Friday, June 28, 2013

Pump-n-dump Denninger

Blackberry took a dump on nasty-bad earnings this morning, and everyone over at ZeroHedge was laughing out loud at Karl Denninger and his expected losses.  Of course, ZeroHedge is rife with gold bugs and inflationistas, so they were only too glad to gloat at his pain.

But then someone mentioned that he had exited his positions prior to earnings, that he was flat.  Just a lowly stock-pumper and platform fanboi now, I guess.

His BBRY Tickers no longer state a position, although I think he picked up some calls today.  Who knows.  So what kind of pain did his sycophants on the board take today?  Will they follow Karl on this buying opportunity?

Face it folks, the value of BBRY is in the toner in the copier machines, and in its buyout value for pathetic, irrelevant Microsoft to launch their desperate mobile initiative number XXXIV (this time, for sure!)  They're done.

At the very least, pump-and-dump Denninger can do better than to encourage his flock to go long a broken mobile company into the maw of a consumer slowdown and epic recession.

So, you TickerForum people, insist that Karl post his positions again, especially if he's going to continue pretending that he's a member of the board, a gifted oracle to be consulted by their C-level executives.

If Karl is really a man, he'll go stand up for himself over in the Thunderdome of ZeroHedge.  But I doubt that ... what a douche.


The upper channel wall and the .786 retrace is at 1634 Wednesday.  Low volume melt-up into the July 4th holiday ought to do it.  Then we plunge again.

SPX 06-28 wave 4 triangle

Thursday, June 27, 2013

Charts 06-28: Wave ii of c of 4 in tomorrow

I put 28 miles on my odometer walking to work this week.  Look at this chipboard palace they are building in the Fremont neighborhood of Seattle, WA.  Instant tenements!

39th St & Greenwood Ave N
Here are the Last Men at the End of History, waiting for coffee in South Lake Union in their idling carz:


Tomorrow, looking for this to finish up early, possibly on an opening gap up, similar to what I am counting as wave (i) here.  Here is a decent, legal ABC count for our wave ii of c of 4.

SPX 06-27

Wednesday, June 26, 2013

Charts 06-26

Ideally, we'll close the gap at 1628 tomorrow at 3pm Eastern before reversing.

SPX 06-26

Tuesday, June 25, 2013

Books: some recent acquisitions

First, try these Google searches, they're great:
"at * we are passionate about *"
50 million+ hits returned, right?  Now this one:
"at * we are passionate about innovation"
282,000 results returned.  These are the great horrid clich├ęs of our time.  Too funny.

I'm so worn down by the fanatical overuse of "innovation" and "innovative", particularly among the promoters and publicists of all categories of business, that I went out and ordered a 1st edition of Edward Shils's classic essays on Tradition this week.

Edward Shils, Tradition

A great response to the cult of Progress that rules today, the late Professor Shils reminds us of what is lasting or permanent, why it is important, and why we need it.  I had this in student paperback, but I decided to get the hardcover ed. before the Treasury complex collapses and things go full-on Mad Max.

I bet Jim Kunstler would appreciate this book, a lot.

I picked up a first of Shils's Torment of Secrecy, too.  I mentioned this book and Fukuyama's comments on it last week.  I had not read this old book (1956) before, but am enjoying it now.

Edward Shils, The Torment of Secrecy

This one, I already had on my shelf; I read it many years ago.  It was sort of a gateway drug to finding Mises's Human Action and discovering the Austrian School of political economy.  The book occupies that strange land of very formal social theory in the mid-Twentieth century at places like Chicago and Harvard.  It's dry but good reading, if you have a taste for what they were trying to do here, establishing a "general" theory of human action and of society.  The book is still in print on Amazon.com.

Parsons and Shils, Toward a General Theory of Action

Finally, I found a nice copy of a Theodore Dreiser novel, a memorial edition published in 1946 after his death.  Mencken wrote the bawdy introduction, which proceeds to point out all of the flaws in both Dreiser the man and this greatest (in Mencken's estimation) of his novels.

