Sunday, August 18, 2013

Regarding HO Signals - A Brilliant Analysis Out of Tasmania

Hello friends, followers, random readers, skeptics, debunkers, and curious onlookers.  It appears we have been given a gift... and I write this article in order to share it with you.

As all of you know by now, the Hindenburg Omen has put forth one of the strongest signals in its history, as judged by the tightest cluster of signals ever produced... as far as I know.  Let's put it this way, with 6
"Are you paying attention?" testing machine
'real' signals in 8 trading days who's going to quibble?  That's a strong enough warning for anybody who is at least half lucid.  Consider this... if you and your lovely family were out sailing on the Gulf of Oman some beautiful Saturday afternoon in your 42 footer, and the Iranian navy fired a 6-pounder across your bow, you know darned well you'd take notice.  The prudent sailor might even take the hint and reverse course.  But naturally there are always the few heroes who might be considered as... what's the best word... daft... the ones who would wait for a second volley just to be sure.  Not a smart choice in my opinion.  Not when taking cannon fire.  And especially not when the HO is firing the volleys.  For, he who dares hold his course even after 6 rounds have whizzed past his nose, each successive shot being closer than the last... well the odds are high that sailor's ship is surely destined to take one up the assigned target.

So now that we've accepted that the current Hindenburg Omen event is at the very least the real deal, we should embrace this rare opportunity to pay attention and watch how the drama unfolds.  And to that end, one of the questions that has been asked most frequently as of late is this; "Does the number of signals, or the type of cluster, have any predictive value about the extent of the decline that might ensue?".  The short answer, the most common response, and the answer I have used to squirm out of doing a ton of work in the form of back-research, is "No!  Once the HO has issued a confirmed signal, as far as the number of signals is concerned, all we can do is refer to the past history of 'what happened next' and take our best guess.  The actual number of subsequent (and redundant) signals is of no value in determining how far the NYSE might drop.".  That also happens to be the 'correct' answer.

But I have never heard this question asked: "Does the steepness of the rally prior to a confirmed Hindenburg event offer any predictive value?".  What a heck of a great question that is!  And one would have to think that of all the factors to ponder, that is probably the most logical one to investigate.  I have never done that investigation.  First of all, I didn't even think of it.  And secondly, it represents a lot of work, too much for the little time I have.  In fact, keeping my eye on the HO and reporting on it has taken up way too much of my time and focus over the past 4 years as it is... to the extent that I haven't published any article on any other topic since March 16th.  I have other things to do you know.  I have to tend to things.  Like, I take a bath every single month... sometimes more than once.

S. Cross, seen only by visionaries
But wait!  The strangest thing just happened.  Right out of the blue, at 2:00 in the morning on Friday, an old friend of mine from Tasmania who I haven't seen in at least 2 years pops up on Seeking Alpha and drops the whole bundle on my desk.  Let me back up a moment and tell you who this guy is.  He's an occasional commenter who goes by the name of Wave Rider.  Why the name Wave Rider?  I can only guess, but since he's from Tasmania I think it's safe to assume that he has done a little surfing somewhere along the line.  I hadn't really spoken with Mr. Rider all that often in the past, but I definitely remember him and do recall that we had some nice exchanges, beginning perhaps 3-4 years ago.  To be honest I don't even remember where that might have happened because we first met before 'this' blog even came into existence.  On second thought, it was probably over at Seeking Alpha.  In any case, I recall that Rider made a lot of sense and he was a nice fellow.  The type of guy I'd love to have a beer with some day.


Livin' the good life 'down under'.
With the name Wave Rider maybe he's referring to Elliott Waves.  But I can't help but to think of Tasmanians,  Kiwis and Australians as wavers of the water sports variety.  One thing I will state with all seriousness though, over the past 5 years I noticed that Aussies and Kiwis, for whatever reason, have amazing talents at technical analysis.  I'm dead serious... their ability to make sense out of mayhem regarding Elliott Wave Theory is truly impressive.  Coming up with Elliott Wave predictions is as much an art as a science and it's not easy to do.  I don't have the patience for it.  I don't thrive well in an environment where "being wrong quite often and having to find a viable alternative" is acceptable.  As a natural response to my own ineptitude, I have become acutely cognizant of real talent when I see it.  And those deep Southerners have it in spades.  Not to disparage accomplished EW practitioners from many other parts of the world who are very good at it as well.  It's just that... I don't know what it is, perhaps it has something to do with living under the Southern Cross, but man... people living 'down under' just seem to have a slightly different type of vision.  Clearer vision.  And it appears that applies to people living on Tasmania as well.

ENTER WAVE RIDER:  Right out of the blue, totally unsolicited, this man who seldom speaks pops up out of nowhere at 2 o'clock in the morning and delivers one of the finest detailed, properly focused, thinking-outside-the-box, analyses I've seen in quite some time.  It's targeted at exactly the right question: "Does the steepness of the rally prior to a confirmed Hindenburg event offer any predictive value?".  Wave Rider actually went to the trouble to do that analysis, going all the way back to 1986.  And then he handed it to us.  What a gift!  Not unlike Satoshie Nakamoto of Bitcoin fame.  But unlike Satoshie, Wave Rider does indeed exist.  With his gracious permission, I'm proud to offer readers his report as follows:

=========================
[highlights by AR to draw attention to key words]

His basis: "I have always been interested that the number of sightings of the HO in a cluster does not seem to be a predictor of the strength or timing of any subsequent downturn. I have therefore been spending some time on the keyboard examining all the data associated with the recorded confirmed HO's going back to 1986.

His qualifiers: "Rather than use the DJIA that Dr. Robert McHugh used, I have used the S&P as it probably gives a better indication of the wider market. You still get the same approximate proportions of declines that are regularly quoted for the HO. i.e. 25% of the time the market falls by 15% or more, etc."

