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Friday, August 28, 2009

28 August Crude is relentless

Crude formed a bullish divergence on its last drop. If it breaks 75, it is going for 85 and then 90, then 100, no doubt about that. With Peak Oil, and occasional tankers collision, Oil would probably want to float despite the slowing down of China demand.
Reason: Hyperinflation, thanx to Ben Bernanke.

The FED has been secretly monetizing debt, buying Agencies Debt from China, and selling Treasuries to them in return.

Gold is in a multimonth giant Pennant formation. also on a hourly pennant. This has to be resolved either Today or next week. Preference for a quick rise to 1000 and beyond to trigger a massive short covering.
Reason: Gold knows something that we do not.

John Paulson has gone to buy 2% of Citi. Smart people like him probably bought 10% much earlier and now want to sell all of them, and finding buyers scarce except himself.

All the Hedgies who went in, now have problem taking profit. Buyers are hard to come by. Consumers are weak. Cash for Clunkers basically suck up the future monies of American homes into a pile of gas goppling metal. Good new home sales mean people are putting monies into home not consumption.

Probably the Equities market would be like John Paulson selling to Blankfein, then selling to Jaimie Diamond,etc.

AUD halted its fall and now rising again, closing in on 0.85 and beyond. 0.900 is in view.

The base of USD index may just give way into 70 very rapidly. Bringing on the de-facto Dollar Crisis which people has written about since 2000. 71 would not hold and then the deep fall into the Abyss.

Thursday, August 27, 2009

27 August Kass called for top

yes, Kass said that the market topping now, would be down for the rest of the year. Other indicators are not bright, China government calling to cut down on capacities in everything, steel mills, etc. Though they still maintain a loose Credit Policy. I.e. you can have the monies, but make sure you dun overbuild.

This would put a lid on the government monies flowing into the stock market. Now the monies left are the people's monies and the external speculators monies.

As the property market has sucked in a fair amount of people's side monies, spare cash for stock investment is limited. Wonder how the hot monies are going to get out, if there are already loaded.

Nonetheless, the government is expected to provide support at Shanghai Composite 2500 ahead of the 1 October Communist Party congress and the October long holiday.

It is still uncertain if the post October rally would happen, but some analyst are touting so. Guess there would be some buying in September.

27 August Mocking the market: U fighters

http://www.channelnewsasia.com/stories/singaporelocalnews/view/1000993/1/.html

Staff of the labour movement have earned a new accolade from their chief for helping to upturn the downturn - they are called "U" fighters.

the labour ministers of Singapore mocking the market by calling themselves U fighter.

What if they get the alphabet wrong ?
do they go back to primary school to relearn the alphabets ?

FDIC voting on Private Equity buying distressed banks capital requirments at 3:30 pm.
May be the flame for the next move higher.

Wednesday, August 26, 2009

26 August Mississippi and South Sea Bubble

I am not a history buff, but I have read in 2 commentaries (one written by TradingAce, another in a Chinese site “香港平民股神”曹仁超:中国须当心弄巧成拙) about the French King Louis 14, he initiated QE to the French colonies, cumulating in the Mississippi bubble. (similar in the South Sea bubble in Great Britian) then around 1720. Then chaos ensue and his grandson Louis 16 was sent to the Gullotine.

In modern era, we dun send Alan Greenspan to the Gullotine, neither can we send Bernanke to the Gullotine. But millions families would be devastated.

In China, we still have Firing Squads. If the China stimulus morph into the equivalence of the Mississippi or South Sea Bubble, the CCP would collapse, and every cadre from the Chairman, the state CEO and the village chief would be sent to the firing squad.

I have this eerie feeling that the Squid Goldman Sachs want to precipitate a regime change in China by leading the Chinese on.

Perhaps it is already late, as the damages have been done.

I count another Bull Market Oracle, DOW to 10,000 by October.

Tuesday, August 25, 2009

25 August Blind Optimism

Shanghai did not manage to hold above 3000. Wen JiaBao at the Economics forum said "Blind Optimism". It is like Alan Greenspan "Irrational Exuberance".

Then in a local HK website that provides charting tools, it says Funds inflow into HK markets, buying HKD, selling USD. I went to check the USD/HKD chart, flat as usual. The boys are ready to pull out, and spreading false news.

Most blogs I read now are bullish, Calfutia, Afraid to Trade, etc.

When others are greedy, you should be fearful. We still the proverbial Black Swan for this one.

Meanwhile FED ordered by Judge to reveal its lending to banks.

Baltic Dry Index has been plunging. Those of you who long AUD, better get out. so does Copper.

Monday, August 24, 2009

24 August "C going to 5 before going to Zero"

today C has reached 5 as of morning trade. expect a pullback and another test.