Theodore Dreiser, An American Tragedy

I actually stumbled across this volume at a bookshop in Pike Place Market, where they mostly sell tourist books and trade paperbacks.  "Here's a hot one," I asked the bookseller as I checked out.  "Moving a lot of Dreiser today?"

We're big on the American realist novelists here in Deflation Land, the Dreisers, Frank Norrises, James T. Farrells, the Nelson Algrens.  They are always welcome.

Financial markets?  We're still heading up, end-of-quarter window dressing and all.  There are two gaps overhead -- and I bet we close them both before selling off again, per the chart I posted last night.


Monday, June 24, 2013

Charts 06-24

Some sort of ending-diagonal or bullish wedge formation like this would be needed to absorb the impact of this decline and let us bounce off the 200 DMA -- currently at 1506.

Otherwise, any kind of wave 3 that extends could do irreparable damage to the chart.  /ES is messy overnight, the S&P is back to acting like an ETF for the Yen.

SPX 06-24

Sunday, June 23, 2013

Charts 06-23: Three Peaks and a Domed House (again)

The sharpness of the drop post-FOMC last week surprised me, but the hints have been there for a while now with the series of Hindenburgs.

I'm counting the move as wave 1 of C of 4, with an important condition.  We really can't have a wave 3 off of this that extends.  A minimal 1.618x of the 77 handles gives us a 125pt move; even with a retrace this would break us down through 1500 and possibly much lower.  From the other E-W analyses I have seen, 1500 is looked on as a line in the sand for the top being in.

The remaining waves in C of 4 would need to get bottled up within the current channel or one not too steeply skewed off of it.  Final target for C would be 1510 if it is 1.618x A, but 1530 would be great, too.

SPX 06-23
Assuming we don't break down through those supports, crash, etc, then we get the final rally to new highs.  How about 1751 into September FOMC?  This would touch the upper wall of the 2009 rally channel and actually give us a plausible A ~ C resolution (see notes on 5Y chart).

SPX 06-23 1Y - showing push to 1751 Sept FOMC

Which brings us back to Three Peaks and a Domed House.  If we have one rally left in us, why that would take us to point 23 on the model.  The "expanded" 2008 tape I have been playing with then does a pretty good job of modeling the price targets (dunno yet about time) on the way down.  It even includes a bounce at SPX 666 (3 of C), before reaching a final low at SPX 570 in early 2015.

SPX Three Peaks and a Domed House

Chris Martenson podcast interview tonight -- "Neil Howe: The Fourth Turning Has Arrived".  I'll listen to it on my walk to work in the morning.

Wednesday, June 19, 2013

Charts 06-19

/ES futures are 4 points off their lows; we'll see if they can recover the rest of their losses overnight here.  The thing to remember here is that if we are indeed in a wave 4, correcting a W3 that ran from the November lows to May 22, then we have plenty of time for this to do what a wave 4 does, which is dick around and waste everyone's money and patience.  It's not necessarily in a huge rush to finish up here.

Until we break the B-wave up-channel on the SPX, I'm not convinced that it's complete, or that another count (like a May 22 final-top-top-top count) is underway.

Holding here and heading higher would draw a sort of mirror-image of the (c) of A path on the way down from the May highs.

SPX 06-19

My 7 year-old is reading so well now, that she does better reading alone than with me.  I miss our book time together, so we decided that a good fix for this is that I would read some of her books, staying a book or two ahead, and that we would discuss them later.

So I'm off to finish The Wind in The Willows.

Tuesday, June 18, 2013

Charts 06-18

Something like this?  As long as we can get through FOMC tomorrow, I'd like to see us loiter in this "B" wave until it really gets tedious.

SPX 06-18

Sunday, June 16, 2013

The case for an October top

One thing that is really interesting me lately is the fibonacci relationship among the waves since the 1266 low, for the waves themselves and their retraces.  It certainly suggests a very large-scale 5 wave impulse move, which would place us now in the midst of a wave 4 still in progress.

W1: 1266 -> 1474, 208 pts
W2: ~.618 retrace
W3: 1343 -> 1687, 344 pts, or 1.65x W1
W4: .382 retrace @1555
W5: equals W1 at 1555 + 208 = 1763, in mid-October

W4 and W5 are in italics because they have not completed yet.

