DXY (weekly info)-no change (above mid)
trend=no
direction=up (1 bar)
high= 75.76
rev= 72.93; mid= 74.35
The dollar upward bias is under threat as it has closed the month below its monthly 3LB mid. It is holding above both of the upper trend lines. Treading water until 7/1/11 when QE2 ends. If some form of QE3 appears (under whatever name the Fed comes up with) the move down will be intense.
EURCHF (weekly info)WEEKLY REVERSAL new low 1.2172
trend=no
direction=down (1 bar)
low= 1.2172
rev= 1.3140; mid= 1.2656
The proxy for European risk restarted its move lower by having a weekly 3LB reversal down last week. That's because any move higher is a temporary reprieve since its monthly 3LB started trending down in March 2008. So obviously bailout, no bailout, bailout, no bailout, etc makes no difference.
53 comments:
@Amen
If some form of QE3 appears (under whatever name the Fed comes up with) the move down will be intense.
If CV ever typed anything remotely similar to that, it's likely that I'd be tarred & feathered & labeled a "cause-ala-sist"
@Andy T
(from yesterday)
Re: VIX
Correct me if I'm wrong, but doesn't VIX itself trade as a paper market nowadays? Didn't CME create a paper product for that? (which means to say that it can potentially be subjected to being 'fluffed' in the same way as any other paper markets 'may be' by interested parties, with deep pockets, on timely occasions)...
I may be totally wrong, but that thought seems to stick in my head somewhere... & it's mainly why the VIX (among other things), is something I just stopped looking at as a reliable technical indicator...
In any case... I was challenged on the claim that the margin "lowering" followed a normal plan... Or the opposite (margin raising intended to curb excess volatility)...
This chart would appear to dispel that notion (in the April - May time period & as applied to the 5 margin hikes in a week [probably, rightfully so, to a degree], but then the opposite policy yesterday [as applied to ES & YM])...
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/images/ES%20realizxed%20vol.jpg
CV,
thanks for not reading a single one of the articles I linked, not that I much expected you to, you clearly have no desire to learn how the futures markets work or why those margin increases in silver had to happen or why ES and YM had the change they just did.
As I said yesterday, it was standard business practice on silver, the CME isn't going to allow itself to blow up because a bunch of people are betting with way more money than they actually have.
But hey, if you'd rather continue raging on and complaining about things that were fully explained in the links I provided don't let me stand in your way, I just hope people understand this isn't about influence, powerful groups of people in the world, or some other such things, it's about the way markets work and standard way things function in the futures pits, and the people operating such pits staying in business.
You've really come "full circle" the last several months CV. Two years ago I remember you being flamed over the fact that Thor thought he was going to tell you all about fitness and nutrition because he works at a place that sells workout videos, which was no match for your experience. Today you are telling traders, an activity that you no longer participate in or dedicate appropriate time toward, what kind of things they need to keep in mind or otherwise be left behind in trading, things of course that have nothing to do with margin requirement changes, even going so far as to claim that the margin changes were somehow, shall I say, sneaky, when the basic math reveals they weren't anything but normal.
And as far as "putting words in your mouth" .....just so I'm clear on what you were saying there in your response to me last night, this is what I came away with:
"I didn't say that the margin increases were the cause of the decline in silver I only *hinted at that in about 5 dozen posts in the last four weeks but never came out and said it as I have no proof so you can't pin that comment on me, all that being said, there is no doubt in my mind that is what they were intending to do, I just didn't say that directly, so you are putting words in my mouth"
do I have that right?
You see, it's all "pretty simple" to me too, man. They react to the market, over and over again, because they have to. Chicken, meet egg.
Ritholtz at it again...
http://www.ritholtz.com/blog/2011/06/is-residential-real-estate-worse-than-during-depression/#comments
EXCERPT:
How does the Great Recession compare to the Great Depression? Some facts we do know:
1. Home ownership in 1930 was 47.8% versus 66.2% in 2000, and near 70% in 2006. (Census Bureau)
Comment: What do these statistics have to do with the intention of the article??? Also, to include 2006 homeowners in ANY model of normalcy is akin to using NASDAQ 5000 in contect of any median of normalcy...
2. Unemployment was 25% at its Depression peak; the 2007-09 Recession never saw unemployment get over 12%. (BLS)
Comment: Ever heard of U3 & U6 Barry?
3. GDP lost 30% in the Great Depression; During the Great Recession, we lost 6% of GDP. (BEA)
Comment: How much did the great Keynesian stimulus lab experiment impact those numbers?
4. Following the 1929 crash, broad stock market losses were more than 75% (Peak to trough Dow losses were 89%). 2007-09 stock losses were 50-57%.
