CV makes the case that we're still in a "backing and filling" phase. The following SPY chart illustrates some of the key "backs" and "fills" that have occurred since 1219.80 on the S&P cash, and the lows from the "flash crash".
Most of the major turnarounds have occurred on FIBO days.
- Day 8 was important (as that is where the "flash crash" occurred after 1219.80)
- Day 13 was important (as I'd suggested to watch out for in the thread last Thursday)
While today is Day 16... It IS Day 8 past the "flash crash", so it might bear watching. Futures are pointing positive. There is a strong likelihood, IMO, that some kind of smaller top could be put in today. The closest destination points would be the .0557 fibo extensions from the April 26th highs. MACD is showing some "bullish" divergence on most of the short term candles, so there is also a chance that we'll get a few intraday swings (basically establishing a peak in the morning, giving it up, then pushing back higher later in the day less enthusiastically).
All in all, CV plans to be watching for "bearish divergence" to show up by the end of the day (to indicate that Day 8 post "flash crash" will indeed be a TURNAROUND day)...
So I'm going with the FADED LOOK "FADE THE LOOK" strategy here...
Gisele B... World Famous FOREX arbitrage expert... Is probably applying her "fading" skills as we speak and moving back to getting paid in Dollars vs. Euros (she looks pretty happy about it too).
"U.S. housing starts rose more than expected in April to touch their highest level since October 2008, likely on the back of a homebuyer tax credit, but permits hit a six-month low, a government report showed on Tuesday."
ReplyDeleteas I said weeks ago- permits would be down- who cares about starts- that's history-
and permits should continue down for many months to follow- Spring market is over-
the typical Spring would see permits up in April- but demand brought forward- now folks just waiting around to see if some new "rebates" will be offered to go along w/ the historic low rates-
don't hold your breath
CV- love the images. Who cares if she doesn't know a damn thing about currency markets(-:!!!!
Morning!
ReplyDeleteGood post, I would not be surprised to see a couple of more weeks of back and fill and perhaps some choppy stair climbs up.
Currencies have been choppy and sideways overnight and through London. UK CPI came in higher than target again but sterling did not rally for long on expectations of a rate hike (as it normally would), but instead fell soon afterwards as markets digest the prospect of stagflation :(
If you only knew what food and gas in the UK cost you would count yourselves very lucky.
@DL (from other thread)
ReplyDelete"Clearly we had inflation back in the first half of 2008."
Sure, but I don't think you're digging deep enough to simply state that...
The beginning of 2008 was something VERY SIMPLE in my mind...
Hedge Funds had ridiculous amounts of leverage and were bidding up commodity prices across the board...
Look, everybody knew that housing was about to collapse... The FED has started cutting rates as early as August 2007, Meredith Whitney came in and called out Chuck Prince & Citi in November, and the market hit it's peak in October (2007)...
At that point there was ONLY ONE TRADE... Commodities...
Despite the looming "housing mess", the thought at the time (as expressed and re-assured by Bernanke himself) was that it was "subprime" and it was "contained"... This was BEFORE Bear & Lehman blew up...
This was also "pre-China Olympics"... The thought by many STILL WAS (and frankly STILL IS - by bulltards) that China was going to "pull us out"...
So there was a rush to CORNER THE MARKET on soft and hard goods... Everything from:
- Steel
- Potash
- Oil
- Wheat
- Coal
You name it...
When the "leverage" came undone (because SUBPRIME wasn't, in fact, "contained"), the whole inflation charade was exposed...
Inflation is one simple thing... SUPPLY & DEMAND... Stop!
Now, I agree that you can have "asset price" inflation (because of too much leverage - or because of a "perceived" need that never materializes)...
But the market exposes that very fast...
Frankly, I believe it's better to use COMMON SENSE rather than "listen to what the markets are telling you"...
Hell, right now the markets are PRICING IN earnings at "x" levels, based on "x" level of GDP forecast...
Do you REALLY believe these numbers? I sure as hell don't!...
And that's why I'm saying it's an ERROR, sometimes, to follow what the market is telling you...
All the market ever says to me is "OK, I'm going to run over here to this FIBO number... Now I'm going to run over there to that FIBO number...
Market = Bag of Rocks
People = Dumber than Bag of Rocks
CV, your 8:52.
ReplyDeleteMakes me wanna come back to this "watering hole" everyday!
Good work!
*re-posted from previous thread/wanted to give my two gold coins*
ReplyDeleteIMO, the DOW to GOLD ratio is most important when speaking of gold. This is where gold will soar during deflation but in terms of nominal value it will fall. When gold gets in the ball park of 1000 I will start adding.
As for our current environment, I would think oil is the best baraometer. 20% gone in 2 weeks AFTER the worse spill in history (not yet, but it will be when all said and done). OIl and I do not get along (as I have said before I will never trade it again, and I could be 100% incorrect) however it looks very ominous that in a supposed inflationary environment oil and other commodities are tanking.
I wish you all good luck trading today. It has the makings to be fantastic.
This just may come back and bite the US in the ass: Cornyn Amendment Blocking IMF Bailouts
ReplyDeleteAlso here: Bloomberg: Senate Moves to End Debate, Vote on Financial Bill
ReplyDeleteI am watching 693.16 on the RUT and 1134.23 on the S&P.
ReplyDeleteA break of there should lead to a hard down and I would be waiting for a retrace before dipping my toe in the water.
