08.08.2012 -- Topping or break out..

My 7 month old got hand, foot and mouth disease.  Its a virus sort of like chicken pox, you only get it bad once.  Its not fun.  They cant sleep, so therefore, neither do you.

Short answer here for an update is that we are either on the verge of a breakout or breakdown.

There are quite a few arguments against breakout.

1) Volume is pathetic
2) Earnings have damaged quite a few previous growth leaders
3) Lots of divergences (DJT, Russel 2000, SOX) .. all lagging the S&P and DOW
4) Lots of falling RSI's on rising indicies

.. that said.. the market is basically ignoring anything negative.  Anything negative just means more QE.  Its all about flow... there's just a lot of money that needs to go somewhere.  Central banks around the world and just crapping money and it has to be put somewhere.  Always remember that cash is a liability on a bank balance sheet.  Even if the investment earns negative return, think Swiss T-bonds which have a negative yield, it's better than having cash for the bank because it's still considered an asset on the balance sheet even at a negative yield.  (which is kind of stupid btw) but this is a new world and a new situation with new rules.

I'm not going to bother posting a chart tonight.  My focus is not on super short term movements anyways.

1422 is a line in the sand here.  After 1422... flow takes over and just massive amounts of money that needs to go somewhere other than cash could push this thing to new all time highs.  Even when you have Rosendickbag on TV saying they should do endless QE. 

This is a mess folks. It really is..

You have insane monetary policy pushing money into assets with a economy that refuses to respond and the money that should be driving inflation higher to stop the insanity, is doing nothing except driving stocks, PMs and energy prices higher.

Guess what... stocks, PM's and energy are not in the calculations for inflation measures.

We could totally crash sometime soon... or we could end up with the S&P at 1600, Gold at 2500, and Oil at 175$ a barrel.

Japan is our only reference for what might happen going forward here... but their situation was just different.  So much so, that I don't think it can serve as any frame of reference for what will occur here.

Long story short... we can go to new highs... or we can crash.  Either way... over a long period of time... nothing good will come of whats happening now.  It will be all bad.

I predict right now that 95% of people currently in their 30's and younger (and some in their 40's) will never retire and be destitute in their "golden" years.  30 years from now the US will be full of poor old people.  Very different from now.  The US will ultimately resort to what many asian countries do.  The grandparents (those in their 30's now) will move back in with their children to raise their childrens kids while their kids work.  Not completely by choice but mostly out of necessity for both parties.

I formally declare this market and country as being FUBAR'ed.

GL

CJ

08.03.2012 -- Short term pivots

Today confirmed what I suspected, and the last chart in yesterdays post is significant.  I finally figured out what pivots/trends that this short term move is using.

Not much else to add really except that it still feels like the PPT is involved here, likely due to the elections coming up.  Obama certainly does not want a market falling apart into November, so much will be done behind the scenes to keep it as presentable as possible.  With so much poor economic news, downward GDP revisions, Spainish and Italian bonds falling apart again, the FED disappointing.. certainly didn't expect to see the S&P still sitting at 1368 after all that.  Even add on top the general loss in market confidence with the Libor scandal and Knight Capital HFT SNAFU.

Anyways.. here's the short term pivots/trends to watch.  Until these are broken north or south, we will just bounce around inside them.

08.01.2012 - 1368 first stop

No real change from yesterday.  Not a lot of market movement.

I will say though, there are some important sectors that have been underperforming the entire ramp and this selloff. 

Today for example, DOW down 37, S&P down 4.  

The NAS was down 19 or .66%, the Russel 2000 was down 1.65% and the DOW Trannies were down 2%.

The only area that seems to be doing o.k. that is a growth indicator is the SOX. 

Next movement is still up in the air... but we at least appear to be targeting 1368 before the next movement decision;

Was messing around and these also look like important trend lines short term;