Saturday, May 30, 2015

Books books and books ... 5-30

Market poised to rally all week in anticipation of Greek kicking-the-can, but plenty of technical indications that a (the?) top may at last be at hand.  Let everyone call it a correction until it's not.

What better time for a book thread?  I've been stacking quite a bit lately.

You'll notice a rough theme, but these are just some of very many analog books I am continually sifting from the shelves of the world over to mine.

I'll let the books tell the story.

The Three Musketeers (1953), The Swiss Family Robinson (1949),
Grosset & Dunlap Illustrated Junior Library
Thomas Hobbes Leviathan, Oxford, 1947 print of 1909 ed
Robert Browning Poems 1833-1868, Oxford, 1925
Max Weber The Theory of Social and Economic Organization,
Free Press / Falcon's Wing, 1947
Georges Sorel Reflections on Violence, with an introduction
by Edward A. Shils, Free Press, 1950 
Bernal Diaz del Castillo The Discovery and Conquest of Mexico,
Farrar, Straus, and Cudahy, 1956
G.W.F. Hegel Philosophy of Right, Oxford, 1945 
A.N. Wilson After the Victorians: The Decline of Britain in the World,
FSG, 2005 
Harlan Ellison, ed. Dangerous Visions (1967),
Again, Dangerous Visions (1972), Doubleday
J.H. Parry The Spanish Seaborne Empire, Knopf, 1966
John Bagot Glubb The Course of Empire: The Arabs and their Successors,
Prentice-Hall, 1965 
Albert Camus Théatre Récits Nouvelles, Gallimard, 1962
Sir John Glubb, Soldiers of Fortune: The Story of the Mamlukes
Stein & Day, 1973 
Alan Moorehead The Traitors, Harper & Row, 1963
Issac Asimov, ed. The Hugo Winners, Nelson Doubleday, 1962
Horace Gold, ed. The Fourth Galaxy Reader, Doubleday, 1959
Tim Jeal Stanley: The Impossible Life of Africa's Greatest Explorer,
Yale, 2007
Tim Jeal Explorers of the Nile: The Triumph and Tragedy of a
Great Victorian Adventure
, Yale, 2011
Camilo José Vergara American Ruins, The Monacelli Press, 1999

Wednesday, May 27, 2015

Charts 05-27 am: One more high! and 3PDH update

We've still got the daily and weekly SPX Bollingers to visit, and we could come within a few points of the monthly Bollinger Band as well.

I noticed that the May 6th low actually was right at the .382 retrace of what we have been counting as "wave 3" in the ending-diagonal that is now terminating the reflation rally effort since the 2009 lows.  So let's call May 6th, "wave 4" and be done with it.  That would put us in the final wave 5 now, with (a) of 5 complete and (b) either complete now, or finishing up soon.  (c) of 5 will be an impulse wave to a top, ideally a touch of the top trendline that defines the wedge.

I'd like to see a steep, peaked, castellated structure up here for our domed-top, something volatile like this with deep retraces that shakes out all of the sissies.  It's a series of drops with retraces to visit and reject old channels. 

SPX 05-26 Domed-top structure

The pattern defines a head and shoulders top with an initial target below 1500 SPX.

SPX 05-26 3PDH resolution

This reaches a climax this fall, whereupon the Fed is very likely to do something bold again at the December FOMC meeting.  The short-squeeze will be epic.

Ben Jones's invaluable Housing Bubble Blog reports that idiots are waiving inspections again to get in before they are priced out forever again.

CNBC on Colorado. “When Christopher Simmons began shopping for a home in Denver six months ago, he had no idea the risk and the frustration it would take to get one. The 27-year-old had good credit and cash to put down, but that was not enough in this red-hot market. Finally, Simmons went under contract on a small home in a transitional neighborhood, but only after beating out five other bidders. He wrote a letter to the owners, describing how he had grown up in the neighborhood, and then he added a risky tactic.”
“‘I waived the inspection and the appraisal contingencies on all of the offers I made and on this one as well,’ said Simmons.”
“‘Prices are going crazy. Multiple offers, love letters, videos, all kinds of things to appeal to a seller in order to make yours stand above all the others,’ said Denver real estate agent Jill Schafer.”

For all the greater-fools out there laundering Chinese graft-fiats or desperately buying real estate sight-unseen, let me introduce you to Michelle:

Friday, May 22, 2015

Charts 05-22: the "Force Janet Yellen's Hand" scenario

Two hours to go before the Memorial Day weekend, and we are hanging in here stubbornly.

We've moved sideways through a couple of support trendlines that have now been slowly, gradually stressed and broken, but the market is not yet ready to head down.

The daily SPX upper Bollinger, the lower daily VIX Bollinger, are untouched and probably unlikely to be tagged into the close today.  So far, these technical indicators have served us well to know that we have not yet reached the end of this.

The two most likely events that can roach the market and bring the return of the bear would be a suprprise hard default and exit from the Eurozone of Greece, and a 50 bps or better rate hike at the mid-June FOMC meeting.  Assuming that the PTB can keep Greece on ice, then let's consider that the equity market hangs in here until the FOMC, all-but-forcing Janet Yellen to declare victory and discontinue ZIRP (for now).  ZIRP will certainly return, but under much more desperate and frightening circumstances.

Here's a proposed ending-diagonal scenario that completes into the June Fed meeting, at the 2145 level on the S&P 500.

ending-diagonal into June FOMC edition

EDIT: after looking at the DJIA for corresponding waves, I added a second count in red that would have us finish up an ending-diagonal after the first week of June, presumably on Greek troubles.

