Sunday, January 7, 2018

Again we look for the reversal

SPX way above its daily and weekly Bollingers, RSIs out in space, people looking foolish talking about "recovery" and "growth" and inane obvious scams like "crypto-currency".  At this point we're just looking for the high-volume reversal that cements the top.


10Y Treasury yield looks like it's about to break out over a trendline since 1987.  Bicycle sent a link on a possible bond/equity disaster.  And why shouldn't bonds roach and yields break out?  No one in Washington even bothers pretending to be fiscally sensible.

10Y according to Yahoo!

10Y according to investing.com

A .gov shutdown is lurking again, and it threatens to blow out yields, leaving the Fed helpless to watch events play out.  For equities, it's a matter of how soon we retrace to support at 1810.

SPX 2018 crisis


85 comments:

Christian Gustafson said...

We will accept nothing less than a complete crash and collapse in equities. Once it starts, leverage takes us the rest of the way.

Anonymous said...

What kind of freak bakes a cake like that? I'm afraid it's going to be a while for a "collapse," downturn/bear market yes, collapse nope. Still looking for a bearish 2018 summer, no guesses as to how far down. 10-15% is probably a lock.

Anonymous said...

Stay away from Starbucks. Sick!

https://www.reddit.com/r/The_Donald/comments/7ou5l4/black_starbucks_employee_puts_dog_shit_in_childs/

Bryan Franco said...

Ther is a lot of tension on the 10y yield chart

T.Berry said...

hugh,

still in uvxy? as for a collapse, don't forget, circuit breakers, the fed, the donald. circuit breakers will stop a 1987 collapse before ever happening. and 1987 was only a 23% decline which was made up within 18 months. stocks always come back so don't panic.

hope you don't regret getting out of the market for 2018

Christian Gustafson said...

250 bps on the 10Y today would wake everyone up.

And as this gets going, and the Fed's hands are tied, we get to enjoy daily tweetstorms from POTUS about how it is Morning in America again, that everything is fine, etc.

All this while the deranged Trump haters lose what is left of their minds.

Kevin Wilde said...

1987 was a 50% decline from peak to trough. Just because that one was a single bear event - like 2008 was too - they can come in twins and triples, like 1929-1933, 2000-2003 etc.

SMH day 4 above 50 day MA - get your hedges on - last chance.

Kevin Wilde said...

When it comes, the bear will be a 80-90% downer, and take many decades to get back to even. Ride the bubble for sure (I'm long the Qs with some TZA and UVXY hedges) though do not forget how this is going to end. As aging boomers age, government and central bank balance sheet get pushed ever closer to the breaking point. No way the financial system survived the next recession bubble popping, of which we are long over due.

T.Berry said...

we managed to avoid the fall 2017 crash beginning, nas 6750 crash beginning and in a few days the final high put in today.

glad i sold my hedge in tvix back last fall before crash at $11.56 for a 7.5%. it's now cheaper than a micky d's value under 5 bucks.

T.Berry said...

correction: 6850 was gonna be the show stopper

Kevin Wilde said...

The only difference the market going higher makes is it changes the 90%v loss number a tad. NAZ peaks at 6700 the low would be 670. If NAZ rallied to 7000, the 90% loss target moves to 700. Seriously doubt that will make a difference in the end. Bubbles going up are a wonder to behold, though the higher they go, the higher degree of the financial strain coming out the other end. All bubbles - without exception - always collapse in near entirety.

T.Berry said...

"a 1987 crash awaits the bulls as the NAZ nears the 6850 level. So big bad bear starting now, or after a run to NAZ 6850," 10/11/2017

still long lol

T.Berry said...

for those still long. when the s&p is up over 2% after the first 5 days it ends the year up 15 out of 15 times its happened.

the average gain is over 18%.

this indicator has never failed in 67 years.

dow jones 30k could be reality this year but i'm going to stay on the conservative side and stick with 28800.

highly caution anyone considering shorting even given today was the top. :)

Anonymous said...

