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Nic Lenoir's Global Macro Update
From Nic Lenoir of ICAP
The $1Tr USD question today is whether this is it for equities and we are going to move aggressively lower. I am just about as bearish as it gets medium term and long term. However, short term it seems to me that it is not obvious we are going to move lower just yet. I was early to recommend taking profit around 1,070 the other day on the tactical shorts re-opened at 1,095 (we still recommended to be core short since 1,126), I am sorry as I misjudged how long this move could run.
Still looking at the Nasdaq future we see that we have reached the intermediate support highlighted previously (see daily chart) around 1,768, and similarly we have tested the 1,040/1,050 support zone for the S&P future which has been a key support as well. Then looking at the Russell we see that we have tested and so far rejected the neckline of the H&S. I am absolutely convinced we will break through those levels but not until after we first bounce to shake shorts.
In terms of Elliott Wave counts there are two alternate scenarios but I feel that most likely we are finishing the initial impulse since 1,126 and are going to see a corrective wave 2) which should give us the opportunity to sell again between 1,085 and 1,100. The wave count for EURUSD seem to confirm this.
The Nikkei has broken during US hours for the future the key support around 9,000, and the USDJPY has made new lows below 84, but already there are talks of an emergency meeting of the BoJ tonight. I may have been early with my recommendation to buy USDJPY between 85 and 85.20 but so far the 83.50 stop on a daily close holds... We clearly need a bit of help from the BoJ because if the Nikkei closes below 9,000 tonight or worse new lows then the consequences could be nasty for risk assets in general as the JPY will catch a bid like rarely. After 20 years of consistently bending over, let's see if Japanese central bankers will disappoint. They have little choice as they know Mr. Bernanke will not hesitate and USDJPY trades with a 7 handle Japanese exports are pretty much toast...
The thing that is making me doubt this bounce is no so much that the BoJ does not show up but rather the price action of AUDUSD which has failed twice at the 61.8% retracement recently and could be entering iii) of 3). If that's the case then there will be no bounce, so clearly hang on to your core shorts. The only concerning point is the fact which was pointed out by a friend that the put/call ratio is at its lowest since April... That means there are a lot of people who are not hedged out there and if we start probing 1,000 or lower in S&P and trigger the H&S in the Nasdaq we will get liquidation in full force. I think it is definitely coming, but not just yet...
Below a speech to practice for central bankers around the world:
http://www.youtube.com/watch?v=HuGIgf-ICHM
Good luck trading,
Nic
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dont be sorry. data today was so bad that....
lol....well although I have nothing against the guy personally. I really think that these charting lines is just a rear view map fitting with no forward value. Pardon me if I am wrong but how many times have we had trend line 'failures'? only to see a new set of trend lines another day being trotted out. I would rather base my investment decisions on something more material that secularly works in my favor over time. Anyways...this is just me...others here may know better but my hats off to their acumen.
I don't disagree, but there are lots of people out there that use these same support/resistance numbers, that in some ways they become self-fulfilling. Therefore, it's relevant IMHO to know where they are...
I can guarantee that things will keep going down until they go up again!
Oh, I see, playing texas hold'em with GS but your two cards are turned over on the table for everyone to see is the way to gamble?
I don't think so...........
You bet. Past no guarantee of the future, innit?
Don't know you got junked, you were just voicing your opinion. I agree with you on trend lines getting broken.... This very site talks about the robot traders but some how people still think they can outsmart the big guys in the short term...
For example, I have no clue which way the market is headed so I'm sitting is cash and gold. Ofcourse, my shares in procor and gamble and in berkshire will sit tight. My silver and gold have been doing nicely and will be kept in my possession until I pass it on to my children one day. Unlike many here, i dont trade simply cause i am not good at it. However, I would love a pullback in gold to add to my stash... Maybe add to my ammo, food and seed storage isn't such a bad idea over the next couple of months.
Viva el zero hedge.... Keep the truth coming....
85 new 52 week highs,
166 new 52 week lows,
4th Hindenburg Omen
Euro seems to be holding here around 6.80.
