Saturday, September 26, 2009

Faber speaks with forked tongue

On the 22 of September Faber said this:
"Now we have a particular situation in the US whereby interest rates are at zero and the fed has made statements whereby they will not increase interest rates much. They will keep them below the rate of inflation. In this environment the worst investment, of course, is to be in cash, in the long-run, or be, even worse in US government bonds. What you want to be is in assets, whether it be real estate, commodities or in equities. And ideally, of course, you are in foreign currencies or a currency that can not be increased in its supply, like gold, silver, platinum, palladium etc."
 ..."my view is, probably over the next 2, 3 years you are better off being in equities"

It is clear that these statements can not be misinterpreted. I can find no other way to understand the statements above than he foresees a total collapse of the dollar and explosive inflation in the long-run. While I agree, inflation will likely be a problem at some point. It is likely 4 to 6 years away. Anyone who takes the Faber trade will be broke by then, yet Faber may still try to say - "I was right". Again, I think that his views are irresponsible and dangerous.

Currently he is saying:
“I wouldn’t be surprised if we’d seen the peak of the market for this year because the economic news isn’t going to improve very much. The correction in the market has been overdue for quite some time.”
A correction is not deflation...and a pullback in Gold is not deflation. He is looking for pullbacks. And, in my opinion the stated basis for a pullback is pretty flimsy at best. I would much prefer him to state some technical reason...absense of good news does not drive prices one way or the other. If absence of bad news were to drive prices then this bear market rally would not have been possible. Faber looks pretty confused and disoriented. I can understand that, this market is not rational (and no market is), but the smarter you are the more you try to rationalize it. This is why Faber is missing the big picture...he is trying to come up with a nice rational and intellectually stimulating story or thesis. That is, by the way, a great way to be entertained...but definitely not a great way to make money.

A dollar crash and inflation fit into a very marketable story... probably you can get a lot more signups for $200 if you use that story than a huge dollar rally and epic deflation.

What we will likely get in my opinion is not a pullback, but a resumption of the trend. Just look at that real estate chart that I posted previously. We have a way's to go before we even get to wave 4. And, Faber absolutely recommends real estate assets in the above video.

Another sign of a top...Dr. Martin Weiss, Phd, Md, Esq, Jr, III

Martin Weiss, in my book, is a freak. He pushed leverage short ETF's at the bottom. His options and leap trades are 90% losers if you check the actual trades...I had to do a lot of work to find a history of his option trades. Most of his trades, in general are losers and he wants to charge you $5,000 a year for advice. (see trade history below)

Interestingly, after 27 years of promoting a deflationist view, Weiss has now converted to an inflationist. Clearly, he is responding emotionally to rising market prices and to all the angry letters from people who bought leveraged short ETF's with out any risk limits. SRS which is one he was promoting at around 100 is now 10 bucks. If you followed his advice he did not advise you when the trade was broken, nor did he advise you that these are depreciating assets. The market could go down 50% in a year and this type of security could be up only 10 to 20%. Now get this, after putting everyone through this...he now is essentially saying buy long ETF's.

If this is not another sign like Faber, Grant and others...I do not know what is. Weiss has to be the worst market timing trading advice I have ever seen and now he is wrong on the fundamental side too - right at the there any better time to change your view?

If You Don't by Health Insurance and Don't Pay the Fine?

Now this is progress! Go Obama...

This is not China or Russia Mr Obama.

I think Obama should start doing some of the things he said he was going to do. Its  getting rather ridiculous...what else are they going to come up with.

Politico reports:
Sen. John Ensign (R-Nev.) received a handwritten note Thursday from Joint Committee on Taxation Chief of Staff Tom Barthold confirming the penalty for failing to pay the up to $1,900 fee for not buying health insurance.
Violators could be charged with a misdemeanor and could face up to a year in jail or a $25,000 penalty, Barthold wrote on JCT letterhead. He signed it "Sincerely, Thomas A. Barthold."

