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The End Of The Line
176

The End Of The Line

by The MoleApril 28, 2010

LEAP is an economic think-tank out of Europe. About a year ago they predicted that the Chinese would scale back their exposure to long term U.S. treasuries and shift into the short end of the yield curve. They were proven correct. A few months later LEAP also predicted that the second stage of this secular bear market cycle would not be triggered here in the U.S. but on their own turf, specifically naming Greece, Portugal, Spain, and Ireland. That was way before the MSM ever became aware of the PIGS – we are talking fall of 2009.

I am not a subscriber but am considering it as their monthly bulletins continue to cut through the noise and offer surprisingly accurate predictions six to twelve months into advance. What I appreciate the most is that the reports are generated outside the U.S. which offers me an alternate perspective on where Bernanke’s bubblenomics might be leading us.

Now LEAP is back with a new report – the teaser part of which you will find copied below. If you are interested in signing up for their annual service go here – please bear in mind that Evil Speculator is not affiliated with LEAP in any way. We don’t get a cent if you decide to sign up – I want to be clear on that. However, I feel it is important to give you an opportunity to get to know their work as their analysis may affect your long term investment and plans for the future. Enjoy…

Just as LEAP/E2020 anticipated many months ago, and in contrast to the reports coming out of the media and the « experts » during these past few weeks, Greece really has the Eurozone behind it to give support and credibility (especially concerning good management in the future, the only guarantee of an escape from a damnable cycle of growing public deficits (1)). There will not be, then, any Greek default of payment even if the commotion over the Greek situation really is an indication of a growing awareness that money to finance the huge Western public debt is becoming increasingly difficult to find: a situation now « untenable » as a recent report of the Bank of International Settlements underlined.

The fuss made over Greece by the English and US media in particular tried to hide from the majority of the economic, financial and political players the fact that the Greek problem wasn’t a sign of an upcoming Eurozone crisis (2) but, in fact, an early warning of the next big shock of the global systemic crisis, that is to say a collision between, on the one hand, the virtual British and US economies founded on untenable levels of public and private debt and, on the other hand, the double wall of borrowing, maturing from 2011 onwards, combined with a global shortage of available funds for refinancing at low rates.As we have explained since February 2006, at the time of our anticipation of its imminent arrival, one mustn’t forget that the current crisis has its origin in the collapse of the world order created after 1945, of which the United States was the support, assisted by the United Kingdom. Also, in order to understand the real effect of events caused by the crisis (the Greek case, for example), it is useful to relate their significance to the structural weaknesses which characterise the heart of the world in full meltdown: so, for our team, the « Greek finger » doesn’t cite the Eurozone as much as the explosive dangers of the exponential financing needs of the United Kingdom and the United States (3).

2010 projected sovereign debt issuance (Total: 4.5 trillion USD) - Sources: IMF / Hayman Advisors / Comcast, 03/2010

2010 projected sovereign debt issuance (Total: 4.5 trillion USD) – Sources: IMF / Hayman Advisors / Comcast, 03/2010

Subscribers should be aware that during a period when financing requirements exceed available funds, as is the case today, the sheer amount as regards sovereign debt issuance is more important than the ratios (amounts in relative value). This is shown by a very simple example: if you have 100 Euros and you have two friends, one « poor », A, who needs 30 Euros and the other « rich », B, 200 Euros. Even if B can pledge his expensive watch, worth 1,000 Euros, to you, whilst A only has a 20 Euro watch, you can’t help B since you haven’t sufficient funds available to fulfill his financing requirements; however, in discussing a pledge and interest, you can decide to help A. Putting it in this perspective thus invalidates all the arguments based on the debt ratio: in fact, according to their logic, you would obviously help B, because his debt ratio is clearly more favourable (20%) than A’s (150%). But in the world of the crisis, where money is not available in unlimited quantities (4), the theory hits the wall of reality: wanting to do something is one thing, being able to do it is another.

So then, LEAP/E2020 asks two simple questions:

. who will be able/want to help the United Kingdom after the 6th May when its political chaos will inevitably expose the advanced meltdown of all its budget, economic and financial parameters?
The financial situation is so serious that the technocrats running the country have devised a plan, submitted to the parties contesting the next General Election, in order to avoid risking a power vacuum which could lead to a collapse in Sterling (which is already very weak) and British treasuries (Gilts) (the Bank of England having bought 70% of those issued over the last few months): Gordon Brown would remain Prime Minister even if he loses the election, unless the Conservatives were able to garner sufficient votes for outright victory (5). In effect, with an economic and political crisis as a backdrop, the polls lead one to think that the country is turning to a « Hung Parliament », without a clear majority. The last time that happened, in 1974, was a kind of political preliminary to IMF intervention eighteen months later (6).