Comment: Is it reasonable to compare 1929 Dow components (heavily bent on "industrial"), with 2008 components (many "financial" or "technological")... For Chrissakes - BAC, C, & GM were REMOVED from the Dow (& replaced)... Basically fulfilling the same argument as U3 vs. U6...
5. Industrial production, which plummeted 75% around the 1929 Crash, has actually thrived during the Great Recession. Fed action and a weak dollar has helped US Manufacturers.
Comment: Now- If CV said ANYTHING REMOTELY SIMILAR to a CAUSE statement like "Fed action and a weak dollar HAS HELPED US Manufacturers", I'd be taken out & shot... But it's OK if YOU say it Barry (because you're not "unhinged")...
But the biggest and most important difference was financing: Mortgages were 3 to 5 year, interest only, with a balloon payment of the amount borrowed at the end. After that 3 year period, you either resigned with the bank, or sold the land and paid off the note. There was no such thing as a 30 year fixed rate mortgage in the 1920s or ’30s...
Comment: And there you have it people! All Barry's FACTS can be summed up tidily into that one thing... Just like a 30 minute sitcom!
Yes, home prices are bad. They are nearing the 35% drop we forecast back in 2005. But worse than the Great Depression? I don’t think so...
(Ritzy ends with his classic "wag the finger at the plebe" style)
"Never let the facts get in the way of a good narrative"!
---
Well BR, at least I agree with that part (as applied to your post)...
ADP 38k vs exp 170k. Whoosh.
@ben (8:58)
That's all fine... OK... I'll go with your premise that...
MARKETS WORK THEMSELVES OUT...
I'd agree with that...
Give me your opinion on the following hypothesis then...
Let's say there had NEVER been:
- TARP's
- QE's
- American Re-Investment Programs
- Omnibus bills
- Cash for Clunkers
- IMF bailouts
- FASB Rules changes
& dozens of other things that you or I could name...
What is YOUR guess as to where the "wave counts" may have taken us on a path to?
I ask it in that way on purpose... (Because it's half likely we'd still be, level wise on the indices, where we are today - that is - if the system had crashed & burned, then the MARKET would have figured out the winners & losers for itself... savers possibly being rewarded... excessive risk takers annihilated)...
But instead I ask... "What PATH would it have taken"? & more precisely... Do you suppose that the PATH (wave count wise) might look a lot different (in the method in which it's counted) than what actually ended up getting painted???
We are arguing about TWO DIFFERENT THINGS...
1. You're arguing that markets work... period (at least that's my interpretation of your drumbeat)
2. I'm arguing that there's an ATTEMPT being made by TPTB to alter the outcome (which will ultimately fail in the end [and bring it all to YOUR conclusion]... 'Hijacking' would be the best way to describe it...
For me it's silly to deny that there would be ZERO interested parties in hijacking an economic system for their own benefit (succeed or fail)...
I suppose the thing that 'irks' me a little about our discussions is that you seem to single me out...
I mean... Amen Ra has had the "QE INFINITY" logo going on on this blog for almost a year now... Why no pleas to Amen Ra for broadcasting a flawed message there...
---
"Today you are telling traders, an activity that you no longer participate in or dedicate appropriate time toward, what kind of things they need to keep in mind or otherwise be left behind in trading"
Yup - I know nothing about meteorology either... So I'll refrain from suggesting that anyone own a raincoat or umbrella...
I know nothing about skin cancer - so I won't advise anyone to think about using sunblock, or sunglasses...
I know very little about politics... So I suppose I should tell everyone NOT to vote...
Frankly - I don't know much about the NBA (so I have no right to side with either Dallas or Miami in the Finals
I don't know how to play any musical instruments (or can't read music sheets), so I should NEVER put a music video link onto this blog...
For that matter - I'm not and IP genius (like Thor)... So I have no business even being at a computer and typing out my thoughts on a keyboard...
So sorry :-(
Of course ADP instantly becomes irrelevant if you happen to listen to the MSM.
CV
The Fed will be waiting for Congress to come to them on bended knee to restart QE as the market implodes during an election year. TPTB don't really care because they'll make money regardless.
Maybe somebody can refresh my memory...
But last fall/winter... Did CV actively (or EVER) engage in assaulting anyone's logic with respect to some of the prognostications as to NFL games I'd publish)???
I don't remember doing that (but correct me if I'm wrong)...
As I recall... I simply put up a detailed description of what I thought were the factors involved in each match-up and let it stand at that...
Mostly - by the time I get through a slate of 16 games for a weekend I'm exhausted (so have no further desire to debate - and an thus more inclined to WHINE about which of my '5 unit' projections went wrong)...
