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Guest Post: Where Are The Markets Headed Next?

Tyler Durden's picture


Submitted by Tony Pallotta of Macro Story

Where Are The Markets Headed Next?

Being honest, no one knows. But, using the current road map it appears we may have a little more selling before a decent move higher. Below is the updated 2007 "analog" as compared to the current market. Few interesting points.

The move in 2007 from Point F to the next low was 15.3%. The market then rallied 10% before another leg lower.

The current move from Point F to the current low is 11.1%. Interesting a 15.3% move from Point F would bring the SPX to 1,143 which is the rough target of the head and shoulder's pattern and where key support levels come into play.


At some point this market will rally and will rally hard. Remember there are a lot of participants who view this selloff as excessive and based on fear. They view the macro data as a soft patch and see the Fed ready to launch QE3. When this market rallies they will be very loud in their "I told you calls." Many shorts with conviction after a day or two of market strength will in fact panic and begin to believe in the health of the economy contrary to what they know in their heart.

When studying the 2007-08 chart remember Bear Stearns was "bailed out" by JPM in March 2008 which caused a multi month rally that preceded the epic selloff.

My personal view is we are headed for a similar epic selloff. I'm not sure when but suspect it is sooner than most think. BAC breaking down could very well be the modern day LEH failure. We are surrounded by "black swans" right now from rumors of Italian run on the banks to failed Spanish auctions and more.

Vix Skew Divergence

The skew continues to move lower while the vix moves higher meaning volatility is more evenly distributed and "black swan" events are less of a concern among investors. Still based on historical levels the all clear signal for equities is unclear. Below are two charts (1) short term chart that looks like more selling is probable and (2) long term chart to put the current levels in perspective.

I wish I could be more definitive in terms of where markets are headed next based on this signal. Probability would say further selling based on divergence and the 2007 pattern but this market is emotionally charged with lots of leverage. A dangerous combination. Be careful out there, respect stops and don't be a hero.


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Thu, 08/04/2011 - 23:04 | 1525515 tsx500
tsx500's picture

freaky Friday bitchez

Thu, 08/04/2011 - 23:25 | 1525545 TruthInSunshine
TruthInSunshine's picture

No more glib or sardonic comments from me tonight. I genuinely think we may be on the verge of something awful ('we' meaning the global economy).

This is another credit crisis, with the Fed being genuinely constrained (with rates at 0.25%; what's to lower, unlike in 2007, when those rates were at 6.25%?), and unlike in 2008, with Bear Stearns and Lehman (and many other financials) sinking, now we have the too big to fail but too big to save - sovereigns like Italy, Spain - maybe France & the U.K - in serious risk.

The global economy isn't equipped to deal with this. It's an outsized crisis.

I want to point to this example as how the cascading effect quickly gets to the point that it's unstoppable, and this is quite relevant now, as not even the world's biggest central banks can 'fix' the massive debt overhang that's been accrued since roughly 1983, and the binge and purge is the only thing that will flush the system.

All the world is a debt junkie, some nations more than others, but debt junkies all the same.

Some junkies die during withdrawal. Keeping them high requires larger doses of drugs, which leads to nearly certain OD, also.


Here's the example:


   RealClearMarkets - Lessons From the Credit-Anstalt Bank Collapse


Like I said, this time, the credit risks are major sovereigns. There is no fix, by even the most imaginative angles.

This is what happens when Keynesianism run amok has debt layered on debt for many decades, and the financial parasites designed extremely opaque and uber levered derivative products to try and capture outsized profits on those vehicles, knowing that they will be bailed out - until they aren't, because their sovereign sugar daddy has taken a bullet.


Thu, 08/04/2011 - 23:27 | 1525559 Reese Bobby
Reese Bobby's picture

Row, row, row your boat...

Thu, 08/04/2011 - 23:36 | 1525588 Spirit Of Truth
Spirit Of Truth's picture

Now just throw a massive dollar short-covering rally into the mix since the dollar carry trade that lifted all boats will quickly sink them when unwound.  The Fed managed to engineer probably the most lop-sided trade and the largest associated speculative bubble in human history.  Ben Bernanke's helicopter just smashed into a cliff.

Thu, 08/04/2011 - 23:54 | 1525616 HarryWanqer
HarryWanqer's picture

Nah...  QE3 is right around the corner.  I am a buyer here.

Time to load up on BAC, NFLX and AAPL.

Fri, 08/05/2011 - 00:10 | 1525666 TruthInSunshine
TruthInSunshine's picture

I had to double check that it wasn't Hammy, because even by his satirical stupidity, your post is legend.

Make sure to pick up some LULU, too, since your urinal cake business is sure to suffer for the foreseeable future.

Urinal cakes are highly discretionary.

Fri, 08/05/2011 - 00:23 | 1525702 Fish Gone Bad
Fish Gone Bad's picture

Might want to stamp: DO NOT EAT THE MINT on the urinal cake so the stupid people won't eat them after they are stolen.

Fri, 08/05/2011 - 00:55 | 1525750 caerus
caerus's picture

mmmm...urinal cake

Fri, 08/05/2011 - 00:09 | 1525669 rocker
rocker's picture

Harry, Hairy, Herly, Whatever. Your a pimp boy for CNBC. Get a job. They need you.

McConnel & Co. guaranteed the collapse of the U.S. economy.  You may get a dead cat bounce. Hint. Sell the Dead Cat.

Real investment money is going into Singapore and Russia with a little Indonesia.

The U.S.   We are Japan Now.   Means: Declining Markets and Economic Contraction. Japan would acutually be a better bet than USA.

Without fiscal aid from the government to juice anything. We are Dead Money.  Or should I say Declining for the count.

