Tuesday, January 22, 2013

304% Per Year - Is That Sustainable Ben?


No useful analysis today folks.  We're just going to rant a little bit... have a little fun with numbers, to investigate what's in store for the equities markets in the event that the Fed gets their way.  Which begs the question "When was the last time they didn't?"  It has become abundantly clear that Chairman Bizarro intends to destroy the dollar.  In fact that is what he said.  The last Fed statement on Dec. 12th, read as follows, "In particular, the Committee decided to keep the target range for the federal funds rate at zero to one-quarter % and currently anticipated that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6 and a half percent, inflation between one and two years ahead is projected to be no more than a half percentage points above the Committee's 2% longer-run goal, and longer-term inflation expectations continue to be well anchored.  The Committee views these thresholds as consistent with its earlier date-based guidance. In determining how long to maintain a highly accommodative stance of monetary policy."

"At least as long as the unemployment rate remains above 6 and a half percent."   Did you read that part?  "At least as long as..."!  That's what he said!  So since we won't be seeing unemployment under 6 and half percent for another 20 years, Bernanke plans to print essentially forever.  There is less than a snowball's chance in hell that unemployment is going to drop below 6 and a half percent until the entire world has fallen into the abyss and emerged out the other side... years, perhaps a decade or more from now.  It's not particularly difficult to wrap one’s head around the reality that the world's economies are not going to get all fired up again with oil at $200-$300 per barrel and $47 for a loaf of bread.  In case the good Chairman didn't realize it... that's what happens when inflation runs at the rates he's in the process of imposing.  So you ask "And what rate is that Dan?  What evidence do you have that inflation is about to run amuck?"

Well how about this little tidbit:  Since the November 15th low in the S&P 500, the market had risen fairly steadily until December 18th when it closed at 1446.  That was quite the stellar little rally, yes?  But on the 19th of Dec., Santa arrived and took a great big dump on Wall Street.  And down the market came... falling 3.12% during the Christmas week.  You know... just to make Christmas real cheery for American investors far and wide.  But then a miracle happened.  On the last trading day of the year the market gained footing on the promise that perhaps the fiscal cliff might be averted.  All the wannabe actors in Washington took fool full advantage of the lime light and the Congressional Clown Show began in earnest.  Then presto... just in the nick of time the great announcement was made: "Citizens of America, we your leaders have voted.  Let the celebrations begin!  As your representatives we are proud to act in your behalf and make the decisions we think are best for you and our once-proud nation.  We have elected not to do the responsible thing.  We're not going to go over the fiscal cliff.  We have chosen bankruptcy for America.  Yay!  Everyone rejoice!!"  And rejoice Wall Street did. 


Click here for a full blown version

The net result is that since the November 15th low, the subsequent rally into December, including Santa's nasty Christmas week delivery as well as the blast off rally of January, as of the time of this writing the S&P 500 has risen 9.423% in 63 calendar days.  Imagine if gasoline at the pump did the same thing.  Because that's exactly what is going to happen at some point if Bernanke doesn't knock it off. 


To put the latest Wall Street rally into perspective, since the November 15th low, the average daily rate of inflation as measured by the S&P 500 has been 1.001431% per calendar day, compounded.  Do you realize what that rate of inflation for a full calendar year is?  Exactly 68.5465% per year.  True, that’s not quite at the rates that Zimbabwe encountered a few years ago but still, it’s a rate that is not overly comforting.

Click here for full sized image
And let's not even talk about the bizarre "Yay, we're-going-bankrupt" rally off the low of New Year's Eve.  Suffice it to say that ever since that glorious announcement the S&P has rallied at the rate of 304% per year.  Why... at that rate on Dec. 31 of this year the Dow will be at 38,896.  Geez... that's almost 39,000.  I wonder if that's sustainable?  I tend to doubt it but that's what the goons on Stomp All Over The Constitution Avenue want us to believe.  Nonetheless, even though 69% per year, or even 304% per year, is relatively benign compared to the rates experienced by Weimar and Zimbabwe, the world is still about to endure crushing inflation.  Chairman Bernanke promised.  If the central banks of the world keep this up you are going to have a very difficult time finding the money to fuel up your vehicle in order to take that weekend excursion you had planned for the kids.  Chairman Bernanke promised!  Hell, that's already happening.  In fact it’s going to become increasingly difficult to even feed those children.  Chairman Bernanke promised!  And thousands of Americans are going to starve to death.  Chairman Bernanke promised.

And in case you doubt that Chairman Numbnuts Bernanke made those promises to wreck your grand childrens' futures in order to save his own and those of his cronies, [all of whom are assholes], scroll back to the top of this page and re-read that last Fed statement.  Try to grasp exactly what they're saying.  The stock markets know what it means.  And soon the commodities markets will reflect the same reality.  Get ready folks, the world’s glorious fascist leaders have gone on full blown "screw the rest of humanity" mode.  Gold should be at $4,000 per ounce tonight.  If it weren't for the constant suppression of that market, it would be. 

And while we're on that topic... in the past we have read arguments that some day the price of gold and the value of the Dow Jones Industrial Average would reach parity.  The most common number thrown around back then was $4,000.  4,000 on the Dow and $4,000 gold.  I think we can safely toss that one out the window.  If the Fed thinks they're going to inflate America out of its debt problems without seriously dangerous social consequences they had better lay off the crack they're smokin' over there.  Because if they continue with the program they're currently running, if their goals are achieved, we're going to see gold and the Dow reach parity all right... at $20,000.  And $35 for a 5 lb. bag of rice.  The unwashed masses are ‘already’ sharpening the tines on the old pitchforks Ben.  If I were you I’d knock it off already.  But then again… you have friends to protect. 

But let’s take a closer look at exactly what effect the Fed is having on equities.  If we apply the rate of inflation as detailed above to the Dow (using the lower 69% rate), it would hit 20,000 exactly 270 calendar days from now.  October 15th, 2013.  And let there be no misunderstanding here, the stock markets are not going parabolic because of any fantastic economic performance.  They are going parabolic because the Fed is literally buying the stock markets... bidding them up in order to create the most bizarre illusion ever seen in the history of mankind... trying to make the stupids believe that all is well.  They must be thinking that as long as the equities markets are soaring, the guillotines might be delayed by a year or two... just enough time for the economy to catch some traction and America will be saved.  Is it even possible that they are even remotely close to being that daft?  I don't think so... they know "exactly" what they're doing.  And by the way Mr. Chairman, where is Germany’s gold?


===================== END OF ORIGINAL ARTICLE =====================


And for your musical entertainment....
Mr. Joe Cocker is Feelin' Alright - Live in Berlin


.

218 comments:

  1. Fed..print...

    Market up.
    --
    End of issue.

    I mean, how many more years do we need to see of this before the deflationary doomers get it ? 5yrs? 10yrs? Will it really take a century for some of the traders in their twenties to finally accept that its THAT SIMPLE.

    What will be really laughable is at the next pull back.. whether thats days, weeks..or months away. We'll doubtless see the same old crap posted (not least as I've posted myself), talk of collapse...and sub'sp '1000

    Meanwhile...the Fed print....and print
    ---

    In terms of valuation, the SP @ 15 times really isn't high at all, relative to everything else 'on offer' in the investment world.

    Hell, we saw the 40s in the distant past, and that was with high interest rates (relatively) and NO fed printing.

    So why not PE of 100 for the main market?

    Sp' 10,000 ?

    Why not huh?

     

    ReplyDelete
  2. “Everything has to come to an end, sometime.” 
    ― L. Frank Baum

    ReplyDelete
  3. Ben's an advocate of the Birinyi ruler theory!

    LOL

    ReplyDelete
  4. A couple of months ago I really let my hair down one night and allowed myself to consider the most bullish scenario I could come up with based on classic Elliott Wave Theory and nothing more.  It was based on monthly charts.  I considered that from the low of March, 2009 the market has embarked on what is a series of nested 1s and 2s.  From there I simply applied common Fib numbers and came up with a target of 1885 on the S&P that would peak approximately Sept. of 2017.

    I can see plenty of reasons why it shouldn't happen, one of those being completely crushed economies world wide due to prohibitive oil prices.  But we've seen that sort of thing before, where the stock markets explode higher during rampant inflation while economies crumble.  I remember in the '80's when rates started to go through the roof (19% mortgages) and yet it took years to start to get inflation back under control.  In roundabout numbers, the S&P went from 100 to 1500 over the next 20 years.  Could that happen again with the entire world saturated with debt that can't be paid even at these low rates let alone at rates 2% higher?  We don't even have to talk about what would happen if rates were 5% higher.  But are rates going to ever go up at all?  I mean seriously... are rates "ever" going to rise as long as the central banks of the world continue to be run by the insane?  No!  Not if they are willing to completely destroy every currency in the world and half the global population right along with it.  I think these monsters, the most evil entities that have ever infested this planet, would do just that.  Or should I say "are in the process of doing just that". 