I think this is highly unlikely though.
Looking for 1150's on the S&P and 710-720 on RUT.
If those happen bomb sirens should start blaring.
My invalidation points are 1173 on S&P and 719.7 on RUT.
RUT has been a pretty good forecaster lately.
morning! today maybe a strange one.. I'm still of the mind that a lot of shares need to be distributed to those Dumber than Bag of Rocks types.
ReplyDelete"Wal-Mart said a key measure of revenue dropped for the fourth consecutive quarter as it continued to see a decline in customer counts at its U.S. namesake discount stores.
It also offered a muted outlook for the current quarter as shoppers worry about jobs and their finances."
May 18 (Bloomberg) -- Pfizer Inc. plans to cease operations at eight manufacturing sites in Ireland, Puerto Rico and the U.S. by the end of 2015, as well as to reduce operations at six other plants in Germany, Ireland, Puerto Rico, the U.K. and the U.S. These changes will result in a global reduction of about 6,000 jobs over the next several years.
@Ra
ReplyDeleteThose are some good links. Thank you.
There is just enough good news out there to make the dip buyer's believe all is well.
Financial regulations, lay offs, outlook from Wal-Mart, a retracement almost done on EUR:USD, and signals pointing towards DXY taking out 90 leads me to think today is going to be great for some, not so good for others.
I like $wlsh better than $rut. The former is trending down but both have similar daily candles.. I'm extra curious about the $spx today.. mainly because of yesterday's closing 15 min candle.. gotta get coffee!
ReplyDeletethis is interesting.. John Paulson's Q1 moves:
ReplyDeletehttp://www.fundmymutualfund.com/2010/05/john-paulsons-q1-2010-moves.html?
@karen
ReplyDeletePaulson = Barbell
I can't remember how it goes, but I think BARBELLS exist above both bags of rocks and "dumber than bag of rocks" on the totem...
is a bag of regular rocks more dumb than a bag of pet rocks?
ReplyDeleteback with coffee.. would love to see this day go red.. juxtaposed to yesterday's red to green..
ReplyDeleteben, business or pleasure on your LA trip (next month?)
ReplyDelete@McF
ReplyDeleteAsk Charlie Brown...
http://www.jwz.org/images/igotarock.jpg
Karen,
ReplyDeleteI got a feeling you won't be disappointed. And if you are, it won't take long tomorrow.
FULL DISCLOSURE!
apparently ANF is having a serious problem with cotton prices.. i guess they missed but are up 2% this morning..
ReplyDeletekaren,
ReplyDeleteit's in August, it's a trip we qualify for here based on our production, there are business aspects of it but I never attend those on these trips, I go for the free breakfast and then I hit whatever town we are in and have fun. Last year this was DC which was cool.
@karen (9:45)
ReplyDeleteNow THAT's what I call staying on topic...
thanks for the heads up on ANF this morning. I'm going to look again at that to see how expensive puts look.
ReplyDeleteSomething about shorting that company in particular feels good.
Happy! great pic for me! and did you see all those shoes!
ReplyDelete@McF
ReplyDeleteWhile you're there, you could re-create CV's "ceremonial milk toast" (circa 1979) from the 3rd "O" of the HOLLYWOOD sign...
Don't ask!
A little "heads up"
ReplyDeleteDespite the FIBO extensions oft discussed...
If todays rally gets out of hand, the 89SMA on SPX on the 60 minute candles looks like it has been acting as a decent RUBICON...
It's around 1159 as we speak (and is declining)...
CV.. really liked your spy chart above.. interesting picture with today's gap up open but we still haven't exceeded friday's high.
ReplyDelete@Karen,
ReplyDeletemcGLAD you enjoyed.
did any of you watch this santelli video on gold?
ReplyDeletehttp://www.youtube.com/watch?v=b6d3Oy6YMCI
karen,
ReplyDeleteI haven't watched the video but I think he's right, the paper gold is highly leveraged vs. physical. How do we square that with Paulsens biggest position which is GLD?????
If this is actually true shouldn't the paper come way down in price?
also, you might want to read what sinclair is saying about gold:
ReplyDeletehttp://jsmineset.com/2010/05/17/today-in-gold/
We have already passed 1.618 off 1125.99 yesterday. I would think a pullback around 1152 to 1142 but we absolutely cannot go below 1134.23.
ReplyDeleteFULL DISCLOSURE!
damn, just too slow on ANF. Look at it now.
ReplyDeleteFAS is not along for the ride on this bump.
ReplyDeleteFAZ is green.
@karen
ReplyDeleteIf you take another look at the chart, you'll see WHITE & YELLOW (vertical areas)...
The yellow areas reflect "after hours" trading prints (which is why I put the SPY chart up...
The S&P cash will reflect the GAPS, the spy AH smoothes those prints out...
Almost INVARIABLY, at the close of each day I can tell which direction the market is going to head on the open the next morning (unless there's a major overnight NEWS EVENT)...
Why?
Because the SPY chart will always "pick off" the prints in the opposite direction of where it's going to go the next day...
Look closely at the AH prints just after the close of each day (white areas), and you'll see this to be true...
It works probably 95% of the time...
@McF
ReplyDeletePaulsons position is a BARBELL...
He had GLD, but on the other side of that he has banks...
I think Paulsons "wet dream" is that we REFLATE...
