Saturday, January 30, 2010

Why this is probably the end of the rally...



Notice here the huge divergence between price and the price/volume weighted CMF indicator as seen in the ETF that tracks the risky small cap Russell 2000 (lower chart, IWM). The July correction in price was equally deep to what we have seen now, but it had buying volume on it's side, unlike the present situation...

Battle of the Titans: JPMorgan vs Goldman Sachs

http://www.huffingtonpost.com/ellen-brown/jpmorgan-vs-goldman-sachs_b_441922.html

Friday, January 29, 2010

I Am Become Debt, Destroyer Of Worlds

http://www.safehaven.com/article-15625.htm

Interesting....

Funds flee Greece as Germany warns of "fatal" eurozone crisis

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7095818/Funds-flee-Greece-as-Germany-warns-of-fatal-eurozone-crisis.html

After Greece goes the way of Iceland (soon) then maybe Spain goes down too? Then who's next? The last domino to fall will be the U.S.

The World Economic System is dying, and like a drowning man, where the heart and lungs shunts the available blood back and forth between the brain and the heart to keep the 'core' alive, the world system is doing the same. The 'blood' is 'liquidity'. The brain and heart of the world system are probably, London and Wall Street, so they may survive for a while, at the expense of the 'extremities' (small countries) of the global system...

Thursday, January 28, 2010

The Greatest Threat to America

http://english.pravda.ru/opinion/columnists/111884-0/

From Pravda, no less....found this link on Urbansurvival.com....

Getting closer to a more sustainable bounce..



Note that the $SPX is now just about at support from the trendline that rescued it back in July...the $NDX is close to, but not yet at, the equivalent place...

Tuesday, January 26, 2010

You can see the double bottom...


So the bounce really got started today, after the double bottom completed. Now we will see how much power it has. My belief, is not enough to revive the rally from last March....

Someone on another site said that Obama's State of the Union address tomorrow night will be important. I suspect that's true, and even though I don't usually correlate news with market changes, further emphasis in that speech on curbing the banks may well be the catalyst that causes this little rally to top and reverse say, Thursday morning. Just a guess.

Monday, January 25, 2010

The bounce has materialized, but...

It doesn't look terribly strong. Can't say if it ends later today or lasts a couple days, but how long it lasts will say something about the strength of the downleg that's starting....

Friday, January 22, 2010

Wow! weak market!



Notice the upper chart of the $SPX. We have already breached the exponential trendline that has been the primary support for the rally from March (the trendline with the black arrow pointing to it). If we now go on to breach the deeper trendline (pointed to by the green arrow), then the Bear has probably returned. The light blue arrow shows the only correction that occurred since March that was deep enough to use this lower trendline for support.

Wedge forming...


Obviously, a bounce will happen later today or Monday. If the bounce doesn't materialize into a powerful rally, then the Bear is back. So we'll see what happens...

So, Corporations can now spend unlimited amounts to promote "their side" in campaigns...

I'm sure you've heard of the new ruling, if not, here's a link:

http://www.bloomberg.com/apps/news?pid=20601103&sid=a_ONCajlMuTY

I can just hear the noise levels going up, more misinformation and disinformation then ever. Maybe this will get people to stop watching television, I'm sure it will get shrill as well as busy as corporations and unions on opposite sides of an issue try to outspend each other on TV ads. With deep pockets, the nonsense levels could reach new highs, and truth, more then ever, will be the casualty here.

Meanwhile the market is down again today, I'm just waiting for the 'end of day' to run my analysis....

Thursday, January 21, 2010

Decline may have indeed started...

Probably by the end of this week, we will know that the Bear is indeed back. The market action of the last two days strongly suggests this.....

I will redo all of the important charts tomorrow night, and see what we have at that point...

What I am watching for is a decline of the $SPX, particularly, that takes it below the 'micro' trendline that it's been 'resting on' as it 'climbed'. None of the minor corrections in that index has penetrated that trendline since the rally started, so I will take that event as pretty solid evidence that this correction is of a different scale and much higher importance then the other ones.

Wednesday, January 20, 2010

Looking like a distribution pattern...

The market continues it's "up one day and down the next" pattern, but it could be a distribution top. Today's market action might well have something to do with the elections last night. I would say Brown's victory in Massachusetts has to be the start of something bigger. I distrust Republicans every bit as much as I distrust Democrats, but man by man we have to sift out the trash in each party to get reform.

Tuesday, January 19, 2010

Still waiting on miss market...


You can see here the negative divergence on the Nasdaq breadth indicator $NASI compared to the $NDX, shown by the dashed, thick black line, and the two recent node hits given by the vertical red dashed lines on 12/28/09 and 1/08/10, and also all of the recent places where RSI on this breadth indicator peaked. These were usually at least short term tops. Though that's true, today didn't resolve anything...

Friday, January 15, 2010

Another interesting timing clue...

I don't need a chart to say this, the amount of time that the $NDX has spent rallying from the March '09 lows, as of 1/08/10, was exactly .618% of the duration of the crash from Oct '07 to that March low. We are only a few trading days beyond that, so it would still qualify as a Fibonacci turn if the markets broke down here. This is in addition to the exponential nodes we have just seen hit over the last two and a half weeks. So things are not happy today in the markets, and it bears watching, as change could be coming....