Japan did their 20 years of hell.  We have just begun. Bambi has no balls and is worthless.  He is Not FDR. Maybe Hoover.

Good Luck all.  We are going down here.  Cats included. 

Fri, 08/05/2011 - 00:16 | 1525681 long-shorty
long-shorty's picture


as usual, anyone who fails to appreciate your humor and gives you a thumbs down is not someone I would like to have a beer with (and therefore also stands little chance of being elected President in 2012). keep up the good work.

Fri, 08/05/2011 - 00:16 | 1525694 long-shorty
long-shorty's picture

wait... shit... sorry, I got confused. I thought you were Hamy Wanger. You're not joking, are you? You are in for pain.

Fri, 08/05/2011 - 01:51 | 1525820 spdrdr
spdrdr's picture



Note the putative surname of the poster.  It's not Harry, it's not Hamy, it's........ ANOTHER one!

Fri, 08/05/2011 - 00:19 | 1525699 Liquid Courage
Liquid Courage's picture

And when QE(Strike)3 bites the dust ... and it will ... the fortune you make in MicroDollars will be worth how much in  *NewImproved* MegaDollars?

About One dessicated cheese sandwich. Bon Apetit, Harry!

Fri, 08/05/2011 - 00:53 | 1525734 TruthInSunshine
TruthInSunshine's picture

Floyd Norris of the New York Times, a through and through Bernanke & Federal Reserve Apologist, is just the latest in a long stream of Fed Apologists to criticize QE2 and QE, generally, as being an ineffective program.

I am not shocked, but I am surprised that so many Fed boosters are now publicly and loudly claiming QE is bad medicine, especially given that Jackson Hole is mere days away, and consensus view is that QE3 is a given.

And this isn't some article buried in on page B11 of the business section, it's a prominent and highlighted front page article.

There have been some hints that the Federal Reserve might be willing to resume purchasing government bonds, which it stopped doing in June, despite opposition from conservative members of Congress. But the revised economic data may indicate that the previous program — known as QE2, for quantitative easing — had even less impact than had been thought. With short-term interest rates near zero, the Fed’s monetary policy options are limited.

  • Time to Say It: Double Dip Recession May Be Happening

    Thu, 08/04/2011 - 23:33 | 1525575 moldygoat
    moldygoat's picture

    FEMA camps and global currency ( not cigarettes or bum sex). Global fiatso coupons for food instead of debit cards. Great! Hope you can stash a kugerrand in your aynusrand.

    Thu, 08/04/2011 - 23:39 | 1525590 Tejano
    Tejano's picture

    It's unstoppable until it stops; and it will stop. Then there will be something else. This is not the end of the world. Life will go on. Embrace the change.

    Fri, 08/05/2011 - 00:12 | 1525678 caerus
    caerus's picture

    like nickels and dimes right?

    Fri, 08/05/2011 - 00:17 | 1525696 Tejano
    Tejano's picture

    '42 - '45 nickels and mercury dimes.

    Fri, 08/05/2011 - 00:21 | 1525707 caerus
    caerus's picture

    bravo my friend

    Fri, 08/05/2011 - 00:42 | 1525730 Manthong
    Manthong's picture

    The humble nickel still has nickel content and value.. about 30% over face.

    The rate we're going, it may be the new barter dollar.

    Fri, 08/05/2011 - 01:09 | 1525768 TruthInSunshine
    TruthInSunshine's picture

    Anyone  with pre-1965 Washington Quarters will be big pimpin'.

    Fri, 08/05/2011 - 01:50 | 1525793 wisefool
    wisefool's picture

    Absoloutely. Been stated here, and other places on the internets. common, physical metal US coins will be the day to day currency if TSHTF. PMs like silver eagles and gold ozs. will only be seen at hospitals, used to pay doctors for legitimate illnesses, or for surgeries after gunfights over said precious.

    EDIT: Fed has 1 Billion presidential and sacejwea coins stored in the basement. presidential dollar program to be halted. last president minted rutherford b. hayes. Sorry Jimmy, Bush boys, Bubba and Obama.


    Fri, 08/05/2011 - 01:09 | 1525763 Arkadaba
    Thu, 08/04/2011 - 23:41 | 1525594 DormRoom
    DormRoom's picture

    There's no credit crisis yet.  What' the LIBOR spread?  You'll have to wait until one of the big European Banks fail, and create a cascading failure in Europe, which will spread across the globe in hours, thanks to the electronic age.


    Forget BAC.  If there's a credit crisis, it'll start in Europe.

    Fri, 08/05/2011 - 04:31 | 1525952 falak pema
    falak pema's picture

    In EU the central issue is will the Germans allow the ECB to print away if the Italian crisis creates bank liquidity crisis. That is now the overhanging cloud on the EU front. Looks like the printing presses will have to churn overtime all over the world : FED, ECB and BOJ! To keep the bears out of the honey pot!

    Fri, 08/05/2011 - 06:39 | 1526059 ZeroPower
    ZeroPower's picture

    Exactly. US banks are already on life support - but theres no way its getting pulled by Dr. Ben et al.

    Over here in London, some big decisions will have to be made regarding RBS and Lloyds, probably the 2 most probabaly suspects. Otherwise, pick any handful of SPA or ITA banks (hello France, you arent excluded) and we could easily see  not just a 1-2 LEH-AIG event but im talking systemic failure across the financial sector.

    Scary stuff.

    Thu, 08/04/2011 - 23:57 | 1525638 Seer
    Seer's picture

    "The global economy isn't equipped to deal with this. It's an outsized crisis."

    Ah... the global economy is predicated on endless growth, so, sure, it's NOT equipped to deal with the fact that this is a finite planet.  Slinky down the staircase (note: not my description, but it really is the best one).