ReplyDeleteHis banks would be very profitable and his GLD ought to stay solvent but not decline a lot...
too funny on anf! feeling dumber than a rock for not selling my smn yesterday..
ReplyDeleteCV, you've spoken about that ah phenomenon before, thanks for pointing out the bars on the chart!
ReplyDelete@CV: 8:52: I think you nailed it right there.
ReplyDeleteOne last push upward? How long can this go on? Pretty fascinating.
ReplyDelete@karen
ReplyDeleteI'll try to put up a chart with AH more frequently when it means something...
On "backing & filling" zones (like we're in now), any knucklehead could pretty much figure out the next days direction...
But it DOES come in handy when you get these NEVER ENDING moves (like the one from February - April)...
The AH prints foretold that reversal pretty well...
I'll try and use shorter timeframes... The above chart is a 20 day chart... It's more clear on 5-8 day charts (because the yellow bands are fatter)...
The "problem" is (on shorter days), to see the larger trendline points...
@manny
ReplyDeleteMy money is on sharp push higher and a hard fall.
1160 is the .618 retrace off 1115.
Sorry,
ReplyDelete1151 is .618 retrace
1160 is .786 retrace.
wow, now I'm seriously cursing ANF.
ReplyDeleteTLT looking robust today.
ReplyDeletei love it when the $compq leads...
ReplyDeleteHas anyone commented on this:
ReplyDeleteWASHINGTON, May 17 (Reuters) - The United States would oppose International Monetary Fund bailout packages to countries that are not likely to repay them under a measure passed by the U.S. Senate on Monday.
Bonds
The 94-0 vote came amid widespread concern that the United States is indirectly supporting a $40 billion IMF bailout approved for Greece earlier this month as that country struggles to rein in its debt.
A series of unprecedented U.S. bailouts to stem the 2008-09 economic crisis has angered many Americans and lawmakers have said they are unwilling to bailout foreign countries, as well.
...I would think this would worsen the bailout in Europe...already the Germans are being dragged kicking and screaming...
OK... So... Scorecard...
ReplyDelete1. We got the "Johnny Hour Rise"
2. Now we're starting to give back (and the RSI & MACD do their little "crosses")
All we need after that would be some slightly HIGHER HIGHS into the close/coupled with some "bearish divergence"...
& the table would be set for a big Dip on Wednesday...
THEORETICALLY
DAMMIT! I hate it when the page does not refresh... ignore 10.41
ReplyDelete@BinTn (10:38)
ReplyDeleteI didn't comment on it because it's basically BS if you ask me...
So what? We only help out if we're GUARANTEED the money is going to be paid back?
What a crock of s***! Who determines that? Mr. "I've never run a Dairy Queen" is going to sit down and crunch numbers on PIIG austerity? Not even the ECB 'geniuses' could dig through all those lies...
Besides - What's to stop Helicopter Ben from providing them them the money they need anyway using all his "parlor tricks" that nobody can audit?
These are more "dog & pony" charades to help get the "ducks in a line" for the November elections...
@McHappy
ReplyDeleteGone! :-)
Eyes are on 1134.23 and 693.16. Expecting a bounce before then buuuuuuuuuuuuuuuuuuuut......
ReplyDeleteWe are getting very very close.
ReplyDeleteGrantham guarantees a Gold crash?
ReplyDeletehttp://www.zerohedge.com/article/here-why-jeremy-grantham-thinks-gold-will-crash
Whoops, that was tongue-in-cheek. Nevermind.
ReplyDeleteI'm seeing 1134.66...... Did anyone get any lower?
ReplyDeleteAs long as 1134.66 was in fact the lowest point here, one more push and get ready to drop.
ReplyDeleteHow many people just wiped there face and said, "Thank God!"*
*Bulls and bears alike.
RUT broke through 693.16.
ReplyDeleteI am preparing to short.
oops.. ABK's loss report:
ReplyDeletehttp://www.housingwire.com/2010/05/18/bond-insurer-ambac-posts-wider-loss-on-second-lien-rmbs-woes/?
Meredith: Avoid Banks at All Costs
more to consider on gold/inflation, some notes I have from RP papers:
ReplyDeletewe had persistent inflation from 1933-1970 and gold and silver didn't move the whole time. People love to argue that its because the price was fixed, but I have a newslfash for those folks...the price of gold is technically still fixed. $42.22/ounce. This is what a domestic insurer is going to pay you if you if you ship gold out of the country and it is lost. The market has simply forced it higher...but that's that whole control thing, nobody wants to talk about that.
Inflation kept on going during the 70's and gold and silver went up big for a decade, then inflation just kept right on going from 1980-2001. Gold and silver, not so much, they lost 83% of their combined value. The only major investment to actually lose dollar value during those decades. That's pretty amazing. Inflation kept right on going after that and once again after not moving for decades, gold and silver moved much higher and for 8 years it's been prfitable.
But big picture, in 76 years of inflation, gold and silver rose during 18 of them, for 58 years it went down or sideways.
Despite a 4.4 times multiple in the M1 measure of money supply since 1980, not to mention an 11-fold increase in amount of dollar denominated credit outstanding, gold and silver are not really well above their highs from 30 years ago, in silver's case it's not even close. Shouldn't they be based on the inflation makes gold go up argument? I'm measuring ifnlation properly here, it's expansion in the money supply plus credit.
conclusion:
"In 1933, had you possessed clairvoyant knowledge of the annual inflation rate for the entire century ahead, you would not have been able to predict the path of gold and silver."