For the rest the Government puts a positive spin on the statistics to try and create the conditions for a victory (or a managed defeat). However the reality is depressing. British real estate is trapped in a depression which will prevent prices reaching their 2007 levels for many generations (in other words, never) according to Lombard Street Research (7). The three parties are preparing to face up to a catastrophic post-electoral situation (8). According to LEAP/E2020 the United Kingdom could well suffer a « Greek (9) » event with British leaders announcing that the country’s situation is substantially worse than that disclosed before the election. The numerous meetings, at the end of 2009, between the Chancellor of the Exchequer, Alistair Darling, and Goldman Sachs is a very reliable indicator of sovereign debt manipulation. As we wrote in the last GEAB issue, all one needs to do is follow Goldman Sachs to know where the next risk of sovereign debt payment default lies.

US Federal Government financing requirements (2010-2014) (10) (in trillions USD) – Dark: the federal deficit / Light: maturing debt (future short term borrowing not included) - Sources: Moodys / S&Ps / Treasury Dpt / New York Times, 03/15/2010

US Federal Government financing requirements (2010-2014) (10) (in trillions USD) – Dark: the federal deficit / Light: maturing debt (future short term borrowing not included) – Sources: Moodys / S&Ps / Treasury Dpt / New York Times, 03/15/2010

. who will be able/want to back the United States once the British fuse (11) has started burning, causing panic in the sovereign debt market in which the United States is, by far, the largest issuer?
Especially since the size of sovereign debt needed corresponds with the start of the expiry, beginning this year, of a mountain of US private debt (commercial real estate and LBO due for refinancing, amounting to 4.2 trillion USD of private debt expiring in the United States between now and 2014 (averaging one trillion USD a year (12)). Purely by chance, it is the same amount as new global sovereign debt issuance for 2010 alone, of which almost half is by the US Federal Government. Adding to that the financing needs of the other economic players (households, businesses, local authorities), the United States must find nearly 5 trillion USD in 2010 to avoid « running dry ».

Our team anticipates two replies just as stark:

. as regards the United Kingdom, the IMF and the EU, perhaps (13); and we’ll be watching, from this summer, the « Bank of England battle (14) » to try and avoid a simultaneous collapse in Sterling and UK public finances. In all cases Sterling will not come out undamaged and the crisis in public finances will engender an austerity plan of unprecedented size.

. as regards the United States, no one; because the size of its financing requirements exceeds the capacity of other players (including the IMF (15)) and, in winter 2010/2011, this event will lead to the explosion in the US Treasury Bond bubble founded on a huge increase in interest rates to finance sovereign debt and private debt refinancing needs, causing a new wave of financial institution bankruptcies. But it isn’t only countries that can default on payment. A Central Bank can also go bankrupt when its balance sheet consists of « ghost assets (16) » and the Fed will have to face up to a real risk of bankruptcy, as analysed in this GEAB issue.
Winter 2010 will, equally, be the stage for another destabilised event in the United States: the first major elections since the beginning of the crisis (17) when millions of Americans will probably express their feelings that they have had a « belly-full » of a continuing crisis (18), which doesn’t affect Washington and Wall Street (19), and which creates US public debt which is now counter-productive: a borrowed Dollar now causes a loss of 40 cents (see chart below).

Diminishing marginal productivity of debt in the US economy (in USD) (GDP/Debt ratio 1966-2010) - Sources: EconomicEdge, 03/2010

Diminishing marginal productivity of debt in the US economy (in USD) (GDP/Debt ratio 1966-2010) – Sources: EconomicEdge, 03/2010

One may not be in agreement with the answers given by our team to the two questions asked above. However, we are convinced that these questions cannot be ignored: no analysis, no theory on world developments over the next three quarters is credible if it doesn’t provide clear replies to these two questions: « who will be able/want to? ». From our side, we think the same as Zhu Min, the Deputy Governor of the Chinese Central Bank, that « the world hasn’t enough money to buy any more US Treasury bonds (20) ».

In this issue our team has, therefore, decided to make a progress report on the major risks weighing on the United Kingdom and the United States, and anticipate developments over the next few months in the growing context of a “velvet war” between Western powers (financial, monetary and trade war). We will also disclose a series of recommendations for facing the double shock of British and US financing needs.

Access to full report here (subscriber based).

Mole here again: That last chart is especially scary. As Karl ‘No Slave To Fashion’ Denninger suggested a few months back: We are reaching the point where additional debt issued may reach a point of zero or below zero productivity – based on the chart above that moment has come and gone. That, my dear ladies and leeches, is the moment when the jig is finally up. Because no printing of the Federal Reserve will then be able to postpone the inevitable, which is a deep decade long worldwide depression.