Inconsistencies and Lies form the FED

These guys should go to my previous post of Alan Grayson's questioning of the Attorney for the Fed...he claimed that the increase on the Fed stated balance sheet (this does not refer or count the 14+ trillion off balance sheet increase that the fed is hiding) of 1 trillion dollars or so was based on open market transactions for agency and other securities. In this video, the fed states with high degrees of confidence that these transactions were loans and other transactions.

This guy can not get straight did they spend the money or lend it? And the General Counsel for the Fed thinks they did open market transactions and so they do not know who the counterparty was.

This is a total FRAUD...what do you think they did with the money. I think they gave it to their buddies.

Friday, September 25, 2009

Does the Federal Reserve Engage In Market Manipulation?

Watch this...Paul and Grayson are heros.

Single Family Home Prices in the US

Today, it was reported that the median price of a single-family home dropped 2.3% in August. The stock market sold off on the news. For some perspective into the all-important US real estate market, today's chart illustrates the US median price of a single-family home over the past 39 years. Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased – increased. That brings us to today's chart which illustrates how housing prices are currently 30% off their 2005 peak. In fact, a home buyer who bought the median priced single-family home at the 1979 peak has seen that home appreciate by a mere 4%. Not an impressive performance considering that three decades have passed. Over the past two months, single-family home prices have resumed their decline and remain (until proven otherwise) in an accelerated downtrend.

What's important to realize is that the rise in home prices has not reflected any of the momentum of the stock markets....or all the unabashed optimism of economists and policy markers. This chart is reflective of a market in a wave 3 decline. We still have not gotten a wave 4 consolidation nor are we anywhere near making a wave 5 low.

This is not good news for Bernake...nor is it good news for Peter Schiff or Marc Faber or those bears who recently capitulated. Lower real estate and land prices will collapse balance sheets further and blow up all those off-balance-sheet entities and SIV's to the point of no return.

Short-Term Bounce indicator

Watch for the CCI's to cross -100 at the same time and a break of that trendline.

Dow is under wedge line

Thursday, September 24, 2009

New articles I am working on

  1. China - stimulated for catastrophe...a dictator's depression
  2. JP Morgan - insolvency masked by smoke, camouflaged by mirrors
  3. The bank of the world - engineering the bankruptcy of the planet
I have been a little slow lately...please be patient. I think these are good and enlightening pieces...but its not easy to put them together.

Market Observations - Indexes at supports

This chart of the Russell 2000 Futures shows a major support at 595.4. After hours this level was touched. We should look for a bounce from these levels. If there is a break down from these levels (1039 on SPX and 589 on the Russell Futures) that would defiantly qualify as P3 type behavior. However, if we can bounce from here we may make a failed high and then take out support thereafter. We have a lot of unfilled gaps up to the 1077 area on the SP futures. I would like to see them filled. Also, there are a lot of good support levels shown on this chart as targets on the down side if we go that direction.

If there is a gap down on the for that gap to be bought.

I trade the TF futures and they are a very good momentum gauge for the markets. If they start showing downside outperformance....larger indexes will usually follow

9650 is potential support for Dow

Industrials Break Wedge

Mid caps under heavy distribution

Jim Rogers has not sold any Chinese Shares since 1999

This is one hell of a volatile ride...china may not see its all time highs for decades...quite likely it will take out its 1999 lows much sooner than that.
Jim Rogers says since 1999, when he bought his first China Shares he has never sold them. Rogers believes that after ten years China stocks will still be rising, but at the same time he has sold all stocks from the other emerging market countries.
Last year in October, he bought stocks in China again. But the Chinese shares he bought were H-shares, B shares, and S shares. He has never bought A shares, since the A shares are too expensive, and perhaps one day, China's H shares, B shares, S shares and A shares will merger as one kind of stocks.
If signs of collapse appear in China's stock market, Rogers would buy more Chinese shares. He thinks this may happen in the near future, but not at the present time , because although China's stock market is making adjustment, no one is selling Chinese stocks in large quantities. Besides, China's stock market rose 80 percent in the past six months, prices have been too high," I will not buy Chinese stocks at this time. After a year or two, I would consider buying Chinese stocks again" Rogers added

Wednesday, September 23, 2009

FDIC, is rapidly running out of money because of a wave of bank failures

If they believe the confidence game ponzi scheme can be held up when insolvent institutions are guaranteeing insolvent regulators who guarantee institutions...then we are in for a very rough road. As I said in my first post about the FDIC, where did all the money go? FDIC incompetence - where did all the money go?