RP
1135.05 appears to be the low now.
ReplyDeleteRUT has broken - S&P has not.
I was looking at TZA and am now a little confused.
@McF
ReplyDelete"gold is technically still fixed. $42.22/ounce"
There is approx. 1oz. of tobacco in roughly 31 cigarettes...
On that note, they're catching up to gold little by little...
Meredith's view on second half of year: "bleak"
ReplyDeletedouble dip in housing.. unemployment rising.. consumer spending down
oh, ben! look how low NLY has gotten! was in 15s today..
ReplyDeleteThose shoes are mesmerizing.
ReplyDeletewow, Karen, even on a really basic chart that NLY pattern looks bad.
ReplyDeleteI guess this is a real showdown of the titans isn't it. MW vs. JP.
Should be interesting. I'm betting on MW being correct of course.
this is fascinating on Beazer Homes, but there are so many good posts at this site just go there and read them all!
ReplyDeletehttp://fridayinvegas.blogspot.com/
punctuation for a sarcastic remark:
http://02d9656.netsoljsp.com/SarcMark/modules/user/commonfiles/loadhome.do
well, the June 46 puts on the Q's went below a dollar today so I bought more. We'll see, I may end up feeling some pain on this before it "works", if it works at all.
ReplyDelete@McF
ReplyDelete"I guess this is a real clash of the titans isn't it? MW vs. JP."
---
In this "Tits of the Clashons"... I'll take the former...
bought some S&P puts for a day trade. S&P couldn't get back above the monthly 3LB mid. Plus it's day 8.
ReplyDelete@Amen
ReplyDeleteYou could be right...
I'm still wary of a spike up at the end of the day...
A slightly higher print than this morning (with some bearish divergence)...
In any case... You're probably good on those by tomorrow...
The "tell" for me today was/is TLT and weakness in financials. Am I off base there?
ReplyDelete@manny
ReplyDeleteYou read my mind. Plus we have broken through what appeared to be wave 1's. I'm thinking the start today (with the gap) may have been a 5th wave blow off for the end of ii.
Big Banks
ReplyDeleteBid Rigging
Kickbacks
Say it ain't so Joe!
From here:
http://preview.bloomberg.com/news/2010-05-18/conspiracy-of-banks-rigging-state-finance-converged-with-mortgage-meltdown.htm
------------------------------------
..Court records in the broadest-ever criminal investigation of public finance shed new light on how Wall Street’s biggest banks were cheating cities and towns during the same decade in which they were setting the stage for a global economic collapse.
As the banks were steering the world’s financial system to the brink of catastrophe by loading more than $1 trillion of subprime mortgage loans into opaque debt investments, they were also duping public officials across the U.S.
Many of the same bankers and advisers who sold public officials interest-rate swap deals that backfired for taxpayers are now subjects of the criminal antitrust investigation involving GICs....
------------------------------------
Now it is getting interesting.
foghorn
Also EURJPY, AUSJPY, BKX and XLF are all down and TRIN is above 1.
ReplyDeleteOf course things could still change rapidly today. I'm under no illusions there.
ReplyDeleteI went all in.
ReplyDeleteA break of 1141 will make me sweat and then 1148.66 will confirm it on SPX.
A break of 698.11 will make me sweat and then a break of 705.34 will confirm it on RUT.
TIGHT TIGHT STOPS HERE!
FULL DISCLOSURE.
@Manny
ReplyDelete(11:55) better comment than (11:49)
I might have to get outside in a few. Stunning out there today.
ReplyDeletethis morning- what a show-
ReplyDeletedamn roofers-
anyway-
foghorn- it's all a big scam man-
a bacchanalia of fraud, greed, laziness and kikbacks- the whole while our wealth disappearing from our very eyes-
siphoned into the least wealth producing industry in the country- banking
it's interesting-
ReplyDeleteGartman- get OUT of gold now
Cramer- get INTO gold NOW
lol
Hhhhmmm......
ReplyDeleteRichard Russell jumpy.
ReplyDeleteFAZ had a head start so mcHAPPY loaded up on TZA with purchases between 6.06 and 6.21.
ReplyDeletemcHAPPY jumpy.
ReplyDeleteHit it and quit it for a quick 35%. Damn algos sniffed out my trailing stop.
ReplyDeleteNice Ra. Next thing I have to learn is puts and calls.
ReplyDeleteGermany to ban short-selling at midnight ... ZH is reporting
ReplyDeletemcHAPPY
ReplyDeleteUsually better to use ITM options so you aren't taken out too quickly. Algos go on witch hunts as soon as orders are entered. LIMO (limit in - market out) is best.
@AmenRa
ReplyDeleteAlgos... That's why GS has 105 "positive" trading days for every 100 days the market is even open for trading...
Here is the latest on the Redneck Riviera
ReplyDeleteFrom here:
http://www.nytimes.com/2010/05/16/us/16oil.html
--------------------------------
...Scientists studying video of the gushing oil well have tentatively calculated that it could be flowing at a rate of 25,000 to 80,000 barrels of oil a day. The latter figure would be 3.4 million gallons a day. But the government, working from satellite images of the ocean surface, has calculated a flow rate of only 5,000 barrels a day.