    Debt is just claims on future growth.  We wrote too many IOUs on the future.  We blew our wad.  We threw a rod.  Stall speed here we come, and then the reversal of economies of scale whipsaws us out of our sleep.  This is what collapse looks like just before it can't be denied any longer.

    Oh, someone here (ZH) mentioned that we were re-entering a recession within the depression.  Yup, it's a matter of changes in deceleration, but it's all down and to the right.

    Fri, 08/05/2011 - 00:07 | 1525652 golfrattt
    golfrattt's picture

    Excellent, excellent post...

    Sorry, sir.... we're all out of silver bullets

    Fri, 08/05/2011 - 00:48 | 1525745 TruthInSunshine
    TruthInSunshine's picture

    Here's a more direct link to a very fine article on Credit-Anstalt:


    Lessons from the Credit-Anstalt Collapse

    And here's a very finely written, and eery (history rhymes, as Mark Twain would say) excerpt:

    The Austrian government stepped in to guarantee all the bank's deposits and other liabilities—but that only brought the government's own creditworthiness into question. "In today's language," says Schubert, "Credit-Anstalt was too big to fail, but too big to save."

    Fri, 08/05/2011 - 01:53 | 1525819 Freddie
    Freddie's picture

    Was't Credit-Anstalt the trigger for the 1930s Depression while Unicredit in Italy with other branches outside of Italy - the trigger for this one?   Don't both of them have the name Rothschild involved?

    Fri, 08/05/2011 - 01:53 | 1525821 Freddie
    Freddie's picture

    Was't Credit-Anstalt the trigger for the 1930s Depression while Unicredit in Italy with other branches outside of Italy - the trigger for this one?   Don't both of them have the name Rothschild involved?

    Fri, 08/05/2011 - 02:01 | 1525830 Oh regional Indian
    Oh regional Indian's picture

    All true TIS.

    Yesterday, the first grain on the sand shifted.

    Avalanche ahead. o doubt.


    Fri, 08/05/2011 - 06:59 | 1526082 Roger Knights
    Roger Knights's picture

    "too big to fail but too big to save"

    Here's a neater way to put it (feel free to use, everyone):

    "too big to fail but too big to bail"

    Fri, 08/05/2011 - 07:53 | 1526158 Use of Weapons
    Use of Weapons's picture

    "An Outside Context Problem was the sort of thing most civilisations encountered just once, and which they tended to encounter rather in the same way a sentence encountered a full stop. The usual example given to illustrate an Outside Context Problem was imagining you were a tribe on a largish, fertile island; you'd tamed the land, invented the wheel or writing or whatever, the neighbours were cooperative or enslaved but at any rate peaceful and you were busy raising temples to yourself with all the excess productive capacity you had, you were in a position of near-absolute power and control which your hallowed ancestors could hardly have dreamed of and the whole situation was just running along nicely like a canoe on wet grass... when suddenly this bristling lump of iron appears sailless and trailing steam in the bay and these guys carrying long funny-looking sticks come ashore and announce you've just been discovered, you're all subjects of the Emperor now, he's keen on presents called tax and these bright-eyed holy men would like a word with your priests."

    Thu, 08/04/2011 - 23:07 | 1525518 km4
    km4's picture

    This is much more informative

    Here's The Problem With This Market Crash...

    Thu, 08/04/2011 - 23:08 | 1525519 penisouraus erecti
    penisouraus erecti's picture


    Thu, 08/04/2011 - 23:07 | 1525520 Diatribe
    Diatribe's picture

    silver/gold to the moon!

    Thu, 08/04/2011 - 23:51 | 1525620 HungrySeagull
    HungrySeagull's picture

    I have been watching Kitco all night on the Hour chart.

    It's limp as a 90 year old bedridden on sedatives.


    I look at this one of two ways. A complete capituation of previous PM positions by those who don't know better from either Physical or Paper shares or.... a complete surrender not by choice to cover losses demanded by the Market.


    I am getting too damn old to be pulling an all nighter waiting for Europe to open. But when they do, Asia's experience should repeat itself.

    Several times I have set up a ask; only to pull it and wait/see because of the persistent weakness shown by Kitco hour chart.

    Fri, 08/05/2011 - 01:13 | 1525773 Arkadaba
    Arkadaba's picture

    Asia is sucking.

    Fri, 08/05/2011 - 02:32 | 1525850 HungrySeagull
    HungrySeagull's picture

    It sure did.

    Used to be China bought hand over fist by the goddamn ship load and you can see it in the crappy PM Tape off Kitco or whatever.,

    Now? Nothing. Makes anyone standing about with a hand out for a Bid listing to buy something look like a Orphan "Oliver" holding the bowl up and asking "More?" only to be punished for such self initiative.

    Europe is going to open soon and I have a bad attitude. If you recall the old bumper stickers long ago about those with the Bird being the word... then we will see how this fine morning goes.

    Fri, 08/05/2011 - 00:18 | 1525690 Spitzer
    Spitzer's picture

    gold to the moon

    Fixed it.

    Thu, 08/04/2011 - 23:08 | 1525528 Gibu The Great
    Gibu The Great's picture

    We will rally to infinity on a +infinity payroll number. Barry made a phone call.

    Thu, 08/04/2011 - 23:10 | 1525529 Atomizer
    Atomizer's picture

    Charles Hugh Don't Fight Bet On The Fed

    Fri, 08/05/2011 - 00:01 | 1525643 Seer
    Seer's picture

    Mother Nature laughs at the Fed!  And Mother Nature bats last!

