Saturday, September 28, 2013

Books: some recent acquisitions

All of this waiting on events this week, enduring the wave 4 (on my count) doldrums, is tedious and tiring.  The good news is, I discovered an excellent bookshop in in the Ballard neighborhood of Seattle, and braved the heavy rain today so I could raid the place.

Anderson's Books of Seattle is located just off Market Street, around the corner from where my family likes to get good pho now and then.  It's a small shop, doing a lot of internet business, but the selection on hand was outstanding and very nicely priced.

First, I found a really slick Heritage Press edition of Brave New World, in an orange binding and with a slipcover:

Aldous Huxley, 1974 Heritage Press ed.

Anderson's has a ton of these Heritage Press editions of various books, bought from someone who collected them for a very long time and took good care of them.  Here's another, Suetonius The Lives of the Twelve Caesars:

Suetonius, 1965 Heritage Press ed.

I found a hardcover of Richmond Lattimore's translation of the Odyssey.  His Iliad was a staple of my youth.

Odyssey, Lattimore trans, 1979 printing

And, to finish up the classics, a nice clean copy of Bury:

J.M. Bury History of Greece, 3rd ed., 1959

An Oxford Press edition of Jeremy Bentham's Fragment on Government, to join my general library of English political philosophy.

Jeremy Bentham, Fragment on Government, Oxford, 1951 printing

A general history of Latin America, published by Knopf:

Herring, A History of Latin America

And, lastly, a clean copy of that very strange book Tom Wolfe wrote so many years ago.  I love Tom Wolfe.  Also, I love Tom Wolfe.  Lastly, I love Tom Wolfe.

Tom Wolfe, In Our Time, 1980

The literature and history section is especially strong, and I am eagerly planning another raid.  He has an old Rodale copy of Farmers of 40 Centuries, which I would have nabbed if I didn't already have one.  There's a bunch of Theodore Dreiser and some Solzhenitsyn I'm going to plunder, too, like a fiend.

If you live near Seattle and you appreciate good books, visit this bookshop soon, it's easily in my top three list in the city now.

I also had a good visit to Wessel & Lieberman in Pioneer Square recently.  Here's what I found.

I'm a big fan of John McPhee's nonfiction writing on the world.  Here is his book about the Swiss and the Swiss Army (the Swiss themselves).  I continue to accumulate his books when I can, as they are always good reads.

John McPhee, La Place de la Concorde Suisse

Then I found these gems, a couple of signed first-editions.  The late Jim Sanford was once president of the Mountaineers club of Seattle, and trail guide author Robert L. Wood signed them nicely for him.

The books detail two of the pioneering expeditions into the Olympic Mountains here in the 1890s.  In addition to his legendary trail guides, Robert L. Wood has also compiled the histories of these exploits.

Robert L. Wood, Men, Mules and Mountains, 1st ed.

I had already read his book on the Press Expedition, the story of which is funny as hell and very well-told here.  Setting out in the dead of winter, they get seriously off course in the Goldie drainage (a box canyon), and hilarity ensues.

Robert L. Wood, Across the Olympic Mountains:The Press Expedition, 1889-90, 1st ed.

Heck, even Goodwill has been good to me lately.  I found this spotless copy of the first three books about Fafhrd and the Gray Mouser in Lankhmar, Fritz Leiber goodness:

Fritz Leiber, The Three of Swords

Re the markets, we really could get banged up Monday, perhaps even dropping down to 1660 SPX, the mid-Bollinger on the weekly.  It won't stick, however, because they'll work out something, and trigger the final rally I've been expecting for forever now.

We need the blow-off top soon, to cap the rally since 2009 and welcome a fresh and friendly Bear market to the scene.

Thursday, September 26, 2013

Charts 09-26

Another wiggle in the interminable wave 4 today, but things still line up nicely for a top in a couple of weeks.  Channel and count adjusted accordingly.

It would be nice to gap up and out of here, up into the 1700s, in the morning, and leave this wave behind us.

SPX 09-26

Wednesday, September 25, 2013

Charts 09-25: Wave 4 in?

We have what now looks like a bullish triangle for our wave 4, counting it a-b-c-d-e, finishing up in the .382 retrace area of the previous leg up from 1640.

SPX 09-25
SPX 09-25 30D

The McClellan Oscillator had a second day in a row with a small change, so we should expect a larger move on the indices soon.  VIX and the volatility ETFs weren't too worried about the tape today.

Sadly, Karl Denninger has lost all touch with reality now and is off in space with his delusions while his favorite stock swirls the bowl, lashing out occasionally to ban the few remaining thoughtful participants on the ol' TickerForum.  Would you buy a tech-oriented investment newsletter from this nutcase?  I didn't think so.

Asimov will subscribe, if the price is right.  How about ... a dollar?

Hey, wait, I just noticed that with the extra time spent today, now we can count this entire wave from the 1627 low if we wish.

SPX 09-25 counting from the 1627 low

The important thing for me is having an unbroken 2-4 trendline, which I thought we wouldn't get thanks to how we bounced around down there.  But this wave ate up enough time now to give us a legal count on my rules.  And, counting the wave 3 from 1628, now we can see that this wave 4 has actually NOT exceeded a .382 retrace.

