Saturday, April 13, 2013

Chart round up...

I will be updating this post and adding charts so please keep checking it if you are so inclined…

Liquidity is a funny thing, in general in our markets over the last 10 years or so pretty much every asset is the contagiously relative to liquidity pressures. If liquidity is being provided by central banks then we have seen all assets rise…when a margin call develops to the point of significant liquidity stress in one large asset or an asset class such as equities or commodities it starts to spread to all other classes and we tend to end up with the same result nearly all assets trade in the same direction at the same time with the exception of turning points. The chart of Gold below shows clearly how gold is primarily correlated to equities. Times when Gold has significantly uncorrelated from equities has been indicative of significant stress and usually precipitated significant market fluctuations.
Below is the same chart with proper percentage performance scaling…what we can see here is how much air lies beneath commodities and also how much QE went into them…Moreover, it appears that the most QE sensitive securities are now looking for deflation and an end to QE. It starts with a break of Trendline A in the below chart.
Of course, the number 1 biggest bubble blowers can not see a bubble when it hits them in the forehead…I am quite sure these guys have the same problem with not being aware of their own flatulence...

Friday, April 12, 2013

Bitcoin, Gold…then equities…Why? BURNanke and friends...

Its been a rollercoaster…a BURNanke and buddies fueled roller coaster. Its not likely to stop anytime soon, since this is the biggest experiment that the “good" professor has ever implemented. We are currently sitting in a position where fear of fiat currency has driven people to extreme heights in Silver, Gold and even into Swiss Francs…followed by runs into Oil, Equities, Bitcoin. Bitcoin’s recent collapse was a sign of a crack, in my opinon. But I want to reiterate something here now…if you look at bitcoin over the last year or so on hourly charts you will see plenty of times that it dropped 40% or 60% and has not been called a crash or a bubble. In this case it was termed a bubble because it was in the public eye and also perhaps because $200+ seems like a substantial price. The reality is that all the drops of 50 and 60% before ended up being surpassed substantially. It seems to me that it will happen again as the FED continues to screw up the financial system, their mandate and the currency.

So, Bitcoin has had a crack. Which spread to the next anti-fiat defacto currencies: Gold and Silver. Gold has had a huge drop but looks like $1,100 to $1,200 to me before all is said and done. Minimum objectives seems to be around $1,300. Silver, also is down just about 50% off its high but, not withstanding a few bounces to come, targets roughly $15 before a substantial turnaround is to occur. So, we have inflationary commodities cracking like Gold, Silver and Oil yet the most inflationary asset of them all “STOCKS” are still standing…I think the crack will happen there too…in a very similar manner. Nothing a 70 to 100 point down day on the S&P would not fix - and it seems likely to happen soon. Certainly, sooner than so many of the abundant bulls may think.

BURNanke and company should be proud…and Cyprus is not dead or gone and not fixed.

Nasdaq 100 - a big picture look...

JGB Have a WILD night...

Warts, Halts and all...

Thursday, April 11, 2013

Retail data and Bank Earnings tomorrow…what do the charts look like...

JPMorgan and Wells Fargo Report tomorrow…their charts are not showing a lot of excitement about this report…neither are many of the other banks…additionally almost all the big banks are underperforming the Bank index substantially.

Retail Sales come out tomorrow at 8:30 and Target and WMT both look like they might also not be too excited about this report…they both barely participated in yesterday’s huge rally and have hit resistance.

Bitcoin Swan Dive…a sign of things to come for risk markets

While its hard to imagine that people would drive a bus with directly over a cliff…apparently the ability to ignore anything but the fumes of whatever is being breathed has enabled this capability. A cliff is dead ahead and no one wants to stop breathing the fumes that prevent them from thinking, conceiving or concerning themselves with it. Just push the pedal to the floor and disable the brake…that’s the chosen way not only apparently by Central bankers but those trying to front run and evade them…but its clear that the cliff is irrelevant if you are travelling so fast that you don’t even feel when you have gone over it.

I see the bitcoin swan dive as a part of a violent cycle of its evolution as a free market currency and reaction to distrust of the financial elites. But I also see it as a wave in psychology as people start to process just where they have gone and what they have done and that realisation sets them up to exit stage left for all risk assets.

GOOG, MSFT, AAPL, INTC among other big names down. Transports rejected at resistance and lower high, Russell 2K too etc…- lots of conflict in this market

Wednesday, April 10, 2013

JGB Watch and some comments...

The markets have made it clear that they wish to behave just like bitcoin currency trading…they wish to trade straight into risk with eyes close, ears blocked and elbows locked…no divergence or retest will be required…Small Caps still lagged as usual today, VIX is not celebrating and did not make a new low and treasuries are not pulling back commensurate to equities. Moreover, AMZN, PCLN, AAPL, GOOG and a host of others played not roll in this charade today…We are now dead nut at the resistance from my earlier posts...Expanding Broadening Triangles also a SIGNIFICANT CYCLE HIGH Timing projects for Thursday.

