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Four Major Warning Signs to Market Investors
The market is beyond overstretched at this point on a short-term, intermediate term, and long-term basis. The sheer number of warning signals is staggering.
The blow off top out of the rising wedge pattern we noted before is rolling over indicating this is likely a false breakout:
The Russell 2000 is lagging well behind the S&P 500. Small caps, in general, should lead a rally if it’s going to prove legit:
China, which has lead the S&P 500 in general since the 2009 bottom peaked months ago:
Copper, which serves as an excellent proxy for the global economy, is collapsing, showing that this rally in stocks is occurring while the global economy gets weaker and weaker.
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Best Regards,
Graham Summers
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I would surmise that the biggest danger sign for market is if Graham Summers got bullish...
Run Forrest...RUN!
Your wrong its a hole new paradime
yes!
and we want MOAR!
$4bn a day says this can go on for a lot longer than most peope expect,and should it crash,Bernanke will make it $10bn or whatever is required to make it go back up.
Doesn't apply in Zimbabwe...
I just hope there are a lot of suicides!
everything you said is correct, and under circumstances where the US federal reserve bank (and other central banks) didn't have a complicit interest in propping up the stock markets for political reasons, the S&P would never have been in that rising wedge in the first place. Therefore, until such time as these insane folks running the printing presses cease, all bets are off on fundamental and technical analysis as primary indicators influencing price, because the new primary and overwhelming factor influencing market pricing is the federal reserve bank. Period, end of story.
Yeah, what he said. Technical and fundamental tools, historical trend analysis, traditional methods are all useless in an era of unlimited printing. Can't agree more.
sunny
Getting the dollar down? Wasn't that the cry back in 1987???
It's called INK as long as Ben has it we will go FORWARD !
What I love about Summers is that every word is true, and not one word matters. Everything's about to go to shit, but nothing quite gets there. That's the only flaw in his analysis, and mine . . .
He fights the FED. Never fight the FED.
Of course, one day it will come tumbling down, but most people vastly underestimate how long the system can be kept running.
I like to point to the old Soviet Union and Nazi Germany as examples. With all the malinvestments, corruption, and centralized planning, it still took 70 years for the Soviets to deplete the wealth of a second tier power. As for Nazi Germany, the economy kept running along until late-1944, even after horrendous bombardment of their cities and industry and losses of men and materiel in war, their economy soldiered on. It was not until the loss of all sources of oil did Nazi Germany finally collapse.
Therefore, everyone predicting the immediate collapse of the euro, dollar, US economy, Japanese economy, etc., should look at history and understand what a beating countries can take before it all comes crashing down. Timing is the issue, so be careful with your puts.
Only when Rockerfeller could no longer supply Hitler with oil, because the Allies controlled all ports and in enemy and neutral territory did Germany fail.
Those dickhead Dulles brothers traded with Bormann until the very end laundering stolen wealth through Swizterland.
Hell the Germans got a great deal! They brought all of their scientist to the USA. a fucking NAZI sent the man to the moon after lanching 2000 rockets on London.
This country has been, and always will be, run by traitors working for the money changers.
US markets will continue to climb while the US Dollar is held down.
http://bullandbearmash.com/chart/dollar-weekly-falls-05-remains-consolid...
Should the US Dollar fall further, which is possible, the Euro will rocket - yes, that very continent that is about to collapse financially......that's right, me neither.
You can pull out any and all indicators you want. The market does not care about any of them. There is no point to keep "warning" - market could be up 30% this year. There is no real "market" to trade - when you know the Fed (and global counterparts) are actively buying equities, futures, bonds and anything else there is no point betting against it. The action is poor at best in stocks - but that NEVER leads to down. Perhaps 1 day per month is down.
I am not sure what would stop the market at this point - news does not do it, fundamentals does not do it, any and all indicators does not do it, global macro does not do it, GDP does not do it - nothing. It is in perpetual buy mode EVERY SINGLE DAY - even the sell days its net bought - most of them rescue almost all of the sell.
When someone in power pulls the plug on any big European banks, that is the end. Until then, party on!!
duplicate post - sorry
Good description, WTF_247. I can't figure how the bernank thinks this is going to end well; I can only assume he doesn't care how it ends. I wished there was someone who knew who the script writer for all this is and how the story ends - at least we'd have an inkling of what to expect. In time of confusion, the dark clouds of doom always seem the most likely result.