It suggests more downside before a low -- also likely at a fibonacci-significant area -- and a final rally into the fall.  Remember, if we need to touch the upper wall of the 2009 rally channel, the longer we take, the higher it runs.

SPX 1763 would be roughly October 18th.  A sharp sell-off would precede the October 30 FOMC meeting, which would trigger the first minor wave 2 bounce.

SPX 06-16
The equivalent of the 2008 waterfall would then arrive late in 2014, but with even more violence, and look very 3PDH at the end of the day.

5Y

Saturday, June 15, 2013

Charts 06-14: Higher high at EOM July

The best thing the May 22 top has going for it is its amazing intraday reversal candle that echoed the 2007 top.  Since then, however, the tape has failed to put up anything particularly impulsive to the downside, and November channel support has held.  We still have the top of the big channel since the 2009 lows just overhead, suggesting that a run to the 1700s will take place before this is over.

I think they can manage to keep things under control through FOMC this week, setting up a 5th wave rally through the end of July, where the top of the 2009 channel will be right at SPX 1725.  This also suggests a top into the July 31st FOMC meeting, an excellent opportunity for another intraday reversal and slide.

This week will probably bore all to tears, if we are indeed finishing up the last few waves of a 4th wave triangle pattern.  There is a "major" Bradley turn date at the end of the week, if you believe in such things.

SPX 06-14
10Y

Monday, June 10, 2013

Charts 06-10

It looks like about half the population of ZeroHedge thinks Edward Snowden a brave and valiant whistleblower, and the other half suspects some kind of triple-layer cake of false intel, controlled releases, and much deeper scandal.  My instinct is to go with Occam's Razor and see him as genuine.

I just want to know whether Chief Justice Roberts was blackmailed with NSA intel into swinging his opinion on the ObamaCare case.  That one seems to be the cutting edge of rumor-dom, as far as I can tell.  It's all plausible now, there is no tinfoil any longer.

I'll also be interested in what else Snowden has to say, and whether or not he has a good deadman's switch with the real juicy stuff to protect himself in case he is ultimately rendered by the spooks.

The entire world around us is propped up by an outrageous lie, that being, that U.S. Treasuries have any value at all, that the debt has any claim whatsoever on brave Edward's generation and that of my own children.  It is our historic privilege to live to witness the entire Treasury complex collapse into dust, and to see our people freed from bondage.  Those of us who are aware of these things, we have front-row seats for the Big Show.  Long Jiffy-Pop.

Volatility tonight provided by the Yen; the /ES is and will keep tracking it closely.  The very small change on the McClellan oscillator today suggests a large move on the indexes in the next day or two, probably on sharp Yen weakness before it takes off north again.

The inverse head-and-shoulders firmed up somewhat today with a more level neckline, and if it's valid it targets new highs in the 1700 area.  Thursday would be lovely.

SPX 06-10

Sunday, June 9, 2013

Edward Snowden, American Hero

Godspeed, Edward.  You truly spoke Truth to Power.  Now I hope you don't get whacked.

the Edward Snowden


Recommended reading?  My teacher and friend Edward Shils's Cold War classic The Torment of Secrecy.

Edit: hmm, none other than Francis Fukuyama brought up this topic and book several years ago.

Charts 06-07: Crown Hill United Methodist Book Sale

As neighborhoods in a pretty secular city, upper Ballard and Crown Hill in Seattle have a decent share of small churches.  Most are old Lutheran churches, from when the neighborhoods were Scandinavian ghettos, some of which are disappearing.  Around the corner from us is the Crown Hill United Methodist Church, which has an annual book sale in their basement to raise funds for literacy programs.

I confess I don't know exactly what literacy programs are or why they are needed.  I started working with my own children at age three, and by five both were active, curious readers.  Most parents can't or won't go to the crazy extent that I have, assembling a vast private library, but the public libraries are well-stocked and available for them, gratis.  The excellent elementary school my kids attend is public and has a large and very-involved PTA.  There are schools in the Seattle system that do not even have PTA organizations -- can you imagine that? -- so maybe these literacy programs are for these people and for their kids.  OK, fine.  Learn to read.

