Monday, December 24, 2012

Secrets Of $NYUD

There are often times when patterns on charts just get so confusing that even when we make a plea to the more common indicators for guidance, we find that they too offer little in the way of direction.  And then we have cute little incidents like the mini-flash crash in the ES futures that occurred on Thursday, Dec. 20th which took all of 2 seconds to cause the circuit breakers to trip and put a halt to trading due to a "limit down" event.  And of course all that excitement prompted Zero Hedge to quickly publish one of their patented bullhorn specials explaining How 10,000 Contracts Crashed The Market.  It didn't help much that at the time of this mini-crash event the clocks in Asia had already ticked over to the dreaded Mayan "time to pay the piper" date.  Surely the crooks who run the world were having the laugh of their lives at the sheer 'coincidence' of it all?

But then something funny happened on the way to the Forum.  Or should I say "didn't happen".  The markets opened on Friday morning with the majority of investors all around the globe expecting a minimum of 30 down points on the S&P 500 and the evaporation of 300 Dow points.  I even had visions of such a bloodbath myself.  Silly me.  Because what happened next was... well... nothin' basically.  Apparently somebody came to the rescue and all was well on Wall Street.  We survived the week and the world didn't end.

But let's take a closer look at what "really" happened all day long on Friday.  We begin by first taking a quick look at the mini-crash itself as seen on a 'still photograph' of the futures at the time of the crash as displayed at ForexPros.  [Helpful hint #224: click on any of the Indices you see in the Index column.  Once it opens, select the link to "interactive chart".  From there you can create the time frame of your choice on any of them.]

Ok, to begin our little investigation and analysis on just what exactly transpired during on Friday's apparently lackluster trading day, let's back up a bit and see what that mini-crash looked like:

Click on image for a larger version

Obviously as the clock ticked down toward the open of trading on Friday morning, it seemed apparent that all hell was about to break loose on Wall Street.  But surprise surprise, that's not what happened.  In order to provide a snapshot of the trading activity that occurred during Friday's session at the NYSE, and in order to relate it to the chart above, we take a look at a 5 minute chart of the S&P 500 in approximately the same time frame:

Click here for a larger version
As you can see, after the initial gigantic burst of volume during the first 60 seconds of trading things settled down very quickly.  Stick save in action.  Notice that volume dried up almost instantly as the market commenced to churn sideways for the remainder of the day.  Even the silly Russell 2 million put on a very brave burst in the closing minutes of trading... something I'm always more than ready to mistrust in light of the fact that the Russell is one of the favorite playthings of the venerable JPM theft machine.  In the chart below we see how the mighty Russell finished the day [please note that in order to provide you with intra-day volume data, in this case an extremely important metric, I have to use IWM as a proxy]:

[Please also note that on the charts below, clicking the charts themselves will enlarge them.  Clicking on the link below the charts will take you to real time data.  In a few days the following charts will be far enough into the past that they will basically no longer be useful.  But by clicking on the charts themselves, the image will be retained]

Click here for a larger version
Here's where this particular little study, one using about as small and sharp a focus as I ever employ, gets very interesting.  Note that as was the case with the $SPX, there was of course a huge spike in trading volume in IWM at the opening bell.  And as was also the case in the S&P, after the initial opening shock, volume dried up as the session evolved into one of those typically aggravating days of sideways chop.  But  what we were actually witnessing (in my humble opinion) was one of the largest offloading sessions by the big banks that we've seen in many moons.  Call me skeptical, but in light of the information you're about to see in charts below, as it was happening in real time I was not the slightest bit impressed with the volume spike seen in the chart above for IWM.  It is afterall one of the tools that JPM does in fact use in their daily arsenal to create smoke screens.  In fact, barring some sort of super impressive explosion higher in today's session, the last one before Santa arrives to use your toilet without permission, I believe the data shown in the charts below is a precursor to more downside action.

For those not familiar with $NYUD, it is a method of keeping track of volume by subtracting down volume from up volume.  The net result is a print that is either above the zero line (more up volume than down volume) or below the zero line (more down volume than up volume).  I keep this chart open every minute of every trading day but only have to refer to it a half dozen times throughout the session.  The reason is this: $NYUD has a proven track record of being extremely honest.  In the first 60-90 minutes of the trading day, the vast majority of days it sets the tone for what volume is going to do for the remainder of the session.  Once $NYUD has established its general trend in the first hour or so, it is extremely reluctant to change course.   Secondly, once the path has been established for the day, almost without fail there will be a huge volume burst in the final few minutes of trading which 'finalizes' that trend for the day.  Thirdly, and most importantly, on the rare occasions when we see the price action close in the opposite direction as $NYUD suggests price 'should have gone', it is $NYUD that speaks the truth.  The following day price will be proven to have been the liar and the vast majority of the time price will pay dearly for its sins.  Of course no indicator and no analysis is foolproof, but I've seen enough evidence of these phenomena that I have little choice but to go with the odds... they suggest Friday's action was a well crafted smoke screen.

We begin by looking at a 'typical' picture of what $NYUD would normally look like.  In the chart below the white line represents the entire NYSE ($NYA):

Click here for a larger version


Ok, here's where we get to the nuts and bolts of this analysis that I felt compelled to share with you today.  In the chart below we note that on Friday past, we saw the largest divergence in a long, long time between $NYUD and the price action in the indices, particularly that pesky IWM.  I almost think that I don't even need to explain the chart below any further, except for one small detail... I forgot to draw a couple of lines highlighting the divergence I refer to.  Nonetheless, you can still see that amazing occurrence in the image below:

Click here for a larger version


And finally to put Friday's divergence event into proper perspective, we take a look at how huge the down volume actually was when compared to what has occurred in recent months.  It's quite clear that this was an event that was very rare indeed.  I've broadened the time frame to 3 months+ in order to provide a snapshot of exactly how enormous the disparity was between down volume and up volume, not to mention that all of it was in direct divergence with price action.  One of them was lying:

Click here for a larger version

One important aspect to note is that each bar in the chart above covers 2 hours.  There is no overlap in those last 4 candles which provides further hints suggesting that it was an 'impulsive' event of massive down volume.

And finally, although we have seen days in the past with much more down volume, it is very rare that the market can make its way through the day by heading higher as it did on Friday.  Here's a picture of Friday's action as seen in a daily chart covering a year and a half:

Click here for a larger version

In conclusion, let me be the first to admit that I'm the king of the crow-eaters.  My younger brother and I used to kibitz each other (God rest his soul) about which of the two of us was more likely to end up with egg on our face any time we made some sort of claim that seemed even the slightest bit outlandish.  But whether the market bursts higher today and tries to make a liar out of me or not... I'm sticking to my guns on this one.  It's entirely possible that with what will most likely be a very small volume day today, the market could indeed burst higher.  But if volume does indeed end up being minuscule, I'll discount it.

