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Divergence Update
Ha Ha
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Bullish capitulation Bitchez!
Now the big question is add TZA now or while BB releases the piece of paper he just wiped his arse with?
HAHAHAHAHAH
http://fascistsoup.com/wp-content/uploads/2010/09/Divergence.gif
Animated gif
thats a good one
What a joke. Rod Sterling just wrote another episode of the Twilight Zone and we're fucking living in it.
That would be Serling...
http://en.wikipedia.org/wiki/Rod_Serling
Although, at this rate, it may well be "sterling" that's writing our future...
(silver, that is, not Pounds)
I think this episode is called: Full Retard.
Complete lunacy...
The market ramp is compliments of the Obama administration by way of the FED POMO. You didn't think he was going on TeeVee for an hour with the market hanging in the balance, did you?
Please! He's loves Wall treet and Main Street and Porn Street. Candy all around. It's on Benbama.
I seriously think this will cause TD to lose it today. Quick, take your government sponsored prozak and repeat after me, "Ben is right, the markets are great, everything will be fine".
This is exactly what I meant the other day: the SPX will ramp while the "risk-on" button is muted globally. Twelve more points (to 1155...) and that's it.
Once the SPX touches or breaks that level, get your happy scalping robots on the EURJPY, Only Short. Then go on vacation.
You'll be pleased.
"D
Elaborate please, I am but a humble student and your previous postings have been quite enlightening.
Thanks to you, Three Trees. I am also but a humble student.
:D
There is a distinct sloping pattern on the long-term (Weekly...) SPX chart that has been present for some time. Drawing a line from the top in October, 2007, connecting to the second recent high off the bounce in late May of 2010 leaves us with a definitive slope.
The slope intersects at this point in time to about 1155 on the SPX. Obviously, as the timeline (x-axis...) moves further along, the convergence of the sloped line drops the value of the SPX (y-axis...). So, the longer it takes to get there, the lower the value of the SPX will be when the signal occurs. In theory, the timeling could run all the way out to some time in November of 2010 with the SPX remaining at its current level. Either way, the SPX will hit the line and they will cross- eventually.
When the SPX hits this line again, the chances of it dropping from that level increase significantly, if for no other reason than this is how charts work. The third touch is generally the harbinger of things to come. In this case, that means down. Way down.
Over the past several weeks, there has been an on-again, off-again relationship with risk and the SPX. Sometimes, "risk" pairs, such as the EURJPY (Euro is "risky," while the JPY is "safe"...) don't react to increases in global risk appetite, such as one witnesses in the equity markets. Generally, as risk appetite has increased, the SPX has increased and taken other risk assets with it. Last Friday, the risk trade decoupled in 4X and the risk trade has sat and churned while the market has ramped.
This tells me that the risk appetite for currency pairs has been exhausted and that they are "waiting" for something. It may be that they are waiting for the FOMC results tomorrow. I do believe that that will be the catalyst for renewed movement in the risk-trade currency pairs.
Either way it turns out, QEII or not QEII, expect the news to be bad for the US Dollar. If the Fed goes ahead with plans to restimulate with further easing, then confidence in the dollar will tank and people will sell USD for JPY.
If, on the other hand, the Fed does not ease, that will send the equity markets into a tizzy, the markets tank and drag the USD down with it, as the USD is actually now considered a "risky" currency, especially against the yen and the CHieF (Swiss franc...).
My out-on-a-limb-please-do-not-anyone-follow-this-advice statement is that the equity markets will ramp in the morning after a sluggish showing in the overnight and in anticipation of the Fed announcement. 1155 gets hit around noon.
The Fed announces, et vous y voila! the top has been put in place in exactly the right spot. That means to get short all "risk" pair trades, especially the EURJPY pair after the announcement- maybe even wait a couple of days before you strike. Stocks won't see this level again for several years.
You'll have plenty of time.
:D
The President's appearance today on CNBC's town forum and the news that the recession "ended june 30" suggest that the market is being signaled that tomorrow's FED news will be interpreted as presaging further easing--until it sinks in that the latter is not needed if the former is valid. I look for 1155 by noon and 995 soon.
In other words, we are approaching discontinuity.
