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Guest Post; The Inception-Style Dream is Collapsing

Tyler Durden's picture




 

 

Submitted by Chris Capre of 2ndskiesforex

The Inception-Style Dream is Collapsing

Following the lovely goose egg of a jobs report last week, markets started the week with an Asian Invasion rout led by the Hang Sang down 3%, and the Kospi shedding 4.4%.  The second act of this sonata was Europe getting hammered led by a German Blitzkrieg 1-2 punch with the DAX losing 5.28% but more uniquely, the German 10-yr setting a new record below 2%.  With all these trick-or-treats haunting the markets one has to ask, ‘Is the Ticking Time Bomb Going Off and the Inception-Style Dream Collapsing?’ 

We think so and we will begin by looking to a place that would seem most odd…the institutional players. 

Using the S&P Consolidated data, the Institutional/Asset Mgrs. are long over 409k (net positions).  When was the last time these blokes were this long? Rewind back 3 years and 4 months ago to May 2008.  In May that year, the S&P’s high was 1440.  What did the market do after that?  Collapse to 667.  We are suspecting a repeat here with a Thelma and Louise cliff-dive gap on Tuesday in the S&P weekly charts and likely in the DJIA.  Should the latter one experience a down gap, if history has anything to say about this, a gap will bring some pain with it for over the last 80yrs, the DJIA has gapped 12 times with only one weekly gap being down.  When was that?  June 9th 1930 and the index tanked 21% in 2 weeks.  Could this be the unlucky 13th gap?

Likely so with Europe imploding and growing concerns about a hard landing for China, we see nothing to stop this rout.

One last note…

On Aug. 21st, we posted using our weekly Ichimoku Kumo Break Analysis stating the S&P in the last 8 years has only broken the weekly Kumo 2x, the first time being in 2008 which led to a rougly 800pt drop in the index, and the last time was on the 3rd week in August.  We wrote about the markets possibly doing a small retracement to the 1220 level, and the markets didn’t disappoint…only going 10pts higher, then slamming down over 80pts while failing to close inside the weekly Kumo.  The combination of this rejection at 1230 (also 50% fib of the July 22nd 1350 high to Aug. 12th weekly low at 1107) lining up with a diving Tenkan-Sen (momentum-line) and a failure to close inside the Kumo suggests the original break was legitimate and the markets should easily touch down on the yearly lows.  Any break of these lows and we suspect this will shatter any remaining thoughts from the butane-inhaling bulls thinking the last rally was the real slim-shady.

 

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Tue, 09/06/2011 - 00:16 | 1637120 rajat_bhatia
rajat_bhatia's picture

Fuck  You!!! Do something Good instead of enjoying the ruin of billions of unknowing people

Tue, 09/06/2011 - 00:24 | 1637141 diesheepledie
diesheepledie's picture

Oh Fuck Off it's funny! :)

Tue, 09/06/2011 - 05:57 | 1637574 smlbizman
smlbizman's picture

who untied his hands and feet?

Tue, 09/06/2011 - 11:34 | 1638295 Pure Evil
Pure Evil's picture

Damn, Rat-Raj, that's the biggest downtick I've seen, not even old Swarmy Wanker was able to evoke as much wrath.

I guess you're just pissed cause you got dick slapped on your gold shorts and decided to extract your revenge on poor ole ZH.

But so far, judging by the comments, it looks as if you're getting dick slapped once again.

Getting dick slapped once in the (gold) shorts, shame on you, getting dick slapped by ZH'ers for an effeminate post, that's priceless.

Plus, I downticked you because you forgot to use Bitchez!. Common practice on ZH for top spot guy to end comments with Bitchez!

Tue, 09/06/2011 - 00:26 | 1637151 moldygoat
moldygoat's picture

Is trying to educate the "unknowing" not a good thing?

I was one of the billion until zerohedge.

Tue, 09/06/2011 - 04:59 | 1637518 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

How is this a bad thing for billions of people? I heard that only 1% of Americans own stock. Fuck them.

