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Is It Time to Get into Crash Positions, Or Will The Market Just Enter A Glide Path Rather Than A Tailspin
Submitted by Charles Hugh Smith from Of Two Minds
Is It Time to Get into Crash Positions?
Maybe this flight won't go into a tailspin; perhaps it simply runs out of fuel.With stock markets diving around the globe, a pressing question arises: is it time to get into Crash Positions?
In case you forgot how to get into Crash Positions, here's a reminder:
After a dizzying 500+ point drop in the Dow on Friday, should we brace for impact? There are plenty of fundamental and technical reasons to view the swoon this week as the initial downturn that presages a crash landing.
But if we look at the last equivalent spike down in October 2014, we're not so sure. Both spikes (October 2014 and August 2015) smashed through the lower Bollinger band, but the volume in last week's plummet was nothing special compared to the 2014 swoon.
Big moves have a bit more credence if they're accompanied by massive volume.
This leaves the door open to a sharp rebound, i.e. what followed the spike down last October.
The Put-Call Ratio (CPC) has actually exceeded the spike of October 2014, suggesting fear and panic are at higher levels now than back then. Sharp peaks in the CPC typically signal market bottoms.
But even if the market rebounds sharply, that doesn't necessarily signal the return of higher highs. Recent lows in the CPC signaling extremes of complacency did not result in new highs; the market has been range-bound for months. This suggests the Bull is tiring--even if price pops back up.
The SPX MACD has worked its way down to the neutral line, threatening to punch through to negative territory. Bad things tend to happen when MACD stumbles below the neutral line, and that suggests the next decline might be different from the spike-down-snapback pattern of last year.
Is it time to get into Crash Positions? It never hurts to be prepared, but if the market pulls another October 2014 snapback here, the market could enter a glide path rather than a tailspin.
Keep an eye on the fuel gauges. Maybe this flight won't go into a tailspin; perhaps it simply runs out of fuel.
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"I just want to tell you both good luck. We're all counting on you."
It'll be a glide path.
Of a freight train from 50,000 ft.
Long parachutes. Of the golden variety.
Can´t just look at equity markets, look at the demand signals in the real economy. Those signals are very weak.
Dead cat bounce.
Interesting chart . . .
http://blog.kimblechartingsolutions.com/2015/08/looks-like-2000-again-fo...
530 points is hardly dizzying for a market at 17-18000 that has in the past seen 22% drops in a single day, which for an 17000 market would have meant a drop of 3400 points in a single day.
This is barely a pothole for a manipulated market.
There would be a few software upgrades gone wrong to stop trading in a single day if we were to approach that kind of drop.
Heard on the swakbox.......PRINT MOTHERFUCKERS! Print!
Assume the postion...
https://youtu.be/-7870l6ECBw
Exactly it's either a margin call contagion leadin to a credit collapse or a dead cat bounce followed by a margin call contagion leading to a credit collapse. Only difference is a couple of days to prepare or a couple of weeks to prepare.
Take your pick!!
Until there is steam coming from the printing presses/conjuring keyboards, there is nothing to fear.
Nice compfy glide path indeed, but the plane is halfway between Oahu and Manila.
Please return your seats to the upright and locked position
1987 - insane run up with no fundamental reasons to substantiate it, hard break in August, mediocre narrow recovery attempt in September, then a slow roll into the crash, exacerbated by portfolio insurance. Same setup this year, except portfolio insurance has been replaced by a much greater peril - HFT, CDS, and all manner of derivative nitroglycerin, including the VIX derivatives. Many many stocks and sectors have already broken.
This is just a ripple from the china devaluation. Like all shocks, it will smooth out within a week or 2. Then we can go back to endless debate about zirp/nirp. When the fed starts hiking, that's when the end is approaching.
surely, there will be QE infinity
"Maybe this flight won't go into a tailspin; perhaps it simply runs out of fuel."