EURJPY... define holding
Would ANYONE like to take a stab at why in the fuck SPG would do well today?
A crisp $100 fiat bill to the first logical fact-driven explanation...
When the market rolls over they always gun the garbage. More bang for the buck because all the SRS victims cover.
there are going to be a lot of renters once the housing market clears?
figured I'd take a stab at it for the hundy - maybe some greater fool will give me some silver for it or something
Boiler: I am sorry to hear that you are still getting fucked by the SRS. I just hope that you are not on margin and thus able to hang in there.
The REITs are in denial, of this there is no doubt. However, with the 10-yr at 2.50, folks will keep plowing into shit like SPG until the very end. Add to that the ratio hedgie motherfuckers and its a recipe for prolonged pain.
Again, no question the unwind and the crush of SPG et al, when it comes, will be spectacular to behold. I just hope you're able to withstand the pain of waiting for it to happen.
Yo Turd!
I'm not in the SRS or DRV ETFs. But I do have outright put contracts (SEP, NOV, & DEC) on both the IYR and SPG.
I don't know what it takes to bring these pieces of shit down but, come on, this is just unreal bullshit at this point. I only take the puts because they are relatively cheap and have high possible return should the bow ever fucking break.
I just don't know what it takes...I mean, my god, it's just reached all-out fucking stupidity at this point.
Market:irrational::You:solvent
you have to remember that 90% of people are absolute shit eating morons.
Well, I'm as crazy as a shithouse rat. All of my other put contracts are doing great, including the ever crashing BP. Amazingly, the only sector that is just buoyant as fuck is CRE. I'm NTM on the IYR put anyway.
What, exactly, makes my purchases of puts shit-eating stupid? It's a gamble, so what the fuck is your point?
No worries,,,no need to be sorry or to pray for the end of this thing. It'll be a side door "broadside" jolt that culminates in a very exciting exit of all momos/hft's and algo partners in crime. As we all expect, the trigger will most likley be,,,,,DRUM ROLL PLEASE"""
DA BONDS!
+1 on the broadside. ZH's will have just enough time to turn and see the oncoming headlights for a second or two. Most people won't even know what hit them.
Noway we are done with SPX yet...to low RSI for being a v (w5).....1040 will be tested and pierced
a buzz from minyanville regarding the put/call ratio is at its lowest since April...it seems that there was 500k call options traded on ATVI, which skewed the ratio, otherwise the ratio would have come in at 0.58
OCC or CBOE or what?
As a daytrader, days like this make my balls itch.
.....and your asshole hurt.
That's o.k. I don't make my decisions based on some internet self-styled guru, regardless of his past successes. And I didn't this time either.
No harm, no foul
"I am sorry as I misjudged how long this move could run."
Nic, imo you have consistently done a great job reporting the technicals in a market cursed with trends that run longer than anyone could have thought. Remember "irrational exuberance?" The dotcom market sure seemed like it had to be topping when Greenspan said that, but he was waaay early (December 5, 1995). The Cubes had their biggest runup in the final 6 months of their blowoff into 2000.
Fast foward to today. "Everyone knows" that the dollar is toast, that hyperinflation is a slam dunk, that interest rates (and AU) are headed to the moon, but maybe everyone is way too early once again. And, really, take a look at the MACD and RSI for TLT right now. I'm no technical guru, but things certainly do look overdone. Yet I think we could see months and months of interest rates grinding lower before it's time to back up the truck on TBT.
The fix for being right and early is to be careful and patient.
It must be sweet indeed to be paid for theorising about the future direction of markets without being called to account for the accuracy of your predictions, implied or otherwise. Not meaning to single out Nic Lenoir, but you certainly couldn't make any money on a sustainable basis following his - or anyone else's - musings on future market direction, written as they are, on water. The uncertainty inherent in the future creates an unsatiable demand for certainty, which is exploited by a legion of scribblers who have elevated the unverifiable prediction to a form of reflexive discourse that would make the Oracle of Delphi weep with envy. Follow these pied pipers at guaranteed ultimate peril to your trading account.
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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