 

Oh wait, now I remeber. When they lose money in the stock market their Soylent Green venture becomes financially viable.

 

Come on Dow 36,000!

Tue, 09/06/2011 - 00:49 | 1637201 Enceladus
Enceladus's picture

Can't wait til u make good on the morphine promise.

Tue, 09/06/2011 - 00:54 | 1637213 rajat_bhatia
rajat_bhatia's picture

So i imagine you're hoping to live a reall comfortble life in the future, eh? What are you? a Rothschild? Or have u got a nuclear bunker custom built? What makes you so assured?

Tue, 09/06/2011 - 01:28 | 1637298 decon
decon's picture

Who told you you could leave the front porch?  Trust me Rajat, these beatings will make you a better person.

Tue, 09/06/2011 - 02:18 | 1637369 surfersd
surfersd's picture

Raja 17 weeks ago you didn't know ZH existed. Take your crude mundane comments and go away.

Tue, 09/06/2011 - 05:03 | 1637524 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

May I suggest NAMBLA.org?

 

They are always looking for infomed commentary. And perverts.

 

Wait, that's wrong. I shouldn't call a pedophile a pervert. I should save that term for Jamie Dimon.

Tue, 09/06/2011 - 07:55 | 1637664 nodhannum
nodhannum's picture

A pedophile? Isn't that someone who likes to ride bikes?

Tue, 09/06/2011 - 08:09 | 1637692 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

I think they like to have sex with bicycles.

 

But who am I to judge?

Tue, 09/06/2011 - 08:20 | 1637723 falak pema
falak pema's picture

you judging bikes or velophiles?

Tue, 09/06/2011 - 08:44 | 1637832 mtomato2
mtomato2's picture

NOT THAT THERE IS ANYTHING WRONG WITH THAT....

Tue, 09/06/2011 - 09:18 | 1637975 Thomas
Thomas's picture

I once slipped off the pedal and had sex with my bike.

Tue, 09/06/2011 - 08:19 | 1637715 falak pema
falak pema's picture

Raja means "king" in indianese...and kings "know" all! 

Tue, 09/06/2011 - 08:58 | 1637891 NoClueSneaker
NoClueSneaker's picture

...especially Raja Merv ?

( He dodges the spotlight ... )

 

Tue, 09/06/2011 - 02:19 | 1637370 surfersd
surfersd's picture

ditto

Tue, 09/06/2011 - 02:58 | 1637410 StychoKiller
StychoKiller's picture

Alleviate some suffering:  http://www.worldvision.org

There are multitudes out there that are worse off than you.

Tue, 09/06/2011 - 07:11 | 1637626 Snidley Whipsnae
Snidley Whipsnae's picture

The're going to continue the shock threapy till your moral improves...

Tue, 09/06/2011 - 08:48 | 1637844 Toolshed
Toolshed's picture

What makes me feel so assured? My fresh stockpile of guns and ammo of course! I don't need no stinkin' gold!!!

Tue, 09/06/2011 - 01:05 | 1637235 Problem Is
Problem Is's picture

The 9th Rule of Fight Club:
Newbies have to STFU and read their first 26 weeks...

Mr. rajat_ass-hat 17 weeks and 4 days...

Tue, 09/06/2011 - 09:43 | 1638065 RockyRacoon
RockyRacoon's picture

You don't get to make new rules.....

 

1st RULE: You do not talk about FIGHT CLUB.

2nd RULE: You DO NOT talk about FIGHT CLUB.

3rd RULE: If someone says "stop" or goes limp, taps out the fight is over.

4th RULE: Only two guys to a fight.

5th RULE: One fight at a time.

6th RULE: No shirts, no shoes.

7th RULE: Fights will go on as long as they have to.

8th RULE: If this is your first night at FIGHT CLUB, you HAVE to fight.