I like it.

Monday, September 23, 2013

Charts 09-23: Reader mailbag

I decided that the blog could use a little fresh paint, so I played with the Blogger template editor a bit.  The wallpaper image at the top is Loredo Taft's "Fountain of Time" sculpture located between the University of Chicago and the barbarous and dangerous regions to the south and west of Hyde Park.
"Time goes, you say?  Ah no, Alas, time stays, we go."

Death in the "Fountain of Time"

Today's tape stayed within bounds and did not look impulsive.  We'll look for a flat pattern on this proposed wave 4.  I stay out of the way of wave 4's because they are designed to eat your theta and drink your milkshake.

SPX 09-23

Loyal reader "Joe" asks a scintillating question today:

Let me ask you this: where does China, Japan, etc get their dollars they use to purchase US treasuries (which is a dollar-denominated ASSET)? They come from the US!!! So how in the hell do you expect foreigners to PAY US BACK in the very currency WE control?!
This is why Karl Donglicker and the rest are so bloody wrong in their entire macro analysis. They fail to understand the nature of fiat currency. We have no fixed convertible currency to gold or anything else; our debts are denominated in our own currency, not the euro, yen, etc.

Your ready abuse of the Karl Denninger tells me that you are a serious and sophisticated man, worldly and refined.  So I will take your question seriously.

The short answer is that our crappy unbacked "fiat" currency is actually very hard indeed, backed not by PMs but by crude oil itself, by the convention of the petrodollar.  As long as oil is priced in U.S. dollars, then any owner of U.S. dollars may trade them in the world markets for liquid energy, the lifeblood of the modern world.

So the entire world scrambles to obtain them, at least they do today.  This is quite a privilege for us, but it's hardly a natural or permanent state of affairs.

[editor's note: here I was forced to work on some work stuff, but I really wanted to post the chart tonight, so I'll finish the answer in the morning.  Promise.]

The fictitious world of fiat ultimately ties back to the real world via energy, which is why the Saudi America meme is pushed so hard to the credulous by propaganda outlets like Forbes magazine.  China and Russia understand the petrodollar very well, and are positioning themselves for the post-postwar era after Bretton Woods.

A debt-based currency system reaches its maximum point and deflates .  Until the first RE bubble blew, we were able to create new credit and debt in the private sector, until it reached its own top via zero-down ARMs and MBS derivatives.  Lately, private-sector credit creation has been student loans and 8-year car loans.

QE is not raw printing, it's a last-ditch effort for the Fed to support credit creation here in the America.  Every dollar added to the balance sheet is another dollar of debt on the national tab.  It only has value due to our faith in the idea that it is money good.  This faith will falter.

I may concede your point if the Fed picks up the tab for the municipal and pension obligations in the country, as well as the derivatives book of the TBTF banks, if things continue smoothly afterwards.

Sunday, September 22, 2013

Charts 09-20: October New Moon the next candidate top

RSI on the SPX peaked with the awesome FOMC spike this week, so much so as to suggest it was the end of a wave 3, not a 5.

Diligent Elliotticians should then find the current channel and figure out where we are within it.  I would argue that we completed the (a) wave of the 4th wave correction of the W3, with (b) set for Monday, and further selling-off on Tuesday and Wednesday.

Monday's rally off Merkel's re-election should not set a new high on SPX.  It should be contained around the 1720 area, allowing for (c) of 4 to take us just below 1700, or mid-session Wednesday according to the channel as drawn.  Late this week we will have Durables and GDP, should be exciting.

A top into the SPX 1751 area would make for a decent-sized 5th wave here, about 1.618x the wave 1 from 1628.  Maybe it will even unfold as an ending diagonal, confirming our expectations of it.

SPX 09-20

BBRY may be a zero by year-end.


To my knowledge, Karl Denninger is not a registered financial advisor in the State of Florida.  If he has mislead you with his advocacy for BBRY or other benighted stocks, whether with your own or someone else's money (greets, Asimov), I am providing the link to report an Investor Complaint to the U.S. Securities and Exchange Commission for your convenience.

One more thing, I think Fred Reed's piece over at Taki's Magazine is important and should be read widely.  If you're new to Taki, whom I discovered in The American Spectator, geez, a couple of decades ago, then stick around and enjoy the rest of the site.

Good luck this week!

Friday, September 20, 2013

Charts 09-20 a.m.: Nope, no top yet

... but I think we have a better idea of a channel here, and it points ahead to the 1752 area again in a few weeks.

The next window, then, for a final top would be SPX 1752 on about October 7th.  This is immediately after the October New Moon (10/5), and immediately before a "major" Bradley turn date, 10/8.

It also has a nice correspondence with 2007.

SPX 09-20 a.m.

This count puts us in a wave 4 that will target wave (iv) of 3, then rally to a final high and rollover mid-channel.

Most of next week should be the usual wave 4 tedium.

Wednesday, September 18, 2013

Charts 09-18: Looking for a top

First, here's a neat pic of some moss I took out in the Bogachiel Valley in Olympic National Park; it makes for a great wallpaper.