His general observation: "The interesting thing though, is that while the number of sightings in a cluster is no real guide to the dimension of any decline, the pace of the rising market before a confirmed HO is. Generally, the majority of confirmed HO with subsequent major declines have come after the market has averaged a gain of over 0.08% per day since the low that followed the previous HO. How long ago the last HO occurred does not seem to affect this observation."

The data he uncovered: "The results of the HO which followed daily gains averaging over 0.08% were -31%, -30%,-21%,-18%, -15%, -10%, -5%, -3% and 0%. That's 6 out of the 8 declines of 10% or more. By comparison, in the case of all other confirmed HO where the average daily rise of the market was less than 0.08% the average decline after a HO averaged less than 7%.  And that was only brought up that high by a couple of outrider observations."

Wave Rider's Conclusion: "The interesting thing about the cluster of HO you are currently recording is that the average daily gain since the market low following the last confirmed HO is the second highest on record. That assumes the May/June HO is considered a different one to the August one we are currently monitoring (AR's note: correct assumption). This suggests the present HO could be a portent for a very significant market decline indeed."

An additional point: Hence the rule "The faster they rise the further they might fall". Incidentally, the average daily growth rate before the August 5, 2013 HO was 0.193%. That is by far the highest ever, except the doubtful Dec 1998 HO."

[AR:  Good lord, I hope readers appreciate the implications of that last "additional point".]

========================= 

I also hope readers appreciate how many hours went into this analysis.  When I asked Wave Rider for his permission to reproduce this meaningful work, he graciously granted it although initially he hadn't anticipated that his offering would reach this wider audience [yes, this blog gets far more weekly visits than the HO blog at Seeking Alpha does, not to mention the huge exposure that Global Economic Intersection will also be providing for Mr. Rider's Opus].

As a result of my request, WR revisited his work just to make sure he was satisfied with it, and then did offer a few additional comments and clarifiers.  In order that you can easily find all his commentary, I'm happy to provide this link that should take you directly to the bundle he initially dropped on my desk, this one which will take you directly to the comment which includes his data set, and this link which would take you to the entire blog where you can scroll the comments section to read Wave Rider's additional commentary and detail, after the fact.

On behalf of all readers, I offer our sincere thanks Wave Rider. We should also accept and acknowledge that Mr. Rider did not make any prediction, he simply presented a beautiful piece of work for our consideration... which is exactly the same as what the Hindenburg Omen itself does.  The HO simply presents the facts and contrary to popular misconception, does not make any predictions.  With that sorrily-misunderstood fact now finally (hopefully) becoming clear to the debunkers, we recognize that Wave Rider's analysis is simply much too good to languish in that now-very-quiet room over at Seeking Alpha.  This is very valuable stuff.  And for that... payment is in liquid gold:

CHEERS MATE!


112 comments:

  1. I love that kind of info---its interesting of course.Now the next question is...what effect does QE have on HOs????Does it mitigate or even eliminate it?I know for a fact that the stoppage of previous QEs resulted in 10-20% corrections.The resumption of QE brought us to all time highs.The question to be answered in my view if things is:Do they taper in September?If they don t we ll be fine.If they do...watch out below.Also everyone keep an eye on margin debt numbers released around Aug 29th.Another decrease would show a trend from the April peak---another leading indicator of a stock market top.Good luck to all.

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  2. From what I see, the mainstream seem 'generally' agreed for a taper of 15-25bn at the FOMC of Sept'18.

    Certainly, that will be a significant problem for the bears - especially if most of the cut is on the MBS side, rather than the QE-pomo - the latter of which is directly responsible for the underlying equity upside pressure.
    -

    Regardless though, we should have an interesting few months ahead. VIX can't go much lower, right?

    At best, I can see the low sp'1400s, but that is a mere 'best case', and even then, I'd guess the Fed would quickly increase QE again, back to 85bn, if not 100bn.

    *one thing few are considering, there will probably come a point where the Fed are buying outright equities/ETFs. Why wouldn't they go that route eventually, since the JCB and other CBs already did?
    --

    Anyway, good stuff by Rider, and it does make sense. The last wave of upside hysteria-nonsense...but within it, very underlying signs of weakness.

    Yours..
    awaiting more HOs

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  3. Wouldn t that be unimaginable?The Fed buying stocks to keep it propped up?We will know what happens with stocks via the bond markets interpretation on the QE fade/or not to fade.Bonds panic over 3%to 3 1/2% would be a quick 10% correction I d say.

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  4. ..but thats just it...why wouldn't they? The JCB been doing it openly for years, and there was a good article earlier this year about 'many' other central banks having 10-20% of their 'portfolios' (laughably funded via out-of-thin-air' money) from stocks.
    -
    I've ZERO doubt the 10yr goes to 3.25/40 within the near term. How Mr Market deals with that, I don't know.



    My own equity target is a simple hit of the lower weekly bol..currently 1545 - but rising each day. If that is hit in the CURRENT multi-week down cycle, then I'll be open to the low 1400s in Oct/Nov..otherwise, I'm an sp'2000/2200 guy for next spring.


    I realise those two scenarios are indeed a extreme polarised pair. The following is the 'best bear case'. It sure won't be easy though, even if QE is cut.


    Yet..we do have a truck load of HO signals, and I sure don't wanna be holding long, and hit by any of those fiery cannonballs.

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  5. To me....thats a last ditch solution to a market crash of unbelieveable proportions.Just when it looks like everythings going black...Larry/Janet Summers/Yellin announce equity purchases....Hoo hah!!!!

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  6. If you were the Bernanke in Nov'2013, with sp'1400s, wouldn't you print off an extra $500bn..and start buying the SPY ? ;)
    --


    Q. This may be a stupid question, but if there is a HO signal, is it not possible to flip all the rules/indicator, and give some kind of 'super' buy signal?

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  7. 1400 s&p is not a crisis...remember 666?Did they do it then?We may never know.And AR already answered that reverse HO question on another blog from Aug 8th I think it was.

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  8. Interesting analysis indeed! Big two thumbs up for Wave Rider :-) I find it interesting that the US$, US equities and US Bonds have ALL been sold off here (unusual occurrence). Since QE-infinity was announced (to keep interest rates low) bond yields have continued to rise. Whoops!