    I mean who is going to stop them?  The bond vigilantes?  There are no bond vigilantes left.  Any who step forward and 'attempt' to be bond vigilantes will be crushed by an insane banking system.  So I'd have to say that gold will likely hit $20,000 per ounce with absolutely no problem whatsoever.  And the DOW?  30,000 with ease.  Much higher actually because although it took 100 years for the USD to lose 97% of its value, the next 97% won't take nearly as long.  In a nutshell, it looks to me like the mythical deflationary phase is going to be bypassed entirely this time around.  If I'm not mistaken, the goal of the central bankers has been exposed... we go straight to a calamity on every level and in every nation and the satanic come swooping in with the "solution" to the "problem they created"... a one world government and a one world currency.  I'm fully convinced now that this is their goal.  However I am not at all convinced that it's going to turn out as they're planning.  I think they're underestimating by a very wide margin the savage anger that is going be heaped upon them in the process.

    ReplyDelete
  5. Kermit Birinyi is just a wee bit "too" bullish for his own good, lol.

    ReplyDelete
  6. I have to admit I don't know of him.  Does the initial "L" stand for "lip" by chance?  Lip Frank Baum... no I guess I'm probably on the wrong track with that one.

    ReplyDelete
  7. 15x earnings IS excessive compared to privately held companies and personal entrepreneurship. publicly traded equity is overpriced because of something academics call "liquidity premium". because it is easier to get into a corporate investment rather than a privately held investment, the publicly traded investments become overvalued at tops like these. but once this excess capital has flooded publicly traded equity and ROIs have collapsed, capital SHOULD then exit and find better ROIs in private investment or entrepreneurialism. The real "liquidity trap" is that in which capital is sucked out of the productive economy into high finance, but the owners of capital are inhibited from making private investments and outsource their investing to the "professionals". what good is the "liquidity premium" if it is not as easier to get capital OUT of the financial system and into profitable PRIVATE investments? The system of excessive reliance on investment "professionals" inhibits investments in entrepreneurialism from the majority of the population not in the finance industries. 


    Because of excessive taxation, regulation, litigation, unionization, etc. (and inertia from groupthink and sloth) capital remains where it earns less return. And this excess government intrusion leads to an economy dominated by the very large corporations that the big government apologists castigate with such vicious rhetoric. The big government-corporate complex hinders the efficiency of the economy and makes these asset bubbles even more unjustified. The big government-corporate complex remains dominant by hindering its competition. so many stocks and indexes are in uptrends (attached, more proof the market is dangerously overvalued) because government has greased the wheels for the established companies that serve the needs of the past; but it is new small businesses that are needed to serve the demands of the future.

    the dynamism of the economy (especially an economy continually in need of money flows for debt financing) will not long suffer the domination of inefficient monopolists. The more stocks remain in uptrends the worse the ROIs for investors who rely on the public markets. more and more investors would eventually drop out of the public markets and return to private opportunities... or just distribute their assets for living expenses in retirement. The demographic winter of Baby Boomers retiring and fewer youngsters ready to take their place creates a drag on asset markets that the Fed cannot overcome. Bondholders (including the Fed) cannot abide too much inflation as their investment income must retain its purchasing power. The more bonds the Fed holds the more the Fed needs inflation to be held in check. And the more long-dated the Fed's holdings the more sensitive the Fed's portfolio becomes to rising interest rates.

    Cycles exist for a reason. Extremes cannot continue without creating and exacerbating their own problems. Inflationary summer must give way to deflationary winter. Recessions must cleanse malinvestment. The seasons of life are not abolished by fiat debt creation. 

    ReplyDelete
  8. (another) housing bubble has formed: ridiculously overvalued and topping

    Kimble's chart shows the construction index and IYR wedging and failing at resistance

    David Rosenberg's chart shows the homebuilders are even more overvalued than the previous top
    http://blog.kimblechartingsolutions.com/2013/01/homebuilders-more-overpriced-than-at-the-peak-of-the-housing-bubble/

    homebuilder sentiment near 7-year high http://www.goerie.com/apps/pbcs.dll/article?AID=/20130116/APA/1301160745

    "The National Association of Home Builders/Wells Fargo builder sentiment
    index released Wednesday held at 47, the same as in December and the
    highest reading since April 2006, just before the housing bubble burst."

    as the ratio chart shows there is too much bullishness relative the scanty construction actually being done. homebuilders must be expecting credit to remain available and customers to remain employed and qualify for loans, even as taxes go up and government spending is scrutinized. 

    ReplyDelete
  9. I was really shocked to hear Kyle Bass say that he's long anything housing related.  I like Bass.  I think he's one of the sharpest dudes out there.  But on that call I think he's off his rocker.  Completely off his rocker.

    The "only" way that call could be the correct one is if Mr. Bass knows with certainty that interest rates will not be rising in the USA in the future.  Admittedly, maybe he's only bullish on real estate for the next few months.  But that is one wacky call in my humble opinion, especially in light of the fact that even if rates continue to drop, the price of oil would crush the economies of the world even faster.  In a world of rising unemployment real estate is not a good investment.  Period!

    ReplyDelete
  10. I love seeing projected numbers like that. To me, it simply shows how unsustainable it is.

    And politically it cannot be sustained. All the talk of implementing austerity in the future is a smoke screen. It's already being implemented. For example, one elderly gent I know has had his Social Security COLA practically negated for five years in a row by offsetting rising Medicare premiums. And his co-pay on his VA benefits have tripled in that same time span. A retired civilian Air Force employee had his benefits slashed by a third. Minimum wage hikes for average workers have in no way kept up. The idea behind the minimum wage was to make sure a living wage was paid. Now, increasingly, I see people sharing houses and apartments, not just in pairs, but in groups of four and five and more, just to get by.The cost of living has outpaced wage and job growth. Fuel and groceries in particular have risen 20 to 30 percent in that five year span.
    The peasants will be getting restless when they get around to connecting the dots. Most don't really watch their money that closely. But they'll figure out part of it pretty soon. And that is the "unintended consequences" that prevent this policy from being truly open ended.

    Politicians may start suggesting ways people adjust their lifestyles to adjust to having much less. Like for example, "Let them eat cake." And that may pop the corks on the pressure cookers. And politically, they'll have to pull the plug on QE, if they haven't already done it by then.There are several reasons it's not sustainable. And one reason may be that plummeting social mood might end the rally in the markets even before an end to QE does.By the way, I bought more SH today. If they run it up through another key level, I'll buy more. Because that's how I roll now.

    ReplyDelete
  11. One per cent inflation per day is nearly 3700% per year, sir. I still don't see how this is going to enter the real economy through wages or lending though, which is needs to do to create genuine inflation (rather than price rises as a result of asset bubbles). VIX closed at 12.43 again today so there has to be some kind of pullback soon. There's a Bradley turn date coming up at the weekend apparently - could that be a potential window?

    ReplyDelete
  12. Nouf wrote this a couple of days ago: http://www.safehaven.com/article/28476/market-report-time-to-put-on-the-bear-suits

    Apologies for my clutching at straws, I'm just a sore bear at the moment.

    ReplyDelete
  13. Take a valium, with a beer.

    It'll help.

    yours... Dr Bear.

    ReplyDelete
  14. I am devout follower of Mr Bass, and I have to agree, his meddling in the real estate market seems a crazy thing to do.

    Even if there is no societal meltdown, the economy still sucks..and housing will take decades to resolve.
    -
    Short term, Bass is probably doing okay, but he sure better be able to get out of his REITS if the derivatives market implodes.

    ReplyDelete
  15. Birinyi has been proved right, and despite his reasoning is probably wrong, thats not really important, is it?

    Its time the doomer bears got out a ruler..and draw a line up to the sp'1700s...and beyond.

    ReplyDelete
  16.  But we're in a NEW era.

    The old rules/valuations no longer apply.

    ..and thats the issue the doomer bears - not least myself, have been refusing to accept for over four stinking years.
    -

    The ONLY place for funds to go is the equity market.

    Ironically, with interest rates permanently low.. NEVER to rise again, that rules the bond market out, and so...EVERYTHING ends up going into equities.
    --

    I have to ask..if equities were in the PE 40s during the peak bubbles...- with high int. rates, and NO fed money, then you have to ask yourself, why are we not already in the 40s now?

    Why not 100 ? I mean..seriously?

    ReplyDelete
  17. Nice charts ... I think the last time I looked at the Schiller index, home prices looked like they were in a weak wave 2.  Wave 3 should begin at some point in the nearish future.

    ReplyDelete
  18. Yes, I thought he said something like he saw signs of bottoming in housing in that video of a month ago.  But I disagree.  Yes, interest rates are more likely to go up, and as you say, employment rates and salaries do not support these still inflated values on the East coast.  Values probably have to go back to 1996 levels where they were when interest rates were 8%, because they will be there again.

    ReplyDelete
  19. one of the surest signs of a top is saying "This Time is Different". 
    the constant refrain of the .com bubble top was the NEW economy.
    the more people claim the old rules don't apply, the greater the consequences of breaking the rules.