Last year at this sale, among the romance novels and sun-faded books by Arthur Schlessinger (ecch!), I managed to find a nicer copy of Jim Kunstler's World Made by Hand than I had, and a neat old 1960s 1st edition of Medicine for Mountaineering.  So I had to go again.

My wife mentioned that this year you could pay $5 to get in to the book sale an hour early.  Sure, no problem, it's for a good cause.  And then I saw why this was so ... the booksellers were there.

I see them in Value Village once in a while, with their damned scanners.  An iPhone app looks up each book by UPC or ISBN or some such, and echoes back its market value.  Beep, beep, beep, they work the aisles like grocery stockboys, filling a grocery cart with any book they can find whose quoted value exceeds the thrift store price.  Arb the Schlessinger!

These guys don't have physical stores; they're strictly internet.  They could care fuck-all for the book or its author.  They're too busy searching for a yield.  I suppose I should appreciate them for the liquidity they add to the used book market, and maybe even for making possible the search-and-order simplicity of an abebooks.com.  In practice, these guys are annoying as hell.

The Crown Hill Methodists decided to get a piece of the action, so they opened the doors early for those of us willing to pay a little extra.  Good for them.  

Each had a good-sized box, and as soon as the doors opened, they quickly descended to the church basement for the tables of books (some 6,000+, I think).  They worked each row like Mexican apple-pickers, with ruthless efficiency, swipe swipe swipe, one book after another into their boxes.  At first it was all instinct, they knew what would provide the vig, but then things slowed down and they went to their infernal iPhone scanners.

If the church is smart, next year they will charge $20 to get in early.

Well, anyway, in the midst of this madness, working slowly and manually I managed to find a few that these jackals missed. 

Solzhenitsyn in tha haus dawg
Michael Lewis and Disney-free Bambi
I simply added a fresh jacket to each one, and they turned out great.  Super.

Last week I found a nice 1945 Heritage Press edition of the Federalist Papers in a new bookstore over on Greenwood Ave.  Very nice for six dollars.

Factions for a fraction

Charts?  OK.  

We are certainly setup to get the blow-off run to finish the rally from 2009.  There's a potential inverse-head-and-shoulders in play, a serious VIX (market-)buy signal, and the McClellan oscillator pointing up, up, up.

SPX 06-07
We could have new all-time highs as early as Tuesday, and I would love to see us touch the upper wall of the reflation rally channel this week.

4Y

Holy cow, it looks like the Karl Denninger is about ready to start manufacturing IEDs in his garage.  I think Karl's about done offering advice on how to fix things.  Well, bully for him.  

Now Karl just needs to ditch the cul-de sac coffin he's living in and go native in the sticks somewhere.  And get some geese! 

Friday, June 7, 2013

Charts 06-07 a.m.: A legal bear count

If you need one.  ;)

SPX 06-07 a.m.
Edit: /ES futures and SPY pre-market are up up up.

Maybe we finally get that blow-off move to complete the Jaws of Death, courtesy of that crazy-oversold McClellan oscillator.

SPX the crazy finish

Thursday, June 6, 2013

Charts 06-06: BTFD next week?

I took a few days off to wait and see and try to get a bead on the current correction, clear my head, get back-to-basics, plot out some channels, figure out where we're at.

Scoping out the current channels, I think the current drop will end mid-next week around SPX 1574, with one last strong summer rally to follow.  The rally could end at the July 31 FOMC, or even stretch through August if it's some sort of tricky terminal pattern like a big E-D.

Zooming out, it starts to look like this move may actually correct the giant move up since SPX 1398, instead of the sharp rally that began April 18th.

The important thing will be that it touches the other side of the giant channel since the 2009 lows.  That will mark the completion of the reflation rally and the start of the next true bear market.

Edit: OMG is the McClellan in oversold territory.  Wow.

SPX 06-06 a.m.
9M
5Y