In any case, this particular analysis is very valuable most of the time... and is something so worthwhile knowing that I'm more than happy to share it with my readers and followers.  In other words, on this particular occasion I'm willing to take one for the team.

And this time I can say with confidence that this IS the last piece I'll publish before Santa gets here.  So on that note I'd like to wish each and every one of you a most wonderful and happy Christmas.

Click here for your Christmas gift courtesy of Albertarocks

94 comments:

  1.  *a note on Forexpros.

    I do love their overnight futures charts.. I not know of any better site that offers free charts like that.
    --
    ES was actually lock-limit down @ 1391 on Thursday night (for 15 seconds)
    Forex' show the low @ 1406, they didn't quite catch the low for some reason.

    its just a minor note, but ES did 'lock limit down @ -50pts.
    --

    Well, I've spy puts, VIX calls, I'm going to play it as I saw it from October.

    Target is 1225... by mid-January.
    -

    Happy Christmas AR..and to all your legion of followers.

    The next few weeks...could be..VERY exciting.

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  2. Excellent sleuthing AR.

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  3. I was wondering about this session but didn't have the tools or skills to find the offloading that took place.

    This is further evidenced by the big boys having a lot of bonds right now, expecting something like higher interest rates.

    http://www.zerohedge.com/news/2012-12-20/guess-who-not-rotating-out-treasurys

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  4. It does beg the question though... who was buying? Merry Christmas to Alberta and all.

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  5. Well apparently basically 'nobody' was buying, otherwise there would have been pressure for price to have have risen instead of falling.  But that's a question I always ask myself too Tom because arguably "immense down volume" could be interpreted as "immense buying pressure but only at lower lower levels".  Whatever the answer to that question is, one thing we do know from that type of action is that until it reverses there is more selling pressure than buying pressure... more supply available than the demand could handle.

    Merry Christmas to you as well Tom.  I hope Santa brought you something real nice such as this here lovely motorized rolling pin.  Rolls back AND forth.  What will they think of next?

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  6. Well apparently basically 'nobody' was buying, otherwise there would have been pressure for price to have have risen instead of falling.  But that's a question I always ask myself too Tom because arguably "immense down volume" could be interpreted as "immense buying pressure but only at lower lower levels".  Whatever the answer to that question is, one thing we do know from that type of action is that until it reverses there is more selling pressure than buying pressure... more supply available than the demand could handle.

    Merry Christmas to you as well Tom.  I hope Santa brought you something real nice such as this here lovely motorized rolling pin.  Rolls back AND forth.  What will they think of next?

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  7. Excellent sleuthery good sir, and a Merriest of Christmases to you!
    Thanks for sharing that useful indicators ... sounds like a tres good way to see through their trickery with price.

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  8. I realized today how odd it is that in the US the media is obsessed with stories of how terrible it would be to go over the cliff.
    Meaning how terrible to the economic growth it would be to have a bit of austerity ... spend less and tax more to trim the deficit a bit.  Stop increasing the 16T debt by 1.6T a year, still increase it of course, but less quickly.

    When AT THE SAME TIME the rest of the world is talking about austerity and fixing huge debt issues.  We are acting like our huge debt is not an issue, and that the cost to GDP is pain we can't take to reduce debt. 

    The US is insane.

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  9. For sure Greg, the media shill machine is really just the propaganda branch of the banking mafia.  "The people will hear what we want them to hear.  They shall see what we want them to see and they will read what we want them to read.  The truth be damned."

    I hope you and your family are enjoying some beautiful time together.  Yay Olivia.  :-)

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  10. https://www.youtube.com/watch?v=JUc8-GUC1hY&list=UUvPpdXUKvHB7I1rjPYzPtPw&index=1
    Definitely agree. However when politicians are faced with low interest rates "forever" do you blame them for kicking the can down the road? Who wants to be the adult to shut down the party? Free booze, as long as the music is on you gotta dance right? These things take a long time though. There is no reason to think US cant get to 25 trillion or more in national debt with even lower rates. Take a look at Japanese bonds. Take a look at the video posted. Japan may be closer to its day of reckoning. But the US is holding up pretty well. We cold easily see another decade of this charade.

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  11. Thanks for posting the Kyle Bass vid.  I watched it a couple of days ago and should have posted it here myself.  Is it any wonder Bass has become so popular?  He's gotta be one of the sharpest dudes out there.  That video is an hour well spent.

    In my darkest hours, when I betray my inner bear and give serious thought to the possibilities you propose above, I have to admit that you could absolutely be right.  A couple of months ago I lost my mind, out of sheer frustration at how the markets have been reacting to the worst news possible by putting in yet another "ho hum, and away we go higher anyway" session. 

    So just for the heck of it, one night I suspended my bearish beliefs for a few hours and came up with the most bullish scenario that EWT would permit (in a classic impulse higher as seen on the monthly charts).  I almost felt 'dirty', as if I was 'sinning' to even allow myself to think that bullishly.  But you know what?  After that chart had been all dolled up with my new-found bullish perspective it looked perfectly reasonable.  In fact it looked much like the scenario that Sid proposes in his excellent video.  At the time I put that chart together I proclaimed that I would have the audacity to even show it to anybody until I saw the print for the 'finished' January monthly candle.  As of this moment the entire scenario is still a complete possibility.

    Regarding your question "Who wants to be the adult to shut down the party?:  I guess it could have also been asked as "Who in congress wants to act like an adult and take responsibility?".  I suppose if we put ourselves in their shoes it would be a very tough thing to do wouldn't it?  If any politician were to take that leadership role and pull away the punch bowl the media propaganda machine would blame that person for eternity as having been "the cause" of the decline of the US economy.  The behavior of the main stream media is absolutely disgusting.  I'd go so far as to propose that it's flat out criminal, right out of Joseph Geobbels' playbook.

    "There is no reason to think US cant get to 25 trillion or more in
    national debt with even lower rates. Take a look at Japanese bonds. Take
    a look at the video posted. Japan may be closer to its day of
    reckoning. But the US is holding up pretty well. We cold easily see
    another decade of this charade.
    "

    I think you're right... that scenario is entirely possible.  Who are we to think that we know the "timing" of the great deflationary cycle?  As you suggest, if Japan can get away with it for 25 years, why couldn't the USA, whose currency is 'still' the world's reserve currency, get away with it?  Who's going to stop it from happening... the bond vigilantes?  Who are they anyway?  Do they even exist anymore?  Because since the central banks of the world are basically the only entities left who are buying up all the bonds, then they hold the vast majority of them and wouldn't even 'allow' a bond crash to happen... not until the last moment when they simply lose control.  Flat out lose control.  The disaster would likely take just hours to unfold, not weeks or months.  But am starting to see the very real possibility that that event might indeed occur closer to the 'end' of Obama's term, not here near the beginning of it.  Or maybe even at some time beyond that.