    Fri, 08/05/2011 - 00:03 | 1525650 tip e. canoe
    tip e. canoe's picture

    "Naturam expellas furca, tamen usque recurret"

    Fri, 08/05/2011 - 00:05 | 1525649 tip e. canoe
    tip e. canoe's picture

    Since we all know any such Grand Gesture will fail, then the Fed would be committing institutional suicide.

    if you replace 'institutional' with 'intentional', the choices may become a little clearer.

    Fri, 08/05/2011 - 05:04 | 1525975 falak pema
    falak pema's picture

    Thanks Atomizer, I like reading this guy CHS's bearish view on what the FED can do.

    This is one of the key issues : Has the QE-2 failure (sterile can kicking) and the recent Congressional gridlock (no mercy on US fiscal pumping), changed the view of international markets on the reserve currency role of USD? Is this the straw that broke the camel's back and destroyed the sovereign creditor world's confidence (China, Japan, Germany/Norway, ME oil kingdoms; Russia), in the ability of the FED to pump and dump effectively.

    If this is the case than the american HF and their highly leveraged plays on derivatives will lose international surplus, (hot), money support. And the heat will turn directly on the US economy.

    "We don't believe you anymore" is the most damning thing a central banker wants to hear from his peers. In this case, QE-3's effectivenes will lose all effect. As Marc Faber says, the coming weeks will be crucial to see if the FED, and the US WS oligarchy it represents, still has financial clout to convince the sovereign creditor market to follow it.

    Thu, 08/04/2011 - 23:08 | 1525530 Grand Supercycle
    Grand Supercycle's picture

    S&P500 head and shoulders target is 1,176 and further downside

    As mentioned for some time - S&P500 monthly has been tracking sideways this year. This extensive distribution signified a bearish big picture and that a significant downtrend would follow.

    Fri, 08/05/2011 - 00:17 | 1525686 rocker
    rocker's picture

    Where did you find that number, I posted it a few days ago.  Right on. Bounce from there.

    Zh says lower. Either way. It's DOWN from here.  

    Thu, 08/04/2011 - 23:16 | 1525535 oogs66
    oogs66's picture

    great article

    Thu, 08/04/2011 - 23:18 | 1525536 HungrySeagull
    HungrySeagull's picture

    Straight down, based on layoff reports all week on Bloomberg via satellite.

    Also Losses must be covered by those who did not have time to cover prior to today's close.

    Metals are trading very tightly.. 15 cents or so apart... almost as if it's waiting to take off and go to the moon. Might be a long night.

    I say open, plung 340 and then fight back and close around 800 down.


    If QE3 goes into effect, then the PPT will render all of my doom saying irrevelant. and Metal will take off.

    Thu, 08/04/2011 - 23:40 | 1525596 jkruffin
    jkruffin's picture

    With the data that is already out like you said, there isn't even a way for the government to even manipulate this payroll report like they have the is definitely doing to be very bad!!!!!!  And SPY will pay homage to 110 quickly

    Thu, 08/04/2011 - 23:15 | 1525537 roccman
    roccman's picture

    no cheap oil cheap widgets

    stocks are highly overvalued


    Thu, 08/04/2011 - 23:17 | 1525540 Liquid Courage
    Liquid Courage's picture

    Yeah. Remember Chuckie Prince: "We're still dancing"? Today seemed like a bit of a dance to me ... no real panic, just a bit of carefully choreographed decompression.

    Maybe the target to close shorts is more of time than price ... i.e. a day or so before Jackson Hole and, presumably, the onset of QE3 which should ignite another monstrous rally ... I think.

    Thu, 08/04/2011 - 23:55 | 1525631 goldfish1
    goldfish1's picture

    Of course Q3.

    Thu, 08/04/2011 - 23:20 | 1525541 MrJingles
    MrJingles's picture


    Kind of thinking its time for the huge crash now and it will be lengthy and will really suck.   Kind of wondering if our economic world will make it through the weekend.  Bad feeling about this weekend.  Bank holiday anyone?

    How about a 1,000 pt drop tomorrow?

    Thu, 08/04/2011 - 23:43 | 1525597 DoChenRollingBearing
    DoChenRollingBearing's picture

    Yeesh, just as we are going on vacation..

    We will carry over $10k just in case of problems until we get home.

    EVERYONE!  In addition to gold, it is worthwhile to carry around at leat $5,000 to get you back if on vacation.... 

    Thu, 08/04/2011 - 23:55 | 1525623 HungrySeagull
    HungrySeagull's picture

    Where we live, it's a 460 Rowland and a BUG revolver with adequate ammunition when out and about away from home, not money.

    Fri, 08/05/2011 - 01:08 | 1525762 Nostradumbass
    Nostradumbass's picture

    Seagull says:

    'Where we live, it's a 460 Rowland and a BUG revolver with adequate ammunition when out and about away from home, not money.'

    Hey Seagull, not everyone thinks visiting a red state in the USA is a vacation... some might consider it a highly distasteful and repulsive idea in fact. Do you assume people are not going anywhere but to a red state for vacation?

    I like and own guns too. But they don't go to the south of France, Costa Rica, Chile, Canada or elsewhere abroad with me.

    When the trouble is so great that we don't dare travel far from home anymore, THEN the guns will be always at the ready.

    Fri, 08/05/2011 - 02:36 | 1525859 HungrySeagull
    HungrySeagull's picture

    All I can say is that over the years I have taken many small vacations in country all over the USA. And several overseas.

    Until a few years ago Guns were not part of the family in any shape or form.

    Until the first gang related grafitti from MS13 showed up on a side of a store in our area. That was enough for us to go ahead and start packing. Now we wonder if we really need to be "Packing our suitcases" and take a little vacation somewhere.