The press is not asking the right questions....what about the conflict of interest? If you need to borrow from an insolvent institution and then have the audacity to suggest you will insure that very institution - who is going to believe you?
Posted Tuesday, September 22, 2009 3:59 PM -
Banks May Bail Out the Bailout Bailing Out the Banks
Daniel Gross
Say that three times fast. Reports today suggest senior regulators, including the FDIC's Sheila Bair, are thinking about tapping the nation’s healthy banks to lend billions of dollars to rescue the insurance fund that protects bank depositors. The fund, overseen by the FDIC, is rapidly running out of money because of a wave of bank failures, and Bair would rather go hit up the banks themselves than go hat in hand to Tim Geither--who is, by all accounts, not her favorite person. There are a few reasons why this could be smart--for Bair and for the administration:
  1. The debt ceiling limit is approaching, and needs to be raised. And it's always a time for the opposition to make mischief. Anything that limits the need for Treasury to ask for less borrowing capacity is a positive.
  2. Bair has been tougher on the banks than Geithner or Treasury (or Congress), and is likely to continue to be. The more the FDIC is able to make and execute policy without having to rely on Treasury, the better.
  3. In recognition that the healthy banks (such as they are) have been enormous beneficiaries of all the extraordinary efforts--guarantees, zero-interest rate policy, bailouts, etc.--they should make funds available to the FDIC at extremely low rates. The healthy banks have benefited enormously because the government has let them rent the government's balance sheet. It's fair to ask J.P. Morgan Chase to return the favor.
  4. The great thing about the FDIC--historically, at least--is that it's self-funded. The banking industry essentially insures itself against debacles and failures. The problem in recent years is that, largely due to Congressional interference, the insurance was under-priced. Banks didn't pay nearly enough in insurance premiums. The principal going forward should be that that the industry is responsible for funding its own bailouts--whether it's through the insurance premium on deposits, which should be raised (especially for the big banks); and through the fees the FDIC is collecting for guaranteeing debt banks issue (about $9 billion so far and with the possibility of $30 billion over the life of the program). Premiums have to go up, and will. But there's a degree to which its counterproductive to jack them up sharply right now. Ultimately, the big, healthy banks will be paying more in premiums. If the FDIC borrows money from large banks, ultimately the same banks that lent the money are going to be kicking in to pay the interest.
see full article here

Transports - Highest Volume Day Since 2006

Biggest selling day EVER...look at these two charts.

Marc Faber's Historic Headline

"Buy Stocks Because US Dollars Will Be Worthless" - Marc Faber

If one of the worst market calls potentially of all time was made by Marc Faber yesterday...kindly refer back to this screenshot.

Depending on how you view it, his advice could be interpreted as irresponsible. His premise flawed and his facts dubious.

You don't get a better capitulatory indicator than this if it turns out as I expect it will!

SPX does not show the same structure as the DOW

The SPX wave count is not as clear as the I am preferring the Dow.

Vix never closed below that support shelf.

Transports have biggest volume day of the year...and its DOWN.

Baltic Dry Index breaks 200 day Moving Average.

5 Waves Down - Dollar Takes out HOD

For this market to remain looking to upside targets we needed to keep ABC's for downside moves. That did not happen. Today we got a powerful impulse wave off the high combined with the dollar trade calling the fed's bluff and taking out the high of the day.

Odd's no longer favor continued upside.

That was not so emotional was it? Long's will likely not even notice a down trend until its too late.