    ReplyDelete
  20. I'm mulling a career change.  Pitchfork and torch manufacturing looks promising.

    ReplyDelete
  21. "Stock prices have reached what looks like a permanently high plateau."
    - Irving Fisher

    ReplyDelete
  22. stocks already extremely overvalued 
    ... individually and as an index
    http://www.safehaven.com/article/28491/very-bullish-and-very-overbought
    http://static.safehaven.com/authors/chenard/28491.png

    ReplyDelete
  23.  Fisher needs to go look at the Transports.

    we are ALREADY beyond the plateau..and going way beyond.

    ReplyDelete
  24. This time IS different.

    Permanently low interest rates.
    Central banks across the world..printing to offset the deflationary pressures.
    --

    The end point IS the same, but this could easily keep going for some years.

    ReplyDelete
  25.  Excellent, ZZ :)

    ReplyDelete
  26. Manufacturing & agriculture automated jobs away. Service industries are next:

    singularityhub.com/2013/01/22/robot-serves-up-340-hamburgers-per-hour/

    High structural unemployment is here to stay and the Fed knows it.

    ReplyDelete
  27. Military pensions are extremely, unsustainably generous. Half pay & full health care for life after 20 yrs.
    If you figure about 20% make it to full retirement, with today's life expectancy, you are paying for 1-1/2 armies with all pensioners. One of the unspoken reasons for military cuts

    ReplyDelete
  28. The ponzi scheme is coming to an end. There's no one left to sell too.
    Immigration in the US is way down and kids coming of age don't have the employment to pay for homes

    ReplyDelete
  29. If the nearby pay phones have been retrofitted to accept trillion dollar coins by then, I will!

    ReplyDelete
  30. http://www.youtube.com/watch?v=NZR64EF3OpA
    "Pay no attention to interest rate risk!"
    "Oh, no, I'm a very good man.  I'm just a very bad central banker."

    ReplyDelete
  31. > The peasants will be getting restless when they get around to connecting the dots.

    For all my agreement with the perspective you've identified, I often circle back to a nagging wonder.  Are empty stomachs a precondition for revolt?  Us Americans are collectively pretty fat, happy, and docile.  Can meaningful change occur while dollar menus, Super Big Gulps(TM), and Great Value(TM) Family Size boxes still reign?

    ReplyDelete
  32.  I was the poster child for the meltdown. It hasn't gotten any better employment wise for anyone of us mid-level types. Too many people chasing too few jobs. On another note, I was contacted by a company in Walla Walla WA of all places. I have been sending my resume all over the country for a long time and posting it on job sites. Heck, i'm not wedded to Texas by any means, if they want to hire me...Walla Walla here I come. LOL. and I love the name it makes me laugh.

    ReplyDelete
  33. Indeed.  That's an incredible correlation isn't it Zimmer?  Not by accident either.  Just as it's no accident that autism today in the USA is up 50000% (500 times as much) as it was before vaccines became mandatory inside the schooling system.  Mandatory only insofar as that it depends on whether or not the parents "want their children to be schooled" or not.  So I guess it's not really mandatory.

    ReplyDelete
  34. Hey Zimmer... I assume you've chalked up the tip of a pool cue at some time in your life, right?  Well you know those little chalk blocks?  I've been working on a pitchfork tine sharpening system very similar to one of those things.  A tine little grinder that the user just twists on the end of a tine.  Like a pencil sharpener almost, except that they "grind" rather than "shave".  The peoples can carry them in their pocketses.  $13.96 per unit.

    ReplyDelete
  35. "...but he sure better be able to get out of his REITS if the derivatives market implodes."

    You're absolutely right PD.  That's the one thing I absolutely detest about the real estate market, compared to what we do with equities, that market is so illiquid that once a panic ensues even fire sales won't get RE sold.  People are literally trapped when they hold something so illiquid.  Even in the hottest real estate markets it can take a couple of weeks to get it sold.  But when times are tough, RE fires suddenly rise in frequency instead of "fire sales".

    In fact that time bomb would go off so fast that even the awesome Mr. Bass himself wouldn't have a chance (to exit).  I don't think it's difficult to understand that as long as an economy is "just holding its own" or "ticking along steadily with unemployment holding steady at (say) 6%", then there is absolutely no pressure for RE to rise in value.  If salaries aren't rising, then RE can't rise in any normal world where cheating isn't promoted by bankers.  Those days are over.  I just can't see "any" pressure for RE to rise in value for the next 20 years.  Inflation wouldn't even do it this time around because the inflation that the Fed is inspiring is bone crushing stuff, not the "good" inflation of decades past.

    ReplyDelete
  36. it's not a "different" time, it's Kondratiev Winter.

    the reasons for low interest rates begin in the private sector before they are exacerbated by central bank chicanery. increased supply and lowered demand of credit has pushed interest rates so low in accordance with generational/demographic cycles. as populations age and retire in the affluent industrial nations older populations save for retirement, pay down debt, and reduce spending. meanwhile the younger generation that would be increasing the debt-based money supply is fewer, faces greater unemployment, has fewer children, and is living with family at a much higher rate. demographic and economic depression will limit the ability of the private sector to prop up the money supply as the boomers extinguish their debts and reduce their costs of living. 

    this is not unheard of as it recurs every two generations, or about every 80 years. the previous Great Depression was the last such incident. the stagflation of the 1970s was its polar opposite (Kondratiev summer). now we once again are experiencing Kondratiev winter. just as in Japan, low interest rates and central bank easing will not be able to prop up asset markets that inevitably decline 50-90%. the great reflation of 2009-2013 is but a brief interlude in the longer term decline. the Fed will fail just as the BOJ has failed. the demographics of the private economy are stronger than the monetization of the Fed.

    ReplyDelete
  37. Great thought Zimmer.  You're probably on to a big factor there.  It just might indeed take a hell of a lot more true physical "hunger" to ignite that fuse.  Maybe that's why those fat-food joints are about the only place left where the poorest of folks can get a quick fix.  Go out and collect a few dozen empty cans somewhere and convert them into a quick hamburger so that they'll have the energy to go out and do it again tomorrow.  Geez... what a life.  Yup, you're probably onto it.  We might have to see a whole lot more of that before the people start throwing rocks at bankers.

    ReplyDelete
  38. Go ahead and "clutch" Tom, that's perfectly normal.  In all due respect to practitioners of EWT, every single count they ever put forward is 100% speculation at the time it is presented.  In no way is that comment intended to be an insult to them either.  But it is what it is... we will see 3 different EW technicians, people who really know their stuff, come up with 3 different outcomes for the same scenario, all 3 of them being legitimate and possible... yet just as often as not, all 3 of them will be viciously broadsided by something else that is even more legitimate... PRICE ACTION.

    ReplyDelete
  39. Yep, their QEternity won't change unemployment one bit.

    ReplyDelete
  40. I imagine Soylent Green is next.  I'll tell ya what... I ain't eatin' any of that shit, lol.

    ReplyDelete
  41. I agree ... the printing has not stopped house and wage deflation.  It hasn't helped the onerous debt servicing cost faced by the entire population.  It's going into assets, but that doesn't help the majority of the people.  As debts default (and mathematically they must as a result of low wages, high unemployment and unaffordable housing, and tight credit even while interest rates are low the bankers now demand 20% down payment)... It's a matter that debt debaults are a greater force than Fed printing (because they are leveraged in the system 10:1).  As you say ... BOJ will also fail with their printing -- their interest rates will rise and foreigners will not invest in their bonds due to currency and default risks.

    ReplyDelete
  42. I don't think interest rates are permanently low, because the Fed doesn't set them, the market does.  And when banks are suffering default losses, and limited capital, they will not loan money unless the interest rates increase to make it attractive.

    ReplyDelete
  43. Nice write-up AR, thanks.

    You might be right on the inflation front, although I have a hard time believing that this mirage can continue with the debt burdens not being solved by printing.  And wages and home values are still deflating.  And interest rates could still rise with printing (they surely will in Japan). 

    Although 4 years is a mind-numbing long time they've kept the house of cards standing, long enough to start wondering about the whole deflation thesis, so I need to try to be open-minded. 

    ReplyDelete
  44. Good luck Blueskies! 

    That's a beautiful part of the country, Washington.

    ReplyDelete
  45. My mother was of course a Canadian.  She had one of the saddest upbringings I've ever heard of but she came out of it like a golden rose.  I loved that woman beyond words.  Anyway, both her parents were taken from her by the Spanish Flu in 1918.  She was one year old.  Prior to that (just one year before she was born) she had a baby sister who was killed by hailstones that smashed through the bedroom window of the little country farmhouse they lived in, way out in the country and pelted that baby to death in her crib.  Both parents were trapped in the barn while trying to save animals... and daturally they thought surely at least the baby was safe, tucked snugly away in her little bed.  She also lost an elder sister (3 years old) to the flu.  So all that were remaining were her mother's mother and 4 brothers.  Her grandmother kept my mom and had to ship off all 4 boys to various parts of the country, each to separate foster homes.  They never saw each other again very much for 20 years or more.

