Monday, November 25, 2013

Charts 11-25 a.m.: Proposed terminal wedge, no. XXVII in a series ...

This wedge finishes up at 3:00 P.M. Wednesday, just as the December POMO schedule is announced by the Fed, with the Standard and Poor's 500 Index right about at 1818.50.

Should the POMO calendar show a real "taper" on the purchases, I would bet we will have one of the great final hours of trading in quite some time, losing 40 handles into the close.

VIX did bang out some room on its bullish channel this morning; it still looks headed for the 11s.

SPX 11-25 a.m.

5 comments:

Permabear Doomster said...

re' Should the POMO calendar show a real "taper" on the purchases, I would bet we will have one of the great final hours of trading in quite some time, losing 40 handles into the close.'
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You suggested the same thing at last QE schedule.

Honestly, I don't get it.

WHY do you think this? Just how can you possibly come out with something like that?

Hell, I'm starting to wonder if you're 'going daneric' on us.

Sorry, that is probably the most offensive thing I've said all year, but really...as I have asked before..

WHERE is your 'throw in the towel level' ?

At what point do you give it up..and concede that QE is going to relentlessly push this market higher...UNTIL the QE stops?
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I'm staring at your chart, and it just looks...stupid.

I'm trying to be...diplomatic here, but it is getting increasingly difficult.
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I see people STILL shorting the indexes, and this is plain crazy, the SAME month that the Dow has broken.and confirmed a GIANT bull flag.

The very notion that we're on the edge of a major wave lower..is madness.

Christian Gustafson said...

We had this event last month, now we get it again, arguably the one sure thing that would put a cap on this and bring back the bear.

There are problems out there, real rumblings -- the TOMO repos are evidence of that.

You are free to believe that the Fed can create inflation, Doomie. I simply do not. Deflation cannot be stopped, QE only creates more debt.

plymster said...

For someone who's not really well acquainted with the arcane nuances of TOMO Repos, what does all the recent activity mean exactly?

I see that the Fed is buying Treasuries and MBS from the Primary Dealers via POMO, but what does it mean if they are temporarily selling back treasuries? Could this just be some mundane activity for recordkeeping purposes (ie: BofA and JPM need to keep a larger amount of treasuries on hand during Q4 to support some sort of merger activity, or routine form of business)?

Or does it indicate something more critical, like the primary dealers are desperate for assets to pay off some of their debts?

Bryan Franco said...

perma - if it was just gold.. if it was just gold and silver .. if it was just gold, silver, and copper.. wait, no, if it was just gold, and silver, and copper, and just about every agricultural commodity that has been in decline for some years now. but driving gasoline too? now i've reached my tipping point! perma - the commodity complex is 'saying' that the global deflationary scenario is one that we are definitely not out of the woods from. let me see those join the party, and i will start drawing nested ones and twos northward. if we are in the midst of an epic equity boom, the move will be highly nonlinear and truly impulsive looking, with plenty of time to join the party. a move from 666 to 1807? what joke compared to 1807 to 18,070. sorry, i realize this is supposed to be spx related.

Permabear Doomster said...

Franco..I DO believe we are in deflationary spiral.

I am a follower of Armstrong, and he IS very much of the deflationary mindset...since the govts are hounding capital.
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Yet..equities rise...for a number of reasons, which I've been over a thousand times.

We can..and ARE having both. Inflation in equities - as demand/new money seeks a return...whilst commodities reflect the reality.