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  9. That's an interesting point brother Mars, about 'all three of them' selling off. The US equities and US bonds have sold off at the same time [priced in US dollars of course, meaning they have sold off "relative to" US dollars]. The common wisdom is that that's not supposed to happen, because for decades investors have just assumed that funds leaving the equities markets would find their way into the bond markets, and vice versa. And for decades they've be right.



    BUT in a deflationary scenario money simply vanishes due to repayment of debt, so for the bond markets and equities markets to decline at the same time would be normal in a deflationary scenario. Investors just can't seem to wrap their heads around that... can't seem to understand how or why it is even possible for that to happen. But for equities and bonds to decline at the same time is a logical response when dollars are vanishing.



    But the most interesting thing you pointed out is that the USD is also declining. Now 'that' really sounds like an impossibility. But the USD is declining 'relative to what'? Not to US bonds. Not to US equities. But relative to 'the other currencies in the USD Index Basket'.


    Sp that's raising a very interesting possibility that I hadn't really thought of before. In a deflationary scenario the US dollar should come under immense buying pressure. One would assume that that means it should soar relative to other currencies. That's what I have always assumed. But in fact maybe that's not really the case at all. The US Dollar would definitely come under immense buying pressure in a deflationary scenario, but relative to what? Apparently, maybe 'not' relative to the other currencies in the Index basket, but primarily relative to things priced in US dollars. And 'those things' would be commodities, oil, a lot of global debt (but not 'all' global debt), and of course US bonds and US equities.


    So you've kind of forced me to think about this whole damned paradigm all over again... specifically... "would it be possible for the US dollar to collapse during a deflation"? The common wisdom is "of course not... a surging dollar is the very definition of deflation, surging due to a diminishing supply of them". But in theory, that does not mean the same thing as "the US dollar must surge relative to other currencies", but instead, "it must surge relative to all things that have been leveraged in terms of US dollars".


    Bottom line... "could the US dollar fall relative to other currencies during a 4 year long deflationary period?" I think the asnwer is "Yes it could, as long as those other currencies are, at the same time, undergoing an even mightier deflationary phase of their own". And that is entirely possible.


    What do you think of that possibility... of the US dollar falling 'relative to other currencies' during a global deflationary phase. Now that I think about it... I think it's entirely possible. And that's something that has never even crossed my mind before today as being possible.

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  10. That's a good point about the dollar when thinking about it in terms of other currencies.

    The thing is though that the basket of currencies is weighted so 70% of it is the Euro & Pound Sterling, which have been moving in lock step since 2000.
    It's hard to imagine hoarding of Euros during a crisis, but I suppose anything is possible.

    Maybe a more likely scenario is the digital currencies will blow the whole thing up and displace all fiat money?

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  11. Hey there Greener. How are ya buddy? Yup, I was thinking about that... that the Euro alone accounts for about 56% of the basket I think. So if my theory (or at least "question") is correct then we'd have to see the markets priced in Euro implode worse than those priced in USD. In other words we'd have to see the European bond market tank real hard and the American bond markets falling a lesser amount. They could fall hard, but with less severity as the European. The result would be that the Euro would come under immense buying pressure, even more than the buying pressure on the USD. So although it would be a nasty deflationary scenario, the USD could still actually fall relative to the other currencies, at least for a while, perhaps half way through the entire deflationary cycle? I don't think this idea is unreasonable. Maybe it is going to happen but just hasn't started yet?

    LOL... yes, the digital currencies are not going to go away... ever. Especially with Germany coming out and officially recognizing Bitcoin as "private money". That pretty much seals the deal... Bitcoin shall survive.
    http://rt.com/news/bitcoin-germany-recognize-currency-641/

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  12. Could be. I remember some time back you posted a chart comparing the dollar and the stock market, and the conclusion was that there was little to no correlation. While the stock market looks pretty extended, the dollar has just been basically directionless for a couple years now.

    The Euro appears strong in the crosses against the Pound Sterling, Swiss Franc, Aussie dollar, & Loonie.
    But against the US dollar and Yen, it's a murky sideways range.



    The interesting thing the past few months has been the Aussie dollar collapse reflecting the Chinese slowdown. Now we're getting another AUDJPY divergence with the stock market.

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  13. The chart you refer to was actually the focus of the one single most visited article I've ever written. As of this very moment it has had 55,553 visits.
    http://albertarocks-ta-discussions.blogspot.ca/2012/01/blog-post.html


    In the past 6 months the correlation has been 'in tandem' for almost that entire stretch. That AUS/JPY divergence with the stock market is exceedingly out of whack. The only thing I could possibly contribute that to is a concerted effort by invisible hands to prop up the US stock markets at any cost, even in the face of the fact that the currency traders are showing aversion to risk.

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  14. The only currency that is weaker than the US$ at the moment is the Yen. Coincidently, Japan is the only country that is printing more aggressively than the US. I think what is at risk here is a loss of confidence in the US$ and US assets as a result of the Bernanke QE experiment. If the US$ continues to fall, and starts to accelerate lower, there will be a panic at the Fed as offshore investors unload their favorite US$ assets. Will that be the final nail in QE's coffin? How might this play out?

    One scenario I have been playing with is that the US$ decline starts to accelerate, risks assets fall hard, the Fed INCREASES QE, the US$ falls further (as markets call this Ponzi scheme for what it is), yields rise, commodities surge, and the Fed finally gives up the experiment and is forced to aggressively reduce its balance sheet (aka Paul Volcker style) and the US$ launches higher in the midst of the deflationary spiral... so maybe we need a crisis of confidence in King $ to normalize these markets? EVERYONE is expecting a strong US$. When everyone is in the same trade, its time for me to jump on the other side...

    What if this 7 year DXI triangle breaks to the downside?

    http://screencast.com/t/CExx2RcqN

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  15. But no one makes money when a Ponzi scheme is exposed and blows up...only while people believe in it.So it ll.be tough to see this get detonated by the people that want it to continue.