    Now my mom's mom, who died from the flu also had 4 brothers.  Those men were my mother's uncles... my "great uncles".  Two of them moved to the USA, one to Detroit and the other to Walla Walla.  His name was Stuart Wells... and what a character he was.  With a reputation as being a very handsome man, tanned all the time from those hot Walla Walla summers, it was just a treat every other summer for him and his wife to come up to Alberta to visit us.  And back in those days he could bring us vegetables that he grew in his own garden.  Bring 'em right across the border with him... no problem.  And they'd bring us the biggest and tastiest tomatoes I've ever seen.  As big as softballs.

    I've only been to Walla Walla once as an adult (if you can call 18 years of age an adult) and man... was that place hot.  It's much like the interior of B.C., hot and dry with summer time highs reaching near 100 degrees. And even hotter once in a while.  So I'd guess that Walla Walla wouldn't be quite as foreign to a Texan like yourself as you might think.  Not to mention that Washington is one beautiful state.  I'd say go for it if you get the chance.

    Oh, and about the name of Walla Walla.  My great uncle Stuart used to say that "they loved that place so much they named it twice".

    ReplyDelete
  46. You've hit on so many of our collective failings in such a few short sentences my head is spinning.  Maybe I need some more of my ADHD meds.  Or a flu shot.  But not before I pop a few Airborne and some Viagra.

    ReplyDelete
  47. Viagra pills are blue aren't they?  Seriously, I've never seen one.  If so that might partially explain why the vast majority of people have opted for the blue pill.  Me... I'm a red pill kind of guy.

    ReplyDelete
  48. I hear you Greg.  A few months ago I allowed myself to really suspend what "I think" I know and allowed myself to pretend I'm just stupid.  But that's what it would take in order to believe that the Fed and the other central banks could actually pull it off.  Yet I'm finding it harder and harder every day to look at what's actually happening, relentlessly, and say to myself "it isn't happening".  It 'is' happening right before our very eyes. 

    I mean, I think we have to understand that all the central banks are in bed together.  They all have the same problems and all agree that the solution is the same in every case, to destroy the currencies.  And as long as they're willing to destroy the currencies, drive them basically to zero, and therefore drive the price of everything on the planet theoretically to "infinity", then that's where equities are going.  They are literally on the path to the destruction of maybe 50% of humanity itself via starvation alone.  And they don't give a shit.  Who would be the slightest bit surprised if we started to see asassinations [misspelled deliberately] in the near future?  I think the bankers have to face the likelihood that they're toying with the lives of people here, some of whom have a lower tolerance for pain than others.  Mad dogs will eventually bite back.

    ReplyDelete
  49. Sad and poignant and nicely written AR.

    I am a nothern girl, the Texas heat is really getting to me. It's much too hot and humid for too many months.

    ReplyDelete
  50. Thanks Greg. It's not the hip side of the state. Always thought I'd like Portland, OR, but not sure if I want to go back to living in a city again. Spent too many years in Vermont. Even Austin is too big for me and I am a NYC girl originally.

    ReplyDelete
  51. Ditto on the nice write-up.

    ReplyDelete
  52. hey you need a logo for that? :0

    ReplyDelete
  53. a friend of mine refused to vaccinate her kids. they are in private school, but she still had to jump through hoops to get the paperwork for them not being vaccinated. they are trying to poison us all in some fashion. i often wonder about that polio vaccine that was in sugar cubes that we had to line up and take in first or second grade.....

    ReplyDelete
  54. Thanks.  Yeah for sure, the older I get the more I appreciate how sad my mother was as a young mother herself, realizing that she didn't have a mom of her own to emulate.  But her granny did a great job of raising here.

    Oh, you're not a native Texan.  Well if you have good fortune to be offered that job in Walla Walla
    don't be afraid of the move.  It's definitely hot there in the summer,
    but dry.  And since you're a northern girl then the winters would probably
    be a welcome relief for you.  But if you need something really cold,
    gaze a bit further north.  We'll freeze your ass off up here but warm
    you up with love.  Love and wine.  Love and wine and snow candy and stuff like that.

    ReplyDelete
  55. love, wine, and snow candy. doesn't get any better than that :) as long as I am roaming around this rock spinning in space maybe i'll get north of the border one day.

    ReplyDelete
  56. Please tell me you're an Alex Jones fan.  I am.

    ReplyDelete
  57. Hahaha.  That's good.  Apples are good.

    ReplyDelete
  58.  I like the message that Alex Jones is trying to get out because I believe he is right on in many ways. Sometimes, though, I think more people don't take the message seriously because he can get a little over the top in his delivery. I like Max Keiser and also Karl Denninger...but people frame them as kooks also, probably because they are scared of the truth being spoken way too loudly.

    ReplyDelete
  59. "READY SHARP... PRICK A PRICK TODAY"

    ReplyDelete
  60. and carrots too!

    ReplyDelete
  61.  good one.....LOL

    ReplyDelete
  62. I think life was hard for many back then. It was part of life. Shit happened...and still does.

    there are Stories like that in my family too. hard times, sad times, but you got through them and didn't whine. Maybe cry, but not bitch and whine.

    ReplyDelete
  63. Yes I remember those now that you mention it.  I'm old enough that we didn't have to take all that many vaccines when I was young but I 'do' remember a few.  They never made me sick but I've never taken a flu shot other than those forced upon me by the schooling system.  It just sickens me to see older folks line up at the pharmacies here (the ones in a big food shopping center for example) to get their flu shots.  Free of course.  They'll poison us for free.  But that'll be the freakin' day I ever take their god damned poisons.  I never let them poison my kids either and they're healthy as a pair of big horses.  One female, one male.  I'm not sure which of the two is stronger but they're both very impressively strong and healthy, even in the eyes of their own daddy.

    Colloidal silver makes all vaccines completely redundant.  Is it any wonder then that the FDA is trying feverishly to get it reclassified as a "pesticide" so that it will be banned from human consumption?  A pesticide!  How ironic is that?  Because one could say that it is a pesticide, insofar as that it kills 650 known bacteria and viruses on the spot.  I'd say those little bastards are "pests" all right.

    ReplyDelete
  64.  I'm in total agreement with you. Doctors are the pushers for big pharma, who, oddly enough! is in bed with everyone in Washington. Way back when, before big pharma, doctors had more homeopathic remedies.

    My own little pet theory, put your tinfoil hat on, is that they are actually TRYING to kill us off in a sneaky way, because of population growth. the planet will not be able to sustain everyone.

    And don't get me going on factory farming.....

    ReplyDelete
  65.  major congrats on your kids! I am pretty proud of my daughter too.

    ReplyDelete
  66.  never trust the government. never. ever. it's like trusting a cop, but much worse. they lie. and there is so much proof that they lie if you care to look. as you do!

    ReplyDelete
  67. I agree on all counts.  Alex is a bit too emotional and flamboyant... to his detriment.  But that doesn't diminish the truthfulness of his message one iota.  I like Max and Karl as well.  Max is pretty damned funny about it too.  In fact he's flat out entertaining and yet speaks the truth.

    ReplyDelete
  68.  yeah, Max is entertaining!

    i has ta goes to sleep. sheesh. werk tomorrow. i am glad i have part time work!

    ReplyDelete
  69. You mean you've never been here?  Who am I to talk, I've never even been to eastern Canada.  Too god damned far away.  Geez, did you realize that for those of us living out west here, we're closer to Las Vegas than we are to Toronto.  My friends who live in Newfoundland are closer to Ireland than they are to me.  How crazy is that?

    Anyway, just as in the USA, Canada's geography runs the entire gamut.  You can find it all here but I'd have to say that the west is by far the most stunning if you like 'awesomeness'.  Here are two quick videos that more or less where I live.  I'd like to get to B.C. more because it's warmer and I love the lakes.  Alberta has no lakes that could even compare to the beauties in B.C.

    Turn your volume up, you're probably gonna find these two clips pretty nice.  The most satisfying part of it all is that they don't capture the real beauty.

    You Gotta Be Here

    Remember to Breathe

    ReplyDelete
  70. You guys are too kind.  Seriously I just knocked it off quickly because I was feeling a bit pissed off.  I started it a few days ago, spent maybe 20 minutes on it and then shelved it.  Pulled it out today and finished it off real fast.  Just ranting really.

    ReplyDelete
  71. Hahaha... you're crackin' me up here.

    ReplyDelete
  72. Oh my... you're a lady after my own heart.  I wouldn't call your theory a "theory" at all.  I have absolutely no doubt that they're implanting the seeds of our demise in so many places.  Flouride in the water?  Are you kiddin' me?  Flouride is one of the components of rat poison.  Mercury in vaccines?  That's such a criminal practice that charges of "crimes against humanity" are fully warranted.  And don't even get me started on the Georgia guidestones.  One of Ted Turner's pet projects no doubt.