Well, you can take your pick of tailspin or falling like a rock (as a result of the fuel lines sucking air), the end result is the same. Multi-ton aircraft tend not to 'glide' very well...
Isn't there enough hot air from all the talking heads to keep every bubblicious balloon afloat?
If you need any translations for the talking heads I speak jive.
Plus a bunch for the Airplane reference.
https://www.youtube.com/watch?v=g0j2dVuhr6s
Time for a rate hike, let's go for 0.50% Janet.
All I heard Friday was "China"; yeah sure, that's it.
Not true - They glide pretty well; much better than cessnas and pipers do. Lift-to-drag is better in a jet than everything but real sailplanes.
https://en.wikipedia.org/wiki/Gimli_Glider
But if you run out of airspeed in any airplane - you is hurting.
I wouldn't mind running out of air speed. As long as velocity doesn't pick back up vertically.
Got plenty of AS until 0 MSL
Son, these machines are perfectly safe--we haven't left one up there ever!
BTFD! The bankers have your back!
Where we are now is what pilots call stall buffet, that wonderful point just before you lose all lift. I expect that the FED etc will try another big cash infusion which will basically be handing parachutes out to the bankers and Wall Street, but they haven't noticed the 'chutes are another fine product of ACME .....
No where we are now is what Airline Pilots call 'Coffin Corner' - the altitude near which an aircrafts stall speed is equal to the critical mach number :)
https://www.youtube.com/watch?v=y2R3FvS4xr4
Are you kidding? Everything is fine. Janet's got the crew greasing the money printer as we speak. And there will be no more talk of rate hikes. Janet borrowed Hillary's rag and wiped the rate hike server clean. The biggest problem facing investors now is if your wife finds your name on an Ashley Madison leak. BTFD or lose.
Fate the Magnificent
"Push the Button, Max"
Okay muppets..... hold the course,,, buy the freakin crash!!!
Bullish on Monday.
at least for the first 30 minutes after opening.
How dependent are you in paper?
I use it to wipe my ass.
Markets been scud running for yrs. might be a mountain in those clouds
Sheesh. After going straight up for years, we are slightly in red for YTD in the main indicies. Everyone hyperventilates as if every company in existance has gone tits up. This has barely even been a correction.
An 11% correction since July 15th with more than 1/2 of that in the past two days is something to keep an eye on. China will devalue the Yuan more and they will depeg from the dollar completely at some point of time; I say within 3-4 months and that will be a tail-spin and "official" intro of QE4, which will have a short life, then comes real trade war and hot war. We will not make it before the next Presidential election and with at least 10% increase in ObamaCareLess coming; this is going to be one ugly outcome; the retail industry is going to be in the dust-bin after this Christmas season, which will be far worse than last year. Can anyone say "King Obama"; we may not see another election for some time.
Low volume crash, because of corporate buy backs!
These dumb CEO's aren't going to hit the sell button on their own stock until the banks force them.
Are they going to double down? Pilot pull that stick, but she going to stall.
Personally I am going to do the opposite of whatever Denis Gartmann is "long/short of" on Moday! Unless he is long in the one department in which he is short!
They should be focusing on both the bond market and China; these will affect the equity markets. China is pissed and we have just pissed them off more (think IMF rejection & recent explosions) and we are pissed (think Yuan devaluation); so more pissing is around the corner and it is all of us who ultimately get pissed on the most. A story of piss.
it never gets old
https://www.youtube.com/watch?v=1U7YU9rZS4w
Might want to pay attention to the preponderance of August, September, and October dates in the list in the link below, and how Asia can dramatically affect things.
http://www.infoplease.com/business/economy/declines-dow-jones-industrial...
There has been a plane crash near my hometown. A jet went firtically down and blew up some people. Since I DO beleive in metaphor, I consider it likely the plane crash was a 'sign' and monday+ will be carnage.
