Wednesday, October 21, 2015

S&P up against resistance

Shanghai Composite off 3.2% last night.  S&P 500 may get the memo soon.

NIRP announced at December FOMC?  They'll need a reason for it, of course.

SPX 10-21

36 comments:

Christian Gustafson said...

Pretty much the worst-case scenario in this chart, that we begin a downturn into the October FOMC, and they actually hike rates.

Bicycle said...

I have trouble wrapping my head around what NIRP in the US will look like. My intuition is that USA will not be nearly as compliant as Europeans at outright NIRP... we would see mass bank runs and failures in the style of the GD. But just months ago I did not think the Fed could be so insane as to even talk about it publicly as being an option so...

Christian Gustafson said...

Mass bank runs? Who has savings?

The big money will see capital appreciation in 10Y etc Notes and the Long Bond.

It will work until it breaks again.

T.Berry said...

that would be a gift to put additional funds to work, we just entered best period to own stocks, oct to april. not expecting new ath's till early '16 anyway

Bill Bober said...

New ATH in early 16? LOL!

Christian Gustafson said...

H&S local top off the 2020 SPX neckline?

Targets 2000, then beyond.

Bryan Franco said...

CG - Yes. And love how the S&P 500 Index gap was respected as resistance

Bill Bober said...

Keep your eye on oil, it's about to get very interesting.

scott said...

Minimum balance on checking to avoid fees, inflation, fees for various transactions...all these add up to NIRP already. They are charging you to let them use your money and your labor. As long as the Fed owns the money, they own your labor...

None of your accounts are demand deposits, but rather "the new accounts" FDR set up in '33. They own you and you have to pay THEM to use your own body.

NIRP INDEED! more like SLURP: Slaves Living Under Repressive Putzes!

Sarah Bell said...

Yes and the great news tonight is Paul Ryan is the new Speaker of the House.

Yes - we are doomed.

Bill Bober said...

"Minimum balance on checking to avoid fees, inflation, fees for various transactions." Ever hear of a Credit Union?

Christian Gustafson said...

Does anyone else think the JPY is in a bull flag just waiting to take off north?

T.Berry said...

"New ATH in early 16? LOL!"

not ruling out by year end given how well earnings coming in and mkt pricing in a rate hike that in likelihood going to happen. and if fed went crazy and did nirp, look out above. plus we have the year ending in "5" and 3rd yr presidential term dynamics in mkt favor. but we shall see

john said...

S&P 2040 here we are, now what?

T.Berry said...

"rate hike that in likelihood going to happen"

corrections---NOT going to happen. don't see one until '17 a

Christian Gustafson said...

There is the 200 DMA. There's the possibility of a bearish wedge nearing completion here on the SPX.

Or there are new highs. We wipe August from the board like it was nothing.

Bicycle said...

Today is pretty catastrophic for the bear case. S&P and Nasdaq have already blown through trend resistance from the summer top and the RUT and DJIA will probably follow.

It's possible to make a case that August was just a backtest of the trend from the inflation adjusted dotcom and '07 highs on the DJIA. Which means we might blow through the old highs and keep on going for a very, very long time.

Bicycle said...

I think it's over guys. Underlying fundamentals will obviously continue to deteriorate, mass layoffs accelleration, etc. It won't be long before we're all living in corporate barracks, behind barbed wire fence and with suicide nets on the upper floors of the office buildings. That is, if you actually have a job and aren't trying to eek out a subsistence with your garden growing from your illegally obtained seeds. Praise be to the oligarchs.

Christian Gustafson said...

Market was just waiting for Bicycle to capitulate.

Bicycle said...

minor wave action... the bear case is really busted on the S&P and Nasdaq and remains so. It is what it is. Should have BTFD.

Bill Bober said...

"the bear case is really busted on the S&P and Nasdaq " Well, you've had many charts for the past few months that suggested that the bull case was busted. How well did those turn out? If every instinct you have have is wrong, perhaps the opposite is right. I suggest you keep your eyes peeled, this is the setup we've waited for.

scott said...

Blogger Bill Bober said...
"Minimum balance on checking to avoid fees, inflation, fees for various transactions." Ever hear of a Credit Union?

yes, most will waive fees and I do have accounts at one still, BUT tell me how rates substantially lower than inflation are NOT NIRP?

Bill, you seem to post a lot of snide wit as wisdom.

Tell us, what "setup" is on that table in your mind and who is the "we" that have waited for it?

Is it a BTFD setup? I'll keep my eyes peeled!

scott said...


Blogger Bicycle said...
Today is pretty catastrophic for the bear case. S&P and Nasdaq have already blown through trend resistance from the summer top and the RUT and DJIA will probably follow.

Selected earnings with ECB Jawbone = rising tide. Even the loss of 19% revenue for CAT and it recovers from pre-open losses with almost 3% gain. Microsoft the same BS with significant revenue loss but its up after hours. To call this action stupid is
generous.