Olympic moss

Now that we have got that out of the way, let's look at the long-awaited blow-off move that started today.  I count this as the start of a 5th wave move, with an ideal target in the 1751 area.

Here's my local count.

SPX 09-18

SPX 1751 would be an ideal target based on wave equivalence between the huge A and C waves in the entire move up from the March 2009 lows:

SPX 09-18 5Y

A strong thrust into the 1740s tomorrow that gives a viable wave count here and touches the far wall of the channel up from SPX 1627 will have me looking for a top.  Selling into opex will be muted, picking up next week depending on the elections in Germany.  ETFs like SPY will take an initial hit Friday morning when they go ex-dividend.

Overall count of the proposed ABC 5th wave here.  This is part of a very large ending-diagonal from the 1266 lows, where we can count each impulse up as a triplet.

SPX 09-18 60D

Um, the McClellan Oscillator is kinda-sorta overbought tonight.  Just a wee bit.

Good luck out there.  May we soon witness the Return of the Bear!

p.s. Lunatic_Fringe had highlighted several fib extensions at about the SPX 1744 level.  That may be worth watching, too.

Monday, September 16, 2013

Charts 09-16: Final rally channel?

Dropping all of the chart numbering for a second ... returning to a simple channel from the recent low.

On this chart, it's got GREEN lines.

Project it up ... so ... can we make my target EOW?

SPX 09-16 a.m. - final rally channel?

Sunday, September 15, 2013

Charts 09-13: Go go go to the top

Well, I'm back from the Idaho, had a great time.  It will be even better if we can make it to my target of SPX 1768 this Friday.  As of Sunday night, /ES is gapping up 20 handles, and this ambitious target does not look impossible now.

A little overnight /ES, some short covering, some "peace" in the Middle East (thank you, Mr. Putin), some Fed pumping, some more short covering, a September op-ex week, and a pending election in Germany ... this week could be a real beauty.

I came out of the shit a day early and drove 500 miles Friday morning so I could surprise my girls at their elementary school.

find the "Repo Man" reference

The Sawtooth Wilderness north of Boise is an extraordinary place, an easy pick for a national park if the Idahoans didn't want it for themselves.  As a national park, it would draw too many visitors from abroad, and the good people of the Idaho would not be able to hike with their dogs there.  I saw lots of pooches.

A point-to-point hike across the Sawtooth Range completely blew my mind.  As a Pacific Northwest hiking snob, I had no idea of the scale and wonder of this place.  All WA hiking snobs should go see it at once.  It beats the Alpine Lakes, including the Enchantments, and most other parts of the Cascade Range outside of the Picketts in the North Cascades.  The Sawtooth National Rec Area is a little smaller than Olympic National Park, but packed full of alpine lakes and 10,000 ' peaks. 

easy-peasy national park-worthy

The Sawtooths are splendid.  They are Boise's dirty little secret, which they do not want to share.  If an NSA wet-team had abducted me off the street and dropped me into the place, I would have sworn it was the High Sierra.  The only thing missing would be the incense cedars and the sequoias -- lodgepole pine is the dominant tree in the range, from what I can tell.

from the Cramer Divide
above Lake Ingeborg
Flying a kite from the pass above Lake Ardeth
Dawn at Toxaway Lake - a typical scene!

So we are looking for a dramatic finish this week, one that removes all the shorts from the pool and sets us up for a top -- after the German election.  Let's go parabolic:

SPX 09-13
Zooming out, the tape can touch the top line of the rally channel from 2009 and begin its descent.


Friday, September 6, 2013

Charts 09-06 a.m.: so are waves 1 and 2 in?

Did anyone notice that we completed a legal 5-wave impulse up this morning, off the 1628.05 lows?  My count has no overlap between (i) and (iv), similar waves (i) and (v), and an unbroken (ii)-(iv) trendline.

The selloff to 1640 took us to a .618 retrace ... which would make wave 3 UP directly ahead of us.

We have 2 weeks now to make it to the upper boundary of the 2009 rally channel at 1768 SPX.  That would be a pretty blistering pace -- can we do it?  Maybe the market will be excited about the Peace in Our Time being achieved inadvertently by our incompetent chief executive?

Can we get a proper blow-off top now, a real doozy here? 

I will be severely off the grid hiking in the Sawtooth Range of darkest Idaho all next week, so no posts here until next weekend.  Heading out to the Boise at 6 a.m. tomorrow, packing a 7-piece Orvis fly rod and a mess of scotch.  These are survival tools.

Good luck to all!

SPX 09-06 - legal 5-wave impulse from 1628.05 low

Monday, September 2, 2013

Charts 09-02: Last rally

We had a plausible complete count (updated -- see the chart) on the pop down to 1628 on Friday, and now we have 3 weeks to head up to a final top at 1768 into the German election.  /ES futures are up 15 handles, looks good.

We're looking for one last 5-wave move up; this week could contain subwaves i and ii of the set.  If ii finishes this Friday as a sharp selloff, that will leave a lot of people short and looking for the gap down into a wave 3 kinda Monday morning ... which they won't get.

SPX 08-30