Friday, December 9, 2016

The best the bears can hope for ...

... would be a draw down into FOMC -- obvious rate hike -- and massive short-squeeze to finish the year.

But such a move would complete 5 waves of a megaphone C.

Wednesday, December 7, 2016

End of December

That's about the next window to look for a "candidate top".  Oh, there have been so many!

The Fed hike next week is completely expected and will only retrace a bit of this final rally, taking us up again into year-end and the December New Moon.

Some day this war's gonna end.  And we will be there when it does.

SPX December snooze

Saturday, December 3, 2016

Charts 12-03: Italian referendum weekend

The ECB announced on Monday that in the event of the Italy referendum failing this weekend, that they would be ready to keep things stable with increased bond purchases.  So the market has been sanguine about this all week.  We haven't seen the march into hedges like VIX calls and volatility ETFs that preceded the Brexit vote.

the Fred Beckey

A "no" vote on the referendum essentially is the true beginning of the end of the EU, so I suspect that the reaction will not be so muted.  Of course, we don't want to see a lock-limit down on the overnight /ES Sunday, but a 30-handle gap open to the 2161 area of SPX would work nicely.  We would then sell off the entire week, eventually reaching an interim low at the December FOMC, for a couple of weeks of Santa rally.

But the larger goal for the next couple of months is to cross the big pink megaphone, then bounce into Spring with a phi retrace and backtest of the old rally channel.

Since the Donald won't be using the legacy media during his reign, I have added a free plug-in for his Twitter feed down the left panel.  A couple of ads are tacked onto the block, the impressions of which benefit the authors of the plug-in and not this blog.

I still can't believe that the financial press has advanced the idea that Trump spending will be inflationary.  If anything, you could start with the idea that they are taking a fiscal instead of a monetary route in all of this.  But the results will be the same, inescapable debt-deflation and an eventual spiral.  Globalism was the last act in a grand effort to expand credit, by exporting inflation throughout the world.  There is simply no easy or safe way to dismantle what we have built here.

SPX 12-03

Thursday, November 24, 2016

Now we chill out waiting for the reversal

We hit the top of the big megaphone, we're still hearing this stupid narrative that $1T of infrastructure spending now will somehow give us inflation, after all we have thrown up in desperation thus far.  Of course, the inflation already happened, over decades, so to expect it now is just insipid or deceptive.

At some point the headline makers will figure out that Trump's infrastructure gambit is an effort to trade debt for concrete things (as opposed to financial industry graft), while we still can.

The 35-year bond bull has reached its terminus.  Now we get to experience reality again!

Once we go, all the chart destinations for support and resistance fall into place.  The Italy referendum is the next big hurdle.  Burn down the disco.