BP has resisted entreaties from scientists that they be allowed to use sophisticated instruments at the ocean floor that would give a far more accurate picture of how much oil is really gushing from the well.
“The answer is no to that,” a BP spokesman, Tom Mueller, said on Saturday. “We’re not going to take any extra efforts now to calculate flow there at this point. It’s not relevant to the response effort, and it might even detract from the response effort.”
The undersea plumes may go a long way toward explaining the discrepancy between the flow estimates, suggesting that much of the oil emerging from the well could be lingering far below the sea surface.
The scientists on the Pelican mission, which is backed by the National Oceanic and Atmospheric Administration, the federal agency that monitors the health of the oceans, are not certain why that would be. They say they suspect the heavy use of chemical dispersants, which BP has injected into the stream of oil emerging from the well, may have broken the oil up into droplets too small to rise rapidly....
-----------------------------
Show us the 'real' video BP.
foghorn
Nic
ReplyDeleteI just saw that also. Hmmm time to go all in short?
mcHappy,
ReplyDeleteWhen you're ready to learn, go here:
www.optionseducation.org
Register(free), and they'll email you a confirmation (if they don't email you within 30 minutes, email them and they'll activate your acct.) They have a series of modular classes that are pretty well put together and cover the whole range of options topics.
IW
CV
ReplyDeleteI entered the trailing stop once I was 10% above commission. That way I break even no matter what happens. F@$k those algos.
fookers
ReplyDelete"Germany to ban short-selling at midnight"
ReplyDeleteawesome idea- no-one cashing out their short positions at the end of the day-
talk about enabling a waterfall collapse
@Nic
ReplyDeleteWOW!
@Ra and Ironworker
Thanks.
McHappy
ReplyDeleteI really like the options education here too:
http://www.ise.com/
Another for the UFB file: http://www.cnbc.com/id/37195628
ReplyDeleteMortgage Mods Doomed by Back End Debt
While most don't want to go on the record with me, lest they rile the regulators, Bank of America's Rick Simon says initially, "All the major banks, at Treasury's suggestion, went to non-verified income for verification."
"Morgan Stanley Chief Executive James Gorman said Wall Street must "rebuild trust" with Main Street amid a growing disconnect.'
ReplyDeleteHAHAHHAHAHAHAHA-
that's a good one!!! The dude's delusional
Germany wants BANKS to share costs of Euro-Zone Bailout
ReplyDeleteA lot of negative news out there today.
Now contrast this article to the one above.
ReplyDeleteUnf*cking believable.
From here:
http://latimesblogs.latimes.com/greenspace/2010/05/gulf-oil-spill-noaa-skeptical-of-oil-plume-reports.html
-----------------------------------
Jane Lubchenco, head of the National Oceanic and Atmospheric Administration, called media reports of large underwater oil plumes "premature," adding that research conducted by an academic ocean institute was inconclusive.
"Media reports related to the research work conducted aboard the R/V Pelican included information that was misleading, premature and, in some cases, inaccurate," Lubchenco said in a statement. She was referring to research, including water sampling, done by the National Institute for Undersea Science and Technology.
Lubchenco said those scientists have clarified that they have not reached "definitive conclusions ... about the composition of the undersea layers they discovered. Characterization of these layers will require analysis of samples and calibration of key instruments. The hypothesis that the layers consist of oil remains to be verified."...
.....[Update: 4:52 p.m.: One of the researchers, Vernon Asper, a professor of marine science at the University of Southern Mississippi, appeared to stick to his assessment during a taping of PBS NewsHour, with Gwen Ifill.
"It's not only the size of Manhattan in area, but it's also several hundred meters' depth," Asper said......
----------------------------------
Lubchenko can 'lie' with the best of 'em.
NOT
foghorn
RR: "Sell Anything"
ReplyDeletehttp://pragcap.com/richard-russell-sell-anything?utm_source=twitterfeed&utm_medium=twitter
My day is made !! Financial Mother Goose
ReplyDelete@karen
ReplyDeleteI would tend to agree with him,
we all know it's gonna blow,
it's a matter of when, not if.
foghorn
http://immobilienblasen.blogspot.com/
ReplyDeletedoesn't have anything on the German Short Ban yet...
anyone having any trouble as i am in accessing tbp?
ReplyDeletefrom Karen's 12:41-
ReplyDelete"If I read the stock market correctly, it’s telling me that there is a surprise ahead. And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead.
Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country."
wow- dude sounds pretty grim(-:!!!
and Karen- I haven't opened your 12:42- but I am assuming it is Cassandra
Germany ban will apply to stocks AND BONDS ...
ReplyDeleteFinally someone speaks the truth. In an interview with Spiegel Magazine, former Bundesbank chief Karl Otto Pohl, says it how it is: "Without a "haircut," a partial debt waiver, [Greece] cannot and will not ever [repay its debt]. So why not immediately? That would have been one alternative. The European Union should have declared half a year ago -- or even earlier -- that Greek debt needed restructuring." As for the reason for the bailout, Pohl's observation will not be a surprise to our readers "It was about protecting German banks, but especially the French banks, from debt write offs." Is there any hope for Europe now? It appears no, as the right decision was to let Greece go bankrupt: "Investors would quickly have seen that Greece could get a handle on its debt problems. And for that reason, trust would quickly have been restored. But that moment has passed. Now we have this mess."