    ReplyDelete
  73. Shorts update. Still holding all yen pairs short. Also added /LBS,/NKD shorts yesterday. 

    ReplyDelete
  74. Yeah, I'm still in the "deflation first" camp too. All it would take is a crash, followed by massive default.

    ReplyDelete
  75. http://www.hussmanfunds.com/wmc/wmc130122.htm

    Its 1997?

    ReplyDelete
  76. From the article:  "For optimists, there is a false one-week signal in 1997 – during the
    internet bubble – that was not associated with a negative
    follow-through."

    I'd have to say that if we just go with the odds of what occurred in the past, no this isn't 1997.  On the other hand we've never seen central banks of the entire world so hell bent on making sure it is 1997.  They seem to either be so powerful these days as to get whatever they want, whenever they need it... OR... they're using the shadow banking system, whatever in hell that is, or some other illegal means to be pulling the strings like they are these days.

    304% per year.  Are they kidding or what?  What god damned freaking universe are those stupid infuriating bastards from anyway?  I'd say, "yes, it is 1997 and the charade is just going to keep on truckin' until they lose control completely.  And that could just as well be 2017 as two weeks from now.  Nobody knows, not even the Fed itself.

    ReplyDelete
  77. Spot on about the bread, ZZ. And don't forget the circuses - cable TV, facebook, smart phones. The internet is seen as empowering and it is, for those who want to be empowered. For the rest it's another distr... ahahaha look, a cute cat video! LOL!!!

    ReplyDelete
  78. A fine post, DC. The long wave cycles are exactly what the "Keynesians" fail to appreciate when they talk of kickstarting the economy with more stimulus. The dead wood of debt saturation needs to be cleared before the fire can get going again.

    ReplyDelete
  79. Did you get distracted or somet.... OMG, take a look at this, the new Corvette for 2014.

    ReplyDelete
  80. Thanks :) those vids are great. Beautiful scenery.

    I've only been to Montreal, which is kind of like going to Europe (but closer) when I lived on the east coast.

    Always thought I'd love western Canada. I like being surrounded by majestic beauty. 

    ReplyDelete
  81. yep...flouride in the water, hormones in our food, GMO corn and other food products, and my sister just sent me something about our lettuce being poisoned from the water in the colorado river. not to mention that "they" don't want you to eat too much fresh water fish either because of high levels of chemicals that will kill you. and after fukishima there will be an ongoing ocean fish problem of gigantic proportions. stop the rock I want to get off!

    ReplyDelete
  82. sugar cube for dessert would be nice.

    ReplyDelete
  83. HAha  It's people:  http://www.youtube.com/watch?v=8Sp-VFBbjpE

    Of course, being a bear at heart I love the Charlton Heston post-apocalyptic trilogy, Planet of the Apes, Omega Man, & Soylent Green. Omega Man in particular was so cool with his swingin, bachelor pad, vampire-killing penthouse fortress.

    ReplyDelete
  84. I was just looking at this last nite.
    Since the 2009 low, we're following roughly the same slope as a trendline drawn from the beginning of 1995 (which is sort of the end of a long base and generally regarded as the start of the "Bubble Age")  to the 2000 top.
    Right now we've gone through about 75% of that run in price and about 75% or so in calendar days. Not sure if the Gann guys have anything to say about it, but it sure seems notable at least. That would put us about at the end of '98

    ReplyDelete
  85. Good luck Blue,
    I hope they have horses wherever you end up

    ReplyDelete
  86. I'm still going with my heretical theory that the whole market structure is skewed because of intervention. And that this is a corrective wave. 

    "Corrective?" you may say. "Are you out of your mind? It's higher than the previous, supposed impulse wave down!"

    Ah yes, but if one supposes that the market is a distorted metric, and that intervention is amplifying and exaggerating moves, then it could be a corrective wave. And there's a simple way to illustrate it. Just rotate the chart. In this case, about 17 degrees clockwise.

    Ho HO! Stand by for a big impulse wave down! If not, I'll just buy more SH at 1520. :)

    http://i.imgur.com/RW4jZpY.jpg

    ReplyDelete
  87. A tweet from Josh Brown (@Reformedbroker:disqus ):

    I'm not saying the Vix will be 12 forever...but it's just started hanging Justin Bieber posters on its bedroom wall

    ReplyDelete
  88. hey everybuddly! 

    "attention! the post lunch melt-up is scheduled for it's regular schedule time. that is all."

    wouldn't surprise me.

    ReplyDelete
  89. I went to see Omega Man with my younger brother and to be honest that movie scared the hell out of me.

    ReplyDelete
  90. I saw the other two when they came out but not THAT one. Both left a big impression on me for sure.

    ReplyDelete
  91. http://youtu.be/sTF_wJW7N4g

    ReplyDelete
  92. love Joe.

    hey how do you do that? the title in blue?

    ReplyDelete
  93. Do you mean the link that is blue?  Yeah, that's what you must be referring to.

    It's a setting I have to enter when I'm setting up the entire 'template' of the blog.  The colors of the links change depending on whether the user (in this case 'you') have ever hit the link before.  If not, it's red.  Once you hit that link it should show up for you in blue.  It's just a setting to help users recognize if they've ever hit a link previously.

    ReplyDelete
  94. Here's a snippet from an article posted by Whisper Number this morning on Seeking Alpha:

    "Apple reports fiscal first quarter earnings on Wednesday, January 23rd,
    after market close. The whisper number is $13.68, twenty-six cents ahead
    of the analysts estimates. Whisper numbers range from a low of $12.50
    to a high of $14.23. Apple has a 72% positive surprise history (having
    topped the whisper in 42 of the 58 earnings reports for which we have
    data).
    "

    I wonder what would happen if the report came out something like this:

    "In a surprise report issued after the close today, AAPL disappointed investors by reporting fiscal first quarter earnings of $1.04 per share, missing expectations by $12.50.  The company also reported a net loss of $252.62 billion after one of the executives (name to remain withheld) went on an unauthorized month long gambling holiday to Monte Carlo over the Christmas season.  The company also reports that as a result of the unexpected 'vacation', the outlook for the second quarter will be somewhat muted."

    I'll bet the market wouldn't like that report much.

    ReplyDelete
  95. thought it was on your end.
    my other question is...every time I use the "embed" link on youtube it doesn't "embed" which is why I use the regular "share" link. do I not see it embedded as I need to reload the blog page?

    ReplyDelete
  96. You kind of lost me there BS.  I'm not following your last sentence about having to reload the page.  Can you see the video embedded beneath the article?

    ReplyDelete
  97. In the final 15 minutes AAPL is creeping higher rather unimpressively.  It's currently in a 3 wave sequence higher, which makes me believe that whoever is pumping AAPL at this very moment knows something.  I'm gonna go out on a limb and predict that the report is going to disappoint.

    ReplyDelete
  98. if there were to be hope for an American economic recovery, it would come from the oil and gas fields
    http://www.cato.org/publications/commentary/energy-future-abundance

    the success of advanced production methods shows great promise for fields from New York http://blog.heritage.org/2013/01/10/new-yorks-fracking-opportunity/ to Texas to the Great Plains http://blog.heritage.org/2012/06/19/a-fracking-miracle-north-dakotas-bakken-boom-video/

    of course the success has been demagogued by purveyors of junk science 
    http://www.conservativedailynews.com/2013/01/the-5-reasons-you-must-watch-frack-nation/

    ... but the success of the free market in repairing the disasters of government intervention is instructive
    http://blog.heritage.org/2013/01/11/free-markets-follow-the-fracking-model/

    the road back to recovery in America is to be found in the heartland
    http://www.youtube.com/watch?v=6rnXo14Rqf0

    ReplyDelete
  99. Wow!  Rand Paul tears Hillary a new one.  How outstanding is this:
     http://www.businessinsider.com/rand-paul-hillary-clinton-benghazi-2013-1

    ReplyDelete
  100. good for him. she was probably too busy trading her futures account on inside info to read cables. 

    ReplyDelete
  101. oops on aapl...market will prolly sell off tomorrow.
    but nflx ramped hard.

    ReplyDelete
  102. i can see your embedded vid fine, 

    but when I try to do one, it just shows the text and not the little video to click on.

    ReplyDelete
  103. BS!!!!!!!!!!!! LOL. but, but, everyone calls me blue....

    ReplyDelete
  104. right now ES is not one bit happy with AAPL

    ReplyDelete
  105. I know what you mean now.  Now that you mention it, over on troll central they 'do' show up as the little vid.  I'm not sure why that doesn't happen here.  It should now that you mention it.

    ReplyDelete
  106. LOL... my humble apologies.  I got used to calling BlindSquirrel BS.  It was just a mindless reflex, honest.

    ReplyDelete
  107. Oh yeah.  With AAPL down 10% after hours and making up 17% of the entire $NDX, the NAS 'has to' sell off hard tomorrow.  Futures on $NDX are down by 1.79%.  I'm gonna get rich tomorrow it looks like.