I hope Marc Faber, Peter Schiff and Warren Buffett have their army boots on.

Ken Heebner of CGM Funds must be hanging out with Faber

Ken likes Ford - he says there is a shortage of cars.
Ken likes Goldman Sachs - he says they are best of breed.

Cash for clunkers is done and a failure. Additionally, most car company CEO's have reported that results will be terrible to disastrous for September.

We are going to see harsh reality in September. U.S. industry results are a disaster.”  
--Sergio Marchionne, the chief executive officer of Fiat and Chrysler

What both of Ken's statements have in common is good imagination...I think these money managers like to speak to hear their own voices. Apparently, that can get you clients?

Take a look at Ford...beautiful impulse wave - problem is the pattern is complete - there no volume at these levels. Not to mention no earnings visibility.

Take a look at they know what they will earn next year? Would you believe them?

It definitely feels like these guys are trying to set a trap...or they are just stupid.

Most likely its a combination of both.


Time machine

I remember the march low. I remember it vividly because I was on a conference call and when the SP500 hit 666...I suggested while on that call that 666 was too ironic a number for the manipulators at the Fed to ignore. I suggested this would be a bottom. But then being an astute trader (supposedly) I looked for VIX, put/call and volume extremes...none of which occurred. The only extreme that existed was the percentage of people bullish the market were 3%. We did not get capitulation - in fact what happened was we had a huge flurry and large volume of call buying. Just the opposite. Bulls are not supposed to be right - remember. I imagine by the banks who were telling all the pension funds and retirees to sell some insurance against their portfolios were buying those calls. Ironically, they most likely used tax payer money to fund these trades.

Those call trades obviously worked rather well - to put it mildly.

Back to the future

Here we are again...emotional extremes but the market has not capitulated...but we are seeing rampant bullishness. It must be well over 90% by now. Dollar bulls are probably below 3% by now. But that's it. Volume is declining. And institutions are loaded to the gills with inflation assets. I suggest that the situation that happened on the un-bottom bottom we had in march may be able to happen here...we may not get a convincing top. But by the time most recognize the top is in they will have bought every dip on the way down. Remember in March, the lack of a convincing bottom had most people doubting the market's commitment to go up without a retest at least. So, the market was shorted every time it went up and that reinforced the uptrend by trapping shorts who felt flush with money after the sell off.

Do the longs feel that way now? I suggest they do. I also wonder if they are being setup the same way the bears were. The irony is that, the absence of a capitulatory bottom fooled a lot of people. A lot of people did not get long in time...they were too worn out from trying to buy all the way down. Doesn't that remind you of this extreme now?

I prefer the emotional top scenario that I have discussed in previous posts. But it is important to consider alternatives as well. The market like to do what fools the most people...and perhaps a blow off bottom in the dollar may elude us...and the commensurate top inflation assets.

Behold the non-top top may be approaching.

Emotions are at extremes

I posted this post - So, its all getting very interesting... on Sept 2nd. I have to admit I was looking for an inflation or hyper inflation trade to develop. I expected that this would happen - but my expectations were milder in relation to stocks and the dollar than has actually occurred so far. What is ironic is that silver had a strong inflationary reaction but gold is floundering...I would like to see a higher move here in gold and think that if a wave 3 of 5 move down, gaps the dollar down tomorrow or sometime over the next few days...that could set the stage for a pronounced pop in the metal and the markets. However, that pop could likely be accompanied by a reversal the markets and in the dollar in fairly short order.

The Market

Take a look at the markets today. They struggled, overlapping their way up after a small gap up. Problem is the dollar had a huge gap down. Equities are suffering from exhaustion IMO. Also, people keep referring to mututal funds and investor's large commitments to the markets as bullish. Additionally, everywhere you go you hear that there is a large amount of money on the sidelines. Well, lets take a look at that. Mutual funds are required to hold a certain percentage of assets (I believe 2.5%) in cash. Additionally, they need to cover their fees and operating expenses. Most of these funds are now tracking with less than 3.9% cash reserve. This essentially leaves these funds broke. So, when they need to sell - my question is who will be there to buy?