ReplyDeletehttp://www.zerohedge.com/article/ex-bundesbank-chief-says-greece-will-never-repay-debt-says-bailout-all-about-rescuing-banks-?
That RR article is a little bit misleading, he's been saying to hold only gold and cash, and gold miner stocks for a lot of months now. He even was skeptical manytimes of his own PTI (primary trend indicator) It's not like he just came out with that call.
ReplyDeleteHe's a huge gold bull, love to read his thoughts on gold, dude has been around forever, he believes gold has entered it's third phase, as he looks for phases to large bull markets. He's expecting it to run for years more.
bat, no cuz i don't got there!
ReplyDeleteahab, yup, cassandra!
put/call hasn't broken 1.00 yet today, fwiw
ReplyDeleteIs this guy an idiot???
ReplyDeleteSUNDAY, MAY 16, 2010
STILL A CYCLICAL BULL
Until the pattern of higher highs and higher lows is broken this will remain a cyclical bull market. Shorts trying to jump the gun run the risk of getting caught opposite the Fed's printing press.
The secular bear trend can't resume until a yearly cycle bottom is broken. That yearly low came this year on February 5th.
http://smartmoneytracker.blogspot.com/
Where has leftback been lately?
ReplyDelete""Morgan Stanley Chief Executive James Gorman said Wall Street must "rebuild trust" with Main Street amid a growing disconnect."
ReplyDeleteWell, I'm with ahab here, this really is a funny statement. Trust takes a long time to build and can be ruined by one thing. This doesn't seem to really fit present culture on WS, where everything is about short term profits, the long term be damned.
ahab, I also never got a chance to say anything about that link you put up about brokers. It was dumb imo, brokers "churning" had nothing at all to do with any of this, so it figures that's what's coming out of financial reform. I'm know some brokers churn, but it's pretty rare for reps to even work like that with clients anymore, if you work with a rep it's more likely you are paying loads or some sort of flat wrapper fee.
Mannwich @ 12:58
ReplyDeleteI think he's found more important things to do with his time.
For the life of me, I can't imagine what that could be.
b22-
ReplyDeletethat churning link doesn't ring a bell- are you sure it was me?
yeah- rebuilding trust- WTF planet is this guy from?
what could they possibly do to instill trust at this point?
@DL: LOL. Me neither. Actually, looking outside today, I might be insane holing myself indoors watching this right now.
ReplyDeletekaren-
ReplyDeletethat money quote that I posted from your 12:41 link-
pretty ominous-
in my mind- there is every reason to believe that the economy will worsen- GDP again contract- housing again contract- consumer spending again retrench-
there are so deflationary forces in play
. . .so MANY deflationary forces in play
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteDL, you do make me laugh! Now, if I were a bull, the tape of the last two days would have me concerned.
ReplyDeleteSHORT SELLING NEWS HITS CNBC!
ReplyDeleteS&P/Experian Report: Bank Card Defaults Worsen In April
ReplyDeleteBy Market News International || May 18, 2010 at 17:05 GMT
WASHINGTON (MNI) – Consumer Credit defaults for first and second mortgages, and auto loans declined in April but bank card defaults increased according to a report jointly released by S&P and Experian Tuesday.
“Consumer defaults continue to moderate in the key big ticket items of first and second mortgages and auto loans,” David Blitzer, Managing director and Chairman of the Index Committee at S&P Indices said Tuesday.
However he warned the uptick in bank card defaults could spell trouble for other industries. “The bank card series may raise concerns for many consumer related
businesses as well as for consumer oriented lending institutions,” he said. The Consumer Credit Default Report is a joint venture with S&P and Experian designed to measure defaults on consumer balances in important loan areas.
The report found defaults were down from April to March for first mortgages by 6.0%, second mortgage by 11% and auto loans by 17.5%.
The bank card category showed an increase in defaults of 2.4%.
On a regional basis, the report recorded data for five major metro areas — New York, Chicago, Dallas, Los Angeles, and Miami which all showed a decrease of defaults from March to April. “Regional variations in default rates are typical. The sharp declines in Los Angelas and Miami reflect a somewhat more stable, though
still weak, housing market as well as some overall economic improvements in recent months,” Blizter said.
The next report will be released June 15.
S&P/Experian Consumer Credit Default Indices Summary:
S&P/Experian Consumer Credit Default Indices
April March April
Index to April March
——————————————————–
Composite 3.85 -6.00% -27.00%
First Mortgage 3.71 -6.20% -31.10%
Second Mortgage 2.49 -11.00% -45.40%
Bank Card 9.14 2.40% 19.30%
Auto Loans 1.94 -17.50% -15.30%
——————————————————–
Metropolitan Statistical Area April Index Level
S&P/Experience Consumer Default Composite Indices
Five selected metropolitan statistical areas
April March April
Index to April March
———————————————————
New York 4.13 -3.40% -12.10%
Chicago 4.30 -3.60% -5.80%
Dallas 2.71 -13.20% -14.70%
Los Angeles 5.14 -11.10% -37.80%
Miami 10.42 -7.90% -40.50%
———————————————————
** Market News International Washington Bureau: 202-371-2121 **
Anybody notice EUR:USD?
ReplyDeleteKaren @ 1:11
ReplyDeleteYeah, I'll be very surprised if the SPX doesn't make at least one more trip down to 1110 (and probably lower) within the next two weeks.