What is the discontinuity? Ireland is too PIIG to fail, yet there is no credible bailout possible.
In, short, tonight's news out of Ireland supports ORLY's analysis--the next few days will be interesting--for those of us who are not able to do Orly's REMARKABLE chart analysis, but who can read the ensuing market reactions.
Orly, I'm really astonished by your self confidence, it seems you're the only one who's keeping calm. Well I'd be happy to say you were right today, but in this market I'm afraid you can expect whatever...
however: what do you think about EURUSD? I have something personal with it :)
thx
Behind money management, the single-most difficult thing in trading 4X is removing all bias, prejudice and preconceptions from your trading. It is much easier to remain "calm," as you say, when I just do what the charts tell me to do.
As for my weekend calls, you may call me right, if you like, but what I said was:
So far, I've done fairly well, I'd say.
:D
But in answer to your query, there is a hierarchy of risk to safety seen in 4X. Of course, another trader's thoughts may be different. It is like a dominant/submissive thing or a yin/yang deal, if you will.
The JPY is dominant over the USD.
The USD is dominant over the EUR.
In each case, the "submissive" of the pair is the "risky" of the pair. This grouping of pairs also gives you a nice, circumferential circle-jerk of risk/reward. In other words, if the SPX tanks, the USD tanks against the JPY and the EUR tanks against the USD.
Makes for interesting trading with a built-in hedging device.
:D
five standard deviations bitchez...
LOL
Praise Mao and may Bernanke have mercy on your soul.
F***.
Ha Ha! Bitchez!
http://www.youtube.com/watch?v=ppEJ8r7bQ2o
OK...deep breath..I'm gonna ask and prepare for wrath of the board, what's going on here?
It's Magic, Benbama style.
You don't think the sitting president, the POTUS, was going to appear on TeeVee for an hour with the market dropping, did you? And you don't think the market would be allowed to drop after that one hour special, did you?
This is manufactured consent, Benbama style.
And don't forget the recession has ended over one year ago... they have to make up for the time lost.
Just a few months after The One took office. That also means TARP has worked right? We will get a new one that will work just like that.
Grandchildren won't believe this crap.
Spooky Action at a Distance
The Ponzi ramps up! Woohoo.
Because at the end of the day, it has nothing to do with facts. It is all about perception and as long as you can make people believe we are living in happy days...the perception becomes reality.
I would not be the least bit surprised to see housing numbers this week that are absolutely wretched and ignored and for the ponz to ramp past 11k.
Or up a (statistically insignificant) 3% - in a sign of the housing market "stabilizing". /sarcasm
Stocks are so 20th century... During the week we will see some real pain from Europe, stocks will keep on their dufus course to a newly fresh minted annual high...
"The Word 'unblowupable' gets thrown around alot these days ....." ~~Homer Simpson ;)
Clusterf*** on 1...2...3.... LOL.
Is there an asset class that is NOT up today? Bonds, stocks, gold, etc. As some other poster mentioned on another thread - you don't have to sell one leg if you are getting the money free to begin with.
"We will not monetize the debt..." -BB
Makes me think the Irish bond auctions will go just fine, with a big assist from the ECB.
Interesting how the MSM is spinning the Ally mortgage halt today. They are only dancing around the issue. Kind of trying to pass it off as a positive for consumers...
Uh, dollar flat, commodities mixed, silver down, gold flat, but hey stocks are up. Now that's an odd divergence - just makes the ramping more obvious.
One POMO too far?
"I can't hold her together Captain. She's breaking up."
"One more second, Scotty, just one more sec............"
Please explain to us simple minded people. Whats Ha Ha?
If the primary dealers are buying all these billions in equities with the FEDS money then why isn't there any volume? And with no volume how is that this market has gone up parabolicly?
Well, because there is a supply squeeze- like diamonds. There is an artificially low supply in storage( state street) and the primary dealers buy stocks at a fractionally higher price. When retail buying comes in, you get stupid ramps- but this is where the banks start dumping on the greater fool- as the retail dope comes in for the long ball.
Then the banks start selling to humans who panic and have no algos to
Run except buy high- sell low.