Final comment: None of the above should be considered when it comes to daily trading decisions, at least short and medium term. I am sorry for sounding like a broken record on this, but I don’t want you guys to start shorting the market in a big way tomorrow. As we all have learned by now – these things will take its merry time to unfold and I merely want to offer you a glimpse into the future. Anyone visiting Evil Speculator will be well prepared to trade this market down, once we start seeing meaningful (and painful) support zones being taken out.

Cheers,

Mole


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • dullmind

    Wow, that's a great post Mole, so was the previous one. Now if only this stupid flu
    would heal and I could think again… <font size=”+1″>cough, </font><font size=”+2″>cough, </font><font size=”+3″>cough, </font>
    my god, my lungs!! Bye

  • roncofooddehydrator

    Thanks mole, great stuff.

    So far /ES has yet to break through the 2 hr 200 EMA. The 30 EMA is at the same level now, and with two moving averages at the same spot it seems like the 1192 area is offering a decent amount of resistance. The 60 EMA is at 1195, so it seems like even should we break through 1192, we may still be constrained by the 1195.

    I could easily imagine that we hang around this area until the GDP report on Friday where it will be used as an excuse to either break through all the resistance and start the march up to that 1260 target you mentioned a few days ago or be rejected one last time and head downwards.

    http://screencast.com/t/YmRhYzBi

  • bananaben

    The ONLY industrialized country in materially worse fiscal shape than the US is the UK. I recall reading something months back where it was leaked that drastic budgetary action was coming after the elections. So May will see Europe tearing further apart while at the same time many US states and municipalities (like LA) head closer to complete insolvancy.

    I can't believe that I had to cover my shorts the other day in a market that is strenuously overvalued with record bullish sentiment and a world that is unravelling before us all. This market is a fucking joke if you think about it. Anyway, I think it is going to go down 1987 style high volume event at some point. I am very concerned they will screw us all by freezing the markets and invalidiating puts/short ETFs somehow. We will need to keep on our toes and help each other make the right moves.

  • rosocecasita

    Long: Physical Silver, Flour x2, Beans x4, Rice x2, Salt, Sugar, Barley, Lead, Lead Delivery Devices, and popcorn & coconut oil to enjoy the show.

  • http://evilspeculator.com molecool

    That's the spirit – thanks bananaben. And don't beat yourself up too much – the fat lady hasn't sung yet – plenty of bottom to fall out from this. Just zoom out a little – a few months ago you would have thought: I'd love to short from all the way up there. So, it's just a matter of changing your perspective 😉

  • http://evilspeculator.com molecool

    You forgot p0rn.

  • bananaben

    It's no joke. I don't have any gold or silver because if the market tanks as it should they should both get crushed and that's when I will be buying. onlygold.com has been recommended to me – cheapest bullion coins are Canadian maples. I don't understand silver – isn't it better to get fractional oz. sizes of gold coins?

    That said I have stocked up on rice and beans but I need to stock some of the other items you suggest. I have purchased a shotgun w/ slugs/shells. Once a confirmed top is in, I will also get an AR-15 and 1-2000 rnds. Armageddon is coming – will you be ready?

  • rosocecasita

    This is the “preservation of Technology kit”

    http://alturl.com/y2az Power Cell + inverter
    http://alturl.com/oh97 Solar Cells + hookups
    http://alturl.com/48dh Netbook with SSD drive.
    http://alturl.com/7pry Wikipedia Download.

    That's if you want to be the Brotherhood of Steel.

  • rosocecasita

    Check silver & gold the last two days: Almost a 100% negative correlation to the market.

    if this holds up during the crash, gold will be rising with a falling market. Gold was gaining vs a rising dollar.

    Same with silver.

    The theater is filled with smoke, and your close to the exit. Do you wait to get closer? Wait to long and the crowd will trample on the way out.

    Better to be early on this one, imnsho.

    I ordered 100 oz yesterday, physical delivery. I'm buying some long term otm puts at 5% the value of the 100 oz in case they do crash the price again, then I'll buy 2x as much again.

  • rosocecasita

    Nighters, see ya on the flip side!

  • http://evilspeculator.com molecool

    Unfortunately that Duracell pack is discontinued.

  • bobthehorse

    Look on the bright side – you are still solvent. A lot of bears aren't. I am looking for 1200 today on ESM0, 2800/05 on VGM0 to get my shorts back on. I am currently small long.