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  12. I remember a couple of people on here have been tracking the AUDUSD and AUDJPY. Barely stopped for breath after peaking early last week - down over 200 pips so far. Is this move fitting in with your projections?

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  13. I personally don't follow the Aussie:USD at all because that particular relationship isn't really part of the currency carry trade in my opinion.  Therefore it's relationship with equities is looser than the Aussie:Yen pair is.  For people who actually trade the AUD:USD pair in one fashion or another of course it would be important to track it.  But I don't trade it so I don't follow it.  BUT, the Aussie:Yen... that's a whole other story.

    And to answer your question... NO, that pair is not following the bear's playbook.  It's soaring which would suggest that equities should be soaring.  Up until now that pair has had a magnificent correlation with the S&P but today they've sure taken different paths.  And almost 'all' of the change in that ratio is not due to what the Aussie is doing, but to what the Yen is doing... crashing.  It's in freefall at present (down 1.6% in the past two trading days alone) which is why the NIKKEI is soaring.  For the Yen to be crashing like this is very out of the ordinary I'd say.  Do you remember the wild interventions by the BOJ where they did everything in their power to halt the rise in the Yen?  And then the IMF (I think it was them) even jumped on the bandwagon and did the same thing... tried to drive the Yen lower.  Each of those interventions worked for all of about 24 hours.  So I'm not sure what is causing this sudden collapse in the Yen but whatever it is, it should probably be considered as inflationary for stocks.  But stocks aren't following along.  So yes, there's a disconnect going on right now at least in the 'present' time frame.  It's going to be interesting to see how this plays out in the weeks ahead.

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  14.  I think the Yen crash is probably linked to the elections over there and the likely win for the uber-dovish candidate. These risk-on/off correlations and carry trades work very well until they suddenly don't and I imagine the market is getting spooked by the spectre of printing over there. It strikes me that the Japanese have had enough of the last 20 years and look like voting for a populist right-winger running on a nationalist and inflationary monetary platform. What could possibly go wrong?

    I seem to recall Greg In Baltimore and another poster were following the AUS/USD pair and predicting an imminent reversal a couple of weeks ago. Look forward to their updates.

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  15. Alberta I did some rudimentary intermarket analysis (gold vs CRB vs SPX) in the inflation/deflation or muddle through stagflation.  What do you think - gold is a bubble  - or gold is pricing in a collapse of banking system (via dervivative crash) or we are going to repeat 2000 with equities down (but real assets rise).  I posted the link here as it is rather long but can copy and post here if you prefer. . 
    http://www.bullbeartalk.com/forum/lounge/452-wednesday-december-26th-boxing-day-panic-dude-wheres-my-inflation.html

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  16. Hi Jeff, and welcome.  I haven't got time at the moment to read that full post but it sure deserves some attention.  At a glance I'm sure liking what I see there.  I won't be able to even look at it in depth or investigate that website until tomorrow.  But with just the quick glance I had at your post over there, it seems like you're looking at the same things I am (in a roundabout way) with the $CRX analysis I did a year ago.  Here's a link to the latest revision of that analysis.  I think we're looking at things from the same angle and I definitely want to read your post.  I will do just that as soon as I get a chance and comment on it.  Great job :-)

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  17. I saw the CRB:SPX study here first and left a post how I would expect central banks to create inflation (via these QEs) to offset the underlying deflationary forces from sub-prime bubble collapse.  But gold's out performance relative to the CRB since  2005 has been suggested that either gold was in a bubble or at least overvalued as an inflation hedge.  That is, the Gold:CRB ratio during the 1980 peak was 3 and currently the Gold:CRB peak is 6 and so it is overvalued by twice as an inflation hedge.  

    But now I think that gold is not only behaving as an inflation hedge but more like "insurance" against the collapse of the economic system from a debt/derivative crisis or possibly war.      However, as "disaster insurance" it becomes difficult to rationally value gold.  Gold's value could be as large as currency and/or credit.  And peace  and prosperity (true economic growth and not credit asset bubbles) impair the value of gold and need for "disaster insurance".  

    What I'm trying to understand [assuming the above is correct], are there intermarkets hints to determine if the economy will replay the 2000 to 2004 scenario (SPX down, Gold, CRB, HUI and real assets up, weak dollar) or a minor replay of a 2008 recessionary slowdown (Assets sell off and dollar rallies).   I'm discounting high economic growth outcome altogether and I suspect slow economic growth with low inflation similar to the 2000 to 2004 will play out but I don't know how to confirm it.  

    Looking forward to your reply.

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  18. I have the week off, and it's had good and bad moments thanks!  Tonight the 12-yearold is upset we took her ipod so she can sleep and not text her friend.  I've grown to passionately hate AAPL for what they've done to an entire younger generation ... so distracted the lot of them.  On the other hand, on Christmas Eve the 8-yearold stayed awake from 1 am to 6 am and then woke us up.  The patience of youth!

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  19. Yes, these things do take an unbelievable amount of time.  The past two and a half years shocked me that we are only where we are. 

    That's an excellent video, and Kyle is exceedingly bearish on the Japanese debt situation -- "clearest scenario unfolding he's seen in his career".  He gives them up to two years before they have a credit event.

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  20. Man, I understand your frustration Greg.  I had exactly the same problem with my son and his Nintendo.  Back then Nintendo was all the rage and although it really did help the kids learn some incredibly good hand/eye coordination skills, and literally 'made them' develop very fast reflexes it was a monstrously bad thing when it got to the point that they were addicted to it and wouldn't do their homework.  It finally got to the point that I had to take my son's Nintendo away from him for an entire year.  But it didn't keep him away from sports though and he put some of those hand/eye coordination skills and quick reflexes to good use as a baseball player.  He was really good at that... a big home run hitter.  I mean BIG home runs, big enough to have gone out of many of the major league parks, which was pretty darned good for a 200 lb. 18 year old.

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  21. Jeff before I really dive into your post, would you mind clearing something up for me?  If I'm understanding your angle correctly, it's really gold that's the target of your focus.  Would that be correct?  To be honest I haven't looked at the CRB itself in a very long time.  Instead I've been focused on the commodities only stocks... the $CRX, since I'd used that index for a pretty in depth analysis already.  I'd kind of gotten used to using that as a proxy instead.  But I do understand that the CRX does not reflect actual commodities prices accurately.  Sp when I get time to dive into your analysis I'll be using the CRB as you did.  So let me know... is your curiosity really about gold more than anything else?

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  22. I guess I'm really after a grand unified theory (commodities, commodity stocks, gold, SPX, dollar) of how each reacts during stagflation (2000 to 2004), deflation (2008), inflation (1976 to 1980) or low growth muddle through 2008 to 2009, bubble economy 2005 to 2007 etc.   But yes gold is the primary focus.

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  23. Jeff...

