Saturday, December 24, 2011

When 16 out of 16 analysts are looking for the least controversial means to further their firms agendas and charge their 2% management fees for providing terrible and useless advice, you know something is not what it seems. These guys have to be living in a different world and clearly can not understand basic economics. If ever there were a great indicator as to doubt, its the Barron’s round table and the asundry year end analysis from average to below average analysts with litte conviction.

In any case, here we are, and the central planners have succeeded in ramping the market while no one has been around and while people are attempting to be in holiday cheer. This ramp changes nothing and it gives no confirmation to any of the harebrained analysis from the dufus analysts in the pictured article. Below are some interesting charts to think about before all the year end pumpers come back to work next week.

Friday, December 23, 2011

Treasuries - interesting action today...

If these setups are as they appear…top tick in this bounce either occured on Friday or will do so early next week. Since futures will trade on Monday (Forex trades Sunday), it woud be very common for them to open flat, an unlikely but possible push to one more high in the futures markets and sell off hard - all before the equity markets had a chance to print any quotes. This scenario could have us opening gap down in the Equities markets on Tuesday if it were to playout as seems to be suggested by the Treasury charts below.

Risked up to their eyeballs…some charts for christmas

Much to my surprise the brilliance of Mr. Market needed to push an already VERY extreme dislocation in prices even further…so the markets rallied and rallied in the face of ever increasing internal stresses. I will be posting quite a few charts…nothing has changed from last weekend in any significant way except for the fact that the markets are more stretched and dislocated than before. How the risk markets can rally in the face of the fact that many European sovereign bonds are back into stratosphere yields, is something I can not answer - though I think the centrally planned market dynamic probably has something to do with it in addition to many people being over leveraged on the short side.

And NO the TBill yield persistently effectively at negative yield is NOT bullish…all in all, this Christmas especially, the Masquerade is back in full regalia.

Merry Christmas.

Wednesday, December 21, 2011

Ron Paul…his message is "restore america"

Somehow I find that significantly more believable than some amorphous ambivolent “Change you can believe in” rhetoric.

Government Approved…as ECB gets the shaft...


This is good news?…not it you judge a book by its cover...

This cover says exactly what I posted yesterday, financial engineering at its level best of its worst. These guys fabricated lower yields, fabricated data and fabricated the leverage with which to create the illusion. They made this whole thing up. Ususally exceeding expectation is a good thing - NOT IN THIS CASE.

The banks that borrowed, borrowed from an already insolvent ECB and with their appetite, confirmed just how desperate everyone involved really is. What’s more, is that this loan facility just makes everything worse, with the exception of the ONE DAY bounce we got…and that, as you can see, will not be a lasting legacy.

The dollar responded by testing the support level in the neckline of the Cup and Handle pattern and came down to the lower trend line as marked. Now the ridiculous policy of lending bankrupt institutions money that they can not and will not be able to repay will be justly rewarded.

Risk assets are now likely toast and the weekend charts that I posted are still 100% on track though they may have to wait for this holdiay week to pass. Of course, the equity volatility was higher than I would have liked but, all in all, NOTHING has changed and NOTHING has been FIXED.

Tuesday, December 20, 2011

Hopium is all this market has left


For all the hoopla, the dollar is simply retesting a breakout. This was something that I expected but with Cup and Handle patterns you quite often will not get a real retest. However, today’s move in equities and he EURO essentially could only move the Gold market roughly up $16.50 (it should be up roughly $110 higher at this point given the action in other key markets - but Tyler Durden or Morgan Stanley are all to happy to ommit that part) and silver around 50 cents at the time of this writing…this indicates just how much hopium is embedded in the moves.

Below is an example of more freshly smoked hopium…Tyler just does not give up...
The pullback in the dollar offered wonderful opportunities for attractive prices which apparently insolvent European banks are not letting pass without being noticed…I also, did not let the dollar prices go unnoticed.

The spread between the Dollar and inverted S&P500 has not come in and will likely lead to a brutal resumption of the previously scheduled programming in the not too distant future.

The Dollar and the EURO

Lets see if a directly engineered yield in a single new spanish bond issuance and games with German confidence numbers really means anything…likely it will not.

Sunday, December 18, 2011

 
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