Personal savings rate nosediving.

https://fred.stlouisfed.org/series/PSAVERT

T.Berry said...

putting money in savings account is a losing decision. american's are much smarter. inflation will kill the measly .005% interest rate. the only way to get ahead is to be in stocks. you can earn a years worth of return in a few days being in the stock market.

another record day for the s&p. 6 straight all time record high closes out of 6 trading days in 2018. so much for yesterdays final high

Bryan Franco said...

Meanwhile, the semis could be putting in an epic divergence here. I like industrials relative to Tech here.

Kevin Wilde said...

Yesterday was day 4 for SMH rally above its 50 day moving average, which usually marks important tops when in this position, with today's red ink for SMH exactly what one would expect if the bear was indeed about to begin (as the pattern below suggests.) That pattern is near exact the topping pattern that led to the 1987 crash. If we are to repeat that, then we should see SMH drop almost every day till we get to the 200 day moving average, with the crash itself a 4 day hard break of that 200 day MA. Indeed, Black Monday back in 1987 when the indexes lost 15%-20% in one day was day 4 of that break below the 200 day.

New highs for SMH and I move into the larger blow off camp, though till then I'm keeping a wary eye on the 1987 crash repeat right here.

T.Berry said...

think 40,000. that's where the dow jones is going. realize now or realize later but that's the target and we get closer by the day. will be no crash nor anything close.

this bull market will be entering it's 10th year this march. it will be not only the longest but the strongest in history. been saying this for the last 9,000+ dow jones points. nothing changed except the economy is gotten a whole lot stronger.

T.Berry said...

besides right now it's earnings season and the stock market very seldom goes down during this period. record earnings on tap and way better than expected. we may even se 26000 in the next few weeks (only 2.2% to go) 30,000 is definitely in play for 18

Kevin Wilde said...

Today looks the cherry on top candle to end the bull. If so, down hill all the way from here.

T.Berry said...

free beer tomorrow lol

Christian Gustafson said...

>he was broke because of a gambling problem
>he was a millionaire and not broke
>he was a Muslim convert
>he was not a Muslim convert
>he was ISIS
>he wasn't ISIS
>he was a loner
>he was married and hung out with lots of prostitutes
>he wasn't married
>he had a girlfriend
>he had no mental illness
>he had possible mental illness
>he was a gun guy
>he wasn't a gun guy
>he was alone in the room
>evidence that he wasn't alone in the room
>he shot the security guy after he started shooting into the crowd
>he shot the security guy before he started shooting into the crowd
>the security guard was killed
>the security guard was shot in the leg
>the security guard was a janitor
>there was a maintenance man
>there was no maintenance man
>Campos investigated an Open Door Alarm
>Door was jammed shut
>he shot at the fuel tanks
>he didn't shoot the fuel tanks
>he was driving a Chrysler Pacifica
>He was driving a Hyundai Tuscon
>vehicle was full of guns and explosives
>vehicle was not full of guns and explosives
>there were shots at other casinos
>there were no shots at other casinos
>there is casino video footage
>there is no casino video footage
>this is the official story
>this is not the official story

Kevin Wilde said...

Jim sounding the alarm bells
www.businessinsider.com/jim-rogers-worst-crash-lifetime-coming-2017-6

Anonymous said...

Come on CG, we're living in the post-truth age now! Was there ever a truth age?

“The men the American people admire most extravagantly are the most daring liars; the men they detest most violently are those who try to tell them the truth.”

H.L. Mencken

Anonymous said...