Tue, 09/06/2011 - 01:41 | 1637323 AustriAnnie
AustriAnnie's picture

If the billions of unknowing people had been reading what was available online back in 2003 and since, instead of watching American Idol, they would be in a different situation now, wouldn't they?  Education is free.  The people screaming the loudest now are the people who were the most greedy when the market was on the way up.  This website, however, makes every effort to educate people, so they'll stop acting like the sheeple that they are.  Unfortunately, this mess will occur again in the future, as it has for centuries, because people refuse to learn and always think they'll somehow get something for nothing.  If the people are "unkowning" it is by their own choice.  Tyler Durden and MANY others have been warning that all this would come to pass for a long time.  But the people will learn one way or another.  Either by reading and educating themselves, or by experience.

"Experience keeps a dear school, but fools will learn in no other."

Tue, 09/06/2011 - 03:49 | 1637447 Overflow-admin
Overflow-admin's picture

 

 

 

"Wise men are instructed by reason;
Men of less understanding, by experience;
The most ignorant, by necessity;
The beasts by nature."
Letters to Atticus[?], Marcus Tullius Cicero

Tue, 09/06/2011 - 06:36 | 1637600 falak pema
falak pema's picture

He brought the beast out of Mark Anthony who sent his hit man to execute him; precisely because Cicero was the most reasonable, eloquent man in Rome. His rival Caesar, must have been very ignorant as the Ides of MArch proved. He crossed the Rubicon thinking it was necessary to save Rome. It lost Rome its Republic, but then his successors did have a great time for three hundred years as top dogs. 

Swings n roundabouts..."Wisdom is for fools who don't know how to act with a well placed Gladius."

I bet you don't know who said that!...

Tue, 09/06/2011 - 07:58 | 1637668 Conchy Joe
Conchy Joe's picture

Yep - I've read Zero Hedge and other (lesser) sites for a years and even I got it. While I don't understand some of the finance lingo used here, I do understand the basics of finance and more importantly mass balance. This deepening mess was all very predictable 5 years ago. The only thing that was a suprise to me was the government just printing money on the scale that they did. I wasn't aware that a country could do that and not have all of the people that hold their debt and their dollars raise hell.

Now that the presses have been running - our system seems to be on life support, artificially alive, waiting for an event or series of events to push it one way or another.

The only question I have anymore is when the event will be and which way will it push things for America.

Is there a benefit to the elite to crush the middle/working class in the major countries? I want to go with the rational answer of "no". That's what keeps me sane.

Tue, 09/06/2011 - 08:49 | 1637849 mtomato2
mtomato2's picture

"Mass Balance..."
Like it, gonna use it. Thanx.

Tue, 09/06/2011 - 12:52 | 1638666 Herd Redirectio...
Herd Redirection Committee's picture

"Is there a benefit to the elite to crush the middle/working class in the major countries? I want to go with the rational answer of "no". That's what keeps me sane."

Well, its time to get acquainted with the reefer, because you are going to need a new way to stay sane.  The elite, the rich, the 1%, the Billionaire's Club, whatever you want to call it, is making a big move to solidify and cement its existence (at the top of the pyramid, as it were).  In the long term it will fail.  What happens between here and there, we will see.

Tue, 09/06/2011 - 02:44 | 1637394 macfly
macfly's picture

rajat_bhatia, you are an idiot, if you don't like what you can learn here crawl back into your happy little CNBC bunker.

Tue, 09/06/2011 - 04:16 | 1637477 Reptil
Reptil's picture

What a stupid comment. ZeroHedge is one of the few places where warnings were posted we're on the wrong track.

No one knows how this is going to develop, but shooting the messenger is about the dumbest thing you can do: typical sheeple comment.

Tue, 09/06/2011 - 04:42 | 1637506 Oh regional Indian
Oh regional Indian's picture

Hey rajat bhai, why don't you share the good you are doing? That will set the right tone. Else, you are just moaning.