    Fri, 08/05/2011 - 02:05 | 1525831 Doyle Hargraves
    Doyle Hargraves's picture

    Don't know for sure but my prediction on the other board is this, market tanks @ 600-750 pts. BAC closes at $6.66 or lower and dies over the weekend thanks to  a mini bank run tomorrow on the bad news surrounding them the depositers withdraw everything. TPTB come in scoop up everything worth anything and feed the carcass of bad debts to the taxpayers, Because BAC has so many hands in so many cookie jars, well it gives TPTB (debt brotha, CONgress, the bernank fed) reasons to unleash QE as much as needed and CONgress to provide ' fiscal stimulation' as much as needed to cover BAC's funeral expenses and a lil extra for pork barreling. The inflationary depression will not stop PMs going to infinity as QE/fiscal stimulus fails physical PMs will be hard to come by at least at the market 'spot price' Mad Max time Bitchez!

    Fri, 08/05/2011 - 02:35 | 1525861 HungrySeagull
    HungrySeagull's picture

    I don't know how you can consider a death of a large bank like BAC.

    Such a falling giant will block the sun for those caught in it's shadow and influence.

    Thu, 08/04/2011 - 23:20 | 1525542 ffart
    ffart's picture

    Down, down, down.

    Thu, 08/04/2011 - 23:21 | 1525543 Cheesy Bastard
    Fri, 08/05/2011 - 00:52 | 1525748 DaBernank
    DaBernank's picture

    So, 2.5 years to gold confiscation?

    Thu, 08/04/2011 - 23:20 | 1525547 Atomizer
    Atomizer's picture

    Just review the DTS report. Someone is cash burning debt ceiling funds. Timmah is granted approval in continuing daily operations.

    Thu, 08/04/2011 - 23:21 | 1525548 Reese Bobby
    Reese Bobby's picture

    I owe ZH an apology.  My 8 year old son posted this commentary.  He doesn't know anything about financial markets but he seems to be a wiz at computer hacking!

    Obviously the Global Bank Cartel disaster of 2011 has nothing to do with the place setting time bomb that was 2007.

    I have told junior this site is for adults and he has promised to refocus on Call of Duty.

    Thu, 08/04/2011 - 23:39 | 1525589 HungrySeagull
    HungrySeagull's picture

    Keep him focused on COD, and AWAY from BF3 or it will COST you in the Hardware required to run the game.

    I have a stack of hardware and more on the way as I type this sitting next to the computer, which will soon to be retired after only a year.

    Thu, 08/04/2011 - 23:43 | 1525603 Stares straight...
    Stares straight ahead's picture

    His comments seemed appropriate and earned him 2 green peas.

    Thu, 08/04/2011 - 23:25 | 1525551 kito
    kito's picture

    Market has tremendous rally on tomorrows news that 2 jobs were created.....and barton biggs gets redemption!!!!

    Thu, 08/04/2011 - 23:22 | 1525552 Bindar Dundat
    Bindar Dundat's picture

    We are fucked for the LONG TERM.

    Thu, 08/04/2011 - 23:25 | 1525557 imapopulistnow
    imapopulistnow's picture

    Next  will be down,Very far down.

    Thu, 08/04/2011 - 23:27 | 1525558 Cleanclog
    Cleanclog's picture

    Here's what I think:

    QE3 Fed buys stocks

    QE4 Fed buys houses

    QE5 Fed buys small countries

    QE 6 Fed buys people, with a sorta return to slavery, but at least they eat.

    Reminder . . . the Fed isn't for the American people nor a part of government.  It is an entity for its shareholders which are banks.  This is true but few people know this.

    Thu, 08/04/2011 - 23:56 | 1525634 tip e. canoe
    tip e. canoe's picture

    here's a remix:

    QE1 Fed bought securitized houses (as long as the minions don't continue to shriek about those silly robotitles)

    QE2 Fed bought stocks (through a couple chinese walls)

    QE3 Fed buys WW3

    QE4 Fed buys itself and implodes into a white dwarf

    Fri, 08/05/2011 - 00:04 | 1525653 Seer
    Seer's picture

    That which cannot continue forever, won't.  I long ago figured that the ultimate/final goal would be that the Fed would collapse into itself.

    Thu, 08/04/2011 - 23:29 | 1525563 Au_Ag_CuPbCu
    Au_Ag_CuPbCu's picture

    Where is RoboDouche?

    Thu, 08/04/2011 - 23:45 | 1525602 Tejano
    Tejano's picture

    Where's Hamy. I always get a kick outa' Hamy.

    Thu, 08/04/2011 - 23:56 | 1525606 DoChenRollingBearing
    DoChenRollingBearing's picture

    Excellent question!  Although some of his commentary has been useful to me...

    Thu, 08/04/2011 - 23:30 | 1525565 Au_Ag_CuPbCu
    Au_Ag_CuPbCu's picture


    Thu, 08/04/2011 - 23:31 | 1525567 Hedgetard55
    Hedgetard55's picture

    Can an algo "panic"?

    Thu, 08/04/2011 - 23:31 | 1525569 Au_Ag_CuPbCu
    Au_Ag_CuPbCu's picture

    Oh yea, grabbing more AG for it, gonna be pissed when this thing resolves.

    Thu, 08/04/2011 - 23:34 | 1525572 mess nonster
    mess nonster's picture

    Denial lasts as long as the consequenses can be deferred.


    Thu, 08/04/2011 - 23:35 | 1525577 WonderDawg
    WonderDawg's picture

    Asian markets in meltdown mode tonight. It's going to be an interesting day tomorrow.