Remember, these actions were instituted for the benefit of the top "power" percentile even though they falsified and misdirected the reasons. I think the Fed needs/wants the market to stay above approximately 11k for the financial safety and security of those people because they know their actions aren't doing much for the average person. Thus, I expect they know that they'll have to stop this insanity at some point and know that when they do, the markets will tank. As a result, I believe their strategy will be to run the market to "supershock" levels in order for the expected mass correction not to fall below the "high" levels they really want to solidify as the "NEW" low. In effect, if they run this game to 20k and then call it off, then the market would crash but I believe they don't think it will crash more than around 50 or so percent before people then start to perceive the market as "corrected" in a big way. So, if they can get people to use 20k as the new reference of a high point (even if half was created with fairy dust), they may be able to get people to psychologically perceive 10k as an extreme low and begin to reinvest at that level. Of course, they will likely be offering the promise of new fairy dust the whole way down intending to slow the momentum of the decent as much as possible with the intent of reinstating more QE if it falls below the threshold. With this method, meaning with allowing for a large painful "correction" (to a level they really want/expect), they may be able to convince people that they only did what was needed at the time and that the correction proves they have pulled their (blatant) manipulating influence from the markets thus allowing the markets to "normalize" back to "free market capitalism" rules. The end game being that those with everything to lose (but having power) and those with nothing to lose (thus dangerous) being enriched and contented by the passive middle class whom have little individual power and fear losing what they do have thus making them resistant to rallying a response to being the victimized pawns of the corrupted system.
The final result being that the top percent and insiders (literally) create massive increases in their personal wealth during a depression level event that they caused in their "generosity" of helping out poor people with bad credit buy things they can't afford and didn't deserve. They're able to use the eventual "correction" as a way of showing on the "public record" that they lost (the expected fluff) money which enables them to claim themselves as victims of the event also. Their fraudulent gains are financed through the loss of value in the currency which means the gov't will also use this money to fund it's needs rather than tax these parasites at a fair rate thus allowing their financial power to grow exponentially. This doesn't even include the relative value increases of all the property that they own that will eventually occur as inflation rockets to extremely painful levels for those that aren't benefited by the corrupted manipulation. Not to mention, this "fraudulent fluff" provided by the Fed also serves to provide additional time and opportunity to their fellow banksters to avoid prosecution/punishment by covering their tracks and fortifying themselves from the repercussions of their actions by confusing the public about the current state of affairs with falsified figures and realities. This will wind up as one of the most successful wars ever colluded upon the middle class in history whether scripted or by mismanagement of power. Nothing gets "cleaned" or cleared in this process as provided by the events of a true Depression so the system just stumbles on it's sickly and intently corrupt way while most of the middle class continue to lose ground to this hierarchial class system that their country's ancestors fought to escape.
That's my expectation for the record. It's a plan that attempts to whitewash everything without fixing anything. It's a "shock-n-awe" process that instills hope, fear and a desired dependency on a savior which they're happy to provide as long as you provide them unregulated power and control to alleviate the pain that their previous actions caused. Continue on people...nothing to see here....
The script is this:
-world financial system collapses
-hoarders of gold/food, etc are made into criminals; lots of people die
-all citizens who want to buy/sell goods are issued government accounts (coordinated world government financial system)
-government ID is biometric, those who refuse to comply get diddly and those who support them are criminalized
-those with unacceptable beliefs must be re-educated until they renounce those beliefs, else they get diddly
You can read your own interpretation of Revelation, but that probably is reasonably close as to what the endgame looks like.
'but, but, a freedom loving people would never allow this to occur!'
Really?
"hoarders of gold/food, etc are made into criminals"
LOL...by whom? Are you saying that this "new government" will be going door to door across the 3,794,000 square miles of continental U.S. territory in some kind of organized effort to criminalize America's gold and food hoarders? PUH-LEEEEEZE. These fuckers can't even balance a budget or defeat a guerrilla army in Afghanistan. They're not gonna do SHIT. They're going to be running for their lives. Hatred of the U.S. government by its own citizens is at an all-time high, and that's with the illusion of order and "prosperity" still in place. What do you think's gonna happen when society truly breaks down? LOLOLOLOLOL...