Currency traders have taken the news of the short selling ban at a time when the markets were relatively quiet to mean that there is another shoe to drop, just don't know what it is yet ...
ReplyDeleteahab,
ReplyDeletewas from a couple days ago:
http://traders-anonymous.blogspot.com/2010/05/amenras-corner_14.html?showComment=1273880309845#c5286520969505304096
Picked a hell of a time to check back in... I cant even get a EURUSD quote from the usual site-
ReplyDeleteI see its naked shorting though... not outright shorting.
Hendry’s Eclectica Asset Management has bought options on 20 companies in international markets that will profit from “a dramatic collapse” of China’s growth
ReplyDeleteand those beneficiaries of a China collapse would be...?
oops! posted the above in response to this
ReplyDeleteHugh Hendry Shorts China, Betting on 1920s Japan-Like Crash
lol- b22- I didn't even read it- I don't use a broker- but knowing that you and I-Man were brokers- thought you may have found it interesting-
ReplyDeletebut keep in mind- mortgage broker's rated below used car salesmen in the "trust" factor-
so you guys got nothing on me- LOL
gotta roll-
later
I-Man is not a broker.
ReplyDeleteI-Man works for a few brokers.
I think the Germany move is step one on the road to all derivative trading being banned before this is all over.
ReplyDeleteThat aint inflationary either....
my "title" isn't broker either since I do planning, insurance, etc. Bottom line: I'm in sales just like everybody else on WS!
ReplyDeleteAlso crossing the wires is clarification on the short selling ban. It will be limited to the top 10 German financial institutions. It is effective from Midnight.
ReplyDeleteThe ban also applies to credit default swaps on European government debt, AS WELL AS THE DEBT ITSELF.
BANKSTER PROTECTION RULES
My take on EURUSD ...
ReplyDeletehat daily hammer yesterday was very small relative to the downmove and momentum we have had, It doesn’t seem enough to turn this big ship around.
Also the all-time low at 0.8228 in October 2000 and the all time high at 1.6040 in July 2008 so that means the 50fib is at 1.2140 … and the 1.618 fib extension of the last swing is around 1.2165
Those are big levels I would like to see touched before trading a bounce.
GS called for EURUSD long this morning, stop below yesterdays low and target 1.35 ...
i just got bumped out of e*trade and can't get back in. imagine that as the market is falling..
ReplyDeletethanks for the updates Nic, very bullish news (snark)
ReplyDelete"The ban also applies to credit default swaps on European government debt, AS WELL AS THE DEBT ITSELF"
ReplyDeleteSounds like desperation on the part of the politicians.
Yeah, Jamie over at forexlive implying the squid and china buying up eurusd... starting to see some action in the 1min... finally got my eurusd charts up.
ReplyDeleteBookmarked last nights gold talk for a later read...
ReplyDeleteDid you ever get short Ben?
The squid have got it wrong calling long EURUSD twice already.
ReplyDeleteThree times a charm ...
I,
ReplyDeleteNo, I'm sticking with silver trades instead. I'm not bold enough to short gold.
I <3 Jamie, I-Man
ReplyDeleteOne thing I've noticed since I started cracking out on fx is that its a market that loves a good rumor... who did what and why seems to be a big fascination. Guess thats true for all markets to a degree. Sometimes I wish I didnt read "news" at all, only charts.
ReplyDeleteFunny how Greece wants to ban on the eve of their debt roll over. We all remember what happened when that was done over here...
ReplyDeleteMcF @ 1:54
ReplyDelete"I'm not bold enough to short gold".
What? Whaaaaaat???
All this time, I thought you were "fearless".
oh snap
ReplyDeleteI,
ReplyDeleteI'm having the most success right now just using put options so that's where I'm operating primarily right now.
Much like stocks last year, I sold the dollar a little too early for this move up.
DL,
ReplyDeleteI shake in front of gold though man!
$69 crude looking iffy.. 65 next..
ReplyDeletethere are higher probability shorts all over, puts are still a relative bargain on lots of stocks imo, so I'd think I'm just not being smart or I was trying to force something by shorting gold.
ReplyDeleteJust took out 1126 I see...
ReplyDeleteMcF,
ReplyDeleteIt can move pretty fast.
SPX is in a "textbook" trend channel today.
ReplyDeleteDL,
ReplyDeletethat's just it, long term (7 years forward and out) I'm super bullish on gold, so I'm more interested in waiting for a chance to buy physical rather than trying to short.
Looking kinda like we might fall out of that channel...
ReplyDelete@Ben 2:05
ReplyDeleteX infinity
Gold ATM machines, gold superbowl commercials, CRAMAR!, there are a lot of contrarian indicators. Although I'm one of them, so never mind.
I want some of those gold coins all those german banks were buying... after gold gets whacked.
ReplyDeleteI love this site! Sorry if this is a repost, but this is some cool shit:
ReplyDeletehttp://finviz.com/map.ashx
We are under 2 hours to the close.
ReplyDeleteJaime: "Hey Lloyd. Jaime here. No man, no plans tonight. You? Cool, I might swing by for a few. Listen, circuits are off now right? Lets do it."
I-Man, I pull finviz up on my iphone the second i open my eyes in the morning !! (thanks, again, to Nic for that and forexlive!)
ReplyDeleteI have to admit, I hate 20pt 1min dow moves.. especially when they keep jerking up.