    Thu, 08/04/2011 - 23:36 | 1525580 alien-IQ
    alien-IQ's picture

    It was not the JPM "bail out" of Bear Sterns that triggered the rally in March. It was the FED announcing the expansion of QE!!!!



    March 18, 2009: FOMC Statement: Expand MBS program to $1.25 trillion, buy up to $300 billion of longer-term Treasury securities

    S&P 500: 794.35

    "To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months."

    Seriously? JPM bail out of Bear Sterns caused the fuckin rally? Gimme a fuckin break.

    Thu, 08/04/2011 - 23:44 | 1525598 WonderDawg
    WonderDawg's picture

    Ah, he's talking about the JPM bailout of BS in March 2008, not the rally that started in March 2009.

    Thu, 08/04/2011 - 23:45 | 1525600 MacroStory
    MacroStory's picture

    You are a year late to the party. That was in 2008 not 2009 that I am showing...    Perhaps you missed daylight savings a few too many times. How did the markets rally a year before QE was announced?  Nice one!

    Thu, 08/04/2011 - 23:54 | 1525626 alien-IQ
    alien-IQ's picture

    My mistake on the time line. Granted. However, I still dispute the premise that it was the JPM "bailout" of BS that triggered any rally but rather it was the FED signaling it would do "whatever it takes" to keep the banks solvent...even if it meant destroying their own credibility.

    As mentioned in this:
    "On April 29, a former top Federal Reserve official told The Wall Street Journal that by offering $30 billion in financing to JPMorgan for Bear’s assets, the Fed had “eliminated forever the possibility [that it] could serve as an honest broker.” Vincent Reinhart, formerly the Fed’s director of monetary affairs and the secretary of its policy-making panel, said the Fed’s bailout of Bear Stearns would come to be viewed as the “worst policy mistake in a generation.” He noted that there were other viable options, such as looking for other suitors or removing some assets from Bear’s portfolio, which had not been pursued by the Federal Reserve."
    Reuters, “Ex-Fed Official Criticizes Bear Stearns Rescue,” citing Wall Street Journal (April 29, 2008).

    Fri, 08/05/2011 - 00:00 | 1525637 WonderDawg
    WonderDawg's picture

    Yeah, Bear got hosed, but they were never really in "The Club", and Paulson and some others were still pissed at them for not participating in the LTCM bailout. Or so the story goes.

    Thu, 08/04/2011 - 23:37 | 1525581 dwdollar
    dwdollar's picture

    This pattern has played out beautifully so far.

    Thu, 08/04/2011 - 23:39 | 1525587 dwdollar
    dwdollar's picture

    The job numbers better be as negative as everyone is saying or we could see a bounce tomorrow.

    Thu, 08/04/2011 - 23:50 | 1525592 Taku
    Taku's picture

    MSM pundits all squawking for QE3.

    Dumbfuck pundits and Bernanksters,

    QE1, 2, 2.5...
    QE3 will kick the can. It will create more inflaton. It will destabilize governments. It will starve millions.
    You fucks will take more money from the taxpayer. Give it to more banksters.

    The Bernanks and Krugmans think they have the answer to 1931.
    Maybe they do.
    But back then liquidity wouldn't flow too far.
    Maybe from DC to Atlanta.
    Even to the West Coast.

    Today GS pushes a button.
    It flows to China, EM, & other risk assets.
    It flows to an offshore HFT account.

    They may understand 1931.
    They haven't got a clue to 2011.

    Fri, 08/05/2011 - 00:03 | 1525644 goldfish1
    goldfish1's picture

    These "PhD's" miss the simple factors that often  determine the outcome.

    Fri, 08/05/2011 - 00:13 | 1525674 Seer
    Seer's picture

    No, they don't miss anything.  They're paid jesters.  It's their job to distract us so that their masters (who pay them lavishly for not producing anything of value to/for the average person) continue to rule.

    Thu, 08/04/2011 - 23:41 | 1525593 jkruffin
    jkruffin's picture

    Anyone else notice the BIG AIG MISS!!!!! Seems to not be talked about tonight on any of the business channels,  they gotta hide the rotten fat...

    Thu, 08/04/2011 - 23:45 | 1525595 MacroStory
    MacroStory's picture

    Deleted double post. Move along please!

    Thu, 08/04/2011 - 23:45 | 1525599 jkruffin
    jkruffin's picture

    Art Cashin stated earlier that big players were expecting a 1000 point drop minimum at any time....not including todays drop....Anyone long better get worried, because today's selling was just a prequel to what is coming for this ponzi scheme collapse.

    Thu, 08/04/2011 - 23:58 | 1525632 DoChenRollingBearing
    DoChenRollingBearing's picture

    Gold then bitchez!

    Fri, 08/05/2011 - 00:22 | 1525700 patience...
    patience...'s picture

    Yea and when you get hungry, maybe I'll throw you a chicken leg for an ounce.

    Fri, 08/05/2011 - 00:39 | 1525721 Bananamerican
    Bananamerican's picture

    maybe you will wander about the countryside trying to trade rotting chicken legs for rototiller parts...

    Fri, 08/05/2011 - 02:39 | 1525867 HungrySeagull
    HungrySeagull's picture

    Maybe a bit of wild hog if you are sharp and fast on your sights. Back east it would be deer for winter.

    Thu, 08/04/2011 - 23:46 | 1525605 punketo
    punketo's picture

    lets play the stock market limbo, how lowwwwwwww can we go?


    Thu, 08/04/2011 - 23:45 | 1525607 Snidley Whipsnae
    Snidley Whipsnae's picture

    Asian equities markets down big tonight but the PMs are holding up well and have regained some of their small losses.