    I put together a chart that's not all that dissimilar to yours except that I added the Euro as a counterbalance to the USD... just to kind of show that as the dollar index fell, it more or less fell mainly relative to the Euro since the Euro makes up 58% of the US Dollar Index.  But while we compare one currency to any other I always envision that battle, that teeter-totter, as taking place inside a basket that has been thrown off a cliff.  Gold is not inside that basket.  Gold is more or less like the Roadrunner standing on top of the cliff watching Wylie Coyote plummet.  I also removed the gold bugs because I'm thinking their share value is more or less irrelevant to your larger theme.  I also added the S&P and the broader NYA which has performed much better than the S&P has since the beginning of year 2000.

    But my take on this entire comparison is that the price of gold has broken away from everything else and has entered into a world of its own... a world where it has rightfully belonged all along.  But thanks to incessant suppression of the gold price by the central bankers of the entire world in an effort to mask over what has truly been happening as a result of unstoppable money printing, gold has not been able to play its rightful role for over 100 years now.  It appears to me that those days are over.  No matter whether we get a massive deflationary event in USD terms or not, gold could never again return to $500 per ounce.  In order for that to happen, the USD would have to rise nearly 400% from here.  That just ain't going to happen under any scenario.  Even if it did, the fear factor that would result because of the accompanying economic and stock markets crash would be mind boggling.  That kind of fear would surely feed into the price of gold as well I think.

    I think gold is convinced now that Bernanke is telling the truth... that in his masked message in the last Fed statement they're basically saying that they'll continue printing "at least as long as the unemployment rate is above 6.5%".  The unemployment rate is never going to get below 6.5% again until we've gone through some sort of great cleansing.  The economy just cannot support job growth of any kind right now and it's not going to get any better until things get a lot worse first.  I also truly believe that the reason the Fed is slyly stepping away from focusing on inflation as being the determining factor about whether or not they print, is because he's losing control of the ability to hide inflation.  So in the sneakiest of fashions they're sliding in the factor of "the unemployment rate" as being the determining factor in the future.  IOW, I think it's gotten to the point where they can't hide the rising rate of inflation for much longer and are fully expecting gold to shoot a lot higher than they'd like.  Gold is sensing that as well would be my take on it.

    I realize that didn't even cover a small portion of the whole "grand unified theory" you are attempting to assemble, but maybe my views could fit in there somewhere.  I 'do' appreciate your inquisitive mind though... I really like your approach because I'm a huge fan of "relativity"... everything is "relative" to something else.  Hence all the ratio analysis I do.  Although you haven't actually done any true "ratios" in your study, you're still looking at it from that angle.  Great work.

    I still don't know much about the BullBeartalk site yet, but it's interesting.

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  24.  Jeff...

    I put together a chart that's not all that dissimilar to yours except that I added the Euro as a counterbalance to the USD... just to kind of show that as the dollar index fell, it more or less fell mainly relative to the Euro since the Euro makes up 58% of the US Dollar Index.  But while we compare one currency to any other I always envision that battle, that teeter-totter, as taking place inside a basket that has been thrown off a cliff.  Gold is not inside that basket.  Gold is more or less like the Roadrunner standing on top of the cliff watching Wylie Coyote plummet.  I also removed the gold bugs because I'm thinking their share value is more or less irrelevant to your larger theme.  I also added the S&P and the broader NYA which has performed much better than the S&P has since the beginning of year 2000.

    But my take on this entire comparison is that the price of gold has broken away from everything else and has entered into a world of its own... a world where it has rightfully belonged all along.  But thanks to incessant suppression of the gold price by the central bankers of the entire world in an effort to mask over what has truly been happening as a result of unstoppable money printing, gold has not been able to play its rightful role for over 100 years now.  It appears to me that those days are over.  No matter whether we get a massive deflationary event in USD terms or not, gold could never again return to $500 per ounce.  In order for that to happen, the USD would have to rise nearly 400% from here.  That just ain't going to happen under any scenario.  Even if it did, the fear factor that would result because of the accompanying economic and stock markets crash would be mind boggling.  That kind of fear would surely feed into the price of gold as well I think.

    I think gold is convinced now that Bernanke is telling the truth... that in his masked message in the last Fed statement they're basically saying that they'll continue printing "at least as long as the unemployment rate is above 6.5%".  The unemployment rate is never going to get below 6.5% again until we've gone through some sort of great cleansing.  The economy just cannot support job growth of any kind right now and it's not going to get any better until things get a lot worse first.  I also truly believe that the reason the Fed is slyly stepping away from focusing on inflation as being the determining factor about whether or not they print, is because he's losing control of the ability to hide inflation.  So in the sneakiest of fashions they're sliding in the factor of "the unemployment rate" as being the determining factor in the future.  IOW, I think it's gotten to the point where they can't hide the rising rate of inflation for much longer and are fully expecting gold to shoot a lot higher than they'd like.  Gold is sensing that as well would be my take on it.

    I realize that didn't even cover a small portion of the whole "grand unified theory" you are attempting to assemble, but maybe my views could fit in there somewhere.  I 'do' appreciate your inquisitive mind though... I really like your approach because I'm a huge fan of "relativity"... everything is "relative" to something else.  Hence all the ratio analysis I do.  Although you haven't actually done any true "ratios" in your study, you're still looking at it from that angle.  Great work.

    I still don't know much about the BullBeartalk site yet, but it's interesting.

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  25. Great stuff.  And I agree with the comment that gold is in a world of its own and this is not a good thing as it either suggest bubbles or serious problems with the government and central banks. 

    The GOLD to CRB ratio chart linked here from ACE  (http://stockcharts.com/public/1610144/chartbook/185389766;) shows that gold remains elevated  well above the 1980 peaks and so suggests that gold is either in a bubble or gold is behaving like a currency and expanding with the central banks money supply expansion.    Also, I noticed that Gold to YEN is flirting with all time highs (their central bank is pursuing active debasement to spur on the economy).  The wrinkle is that the gold doesn't benefit much from this debasement priced in USD as the Yen weakens against both the USD and Gold.  

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  26. I'm really liking your stuff Jeff... where in hell have you been all my life?  lol  You're offering some great thoughts yourself.

    On Ace's chart he asks the question: "Why has gold remained elevated for over 3 years against commodities?".

    I think the fact that he asks that really good question is a reflection of his 'expectation' that gold should have remained relatively 'fixed' against commodities.  By that I mean that he's envisioning that gold should move approximately the same percentage as commodities have done (just as it has more or less always done in the past).  And I don't blame him for asking that question or having that expectation, because we've all been trained over the past 50 years to be expecting that relationship to just continue as "the norm". 

    But I'm interpreting it this way... I'd reply to his great question like this: "Gold has remained elevated for over 3 years against commodities because it doesn't have to be, nor "should it be" related to other real goods as much as it should be related to others of its own kind... currencies.  In my opinion gold has taken its eye off the cost of any other "real stuff" in the world and has fixated its gaze on what its real function is... to monitor, and react to, the value of the global currencies.  I'd say that for the first time in decades gold is beginning to return to its real function, kind of crawling out from under the always-present thumb of the manipulators, the suppressors of truth... the major banks who act as minions of the Fed.  Namely, Citi, JPM, Goldman, and the rest of those fascist monsters.