Thursday, May 21, 2015

Friday VIX collapse finale

The lower Bollinger Band on the daily VIX is 11.55.  A volume-less, dead Friday before a holiday weekend provides an excellent opportunity to put a cherry on top of this thing.

Upper daily SPX Bollinger is at about 2140.

Have a nice weekend.

Detroit ... before ....

Tuesday, May 19, 2015

Charts 05-19: When do the Greek deadbeats exit?

Just a quick short-term chart.  SPX is bumping up against its daily Bollinger Band again -- up at 2135 SPX this morning.

How bubbles end

SPX 05-19

Of course, 2138 SPX is the perfect 1.618 fibonacci  extension upwards of the 910-pt bear cycle from 2007 into 2009.  Maybe it is of sentimental value to the algos out there.

Here be monsters.

10Y Note Monthly

Tuesday, May 12, 2015

Charts 05-12: Range-bound through May?

We did not get a spike up to the upper daily Bollinger Band on the SPX on Monday, dropping us back in the old range.  It's starting to look like a smaller ending-diagonal 5th wave within the larger pattern since the October lows.  It could easily last to the end of the month and eat the theta of anyone betting hard on a seasonal May sell-off.

Here's a proposed count:

SPX 05-11

The first target of a break would be its point of origin, the 2040 area SPX.  The 200 DMA will be in this range into June FOMC, setting up a bounce back to test the wedge.  A failure turns our attention back to support at 1820 (for the next bounce).

If the Bollinger Band theory holds out -- that we need to reach it on the daily and possibly the weekly SPX band, like we did in the 2000 and 2007 (year) tops -- then we have a very useful signal and guard against shorting this too early, while it is still stuck in this dangerous chop.

And the larger meltdown into the fall, of course, as we roll-over the old supports are all lost (desperate, doomed rallies).


Sunday, May 10, 2015

Charts 05-09: All eyes on Monday

In wave counts, the general shape of things, and technical measures such as the tight Bollinger Bands on the daily SPX and the volatilities, we have a very good shot at new highs and a midday reversal on Monday, May 11th.

Let 'er rip

Zero Hedge has been writing on liquidity problems and conditions for possible forced-selling in the bond markets, something which we will need to watch carefully.  

And, if you believe in such things, there's a few Bradley indicators for a turn near May 10th.  Was that last week's low?  Or is it Monday?

Someday this war's gonna end.

SPX 05-09
SPX 05-09 2Y head & shoulders top
SPX 05-09 1Y with 1074 fall target
VIX 05-09
UVXY 05-09

Wednesday, May 6, 2015

Charts 05-06: Russell 2000 chart for Bryan

The Elliotticians consult their charts of moon cycles, fibs, and astrological omens on the RUT:

Thus it is written, but I say unto you ...

You're probably right re the high being in on the RUT, Bryan, even while I still expect the S&P 500 to complete its own terminal pattern with a final new high.  There are a couple of interesting details I had not noticed about its chart -- see the notes.


Tuesday, May 5, 2015

Charts 05-05: Greece is saved?

The meeting of the Eurogroup finance ministers looms next week, where they will evaluate Greece's progress towards restoring the proper growth and the animal spirits, and decide whether to make their next installment of bailout money.  The IMF is first in line to be paid.

Ah the good times

Greece needs the cash.  They have no real economy, they are broke, everyone knows it, it's a matter for extra-innings game-theory at this point.  And I think the shabby treatment of Tsipras last week was the tell on this.  Now that they've sidelined this crazy bomb-thrower, this socialist madman, surely the responsible adults in the room can work something out.

The market can trend mildly down the rest of this week, back to 2080s on the SPX, to set up the final impulsive rally, c of 5 on our ending-diagonal count, that will finally break through the resistance in the 2120 area and reach the upper boundary of the wedge.  Greek salvation gives us the last burst of energy we need to put in a proper top.  This would complete into the next Bradley turn date window on Memorial Day in these (still) United States.

The 4/27 Bradley turn did mark a significant high, which was good for a week.   After Memorial Day, we'll find out if the Greeks have any of bailout money left over from the ECB to make their govvy salaries and pension payouts at the end of the month.  That may be it for them.

Short-term count, we're in "b" of the last 5th up here.

SPX 05-04

Larger count, with a low into FOMC.  A strict technical take on this is that returning to 1820 SPX into FOMC, the Fed could even raise rates, and it would rally the market.  I'm serious.  They could come out with a triumphant statement about how everything is just great now and it's well past time to normalize rates with a 50bps hike.

The confused market would marvel at the sheer huevos of these guys and proceed to squeeze any shorts still holding into absolute despair.  Bullard's meddling last fall (when the 10Y Treasury yield crashed) and the June FOMC would then make nice book-ends for our 3PDH domed-top.

SPX 05-04 1Y

If the VIX keeps bleeding -- low 11's into the Memorial Day break.  Everyone patiently waiting for a fall 2015 crash might not like it if it happens in June and July.  The crash would come on a kissback and failure to re-enter the old rally channel, as charted above.

VIX 05-04

I've been reading Georges Sorel lately, interesting fellow, and he says that it's the optimists and idealists who spill all the blood and fuel the Terror when things don't go as planned.  We pessimists set humble goals based on our knowledge of human nature, and have no interest in utopias.  It's the true believers out there that are genuinely dangerous; they go off the deep-end in a hurry when the real world does not conform to their wishes and start lopping heads.  Krugman to the barricades!