The Fed admits to the economy still sucking balls – it’s only been eight years guys, what did you expect. And in other more cheerful news the sky is expected to remain blue until further notice. The long term outlook on gravity also is positive. Yah, thanks – tell me something I don’t know.
So if you’re still a bear listen to me now and listen to me very carefully: Stock up on more vaseline as you will need large quantities of it should you continue attempting to short equities. Unless you have less than three brain cells to rub together it’s rather simple to understand how this is going to play out.
This entire QE game and the global currency race to the bottom has now devolved into the following script::
The Fed will continue to pretend that it wants to hike rates.
However, and here comes the trick, an actual hike is made dependent on the economic data.
We all know the economy will continue to suck. It has sucked since 2008 and the U.S. doesn’t make jack anymore, plus you can only sell so many yoga apps on iTunes. And the marijuana market is getting crowded.
Ergo – the Fed gets to postpone until further notice or if by some miracle one of two things happen:
The economy actually improves. Good luck with that.
They manage to get better at cooking the books. Possible.
Let’s face it – the Fed is incapable of hiking rates, at least during this decade. As soon as they do the Dollar is going to explode and they are barely able to contain it as it is. Which in turn would completely eviscerate the U.S. economy and perhaps even crash equities markets worldwide. If you think you want to see this happen, think again.
So we did a pretty good thing yesterday morning getting exposed long near 2070 – and if I say ‘we’ then I mean Skynard, a few other hardcore rats, and yours truly. Which is probably the total of all retail rats out there holding long positions – I bet you someone else’s money a ton of people went short and are probably still holding. SuCKers.
Alright – there’s no predicting what’ll happen next but I’m going to move my stop up to today’s big FU spike low near ES 2078. Then I’m going to grab a glass of good Spanish Rioja and watch the ensuing squeeze whilst practicing my evil laugh.
If you want to tag along here’s a training video – feel free to post your own.
See you guys tomorrow
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Unfortunately I will not be able to produce a post today as I’ve got my hands full trying to fix a technical issue that arose yesterday with logging my automated strategies to Google spreadsheets/drive. Turns out that Google dropped an older access method and that means I need to figure out how to use the new one via a rather antiquated API which happens to be the only one to work in NinjaTrader 7. Google is notoriously bad about documenting and supporting their APIs and if you lucky you find some examples posted by well meaning coders who previously spent weeks figuring it out the hard way.
Now that all probably means nothing to you but effectively it’s heads down and tearing through code for the Mole until I find a solution. My apologies – this obviously couldn’t come at a worse time as we seem to be transitioning into a new market phase. I’ve asked Scott to fill in for me and hopefully he’s able to bridge me over.
It’s been a while since we’ve covered equities exclusively and as the month is coming to an end this is as good an opportunity to catch up. As you all know I have been dangling the ‘late stage bull market’ carrot for a few weeks now and quite frankly I don’t see any reason to change that outlook. I have been very adamant about expecting a final exhaustion spike higher and believe that is already in the works. Now before you start piling into puts be aware that we may be weeks, perhaps even months away from a downside event. So hold your horses and for now just enjoy the charts in preparation for where we heading most likely later this year. Enough weasel talk and disclaimers? Great – let’s get to the charts.
Actually it was the Zero chart that reminded me that a LT update may be in order. Over the past few sessions some of my subs and myself have been noticing strange signal patterns suggesting distribution. It’s very much possible but quite frankly I don’t see anything on the momo side that would suggest urgency. In short – nobody can predict when things will take a turn but we are a bit early in the game here still. So let’s review the evidence:
First the long term SPX with my trusted weekly stochastic. I almost never use this indicator – except on the weekly chart where it actually works pretty well! Right now we’re scraping 100 but in this bull market this means nothing. Most likely we’ll see an embedded signal (above the 80 mark) for a while before we head lower here. So no reason to be in a hurry – again we may be weeks or perhaps even months away.
SPX vs SPXA200R – the latter is the percentage of stocks in the SPX trading above their 200-day SMA. Now that one is looking bloody well divergent and eventually there will be a price to pay. But I don’t think that we’re due just yet (watch how the market will drop instantly after Mole’s statement).
More charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don't waste time and sign up here. And if you are a Zero subscriber you get free access to all Gold posts, which gives you double the bang for your buck!
This one is courtesy of Chris Carolan over at spiralcalendar.com – one of the few other analysts I follow. Chris graciously permitted me to post this chart which I not only find absolutely compelling but also appears to be in line with what I’m presenting above. See the delay in the response on the S&P? Ponder on this one over the weekend.
Alright – I’m exhausted and am desperate for my Friday treat:
Not her you deviant! I’m talking about the Hefeweizen – which is waiting and that’s my cue. See you guys Monday!
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