24 Aug Americans are angry



Obama does smell like the Nazis.

Sunday, August 23, 2009

23 August Louise Yamada

It is now Louise Yamada turn after Pretcher last week. I have embeded the MP3 on the right. Louise admits that now is one of the toughest market in her whole career.

Final Destination preview 28 August in US.

The second American revolution has begun with the arrival of Obamageddon. First short April 15 Tea Party, Second shot 4 July and the 3rd shot with the healthcare townhall meetings.

Obama, the BEAST, has brought on the demise of America.

China market.
China marhet has rose to 3500, above is a thick cumulation of buyers from last yrs who were trapped in the range of 3600 to 4000 from april 2007. let us see if anybody want to do national service to give out monies to the retail.

Friday, August 21, 2009

21 August Friday OPEX

The usual wisdom now in the market is to complete the Wave C in the region of 1050, where B finished at 978 and A finished at 1018 from 869. (see Daneric wave count).

Expected a drop on Friday for a small pullback for (ii), when (i) completed yesterday at 1008.

Let us see what Bernanke would say at Jackson Hole to put flame on another rally up towards 1050.

We are definitely at the end game rather than the beginning of this rally from 666. Hence be prudent with long or short positions.

http://www.reuters.com/article/innovationNews/idUSTRE57J4RP20090820

Citigroup shares use to plunge whenever there is news of assets sales last year. Now asset sales become good for the shares.

Cash for Clunkers would end on 24 August, i.e. less incentives for car buyers, i.e. the inventory built up by the Car manufacturers especially GM would be sitting idle in 4th Qtr.

The leading indicator came in at 0.6%, previous month was 0.7%, if you look at the chart, you can see a hook pointing down, i.e. we are at a turning point.

The Baltic Dry Index has been declining for weeks.

The rally on Wed, Thursday can be attributed to Crude rising in the news of lowering inventory. Market is in the midst of looking for direction.

We see Buffet talking down dollars, so does some columnist, sign of funds building Dollar position.
Euro performance has been weak.
For the Bulls, their hope of a higher SPX would be the devaluation of the Dollar on inflation expectation, higher commodities, etc. Just like what happened in 2007, when Stocks were on a climb when Dollar was creeping down.

However, the Deflationary forces are more intense now after so many stimulus monies and ZERO rates for quite a while. Curbs on commoditues speculation are in progress. China pausing commodities stockpiling.

The Bulls have a tough job, when the short sellers are not there to cover.

Mizuho Nicole Elliot (the Dollar bear) has gone on leave since last Friday till 1 September.

Strangely Nikkei has been on a tear downwards 10,000.

Watch Dow industrials for 9000

HangSeng for 20000

Shanghai composite for 3000, all these are round figures with great psychological impact.

Chinese just entered into the month of Ghost today. It is the month when the Chinese worships their dead ancestors, and commercial activities slow down, especially new house purchases, etc.

Personally, I look forward to a tumbling of Equities back below March low, SPX towards 577, and USD to tumble as well to all time low of 60. This scenario would take a great panic in the market, when the much awaited final collapse of USD has come. (one which people has waited since 2000). In such a scenario, capital would flee US on threat of capital control in US.

Of course this remains a Black Swan event. Today conventional wisdoms says a rising market with a slowly depreciating dollar.

Wednesday, August 19, 2009

19 August Free Fall

some nobel economists appear to talk about Banks to reflect true value of assets. If GS falls through the rising ladder, it is free fall.
China is on free fall already.

the devastating about last year fall was that buyers keep coming in at various level.

Let us hear what Bernanke has got to say on the Fed seminar in Wyoming with world wide Central Bankers present.

Sunday, August 16, 2009

16 Aug Christmas

We are still months away from Christmas, 4 months away. However the market is on a tight rope. The market is waiting upon the Christmas orders. China is waiting, Asia is waiting for the orders which should be in by now.
However the Christmas orders are not in yet.

Christmas holds the keys, Christmas buyers waiting on the market, the market waiting on the Christmas buyers.

16 Aug Bob Pretcher weekend

Bob is confident that bear market would extend into decade. And there would not be sideway but down. Up a year or 2 in dollar.



He made the call and broadcasted on 11 Aug. 8 trading days into OPEX August. We still got 4 more days to take profit.

Meanwhile Bloomberg is running his interview over and over again on this weekend.

Bob made the call of bottom on 25 Feb 2009, 7 days before the March low on 6 March 2009.


He made the market top call when S&P was 1519 on 19 Oct 2007.


However, other bloggers:

Michael Vadon calling for Nasdaq to return to 2000 high. he observed that institutional monies have rotate out of defensive stocks into growth stocks and tech. UP.