The Transports

Take a look at this very good chart from Mathew Fraily at - Bullish Percent for transports are at all-time highs if this chart is correct. And additionally to that, ships are sitting in harbor empty for months, Baltic Dry Index prices have sunk tremendously and china's factories are continuing to cutback output and workers. Did you know that 75% of shipyard deliveries (new ships that have been built and ready for delivery) are being defaulted and are then sold in the distreed market. Shippers are unable, or unwilling to come up with the cash to pay the final payments (usually the largest) when the ship is complete. This is not just happening in western economies...chinese shipbuilders are getting killed.

Marc Faber

Another fascinating event, is the truly amateurish presentation by Marc Faber. I really feel that his presentation was almost laughable. Essentially, and I never thought I would say this about Henry Bloget, Bloget looked a lot more clear minded than Faber. When asked about why the inflation of the 70's and bad performance of stocks during that time, Faber answered that "if you bought mining stocks and oil stocks you did well" ...and "if you bought the low in 1974 you made a lot of money"...and "there was a lot of volatility"...Please forgive my ignorance, but those do not seem like answers to the question that Bloget asked and more importantly they are only anecdotal attributes to an over all market.

Another piece of information that Faber seems totally oblivious to is that you can not have global liquidity expansion when the only people receiving credit are failing banking institutions. Expanding liquidity requires that money is flowing through the entire system - not just a small part of it. Additionally, expanding liquidity which implies the creation of more currency though fractional reserve practices - requires loans to be issued and decreasing bankruptcies. We have increasing bankruptcies, credit lines being pulled or reduced and limited availability of new credit - unless you are government, failing bank or institution or a government guaranteed ponzi scheme like the FDIC, Salliemae, Fannie Mae, Federal Home Loan etc.

How can you base a forcast on this market on anecdotal attributes of another market that ironically has little in common thematically with this one? In any case, Faber sees the dollar collapsing and made the most atrocious recommendations I could imagine. Talk about jumping from the frying pan into the fire. He is recommending that inflation or hyperinflation will effect the US and its currency, driving up stocks and commodities, while it will have little or substantially less impact on currencies like the Euro. The irony is that he Euro is not a stable currency and will be and is being dramatically undermined by the instability of its members and their ability to maintain its backing. Faber, is one terrific reason to start looking down for inflation assets and up for the dollar in my opinion. Really that was a hair-brained interview. He should be embarrassed.

Somebody responded to my post about it, that upon seeing the piece he thought Faber had to be setting himself up to be long the dollar...but was advertising the opposite case. Somebody else responded that Faber has been more correct than EWI or Precther. I would like to see some documentation of even Prechter's pronouncement to be short was early - and he said as much...he has a high probability of being right. I am keenly aware that the dollar trade by Prechter was early and the calls to start shorting equities were early...but Prechter , made a reasonable case, limits and has at least has a reasonably high probability assumption and chart analysis to base those trades recommendations on. I am sorry but Faber is prognosticating with tea leaves...where is his stop? And what was his best trade - certainly not calling the top to the day on the SP500 and capturing 800+ points. Atleast, EWI gives you limits in their update analysis. I agree that they are quick to label pattern with the most bearish potential when other labeling would likely be more probable. This is why danerics work is so good...he made several of the big calls that EWI was overly bearish on...Gold rally, Dollar ED...but he too has ben challanged by the never ending ED of the equity markets. But to be realistic, I would prefer to have these situations than hair-brained recommendations like Peter Schiff and Marc Faber seem comfortable in making. Marc really surprised me.

Oh, but I get it now, the market can rally infinitely on a falling dollar and the inflation that that creates.

General Rediculousness...

