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View From Far Above
As the entire world knows by now, China joined the rest of the world's central banks in more "easing", which sent markets into a spastic move higher. As you can see by this view of the NQ, this massively bullish news has not, as of yet, represented any kind of sea-change in the markets. Before the day was even out (again, in some, not all markets), the entire move up was reversed.

As noted in my Bear Despair post earlier this week, however, the bulls are still firmly in control, with all the central banks as their allies. The Dow Jones Composite hit yet another lifetime high, and it has exceeded even its long-term resistance line (in blue):
A much closer look at this line shows how, once the price has pushed above it, the line changed from resistance to support. For ten days, the price valiantly obeyed support and then finally leaped above it. Until the price breaks that trendline again, the bulls have the bears by the short hairs.
On a very long-term perspective, the NASDAQ Composite blew past the point that it "should" have stopped many months ago, marked by the arrow. Incredibly, the NASDAQ is approaching the levels it saw during the insaner-than-insane 2000 Internet peak.
As fantastic as the S&P 500 and the Dow 30 have been for the bulls, the much broader small cap index continues to show middling performance. My view continues to be that we are simply grinding out a top; I've tinted the analogous regions in green below.
This year alone, for example, the Russell is close to unchanged. With all the massive QE going on from Japan, China, Europe, and the U.S., a gain of 1% is really nothing to write home about. One can only imagine what the markets would be doing in natural circumstances, with no intervention (hint: much, much lower).
In sharp contrast, 2014 has been kind to the S&P 500. The past five weeks have yielded over 200 points on the S&P.
Just as I think the small caps are grinding out a top, I likewise believe the VIX is performing the same action. We got our first taste of VIX potential in late July/early August, and then we got a much better taste during the first couple of weeks of October. Who knows where the next surge will come from (did anyone really expect Ebola to be the cause last time?), but as long as we keep painting out a series of higher lows, the potential is still there.
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It is going to be quite A CRASH some day.
I wonder if the VIX will take out 90 on that chart, when it happens.
Five years of unprecedented double digit gains says to me "mission accomplished" and then some. Next up NASA's "Space Launch System."
Looked at a chart of silver yesterday. The authur referred to a pattern of "running resistance', but didn't explain what the hell RR meant. I researched it and found no such term in use anywhere. I finally reminded myself that there are no markets -only interventions ....and the charts aren't showing anythin more than the trail of the interventionists.
Keep stackin
It's a bubble, pure and simple...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
let me understand how fucking incredably SIMPLE this is!!!!!::::::I CONTROL THE MONEY CREATION THEREFOR I CONTROL THE MARKETS!!!!!!!!!!!!!!!!!!!!!!!
sorry, for the caps, but enuf is enuf on this endless diatribe of the the charts, markets ect.
it is all a big fucking flim flam of restorative belief the system is real = FAITH,IE; KEEPING THE FAITH...
Tim,
With all due respect to your chartist skills, I think you should aknowledge that in this day of centrally managed markets such analysis can be useless when it comes to the major stock markets. The later have become the prime instruments of monetary policy as no other than Greenspan kindly hinted to us several years ago. By buying futures and outright equities, central banks can continually paint the tape causing technical analysis to fall on its head. Whether this can go on fo ever is an important question. Can the central banks print enough money to mop up enough shares to perpetually levitate the indeces? While I don't know the answer, let me propose that they can certainly do so until such point that we get a bond market / interest rate disturbance. As long as bond yields are well behaved it is futile to try to pick a top as the central banks will continue down their preferred path of propping up the markets.
Succinct, accurate, and better than any chart, although by now the CBs control--- not influence----CONTROL should be factored into a chartist's calculations since it's got a 6 year and counting track record.
Charts actually work better in a manipulated market. The manipulators tend to use the same modus operandi over and over, and to respond to the same move with the same stimulus. The clever chartist (or algorythm) can recognize these patterns and exploit them.
In the heyday of manipulated markets before the SEC spoiled the fun you could make fortunes if you could figure out what J P Morgan, W C Durant, Mike Mehan or Allan Ryan were up to. The same goes today for the too big to jail banks, central banks and governments.
Anything that can be manipulated will be manipulated. Just watching the markets play out on a daily basis you can watch it being pushed in the preferred direction, but that's OK because the 'smart' people are doing it.
That any one, or combination of participants, may appear to have a market cornered can never be a cornering on the psychology of humans. Edwards and Magee are still sound regardless of the fraud.
Would appreciate X axes on the first five graphs Tim. Nice set of charts.
And with the volume, please! A road map is of better use when the key is included. Otherwise, it is a very nice set and narrative.