate its way out of the debt or default (likely on obligations like unfunded Medicare, Medicaid and Social Security, etc.) because politically it would never be able to raise taxes and make the spending cuts necessary.
He said that the attempts to inflate have all failed and so he thinks default is more likely.
He basically said he couldn't see a QE2 situation and that the debt markets would not let them get away with printing more money.
I am not sure we should be worried, we are all going to be dead in 6 months in the methane explosion:
http://www.helium.com/items/1882339-doomsday-how-bp-gulf-disaster-may-have-triggered-a-world-killing-event
Can the Fed do QE2 without congress? Because congress didn't even agree to extend unemployment benefits. I am not sure.
Is The Fed Funding The Treasury Through The Banks? | zero hedge http://goo.gl/JCRj
Nic, AFAIK (which isn't much), the Fed can act unilaterally. That's what I expect them to do, precisely because of the political situation. Ben might very well follow the plan he laid out in his 2002 speech.
Thanks Wunsacon, that makes sense then, although I am sure it will cause a shock.
In other news BofA = Big fat liars caught with pants down. Honestly these bank balance sheets are meaningless fantasy:
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aN2pSqH0iDpw&pos=2
wunsacon.
I think the QE1 was the "fuel" that sustained the market rally for most of 2009, but it had already bottomed before QE1 was announced, so Mr. Market had already been washed out on a bearish extreme.
A little QE2 would be good for some juice for sure, but for all we know the market is bouncing now BECAUSE some sort of announcement is coming...
In the bigger picture, I firmly believe the "market" is much bigger than the Fed and there's not a lot they can do to prevent deflationary pressures.
Though, I must admit that the Fed has been far more aggressive in the last couple of years than I had ever imagined.
Nic,
Nice article there on "end of days." That's a pretty bone-chilling theory....
وكان ماري خروف قليلا مع الصوف كالثلج. ذهبت في كل مكان أن مريم الضأن واثقا من أن يذهب. ماري يحب خروف تعلمون.
@ Osbama(12:47)
Translation please, unless you want to keep it a secret! Is that a code message for CV?
nursery rhymes from Osama?
CV has no clue...
My "secret decoder ring" is all rusted...
Probably something about "virgins"...
What they don't tell the guys is that they're actually VIRGIN GOATS...
Nic,
re: BAC
I'm pretty sure the banks are all doing some very odd things each quarter with the balance sheets, I seem to recall reading about that very issue last year, here is another potential issue:
http://online.wsj.com/article/SB10001424052702304830104575172280848939898.html
I see the SEC is "on top of it" so I'm sure they'll get that all cleaned up.
As for the methane bubble, yeah.... that was scary
Osama post is: Marry had a little lamb....
guys, Kenny must have gotten some permission from EWI to put this chart up, it doesn't show that some of these sentiment extremes actually happened several months before the highs and lows were put but it's a fun chart to look at with the sentiment amounts....we don't need to get into the count too much:
http://2.bp.blogspot.com/_goypolxEFd4/TDiy_84EjqI/AAAAAAAAGUc/n7mpAqXQGfY/s1600/DSISP500.gif
Regarding the labels, I just have to put something out there. I can't count the March 09 - April 10 rise as a five, there's no clear impulse in the third wave, too much overlap, no alteration, yadda yadda yadda, I know a lot of people are counting that rise as an impulsive 5 though. Let's just say they are correct and we are about to enter a huge third wave UP. Well, it is interesting to note what is going on in what we'd be calling Wave 2, which is what we are dealing with right now.
Consider that the DSI on that chart is now down to 17% from 90%+ very quickly, the news right now, we'd have to admit it's leaning negative the last few weeks especially and as we've said in the past, wave 2's are supposed to make people think the old trend is back, this time, the trend from October 07-March 09.
As I said, I don't agree with that count at all, but if it is correct, Wave 2 is certainly doing it's job from a sentiment perspective.
Would be interested in hearing some thoughts on that.
Chinese export numbers show a huge rise in the trade surplus, enough to calm worries over China and fuel some risk appetite perhaps.
http://www.telegraph.co.uk/news/worldnews/asia/china/7883266/Chinese-export-surge-fuels-trade-surplus.html
I am wondering if we have a week like the one 21st June where we had a big risk appetite spike in Asia and London which reversed and collapsed in the Monday New York session.
Olives, BBQ'd sardines and some Sangria for lunch today.
Guess which team I am shouting for :)
@Nic
If this is any indicator...
CV is using the scraps from some marinated steak to make a BEEF FRIED RICE entree (with my own watercress & scallions - even soy)...
Also though... I have a gazillion fresh cucumbers in the garden at the moment along with cherry tomatoes, fresh dill, and some other ingredients...
Therefore... COOL CUCUMBER pasta salad...
CV is probably good to go through Tuesday :-)
So the markets can do what they want...
Also...
Found yet ANOTHER stash of old coins in the basement (even larger that the last one)...
This one has quite a few old CANADIAN quarters (1968 and before)...
Plus... a S***LOAD of buffalo nickels (although, other than novelty, they're not EXTREMELY valuable... Probably 7x face at the moment...
Interspersed with that though were quite a few "P" stamped 1943 Jefferson Nickels...
Those are no joke... They're pretty valuable...
Nickels bitchez :-)
Here...
What ELSE could be the "theme song" for a WORLD CUP final between two EUROPEAN sides?
Don't Laugh... ENJOY! :-)
http://www.youtube.com/watch?v=9jK-NcRmVcw
When did the octopus predict the game would end?
@Nic
"When did the octopus predict the game would end?"
Answer: December 21st, 2012
or... The day that OWEBama announces QE2...
Whichever comes first...
ok......
market goes up until july 26th...then big roll over into 2011...bottom below march 09 in 2011
mayan calendars and martin armstrong are nice, but, what about the cardinal climax!
holy sheet....;-)
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