Friday, July 09, 2010

For clarity and contemplation

The boldness of the bulls after just a few days of a low volume rally is simply staggering.  Whether the next decline starts this afternoon or next week, or in concert with the Cardinal Climax, it just doesn't matter.  I am re-posting this Weekly SPX chart as a reminder of where we have come from and are likely going in the not-too-distant-future:

SPX Weekly

By design, my shorter-term trend models will only kick in on the downside after the next wave down gets going.  Anything from Daily to Intraday is subject to market psychology and manipulation, but they are still tradable for anyone with the stomach for it. 

Below, the past ten years for clarity and contemplation:

SPX Monthly



Anonymous said...

Did you notice Doug Kass's call for the bottom of SPX the day before the 3% rally? He said the market bottomed at 1012 for yr 2010 and will go higher now.

Allan said...

I heard Doug Kass on CNBC and his now famous bottom call (replayed every hour or so it seems). It means nothing to me, not that I don't respect the guy and his opinions, but I have my own opinions that I have more faith in since I know how they were developed and accordingly, am responsible for. I'm sure he would say the same about my opinion, if you water-tortured him to get him to acknowledge my existence.

Anonymous said...


Can you comment on NNVC. Will we see 1.00 again? can you post a chart?


GOD said...

....on behalf of the great wizard and all the believers in our great land of new normal,please allow me to
your blessed existence.

....and furthermore, present you with a medal.

manufactured with the finest pure grade of titanium at the core,and gold plated on the outside,

it reads:

For steadfastness in due diligence,
forthrightness in trend model system design,
and painstaking efforts in newsletter services,

you are presented this medal.

on this day
july 9,2010

Anonymous said...

good charts allan, for perspective, great comments perfectly understated, borders on poetry.

I studied the charts ,drew my magic lines,and saw the critical point ,is here and now, with the cardinal astrological day of reckoning, the world spinning toward a breaking point or line in the sand, global powers needing to decide between chaotic war and chaotic peace,the market teeters at the edge and the price point is the same that I saw last year when my magic lines showed it to me.....

1040 S+P

below is 930-940
below that is 830-840

above is 1140-1130
above that is 1240-1230

a sideways holding going nowhere in the next month or two to buy time
is a good sign for avoiding a collapse.


Anonymous said...

T said: "a sideways holding going nowhere in the next month or two to buy time is a good sign for avoiding a collapse."

In a normal recession, I would tend to agree. But we are well past the point where putting our problems off for the future is going to help. If your position is that buying time is going to fix things, I cannot agree.

Taking out another credit card to buy some time doesn't avoid a collapse. It just makes things worse.

Buying time didn't help during the 1930s. Doing so didn't help Japan since the 90s. Spending trillions in scores of economies around the world during this last round of stimulus didn't help either. We now have over twenty examples in developed economies where buying time doesn't work.

Next month, this "recession" will officially be twice as long as any post war recession on record. After spending trillions in stimulus, has buying time put us any closer to avoiding collapse? Or instead, has this buying of time ensured that we must address all of our problems at the same time and therefore made the collapse more cataclysmic and inevitable? I would say the latter.

Soverign debt, real estate, jobs, an unsustainable econonomic model based on infinite growth (ie: an economic perpetual motion machine), a huge aging electorate voting for an unaffordable ponzi scheme in pensions and health care, corporate corruption, unsustainable federal spending and perpetual wars. How is buying time going to do anything but ensure these problems go critical mass simultaneously?

Buying time may result in some low volume gains in the market, but I believe the higher they run up the indexes on low volume, the more violent and unpredictable the inevitable crash will be. I'm not completely against long positions in this chaos, but I'd be very careful in a long swing position with this much manipulation and volatility.

In the markets, they can only buy time for so long, otherwise, the powers that be wouldn't have allowed the fall from April 23. It seems they goose the market once a month, and then sit back to admire their work as the air slowly goes out of the bag. I'm betting that each time they tell a lie, they lose credibility and a little of their ability to move the market. I think the same goes for their handiwork in the futures markets. We gave back the gains from the 6/7-6/15 rally in two weeks. I think we will give back last week's gains in even less time.

Maybe last year they could have run the S&P 500 back up into the 1200s, but this has gone one too long. Too many people are hurting too badly to believe their baloney anymore. We are at the realization stage.

If the S&P 500 crosses 1200 again before these problems catch up to us, I'll eat my hat (because that's all I'll have left to eat! LOL)


Digger said...

I thought Warren Mosler ( nailed the bottom pretty well on July 1: "If euro solvency risks are indeed fading, it should be back to an ok market for stocks (which could have a large one time shift upwards to reflect the reduced euro risk), and low rates from the Fed until something changes."

However if the deficit terrorists prevail, we will likely have a second great depression with massive deflation.

I think Crawford is putting way too much emphasis on what is a relatively minor point of the Cardinal Climax, most of which of occurs between 2008-2015.
The Jupiter-Uranus conjunction cycle indicates new highs could be forthcoming.