    I'd say that this is also part of the reason that Bernanke recently said he'd be looking not only at inflation as the determinator of whether or not he continues printing, but would begin looking at the unemployment rate as another determining factor.  What he's really doing, and I'm 100% convinced of this, is slowly introducing a new factor that he knows damned well will allow him to print for 10-20 more years maybe.  And as time progreses, we're going to be hearing the Fed speak less and less about inflation as if it no longer matters.  In other words, he knows what is coming and he is powerless to control it.  So why not just sweep it under the carpet and start using a different excuse... the employment rate.  He's paving a "different escuse" that in the future will sound like justification for more printing... because that's exactly what he plans to do... print, print, print, print.

    I do not think gold is in a bubble, nor anywhere near a bubble.  It's behaving like a currency, in fact the only real currency in the entire world.  This is the way gold is supposed to be behaving.

    Right, gold doesn't benefit much when priced in USD.  But from the eyes of a Japanese person gold is starting to look pretty yummy.  The same thing will happen for Europeans when the Euro starts to tank.  I keep referring to that currency basket that was thrown over the cliff.  Over time gold will rise relative to each and every one of the currencies, but thanks to the FX markets it will rise more against one of them than against another for a while, then the rolls will reverse, etc... but over the longer haul gold would always be rising because all those FX battles will 'still' be going on inside that plummeting basket.

    So in a nutshell, I think I have to admit that what you and I are talking about is a massive inflationary event unfolding.  This goes completely counter to my deeply ingrained belief in the deflationary outcome.  But lately I've entertained very serious thoughts that perhaps that deflationary outcome doesn't get started for another 5 years perhaps.  At the moment I guess I have to admit that I've been too early to expect the big deflationary scenario.  What does that mean for equities?  Holy smokes... we'd be talking about 20,000 on the Dow and a loaf of bread at $16.

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  27. I'm thinking of 2001 to 2004 repeat going forward when SPX tops (if it hasn't already) with higher but moderate inflation but slow to possibly negative growth which will benefit gold, commodities, real assets.   This is why I had those assets on the long term chart.  I'm also bullish on emerging markets who are growing and Japan who seems to be debasing the currency for growth (much like the US did post 2000) which should be supportive for gold and commodities.     

    Also, unrelated to the above but one thing I look at sometimes is GOLD to USD ratio chart because it shows the rel strength of gold to the dollar and the chart looks a bit different from the GOLD chart. 

    Let's see what 2013 brings. 

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  28. http://www.bloomberg.com/video/gundlach-fiscal-crisis-the-issue-not-fiscal-cliff-GjrJ7SShSTK09M8eE3TkFw.html

    Thanks for the thoughtful reply. Heres another smart guy. Take a listen to what he has to say about Japan. Your thinking may be right but timing is key. Markets are overbought and a correction is definitely possible. However to talk about dollar devaluation and currency crisis in the USA is premature. It will happen but a long ways down. If you listen between the lines of what Kyle Bass had to say its looking pretty bullish for USA. Housing is kind of stabilized. We have recapitalized our banks as opposed to Europe. Natural gas and more oil exploration looking good for energy etc. And we have the mightiest military in the world. It would take a lot to bring the US to its knees. In the meantime you can lose all your wealth climbing up the wrong tree. Better to look for the ones that are close to demise like Japan and focus on that. Long term Yen monthly charts breaking down. 

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  29. "Also, unrelated to the above but one thing I look at sometimes is GOLD
    to USD ratio chart because it shows the rel strength of gold to the
    dollar and the chart looks a bit different from the GOLD chart.
    "

    So do I, lol.  What we're 'really' doing when we do that is that we're pricing gold in terms of the USD Index.  It's actually a way of investigating the price of gold in terms of the entire basket of currencies that are in the USD Index.

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  30. As per some wise people;

    there is an expectation of a manufactured sell off in the precious metals to draw out any remaining loose cards.

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  31. Yes. We are only getting started! Looking for a move below parity on aud/usd. Not much luck with aud/jpy for now. I am sure that will come into play next few weeks. Check charts on previous post.

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  32. USDJPY is everyone's NEW YEAR's present for 2013 and financial independence.  The holy grail of a 3rd wave up has started ... of intermediate 1.  Here's a rough projection of what we're looking at here as awareness of Japan's soon-to-come debt restructuring hits people with this thought: "oh-shit-and-we-thought-they-had-a-safe-currency ... sell it sell it sell it"

    Happy New Year to all you fine peeps.
    And to all who go long the USDJPY, a good life!

    Chart not coming through.  Rats.

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  33. I'll try the chart again ... it's my favorite chart of my entire trading career
    Rats again.  Will try later.

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  34. Good catch on Ben's latest sneakiness ... thanks!  And good to watch out for that inflation cropping up.
    Hey, I had another chart that I couldn't post.  On my favorite usdjpy longterm count.  Bery bullish.

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  35. I also think in the end gold will skyrocket against all currencies.  Has to with all the printing.
    But, I still think deflation could happen first.
    But I think the japanese currency is about to get thrashed first.
    Then later, the dollar.
    Gold I am not ready to bet on yet.  I think it is a later stage mover.  Just a hunch.
    I don't think all the reported printing is having an impact on the dollar because deflation is a bigger force at the moment. 


    So it's all somewhat unknowable, as I think the order could go either way, but I'm betting we get deflation first and then inflation (from the point of view of the dollar).  But as they say, timing is everything.

    It's gonna be a more interesting year than 2012, I sense.
    Cheers!
    Greg

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  36. Hi Greggor.  Man, I'm feeling bad that you have trouble posting charts here.  But that problem seems to be a hit and miss issue for you.  Do you have that same problem on other sites using Disqus?

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  37. Hey Dan,
    I haven't had that problem on troll-central (which I am swearing off for the new year).
    I'll try again here.
    By the way, the week ended last week BELOW that flash crash low on futures that you highlighted (Daneric made that point).

    USDJPY follows (hopefully)  ... rats.

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  38. Good decision Greg.  Plain and simple, that place is just not conducive to positive thought or even coherent thought.  It just reeks of negative vibes and any trader who plans on making money absolutely cannot hang out in such an incredibly unhealthy psychological atmosphere.  It just makes no sense at all to hang out in a horribly negative place.  Imagine the skankiest biker bar you've ever been to.  Would you hang out there?  Don't get me wrong bud, I don't mean to sound like I'm preaching because 'm fully aware that a year ago (maybe more, I can't remember) I used to hang out there too. 