Great book about Vegas here. I wouldn't believe a damn word about anything, coming out of that corruption infested hell hole. My best guess is it's mob related, the money laundering thing is quite probable. One of the former mayors was a lawyer for the mob. Really swell place, just like Hollywood!

https://www.amazon.com/Money-Power-Making-Vegas-America/dp/0375701265/ref=sr_1_1?s=books&ie=UTF8&qid=1515589695&sr=1-1&keywords=the+money+and+the+power

Oscar Goodman

"During his career as a defense attorney he represented defendants accused of being some of the leading organized crime figures in Las Vegas, such as Meyer Lansky, Nicky Scarfo, Herbert "Fat Herbie" Blitzstein, Phil Leonetti, former Stardust Casino boss Frank 'Lefty' Rosenthal, and Jamiel "Jimmy" Chagra, a 1970s drug trafficker who was acquitted of ordering the murder of Federal Judge John H. Wood, Jr."

Anonymous said...

Another great and subversive mob book here. The man that wrote this one received multiple death threats.

https://www.amazon.com/Red-Mafiya-Russian-Invaded-America/dp/0316294748/ref=sr_1_sc_1?s=books&ie=UTF8&qid=1515590315&sr=1-1-spell&keywords=red+mafyia

Anonymous said...

The contract killing of Judge John H. Wood, was carried out by Charles Harrelson, Woody Harrelson's father!!!

https://en.wikipedia.org/wiki/Charles_Harrelson

T.Berry said...

wow, continuing claims 45 year lows, walmart raising wages and giving out one time bonus'. signs of wage inflation beginning to show up. those added wages will make there way into the economy along with additional corp profits from the tax cuts.

it's not surprise the s&p hit the 7th new all time record high in just the first 8 trading days and tomorrow is friday which is usually up.

2% till dow jones 26,000.

the strongest bull market continues the journey to dow jones

yesterdays top just got topped lol

T.Berry said...

tax reform is going to flood almost all sectors of the economy with additional cash & profits. in addition the infrastructure bill is also going to flood jobs and more money into the economy. those are just a couple reasons the stock market hits new all time record highs.

2018 just may end up being much better than most think

T.Berry said...

if walmart can raise wages 22% (from $9.00/hr to $11.00/hr) many more companies will follow suit. wmt has 1.4m employees in us, that equates to about $90m being plowed back into the economy from just one company.

as i said last year a concern here is the economy is going to overheat. on top of a 45 low in claims 10,000 boomers are retiring everyday. best economy in decades and it's all sound solid growth. no funny money : )

John said...

How many Walmart workers have been laid off because they have vendors stock the shelves, now?

T.Berry said...

not sure john but from the looks of the continuing claims it didn't take long to find another job. the us economy is about a zero unemployment which is scary given once the infrastructure bill passes later this year. that alone will create 10's of thousands of new jobs probably more like 100's of thousands. wages are going to go through the roof this year.

greatest economy in the world. always has been

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Looks like I'm going to be wrong about 2018 T. Berry. It's going to be even MOAR bullish than 2017! I suggest you throw every spare dollar you have at this market! Hell, might as well lever up while you're at it!

T.Berry said...

no worries hugh, just get back in and push that crash back. heck what's another year? lol

no counting on 18 to be better than 17. content for the 12% average return. we're almost halfway there :)

John said...

T Berry, please send me your rosy glasses to use for a while--mine have been smashed in the past :)--love ya !!

T.Berry said...

no rose john, just stating facts about the economy and the stock market. i see zero reason for the stock market to crash anytime in the foreseeable future. no reason to sit in cash either. so far this year, my stock market return ytd would take about 7 years to get in a money market. that's in less than 2 weeks.

T.Berry said...

hope today is one of them blowoff tops. the market is up over 7% since the last one :)

John said...

T Berry--Permabull Unicorn!! Pick up some XIV to prepare for zero volatility!!

Thanks and take care!

T.Berry said...

what happened to 6850???

T.Berry said...

s&p low is in for the year.

heard it here on dl first!

John said...

https://www.cnbc.com/2018/01/11/walmart-to-shutter-some-of-its-sams-club-locations.html

Well some of those lucky Walmart employees won't be getting a raise. Maybe this is a top--til tomorrow!! Anyway I bought my last AFBIX and PSSDX today--"we'll see what happens" as somebody orange once said. Good luck ya'll.