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  16. I think the US is at it's budget limit already. I even read a report on ZH where they were saying that somehow, as if by magic, even though the Fed is still buying up treasuries, for some reason the balance sheet somehow magically got stuck right at the ceiling. So I'm not sure Bernanke actually has any room to increase QE any further.


    Yeah, you're right... everyone is 'expecting' a strong USD and on the surface that would make sense if we're thinking about a deflationary scenario. But now I'm realizing that although the dollar would indeed surge relative to things denominated in USD, like equities, bonds and commodities, that doesn't necessarily mean the USD Index has to surge. That Index is only measuring the dollar's value relative to other currencies, so it could still fall relative to those, but be surging relative to bonds, stocks and equities. That would mean that through the eyes of a Euro user for example, US bonds, stocks and commodities would be tanking 'big time'... even faster than seen through the eyes of Americans.


    If that theory is actually possible, then the chart you provided 'should' break to the downside. One thing that definitely pops out at me is that all the action off the 2008 low is certainly not impulsive. I think that chart 'will' break to the downside.


    I'm liking this discussion my friend.

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  17. Well the HO has saved me 4.5% so far in this correction.Listening to Rick Santelli today....he seemed to be predicting a currency crisis in the emerging markets.Maybe thats where the next leg of this correction comes from.Personally looking for 10% total down to 1530 or so.Reevaluate at that point.Of course if we go to new highs before that---itll be another minor correction--thats all.Stay tuned.

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  18. Heres the July margin debt update:382 billion up 6 billion from June and just short of April s peak of 384b.If July had decreased to 370b we could surmise a market top was in place.Previous charts show a lag time of a few months of when margin debt started falling precipitously and a major correction or bear market.Nothing like that indicated here.In fact looks like more of the same.Bull market continues thanks to QE.

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  19. Margin debt ROSE to within a fraction of Aprils high(after being down slightly for two months.)Just released today for July.Past performance would indicate no market top yet.

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  20. Simply Awesome AR.

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  21. Great stuff AR, WR, and others...

    I'll leave you with my views on equities, USD and Treasuries...

    Equities I'm aligned with many, that the recent ATH is most likely a 5th wave and up is done for the IT/LT, or we're in a 4th wave correction that should at least test the mid 1500s on SPX, then with new all time highs to come. Either way, market should be going down significantly in the near future.

    I actually remain bullish on the USD and Treasuries in the near term for two reasons: deflation/no growth in the US and structural issues in Europe.

    Deflation in the US would be bullish for Treasuries and the USD if deflation here does not exceed deflation elsewhere on a relative basis, I agree. Otherwise investors would take their money out of USD and run for currencies with higher growth/inflation/interest bearing potential. That seems sensible.

    But deflation/no growth in the US post tapering, plus a return of a crisis in Europe (Greece and/or Spain), would absolutely be USD and UST positive - even in a deflationary environment in the US. Under that scenario, one would expect US equities to decline significantly, the USD to rise ESP relative to EUR and GBP, and USTs rally in a flight to quality trade.

    I disagree with Mars below re the USD, as I think we are "better" than the Yen AND Euro until the structural issues are resolved and/or the weak countries drop out - esp Spain and Greece. Europe has a much more deflationary environment to deal with than the US - which is why the Fed can contemplate tapering now whereas Draghi can only consider future stimulus.

    All of the EUR crosses indicate immediate EUR weakness is likely, just a matter of to what extent and for how long...

    Love these boards and thoughts, keep me going!

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  22. Hey there Bennie. How are you doing? I'm glad you liked this piece and I was impressed as well with Wave Rider's study. Nice of you to drop in bud.

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  23. I asked AR this question a couple weeks ago. His response was that bottoms behave differently than tops so a different method is needed. Best response given for a super buy indicator was the Zweig Breadth Thrust. Here is my stockcharts link: http://stockcharts.com/h-sc/ui?s=$NYADV:$NYTOT&p=D&b=5&g=0&id=p63589513289. Requirement is for movement from 0.40 to 0.615 in 10 trading days.

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  24. Thanks, I should put some time into reading the Zweig, although I guess I should have looking into that a few years ago.

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  25. Hey AR, I just wanted to give you a chart of HYG and how I think credit is in the early stages of getting pulverized. This ending diagonal wave C should be retraced in its entirety which takes us back to 77.80 (best case). Worst case is that completes the ABC and we are headed back below 59. Bad news bears are comin' to town in the credit bill is due.

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  26. All those HOs are really starting to pay off those on the side.
    --
    The only issue..can we get down to the 1570/60s in the current wave. Regardless of where we floor, will be pretty interesting if we get a few more HOs on the subsequent bounce in Sept/Oct.

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  27. One more of BKX since you have that section in the top right of your page. It looks like the piggies just entered the slaughter house.

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  28. Here we are on the next to last day of august.An attack on Syria is in the works.The consensus is that we drop a few bombs, get out and there s no hard feelings.We re so accustomed to this that there s no one giving any chance of something going wrong over there.Or complications ensue and the stock market takes it the wrong way.This,I think is the moment where the crash could occur on Tuesday.I m not predicting it..just pointing out that if Syria (and Iran)doesn t take its spanking like we think they will...hundreds of dow points could evaporate on Tuesday.If Israel is attacked or other events become known before the markets open,oil would surge and the rest would be a panic (as I read not many people are protected with puts).Any thoughts AR?.
    P.S.I ve now saved 6% thanks to H.O.

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  29. well AR I am glad you deleted my prediction of a Tuesday crash...lol.Thats before the news of Obama handing off to Congress.Crash delayed.

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  30. "A healthy strengthening bull market
    is accompanied by a large number of stocks making moderate

    upward advances in price.
    A weakening bull market
    is characterized by a small number of stocks making large

    advances in price,
    giving the false appearance that all is well."