All eyes Monday morning on the Nikkei - unfortunately for bears the most government manipulated stock index on the planet. I'm sure there are a bunch of meetings occurring a this moment in nyc and brussels aimed at helping the BOJ out.
This could be massive short squeeze set up. I do not know what the ratio is for puts to calls on the SPX, but I can say it must be near 4:1. If the Wall Street gang is in control still, then perhaps another down day on Monday to create more panic and shorts, then a robust upward trend to squeeze the living crap of of the short side. We will know in the next 10 trading days. I was really surprised they allowed the DJIA drop below 17K and I knew once it did it would begin to free-fall and it did.
The fact that everyone expects a bounce is the perfect opportunity for the squid to rip everyone's face off.
You have a gang of criminals running the show so it is difficult to determine anything with certainty. You have to get in and out on a daily basis to be somewhat safe.
Butterfingers Yellen.
In retrospect, she's had stuff sliding through her hands and her plans since she took office. Her plan is basically sideways for the next ten years, index growth roughly equaling inflation while rates normalize and real growth is nearly zero.
But I don't think she planned on last October's crash, nor this one.
But everyone has been screaming for more price discovery, so we had some yesterday. Are we having fun yet?
vix tells a story not seen in a long time..it went up with market volatility..perhaps the markets are falling off the cliff..I am confident an elderly jewish grandma can get this falling rock undercontrol ..no I am very confident mr yellen is just the person needed to keep us afloat..sarc
All anyone needs to do is have a profitable trading system (there are so many just pick one you're able to follow) and just stick to the plan. Size your positions accordingly, set your stops and just follow the plan. Your job is simple, get out at a small loss or moves your stops to lock in profits. When you just follow the market everything works out and people think you're Nostradumus. No one knows when things will turn but a skilled trader will either be out of the market or shorting stocks when that happens. Trade well and you will win.
This is probably why we've noticed massive sales increases..
https://www.eurgold.eu
"So there are a whole lot of reasons to think that this could get rather nasty very quickly to the downside. I don’t see any reason for the market to rally but remember that nobody really has a good feel for how to operate in this algo-infested and momentum-oriented world that we inhabit. So I think people should expect surprises to the downside, even though there may be some violent bursts (countertrend rallies) to the upside.”
http://kingworldnews.com/bill-fleckenstein-warns-stock-market-plunge-wil...
"The Carry Trade Is Unwinding As Contagion Spreads....
Art Cashin: “It is a liquidation and you can see as we speak on Friday, the dollar is somewhat weaker and that’s because various entities are unwinding positions like the carry trade. So the ultimate effects of this process are not fully knowable. As we learned in 2008, the markets are interrelated and there is a correlation there.”
http://kingworldnews.com/art-cashin-prepare-for-more-downside-after-this...
"The Perfect Storm....
Egon von Greyerz: has now started. And this storm will turn into a hurricane probably within the next two months. So in the next 60 – 90 days we will see all stock markets go down by at least 25 – 30 percent and likely a lot more.....Come September – October, as the world economy and stock markets go into a tailspin, there will be enormous fear and that will translate into hedging and insurance in the form of physical gold buying on a massive scale. But with the gold shorts in the futures market and the interbank market being at unprecedented levels, there will be massive panic buying to cover shorts. This is what could trigger new all-time highs in gold and silver before 2015 is over.”
http://kingworldnews.com/a-world-in-denial-headed-for-full-blown-panic-a...
Volume last week in TZA vas very interesting - Monday through Friday:
10.4m
13.7m
16.92m
17.45m
28.8m on Friday.
3 month average volume 14.2m
So even thouogh the overall market volume was unexceptional, the play in leveraged bear funds (check out FAZ - Fridays volume was about 4x normal) was very brisk indeed.
(Note: I'm pretty long TZA - have been all week. Stop is in, can't wait for Monday.)
I'm also a pilot - all the aircraft references/metaphors are interesting. I say we are out of coffee.