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  39. Thanks buddy.  Wish I'd followed your example a year ago.  No question I would have made more money this year keeping my own counsel and not spending the time or energy there, and getting more sleep.  You are very right ... being a good trader is all about being centered to make good decisions at critical moments.  So, out with the old, and in with that which promotes tranquility.   This is a critical moment -- with the USDJPY close to a 3rd of a 3rd. 

    Peace, Love, Hope, and Joy.  Troll central decreases all four of those, so out it goes.  Thanks for hosting again!  And Happy New Year!  May all your decisions increase your peace, love, hope and joy.  And wealth.

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  40. My pleasure Greg.  And on that note... since you're tuning in to positive vibes which include tranquility and love, whether you believe in astrology or not, including the Mayan calendar prophesy, I highly recommend you watch this incredibly good "feel good" movie.  It's fairly new.  Just to give you a teaser, it's message is bad, bad... really bad news for the bastards who run this entire world, the f'king bankers:
    2012 Crossing Over, A New Beginning OFFICIAL FILM [Brave Archer Films®.

    In fact if you have a mind to, share this video with others who can dig the idea of a world so good we can't even imagine it right now.  I'm a believer.

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  41.  Hey, thanks alot ... it'll take me some time to see the whole video, but I like it so far!  I like the interpretation of a change in consciousness is coming.  I didn't get to the place yet where the bankers will pay a price ... must be the minds that are tuned into love are spared.  Trolls won't fare well either I suppose.  LOL. 

    Thanks for sharing ... I'd forgotten about the idea of consciousness on an ever expanding journey. 

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  42. Amazingly, about two years ago a guy I know told me the exact same thing as what I heard in that video.  He compared our 'existence', our 'being' as being a drop of water that is in fact a part of the overall world of "ocean".  Each molecule of water in our bodies is in fact part of the ocean.  It has been in the ocean before and it will return to the ocean at some point.  And from the purely logical or 'scientific' perspective, he's absolutely correct.

    That exact same idea is the theme of the movie.  I think the only reason people might have a hard time accepting such a theory is because we're 'small thinkers' for the most part.  It's just such a beautiful concept that I 'want' to believe it.  I certainly no longer believe in god as the 'god concept' was taught to me by the Catholic church.  That institution is pure evil... it's sole purpose is to control the people with fear.  What kind of horseshit church is that?  If I'm not mistaken most religions are the same... control with fear.  Religion is a 'political' thing and nothing more in my view.  Anyway brother, I hope you enjoy that 'movie' and can see the beauty in it.  And yes, they do talk about the Illuminati and the bankers... and I wouldn't want to be either one because they are on their way out... fear mongering whores that they are.

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  43. Happy new year AR & all!
    Looks like the latest rally in AUD/JPY is waaaay stretched and
    risk is trying to keep the new year's party going.
    It's coming up to some old resistance from 2007/2008 so things should slow up soon  

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  44. See also AUD/USD just bumped up to the top trendline of that big triangle

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  45. Nice work Greg!
    Have been looking for a pullback but every time I count 5 waves done it seems I was just looking at an extended 3rd

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  46. The discouraging thing about the situation is because of the negative atmosphere there's a high turnover rate of contributors, but then he just attracts new trolls. After awhile you just throw up your hands and call it a lost cause. And the really strange thing is he's supposed  to be the Elliot Wave Bear-King, but very few contributors care about Elliott Wave and probably fewer care about his analysis.  

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  47. Happy New Year to you as well buddy.  Almost 'all' of the movement in the AUD:JPY is coming from the Yen.  It looks to me like that thing is finally going to tank 30% or more.  So I think we're a long way away from the day when the currency carry trade people start thinking "risk off".  The weekly charts have turned flat out uber-bullish once again too.  It's all about currency destruction now I guess.  The "race to the bottom" is well under way.

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  48. Yeah, sadly it's just deteriorated into a f'king circus.  And he couldn't care less.

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  49. AR, how about the RUT?
    It topped in Sep without divergence, but with a close outside it's daily & weekly 20 & 50 BB's. 
    Now it's made a new top with divergence and outside the bands again. A cursory examination of the weekly charts at least since 2009 shows a meaningful pullback followed similar price movement (I'm too lazy to look further back).

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  50. Oh yeah I remember some of those trolls coming over here. It's amazing how it seems that there's an endless supply of assholes on the interwebs.
    Thanks again for being a gracious host!

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  51. I'm almost too tired right now to think about that, lol.  But all I can see right now is bullishness all over the entire spectrum, especially from the currencies perspective.  I'm thinking that what we're actually witnessing is what every trader knows should happen and "should be expecting" to happen but for some reason isn't.  Currency destruction leads to higher prices of everything.  Everyone knows that.  So I wonder why the entire investment community seems so perplexed about 'why' this rally is happening.  I'm sure seeing bullishness all over the freakin' place Greener.  Since we're clearly in a bullish cycle I don't even look at overbought signals, nor divergences within them.  We're supposed to be looking for 'buy' signals during a bull cycle, not 'sell' signals.  That would be an example of using momentum indicators backwards and traders do it all the time.  I used to do it too but I finally caught on to that mistake several years ago.  But I'm very open minded and nimble as hell.  So I'm positioned with a lean to the  bullish outcome, and unless any pullback is something really serious I'm expecting that I'll just buy the next dip.

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  52.  As in Feb 2004
    and   Mar 2009


    http://britefire.wordpress.com/2012/08/21/333/

    now in Dec 2012
    after the breakout
    above the top of the W pattern
    the target on the drive back down
    has been the base of the bar
    piercing the W top.

    After this drive back target has been hit
    the move has been
    in the opposite direction
    and gold has made substantial moves up.

    The target has been hit.
    The downward move in gold
    is now likely complete.

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  53. Edited only to make that link work BrightFire.

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  54. That's quite a resistance line it hit today.  Several lines!  Fib retraces, weekly resistance, old support. 
    Can't post a chart, but wish I'd seen it more clearly at 1pm to be alltheway short.  It's still holding above that bottom line of the triangle, so a decision point is nigh.  Running out of room in that triangle!

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  55. Actually I read a Chinese article saying exactly what I mentioned above.  They thought it an absolute joke we were calling some tax hikes and spending cuts a fiscal cliff and thought fiscal ant hill would be more appropriate.  And when we can no longer borrow our way to prosperity ... that would be called a fiscal abyss.

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  56. They're right!  Some tax hikes and spending cuts are the same thing we poor folks have to do when we want to get our household finances in order.  We work harder or take on a second job in order to increase our income and we stop buying those expensive Starbucks coffees.  That's what responsible people do.  That's why I gave my last article the title I did: "The Fiscal Cliff - A Beautiful Thing"

    The only reason they called this entire charade a "fiscal cliff" was to scare the bejesus out of the citizenry in order to justify 'not doing the responsible thing'.  Jesus Christ those politicians are a bunch of irresponsible assholes. 