    The stock market trend is up.
    SPX Weekly Divergence

    http://britefire.wordpress.com/2013/09/01/distribution-stock-market-topping/spx-weekly-divergence/

    The Bullish Percentage of SPX is down.
    SPX Bullish Percentage

    http://britefire.files.wordpress.com/2013/09/spx-bullish-percentage.jpg?w=1000

    Stocks above their 50 Day Moving Average is down.
    Stocks Above their 50 Day MA

    http://britefire.wordpress.com/2013/09/01/distribution-stock-market-topping/stocks-above-their-50-day-ma/

    Another high with another divergence may occur
    but
    TheEndIsNear

    http://britefire.wordpress.com/2013/09/01/distribution-stock-market-topping/theendisnear/

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  31. Oh my lord... I'm glad you made that comment LML, because I have never deleted any of your comments. But you inspired me to look in the spam bin and there were actually 4 comments from you in there. They have all been released of course.


    It's my fault... I forgot to "whitelist" you like I have done for everybody else. Unfortunately, Discus takes it upon itself to spam any comment it likes for no apparent reason. But if I "whitelist" an identity, such as the email address you used to log into here", you're golden. So from now on you can post anything you like, with any links you like, and Discus will leave you alone. I have had so little problem with that issue here (because everybody is whitelisted) that I took my eye off that ball and missed seeing your comments in the spam bin. I just never have to look there normally. My apologies. Here, this one is on the house:

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  32. Can I have 2 of both???lol.Apology accepted...of course.I like your style.

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  33. Hi AR...finally finished with the drinks and the women---back to the H.O.(which kind of reminds me of the women again lol).If you check this blog out again fairly soon...
    Question...How long after a signal is given is it no longer valid.Is there a specific timeframe that the market corrections should occur in?(30 days...60?).Thanks .

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  34. AR...I got deleted again....and I had a v errry impotent question too!

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  35. I ll try again as my previous question must have wound up in a can of Canadian Spam....AR whats the timeframe for each H.O. to be in effect?30 days 60?When does it run its course and become deceased for that instance?Thanks...and send me some more booze and chicks to make up for the last message that wound up invisible.

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  36. looks like the correction is over....anyone agree?Unless the Syrian crisis blows up again...seems like the market is off to the races again.

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  37. the one thing WaveRider didn t take into account in his research is QE.Quantatative Easing wasn t a factor in those instances sited by WR as big corrections.The only thing to consider now is QE tapering---when thats done these indicators may work again....the bond market and the dollar.Seems obvious now the market doesn t like a falling dollar or higher bond yields.Qe though,is the safety net that usually is done AFTER a market crash.This is being done to PREVENT a market crash.And as along as there is QE...there won t be one.(or severe correction).

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  38. this will be my last comment until the next H.O. appears.
    QE CONQUERS ALL!!!!Now with new highs in the spx,we can close the books on the 6% correction we had down to 1628...and with B.B.handing off future tapering to the next Fed head(Yellin?)the market should be over 1800 by October lol.This may be one of those years like we had in the 90s(40-50% up years).No problems til QE ends.(unless we default on the debt limit--which WONT happen).Cheers AR .

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  39. Sickeningly, I have to entirely agree.


    It would seem many equity bears are failing to consider we might be seeing a replay of price action in the late 1990s..relentless gains (aside from a brief scare in 1997 with the asian crisis).


    No reason why we won't close the year in the 1850/1950 zone. Ohh, and twitter IPO next spring/early summer, thats gotta be good for sp'2000s

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  40. Now it's looking like the delay of tapering might have been so they can get through this next week when congress will probably shut down government for some time bc they want to go on record as objecting to Obama Care. October taper? FX pairs already have given back that 2 hour spike when Ben muttered his silliness. Stocks have given it all back and then some. That's probably the top.

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  41. I m doubting its a top.Margin debt came out today and went up slightly.NO DECREASE.All market tops are preceded by a significant drop in margin debt.The beat goes on.

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  42. Party is on. The boys on the hill are gonna break the credit markets and do it in a big way. Just wanted to drop two charts SPX and HYG. I don't forsee SPX catching a real bid again until it gets back into the 1500's, and corporate credit...... Forget it... Just waiting for the first patron to hit the exits and this one is headed for the basement. If it breaks directly from here I'm going with a full blown nested third wave decline and not the less severe wave C. Either way, bad news is in the forecast. Love ya man.....


    BA

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  43. Hello AR.


    Hope you are well, I see its been quiet here for a fair while. I'm sure many are just lurking, after the understandable disappointment that many of the doomer bears have again felt - with the debt ceiling issue, panning out to nothing.
    -


    With QE continuing, it would seem it simply negates all of the HO' signals. It certainly doesn't negate the theory, or the recent signals...but when you throw 1 trillion annually - with much of that money going into equities..being leveraged up...how are we going to fall?


    Its almost November, and again we're seeing another round of top callers. I wish I could believe in them, but...QE continues..and Santa is coming, and then we've the green shoots of spring 2014.



    I have to guess, there is probably another six months until the next chance of a major wave lower, and even then, I have to wonder, how is that possible, with monthly QE of at least 70/50bn ?


    Regardless of the market/economic nonsense...good wishes!

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  44. The rise of the stock market brings in huge tax revenue...decreases the deficit and builds up savings.Those are the reasons for QE ...not improving the economy.Also all systems including Hindenburg that use info that worked in predicting previous crashes are not working for the same reason crashes stop when the Fed pours liquidity in AFTER a crash(1987...2008).But watch out if they ever taper.Where are you AR?How close are we to another signal?

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  45. Know your mushrooms!

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  46. Some disappointment over the debt ceiling was to be expected: likely we would get a stopgap deal that would extend the debt ceiling to some higher level, with reductions in the rate of growth masquerading as supposed "cuts". But not a complete suspension of the debt ceiling, and with it any last remnant of fiscal responsibility.
    http://www.youtube.com/watch?v=ml8b4XbtdlA
    http://blog.milesfranklin.com/debt-ceiling-to-infinity-revisited

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  47. I lost any hope of the US - or other western nations, being fiscally responsible from 2002 onward.