    Gold from $1644 to $1658

    Silver from $39 to $39.44

    So far the big drops seen in US equities markets and Asian markets have not taken gold down much.

    Tomorrow is another day and I don't have a crystal ball handy.

    If forced to place a bet I would short the DJ tomorrow... all bets off if Benny anounces more easy money.

    Thu, 08/04/2011 - 23:56 | 1525625 HungrySeagull
    HungrySeagull's picture

    Tomorrow is going to reveal itself as the hours go by, Asia failed and Europe is next.

    Thu, 08/04/2011 - 23:58 | 1525641 DoChenRollingBearing
    DoChenRollingBearing's picture

    10-4, we will see...

    A plus one green to you!

    Fri, 08/05/2011 - 00:04 | 1525648 Snidley Whipsnae
    Snidley Whipsnae's picture

    Yeah Hungry, tomorrow will be 'interesting times'. I would like to stay up for the European open but I got things to do tomorrow and need some Zs.

    I'm really curious about the rumored bank runs in Italy. When that happened in the US a couple of times around 2008 the news was least in MSM.

    Merkel is on vacation but is said to have come back for a meeting with other pols/bankers. Not that I expect them to accomplish much if anything.

    Wonder how much exposure BoA has to Italian soverign debt?


    Fri, 08/05/2011 - 02:11 | 1525837 Doyle Hargraves
    Doyle Hargraves's picture

    HMMM, BAC started by Italian immigrants, Italian bank runs? Maybe there is something to BAC's demise tomorrow or over the weekend...I was just pulling it outta my ass but now that I think about it TPTB might be giving a heads up to all the sheeple when the shit went down in Italy earlier today that BAC was the next domino to fall. Just a I have said before all the dealings I have ever had with BAC were shit and I hope they burn hotter and brighter than the Hindenburg!

    Fri, 08/05/2011 - 02:40 | 1525869 HungrySeagull
    HungrySeagull's picture

    Italy Italy Italy.

    Reminds me of Sgt. Hulka.

    A cookie for you if you know that line and where it came from.

    Fri, 08/05/2011 - 03:02 | 1525875 Doyle Hargraves
    Doyle Hargraves's picture

    Stripes?! Only because of the Sgt Hulka thing, I haven't seen that movie in about 20 years! I was flipping through the channels the other day and it was on. RIP John Candy.

    Thu, 08/04/2011 - 23:49 | 1525611 jkruffin
    jkruffin's picture

    Also, notice the H&S pattern; right shoulder plunge coming on GOOG



    $400-$425 is the bottom for GOOG

    Thu, 08/04/2011 - 23:51 | 1525614 warchopper
    warchopper's picture

    I don't understand HFT. But it seems to me that if HFT can drive the markets up, it can drive them down. Quickly.


    Correct me if I'm wrong.

    Fri, 08/05/2011 - 00:13 | 1525672 HungrySeagull
    HungrySeagull's picture

    HFT is essentially pre-programmed computers buying and selling MUCH faster than a human can.

    It can almost find your price and then ... shill you up before you know what happened you are out. Not only out, but now in debt and need to cover.

    Fri, 08/05/2011 - 00:24 | 1525705 Stares straight...
    Stares straight ahead's picture

    HFT works by profiting from the spreads on the ask/bid that other market players either cannot act on quickly enuf, or are blinded to by quote stuffing.  IMO, even tho HFT is insanely fast, it probably slows actual overall declines or gains because it has to buy AND sell to capture the profit.  Anyone think different?

    Thu, 08/04/2011 - 23:53 | 1525619 chump666
    chump666's picture

    no rally till wall street gets margin call chaos, then maybe a rally. but. we have china, who's economic breaking point is an oil price over 90.  china goes, so does wall street and any mega multi mth relief rally.

    Thu, 08/04/2011 - 23:54 | 1525621 Bindar Dundat
    Bindar Dundat's picture

    We are all FUCKED -- LONG TERM .

    Thu, 08/04/2011 - 23:58 | 1525628 HungrySeagull
    HungrySeagull's picture

    How so? We have no paper in the Stock Market. Just physical metal.


    I will presume that some here remember what the late 70's felt like, I get the hebbie jeebies just feeling that groove all over again.

    Thu, 08/04/2011 - 23:57 | 1525624 AlephZero
    AlephZero's picture

    We are going to see DOW sub-7,000 by Nov.

    Thu, 08/04/2011 - 23:57 | 1525630 Snidley Whipsnae
    Snidley Whipsnae's picture

    What a hoot! This from JP Morgue via the WSJournal...

    'Gold: JP Morgan 'Loves' it big time'

    double reverse inverted psych job... JP is getting desperate

    Thu, 08/04/2011 - 23:58 | 1525639 Taku
    Taku's picture

    Maybe they want to show us the 2009 green shoots.
    Oh right, that was the record bankster bonus year.


    Fri, 08/05/2011 - 00:03 | 1525645 carbonmutant
    carbonmutant's picture

    The restructuring of the EU will give America its QE3...

    Fri, 08/05/2011 - 00:05 | 1525657 goldfish1
    Fri, 08/05/2011 - 00:21 | 1525675 caerus
    caerus's picture

    NQ has yet to break neckline...take out your faves (big double top in PCLN you say?)  i prefer NFLX...cuz reed's a douche...




    Fri, 08/05/2011 - 00:20 | 1525695 oblonsky
    oblonsky's picture

    whoever came up with these two charts made an excellent call.

    Fri, 08/05/2011 - 02:45 | 1525870 jomama
    jomama's picture

    it would appear they are plotted on current data.