Check out this link (I have seen quite a few others like it but its too late to find them now) - as far as sentiment is concerned this is getting a little extreme:

Gold should reach $15,000 oz Mike Maloney

and Warren Buffett does not know why he's buying stocks, but he's buying them anyway because he knows their intrinsic value. But he seems woefully unable to understand the intrinsic value of cash....which would have way outperformed his portfolio for the last 8 years...though he suggests the worst investment you could have made of over the last 8 years was treasuries or cash. He maintains that going forward also. Buffett own's too many stocks that's why he manipulating facts related to the best uses for peoples money. If you had a 50 billion dollar risk staring you in the face in the form of naked put options you wrote against various indexes - you would most likely be talking up stocks too. see: Buffett - buying stocks because of intrinsic value?

In a post discussing the dollar and Danerics (Daneric's Elliott WavesED pattern...I was clear that wave 5 for the dollar looked to short as EWI had labelled it and that the preferable pattern to trade would be the ED. This pattern now is starting to look more proportional to a wave 5 in relationship to wave 1.

For additional reading please view: Derivatives...what the heck were they for?The EURO - starting a trip to oblivion, More dollar what-if discussion, The Dollar - biggest short squeeze EverWarren Buffett - a bull-market manifestationAll we need is a hit to theoretical money

Tuesday, September 22, 2009

Buffett - buying stocks because of intrinsic value?

When asked if he agrees with Federal Reserve Chairman Ben Bernanke's comment this morning that the recession is probably over, from a technical standpoint.He answered :
"I don't know the answer to that ... and I don't worry about it too much. We're buying stocks this morning, I can tell you that. I'm not buying them based on whether we're coming out of the recession in three months or six months or a year. I'm buying them because I think we're getting good value over time. And I think it is a mistake for investors to focus on business forecasts instead of looking at the intrinsic value of the business." -- Warren Buffett
My question, is: if you do not know the intrinsic value of the dollar, how can you focus on the intrinsic value of the business. Are Buffett's furniture stores a good value, how about chevron with oil at 140 or Well's Fargo?

I am losing more and more respect for Buffett every day. It really seems like he is stock promoter. I always though that he had more character than that.

Marc Faber Loses touch with reality

This is an extremely flawed diagnosis of the situation and surprising coming from Faber. Its interesting that the blowoff that the dollar may get here may make it look like equities are the place to be...but there is little support for that condition to continue beyond the targets I have discussed on the indexes.

To reiterate, Mr. Faber. Your thesis that the dollar will go into the tank is a credit-inflation manifestation and we are not suffering from credit induced inflation. That condition should have been identified 3 years ago. The dollar is already in the tank - its down over 97% since the Fed took over managing inflation and protecting the dollar. But isn't it ironic, people are sure the dollar will go in the tank when it only has a few percent to go to get to zero and is relatively worthless alreadyI am sorry to inform Mr. Faber (and Mr. Buffett) - the dollar is already worthless and maybe it wants to go up for a few years.

Please read my posts regarding the dollar, derivatives and money generation to understand the delusional views that Faber discusses. There little chance that his scenario could playout. With interest rates so low and no on is global liquidity going to expand? He's really out of touch!

Warren Buffett espouses some of the same prognositcations as Faber...and even states that the worst investment you could have made in the last 8 years was treasuries or cash. When in fact that is completely false and inaccurate. see: Warren Buffett - a bull-market manifestation

Also see:
Derivatives...what the heck were they for?The EURO - starting a trip to oblivionMore dollar what-if discussionThe Dollar - biggest short squeeze EverAll we need is a hit to theoretical money

The Dow is having issues

This rising wedge is not getting follow through for the dow (not the Nasdaq 100)...

Check this chart of the Dow...this may or may not get a test of the upper both of them as the dow is showing relative weakness. If it gets strength it mat try for the upper trendline...otherwise the lower trendline is calling. Also, watch for the stochastics to cross under 80.

Nasdaq 100...remains a laggarad

The nasdaq is beginning to consistently demonstrate reluctance to lead the market...this has been exacterbated today and if it does not change will likely lead to significant divergences that will likely turn the market trend.