    Hell, even the 1999/2000 supposed budget surpluses really weren't. The underlying debt still rose.
    -


    Since 2005, I have periodically touted 20/22 trn as the level at which the US has 'issues' with its debt mountain.


    Just another few years, and we'll be there.

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  48. They will certainly pump QE till the cows come home, but the door I don't think they're watching so much is the high-yield and muni-bond areas. If (when) a correction starts, that's where I should think the cracks will start (Detroit, anyone? Much more where that came from, too). Once a taste of fear hits those markets, risk-off can feed on itself.


    One man's opinion anyway...

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  49. When I'm not shorting the rips in the Euro, I've been looking into sustainable resiliency, i.e., generating my own power off the grid, home water systems, backyard farming.

    Been really considering mushrooms: http://logrocal.com/

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  50. just want to say, the first few days of next week is very likelythe Hindenburg to tigger the first reliable signal in the last two years. The parameters are all set. So, i am very optimistic.

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  51. The market has not had a significant fall whilst QE is ongoing.
    -


    So..with QE continuing into spring 2014..and almost certainly..ALL of 2014..and most of 2015..how are we going to fall?



    'Bearish optimism'? Thats not worked out so well..has it?

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  52. Market cares nothing for Detroit..or any other US city.


    Market only cares that QE fuel continues...which it is.
    -
    Your economy understanding I'm sure is superb....but that is all irrelevant in these times. After four years of this nonsense, I'm still surprised people are over thinking it.

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  53. Agreed that the market cares squat about Detroit. Heck, I live within an hours drive of the place and I don't care.


    My only point is that when hi-yield and muni's start taking it on the chin, liquidity can dry up pretty fast, with all it's roll-on effects spooking the stock market. Margin debt is at record levels, while cash to back up margin calls is in the tank, if people (real people, not banks/recipients of QE) get spooked, the feedback loop is pretty strong and they can head for the doors before the PPT can levitate it. The Fed is not (likely) to try to buy the whole market if the herd is running the other way.


    They didn't stop the rout in 2008, and if one steers a jaundiced eye towards these things, there is advantage to letting the market drop 20-30% from time to time for TPTB.

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  54. Damn good prediction by myself...lol.Where are you AR?How does everything look?

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  55. McHugh says new HO generated yesterday. But, don't tell anybody...Ok?

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  56. Anyone hear of an omen occurring on Dec 6?

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  57. what a silence ! time to short when all want to buy and there is no bears on the market. Be patient.

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  58. Time for a long winter's nap...
    :)

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  59. but everyone is scared to death right now.....plus margin debt is not contracting but increasing.Just a couple thoughts.Where s AR?

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  60. S stocks long gold ! 31.12.2013 stock market top, gold market bottom like i said 3 days ago. Regards folks

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  61. The Wolf of Wall Street - yes we can ! yes we can ! we can sell exprensive stocks couse street want to buy now ! no fear wright now, the street want to buy and then wall street sell couse we can easily earn on stocks like di caprio:)

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  62. So what's up folks ? was i wrong 27 days ago ? Short stocks when all want to buy and buy gold when all want to sell !!!

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  63. Dont let those charting muscles atrophy Bro ....or are you snowbound deep in some cabin in the Yukon ? Do you want me to notify the mounties ?

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  64. Like i said sell stocks, buy gold. The ukrainian case will have big impact all the world. They have know about it for monts.

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  65. maybe Polish stocks..but U.S. stox are at an alltime high.Should go higher for a while.Ukraine looks like a one day wonder as of now..but watching it.Margin debt keeps increasing.No meaningful pullback with that happening.Hello AR.

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  66. Beware of the poster below guys. It's a new avatar of genuine pleather , the rent boy owned by non other than Mr Mike Wagner aka "Wags" supertroll.


    You have been warned.

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  67. Also by posting at his new blog , he will obtain your email addys and forward them to his master , who can then give you more of a personal one to one trolling. And maybe even slip your pc a couple of trojans via attachments.


    You have been warned.

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  68. lol! too funny. I would never do anything of the sort. but your misguided paranoia about wags it truly entertaining ;)

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  69. yes 1877 second short up to the 1940 if they can get it.

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  70. Polish short too. The ukrainian case havent been closed since last week and wont be solved.

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  71. Charts, SPX FCEL BTU EXAS

    http://endofbull.blogspot.com/2014/03/march-11th-spx-exas-fcel-and-btu.html

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  72. Really ? that's too strange dude... i don't even know what to think about that. I thought it was you for real and sorry, i'll edit my post.

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  73. new post up! SPX & ONVO http://endofbull.blogspot.com/2014/03/marth-12-spx-organovo-onvo.html

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  74. I tried with you repeatedly. There was no reason we could not have got along. Not interested in trying anymore. Good luck. Sincerely.

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  75. I understand man. I press buttons, it's true. Some of your comments and ideas re: wags, were just too far off base though, couldn't let it lie. And yeah I know you tried, and I know I'm an internet dickhead at times :)

    Best of luck to you.

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  76. You should find your own ideas and discipline. That is the journey. None of this is ever about anybody else or their ideas. EXAS is a buy at .90 fwiw... If it gets there.

    Peace, Om.

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  77. For instance. The EXAS blog post I made. I wrote that on my own, and only called Wags to fact check it, to make sure I wasn't saying anything untrue. I wrote it based on credible sources like David Ahlquist, Douglas Rex, Company website, and various googling of the FDA and Exact Sciences concerning prior management, prior products, and prior issues. Good luck.

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  78. Back up your opinion... with something (anything)... or I wont even bother again :)

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  79. I don't want to talk to you. I was being nice after you wished me best of luck. I think you would agree that EXAS a .90 if it gets there. Wouldn't you buy it if it were .90? There is and was no opinion stated about whether it will ever be .90 again. Hence, "if it gets there."