ReplyDeleteaccording to Jamie:
ReplyDeleteThe ban on credit default swaps is not on short-selling but on buying credit protection for credits you don’t own. Traders are forbidden to buy insurance on bonds they don’t own.
This is prompting CDS spreads to contract across of Europe.
Greece has come in 58 bp to 607 bp
Ireland has fallen 10 bp to 199
Portugal has come in 9 bp to 271 (all prices according to Reuters)
McFearless @ 2:05
ReplyDeleteI'm a little curious as to WHY you're bullish on gold seven years from now.
I happen to agree with you on that, but I'm not sure what your reasoning is.
From ZH - EUR about to get whacked:
ReplyDeleteThe latest bombshell: German Finance Ministry now saying it will likely Ban EUR derivatives that don't hedge against FX risk. And good luck quantifying FX risk. Look for the EURUSD market not to plunge, but to simply shut down as a result of this. Europe is about to isolate itself from capital markets entirely
@Karen
ReplyDeleteInitial reactions are usually wrong. Wasn't there a jump in the Euro a couple of weeks ago? Me thinks spreads rise spectacularly sooner rather than later.
Uh oh. Day 8 starting to act all "fiboish"...
ReplyDeleteKaren @ 2:19
ReplyDeleteIt should also have the effect of removing liquidity from the market.
Potentially, that could have the effect of reducing investor's willingness to purchase the underlying bonds.
CNBC talking about Manny's TLT call and just passed a note from GS that earnings will be impacted 21% based on financial regulations being proposed. Good timing, Lloyd.
ReplyDeletePaging Katie...paging Katie...please report to your station...
ReplyDeleteFiled at 2:21 p.m. ET
ReplyDeleteSACRAMENTO, Calif. (AP) -- The board of California's giant pension fund is asking the state to increase its contributions to employee retirement benefits by $600 million in the next fiscal year to help counter massive investment losses.
The board made the request during a meeting Tuesday. It comes as California grapples with a $19 billion budget deficit and a threat by Gov. Arnold Schwarzenegger to eliminate its welfare program.
@Ra
ReplyDeleteAren't we also approaching FLash Crash anniversary?
DL,
ReplyDeletewithout going into to very much detail, I'd expect after deflation has run it's course and thus the demand to pay off debts, which are primarily based in dollars (what I still believe everyone will want in deflation) no longer exists, then I think gold will be viewed as the only real money and it will rise. this is the education of fiat currency that social mood is going to force upon the world. I'm also using some very long term wave counts by RP, along with cycle analysis from a few other sources outside EWI.
At that time I'm assuming gold mining shares will be fantastic buys as well (2012-2016?), but I still think this buying opp. in gold stocks is years down the road.
I think 1076 will be the next swing low.
ReplyDeleteI meant, anniversary time of day on the 8th day after.
ReplyDeleteThats SPX, of course... not gold.
ReplyDelete"German Finance Ministry now saying it will likely Ban EUR derivatives that don't hedge against FX risk."
ReplyDeleteIf we really start impulsing down again things are going to be a lot smoother for this group if we stick together. During impulse Ewave really shows how powerful it can be, not just with markets, but these types of social predictions as well.
This summer is going to be some show.
Quick everyone ....
ReplyDeleteput in one penny limit buy orders for the stocks you like.
@I-man
ReplyDeleteI calculated 1090. I'm glad to see I'm catching on - at least in the ball park anyway.
You get a car, you get a car, you get xom at 3$
ReplyDeleteHmmmmmmmm.....
ReplyDeletethe q's puts are looking really good now! Not sure yet if I will cover today.
ReplyDeleteNic! I was seriously just thinking the same exact thing...
ReplyDelete@ McH
ReplyDeleteI have 1044 below that
@DL
ReplyDeleteHe's "Mc"Fearless...
Something to do about "golden arches"
I am wondering what is going through Krugman's mind right about now...
ReplyDeleteI did have McD's for dinner last night. Two cheesburgers, love those McD buns.
ReplyDeleteBen, that is revolting!! Mahi mexican style for me.. homemade pinto beans, lots of fresh salsa and avocado slices.. lol
ReplyDelete@I
ReplyDeleteLOL - I'm not there yet! I only learned the basics this weekend.
yeah ben, as your friend, I must encourage you to avoid fast food.
ReplyDeletelol Karen, we do McD's on the East Coast.
ReplyDeleteI give the pickles to my wife it makes you feel a little less disgusted.
oh I know the shit is terrible for you, I would guess I ingested a half lifetime worth of sodium in that meal....we eat pretty healthy most of the time but I like McD's and some DQ every once in a while.
ReplyDeleteMcH,
ReplyDeleteFwiw, I dont use EW... I've read the first few pages of the book, EWP, but my style is kind of a mashup of classical support and resistance, trendlines, and then once I label my targets, I back check them with Ra's fibo's. If they are off, I start with my redraws of trendlines, or zoom in to look for gaps.
has anyone ever seen a blood sample after you eat McD? You can basically see the fat swimming in it. It's really really gross.
ReplyDeleteIf we get that low (1076-1090), I think 1115 acts as serious resistance.
ReplyDeleteIt is also around the 200 day MA and was the 2009 close.
Got those facts from here. Funny how he looks at support and I'm looking at resistance.
AUDUSD keeps plugging away at new lows.
ReplyDeleteKaren,
ReplyDeletewhy oh why were we not jumping all over the ANF puts this morning?