  • bobthehorse

    This is going to be a wild day I think. A lot of futures shorts sucked in now, I think a squeeze is likely. Credit Agricole has just revealed they have €850m of Greek exposure – some analysts had €6bn! Couple of ok earnings out as well so overall I can;t see anything to make the market break down early on. Am looking for a squeeze into US open, hoping to get short again around 2800 estoxx which I think will be around 1200 SP future.

  • bobthehorse

    Testing some key levels here again 1193 ESM0, 2010 NQM0. If they break, think the squeeze to 1200 is a given but they came back from here already once this morning. Greek bond spreads have been coming in a bit this morning but nothing too material – prob need some sort of positive noise from a german politician to punch us through these levels. The Euro is looking pretty stable here though – all in all I don't know, bit of a coin flip but my best guess is we go higher

  • bobthehorse

    Here we go – looking for 1200 now

  • http://evilspeculator.com molecool

    Ah – didn't know you're on the old continent….

  • bobthehorse

    Pretty early on the West Coast isn't it?

  • amokta

    Too many people talking of armygideon, which suggests to me that this is overblown
    Are really things that bad, is there really a risk of a new global financial crisis?

  • bobthehorse

    Yes there is a very real risk. Banks guaranteed by their governments aren't very safe if the governments are bust. At the very least, the cost of capital is going up.

    But as Mole points out in this post, this is going to evolve over time. Everyone keeps looking for a 1987 style collapse but the odds don't favour that.

  • http://iberianviews.blogspot.com/ catracho

    Looking at DAX short term 30 mins…which way will we go? Thinking a push up..to test the high yday maybe a little higher…6175? Dow looking at 11125 as possible short level…depends on a. if we get there.. and b…what it “feels” like if we get there!

    http://www.screencast.com/t/NjI3MmJhYzc

  • http://iberianviews.blogspot.com/ catracho

    The rally yday and today..could it be a B wave? with a C down to some? That would fit bullish scenarios for 1270 target..what do the EW'ers think? I'm just an amateur..

  • bobthehorse

    I think this is a 4.

  • http://iberianviews.blogspot.com/ catracho

    EU/IMF discussing 23-25% Greek VAT and 10% rise in Tobacco/Alcohol Taxes -Reuters Surely that would be the final nail in the coffin..

  • bobthehorse

    No that's a positive. Rumour also of 15% public sector wage cuts. Mkt will think Greece may be able to not default. Until the Greeks riot of course.

  • http://iberianviews.blogspot.com/ catracho

    thanks..that's what I was thinking ..about how the people would react!

  • chronographics

    Should be big res at 6150

  • http://iberianviews.blogspot.com/ catracho

    yep that's where I sold some yday..for scalp…just thinking that if the bears get squeezed and the bulls get horny..DAX has a habit of overshooting..anyway at the moment it seems to be struggling…considering DOW trading above 11100..

  • chronographics

    you could well be right regarding the overshoot – as long as it doesn't close up there. EUR struggling a bit here on upside

  • chronographics

    There are a number of counts on this and to be honest anyone of them could be right. Think you just have to trade the levels your count gives you. Sooner or later the right count will put its hand up. Not often i think its a lolly scramble but at the moment….

  • amokta

    Cheers!

  • http://trading-to-win.blogspot.com/ DavidDT

    great post Gmak

  • http://trading-to-win.blogspot.com/ DavidDT

    my first short /es batch (order parked overnight) filled @1195.5

  • http://trading-to-win.blogspot.com/ DavidDT

    and riot they will – faster than 6packs

  • http://trading-to-win.blogspot.com/ DavidDT

    that's the way I like it (b)

  • http://trading-to-win.blogspot.com/ DavidDT

    courtesy of TTWinners to EaSers
    /es range projections
    high 1198.75 (tolerance 1183.75)
    low 1183.50 (tolerance 1179.25)

  • raised_by_wolves

    To where should we all move? Brazil? With more young people supporting fewer old people, Brazil's population pyramid looks healthy through at least 2030. The United States is fucked, of course. See? Where are the Gen-X-ers to bid up the housing market?

  • raised_by_wolves

    You just assumed Mole would never post something focused on fundamentals?

  • http://trading-to-win.blogspot.com/ DavidDT

    how about just moving to uninhibited island and build self-supporting (per Jules Vern) system?
    We could grow anything we would want to

  • http://trading-to-win.blogspot.com/ DavidDT

    wait….was it Mmmm…ole? I am so banned… :(

  • raised_by_wolves

    First step, located the island where we are to live.

  • raised_by_wolves

    Good work. Sleep well. We'll most likely kill you in the morning.