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  57.  Have you tried using a different browser, Greg. Disqus can be temperamental but seems to be working ok in Firefox at this end in the past few weeks.

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  58. I have this hunch that what we are seeing with the yen's crashing is well beyond the devaluation from printing or talking about printing.  I think Japan is headed to a Greece-like debt restructuring.  They have debts that total 25 x their tax receipts.  The debt slaves in the US "only" have a ratio of 5.6.  So Japan is going to implode first.

    To make matters nightmarishly bad, the currency has been strengthening against the US dollar since 1973 when it started trading at 360.  First it strengthened because inflation here was worse.  Then their account balance was positive (exports > imports).  So ... global investors didn't worry about Japan's debt because they were ablt to self-fund it.  However, that is no longer true leading to capital fleeing the country before the debt crisis.  Why can't they continue to self-fund their debt?

    1.  Aging population no longer saving.
    2.  Great social costs like medical and retirement.
    3.  A recession (can't grow their way out).
    4.  exports are declining with China's boycotting autos due to the fight over those rocks in the ocean.  Their account balance will be negative this year probably.  Declining super fast.

    So, the yen is no longer a safe haven:  debt issues, 0% interest.
    The BOJ WANTS to weaken it so exports are competitive (their ONLY lever).
    Many hedge funds are also shorting the hell out of it (huge returns, low risk).
    Leaving one less "safe haven" ... the Euro is out, the yen is out.  The dollar for now.

    Happy New Year to us!

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  59. Hey Tom, I posted some thoughts on the yen's weakness recent and projected (to crisis levels) above yours in response to AR.  Thought you might be interested.
    Cheers,
    Greg

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  60. Cheers Greg, everything you say makes sense. My only question is, why now? Traders have known about the above for several years now - is it a case of inertia and a lack of alternative safe havens post-2007? In any case if the uber-levered carry trade is about to unwind your prediction of a nightmare crash might just be spot on.

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  61. For comparison, if you look at the USD form 2001 to 2005, a weak USD aided by low interest rates was the US growth strategy that Japan appears to be replicating. Over this period, the USD crashed some 30% from 120 to 80 where the dollar still trades today.  And the USD never made a meaningful rally until the Lehman collapse when citizens repatriated their foreign invested funds.   

    I'm speculating here, but if Japan is truly out of policy tools, then to avoid a Japanese economic collapse taking down the global economy, other governments will have to permit the Yen to devalue by some amount to support the Japanese export markets.  [And in effect, Japan will take market share from China/Korea exports whose currency should continue to appreciate].   However,  the other central banks/governments will also limit the devaluation of the Yen and not allow it to implode which would hurt their domestic economies [US] from job losses because of excessively cheap Japanese imports.  I'm not sure the balance here will be, but experience shows that 30% devaluation is tolerable without the Yen losing its safe haven status(?).  And this will hide the developed countries secretly colluding to "inflate" their way out of sovereign debt problem (and overall deflationary pressures) which should continue to benefit real assets.  

    The big wild card is a major global recession, war with China or Lehman like collapse etc (and those are big if) that will again have Japanese citizens repatriate their funds back into their domestic currency.  But even so, like the dollar, I expect the top of the Yen is in place.  

    Also, I love the trade and keep waiting for a retracement to go short but it never happens and I fear the trade is getting to crowded.  But the USD waterfall shows the potential here.  And where is the chart?

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  62. I think Japan will be just fine Greg... the sales of adult diapers are booming.

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  63. I forgot to reply to your post here ... I'm also a recovering Catholic.  It's shocking how backwards thinking the Catholic church has been for the last 2,000 years.  I was more influenced by a meditation group many years ago, and they talked about the race evolving in consciousness.  I can surely tell my daughters are more advanced in their thinking then I was at their age.  Shockingly so.  And the impace the population has by their emotions is fascinationg -- that part in the movie where scientists saw an off the charts reading on September 12th 2001 ... of something that was due to 100's of millions of people emitting strongly negative emotions.  Amazing.

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  64. Where is that ETF that is long adult diapers?  Hahaha.

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  65. Why now?  I don't think traders realized how fast the account balance surplus would shrink.  If you look at the account ballance report, there were some shocking numbers like february of 2012 and September or October.  Those times are correlated with big moves down in the yen right after.  Also, in March Japan had their biggest month in forever of debt they had to roll over, and some of the movement in the Yen then was probably anticipating their debt problems were growing exponentially worse.  Kyle Bass calls it an optimism bias that traders have.  They have repeated so often that Japan is self-funded it has become a truth in their minds.  Although it's about to become a giant falsehood.  Sort of like people repeating don't fight the Fed so often they assume the Fed can solve all our problems even tho nothing could be more false.  Everyone also thought BOJ was a permanent failure at weakening their yen.  40 years is a long time.  They even called the yen the widow maker because of all the people who killed themselves after losing it all shorting it.  But technically, that wedge was broken, and it's come out of a 40 year decline. 

    Nobody worried about the debt levels in Japan ONLY because they were "self-funded."  But now they are NOT.  So ... the worries have to catch up to reality.  Also, there are big corporations with hedging contracts at like 83 (worried it would go lower), so they are buying back to get out of that protection.

    But as you say, part of it must be a lack of alternative safe havens.

    But Kyle Bass thinks we are headed to a major debt restructuring in Japan.  A Greece-like event for the 3rd largest economy.  The currency markets are signaling something MAJOR is coming.

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  66. Right on good sir ... Japan is setting up to be the next debt and currency crisis.  We are taking turns.  First Greece, Europe, then Japan, then maybe the US.

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  67. Direxion has a triple diaper ETF under the symbol POOP.  It a fairly new product but it was decades in the making.  Huge demand now.  It still, it doesn't seem to make nice movements, but instead moves in spurts due to the fact that it's very liquid.  It doesn't seem to make nice patterns either... nothing solid.  But a person should probably trade that one intra-day since there are often huge movements every hour or so.  Depends.  It's a real stinker to trade but if you've got a strong stomach you could just hold your nose and take a swipe at it.  Personally I don't trade it... POOP is just one big stinkin' mess in my opinion.  :-)

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  68. The way the financial system and banking system is setup you need people to go into debt to cause inflation. Credit is what drives asset bubbles and inflation. Not money printing although that may happen in the end game. The US is far from its end game so please dont bet on a waterfall decline in USD. The ability of people to go into debt depends on how much debt they have in the first place plus any asset bubbles building up. If the Japanese are convinced the Nikkei is going to the moon and they start borrowing money to plow into the stock market then the yen will decline. No central bank printing is necessary for that. 

    Credit comes first. Central bank printing follows. Not the other way around. As you can clearly see in the US right now the central bank balance sheet is expanding rapidly but USD has not gone down. Thats because not many people want to or can go into debt to bid up asset prices. The central bank balance sheets were relatively tame in the 2001-2005 period when people were going into debt and bidding up house prices.