    I am sure AR doesn't really want a running dialogue on this on his blog. I have not read your blog so I was not in anyway saying anything about anything that you posted on your blog. My point about this not being about "anybody else or their ideas" was about how you spend so much time focused on other people's ideas and bashing et ceterea. I was nicely saying you are wasting your time and should focus on your discipline and your ideas--that is the journey and what matters. I did not mention Wags at all. If you guys are so locked in and set with your discipline and ideas, why would you waste substantial amounts of time bashing on the ideas of others on a lame EW blog like Danerics. So, I was just giving my thought that your time would be better spent focusing on your discipline and ideas.


    Good luck.

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  80. stop shorting the market doomers! Take off those crash helmets and let your scalp breath!

    http://endofbull.blogspot.com/2014/03/march-17th-spx-tsla-scty.html

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  81. Dead blog? You bet. Lost it all playing Bitcoin? Haha... not a chance dude. You should know by now that if there is anybody who has mastered playing a crashing market, you're looking at him. Why else do you think I have been so excited (for far too long) about the prospects of a bear market? Because I know how to play a crash like nobody's business... been there before. And as for Bitcoin, I survived it better than most I'd assume. I have a shit load more BTC now than I've ever... and you can only do that by not being in the BTC market while it's crashing. It also helps to have your coins spread out all over the place. CaVirtex, Bitstamp. Pretty simple shit.


    Now... keep in mind that I can see email addresses and IPs. Although you tried to make your comment look like it came from Wags... I know where it came from.


    Careful buddy. If I see one more comment from you like the one above, you're gonzo. Got it?

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  82. I can see which email address and IP your comment came from and sadly they look oh so familiar. Knock that shit off or I'll just have to end your presence here permanently. You know the rules for fuck sake.

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  83. SJ and GP. I can see your email address and IP's. Don't impersonate. And don't come here and insult Albertarocks, and then point to your own blog. Got that?

    I trusted you kids while I'm gone, and you just do the same shit while my back is turned that you have always done. Either behave here or you're gone for good. No skin off my ass.

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  84. Hey Alberta, I am glad you are back and that I was wrong! I just made a (wrong) ASSumption based on your disappearance. glad to hear it.

    I'm obviously myself and not trying to impersonate wags (if you are talking about my other alias Occam's, I made it pretty clear that was me right there in the profile, and I made it when I made my blog)

    I obviously know you can see email and IP. I don't really care, and you should review the responsibilities of a blog moderator in disqus terms of service. i would be fascinated to know of fake SJ was really fake though :)

    cheers mate I won't plug my dumb blog again :)

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  85. I had originally intended to retire GP and be Occam's dissector (but not hiding who I was before), but then Dan went and inadvertently banned OD in a crossfire. he doesn't seem to understand disqus administration so well.

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  86. You are more than welcome to plug your blog here. I have 'always' welcomed other bloggers to come here to spread the word. I just think it's kind of stupid to insult your host (me) before you do it. What did you gain from that? Absolutely fucking nothing except another dark mark on your own name.

    Actually, a big part of why I have just walked away from the stock markets for the time being is that my son asked for my help in promoting his business. It turns out he is an absolutely amazing young man with a business sense to die for and a knack for making money, the likes of which I have never seen before. I have seen him make more money in two weeks than I ever made in a year. Smart as hell but at the same time he is the hardest working man I have ever seen. A pretty darned good combo if a guy plans on getting rich.

    Anyway, he asked me more than once to join his firm and promote it, so I finally did. I'm pleased to say that his business volume jumped 40% in the 6 months that followed. So we're making a hell of a lot of dough while the sun shines and literally don't have time to waste on markets that are never going to fall until the bankers literally lose control. Which means there can never be "a nice little pullback". It's going to crash in absolutely brutal fashion, but only in conjunction with a crashing bond market and soaring rates. IOW, the big deflationary scenario. And that scenario is simply never going to happen as long as the bankers can keep it afloat. How long is that? I have no idea, but we are all crazy to fight it. Could be 2 more years of upside, 17 more years, or just 3 months. I have absolutely no idea. In other words, I don't think there is any doubt now about what is going to happen... the only question is "when". And I dunno.

    In the meantime, my son married an absolute knockout blonde last summer... a girl he hadn't seen since high school 10 years earlier. Tall, gorgeous athletic girl. About 15 minutes after the wedding she was pregnant and I'm going to be a grandpa in Sept. for the first time. But we've all been so busy running a hell of a successful business they have never gone on a honeymoon... until last night. They finally flew outta here at midnight and this morning they took off for two weeks on a sail boat in the Caribbean. Both my son and his new wife are also licensed mariners so they rented a 40 footer in the BVI... and they're on the water as of this morning. This is not their boat in the picture, but it is identical in size to the one they rented and that is the British Virgin Islands where they are.

    Other than that, life sucks. lol

    And like I said... don't feel that you aren't welcome to plug your blog here. I welcome that. I just don't welcome prick behavior and you of all people know that.

    I hope you are well.

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  87. That is Awesome !!! I love hearing success stories and I am so happy for you, newly minted grandpa!! That will be tons of fun. Best to you. and again apologies, it was rude, and I am often rude and uncouth.....

    In marketing terms, "shock jock" comes to mind :). Lesson learned.

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  88. Dan's an irresponsible asshole. Other than that I like the guy.

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  89. AR, I was doing nothing of the sort and always respect you. Look again if you think I was. I know you can see all about me. Never concerned me because I know you are a normal good person. Somebody pretended they were me here, then took a screenshot, and pretended. I wanted to make sure people knew that was an imposter.

    Nice to see you!

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  90. I would appreciate you looking again and confirming what I said. I have never impersonated. Always only spoke under SJ. Somebody impersonated me blow.i would be curious to know who it was.

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  91. Oh it is fake GP. Have no doubt my tin foiled hat friend.