The algos do not sell at a lower price- only sell at a higher price. Maybe after some technical indicators get tagged do they drop and profit take- which allows dopes to buy on dips. If you are fast, I commend your trading and I'm the dope. But, as a 9 to 5ver, who has time to beat algos and insider trading.
In any case, the stock market is now a political tool for the incumbent class
No volume =
Fed money only =
distorted price discovery =
manipulation opportunity at margins =
stock prices hold/rise =
maintain valuation belief system (this is critical, since all valuation is subjective) =
pull wool over sheeples eyes =
maintain power
So, um, which INVESTORS are investing here?
DavidC
The smart ones.
You know...the ones who aren't living under their house preparing for a blimp to crash in their back yard.
Some of you remained so traumatized by the events of the past few years, that you're missing every opportunity out there. Some people stop hiding under their mattress faster than others.
Life moves on, with or without you.
Making new highs on the day as I type...on what is likely to be another pathetic display of volume. There's no foundation holding up the house!!!
I get a kick out of all the EW idiots like Prechter who said months ago we were "starting the disasterous 3rd wave down", what a fucking moron. LOL
"what a fucking moron" might be a bit strong. Just about every analyst on television is about 50%. In that case, we're all "fucking morons" since none of us can see the future brightly to make any prediction. Just like any other analyst, you take what he says with a grain of salt.
disasterous third wave down postponed temporarily... It'll come though. To predict that equities are headed up seems irrational.
I said that the whole year of 2009.
that was all a bit more believable, what with the "oversold" mantra, and things really were getting somewhat better (not imploding). can't say those things anymore, or believe them anyway.
But what if they tell ya that it is because all these corps are "stuffed with cash?" That's better, right?
Of course what they don't tell you is that all of this cash is due to declining operations, and that they are merely consuming capital until they eventually implode.
Shit, what an understatement:) I spent the time to log in and do the math question just to add more emphasis to your comment. I am so disgusted with this freakshow economy
To predict that equities are headed up seems irrational
....which is exactly why equities will move up.
>>DERP<<
Unless of couse you keep seeing rising wedges then you chime from the highest rooftop. The wolf is coming the wolf is coming!!
Maria puddling on stock rally
Up on deck, denying the recession ever happened.
Right, as if they give a fuck what the 10% who actually pay attention think.
They are simply not going to stop this shit. My point / worry was that, once you blow past a certain point of absurdity then there isn't any further reason to hold back. We're obviously at that point. There isn't anything left to lose now. They'll just accelerate the shit out of this in until November. It doesn't matter how absurd it gets as 90% will accept it wholesale as a 'good thing'.
There is absolutely NOTHING stopping them from continuing this shit at break neck speeds. Nothing. If a thief see you seeing him stealing and you are powerless to stop him, he'll steal even more. Count on it.
You can bitch about what the end result will be to the fiscal stability of the US in the long run, but this is just about as close as the Fed can get to just handing money out to the US public to stimulate the economy.
99% of people may look at the stock market once at the end of the day or week just to see what happened...who gives a damn how it got there as long as it went up? The entities keeping the market pumped know this. Gotta keep the masses happy and consumin'.
"If a thief see you seeing him stealing and you are powerless to stop him, he'll steal even more. Count on it."
Ever see a looter who knows they're being filmed by the 5 o'clock news team? M'fers think it's a game show - and the clock is ticking.
Wall Street II Sep 24th
Orly, you really called it last time - wow. 1550 huh, then short eur/yen?
Sounds good to me.
Thanks again for the kind words, newstreet.
I have noticed that you don't ask specific questions or make specific statements. So I suppose that you'll be here as well to take note of when my remarkable streak comes to an abrupt and inglorious end!
No worries. I can take that, too. /:
Remember, though, that you don't have to catch the exact top or bottom of a move unless you're trying to time it in a pair with a 16-pip spread on a five minute chart.
"Take a little out of the middle." Wait for your time.
:D
Un fucking real.
This is such bullshit. The Fed could keep this up for how long? Twenty years? Thirty?
An awesome display of state power but state power never endures; we get to watch the zenith live.
Market is happy that the capitalists in China are looking to buy up some of GM from the communists in the US. Seems that another round is in order, bartender...