    ReplyDelete
  108. Oh yeah.  With AAPL down 10% after hours and making up 17% of the entire $NDX, the NAS 'has to' sell off hard tomorrow.  Futures on $NDX are down by 1.79%.  I'm gonna get rich tomorrow it looks like.  Yay!

    ReplyDelete
  109.  damn, wish i had had aapl puts....ya just never know though

    ReplyDelete
  110. http://video.cnbc.com/gallery/?video=3000143010&play=1

    ReplyDelete
  111. Hope someones taking the trades I posted. short /nkd, long /6j, short /lbs , short yen pairs.

    ReplyDelete
  112.  that's the thing newb, they beat, but not by their usual out of the ballpark.

    realistically, they couldn't keep up the pace forever, they had to correct majorly at some point.

    ReplyDelete
  113. Long AUDUSD, EURUSD GBPUSD right  now!

    ReplyDelete
  114. GBP for a bounce I hope. Its looking pathetic. Long term it cold go much lower.

    ReplyDelete
  115. I think cable will mount a strong recovery especially now that Britain is bailing out of the EU.
    On the other hand Euro will be in trouble. It looks to me like a zigzag. Zag has five waves and is about equal to zig * .618
    http://bit.ly/14603MK
    AUD looks interesting now. Are you Aussies gearing up to be the Arabia of the south seas?







    ReplyDelete
  116. lol. yay! i'm long audusd also, a little before it popped.

    ReplyDelete
  117. noice! it did. agree on the lower part LT

    ReplyDelete
  118. boy GF. the euro is perplexing. i tried a long and got stopped out (and way too big a stop i might add). is at spot on the weekly chart where it looks like it wants to run, unless it's a total fakeout of a pattern.

    ReplyDelete
  119. I know, that inverse H&S does give me great pause when I would normally be inclined to short it.

    ReplyDelete
  120. i know. i guess if it gets below 13260ish we'll have our answer on the short and above 134 on the long. it's just going sideways but that big drop to that 13262 spot surprised me. Flash PMIs are coming out tomorrow which might move it one way or the other.

    ReplyDelete
  121.  Towels & sandals at the ready lads.
    DK

    ReplyDelete
  122. Haha... just for the hell of it I applied the downdraft in the NDX futures to the QQQ to see where QQQ would open if it opened down the same percentage as NDX futures are right now.  The result? 66.66

    ReplyDelete
  123. Lol... so you're all set up to be either an Aussie OR an Arab.

    ReplyDelete
  124.  Expanding wedge on that audusd, right?
    Gotta go check my archives for eurusd your count.
    And when can we short GBPUSD ... back at 1.60?  That was a beauty that you spotted there ... 4 year triangle abcde with a nested barrier triangle. 
    Hey, usdjpy just left the station for a v of 3, me thinks.  Chart above.

    ReplyDelete
  125. USDJPY:

    Beautiful waves.  Will be so sad to see this 3rd wave end, it's been a hell of a beautious ride.
    This one could be used for EW text books. 
    Train left the station for v of 3 tonight.  Target 93 where v=i of big 3.

    ReplyDelete
  126.  Didn't see them yet, but long usdjpy ... chart above.

    ReplyDelete
  127.  Well done AR, you deserve it!
    Ain't the beer cold?!

    ReplyDelete
  128.  You all rock!

    ReplyDelete
  129.  Hey, that's brilliant! 
    Honestly, that's a simple way to correct for the pumpage, and it all still looks corrective ... little moves day after day.  No volume to back it up.  Nicely spotted!

    All it's ever gonna be is ... a 3-waver.

    ReplyDelete
  130.  You sir are an excellent writer.  Always enjoy your writing.

    ReplyDelete
  131.  You make a good point about all central banks being in bed together.
    And they must figure that in nirvana, if they all print at the same time, maybe nobody will notice, because relative to each other, there shouldn't be any movements in the currency pairs.  Except for gold as you say.

    Who knows anymore for certain how it's gonna roll. Except Japan's debt is going to implode first :)

    Why do they want to destroy currencies again?  That's the part where I'm not clear ... why do they want one currency?  I've never seen that thesis clearly.

     

    ReplyDelete
  132.  Naturally!

    ReplyDelete
  133.  Careful - we're not "bailing out" of the EU. The largest party in the current coalition has promised a referendum as part of their next election manifesto. Both their partners and the current opposition party, who are leading the polls, have said they will not hold a referendum. And even if it is held, an exit is far from a foregone conclusion.

    ReplyDelete
  134.  And here is that fractal for wave 4.
    It's like they are signaling people to short the yen, make a fortune, and help BOJ do their job.

    ReplyDelete
  135.  Wow ... that's huge news about the massive oil find in Australia ... thanks for sharing!

    ReplyDelete
  136. Yeah, it's gotta be cold aright. 

    Know what?  I was just looking at the futures and it dawned on me that even if AAPL were to open down 10%, the $NDX futures are only down about 1.5%.  In the larger picture and in light of the strength of the recent trend, it would actually take very little on the part of the manipulators to allow a tiny correction lasting a day or two and then just continue to ramp this thing for as long as they want.  It's a very unnerving and aggravating fact that the bastages are going to just run this thing until they either "can't" run it any more or make the decision that "ok boys, that's enough for now".  God, the markets are all so incredibly broken these days.  It's getting tougher and tougher to make it work unless one is willing to just go long and forget about it.  I'll consider doing just that once we see even a half decent correction.  I mean the weekly and daily charts are just so incredibly bullish... overbought or not.  In fact in a solid bull cycle we 'want' to see momentum indicators in overbought territory, just as they were for most of the 2 years from the Mar. '09 low until the peak in April of 2011.

    I'd say that even though we hate the bankers with indescribable passion for what they have done (and are doing on an ongoing basis) to the rest of humanity, they are still running the show and will continue to run it until they lose control.  Even though I'm likely to pick up some good coin tomorrow, in the bigger picture I don't think I have any choice but to recognize that right now we're in a full blown bull cycle.  I'll absolutely entertain going long again at the next pullback.  Tight stops would work like a charm if they have intentions of continuing to goose it.

    ReplyDelete
  137. Don't feel bad about that because for someone to have bought AAPL puts just before the close today would have been no better than a 50/50 proposition really.  A very painful loss if you were wrong. 

    ReplyDelete
  138.  oh i don't feel bad. like i said, you just don't know on earnings.

    ReplyDelete
  139. Right, I don't know 'why' Cameron is bringing up that topic but I was thinking it has something to do with politics locally.  I doubt very much that England has any intention of leaving the EU.  And on a darker note if they 'did', they'd sure be in a better position if war was in the back of their minds.  War against who though?  The god damned bankers will surely want to spark wars in the near future, but against whom?  Why?  Germans are great people.  Brits are great people.  Spanish, Greeks... all of 'em, they're great people.  I just hate the idea of war but we know with 100% certainty that the bankers are planning it.  God damn them.

    ReplyDelete
  140. No shyte... that's a whopper is it not?  Holy smokes, that'll set up Australia very, very nicely for the next 100 years.

    ReplyDelete
  141.  Unless China lays claim to that part of the continent along with Japan's rocks.

    ReplyDelete
  142.  It's a shitter alright.  They've been amazing in their control of the markets.  So far.
    Damn near embarrassing to be a bear in my office who predicted imminent collapse 2 years ago.  But seriously, I still have serious doubts the SP500 can get through that resistance line on the three peaks.

    ReplyDelete
  143.  Did you see DK's count on that?  It looks like it has massive downside.  Not sure why, but that's what his chart shows ... a beauty.

    ReplyDelete
  144. Very kind words Greg.  I truly appreciate them too, because about 4 years ago I'd never written anything, not even comments on a blog.  Then once I started commenting on Seeking Alpha it was a handful of American folks who began trying to convince me that I had writing talents.  For the first year or more I didn't even believe them really.  I couldn't see what they were seeing but they 'were' genuine folks and real nice people who I respected.  So I found it hard to completely dismiss what they were saying.  I had no confidence in writing articles but quickly became pretty confident to just write comments.  And that's all I did until until I took over that HO thing for John Lounsbury which has lasted over 3 years now.  He was one of the folks who kept prodding me to try my hand at writing articles.  But I can definitely say that if it weren't for the 'eye'... is that the right word?... or "encouragement" from a group of Americans, Albertarocks as an author absolutely would never have evolved.  It's America's fault, lol.

    ReplyDelete
  145. Well all I can say is that if China dares to get into a dust-up with Australia, China's gonna get its ass kicked, lol.

    ReplyDelete
  146. I got to thinking again about that big triple top resistance line. It's already popped two HUGE and powerful bubbles. I think of it like a "reality check" line, or a "credulity" line, when people just aren't willing to go along and get any more exuberant. Like a line between exuberance and full blown delusional mania. A line between being comfortable going along with things, and feeling really uneasy about it. People aren't willing to cross it.