Daneric argues that (E) of B was completed on Friday low at 994, and we are going into C UP.

Cobra in Cobra's Market View is expecting a UP Monday.

Calfutia says down to 980 then up to 1100 and beyond. UP.

Afraid To Trade, DOWN unless 1020 broken.

Market Club Adams Hewinson shows video of a possible downslide. He is focusing on the rise from 869 and possible retracement. DOWN.

Tim Boste mentioned the return Lunar on 18 August. Down.

Nonetheless, the end Friday prop back to 1004 is worrying for the bears.

Everbody is now expecting 1020 and beyond. Probably the bulls want to get out at higher levels like 1020-1050. A parabolic rise towards OPEX cannot be rulled out.

Otherwise, 1018 would be the top for the rally from 666 if the records of Bob Pretcher is anything to go by.

The BIG QUESTION is: Is there time for the Bulls to exit ?

How about me ? I see some inching higher beyond 1012 but not much. If it falls, the gap at around 910 would be target. Meanwhile expectation for a fall if it happen to be 950-960. I would leave the last 10-20 points in SPX to our hardworking GS traders.

Saturday, August 15, 2009

15 August AUDUSD / FDIC Bankrupt

we are now back to 4th Qtr 2007, when Central Bankers were worried about inflation, and wanting to raise rates. The first one being Australian Central Banker Glenn Stevens.

If you look at the monthly chart of AUDUSD, you see the rebound of AUDUSD from 0.6 has been awfully strong. Now at 0.85 about there. Remember not too long ago, people were talking about PAR with USD.

Then you start to think and realise that something is wrong. China has slowed down its progress of restocking, Australian Rio Tinto, BHP no longer has the means to "manipulate" contract prices. Baltic Dry Index looks like going back to retest the low of Nov last year. American consumers are pulling back big time.

A lot of rich Asian investors have piled into AUD because of its yield of 3%. AUDUSD most recent low in 2001 is 0.48. There is positive confirmation of the low in Nov 2008 at 0.6007.
As this is monthly chart, the top may be in Oct/Nov this yr.

Looking at forex charts and a clear mind on the fundamentals, give us a better understanding of the on-going in the Equities market.

It is all Bullshit rally afterall.

(cannot post charts, problem with blogger)

Important Update.

FDIC is unofficially Bankrupt.
http://globaleconomicanalysis.blogspot.com/2009/08/as-of-friday-august-14-2009-fdic-is.html

and of course more monies printing over this weekend.

Some analyst comes out and talk about the 500Billion debt of General Electric, a company borrowing lots of monies and with negative Cashflow.

I still remembered last yr, C rose from 5 to 9 and then began its fall to 1.

15 Aug HK, Germany, France recession over

Well, they managed to squeezed out a positive 2nd Qtr.
Managed to take a look at the graph of US Leading Indicator.
All the while, the media was bullish because the actual was better than survey, however the indicator has displayed a hook downwards as of last month data.

Though Industrial Production and Capacitiy Utilisation has an uptick today, nonetheless these are backward looking figures.

Throughout 2nd and current 3rd Qtr, the analyst has been giving bleak forecast to most economic data, hence the exuberance whenever the actual is better than survey.

As Opex is next Friday, let see if the market maker wants to flush out the longs.

The achilles heel of the Bull is Greed.

Thursday, August 13, 2009

13 August Pole Shift

in case you are not aware, there is a once in a century flood and storm happening in Taiwan courtesy of hurricane Morakat. It started on 8 August 2009, one year after the Beijing Olympics 8 August 2008.

Such drastic disaster can be attributed to Pole Shift. The magnetic North Pole is shifting from North Canada towards Siberia. This triggered change in the underground lava, changing temperature, weather, etc.

Soon America hurricane season is coming in September. A storm worse than Katrina may happen.

Also this past weeks, Japan has been plagued by an incessant Tremors and Earthquakes. The much anticipated Tokai Earthquake is around the corner. Which may trigger a global Tsunamis.

When you hear the parabolic rise in $SPX, you know the end has come.

not to mention the great St. Andreas fault Earthquake is waiting in the wings.

Wednesday, August 12, 2009

12 Aug FOMC August. 1018 top meanwhile.

Right before the FOMC statement at 2:15 pm, at 8:15 am, CNBC invited the Bear Kings to a roundtable: Roubini, and Nassim Talib, the "Black Swan".

Setup for a rally ? or jiving the market for further pullback.

Nassim mentioned that Kerviel sold 50b USD of stocks, and dropped the market 12%. He is right the market is controlled by the marginal players. Though GS has been supporting the market, once somebody do otherwise in a meaningful way, it would trigger the avalanche of stops, and thus define the top.