I sure hope the NFL resolves the strike soon and we don't miss any games...
Bucky coming back to some decent support levels. Imminent "trade" on the DXY coming....
Woo hoo.
@Amen
"The Fed will be waiting for Congress to come to them on bended knee to restart QE as the market implodes during an election year...
---
What's ironic is that your statement there is even farther out on the limb of that branch than where my own TRUE feelings are...
Who was it that said... "when you have eliminated the IMPOSSIBLE, everything that still remains is still POSSIBLE" (or something like that)...
So, with respect to QE3... There still remain wildcards that could cause it NOT TO HAPPEN...
But in my mind... The 'highest probability outcome' is that we get it...
Why?
It's basically all that Bernanke knows how to do, and, in the end, & despite all the rhetoric, it's what BOTH political parties want... & it's probably what corporations & even the American public want (despite what a few blogs tell you)...
To me... The only 'stalling' issue are little grade 3 gymnastics designed to pre-affix blame for when it eventually fails...
To think that CV interprets all TPTB as some kind of "grand chessmasters" is completely erroneous...
I think they probably THINK OF THEMSELVES as grand chessmasters (but the truth is none of them have the capacity to think a move or two ahead - and then wing it from there)...
ISM 53.5 vs exp 57.1
Excuses to come in 3...2...1...
TNX 2.988% and below monthly 3LB mid (3.044%)
TNX 2.988% and below monthly 3LB mid (3.044%)
Let me think...
- If "I" owned a bunch of TNX (& had been steadily accumulating, since, say, 3.25%)
- & if I thought that a QE2 ending 'equity scare' might have the possibility of making the lemmings run for the classic "flight to quality" if an equity sell-off were to commence 'somewhere' within the time window of that FEAR of uncertainty
- & if there were a US Congress that was delayed in debate over raising the debt ceiling (perhaps a key component in whether a QE3 would be operationally possible - at least within the construct of its predecessor)
- & if I wanted to DUMP all the TNX I'd been accumulating since 3.25%, at a profit, to the scared lemmings trying to get out of equities...
- & if I really knew all along that QE3 was a foregone conclusion (after the re-shuffle), so once I'd dumped all the TNX accmulated at 3.25% and under, I could go back to buying the R2K, shorting the dollar, and slowly accumulating better 'spot prices' on PM's (for delivery)...
Well - I don't know... What would I do?
I'm sure there are no TPTB that ever even came up with that thought (simple as it is)...
Hell - I'd do it (if I could pull it off - and if I could muster the resources to do it)...
It may not go according to plan (but I'd try)...
---
But I really doubt ANYONE thinks of those things out there (because they're all just honest businessmen trying to make a buck & pay their taxes in this workaday world)...
That's one nasty hanging man confirmation on the JNK daily chart.
@Amen
Kinda makes you wonder with the margin reduction yesterday and the abrupt sell-off today...
If somebody wasn't 'wrongfooted' going into things, and the pressure valve wasn't eased a little ahead of time to avoid a really bad hair day or untimely margin clerk visit...
CV,
First, it figures that is your response to me was that I somehow didn't think you should be expressing your opinions.
Nah, my intention is not that you don't post on subjects that you aren't an "expert" on or that you can't have an opinion, that's exactly what you wanted from Thor..... remember, he had no right to question your experience because he didnt' have it. Your words, not mine. Never once though have I taken that approach with anyone here when it came to market opinions nor was I doing that this morning. You are engaging in the same exact behaivor that apparently pisses you off, it's just that this time it's ok because it is you, that's what I pointed out, lets not twist it around now.
In the end, we can argue about what moves market prices every day but when it comes to margin requirements, the specific thing being discussed here, there need not be this type of opinionating.... it's simple math, there is no "agenda" behind what is happening here.
to your question about waves: there is also no point in playing guessing games about what could/would/should have been if not for X, its a total waste of time, benefits nobody, and is all speculation.
second point: there IS a way that markets function/work and that is all that is being discussed here, not TARP, not Andrew Ross Sorkin's writing skills, not the fantasy land naked short for one fafillion dollars that JPM has on silver, and not Becky Quicks bra size.
