Friday, July 30, 2010
(Click to enlarge)
I sold both short positions right after the open, the price targets on the $SPX were almost met,and as you can see, quite a bit of positive divergence on hourly. So a 'bird in the hand'...
So the market may have bottomed today and not on the 2nd or 3rd as I originally thought. With this much volatility, it's hard to know for sure, but when you're close to the profits you meant to make, grab them....
Note the conventional trendline below, the market really may have turned up today, and it looks like a wedge is maybe developing, the lines are not quite parallel:
Thursday, July 29, 2010
$SPX closed right on the green uptrending trendline generated from the March 2009 to April 2010 move.
There is a lot of resistance under here, and lower....
Here, on the $RUT, you can see the crossover of the magenta and ascending brown trendlines marked the low price of the day and started a rally that only seemed to finish near the end....
On balance there's a lot of resistance below us from different geometries across all of the indexes. If it wasn't for the very poor volume that powered this rally from the July 1st lows, I wouldn't be sure of what the trend really is....at least looking at intraday charts, anyhow.....
Very tentatively, we might in some tortuous fashion get down to the lower ascending trendline in both the $RUT and $SPX charts, before rallying again. Those lower trendlines on both charts were struck twice and held, so I assume they will hold again...So just as the decline from the April 26th high was not a simple affair, it's a reasonable guess that this uptrend we are in on a larger scale, is going to be populated by humps up and humps down...I'm assuming we are on a hump down, at the moment....
I may have more to say later...
Wednesday, July 28, 2010
All the funnier, because the Democrats, barely did anything to 'em....
And this has important implications, as you all well know....
Look at this next chart, something is deeply suspect about this rally, maybe it really is a turkey ready to roll over and die, despite the weekly indications implying more upside is possible....well, maybe not...
Tuesday, July 27, 2010
This is how it works, we aid Pakistan, they funnel aid back to the Taliban, they kill our soldiers, we give more aid to Pakistan, and on and on...
It is my thesis that the inflation, deflation debate is flawed because we no longer have reliable price signals. The overwhelming domination of program trading on various exchanges has fundamentally changed the way prices are created and represented in the economy. All 'efficient market' theories are dead. - Max Keiser
Monday, July 26, 2010
Breadth indicators have risen modestly, on a weekly basis, not overbought on this time scale:
Put/Call Ratios not extreme (although $CPCE a little more problematic than the overall ratio):
X-Trend indicator not yet at extremes:
Signs of Caution:
$RUT at some high trendlines, trying to break through...
Slightly worrying sentiment appeared tonight:
Important question, when will this wedge in the $VIX resolve bullishly, and therefore bearishly for the market? This is not yet clear, but we have to watch it closely:
Saturday, July 24, 2010
Friday, July 23, 2010
Dr. Paul agrees well with many others of conscience pointing to the reckless use of power and it's consequences.
As a side note, I went long early today and I am seeing gains. It's a small position, as another trendline hurdle and daily Bollinger Band resistance is overhead yet. But the trend is definitely up now....
Thursday, July 22, 2010
So it could be that the big trend change I have been talking about for few days is finally happening. We'll see..For now, I'm still out of the market until things are a little more solid...
This chart shows the higher probability of the market going higher in the intermediate term as VIX, obviously looks poised to go lower based on these indicators. The question is 'When does that market rise start'? I had thought perhaps today might be the beginning of that, but it turned out not to be the case. Short term the markets trend is hard to read right now. Sentiment is neutral, P/C ratios are slightly bearish.
One service I subscribe to is Clickcharts, and here are two of their proprietary oscillators (the top two) and their verdict:
Short term, at least, Bearish.
Wednesday, July 21, 2010
Mike Booen of Raytheon gave USA Today the money quote for the day: "The targets came in over the ocean, and it was a good day for lasers, bad day for drones."
The markets have declined slightly from this, done 10 minutes after the open...
Tuesday, July 20, 2010
Quite a bit of positive divergences can be found around and about also, in the indexes...
Here's the $SPX intraday, I didn't draw in the divergence lines, I think it's so clear here they're not needed:
And here's the $RUT, same story:
Roberts on Glass-Steagall, Free Trade and the Dangers of an Evolving 'Oligarchy of Private Interests'
Introduction: Paul Craig Roberts is an economist and a nationally syndicated columnist for Creators Syndicate. He served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as a co-founder of Reaganomics. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. Roberts has been a critic of both Democratic and Republican administrations. He has written or co-written eight books, contributed chapters to numerous books and has published many articles in journals of scholarship. He has testified before congressional committees on 30 occasions on issues of economic policy. His writings frequently appear on OpEdNews, Antiwar.com, VDARE.com. Lew Rockwell's web site, CounterPunch, and the American Free Press.
Paul Craig Roberts: During most of my life government power, the power of government bureaucracies, was excessive. The Soviet government was the epitome of unaccountable government power. In the US, government power over business and individuals grew.