V

Tue, 09/06/2011 - 04:47 | 1637510 Durrr
Durrr's picture

You speak about the billions as if they all were long in stock with their life savings when in fact the billions have been having their life maintained in a ruined state at the hands and benefit of the top 1-5%.

Tue, 09/06/2011 - 08:41 | 1637819 LawsofPhysics
LawsofPhysics's picture

Another ignorant sheep has been awakened.  Why don't YOU do some good fucknut and recognize that there are NO guarantees regarding your survival.  Why don't you start by educating andf improve yourself and your community every day.  Turn off the fucking T.V.

It is ZH's fault?  How fucking stupid are you - straight out of the movie Idiocracy, go back to baitn' you idiot.

Tue, 09/06/2011 - 08:44 | 1637834 MFL8240
MFL8240's picture

If you are stupid enough to still be in this market with no growth in the US, Europe or Asia and the ponzi game with this Federal Reserve, you did it to yourself.

Tue, 09/06/2011 - 00:20 | 1637128 Count Laszlo
Count Laszlo's picture

Drama! It's not the end. Not even close. And there will never be an end. Stop yapping and start trading.

Tue, 09/06/2011 - 00:22 | 1637133 zen0
zen0's picture

The pending collapse has been pending forever it seems. It is all suspense and no payoff. Too much foreplay already.

Tue, 09/06/2011 - 00:25 | 1637146 Count Laszlo
Count Laszlo's picture

It's financial propaganda to spread fear among "the citizens" as a form of control. This entire crisis is nothing more than a diversion for political control.

Tue, 09/06/2011 - 00:29 | 1637158 zen0
zen0's picture

It might work if the masses knew there WAS a crisis, but they don't.

NFL starts Thursday.

Tue, 09/06/2011 - 04:41 | 1637504 Simon Endean
Simon Endean's picture

In defense of the masses, they have little reason to know that there is a crisis.  The gummint isn't acting like it, the banks aren't acting like it, the media is telling them there isn't, and the masses themselves are too busy dealing with the micro situation (which is bad enough) to spend much time digging around into the macro.

Tue, 09/06/2011 - 04:54 | 1637513 chistletoe
chistletoe's picture

not yet.

Tue, 09/06/2011 - 08:25 | 1637746 gwar5
gwar5's picture

Agree. The average person is too busy just trying to put food on the table and they put too much trust in a corrupt system. They wait until they see the red flags from the MSM to alert them to approaching disaster. TPTB propaganda works.

 

Tue, 09/06/2011 - 03:49 | 1637449 Helix6
Helix6's picture

I predict another "historic investment opportunity" for insiders is on the horizon.  Just gotta make sure the sheep are well and truly panicked...  No wonder they call it "fleecing"...

See, here's the gig.  By the time the DJIA hit 12,500, all the sheep were worried about being left behind, so they tiptoed back in.  I wonder who was selling back then?  Now  time to throw the HFT algos into reverse and unleash horrifying predictions of economic doom.  Those sheep will start dumping at about 8900 on the Dow if history is any guide.  In the meantime, a little shorting for fun and profit. 

God I love those 401Ks!  Nothing like throwing 25 million amateurs into the shark tank.  And with our banker buddies now paying out 0.0000000002% on savings accounts while inflation rides at about 10%, what other choice do these newbies have besides equities?  Especially since gold and silver aren't in the plan? 

"Bloodbath" doesn't even begin to describe it.  Shit, this is so easy it's almost lost its challenge.  Although now that I thing about it, separating people from their money is never that boring...

Tue, 09/06/2011 - 06:11 | 1637587 falak pema
falak pema's picture

political control of ...

peak starvation?

peak fiat devaluation?

peak civilization implosion?

peak gold spiking?

I love diversions but ...you kid me not!

 

Tue, 09/06/2011 - 00:29 | 1637156 X.inf.capt
X.inf.capt's picture

be careful what you wish for, brother, SHTF,(been there, done that) its NO JOKE in the thick of it,trust me

Tue, 09/06/2011 - 09:10 | 1637814 Ag Tex
Ag Tex's picture

Amen!  Peaceful and still is a good thing.  Keep stacking in the meantime.