As I said yesterday, I'm pointing things out for the benefit of people that might not know how futures markets work to counter your various claims/opinions, I'm guessing there are a lot of people that don't understand futures markets so I provided some sensible commentary on why actions were being taken, there was no intention to stop you from posting your opinion, just to counter it with some factual information. If people prefer the two or three lines of "proof" from ZH over the papers I linked then that is for them to decide.
third, Ra made a comment here in the middle of the margin increases along the lines of "increase could knock silver down" and at the time I did tell him that they could raise them all they want, won't stop people from buying if that was the psychological imperative that was present, feel free to go dig up the post. I've made many comments like this to Ra over time and to everyone else saying things like that for that matter. I'm also not here to tell Ra what pictures he can post in his threads, I think the QE picture is very funny, was intended to be a joke rather than to be taken seriously
As for your claims that you are being "taken out back" or singled out because of your views as if everyone here is/has been ganging up on you, its hardly the case, and its the same double standard as was pointed out with the nutrition stuff with Thor.
Here's a fresh example that doesn't even have a thing to do with markets:
Someone comes on this site to express that they don't like the fact that you are making anti semitic comments, so what do you do in response? Well, you've spent every day since making smart ass comments exactly in relation to this, comments that are likely to be seen as even more offensive than your originals because it's not about being PC, it's about being straight up disrespectful. I might compare this constant reference to it now to someone being beaten over the head with a stick because of expressing something that you didn't like and you saying "then how do you like THIS" each time you rap that person on the head with the stick. On the other hand you make some comments about margin that I totally disagree with based on the normal functioning of futures markets, provide links to counter every single thing you are saying, and THAT qualifies in your mind as being taken out back and shot.
come on man
Well...that resistance level on Gold getting tested out vigorously....nice little move there. It "should" stop here around 1550.
@Ra,
Here's a question for you
If you were being strict, could you still call yesterday's candle (daily) on CAT a hanging man?
ben22.
I just got Neely latest plot. I hadn't subscribed in a while. He seems really confused on the s&p500.
ben22
CAT was a hanging man yesterday. The hair was less than 10% of the hi-low. It closed lower (which I feel adds to the reversal implications). It also formed the reversal candle right on the monthly 3LB mid.
At,
yeah, that's a fair statement, he's changed his labels every week lately it seems, now back to (B)?
sticking with your X wave this whole time has been a good idea.
Ra,
thanks man, I'm still learning all the sticks, sometimes I out-think myself on what they are, the hanging man touched the bottom of my lowest trendline on CAT in the chart I posted here a week or so ago
I missed the trade however
ben22
QE∞ is on an altar at the FOMC. Each FOMC member has to kneel before it before the meeting begins ;-)
ben22
Yeah, sometimes they look like a particular candle but might not be if they don't meet requirements.
TICKS never broke below 1000 during the carnage today. Not sure if this is good or bad.
http://finance.yahoo.com/q?s=LNKD
Nuff said.
but Peter Theil said Wall St. just mispriced LNKD because they were still afraid from the tech bubble
Love the headline here:
http://www.bloomberg.com/news/2011-06-01/why-64-percent-is-the-golden-mean-in-the-housing-market-view.html
Would suggest that 61.8% is probably the optimum home ownership level. that would be the true "Golden Mean" ... heh heh.
@Ra:
What's wrong with a P/E of 1143?
@Andy T
I just got Neely latest plot. I hadn't subscribed in a while. He seems really confused on the s&p500...
---
My wild guess is that when QE3 is finally announced...
The "a-b-c-X-a-b-c-Y-a-b-c-Z-Q-E-#" pattern (that CV mentioned the other day) will suddenly become visible...
But then again, as I said before, I'm neither a
- meterologist (so I'm not sure if one needs to own a raincoat or umbrella)
- dermatologist (so I shouldn't advise anyone to think about using sunblock, or sunglasses)...
- politician (so I shouldn't advise anyone to vote)...
- NBA analyst (so I have no right to side with either Dallas or Miami in the Finals)
-musician (so I should NEVER put a music video link onto this blog)...
- or a Viking IP sleuthing god (so I have no business even being at a computer and typing out my thoughts on a keyboard)...
As for 'economics'... I'll leave that to the Ivy League Phd crowd (like Krugman, the Bernank, & Larry Summers)
Or... Joe LaVorgna
Deutsche Bank's Joe Lavorgna Cuts His NFP Forecast From 300,000 To 160,000 In Two Days
http://www.zerohedge.com/article/deutsche-banks-joe-lavorgna-cuts-his-nfp-forecast-30000-160000-two-days
Since those guys certainly "dedicate appropriate time toward" their craft... I sure wish they could all come on here and tell us all how it's done...
But if somebody would give me a crash course...
I'd be happy to fill in while they're all spending their summer in Jackson Hole & the Hamptons...
