Thursday 21 June 2012

Which part of this don't you understand?

I've posted hundreds of charts over the last few months, detailing the initial signs of an apparent  'global problem'. We've seen the world indexes start to rollover as early as January. We've seen the metals - along with their associated miners, continue to fall. Today Oil broke $80, another key marker. The econ-data (especially PMI) has been lousy for months now. There is nothing good lately, is there?

As I've asked a few times recently....which part of the following don't you understand?

VEU, weekly, 4yr

Its pretty clear. Along with dozens of supporting charts, whether stocks, sector etfs, commodities, indexes (US, or other countries)...they all are warning of the same thing.

A secondary deflationary collapse wave, in the style of 2008. Now, the Bernanke might - and probably will try to stall this collapse, via a huge QE3 of 1 trillion, but I think he is soon going to realise, he is already to late to stop it anyway.

First stop...sp'1150/00.

What happens there will clarify the rest of the year. If we can hold over 1100, then the market will again rally - not least, if some new QE after August. Yet,,,if we do break the 2011 low of sp'1070s, and if VIX can break 50..then the VEU chart listed above will indeed have summarised everything perfectly.

Today I managed to annoy myself with a mere 'small profit'. I suppose it could be worse. I could be one of those cheer leading maniacs who will be buying all the way down to hell.

That's all for today.



Closing Brief - Game Over Bulls

Those opening dow gains seem a fleeting hazy dream for the bulls. A rough day...a lousy close. Nothing good ahead for this market in the weeks and summer ahead.

The closing hourly index cycles...





A pretty brutal day of consistent declines, even the closing hour failed to provide what would often be a moderate bounce.

I will probably state it hundreds of times in the coming few months..but this market is now in real trouble. There will be bounces along the way, but I sure won't be going long ANY of them.

Maybe more later, but after what was a failed trading day, I'm probably even more displeased than most of the bulls.

3pm update - closing hour ramp?

A dow -200pt day, its certainly given the bull maniacs a good scare. However, we're still likely to get some sort of bounce..more likely than not.




Lets get one thing clear...I am not going long ANY bounce. So, even though I might believe a bounce is coming, I am NOT going to trade long....period.

I will side step this market every time I get the sense one of those stupid bounces is due. I've seen..and experienced too many hyper-ramps to risk being part of that.

My simple rule remains: short...EVERY bounce until sp'1150/00.

The game I am trying to play is to jump out as close to each low...wait for each stupid bounce..and then merely re-short at higher levels than my exit. Clearly, sometimes, the market will just keep falling - as it has done today. Besides, I never held to my original target today anyway, which was a stupid decision.

More after the close...but I am somewhat tired, and remain highly annoyed with myself. Urghhhhhhh

2pm update - bounce...due

Market weaker than just about everyone was expecting, even below my 1335 target. Both the 15/60min cycles are very low. We are due a bounce to the upper 1340s.

I can only imagine the glee and joyous cheerleaders on the clown networks touting 'we're off our lows!' at 3.45pm



Original 1335 target hit.

Looking to re-short at next 15/60min cycle peak....late sp'1345/50..possibly 55

1pm update - interior disgust

Well, that was one near complete waste of a morning for your resident permabear. A real example of just how rife with terror of micro-ramps I've become. After some 4 years of watching this nasty casino, I sure have seen my share of crazy mini-ramps intra-day that rip the faces off so many bears.

My original morning target zone of 1340/35 was indeed hit perfectly. Yet I 'ran for my life' at 1349. Great huh?



So...what now? We will surely bounce. Sp'1350..even /55 is possible sometime tomorrow.

There are some out there who are looking for a C' wave made of 5 smaller waves. They are STILL clamouring for one more high, 1370/90 kinda zone.

I really don't know about such microscopic market moves.

All I know.....sp'1150/ end July. simple rule is...short.  I will short EVERY single damn market spike.

12pm update - original target zone hit

Well, that was a waste of my time. I set a target, but bail way too early.


I had forgotton how annoying this can be.

11am update - a little bounce..possible

Well, looks like market wants to trade up for a few hours.




I was not happy with the 15min cycle, its too low..not good to be holding short I intentionally stopped out earlier at sp'1349.

Will seek a re-short at 1352/57 in 2-4 hrs. If no bounce...I'll sit out rest of today.

I still think there is good chance of 1340/35 as the next target..but...maybe it'll be a low for Friday morning instead.