Tue, 09/06/2011 - 00:39 | 1637174 ihedgemyhedges
ihedgemyhedges's picture

"Too much foreplay already." Now I know that you are not a female................................................

Tue, 09/06/2011 - 01:01 | 1637229 topcallingtroll
topcallingtroll's picture

Hahaha!

You havent met my wife.

She likes it fast with minimal foreplay. You would think that would be great, but we older guys need that foreplay even with viagra. It is very limp-inducing to know the woman gives you only five minutes before she wants it in her and starts getting impatient.

You better be hard now, dammit!

Tue, 09/06/2011 - 06:20 | 1637595 falak pema
falak pema's picture

you sound like you need a scotch on the rocks and an electric shock on the crotch. 

Tue, 09/06/2011 - 00:23 | 1637135 X.inf.capt
X.inf.capt's picture

I say again...

BUY,BUY,BUY....

pre-65 dimes.

Tue, 09/06/2011 - 00:27 | 1637152 GhostTrader
GhostTrader's picture

Fractal wave decades in making is signaling its desire to complete itself. No need to be cynical about it.

Tue, 09/06/2011 - 00:31 | 1637161 spekulatn
spekulatn's picture

Great stuff!

Tue, 09/06/2011 - 00:49 | 1637199 greased up deaf guy
greased up deaf guy's picture

don't you mean "triple lindy dive" in the graphic? if you're going to lather on the pop culture references, slim shady, then get them right ;).

Tue, 09/06/2011 - 01:22 | 1637277 Rick Blaine
Rick Blaine's picture

Not bad.

 

Tue, 09/06/2011 - 01:04 | 1637237 topcallingtroll
topcallingtroll's picture

Go ahead and roll over dammit!

I am positioned to feast on suffering and despair. Of course that usually means a roaring bull market is about to start.

Tue, 09/06/2011 - 01:15 | 1637260 Yamaha
Yamaha's picture

Remember - Greed is good!

 

Greed has moved us to this moment in time - 

Tue, 09/06/2011 - 01:30 | 1637300 Rick Blaine
Rick Blaine's picture

Like many peope out there, all I want to know is when, where, and what exactly the "kick" is going to be...

Tue, 09/06/2011 - 03:44 | 1637445 lolmao500
lolmao500's picture

http://www.businessinsider.com/josef-ackermann-euro-banks-speech-frankfu...

Deutsche Bank CEO Just Gave A Terrifying Speech In Frankfurt

At a conference in Frankfurt he said, "It is an open secret that numerous European banks would not survive having to revalue sovereign debt held on the banking book at market levels."

Indeed it is.
Tue, 09/06/2011 - 05:11 | 1637530 FederalReserveB...
FederalReserveBankofTerror's picture

rajat_bhatia I am with the Neo-Malthusians. The world will be brought back into balance as the Inception Style Dream Collapses. Most of the suffering will be caused by attachment to the dream and the unwillingness to do what it takes to survive the delerium tremors of hopium withdrawl.

Namaste _/\_


Tue, 09/06/2011 - 05:49 | 1637544 Tense INDIAN
Tense INDIAN's picture

India is a disaster waiting to happen

Tue, 09/06/2011 - 11:23 | 1638371 Pure Evil
Pure Evil's picture

What's China waiting for?

Tue, 09/06/2011 - 05:27 | 1637542 Dingleberry
Dingleberry's picture

Deflation=nearly everyone loses, including the rich.

Inflation=rich get richer, poor and middle class get poorer.

Now do you see why the Fed wants inflation at all costs?  They don't give a fuck about you and your 4 or 5 figure 401K.  You are NOTHING, so stop supporting fraud just so you can make a buck.  You and your family are fucked.  Prepare and deal with it.