Thursday, January 14, 2010

Market Manipulation 101

Check out this post on Yelnick, which summarized, says that all of the gains in the stock market in this rally have been made on just 30 Mondays. No kidding.

http://yelnick.typepad.com/yelnick/2010/01/vampire-market-all-the-action-is-at-night.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+PlanetYelnick+%28Planet+Yelnick%29

And then I (along with a lot of other people) get this email today from a professional pit trader (Larry Levine), who has a free newsletter he produces, in which he talks about an event yesterday that raised eyebrows in the trading pits. Some of his comments:

What happened at 12:03pm Eastern Time? There were no reports out, the 10-YR Note auction wasn't until 12pm, and the S&P500 was a bit stonewalled just under 1137.00 after a rally from the day's low. As the market advanced slowly through the congestion it hit: a MASSIVE order, or series of orders, lifted the offer in the e-minis. But it wasn't your garden variety large order of 2,000 mini's - I'm talking about 114 times that size.

At 11:03am today at the Chicago Board of Trade (12:03pm EST) over a quarter of a million mini-S&P500 orders traded north of 1137.00! (228,000 last count)

Could this be real I wondered? Was it some sort of computer malfunction that added too many zeros to the reported, yet smaller, trades?

No, that's not what happened. In fact, a bit of a hullabaloo occurred around my trading booth on the floor of the CBOT as many locals, brokers, and compliance members stared at the aforementioned volume chart in disbelief. As it turns out, all of the trades were indeed valid. None were busted. Moreover, as one of the compliance members told me, he saw the trades listed sequentially (1,000 or 2,000 lot orders) and they all occurred with milliseconds of one another until the massive order was completed.

This order size takes a SERIOUS bankroll to get done. If you are wrong by one-point on a 228,000 lot ES order, you can say goodbye to $11,400,000.00. If you contemplate this size your margin requirement is $1,282,500,000.00, while the notional value is $12,961,800,000.00.

Has a new "playha" hit the scene? Is his nickname "Helicopter?" Has high frequency trading (HFT) taken root in the mini-S&P in a huge way?

Of course by 'Helicopter' he means Ben Bernanke and the Govt. Talk about rigged markets, it sure looks that way...

Monday, January 11, 2010

Another clue...


You see the that the VXN has popped below it's Bollinger Bands. Exhaustion gap for the VXN? Could be...
The VIX looks the same way...

Another warning, from the Russell 2000



To the two nodes overlapping on the $NDX at the end of December, we now add another 1.00 exponential node on the Russell 2000. So we now have a cluster of nodes on two indexes over a fairly tight time frame relative to the long time periods that spawned them. This is again suggesting trend change is in the cards in the not to distant future.

Sunday, January 10, 2010

How the Teamsters Beat Goldman Sachs

I found this link over at the Max Keiser blog (you all should visit there, great site), it looks like the teamsters have the muscle and resources to beat the Goldman boys at their own game.

http://www.counterpunch.org/andrew01082010.html

But this is line with a prediction made recently (check posts from a few days ago) that various groups would start to do battle soon over a shrinking pie. This was resolved 'politely', but that may not happen as often as the Bear market proceeds...

It's also clear from this that Goldman is the 'grim reaper', both predator and parasite, as it routinely makes bets against viable firms, brings them down, and then pockets big profits from the unwarranted destruction of these same firms. Totally treasonous, criminal.

Saturday, January 9, 2010

Funding and the patriotism test

http://www.ft.com/cms/s/0/0306069c-fbb4-11de-9c29-00144feab49a.html?nclick_check=1

Bankers are worried that they might have to factor 'revolt of the people' into their estimates of a country's debt repayment success....

A related article suggests that many large banks are now worried about sovereign debt risk, and what would be the outcome if a major western country went into default. These banks rarely carry debt default insurance (which is nothing more then some of those loathsome, credit default swaps) on the government bonds of major countries since these carry a 'triple A' credit rating. But if such an event were to occur, it's not clear that they could buy or carry enough insurance to cover it, anyway. Thus it suggests huge losses for the players involved.

I personally would suspect that they are really worried about a cascading meltdown of the whole derivatives market, which would bring down the whole global economic system. The article doesn't explicitly say this, but I can read between the lines here...


Class Warfare American Style

http://jessescrossroadscafe.blogspot.com/2010/01/class-warfare.html

Thursday, January 7, 2010

Watching today's $NDX weakness...

Remember that we had the mathematical event of two major nodes overlapping on the 28th of December. That did not mean the top of the market had to be on that day (although sometimes that will happen), only that an internal condition for market psychology should turn on that date. We are still very much in the shadow of that event, and a major decline could start at any time. It was slightly unnerving to see the market rally somewhat after that date, and of course, the market can do anything it wants, but on probabilities, two nodes and a slight trendline breach are pretty strong bearish warnings for the $NDX. I am also seeing a fair amount of negative divergences in most indexes. So still, we are waiting for confirmation that the bear has returned...

Tuesday, January 5, 2010

$NDX Micro charts


Right now the $NDX looks like a breakout is occuring, although one good down day could negate this. The bears best shot comes with the $SPX charts, where major trendlines are being hit right about now. If the $SPX swooned it would bring the other indexes back down with it. That said, it's all speculation. It will be puzzling if the $NDX shrugs off two overlapping nodes and an important trendline. If it can do that, and the $SPX continues up as well, then we have a pretty damn strong market here. The sentiment figures show lots of complacency here.. I wouldn't think anyone would get too involved with this market at this point. The $SPX has a P/E ratio of 151! Kind of scary...

$SPX charts Micro and Macro