China market has been dropping on a tear, on the fear of China government pulling credit. The fear is true, those state enterprises who pour monies into the stock market is now taking profit, on fear of being investigated by the CCP.

The pullback has begun, no matter what Bernanke has got to say. 1018 would be the top meanwhile.

Tuesday, August 4, 2009

4 Aug SPX high 1003.45 38.2 retracement target reached.

If you look at the volume of SPY, it has been getting anaemic, day by day.
Elliot waves work best in the absence of market intervention. E.g. you would not apply EW to JPY.
Nonetheless, we are in a Bear Cycle for now. (why ? bços the investing public is having this feeling of a reversion to 2007 highs).
There is a frenzy out there in China, HK, Singapore buying up properties, shares. The herds usually fail in the mid to long run. A lower low would come in 2010-2011. If it comes this year, it would be a surprise to the Bears as well.
Some analyst has pointed to Oct as possible turn, while others (e.g. McLaren) points to November.
There are still some upside to come, (though we cannot rule out a correction in August).

yes, indeed Bernanke is rigging the Treasuries and Equities, as he once threatened "he would deploy all tools". He has to supplement his PhD theory of QE with market manipulations. Months down the road, his covert operation would be revealed to the world. And the world would then judge.
As one Congressman has said, it is easier to audit CIA then the FED. Bernanke would be remembered as another disgraced FED Chairman.
Meanwhile FBI is raiding Colony, and FDIC is now advising Banks to reveal the true valuation of their loans.
(see MarketTicker).
From now till 9-12 Aug, it would be a crawl upards. nonetheless, the 38.2 retracement has been reached at 1003.

The Bears meanwhile has been battling with the FED since March 09. GOD has foresaken the Bears who truth bearer. Now media is rdiculing the Bears as the "Doomsday Cult". It is tough to be a Bear.

Personally, I have sold off my SSO at 30.70 and 30.88. The high on Monday was 31.

Monday, August 3, 2009

3 Aug SPX last high 999.66/ nope 1000 now

would 999.66 be it ?
it bears the mark of the BEAST.

Gold on neckline H&S still. Last high 961.55.
Crude last high 71.94.

DXY now dropping like stone. looks like a USD crisis now.

3 Aug GOLD train

yes, the Gold train has started, as of now, trying to break out of a inverse H&S pattern, target 1030 and beyond.
Once Gold break 1000, likely there would be a short covering rally, to the moon, literally.
Bernanke credibility would be in peril. The FED juice up inflation expectation, while not expecting it to happen, eventually become reality. Crude would break 80. Pump prices would rise and the American public would be in misery.

These are moves till Bernanke decides to sound the alarm on rate hike.

It is coming sooner than expected. Treasuries are rising in anticiaption of the coming Equities correction.

DXY now on the verge of breaching the last low in Dec 2008 (77.668), when the Equities market recover after the TARP approved by Congress. Now DXY at 77.928.

Unless DXY drops hard, MACD nonconfirmation means another leg of USD strength alongside a stock market correction.

If DXY drops hard, this would trigger USD crisis fear (not crisis but the fear). And the Chinese would be flabbergasted, that straight after their Strategic Economic Dialogue wuth US, their investment in US Tbills is plunging.

Implication for Equities uncertain. A rising DXY or a USD crisis is not good for Equities.

Today there is a series of magnitude 4-5 Earthquakes from North to South of Japan.
It is full moon on 5 August.

Option expiry is 21 August. The common correction would be larger in magnitude, though not necessary the ultimate plunge. Nonetheless, more upside in next few days.

China market is now in a jiterry stage, when some form of government curbing of loan excesses is expected, however hot monies still pouring in.

Sunday, August 2, 2009

1 Aug HSI target met


wanted to attach a picture, but strangely no where to click to upload.

Saturday, August 1, 2009

1 Aug GDP 2nd Qtr

http://www.youtube.com/watch?v=pUnS-PiI2_A&feature=player_embedded

Watch Denniger on youtube debunking the 2nd Qtr. In many ways he is right.
Be prudent with your investment at this stage.
Be careful with your trades, we are near the top, but not quite there yet. Do not short agressively, go long for some quick profits.

I read somewhere about the current China Stock Market rally. It is common knowledge that the current rally is fueled by companies investing government bank loans in stock market. the amount invested is upto 50% of the stimulus monies (400b USD).

While China exports is slumping. A interesting perspective is that China companies have given up on exports, and now making monies through stock market investment instead.

October, China celebrates 60 years of communism. Those who eventually buy the top would be the China citizens again.