    And just as it takes an exponential increase in horsepower to overcome increasing wind resistance the faster a car goes, it would take exponentially increasing amounts of intervention to keep the tickers climbing above that line. And that much intervention would quickly take the wheels off the economy in other ways.So, are we there yet? Yeah. Looks like we are.

    ReplyDelete
  147. OUT! get out of there while you still can
    Form an alternate alliance with Scandinavia and the Baltics.
    It's the only way you'll keep Scotland and Ireland in the fold.
    Cable is dropping in a wedge. The pound sterling could be reborn as a decentralized alternate currency
    carpe liberationem!

    ReplyDelete
  148. That's my instinct as well, GF. Sadly the debate at the moment seems to involve a lot of people shouting very loudly and calling each other names.

    ReplyDelete
  149.  That's a vivid way to look at it and explain it.  I think you are correct.
    Who would buy at these levels?

    At some point hedge funds and others will short at that line (maybe after short-squeezing subsides). 
    You almost wonder if the Fed has outlawed big banks from shorting.  So, assuming that's allowed, if there is very little upside remaining (they know that line is there), then to profit some will take the down direction ... helping it to happen.

    ReplyDelete
  150.  I was only kidding, but I sure hope that would be the outcome. 

    ReplyDelete
  151. morgnin' evryonez! jeez can't keep spx down and NAS has almost recovered. haha, stopped out of my long audusd last night, shoulda taken the pips on the pop as it just dropped soon after, but at least I moved my stop to breakeven. 

    Got long eurusd overnight and that worked out well. Sold it already at 13390. imma glutton for contrary trading, so trying a long again on audusd here at 10465. bottom of BBs on the 240 and sitting on support, see if it goes.What's everyone else up to?

    ReplyDelete
  152. Haha, I was only kidding too.  I was referring to those Australian rugby players.  I was thinking that the Chinese wouldn't fare too well tangling with a bunch of big brutes like those guys.

    ReplyDelete
  153. This is getting scary when I'm short the $NDX by being long the triple ETF SQQQ, and at the same time the S&P and the Russell are of course rising... probably taking in some of the funds that are leaving the tech sector.  It's a strange time we live in when we've come to expect every single equities market on the planet, particularly the bigger bourses in Europe, the Canadian, Australian and American markets all to move in the same direction tick for tick.  In this case the word "strange" meaning "manufactured".  But as a result, to be short the only market that is falling makes one feel kinda good about the call, it's scary as hell because these days that's almost an anomaly.

    ReplyDelete
  154. you made an awesome call on that. and yes, never thought about it but you're prolly right about funds leaving the tech sector. that would explain spx and rut.

    there seems to be a memo that no shorting is allowed anymore. just crazy what the money pumping from all the CBs will do. feel bad for the bears (and I am a bear at heart) because they can't get a break. when they do, it will happen so fast and furious and they will all probably be out or have gotten long. 

    YIKES! May you live in intellesting times....

    ReplyDelete
  155. that's me up there...but somehow I am blank...

    ReplyDelete
  156. It seems we've reached the point where "nothing matters", the markets are going to be forced higher.  "Nothing else matters."  It's also starting to feel eerily like the absolute non-stop pressure for the markets to rise back in the heady days right after the Aug., 2010 lows.  Do you remember that incredible string of up Mondays?  I forget the stats now but if I'm not mistaken it was 26 out of 29 Mondays were up. 

    Do you want to see an incredible comment.  This is from some other site, but the comment struck a cord with so many people that it made it to an article by Todd Harrison on Minyanville and from there on to Pretzel's.  So we might as well post it here too.  It's from a commenter named Minyan Mark and he was talking about daring to short this market when the central banks are at their end game and have nothing to lose any more by just printing the world to oblivion:
    ==================

    Last night, reader Minyan Mark forwarded the following passage that he
    saw on a message board; it was in response to someone who was getting
    short the market [Minyanville]:



    "Hope you didn't put much money on that bet, Dawg. These ****** are
    going to print hard enough to wake the dead. They'll print like ****'s,
    print like mad men, print like fly pimps. Print until their eyes bleed.
    They will print via the swaps, via bank bailouts and mergers, via fixed
    Treasury yields, via real honest-to-God negative interest rates, via
    loans to banks on no collateral, via payroll tax reductions, and in the
    end via actual fiat paper instruments which they might very well drop in
    bails from actual ************ helicopters. They will not give two figs
    what anyone thinks. Here is why: Because this is the ********* end of
    it my friend. There is no accounting beyond this point. There will be no
    history of it. No one to take notes of rates of exchange, or of the
    graft and violence, nobody to worry about the deficit or the GDP or the
    national debt of any nation large or small under the blazing *********
    sun. End. Of. It. Does anyone ***** about how Rome totally debased their
    coinage at the end? Heck no. But whoever did it had enough to hand and
    grabbed some land with a nice vineyard and sat back and waited for the
    Middle Ages to start 700 years further on. And that's what a singularity
    is about. Anything that passes through is stripped of all meaning.
    Nothing we think is important now will remain so beyond the event
    horizon. Nobody will remember, nobody will write about it, nobody will
    be held to any standard. Ever for evar. So yeah, they'll print like the
    mad crazed ******** they are. Because they have nothing to lose, and
    maybe something to gain. Maybe a dollar. Maybe a day. Maybe a slim
    chance to escape with some of the loot. Whatever the **** advantage they
    see in it, for themselves and their elite **** ******* buddies, they
    will full-on-full-time-******* do it to advantage. Watch for it, Dawg.
    It's totally on this time, on like Donkey Kong. And when the dust is
    settled in a generation hence it's going to have become another
    unbelievable episode among the ages of men.
    "

    ReplyDelete
  157. that is INSANELY good. I have never read what is happening right now put so succinctly and so well. It scares me AR. I've been on this earth long enough to know that we have entered the funhouse at this point.

    Yes, I remember those Mondays. I was hanging out on one of the yahoo boards back then and everybody kept commenting on it. 

    Yeah, wow, that little article was so well put.

    ReplyDelete
  158. Yeah, I can see from the IP address that that comment came from you.  I don't know why the avatar is missing.  I've seen that happen for Greg quite often as well.  I was under the impression that that would happen if you signed in with a different email address, one which is not set up with an avatar.  But that comment came from your regular email address as well so I don't know why in heck that happens.

    ReplyDelete
  159. I may not have hit "Discus" when I signed in, i may have chosen something else inadvertently...(i really need to pay attention to coloring within the lines...lol)

    ReplyDelete
  160. Above the neckline.

    http://highrevsopenhouse.blogspot.com.es/2012/10/throw-bulls-bone.html

    But I'm looking for a short term failure now, and then I'll re-evaluate before getting too excited.

    ReplyDelete
  161. oh de NAS just ain't happay today. tried to recover earlier today but a big fail.

    ReplyDelete
  162. that's what i keep thinking. a correction, not crashy.

    ReplyDelete
  163. Wow, nothing like a good rant to get folks fired up! :-))

    Good post and comments. Well worth the read.

    I've got what I consider to be a super bearish post coming up for this weekend (longer term analysis), and thought I'd give you all a heads up while you've got your blood flowin' red hot. ;-)

    It'll be up sometime after Saturday morning. Hope to see you there!

    ReplyDelete
  164. when summer comes to Canada, i wanna borrow ARs lake and kayak.
    80's in austin today. 

    ReplyDelete
  165. Would you do me a favour blue?  If you find out what causes a missing avatar like that would you let me know what it is?

    ReplyDelete
  166. Right on Buddy... I look forward to it.  I have an insanely bullish one, one which I put together during an evening of madness when I suspended everything I "think I know" and just pretended I was as insane as the effers running the Fed.  I put that one together maybe 3 mumfs ago but never published it.  Too freakin' scared to.  At the time I noted that I'd have to see "at least" the finished January monthly candle and more likely, the March one.  I guess I'm hoping that market action between now and the end of March will negate it completely.  But as of this moment, as best I can tell it's got just as good a chance of evolving as the bearish case... because the Fed has gone insane.  Literally insane.  We know how this is going to end.  Minyan Mark really "gets it".  The only question is "when".

    ReplyDelete
  167. It's 34 in Calgary today, the warmest it's been since before Christmas, except for one brief period when we had near-record breaking highs (for that particular date) of 45 degrees F.  Last year just before Christmas it went to 40 below.  This year we haven't suffered anything near that... it's been a blessing to basically be going through week after week of temps. right around 10F.  Believe me that's an easy winter here.

    You gotta be nimble if you're a summer person in Canada.  Summers are beautiful... the entire 6 weeks of it.

    ReplyDelete
  168. okay. let's see if i can replicate what i did....

    ReplyDelete
  169. aha. i logged in as "guest" instead of "discus" but filled in my email and my "blueskies" name.

    ReplyDelete
  170. Thank you.  I've always wondered what causes that.  I'd say that must be why it happens for Greg as well.  Much appreciated.

    ReplyDelete
  171. that's like Vermont. llloooonnnnnggggg winters. and some summers where it never got warm enough to go swimming or wear shorts. 