Perfect place for NASDAQ to Quack - http://stockcharts.com/h-sc/ui?s=%24COMPQ&p=D&st=2015-01-01&en=(today)&id=p39316050977&a=414448489

Bill Bober said...

"tell me how rates substantially lower than inflation are NOT NIRP?" You have numerous investment options available to you in this environment. I have a portion of my savings in the TIP ETF, which is just one example.

http://fintrend.com/wp-content/uploads/2015/09/Moore_Inflation_Predictor_Oct_15.jpg


scott said...

Blogger Bill Bober said...
"tell me how rates substantially lower than inflation are NOT NIRP?" You have numerous investment options available to you in this environment. I have a portion of my savings in the TIP ETF, which is just one example.


Snide Bill: NIRP concerns BANKS. Not market alternatives that NIRP is designed to drive you into. Jesus. Left brain identities.

Credit Unions AND especially banks are already involved in Negative Interest Rate Policies. Not hard to grasp this reality but...whatever.

As for Inflation Protected Bonds they are down 4-5% YTD and down about 8.5% since July 2014. That's a real Negative Interest Rate! Good Choice! lol

Bill Bober said...

"As for Inflation Protected Bonds they are down 4-5% YTD and down about 8.5% since July 2014. That's a real Negative Interest Rate! Good Choice!" I also own stocks through Vanguards dividend paying ETF VYM. I'm not excusing the Feds policies, I hate them. This is why I try to learn as much as I can, and cover as many bases as possible.

Bill Bober said...

BTW the link to the Moore Inflation Predictor should give you a pretty good idea, about what has happened to stocks/inflation hedges in 2014.

Bill Bober said...

Opps, meant 2015!

scott said...

Bill, I dont need the Moore Predictor to know that TIPS slipped hard in 2015...lol

Please stop trying to be an oracle. NIRP is an ACTIVE reality for Banks and yes Credit Unions too. The point is that THEY, through the FED, OWN THE MONEY SUPPLY which means they own you regardless of what "Wealth Effect" they are manipulating you with. In the late 1970's the gimmick was 401k's for instance. We will let you keep more of you money IF you put it in the markets. Same anti-savings market squeeze as now, just a different gimmick. Rates then were obviously high so the "trade off" was higher take home pay and tax free growth...

Owning the settlement currency inserts you and allows you to own the transactions. Why do you think China up until now has only done one thing with the USD we give them? (Buy our debt by the way)

You are owned by the FED Bill. Their is no escape! NIRP IS YOUR LIFE! BTFD!

Christian Gustafson said...

I had some interesting work forwarded to me from Pretzel's site, that proposes we continue to rally, but fail to make new highs, eventually rolling over in mid-November.

The counts are pretty tricky and certainly not standard Elliott waves; they're very complex ABCs.

Bill Bober said...

"Please stop trying to be an oracle" I'm not trying to "be" anything. Our options aren't great here admittedly, but we can throw up our hands and admit defeat, or try to do the best we can. When you say, "I dont need the Moore Predictor to know that TIPS slipped hard in 2015," I doubt your sincerity. During that period, your cash bought you more of many things, gasoline in particular than it did the previous year. In the past 6 months I've bought a lot of things at half the price they were in 2014, and no not just Made in China junk.

Christian Gustafson said...

SPY has blown through its 200DMA in the AH.

I'll be very interested in what McHugh has to say in his update tonight.

Possibly the worst thing that happened to this nascent "bear market" was the limit-down day on August 24.

scott said...

Blogger Bill Bober said...I doubt your sincerity.

Well either my stockcharts data is dead wrong or I am sincere! WTF Bill? Every inflation protected bond instrument started toppin at the end of 1012. I"M NOT FING BLIND MAN! LOL

and as for buying more things with a dollar THATS CALLED DEFLATION! TIPS are inflation hedges wacko...

I doubt you have a savings account let alone any ETF's of any kind.

Go buy some more stuff with you TIP's proceeds. !!!!!

Bill Bober said...

"I doubt you have a savings account let alone any ETF's of any kind." Yes, I'm sure your net worth dwarfs mine. Congratulations.

T.Berry said...

rather than fight it, why not embrace this bull market? much easier making $$ in bulls being long than short. yes, there will be 10% crashes along the way but trying to time those is not easy. this bull is not even in year 7 yet. invest long term, buy dips and you come out ahead 100% of the time. works 100% of the time. it's that simple, really. in 5-10 years the markets will be substantially higher. (the stock market always comes back no matter how much it crashes). based on q3 earnings so far and the strong guidance, it's becoming more likely new ath's will get hit in 2015. either way however they are coming. and yes, i still believe we'll see dow jones 30,000 within 4-5 years.

Christian Gustafson said...

Of course, the eerie similarity to the 2011 tape cannot be ignored. Six more months of bear winter?