How will we determine the magnitude of the next correction?

The calculated trendlines for the small pattern in the upper right (labeled with small blue numbers) will be followed if the correction is relatively short and shallow. Should the correction turn severe, after a little while of following the trendlines generated from the small blue numbers, we will see the price action jump towards deeper trendlines generated from some of the longer term segments, here numbered in red....that's how we will know what's going on at a deeper level...

(Click to enlarge)

Catherine Austin Fitts - Goldman Whack-a-Mole

http://solari.com/blog/?p=7076

Some strange things happening before our eyes...

Waiting for intermediate level decline...

The divergence we're seeing on indicators suggests a medium level decline is likely. Whether it becomes more than that, will only be determined after it runs a while....

Warning for Britain as financial chaos spreads to Spain

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7649392/Warning-for-Britain-as-financial-chaos-spreads-to-Spain.html

Excerpt:

Yesterday David Cameron, the Conservative leader, suggested Britain could follow Greece into crisis. “Greece stands as a warning to what happens if you don’t pay back your debt,” he said.

David Miliband, the Foreign Secretary, accused Mr Cameron of “economic illiteracy”. Lord Mandelson, the Business Secretary, insisted that Britain was in a “very, very, very different situation” from Greece, because the UK retained its AAA rating.

But Neil Mackinnon, an economist from VTB Capital, said it was “a mystery” that Britain had not yet been downgraded.

Angel Gurria, the head of the Organisation for Economic Co-operation and Development, said “contagion has already happened”, likening the crisis to the flesh-eating bug Ebola.

There's a lot of activity on the legal front against Goldman and the New York Fed, but..

Sounds like some tough prosecutors, Neil Barofsky and Robert Khuzami, are going after the NewYork Fed and Goldman, respectively. I haven't posted anything about these stories yet, because it remains to be seen how aggressive these campaigns turn out to be. As good as these men are, I don't think the American legal system is up to the task, I don't believe the U.S. can reform itself. I would like to be proven wrong, but I think the U.S. is too far gone to be revived as an ongoing concern - corruption is still spiraling upward as far as I can see, and some kind of collapse is probably baked in the cake already....

The New Secessionists

http://www.informationclearinghouse.info/article25314.htm

Yes I agree, the system probably can't be fixed...

Big Down day...

Looks like the correction may have started, although I would say we would need a couple more days like this to be sure, and I have price targets that should confirm this when they are reached....

The Imminent Crash Of The Oil Supply

http://www.marketoracle.co.uk/Article18948.html

Excerpt:

The world was completely transformed by oil for the duration of the twentieth century, but if the graph is right, within 20 years it will be virtually gone but our dependence upon it will not. Instead, we have:

• zero time to plan how to replace cars in our lives
• zero time to plan how to manufacture and install millions of furnaces to replace home oil furnaces, and zero time toproduce the infrastructure necessary to carry out that task
• zero time to retool suburbia so it can function without gasoline
• zero time to plan for replacement of the largest military establishment in history, almost completely dependent upon oil
• zero time to plan to support nine billion peolple without the "green revolution," a creation of the age of oil
• zero time to plan to replace oil as an essential fuel in electricity production
• zero time to plan for preserving millions of miles of roads without asphalt.
• zero time to plan for the replacement of oil in its essential role in EVERY industry.
• zero time to plan for replacement of oil in its exclusive role of transporting people, agricultural produce, manufactured goods. In a world without oil that appears only twenty years away, there will be no oil-burning ships transporting US grain to other countries, there will be no oil-burning airlines linking the world's major cities, there will be no oil-burning ships transporting Chinese manufactured goods to the billions now dependent on them.
• zero time to plan for the survival of the billions of new people expected by 2050 in the aftermath of ":peak everything."
• zero capital, because of failing banks ansd public and private debt, to address these issues.

Barcharts Output - $SPX

Here I am playing with the $SPX monthly charts, and noting the bottom indicator StochRSI. Both of the major tops were preceded by divergences in this indicator which I have marked with brown arrows at the bottom of the chart. The points in time where this indicator was maxed out against the top value and pulled away I have marked with thick Black lines, see what happened afterwards...The chart at this point looks Bullish actually, no divergences present...I welcome your comments...

What seems reasonable to me is that we might see a correction, sufficient to relieve the overbought pressure (which could happen anytime), and then a resumption of the upside...I've been generally skeptical of this rally for a while, but there doesn't seem to be any internal weaknesses or divergence, just some overbought conditions such as is seen in young bull markets...

Another look at Monthly Bollinger Bands: QQQQ and IWM

Note that Barcharts might calculate their charts slightly differently then Bigcharts, but theirs are also updated pretty fast, Bigcharts waits until after midnight to update their weekly and monthly charts...

Anyway here are the monthly Bollinger Bands for QQQQ and ILM (proxy for the Russell 2000):

Rather looks like the Russell is already in it's bands and the Nasdaq 100 is close...So if we're in a mania, it may push these wider, if it's supposed to stop it should be real soon...

Something is changing...

I am thinking as of this afternoon that most trendlines are being exceeded, some by quite a bit...I think this is still a FED powered rally, and all normal limits are being pushed through.. Today had rather high volume, reversing the trend of late towards low volume...so the Bear is maybe dying here unless something changes early next week..Note above, the big spike in volume and the associated CMF indicator (green)..

Note in the Bigcharts chart above, only the monthly Bollinger Bands stands in front of the $RUT's march upward...that might stop it in conjunction with the trendlines I posted earlier, but the volume stats right now don't look encouraging for the Bears...

Lastly in the charts below, I have shown how the recent spike in the $NDX looks, based on the regression of past highs. Are we seeing a parabolic blowoff that's near it's end, or just the superseding of existing exponential trendlines by a mania that has no defined boundaries? Right now truthfully, I'm not sure..

Russell 2000 Microtrendlines

Note the important trendlines for the moment are in magenta....We are at a place you might expect a top...provided it stops rising much past the trendline, of course..

Peak Energy - What links the banking crisis and the volcano ?

http://peakenergy.blogspot.com/2010/04/what-links-banking-crisis-and-volcano.html

A few interesting comments about the airline industry...

Letter from Iceland....

http://www.howestreet.com/articles/index.php?article_id=13138

Very Good!

It still doesn't look real safe to short this thing...

At least, not yet...See what the next couple of days brings...Need to see a pullback begin in earnest..

Top being retested..

It looks like the recent top is being retested about now...I note that Charles Nenner is still somewhat bullish in his models..I can't address that directly, although I do respect that he's an analyst held in high esteem...He seems to feel a short term correction is in the works...we'll see...The wave pattern he's suggesting seems rather unnatural in certain respects, but I try to keep an open mind...

Want to know why U.S. Lawmakers don't care what happens to our country?

Jailed Whistleblower: US Lawmakers Held Offshore UBS Accounts

http://www.democracynow.org/2010/4/16/ubs


So I guess they can get out of dodge before everything collapses, and their money is safe...how tidy..

naked capitalism - Was Greece Rescue Futile, and is Portugal Next?

http://www.nakedcapitalism.com/2010/04/was-greece-rescue-futile-and-is-portugal-next.html

For the world economy, the dominoes keep alignin'...

Microtrendlines, $SPX and $NDX

Look at the amazing 'overthrow' of the $NDX chart...a real mania..

Naked Capatalism - Goldman Sacked?

http://www.nakedcapitalism.com/2010/04/guest-post-goldman-sacked.html

Aside from the probable market top reached last week, this is THE news...