Tue, 09/06/2011 - 08:26 | 1637756 Fix It Again Timmy
Fix It Again Timmy's picture

Education is priceless.  All I ever needed to learn about investing was in the book, "A Short History of Financial Euphoria" by John Kenneth Galbraith.  Takes about an evening to read. 

http://www.amazon.com/History-Financial-Euphoria-Penguin-Business/dp/014...

Throw in "Portable Wealth" by Adam Starchild - another short ready and you are ready for business.

Go all in when you have discovered the next big trend.

Sit back and wait.

This shit is so simple...

 

Tue, 09/06/2011 - 09:05 | 1637903 MFL8240
MFL8240's picture

 

Can’t understand all the commotion in the markets today when Hussein Obama plans to tell the world how he can create jobs and prosperityon Thursday,... can’t wait!  After all, the media told us he was the messiah, the smartest President of all time, and the man of hope and change but failed to tell us he is a liar, phony and witty hater.  So, sit tight, all will be well, we have Hussein on our side and he will fix all, just take a look at his brilliant work in the Middle East.

Ok, so what if it took 3 years and a few trillion, he was procupied with golf, give him a break.

 

Tue, 09/06/2011 - 09:10 | 1637929 adr
adr's picture

Deflation is good in all aspects. It is terrible for lazy bloated corporations who will not survive unless they lower the insane margin requirements they have. It actually makes your money more valuable. Walmart will not survive because just the business of running a corporation that large almost costs as much as the company generates. Walmart can not exist without 80% margin on most of what it buys.

Everything is overvalued and everything is vastly more expensive than it needs to be. Do we really need to pay $120 for a pair of shoes made in China? Why are we expected to pay $80 for a shirt made in Honduras for $3? We are expected to because investors have become addicted to absurd profits and corporations must deliver in order to justify the stratospheric valuations.

Deflation could be the catalyst for a new round of innovation and an explosion of small business as Americans shut out of the system can flourish with the oppressors pushed out of the way. Instead of the zombie banking system perhaps the community savings and loans would make ahuge comeback. The strong will flourish when they are no longer expected to carry the weak.

It is insane that we as American consumers are paying what we are for products that actually cost less to manufacturetoday than they did 50 years ago. Perhaps when the giant corporations die the next guy will think, "You know it only cost me $5 to buy this thing maybe selling it for $8 is enough profit, instead of the $20 Walmart charged."

Think about that for a second. Where it matters we don't actually have deflation. The actual producer of the product still makes the exact same as he did before. The only loss is to the giant mass retailer that pays employees nothing. The purchasing power of the population explodes and leads to much higher consumption and growth.

Deflation is good for the masses but terrible for the bloated wealthy minority becuase it costs them control. That is why deflation is to be avoided at all costs. We have tried inflation many times and it has never worked. Our last period of deflation was painful but it led to double digit growth that was snuffed out by an ovezealous government bent on control. FDR caused the depression to worsen through central planning. Obama and the rest of the world's clueless leaders are going right down the same path.

Tue, 09/06/2011 - 09:56 | 1638108 Reptil
Reptil's picture

Frozen vegetables (from the USA) and frozen fish and shrimp (from Thailand and Philippines but imported from the USA) in a supermarket on a caribbean island cost less than the fruit that grows everywhere there (even on the side of the road) and fresh fish from the atlantic.

The global economy is not providing a mark to market, it's a disruptive force on a collission course with management of natural resources. It's ridiculous and will come down one way (appreciation of real cost, while a sustainable model is growing) or another (total collapse and chaos).

Those that set this up and put corporate cartels in charge (through "free trade" agreements) will abandon the producers and market the moment it turnes sour.

Deflation is counter productive for TPTB, I agree therefore with TD that there's going to be more intervention, and manipulation, more on the ground inflation; they'll not let go of the reigns easy. A total collapse is therefore in the cards.

Tue, 09/06/2011 - 10:52 | 1638282 swiss chick
swiss chick's picture

Sounds right to me but then what do I know but it really sounds right

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