Can anyone tell me why the daily charts for the DOW, NASDAQ and the S&P 500 seem nearly identical? How can various traders in these various markets all be generating the same activity? Backroom intervention, QEII coming?
Cross overs and relative weighting. ie IBM will be in the Dow and S&P, Microsoft will be in all 3, APPL will be in the S&P and Nasdaq (not sure about the Dow, probably though), and etc.
What you need to worry about is when they don't look nearly identical.
Remember the rubber band powered balsa wood airplanes? Remember how fun it was to wind up that rubber band super tight, like it would knot up and then knots on top of knots, and then just let fly?
Then...the rubber band would snap.
It's like that.
Will it sting my fingers too?
Even worse, is when right before the rubber band would break while you are still winding, the prop slips and start wailing on your knuckles. Instinct tells you to pull your hand back to avoid further pain, but reason notes all of your work going to waste, so you keep your fingers in danger, willing to endure just a little more pain trying to stop it before it is all wasted.
It's like that as well. But I bet it's gonna hurt more.
/had a whole squadron of those things
I'm a glutton for punishment!
I used to buy two of them, and through the miracle of Ambroid glue and a little extra wood, make twin-engine rubber band diven aircraft. :-)
Twice-The-Fun! ;>)
I even built a Sterling B-17 with four rubber motors.
Anyone for a Messerschmitt ME-323?
Boy this is easy. Buy stocks because the Fed is pumping the markets and make money. Short the market and you go against the Primal forces of nature and fuck yourself.
Index equities, that's how.
They have a "gas pedal" and a "brake pedal" in one room at Goldman.
They pressed on the gas pedal and bought all the indexes today.
Money flows in, money flows out.
That triggers buys (or sells) in all instruments that make up the indexes. "Everything" is only the stuff in the major indexes. Check out small names that aren't in the Russell for instance. They move independently of these singular one way market moves, for actual "fundamental" reasons. They rest are simply part of a larger game.
With the SPY and the QQQQ, they either "buy the market," or "sell the market," faster than you can, and the only "fundamentals" behind those moves are their needs to make money. Usually by daily raping anybody who tries to buy or sell using "fundamentals" or logic.
It's a strip tease with no pay off.
Otherwise known as market manipulation.
The guys with the most money "make" the market.
Skynet. End of transmission. zzzzz......
Anyone care to help? I have virtually no idea what this graph is telling us.
The AUD/YEN is a retio that reflects relative changes to those currencies.
The ESZO looks to be some sort of option to buy the S+P index.
I have no idea what the third one is.
Am I correct about the first two, what is the third, why are all 3 presented together, and what does it imply about the Feddling that's going on?
Short answer:
We're all going to hell if we don't change our ways.
Long answer:
The one that you don't know is the Treasury butterfly spread between 2s10s30s maturities.
The divergence is exactly the opposite of a common divergence between the AUDJPY and the ES with a hat tip to the Treasury butterfly/ES correlation.
And it implies that the Bank of Japan is intervening and the FRB (POMO) is intervening and just a whiff of 'WTF', something's bad is afoot, we just don't know what it is. ... but we are about to find out. :-)
Thank you for helping in my education. Much appreciated.
Chart: ES
Possible Wolfe Wave targets 1100.
http://www.screencast.com/t/NGQ1YmIzN
http://99ercharts.blogspot.com
Something really stinks about today's trading. I know it's been said by others (for 18 months), and said before (by pros and ZH regulars [not that they're mutually exclusive ;]), but my turn. This was an overextended market before today, and on no news we break significant resistance on no particular volume and fixed income barely budges. Shouldn't bonds be confirming our new equity bull by now, for god's sake? Oil is not confirming any of this. All day I kept imagining one of those bearish candlesticks developing by the day's end, and it's a good thing all I did was imagine.
Does any rational investor find the risk vs reward interesting right now? Or do institutions and bots keep gunning beta until the first day they can't? Seems like the latter. The market has become binary: stocks are worth way more until they're worth way less, and it all rests on deus ex machina, the powers that be.
Now the question is, will the NBER headline about the recession being over pull in retail? Now there's a contrary indicator. Kinda seems like a set-up, even.
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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