Distrust of Central Bankers is directly responsible for the problems in Europe, the huge need for people to find alternate transactable currencies like bit coin and then rally them aggressively (though volatile bit coin will likely go higher yet for this reason) and for diabolical economic and earnings reports being simply a noisy sideline and distraction.

2:00 am: BOJ engineered gap?

11:30 pm: JGB saga continues...

JGB Watch

6:30 am: JGB’s sustain trade near lows of friday…Japanese Government and Central Bank slow motion margin is beginning…looks like it will get a lot worse…in the old days Equities would be panicing rather the ES making new highs…situation normal all central F***ed up

Tuesday, April 9, 2013

Central Planning Gone Wrong…Nikkei displays proportionality even a lunatic can not ignore...

Are you about to get COREzined by BURNanke?

If you have bought the party line, believe in tooth fairies, central banker fairies and bank deposit insurance, and especially if you are long and think like the one celled organism (no offence to 1 special reader of my blog) from the Bloomberg video posted earlier today…then you are likely about to feel the meaning of the two particular words: "tail risk" and “corezined”. BURNanke has obviously our COREzined even COREzine himself and we are about to see how it all plays out and if the fairies will come dancing down the isle to further suspend reality.

There are signs everywhere, VIX, High Yield bonds, US treasury interest rates, rates versus equities, JGB’s, ECB’s, divergent new highs, technicals and fundementals…TAIL RISK is not fun people have forgotten that it even exists…and that about usually when it rears its ugly head and reduces 6 months of gains to losses in a matter of days…when it happens is not predictable but in this environment it seems to me the “IF” is not in question. We certainly know that with BURNanke’s record of being aware of what is going on combined with his adept ability to get just about EVERY single forecast wrong, I guarantee that he most certainly can not see anything coming at all that is about to happen.

If its not clear by now, I think it should be obvious that investors need to distrust all the famous beards...

Corzined? Bernanked? − officially make it to the urban vocabulary

This is from the urban dictionary, seeing as not one wall street executive has been held properly accountable for stealing from the U.S. it is apparnetly called being “corzined”.
word: corzined

  • When something of value is stolen, and everyone who was in charge of safeguarding the valuable claims ignorance of just about anything. People in charge who confronted with questions about the valuable items usually answer, "I just dont know where it is" or claim that the valuables were "vaporized" when it was their job to know
  • This comes from the MF Global scandal, and their CEO Jon Corzine, who stole 1.6 billion dollars of client money testified that he didn't know where the money was or where it went. Several other financial officers of the firm also claim total ignorance of everything and claim the money was "vaporized”.
  • Apparently claiming total ignorance of everything also clears you of all criminal charges as well.
Dude 1:  I trusted Mike to watch my cooler of beer last night when I took my girlfriend home. When I came back, all my beer was gone.
Dude 2: I didn't see him anywhere near it man, he was talking to some whores when you were gone.
Dude 1:  oh shit, I just got corzined! I can't even confront him about it because he'll probably kick my ass.
Dude 2:  looks like you learned a painful lesson. Don't trust Mike with your beer.

Momentum Weak and Technicals Setting up

Keep in mind that the last time we are these levels in the S&P the Russell 2000 was up well over 20 points higher and the Nasdaq 100 was also up roughly 40 points higher.
Apparently, just when the risk is among the highest I’ve ever seen, investors have recently lost interest in betting on so-called "black swans” and believe whole heartedly in central bank mania, infallibility and creative destruction abilities.  Clearly single cell organisims (as one of the guys in the above video) are totally bought into that view and ignoring anything else…
“Hedge funds set up to profit from huge market slides are falling out of favor, signaling that investors are increasingly confident leading central banks can avert the kind of meltdown that followed the Lehman Brothers' collapse. 
Investors are pulling out of such "tail risk" funds although economic and geopolitical bolts continue to strike from the blue, be they the messy bailout of Cyprus which has shown how the euro zone crisis can flare up when markets least expect it, or the U.S. stand-off with North Korea. - Reuters
Timing could not be more perfect, all it takes is Japan to feel like they need to make any change to the genie they have let out of the bag to blow everything sky high with non-uranium based nuclear weapons. All its takes is a single new misstep, which will surely be all that should be expected, from the ECB to create massive tail risk…all it will take is one whiff of the incongruities in the US and we have, thank you very much, huge tail risk…

Then we have an absolutely asinine commentary by Hiroshi Watanabe. I you wish to click the title:

WSJ: Watanabe: Too Early to Judge BOJ Easing Steps 
  • Mr. Watanabe called the yen's current level, in the high 90s, "sticky," but said any move above ¥100 to the dollar would be temporary. 
  • "Three digits will not last long," he said.
  • yen's weakening against the dollar over the past few months has caused Japanese manufacturers to reconsider an earlier push to move their operations abroad.
  • As Japanese companies look abroad, he said they would increasingly shift attention toward North America, because of low energy costs from the shale gas revolution and the high cost of shipping goods across the Pacific
Could he be more confused?…Less than a few days is required to assertain the results of BOJ easing:
  • loss of control of and confidence in Japanese financial system
  • beaurocratic fear 
  • loss of credibility
  • loss of buying power
  • loss of savings
  • loss of business confidence
any company trying to run a business with all of this insanely destructive central bank meddling is pulling what hair they have left out and no amount of shale is going to replace the money and trust they have lost because of money and asset price manipulation. This has one ending, A BAD ONE. if the yen breaks convincingly over 100 versus the dollar it will liekly be accompanied by a complete loss of confidence in the BOJ and Japanese government and it will trigger the next phase of these badly conceived plans.

Monday, April 8, 2013

42 minutes of Nigel Farage conversations with BaRUFFO and RUMPuy

I recommend seeing the whole video, there are a lot of segments that you may not have seen before.

Since the Yen and EURO are no longer viable currencies look at the broader USDollar Index...

The Yen and the EURO are the major forces in the DXY dollar index. They are relatively useless in gauging how the dollar is actually faring…here is the FXCM US Dollar Index…which is a much broader basket against the USD.

Journalism or Germanism…an age of rampant and official information deception...

You can clearly see that "as news and information is presented to us may NOT be how it actually looks or is". 

Whether its the contrived methods used to calculate CPI or unemployment…it seems more and more information these days is bearing less and less likeness to what it is supposed to represent…

I think the events unfolding in North Korea bear some consideration in that vain as I am quite certain that NOW would be a very convenient time for a distraction. IRAQ and Afganistan, possibly similarly convenient distractions, resulted in over $7 tillion of borrowing and huge amounts of spending by the Government at precisely a convenient time. Makes you wonder, were those operations more about saftey of attempting to replenish the credit money system? hmmm

Sunday, April 7, 2013

JGB “nuclear weapon” Watch…

JGB’s continue to get slammed…I will update this post as new developments happen in JGB markets for the benefit of those who can not get JGB data which can be a pain to find…”Kamikaze" & “Bernanke" two similar sounding words apparently with similar meanings. If JGB selloff accellerates expect sustained and huge liquidations in all risk asset markets. Apparently the main stream media will start catching on to how significant the JGB and Yen issue is once its already too late to be useful. Right now, its "out of sight - out of mind”.

9:08 am: Apparnetly 3:00 am ramp is good for defaulting Governmnet Bonds too, though I would not call this strong action for JGB’s

2:07 am: JGB’s halted again…what good that will do I don’t know…in this case, a slow motion margin call is not that much different than a real-time one ultimately…it just takes longer and invokes more fear and distrust. Attributes that, though in very limited quanitity among central bankers right now, are nonetheless appearing to be being destroyed.

1:46 am: JGB weakness continues after halt, USDJPY near highs, Nikkei Recovers to new highs…completely broken markets ready for uncontrolled demolition

11:57 pm: Obviously BOJ efforts did not amount to much more than any of their other efforts

11:50 pm: Clearly BOJ is feeling heat. JGB’s halted and then gap up after 20 minutes…I fail to see how this instills any confidence…could this possibly be called a market?

8:15pm: Gap down no halts yet…but halts are looking promising unless BOJ can get the boys at Cerberus to turn the comptuers back on...

Overshoot status...

The S&P500, as many of the indexes that have been driven into a state of hysterical overBULLishness, overvaluation and overconfidence, the "OVER" state in the cycle tends to occur in concert with an overshoot or an overthrow of resistance. In the case of the S&P500 we are involved in several overshoots at once. The issue with overshoots is that you can not exactly measure when they are going to burn themselves out because market participants loose their perspective with the exception of their OVERcommitment to the emotion of the moment. However, because these emotions are so high is exactly why an overshoot does not allow for extended retesting. As soon as you see anything more than one retest the overshoot is likely going to be turning into an overshoot in the opposite direction which is likely the case that is setting up here, not only with the markets hugely overvalued but with all of implosion of credit that is occurring all over the world that the central bankers just can not seem to find a way to sustainably re inflate.
The credit implosion is just beginning to get momentum in this new leg and will likely accelerate throughout Europe and get blown wide open with Japan’s Government Bonds going into default. Moreover, since central banks and the world governing bodies are now a chaotic mess and highly discordant, it would not surprise me if Central Bank officials in China lean on JGB’s to further ratchet up the pressure on Japan.

JGB’s open in perfect margin call territory…perhaps china central bankers can call shorting JGB’s "a hedge” instead of a prop trade…and pull a JPMorgan...

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