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  92. none of his ideas about Wags were off base

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  93. yah he's just so far off base he's not in the stadium ;)

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  94. whoa whoa whoa, let's here about this screenshot lmao

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  95. yes please AR, can you weigh in on whether Fake SJ down below was me, or actually real SJ showing how many screws he has loose?

    I mean we already know the guy has shorted the market at a price higher than the market printed in a given day before, he's just that amazing.

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  96. If it was you, it came from an IP address other than Genuine Pleather's IP address. So there is no evidence it was you. By exactly the same token, it was not the real Soul Jester either.

    So you really should take back "the attitude" portion of your comment above because absolutely nobody gives a rat's ass that you happen to think SJ (or anybody else) has "screws loose". That kind of chat is for Daneric's blog and not this one. YOU FUCKING WELL KNOW THAT.

    Who gives a shit about at which price SJ might have shorted the market? Who's business is that? It's none of your business. It's none of my business. And it's none of my readers' business. The only reason you want to talk about it is because you are a tormentor... a troll. So knock it off GP.

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  97. Ok, we're going to put an end to this childish discussion my friends.

    First of all, I owe SoulJester an apology. In a reply to GP below, I gave the impression that the real SoulJester had posted the "fake Souljester" comments. That was pretty careless of me because what I meant was "whoever is impersonating SJ... if he does that again he's banned for good". Because both of the "fake Souljester" comments below came from two different email addresses [that were damned near identical] and a single IP address. And as advertised, that IP address is now banned from this blog. So are the email addresses although to a troll that particular aspect is no problem. But the IP.... if they want to find a different address to work from, I'll just ban that one too. They soon run out of libraries to work from.

    On a side note... of course I will never divulge any of those actual addresses to anybody.

    In summary, those comments that came from somebody who was impersonating SoulJester DID NOT come from the real SoulJester.

    But neither were they posted by Genuine Pleather as far as I can tell. I have no particular reason to suspect it might have been GP either... other than that he is a bit of a prick.

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  98. Haha. Thanks David but I'm not really back. Just dropped in to stop this nonsense from tarnishing this dead blog. It's image is clean, and it will die that way.

    Alternatively, I can just cut off the comments and be done with it.

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  99. Oh? I took your comment below to mean, that it was SJ pretending it was not SJ. It was NOT SJ? okay then, sorry.

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  100. hahaha. well thank you for clarifying, because I thought you were saying it was really SJ. I will not have to edit and apologize in lots of posts. UGH

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  101. That is entirely my fault. I apologize to you, to SJ, to everybody for having been that careless.

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  102. I had already apologized once to him for thinking it was him then you made me think it was him again! :P

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  103. Katzo and I have a bit of history over at Pretzel's awesome blog. If Katzo doesn't have a troll flaming him so that he can scream for attention, then he will create a troll by taunting others so that he can cry for attention when they slap back.

    He tried that with me at Pretzel's and came out the other end of that brief encounter by being banned to his own room (on Pretzel's blog). So I doubt he's going to waste his time bringing his nonsense here. He 'did' post one or two comments here about two years ago.

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  104. And on a totally different topic...

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  105. Thankyou for sorting this out.
    Just beware of GP's blog. He's a computer whizz kid , and he can be capable of a lot more than you realise.


    Peace Om !!

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  106. No problem SJ. My apologies for having inadvertently fanned the flames for a half a day or so.

    And now I see that one of the more accomplished blowhards is on my case over at Danno's again. Hahaha... Jesus that shit just never stops does it. Which is exactly why I don't hang out in that negative atmosphere filled with negative people. And although GP is having fun at my expense over there (while being decent and relatively cordial here), it's not GP I'm talking about in the next paragraphs.

    Successful people know that one of the best philosophies of life and roads to success is to surround one's self with other successful and positive people. The negative folks... well they just naturally gravitate toward each other into a huge gathering of... well basically it's just a huge cluster of warm bodies that don't produce much. They end up in a world where the only direction they can look is 'up'. And that's where they see those of us who are successful. Envy is one of the inevitable penalties they have to pay for having made the choices they make. And envy is the mother of vitriol. So as long as the host is willing to host a site that caters to the negative thinkers and give free rein to the dialogue... what we see over there is exactly what should be expected. As you know, Danno's site didn't start out that way.

    The punk over there who is throwing the latest barbs my way knows absolutely nothing about me, but he has always been furiously envious. Probably because I simply have more friends and garner far more respect than he does. And dare I say... deservedly so. That issue started on a different blog years ago... long before this one was hatched. He knows absolutely nothing about my life, nothing about my successes, about what an incredibly successful family I come from, about my successful siblings, about my successful cousins, nieces and nephews, about my successful children, about the small and very lucrative corporations we own... or the giants some of us help to run (VP of Encana for example). He knows none of that... and yet he today exhibits exactly the same characteristics he was showing when I first met him over 3 years ago. He hasn't advanced one inch. And to me, that is exactly what should be expected from a person who is satisfied with trying to appear as the big frog in a small negatively charged pond.

    Right now SJ, my life has never, NEVER been sweeter. At this very minute my son is at the helm of a 40 footer in the British Virgin Islands. While he and his gorgeous wife (carrying my first grandchild) enjoy a late honeymoon, I'm holding the fort at his corporation and patiently await his return. Because when he gets back we have a huge problem to deal with... how we are going to handle all the business we have on the books? Essentially, we are fully loaded with all the business we can handle in 2014. A nice problem to have... trying to hold back expansion. Or do we absolutely 'have to' start taking on some debt and blow the doors wide open? Probably... since our business is more or less recession proof. No city is going to shut down it's life supporting infrastructure systems no matter how much shit hits the fan.

    Life for AR has never been better SJ. Those who love to speculate about "what happened to AR", and then just draw the conclusion that "he must have gone broke with Bitcoin"... they literally make me roar with laughter. But hey... that's exactly the type of conclusion that negative thinkers would make. Good people who have a naturally positive attitude (Chartrambler is a prime example) know better.

    I wish you nothing but the best going forward SJ. Fill your life with positive people, walk away from the negative ones... and never look back. Take care.

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