ES Channel

Oil to $200...really?

On the chart I refer to a breakout of -82. That really means a breakdown below 82 in real life - could be rather bearish for oil. That's the inverted interpration based of the chart and in polarity with the real market. This is a very high level view of Oil and it is likely that we test this pattern (the lower trendline) before breaking out. Contrary to popular expectaton, the breakout will likely be in the direction of long-term and substantially lower Oil prices after a test of 110 or so in the CL market.

Key Pattern on SP500 Breaks

The Presidents Day Effect

I hope everyone is having an enjoyable President's Day weekend...it is an interesting reference point for the market. Usually, if the market has been able to rally into President's day, especially closing near the highs...that's a marginally bullish sign for the outcome of the year. However, this time around things are a little more interesting. First of all, we are trading on abysmal volume (potentially the lowest monthly volume in 5 years)  at EXTREMELY stretched prices...and second during EXTREMELY unpredictable times.

In the past history, when we have traded this strongly into this time of year that has bode well for the rest of the year...except when we do so on paltry volume and over extended prices...in both of those cases...in 1937 and in 1931...the results were spectacular and resulted in over 40% declines for both years. The average return for entire year in which we trade into Presidents day strongly is 14.46%. We are currently up 7% for the year...that leaves us a potential, if the internals for the market were strong, of another 7% gain by the end of the year...or alternatively the potential of a 55% decline, as in 1931, if the market internals are a masquerade.

Here is a chart...

Nasdaq 100 chart revisited

I am re-posting in this blog entry (not inspired by Steven Colbert Colbuffington Re-post) with additional markups on the chart and comments because some people seemed to not understand that the significance or my the markings on the chart. The two red trendlines are exactly the same number of points. This indicates a classical type of market symmetry in that the bounce from 2003 is almost exactly equal to the bounce from the 2008 low...additionally, there is minor but not insignificant time symmetry also which is indicated by the comparison at the top of the chart. Markets love to behave symmetrically and this one on the Nasdaq 100 is a very strong pattern indeed.


I will be posting a few new charts and observations tomorrow...

TF Daily Swing System Adds another entry short

TF Daily Swing adds another entry short for a 12mm allocation pool...

SP500 Initial Cracks

Dollar and AAPL retracements

 

Nasdaq 100 - symmetry

Utilities - worth a close watch

TF RVS Swing Adds Short

This is the TF daily system for a 12 million allocation pool.

AAPL finally grinds to target...

S&P 500 Produces Expanding Wedge

These patterns are hazardous to the people that buy them - but now that we have retail people actively buying...this market makes yet another one...this is a brick in the bearish potential.

Food for thought...

If the dollar pattern is valid...then the EURO as shown below is at a critical juncture. The shorts have been blown out of individual CRB components...so the weakness there has good odds that it is just beginning...Today the Russell 2000 was weak compared to the majors because of the commidities weakness. The S and P500 may be looking to slam everyone expecting the expected...fake out city.

Tomorrow we have premarket numbers that I expect will grind the market higher overnight in anticipation. The funny thing is that investors are so confused by the inflation number. They want a low number, even if its clearly flawed, wrong or fraudulent, so that BURNanke can keep up with his market-mayhem but if the number comes in higher than expected then that means BURNanke might have to change his approach...in either case, both concpets are so rediculous they = SELL in my opinion.

Below is the CRB index:

Below is the Dollar

Below is the SP500:

Below is the EURO:

States considering setup of their own sovereign money systems...

South Carolina lawmaker asks if state should print its own money
Reuters/ Lee Jae-Won

States are always looking for ways to generate new money -- but one South Carolina lawmaker has offered an interesting twist to the efforts.

State Senator Lee Bright recently introduced a bill to study "whether this State should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System."

In other words, Bright is asking for a study to determine if South Carolina should print its own money.

Bright's proposal says the study is necessary because "many widely recognized experts predict the inevitable destruction of the Federal Reserve System's currency through hyperinflation in the foreseeable future."

The bill may sound radical, but Bright is hardly alone in his thinking. A Virginia delegate offered a similar plan in January.

A look at valuation...lest all the bullish analyists forget

Not pretty...P/E over 24...what if things don't turn out quite so rosey? What if high inputs compress margins and demand as I have consistently talked about?

Meanwhile the long-term price trendlines hold firm...looks like the "P" in "P/E" need to be making some adjustments.