What do I think? I think the dependent sheep in this country and others will turn on their neighbors with surprising speed when the various authorities point out:
- how they (greedy hoarders) caused the problem
-how they (greddy hoarders) make the problem worse
-how they (greedy hoarders) are not 'patriotic' and are 'selfish' yada, yada, yada.
Doesn't matter if its true. Doesn't matter if 'we the people' hate the 'Gummint' - when things fall apart, even the most ardent (but completely unprepared to take care of themselves) anti-government patriots turns to Uncle Sam to help out.
But as I said, you pick your story, I'll pick mine.
"'but, but, a freedom loving people would never allow this to occur!'"
Freedom loving people? Where?
People love their IPODs way more than they love their freedom.
What will stop it is simple to predict. The market will tank the day that it is more "profitable" for its managers to do so than it is to further extend and pretend. Then they'll start all over again with the remnants, assuming there are any left not in their control.
Not simple at all - define "profit". Tha market managers are not managers at all.
The Bernank has to keep it going until his term ends. His record is at stake.
Even more interesting than the market top, is Eamon Javers the most boring man in the universe?
CNBC went out of their way to hire this guy?
Sure everythings fucked, and we live in total suspension of disbelief....so what do we do about it, other than being bright enough to not be exposed to it, best as possible at least?
When they get it wrong 10 or 20x, they change the name of the company. A fresh start is good.
I admit to being confused.
When I read these top callers, what voice to assign, Beavis, or Butthead.
Help me.
Too young. Try Homer Simpson's dad, as it's all about applying yesterday's logic to today's version of the ponzi's facade of "modern" finance.
We can't bust heads like we used to, but we have our ways. One trick is to tell 'em stories that don't go anywhere - like the time I caught the ferry over to Shelbyville. I needed a new heel for my shoe, so, I decided to go to Morganville, which is what they called Shelbyville in those days. So I tied an onion to my belt, which was the style at the time. Now, to take the ferry cost a nickel, and in those days, nickels had pictures of bumblebees on 'em. Give me five bees for a quarter....
We can't bust heads like we used to, but we have our ways. One trick is to tell 'em stories that don't go anywhere - like the time I caught the ferry over to Shelbyville. I needed a new heel for my shoe, so, I decided to go to Morganville, which is what they called Shelbyville in those days. So I tied an onion to my belt, which was the style at the time. Now, to take the ferry cost a nickel, and in those days, nickels had pictures of bumblebees on 'em. Give me five bees for a quarter....
This market is due for a heart attack . . . right about this minute!
every heard of a breakout shithead
Are you saying the market is about to get pimples?
'Breakout shithead'? No I'm unfamiliar with that term. Are you talking about Bernank?
Graham should breakout of the insane asylum
Actually I like Graham Summers' new minimalist approach in his article above
Quick and crisp, a few key charts that speak for themselves, collected in a way that is fresh on ZH
Less is more ... With this new style GS could quite rise in the commentary ranks
The only thing thats stretched are the anii of the shorts.
Now you know why so many people tout, play with opm, and generally ask to be paid without risking their own money.
Being wrong 90% of the time sux,
85 billion per month from the Fed alone, soon to become 120 billion, then 300 billion etc. please, there is no "market".
"85 billion per month from the Fed alone, soon to become 120 billion, then 300 billion etc."
Yes, but eventually, 120 billion will be only worth 85 billion, and 300 billion on 120 billion, etc.
Right, when a market has been taken over and totaly controlled in all aspects, I'm certainly not going to believe a 'market force' will rear it's ugly head and take it down.....they will pull the rug out from their rigged casino all at once when they want and without warning and no one but them knows when.
What do they want and when does pulling out the rug, help them to get it? Therein lies the warning..
Old market rule #1 'The only reason for the pump is the dump'
Dump from what level - they could bring the SP500 to 1700+ then "dump" it to 1550 - net-net its still much higher. I doubt we will even get that.
Odds are very high that when this phase is "done", traders and investors will not be able to position for the dump. You will come in and ES is -50 off the open or more due to some event. Trying to hedge risk only leads to losses day in and day out. Any bet against the market leads to losses. Hedging longs removes any gains as the hedges almost always lose.
When it finally dumps, the drop could be so fast that only HFT will be able to sell. The circuit breakers will trip in milliseconds - while the opening bell is still ringing!