Quick Survey
A poor NFP print this Friday will be "blamed on":
a) Snow
b) Fukushima
c) Tornadoes
d) Summer of Recovery 2.0 right around the corner
e) evil speculators (in oil & PM's)
f) the maid service at Hotel Sofitel
g) The Royal Wedding
h) the Bin Laden distraction
i) Dancing With the Stars season finale
j) skeleton crew at CNBS
k) incorrect mixture in O'Bamas Guiness "black & tan"
l) the FIELD
ben22
Tell that to all those who bought the IPO (who bought from those who got in early).
---------------------------------------------------
Matthew
Is that even possible? It's just personal info.
CV
m) all of the above
Ra,
here it is:
"Whenever a stock price goes up as much as it does with LinkedIn, you assume the IPO was mispriced and the bankers screwed up...There continues to be a certain antipathy by Wall Street banks toward Silicon Valley companies where they don’t quite believe it’s real.”
apparently the argument goes something like new and innovative companies are real hard to value, banks underprice them all the time, just not this bad in the case of LNKD, banks always make money, banks are bad/hostile, hate banks, most tech ideas are in fact so awesome banks will never understand them....etc. Facebook won't have the same fate.
All the other stuff aside, I'd only like to ask if LNKD is offering something new OR innovative?
it would seem to me niether of those words apply to them
ben22
Probably the reason Facebook is still private.
CAT is getting killed today.
Auto industry also in the dumpster.
it is and I should be even more short than I am (CAT)
very annoyed with myself today on that one, that candle was good for a day or two swing at minimum and you could have placed a stop just above my low trendline to define risk
The June puts are up huge today
Would suggest that 61.8% is probably the optimum home ownership level. that would be the true "Golden Mean" ... heh heh
---
I'd pretty much be happy to sell a 61.8% equity stake in any house I owned outright and live in the basement... (where the food & man cave were located)...
Four days of gains on the SPX...and it's gone.
See how the smooth move lower is much better than a flash crash?
/sarc
OT...
But this 'Terrelle Pryor' thing is a case of 'I told you so's' by CV...
Two years ago (when everybody was touting him a Heisman hopeful), I was telling everyone he was a "thug"...
My definition of 'thug' wasn't like, gangster criminal or anything... Just a simple way to express that I thought he'd just end up being the typical OVER RECRUITED high school athlete, who doesn't have enough sense to do much more than get by on raw talent, and end up doing stupid things...
He's practically singlehandedly put the Ohio State football program into shambles...
...and does he care that it was he, that probably led Tressel to take the fall for him??? Probably not... (though it's hard to completely exhonorate Tressel himself, as he took the risk of trying to cover these things up)...
@Amen
See how the smooth move lower is much better than a flash crash?
All I'm thinking about is how much nastier it could have been with MARGIN CLERKS on the phone...
Looks like that maneuver was done just in the nick of time...
...per my (10:01) last evening...
http://traders-anonymous.blogspot.com/2011/05/amenras-corner_31.html?showComment=1306893660265#c2519741491334467591
---
I hope Ritholtz was wise enough to scoop that ladies $50's & $20's out of his trash bin and buy himself a few "pieces of eight" with it at the local dealer...
It would be a shame if he was so immersed in his reasearch activities, he failed to have the time to do so...
TRIN @ 4.91
yowza!!
AR -- just noticed Trin myself...don't think I've ever seen it that high (only been paying attention for a few months though.)
Jennifer
The last time it was this high was the week ending 7/16/10. Before that 6/11/10 and before that 11/27/09.
Ra,
that TRIN is extreme, but you could argue it's both bullish and bearish
internals the last two days leave you in a hot mess of even more than normal uncertainty
There will be no QE3 until next year.
Trust me on this one. Trade accordingly....
LB thinks we are range bound for now, hates commodities.
We hedged our fixed income today. It's been a huge move of late.
We are still holding tons and tons of cash. We like Japan.
Happiness is knowing your portfolio can survive days like today with fairly minimal damage.....
ben22
Yeah TRIN extremes usually indicate reversal. But we'll see.
-----------------------------------------
New Thread Up
Ra,
I'll do the math when I get home but the Arms Index can be misleading.
Modified Arms should probably be figured out at this point: Multiply advancing issues times advancing volume and subtract from that figure the product of declining issues times declining volume. This is Dave Steckler's idea, then he calculates the modified index over 11 days and smoothes the total with a 10 day MA.
This seems to have given less false signals since 2000.
There's also the rule of thumb that if the Arms index goes above 2.65 you should buy and hold for 40 days, from 2000 to 2005 doing that trade was 223% gain versus 1.7% buy and hold over the entire period.
To note there though, the 40 day hold can and will change, used to be people used a one year hold after buying above 2.65 TRIN, but that doesn't work anymore.
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