    It's actually colder in Vermont today than where you are! My sister emailed to complain to me. LOL. We used to get soooo many days and days below zero sometimes (not to mention wind chill) that I thought my thermometer was broken.

    ReplyDelete
  172. it's easy to do because if you're not really paying attention you are signing in, but it's as guest as that is the first option.

    ReplyDelete
  173. So let me guess... now that the NDX seems to be on the skids, JPM is just going to goose the Russell to over 1000?   Yeah that seems to be the plan.  After all, they couldn't possibly allow the 1 day moving average to turn south, lol.

    ReplyDelete
  174. no kidding. excellent call by GIB!

    ReplyDelete
  175. I'm looking forward to that "insanely bullish" post!

    I think the question is both when and how the insanity ends. Kyle Bass says it ends in war. This post from ZH is a historical primer: http://www.zerohedge.com/news/2013-01-21/japans-deja-vu-chain-events-stagnation-monetization-devaluation-stabilization-retali

    When looking for that ZH post, I was struck by the recent extremely bearish macro data. From most recent to just 3 days ago, here's the standouts IMO:

    http://www.zerohedge.com/news/2013-01-24/gallup-poll-americans-most-negative-nation-and-economy-30-years
    http://www.zerohedge.com/news/2013-01-24/kansas-fed-joins-ny-philly-and-richmond-fed-contracting-employment-index-drops-2009-
    http://www.zerohedge.com/news/2013-01-24/its-official-worst-recovery-ever
    http://www.zerohedge.com/news/2013-01-23/spanish-q4-gdp-declines-fastest-pace-2009
    http://www.zerohedge.com/news/2013-01-22/us-macro-turns-negative-worst-almost-5-months
    http://www.zerohedge.com/news/2013-01-22/january-richmond-fed-plunges-quadruple-dips-posting-biggest-miss-expectations-2009
    http://www.zerohedge.com/news/2013-01-21/japan-unveils-extreme-and-totally-expected-fiscalmonetary-policy-plan
    http://www.zerohedge.com/news/2013-01-21/little-train-couldnt-anymore

    And a market analysis piece:

    http://www.zerohedge.com/news/2013-01-23/guest-post-what-could-possibly-go-wrong

    On the subject of suspending everything we think we know, you know what they say, the more you know, the more you know what you don't know. ;-)

    ReplyDelete
  176. gotta feed the military machine. Ike Eisenhower warned about this very thing.

    ReplyDelete
  177.  i got long on that 6:30 in the morning and got out at just about the peak. then it sold off a bit. so still going sideways.............................

    ReplyDelete
  178. Thanks!  I didn't see that coming.  I gotta say that I think Nirvana may be knocking on the door.

    It occurred to me that this candle was the biggest one yet. In 4 months of minor 3.
    It reminded me how surprised I was with the big candle a few months ago that became the first part of an extended fifth wave of minor 1.  Hey!  Light-bulb moment extrodinaire!

    Ladies and Gentlemen, may I introduce to you ... the possibility of AN EXTENDED FIFTH!!!  Nirvana, in other words.

    Because quite simply we the fifth wave should not last all of one day.  I was targeting 93 where 5 would equal 1 -- we got half of that today.  But in extended fifth waves (flip of pages), and I quote:  "could be 100% of 0-3 or 161.8% of 3, whichever is the lessor.  Maximum length would be 261.8% of 0-3."  Also, wave 3 should be 161.8% of wave 1 (check).  Check out today's candle and look at the first candle in the extended fifth in minor 1.  This thing has followed every rule for 4 months.  Channels, fib relationships, etc.

    So fundamentally, why might we have an extended fifth?

    1.  We have a very unusual situation here.  40 years of strengthening currency when it was believed that Japan was self-funding of their debt because they exported lots of cars and stuff.
    2.  However last night when USDJPY started it's 2.5% rise in one day, there happened to be a trading deficit report.  They had a trading surplus for years.  Last year it was negative because they had to import more oil after shuttering their nuclear plants.  This year it was THREE TIMES more negative than last year.  Big ooops.
    3.  So all the fears are coming true.  This proves it.  They can no longer fund their debt because:
       a.  account balance is getting negative more often.
       b.  trading balance no longer has a surplus -- more oil now and cars being boycotted by China.
       c.  economy is officially in a recession.
    4.  Well, who cares about self-funding their debt?  Foreign investors do. If the aging Japanese people can't fund their massive debt anymore, then other countries will need to step up.  And now it's starting to dawn on people that Japan is becoming Greece II.  Only it also happens to be the third largest economy. 
    5. If you were a foreign investor, would you invest in a 1% bond for 10 years in a country whose currency just lost 15% in 3 months?  perhaps not.  I mean, hell no.
    6.  What happens to the chances Japan defaults when interest rates go from 1% to 3%?  100% comes to mind.
    7.  What happens to capital when you have a country with unservicable debt?  It flees the country looking for a safe haven. When capital flees WHAT HAPPENS TO THEIR CURRENCY?
    8.  Why in the world should the Yen be considered a safe haven currency?  They have debt levels 5x worse than the US for goodness sakes.  AND 40 years of assumptions have done a 180-degree reversal.
    9.  Poor hedge funds desparate for returns ... it was possible to make 75% today with 30:1 leverage.   I was only 20:1 in the beginning, so got 60%.  There is no better investment on the planet with this risk/reward profile.
    10.  this is an EW dream (low risk with a road map).


    Ladies and gentlemen, do yourselves a favor and short the yen with all your might.  At good wave junctures, of course.  Soon.

    ReplyDelete
  179. USDJPY

    RED ALERT
    EXTENDED FIFTH POSSIBLE
    NIRVANA

    For details please see my post to Papa Boulle below.

    ReplyDelete
  180.  awesome Greg. you have been so on top of this trade from the get go.you're legend. actually SJ and Yikes mentioned it today on a twitter discussion they were having regarding the good (mostly ex) peeps from the troll blog.

    ReplyDelete
  181.  Thanks blueskies!  Check out my response above.  I think we may have a trading moment of a lifetime.  We may be looking at an extended fifth wave on the USDJPY, which would target not 93, but 107.  It looks like it's too late, but where may be a monster move ahead, just around the bend.  Entry point is an issue of course.  But this candle today was the biggest of the whole advance, and on the heels of a terrible trade number.  So, all the fears are coming true, bad exports, recession, bad account balance means they don't have the surplus to fund their own debt anymore.  Which means the yen has to be revalued as a debt-trash heap of a currency (like Greece).  Let the yen be trashed.
    Cheers!

    ReplyDelete
  182. And now it's starting to dawn on people that Japan is becoming Greece II.  Only it also happens to be the third largest economy.

    That gets another "wow."

    ReplyDelete
  183.  Thanks blueskies!  I've pretty much dedicated my life's work to the USDJPY the past 5 months.  For some reason this one captivated me for more and more reasons -- seemed like we might have ourselves a whale here.  And things just sort of came together, were given to me ... probably will be my life's work happiest moment some day.

    Hey, tell them hello for me ... I do miss them, and I haven't had good luck getting on twitter, but will try again sometime.  But me and new habits take awhile.  Like it took me a year to rewire my habits to come over to this good energy filled blog by our esteemed host.

    ReplyDelete
  184. yes. GREAT post. hahahaha. i always had a target of 120 and i moight be right.

    ReplyDelete
  185.  will do. and your tracking of usdjpy has been pretty amazing. gotta find a long. i keep saying that. had one at 88 but sold it. i hate the downdrafts. it's a BTFD which has been happening all along. but u called it from way back when.

    ReplyDelete
  186. 88 a couple of weeks ago that is. then it sold off and i didn't buy it again.

    ReplyDelete
  187. lol. fantastic! where's the buying sweet spot?

    ReplyDelete
  188.  90 would be good support, but might not get there.

    ReplyDelete
  189. Bummer, some gnarly waves last night.

    AUDJPY - Key to the Universe
    http://screencast.com/t/NchJFSo2yB

    ReplyDelete
  190.  The sweetest spot was yesterday at support -- 88.5ish ... but it didnt stay long.  I think it may be like a breakout stock now.  Might be worth a nibble to get in, and a buy order down below just in case.  I don't know where to get in yet, but I'm holding mine.  A place will become clear.  This is only the first day of wave 5.

    ReplyDelete
  191.  maybe it will ... on 4hrly you can see 5 waves up with wave 4 near 90 ... next wave could get there.

    ReplyDelete
  192.  USDJPY

    Exhibit A:  Daily volume

    Why is there so much volume showing up AFTER the heart of 3 of 3 is over?
    Most people missed the move over the holidays.
    But why would so much volume show up so late in a move ... 93 is all that's left under the count.

    Unless an extended 5th is headed our way, eh?

    ReplyDelete
  193.  i'm keeping my eye on it. it's tough with this one as it does these little sell offs and you think it's correcting but it's just a little pull back and then it takes off like a rocket. thanks for all your good work.

    ReplyDelete