    Fri, 08/05/2011 - 00:38 | 1525720 Subprime JD
    Subprime JD's picture

    Too many bearish posters on zh tonight. Yesterday can rip higher as sentiment is through the floor. Absent some euro bank blowing up I'd buy tomorrow but eventually fade the rally.

    Fri, 08/05/2011 - 01:05 | 1525758 HungrySeagull
    HungrySeagull's picture

    Not bearish.

    I am a bona fide Silver Bull. Anything that can scatter the sheep from the paper inferno into the corral of PM's where they lie among the golden streets in peace are going to get gored by me.

    Fri, 08/05/2011 - 01:07 | 1525764 caerus
    caerus's picture


    Fri, 08/05/2011 - 01:16 | 1525769 Tuffmug
    Tuffmug's picture

    Time for the EU and the FED to fire up another credit card and remind all the key players that Mark to Fantasy accounting, phony stress tests, infinite central bank bailouts, infinite money printing, and regulators who won't regulate means never having to admit you are broke! The only Law that exists now is that the Ponzi must be saved! The Dow will rise to 20,000+ in inflated dollars and the Shorts, the middle class, and cash and paper holders will be crushed. GOT GOLD?

    Fri, 08/05/2011 - 01:30 | 1525791 Jeff Cosford
    Jeff Cosford's picture

    All I know but I can't see where the similarity is the 2007 selloff is nice and orderly biggest down draft is a 40 handle move 2x.

    Lots of breaking in between. Don't see the breaking here see accerleration.

    If Gold tanked on margin today then I'm looking for more of the same over next 3 trading days. Not sure where the breaks will come but the 2011 is blowing out 2.5 standard deviation and anything else in it's way.

    If I remember correctly it's called fear.

    Fri, 08/05/2011 - 01:40 | 1525802 Sambo
    Sambo's picture

    They are not talking much about it because AIG turned it really does not 'matter' if the results were below street expectations.

    Fri, 08/05/2011 - 01:50 | 1525817 Peak Everything
    Peak Everything's picture

    Why is everyone is so worried about having to live within our means. Every other critter on this planet has to. Why should we be exempt?

    Fri, 08/05/2011 - 01:56 | 1525825 PulauHantu29
    PulauHantu29's picture

    mmmm..."a little more selling" the Cryptmeister says....mmmmmmm....

    How "little?"

    Fri, 08/05/2011 - 02:00 | 1525828 iNull
    iNull's picture

    Phfff. There will be no market by 2015.

    Possibly sooner.

    Fri, 08/05/2011 - 02:03 | 1525829 iNull
    iNull's picture


    Fri, 08/05/2011 - 02:43 | 1525855 iNull
    iNull's picture

    Neither can I resist the quantisential whatever-ness.

    Whatever. You are all >> in line. <<

    Fri, 08/05/2011 - 02:35 | 1525856 iNull
    iNull's picture

    I cannot resist a rhetorical baited question.


    Fri, 08/05/2011 - 02:38 | 1525862 web bot
    web bot's picture

    What I find amazing is that the numbers are showing a recession and the prevailing wisdom is to do more QE... What ever happened to leaving the economic cycle self correct and stop trying to manipulate the market. Unbelievable.

    Fri, 08/05/2011 - 02:39 | 1525864 GoldbugVariation
    GoldbugVariation's picture

    Why is crude oil the biggest faller in this (off 15% since Monday)?  Makes no sense unless someone thinks we are headed back to the Stone Age.

    Fri, 08/05/2011 - 02:39 | 1525866 Hugh_Jorgan
    Hugh_Jorgan's picture

    Where IS that ticking sound coming from?!!!

    Fri, 08/05/2011 - 03:08 | 1525882 Hobbleknee
    Hobbleknee's picture

    Yesterday was a present to Obama from the puppet masters. They're not happy with him.

    Fri, 08/05/2011 - 04:53 | 1525968 Cult of Criminality
    Cult of Criminality's picture

    10-4 on that Hobbleknee !

    Screen so red when i got home,thought the livingroom was on fire.Think he got the message ?

     Oh sorry he`s getting his bus tour circus campaign together after all, its all about the election and next golf game.No time to actually come up with a precise plan on what direction to lead the country besides .yes you guessed it.....Off the cliff thats on top of the mountain,that starts at the sea floor,entering the abyss

    Cheers great job!



















    Fri, 08/05/2011 - 03:21 | 1525895 hunglow
    hunglow's picture

    Ding, ding, ding.  Euro is sucking and the London girls are on.

    Fri, 08/05/2011 - 05:04 | 1525976 Cult of Criminality
    Cult of Criminality's picture

    Should be getting close to a false flag soon. something will have to divert attention from this,this cyclone of shitstorm on the economic financial terrorism front.

    Good luck on your flight to safety clueless,planes,markets can and do crash(i mean look at all the CIA Coke planes that crash to name a few 

    Fri, 08/05/2011 - 05:20 | 1525991 Djirk
    Djirk's picture

    step back a little bit and look at the moving averages 07 to 11....they are about 13% lower.

    Not good for the pension funds 8% return and shows how worthless QE is.



    Fri, 08/05/2011 - 08:07 | 1526186 Gimleteye
    Gimleteye's picture

    Sooooo, we are in trouble? Food and water shortages, riots in the streets, martial law?

    Serioulsy what does post crash America look like?

    Fri, 08/05/2011 - 08:21 | 1526216 Grand Supercycle
    Grand Supercycle's picture

    SP500 bounce is possible from current oversold levels due to Thursday sell off.

    Fri, 08/05/2011 - 08:44 | 1526313 Twice a Day
    Twice a Day's picture

    Harry W, missed your postings, and several elders. I'll be looking to possibly pick something up over the next few days. Now, we may need Splading to inject some runners.

    Twice a Day


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