Bryan Franco said...

Semis no new ath in about 2 months

Bryan Franco said...

VXX has been outperforming its beta substantially over the last week or so

Kevin Wilde said...

T.Berry, exactly what is your stock market return? What are you invested in? Me and my subscribers made 66% last year, and up about 4% this year, including the hedges and taking profits at NAZ 6862. Talk is cheap. What are you invested in? I remain in (as of Nov 21 when NAZ hit 6862 and I took some profits) 47% QLD, 47% cash, 5% TZA, 1% TVIX. Also, what is your plan with your investment when the next bear market lands?

John said...

"just stating facts about the economy and the stock market..."

https://www.goodreads.com/quotes/100106-facts-are-stubborn-things-but-statistics-are-pliable

Anonymous said...

The inconvenient truth about "shitholes."

https://iq-research.info/en/page/average-iq-by-country

Kevin Wilde said...

Yen rallying past three days has triggered a buy signal for the YEN, which is a put hedges on signal for US assets, such as US stocks. SMH continues to act poor, and now one of the FANGS has given up the rally ghost, FB. Looks like the chips are falling into place for a top of some kind.

T.Berry said...

doing just fine kevin. not making superman-like gains like you but i'm content. last year was just under 30% which is one of my best years. holding mutual funds in 401k and in my individual account 5 mutual funds, a couple etfs along with 5 stocks. no need or worry to hedge in a secular bull market. hedging is throwing good money at bad especially in such a strong bull market like the one we're in and being a long term INVESTOR. i'm in for the long haul and will not get shaken out because the stock market always comes back. i am now looking at early semi-retirement within the next 4-5 years

they've been calling crashes since 2012 and if i would have listened back then i'd have about 1/3 of what i have now.

hope to see you around here when the dow jones hits 40k.

the dow jones will have more 100+ days this year than in any other year in history. another record to soon be made :)

love those fridays :)


T.Berry said...

dow jones 30k
s&p 3k (lock in '18)
nas 8,000

all on the table now for 2018. it's possible this year will actually be better than 2017.

as for worrying about a crash, never forget, circuit breakers, the fed, the donald.

T.Berry said...

maybe best start of a year ever

up 8 out of first 9 days

dow jones & s&p up over 4% and naz over 5% and january still has 2 weeks left.

Christian Gustafson said...

$USD completing an epic bull flag?

John said...

as for worrying about a crash, never forget, circuit breakers, the fed, the donald.

1929:

banker pool buying, the fed, the herbert :)

Anonymous said...

Dollar is in a cyclical downtrend.

T.Berry said...

after today, there's a very good chance the lows for 2018 are in. we're not even in the sweet spot of earnings season and the dow jones & s&p are up almost 5% ytd and naz 6%

think tax cuts, wage inflation & infrastructure bill.

dow jones 40,000 well on track : )


ps s&p will be well north of 4k and the naz over 11k.

John said...

Last year, a whopping 66 percent of corporate earnings went to buybacks.

https://nypost.com/2017/08/19/us-companies-spent-4t-buying-back-their-own-stock/

http://clsbluesky.law.columbia.edu/2015/09/11/the-true-reason-for-stock-buybacks/

Depriv said...

Old chart updated.
I think it's still a 'not yet'.
http://keptarhely.eu/view.php?file=20180115v00nf4boe.png

T.Berry said...

smart moves john. corps have been heavily buying over the past 5-6 years. made fortunes doing so. shows confidence in not only their businesses but in the overall economy in general. which is firing on all cylinders. the fundamentals never lie, never have.

question of the week, dow jones 26,000?