I'm rebalancing from bonds to stocks.
The Dow closed down -358 then -530 which is -888 in two days (weird, is that right?). Hmmmm... I am voting for bloodbath. They can't QE away the collapse that is quickening everywhere, at least not for long.
Agree. 40% by the end of September.
I'VE GOT ONE QUESTION.
Imagine that you're a CEO. And you are at the end of your happy glorious career. And you are sitting on 100,000 shares of your company stock, valued at $200 share. This is your Golden Parachute.
Are you really gonna' take the risk .... that MAYBE the market will stabilize?
OR are you gonna figure that there is a chance ... those shares could plunge to $100, or $50, or $10 ??
SO TELL ME PUNK - WATCHA' GONNA DO???
Here's the answer to your question.
Bookmark this link, and check it frequently to see "What they gonna did"
http://finviz.com/insidertrading.ashx?or=-10&tv=100000&tc=7&o=-transacti...
The manipulators still have plenty of leverage to pretty much make the market and the news say anything they want. Right now they may be just shaking things up to get people into "crash position" a few times until a critical mass returns to figuring it's just the "boy crying wolf". The real key is in the derivatives market. When that goes, the central bankers will no longer be able to make the stock market lie.
I don't want to panic anyone but from my seat near the tail, it looks like the wings just fell off and the captain is wearing a parachute.
I always say taht when the captain boards the plane wearing a parachute, it's time disembark
The Central Banks can try anything they want. No doubt they will. It doesn't matter. This is Game Over for them. This is "Pushing On A String". The end game, when there is no response. They cannot create real market forces that don't exist. They cannot create a Global Consumer who does not exist. They cannot create jobs. Jobs are being lost.
The Central Banks are powerless here. Truly.
I just read a report on Brazil this morning. Their economy is tanking in a big way. Inflation is raging, they can't generate jobs, and China QUIT buying their commodities. The conclusion of the report was this: There is NOBODY ELSE to buy the commodities from Brazil. This will get serious.
Exactly Right.
There are NO global consumers out there. Look at the commodity markets. That's Reality. What are the Central Banks going to do? Buy every barrel of oil that is produced, buy every piece of steel? It's a No-Go.
This is Serious.
The commodity collapse is real, there is no demand anywhere. This thing may hold up a little while longer but she's gonna blow
Andrew Ross Sorkinstein on squickbox said it's all good here. Of course he was jacking off to a picture of Yellen under his desk
The more popular Trump gets with John Q Public, the more political support he gets (Jeff Sessions Rep, AL so far) the more the Stalingard and Poorsky index will fall.
The Banksters (remember they are banks, brokers and insurance companies under 1 corporate umbrella since repeal of Glass Steagal) don't like the sounds of "re-negotiated" trade deals with China, Mexico, and Japan.
Banksters no likey when Trump calls the present morons with sloped forehaedws occupying Congress as "stupid and incompetent". They might be stupid and incompetent morons but they are the Banksters bought and paid for stupid and incompetent morons.
When Trump speaks of effectively managng the $18 Trillion debt, that doesn't sound like a continuation of "grease and gravy" as usual.
FAUX News was only the first vested interest to try and destroy Trump's character. They failed. But when Banksters go after you they attack the purse. Going to be interesting to see who wins.
Fundamentaly, a bear market will do the most damage to the most people. . . so, how do we get there? a swift plunge or a zig-zag lower? Everytime time is different because the generals are always fighting the last battle and memories are short. From a scene out of movie 'Total recall' Get ready for a surprise!
I don't know what the hell is going to happen; looks like Miss Janet lost the Silver Linings Playbook.....
Just wait for the short squeeze...
Inmarsat will let you know where your stocks are
Back to school retail sales figures are going to be shoved in our faces with assurances of recovering. Deep pocket guys and CBs will be buying hand over fist monday but its NFL season as in Not For Long.