    Please understand the mechanics of money first before you put any bets on the USD waterfall decline.
    http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

    http://globaleconomicanalysis.blogspot.com/2009/12/fictional-reserve-lending-and-myth-of.html

    So to summarise if the USD is to go down significantly the people in the US will have to take on an enormous amount of debt. If thats not possible then the Fed cannot devalue the dollar. They can print all they want people will just not borrow. The velocity of money will be low.  The next option left is the Federal govt handing money over to the people. We are seeing some of that right now.
     

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  69. Whew, that is funny.  Guess I'll go (for a) LONG (japanese) POOP then.

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  70. Thanks buddy.  Nice to be able to contribute to such giants.  This was some research the past three months, and I think it's a whale on the end of a fish hook.  Think the universe led me to this one.

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  71. A comic in the paper this week had a guy labled congress on a tricycle going over a 6 inch drop.  I think it was also comical that the Republicans got outmaneuvered and had to give in to taxes going up on the 1% of the richest folks (above 450,000).  They now are quite obvious in who they represent.  It's taken long enough.

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  72. http://www.tradingeconomics.com/japan/current-account

    You will get more chances to get back in. Current account deteriorating but more downside to come.

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  73. You might be interested in Pebblewriter's outlook for the Yen. He forsees a pullback over the next couple of months (coinciding with an equities selloff) and then a resumption of the trend: https://pebblewriter.com/usdjpy-update-jan-4-2013/

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  74. Is the Fed lying about QE3 and QE4?

    Pains, Gains and Capital thinks they are.
    The Fed's balance sheet is actually smaller than it was when these programs were announced.
    They were announced before the election.
    PG&C suggests that the Fed is NOT spending 85B per month on MBS and Treasury bonds. 
    And that Gold has already sniffed this out.
    If this is true, the FED has already run out of bullets.

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  75.  Might you have a good count on that?  I was so hoping this was just minor i of a big 3rd wave, but now it's looking so massive that maybe that March move from 76 to 84 was minor i and this is minor iii.  How would you tell which it is?  Would the next correction give us a clue by how far it corrects and what channels it implies?

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  76. Geez!  That's a hell of a different angle on things isn't it Greggor?  Holy smokes.  Or as our good buddy Pebblewriter would say... "Holy 牛"

    If Graham Summers is correct in his analysis (and I certainly have no reason to doubt him) then the entire game has finally and truly been reduced to a game of "confidence" and nothing else.  The ice has become so thin that the fish beneath it are getting a sun tan.  Actually the entire currencies theatre ("theater" for my American friends) is also nothing but a game of confidence as well.  Of course that's nothing new but the day will come when that ice will become thin enough for the fish beneath it to catch a nice tan too some day.  Here's a link to the article you spoke about.  Just click this word that says button, lol.  Thanks for the heads up on that one buddy... I hadn't seen it.  And it's no small deal either.  Much appreciated.

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  77. Attention Baltimore Greg.  Calling Baltimore Greg.

    Greg, I'm still a bit miffed that you can't post charts here.  As you know, I've given you and everybody else who posts here the "whitelist" treatment so that Discus will always honour your comments, links and charts or images.  There is no reason for me to leave the decision making to Disqus about whether or not contributions from my friends and readers should or should not be sent to the spam bin.  Nothing that my friends have to say, nor attachments to their comments should even be scrutinized by Disqus and I've told it so.  I did that on day one, for each of you... with the first comment from every person who I knew from past sites.  All of you are good people and I trust you implicitly to honor this blog in that I know nobody would post any bad stuff like porn or bad links or attack each other, etc.  There are no trolls here so everybody has carte blanche.

    That's why I'm a bit peaved.  Because you have a green light here buddy at all times.

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  78. Here you go Greg. 
    Take it with a grain of salt. Since there's no overlap between waves on subminuette level or above yet we could still be in the 3 of 3 of 3 of 3 of etc. And, of course, the whole thesis could be wrong and we haven't even finished the downside like DK thinks.I like to use indicators to go along with wave labels.  EW Oscillator is a nice clear one. The highest stack is usually the third wave, but that usually works for RSI, MACD histogram, etc also. Another one I like is Aroon because it gives turn signals as well, although other indicators like the Stoch work just as well I suppose. Personal preference I guess and whatever makes the most sense to you.(My favorite indicators FWIW for turning points are the ones by John Ehlers, which are little more technical but seem to always do a good job of steering me on the right side of the road when my EW counting might want me to swerve instead).You can also look at fib targets. If [iii] is really in then it was pretty darn close to being phi squared (2.618) times [i]. 3 equals 1 times phi around 91 depending on whether you measure 1 starting at the Oct 30 2011 BOJ sunday night massacre where I like it or Feb '12.  

    As far as the next correction goes (if it ever comes), we're looking for a triangle to confirm the 4th wave. They probably won't make it that easy on us, so since the proposed wave 2 was a zigzag the next best thing would be a flat. The important thing is the alternation with wave 2 and it chews up at least a few months to keep it on the same degree.

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  79.  Glad it was an interesting tid bit ... it came to my email box.  Weird how everyone assumes it's true, and nobody is checking the numbers.  Guess that's how it is with a ponzi scheme.

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  80.  Thanks AR, I know it's nothing you did like block me ... it's just a thing with discuss.  I had to switch to Firefox to even get the comments reliably, so it's probably on my end.  I'll keep trying to link charts tho ... it works on occassion!  Cheers.

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  81. I use Firefox exclusively and really like it.  But about a month ago it started crashing on me for no reason I can think of, other than maybe too many windows open with too many tabs on each.  But that never used to bother Firefox in the past so I can't figure out why it's happening now.  I've tried all kinds of fixes like updating the few add-ons that I have, etc.  I think I might have to uninstall and reinstall FF.  Gotta be careful with that though because I don't want to lose my customizations, etc.  I think I'll be able to pull it off with no troubles.  Cheers.

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  82.  Thanks Greenface!  I appreciate you sharing your count ... I was really thinking this was an extended fifth.  I was a bit fixated into thinking the little one of this third wave should go beyond the minor one that peaked at 84.17.  But your count seems to fit nicely with that exception of that.  And thanks for those other pearls of wisdom ... will have to chew on those a bit.  Thanks again for some sign posts.  Guess in the big picture there will be more waves to catch ... the next bigger wave 3 up -- intermediate 3.

    Adjusting to new counts (quickly enough) seems the most difficult part in this game.

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  83.  I see what you're saying with the extended 5th, and wanting to see the lower degree 1 reaching past the upper degree 1 (Daneric's rule).

    Could be valid, but I always think of extended 5ths as being terminal.

    If it really was an extended 5th, then I might be looking at DK's corrective
    A - B - C instead of the 1 - 2 - 3 I have.

    I guess we won't know for sure until we start getting some retracements. Right now we could still be in a lower degree fourth.

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