Check out this chart of QID.

Transports - are they missing a 5th wave?

Dollar Drops - likely completing wave 5 now

I have to get some sleep. Just checked the charts and as I expected and posted in my earlier posts...dollar has made a rebound and needed to make one more new low. We made a small wave 4 Friday and today and need to make the small (minute) wave 5 down - likely to below 76 to bottom out. Should be a very interesting day tomorrow...possible that we get a huge reversal in the next day or so as capitulation reaches an extreme.

Monday, September 21, 2009

Throw Overs and the Nasdaq

In my recent post regarding the market scenarios, I was looking for some sort of decisive and volatile reaction to the throw over breakouts on the SP500 and Nasdaq 100. Well, we have not gotten that reaction or any follow through so far, and I am still expecting it. If it is to be to the upside, it should be rather weak, given the lack of strength shown so far at this trend line level. If we were going to break out to the upside, I would have expected hard buying and a panicked type intensity to have occurred already. What we have seen instead is panic in AIG shares and very bad trading in the Baltic Dry Index and Transports. I am quite sure that this is not conductive to further follow through to the upside of substance. This is not to imply that I do not expect efforts to the upside.

One other issue that I would like to point out, is that nearly every major top in the market has been accompanied by a failed or over optimistic throw over in the QQQQ or Nasdaq 100 shares. This one is no exception. I would expect that, without immediate and powerful follow through to the upside, any trader worth his weight that is holding any long positions will see such a move as a failure and a sell hard. Goldman, JPM and other firms with large tax-payer funded discretionary accounts will be quick to overwhelm the deer- in- the-headlights pensioners and retailers...if that does play out.

So, tomorrow is simple..."big up with lots of volume" or else. Even if we get "big up" with lots of volume, its likely to be a top of some magnitude over the next few days anyway. But if we do not, then the throw over has failed and likely represents the end of the "never ending" primary wave 2 up.

Please see my gap chart for the SP500 for some levels for the SP500.

[update: 12:00 am]: In response to a comment, I posted these thoughts. Thought I would add them here.

In any case, I do not see why people would want to take the market down before the end of the month...when returns are good for the month - why not close the month respectably and then roll the thing over. The dollar, SRS and other ETF would make very nice divergent lows if they were to make a new low. That could fit very nicely if we get an emotional up reaction from the indexes. In any case, the pattern is emotional, and any thesis related to october would be meaningless if this emotional area reacts stronger or sooner than the end of the month. In any case, equinox tomorrow and a significant fib time window from 23 to 27th. Pays to be alert.

SRS - Gets Huge Volume and Divergence

Just as expected...the potential reduction in money available to put a bid under the market...possibly coming from the recent money market exodus may be adding to the market's head winds...certainly the accumulation volume for the SRS is showing significant evidence that the market is ending it move.

SRS has moved from 273 to under 9...if that's not capitulation I do not know what capitulation is. There is a flag developing here that points to a small move lower in SRS and then a major rise.

SP500 Gap Zone

Looks up for one more slight push could be possible but not necessary, then hopefully the never ending P2 is done.

Fed Rejects Geithner Request for Study of Governance, Structure

Sept. 21 (Bloomberg) -- The Federal Reserve Board has rejected a request by U.S. Treasury Secretary Timothy Geithnerfor a public review of the central bank’s structure and governance, three people familiar with the matter said.
The Obama administration proposed on June 17 a financial- regulatory overhaul including a “comprehensive review” of the Fed’s “ability to accomplish its existing and proposed functions” and the role of itsregional banks. The Fed was to lead the study and enlist the Treasury and “a wide range of external experts.”
see full article here

SP500 Levels

Russell 2000 top vs IWM top?

We have a little divergence...IWM has hit it upper resistance...but $RUT cash still has a ways to go...interesting...

We are close...but how close?

Great Interview with Dr. Ron Paul

Please see this video also...goes very well with Ron Paul's discussion.

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