Daily Bell: Is that still the case?
Paul Craig Roberts: In recent years there has been a redistribution of power in the US from government to private. The US now resembles an oligarchy of private interests. The most powerful ones are Wall Street, AIPAC, the military/security complex, the oil industry, agri-business, insurance and pharmaceuticals. These private interests control economic and foreign policy, write the legislation that Congress passes and the President signs, and have achieved the monopolization of the US economy by large-scale commercial organizations. As far as I can tell, traditional conservatives scarcely exist in the US today. They have been eliminated by the neoconservatives, essentially militarists committed to US world hegemony.
Daily Bell: That doesn't sound like a very healthy evolution.
Paul Craig Roberts: There's another. The Republican Federalist Society has succeeded in enhancing the powers of the executive over the co-equal branches of government. Many federal judges and Department of Justice appointments are drawn from the membership of the Federalist Society, thus putting in place ideologues to advance executive power. Once executive power becomes dictatorial, we will have lifetime rulers and growing conflict between the executive and private oligarchic interests.
American elections are meaningless as the vast majority of those elected are dependent, or become dependent, on the campaign contributions from the private oligarchic interests. Today government bureaucracies (Child Protective Services and police, for example) have unaccountable power over private individuals, but the power of government over organized private interests has been beaten back. Today the private interests rule the state.
Monday, July 19, 2010
Now I see that the decline of the last three days was the expected failure against the large scale trendlines, but that large scale pattern is itself, possibly failing. The rally out of the 7/6/10 low has regathered at the bottom trendline channel. I have projected today's close as both the high and low for tomorrow, but that is just to show how we have risen off of the bottom trendline, showing it's still alive...
I was also quite bothered by what a low node value the rally was failing at against the long range trendlines (near the .250 node for the $SPX and .125 Node for the $RUT). The $RUT value is really early. Now I see maybe it was meant to be rejuvenated and continued, which makes perfect sense...
Based on Fibonacci calculations, you get 40.701, which is right at the current Bollinger Bands!
So Monday I'll have my finger over the 'SELL' button!
Sunday, July 18, 2010
This is creepy and supports my dislike and aversion to computer games.
Of course, this man is a fool. The U.S. will collapse so badly, that video game technology will be the last thing anyone has time or effort to worry about...
There are potential .500 node turn dates in both early September and early October, consistent with traditional Autumn low points. This is where these wedges may finish their work...
Saturday, July 17, 2010
Asphalt Is Replaced By Cheaper Gravel; 'Back to Stone Age'
Friday, July 16, 2010
If he's right, his technology is well beyond mine, and I think that would make it very cool. But time will tell.
Just click on all of the 'I agree" buttons....
Perfectly simple, really.
Helen is the proprietor of a pub in Liverpool . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her pub. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed in a ledger (thereby granting the customers loans).
Word gets around about Helen's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Helen's pub. Soon she has the largest sales volume for any pub in Liverpool .
By providing her customers freedom from immediate payment demands, Helen gets no resistance when, at regular intervals, she substantially increases her prices for beer and lager, the most consumed beverages. Consequently, Helen's gross sales volume increases massively.
A young and dynamic bank manager at the local bank recognizes that these customer debts constitute valuable future assets, and increases Helen's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.
At the bank's headquarters, expert traders transform these customer loans into ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on the international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics.
Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.
One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helen's pub. He so informs Helen.
Helen then demands payment from her alcoholic patrons, but, being unemployed alcoholics, they cannot pay back their drinking debts. Since Helen cannot fulfill her loan obligations, she is forced into bankruptcy. The pub closes and the eleven bar staff lose their jobs.
Overnight, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
The suppliers of Helen's pub had granted her generous payment extensions and had invested their firms' pension funds in the various BOND securities. They find they are now faced with not only having to write off her bad debt, but also with losing over 90% of the presumed value of the bonds. Her beer supplier claims bankruptcy, closing the doors on a family business that had endured for three generations and her lager supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion pound, no-strings attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Helen's pub.
Quite good, and to the point. Thank you Mish.
Thursday, July 15, 2010
Whatever it is, it suggests $VIX has a ways to climb, and by implication, the $SPX has a ways down to fall....
So be alert tomorow, take nothing for granted...
Here is an intraday chart courtesy of Barcharts that shows weakness at the end of the day.
The Chaiken Money flow was weak on the late day rally, and the Williams Pro Go indicator, like the fast RSI I used, indicates a top (it seems kind of upside down to me, but), not a bottom. But we'll see...
Wednesday, July 14, 2010
The consequences of a culture where 'dumb is cool'.
Here, on 05/13/2010, the two exponential trendlines were at 1163.48 and 1153.77. The $SPX price action was already above them during the narrowing process, and it broke downward rather than upward.
Here was yesterday's action (07/13/2010) for comparison:
The action here, shows the somewhat greater complexity with three trendlines interacting instead of only two, as in the example at the top.