T.Berry said...

todays headline----"UnitedHealth's profit more than doubles on tax benefit"

this will be a common theme in '18. the stock market is still offering good value.

it look like last monday wasn't THE final top for the entire market. :)

T.Berry said...

just 3.8% till dow jones 27,000!

what a year so far. 9 new all time record highs in just 10 days,

2 new dow jones milestones hit already---25,000 & 26,000

sYp only 200 pts from 3,000

took out 2 tops so far

free beer tomorrow lol


T.Berry said...

revised question of the day? (since the last q was answered in record time-lol)

can the dow jones get to 27,000 by february?

T.Berry said...

bobbers down :)

Michael Gauzza said...

Hey all... How does GE's problems fit into the markets action?

T.Berry said...

Reelem' in guys

And dnot forget

Ftee beer tomorrow

Back on road to Dow Jones 40,000

T.Berry said...

GE is a has been. They have zero effect on the stock market. If a company can't make it on this economy they have serious problems.

T.Berry said...

Another 117M getting plowed back into us economy. Apple giving 47,000 us employees 2,500 ea due to tax cuts. This hasn't even begun to snowball yet. 2018 may surpass 2017.

Dow Jones 30000 is in play for this year

Bicycle said...

$2,500 pays like 2 weeks of rent for an Apple employee, lol

Michael Gauzza said...
This comment has been removed by the author.
Michael Gauzza said...

Steinoff, Carillion, and GE perhaps floundering... These have to create at least a small ripple effect no? Stress on Banking System? Exposing hidden risk? Quite a divergence from the "everything is awesome" mantra we hear on TV?

Kevin Wilde said...

What would have massive implications if GE goes BK is what will the Trump administration do re a bailout? Obama backed everything but the stock-holder, while bond-holders took it on the chin, with GM and others. Will Trump ditch the lot, or keep the swamp flowing with gov bailout money? UK is asking that very question now with Carillion. The perma bulls see no danger to the markets because the gov and central banks will always bailout. I say that is a false assumption, with next time around gov will let the dogs go full on BK and offer no bailout. And central banks are likely just to do basic rate cuts, and not offer the QE insanity the next time around (as they fear their balance sheets being so crazy bloated.) But we shall see.

Christian Gustafson said...

Loving the 10Y Treasury yield this morning.

Anonymous said...

LOL!

https://www.investing.com/etfs/ishares-7-10-year-treasury-bond?cid=1036853

Anonymous said...

"Loving the 10Y Treasury yield this morning." How bout THIS morning!?

T.Berry said...

Mkts want normalized rates
Mkts rise on higher rates

Still zero reason to sell stocks over forseeable future. Plenty of record all tone highs to be had.

2012 crash should be pushed back to 2019. : )

Bicycle said...

inflation-adjusted DJIA

T.Berry said...

Inflation is coming

.s & p 10th all time record high hit in 2018 still 2 weeks left

Bring on the gov shutdown! Lol

Last 3 shutdowns the s&p went up :)

T.Berry said...

Nas 7336 wow already 500 pts past the high. Wuwt?

T.Berry said...

And a final high too lol

T.Berry said...

11th new all time record high and only Jan 22. S&p already a mere 6% from 3000!
keep.gov.shutdown. lol

T.Berry said...

1 trillion infrastructure program rrally donald?
40000 on the Dow. Book it!

Bryan Franco said...

I guess 3k and 30k are baked in for the s&p and Dow... Nothing to even contemplate until then

Christian Gustafson said...

What about 3K S&P -- next week, into FOMC. Trump's talking infrastructure now, more free stuff.

The parabolic projects to there, the top edge of the channel you might draw from prior significant highs since the 2009 (year) lows.

Then the Fed throws 50 bps out there, out of necessity.

T.Berry said...

yes 3000 is a lock and likely within several months worst case eoy. 30000 on the dow jones but not until next year

upping my nas year end '18 target to 8,000+ (from 7800) just 8% left on that bone lol

Rate hikes are extremely bullish too. the fed got it spot on this time :)

T.Berry said...

agree bryan calling crashes before the dow jones tags 40000 will probably be more frustrating than it has calling for crashes since 2012 :)

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