10am update - seeking significant weakness

A mixed open, but I'm looking for a significant move lower as the day progresses. A rough target zone is 1340/35. That is a good dow -125/150pts lower, and that is arguably a somewhat bold call right now.

*four pieces of econ-data due at 10am...looking for that to motivate the market lower.




I will look to exit if we get 1340/35 at some point today, and then reassess.

*WTIC oil broke $80...and I've posted on this issue lately. The break of 80..opens up $60.

Yes..$60 coming.

More later

update 10.37am...stopped out of index puts..@sp.1349.   I'm not happy with the 15min cycle, its looking a little low. Will re-short in 2-4 hrs

Pre-Market Brief - the longest day

Good morning. I'm looking for at least a little wave lower this morning.We have four further pieces of econ-data due at 10am, and based on result numbers, I can't imagine they'll be good. In fact, Mr Market - (post FOMC depression?), might start to awaken again to the underlying horror out there in the real world.

So, I'm short, and looking to hold at least to 10.30/11am. I might exit there, and come back to re-short later in the day.

Weekly jobs: 387k vs 383k expected, another pretty lousy number.




From an hourly cycle perspective, if we manage to break sp'1347 early this morning, we should have a good chance to get down to 1335. We'll almost certainly level there, and bounce back 7-10pts.

Good wishes for mid summers day (at least for those in the northern hemisphere!)

Bears should seek a red June monthly candle!

The following issue is something I can't emphasise enough. Those bears who are looking for major declines in July - and perhaps also later in the autumn, should be looking for June to close net-red.

Sp' monthly, scenario


We're at sp'1355, so far that's 45pts higher in June. We therefore need to see June close lower than 1310. Take a little off that it sp'1305.

The doomster-bears 'should' be looking for sp'1305..or Friday June'29.

If that is achieved, then the primary target of sp'1150/00 by late July will be on schedule.

My best guess remains scenario B. There are still some who are now looking for A', yet with the FOMC deciding not to do QE3, a continued rise into July and across late summer now seems highly unlikely.

So...I'm seeking sp'<1305, we've 7 trading days left of June to go. It is well within range to accomplish.

Good wishes for Thursday trading.

A little end Fed day

I was wondering how to close today, many traders are probably overloaded from today's choppy price action, and endless chatter across both the web and TV about 'what is next for the markets?'.

I thought this would be a good chart to close the day....

Sp, daily, fib levels


Yesterdays near-hit of the 61.8% retracement Fib level - based on the wave'1 count, of sp'1363 would make for an absolutely perfect peak for wave'2.

Will it really pan out as simple as this? Wave'2...1363...and now wave'3..down to 1150/00 across July..and into August?

It is certainly something to dream on.

Goodnight from London

Daily Index Cycle update - The turn begins?

A choppy day, but then that is to be expected for a Fed day. Clearly, many were confused by the choppy action - not least those cheer leading maniacs on the clown networks. Yet, today was broadly as expected.

From a bearish perspective, today was VERY pleasing. Despite QE-twist being extended until end'2012, the market failed to spike above yesterdays 1363 high. The only concern (as updated earlier) was the weakness in the VIX.

IWM, bearish outlook


SP, 4mth



There is clearly NO definitive turn lower yet. We could quite easily just churn sideways for a few days. There is also no major econ-data until next week, although there are a few minor data points Thursday morning.

First target will be a close under the 50day MA of 1346
Secondary...10MA of 1331 (but rising still)

I think there is good opportunity to at least get down to test the rising 10MA by Friday - although by late Friday it will have likely risen to around the 1335/37 level.

So..the big question is of wave'2 complete?

The ultimate clarification of that question will only be with a break under the recent sp'1266 low. Only then can we be sure that a new wave is underway - with the lower high of 1363..and a new low <1266. We will likely have to wait until the first week of July for our first opportunity to hit that. I'd look to the July monthly jobs data, Friday July'6.

I'll be highlighting this issue a lot for the rest of the month, that I think it is very important to see June close at sp'1305 or lower. That will keep the primary bearish outlook firmly on track. A close in the1330/50s, would probably do some real damage to the primary target of sp'1150/00 by late July.

A happy permabear

So I'm pleased with today. The Fed have made their decision, the Bernanke has spoken...and the bears now have a clear 5-7 week window to drive this market lower to sp'1150/00. If sp'1363 was indeed the top of this 13 day cycle, then my new short block from 1358 will work out pretty good in the days and weeks ahead.

A little more later...