Friday, August 19, 2011

QE3 - to be or not to be...

I want to reiterate, that as I had stated before we are in a dollar and equity market sell-off. I expect both to continue lower. Many are expecting a Fed asset purchase liquidity program...if that occurs do not expect a market rally. Apparently some people think that QE2 was a success, however, just as not being in a trade is a trad in itself (I am flat right now)...this market reaction is a direct results of QE2. So, as I stated before, QE2 created a lot of money with which to make charlatan bankers to make malinvestments...but what those same idiots have accomplished is the same thing they always have done...they lost more than they made. QE2 has been a total negative for the volume of money in the system...anyone thinking that asset prices will be saved by a QE3 announcement and quite another thing coming. The fed has ZERO credibility, QE3 will be quickly sold, while the dollar will also be sold temporarily and the EURO will rally temporarily...there may be additional volatility in Gold and Silver...however, the key word is temporarily...the volatility for all assets other than cash will be oriented in one direction...DOWN...very, very far down.

I have remained objective throughout this whole market turmoil of the last 8 months...unlike most analysts and market particiapnts...Additionally, I have also made a lot of money during that is time to be very is time to make sure your buying power is remaining stable or increasing. Being flat here IS increasing your buying power and THAT is a trade - a very successful one at that - which is why I am now patiently waiting for my shorts of EURO, Silver, Gold and long of the Dollar to setup and trigger...has some more work to do but it will be more than worth it.

Thursday, August 18, 2011

Its not 2008 - it 2011-ohhh-eight...

This is not 2008...its much worse. The banks are bigger, the debt imbalances are bigger, the risks are bigger, the leverage is bigger the corruption is bigger and the lies are bigger. This is definately not 2008...its way worse and likely will create much more devastation.

The markets are pretty much playing out as expected. Upside targets were 1210 to 1220 for the SP500 futures and we got within 3 points of the lower target. However, I have to reiterate that the biggest trades are not the equity trades - though those are going to be and have been large. I am not certain that the equity trades are going to let you in easily however. The markets are at the cusp of breaking to the 1020 to 1040 target that I previously discussed a few weeks ago. The reality is that if the continue towards those targets uninterrupted, they may just end up going a lot lower if the liquidity implosion gets into full gear now.

The reality is also that european (so far) market regulators in their infinite genius, are revoking the ability for market participants to speculate short or to hedge/manage risk via short sales. This has the exact opposite impact than what they intend. It panics market participants rather than calms them. It destabilizes markets rather than promotes orderly exchange. It turns market participants who were satisfied with executing hedges via short sales for risk management into outright sellers. If the europeans go too far with these tactics, we may wake up one day and find out markets down 25% on a gap open. I think that it is entirely reasonable for the markets to exceed my targets with a direct collapse below the 666 lows of 2009. I do not expect that and it would be a disaster and a shame...but if these brain surgeons continue to lie, cheat and deceive in order to further their bankrupt values and systems...then we have a much better chance of getting that result than I would ever have expected.

However, the trades in equities are not the monsters of the era, those are the currency and debt trades and the commodity shorts. EURO, Dollar, Pound, Silver, Oil, Gold, Palladium, the softs and does not matter they are all destined for a major collapse. However, I expect this panic in the equity markets to trigger further distortions in these markets. Targets remain as I have said a few weeks back: EURO - 1.47 to 1.49 and Dollar Index - 71 to 69. The action, will not be orderly...and Eric Sprott, among many others, will be broke when the ashes are revealed. The whole situation is just downright sick. But these trades are pending and I will be in them when my systems trigger.

Ashes to ashes, dust to I am beginning to understand what they were talking about in Sunday School.
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