  • raised_by_wolves

    Make sure the island has sufficient elevation to remain above water with the rising sea level.

  • bobthehorse

    And won't capsize. Like Guam.

  • raised_by_wolves

    Step two, we need a way to incentivize women to come live with us. Money won't work since their won't be anyway for them to spend it.

  • Thunder44

    Maybe the recent surge in gold is preceding.

  • raised_by_wolves

    How about like the UK (financially-speaking)? Seriously, are you going to stay there?

  • raised_by_wolves

    Gold “needs” a rest and silver “needs” a run to get the (SLV/GLD) ratio up.

  • bobthehorse

    Ask me after the election. All depends on how long the 50% tax rate stays in place. My wife and kids are Americans so we have options. But not good ones! Britain is in such a mess, it can only get better the the £ will be devalued first. I have zero assets in sterling.

  • bobthehorse

    I have no idea what the count is but the market is trading like it is in a 4. So I count from there, i.e. we must just have finished a 3 and have a 5 to come.

  • 2thguy

    anyone else notice the megaphone pattern developing on the SPY?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    a small hamster question, if this gets this bad and fast, will PUTS be honored? Can you trust the coin you banked is still in the bank (or is the bank gone?)

    Under such a scenario can anything but physical gold and silver be trusted?

  • raised_by_wolves

    I don't even think physical gold and silver can be trusted unless you have armed men to protect it. What will stop some tribal warlord from taking it from you?

  • raised_by_wolves

    What timeframe?

  • raised_by_wolves

    Okay. Next week, eh?

  • http://evilspeculator.com molecool

    I see everything all the time. Be afraid – be very afraid!!!

  • http://evilspeculator.com molecool

    Sleepless night – started to read some technical papers and now it's three hours later…

  • http://evilspeculator.com molecool

    My arsenal and a trigger happy index finger.

  • raised_by_wolves

    Will you teach me to fence and fight? Will we eventually become friends? Will it then happen?

  • bobthehorse

    Just sold a scrap at 2758

  • raised_by_wolves

    That might work in Alaska, not California—too many people—you'd run out of ammo within days.

  • raised_by_wolves

    Wait, I forgot, the real Molecool has been retired fifteen years and living like a king in Patagonia.

  • chronographics

    Hmm looks like a 3 down from 1214 to 1183 and we have a clear three up from 1183 (19th April) to 1219 and what looks like 5 down to 1181 making (so far) a nice flat. So you could well be right if the lows from yesterday hold.
    On my cynical side this is what would screw most people up so probably most likely to happen. As you said earlier you smelled a short squeeze. A wise head in this market perhaps better than a good EW count :-)

  • n2thezonez

    mole (or others that would like to chime in)- Which do you feel is most likely:

    1. That the 1219 SPX print was the top of wave B within a corrective expanded flat
    2. That the 1219 SPX print was the top of an upwave, to be followed by a correction (as opposed to actually being the midpoint of the correction).

  • raised_by_wolves

    Good, everything so far is going according to Bullish Plan A. There's the sliver of a white candle that's “needed” on the (SLV/GLD) ratio chart, and $SPX is above 1200. Thank Goldman Sachs or whoever is keeping this market up :-)

  • http://trading-to-win.blogspot.com/ DavidDT

    re-opened 3/4 expected sh pos /es 1198 avg (replaced pos covered 2 days ago around 1180)
    hourly and 4 hours sells perfected
    high range hit
    http://screencast.com/t/OWZhNzViZGE

  • http://trading-to-win.blogspot.com/ DavidDT
  • klout

    got short @ 1198.80 boss

  • raised_by_wolves

    $VIX obeyed with a nice drop into those (20,2.0) BBs.

    http://content.screencast.com/users/raised_by_w

  • http://trading-to-win.blogspot.com/ DavidDT

    does it feel like TOS order execution is delayed today???

  • 2thguy

    on the daily

  • chronographics

    The move up from 1183ish to 1219.8 looks like a clear three so the odds would be that it is the middle of the correction IMO
    Just need to keep an eye on the form as it moves up.

  • johnny

    hello folks , nice article from gmak

  • http://trading-to-win.blogspot.com/ DavidDT

    place is dead again

    anyone wants to form hedge fund and make REAL MONEY instead of nickel and dimeing?

  • raised_by_wolves

    /ES is nicely situated in this lower volume area. Now if the bots can just keep it here the rest of the morning and then ramp it up EOD. . . .

  • 2thguy

    CLF either bottoming or rolling over

  • http://trading-to-win.blogspot.com/ DavidDT

    that prediction is deemed to make $$$ 100%

  • http://trading-to-win.blogspot.com/ DavidDT

    coin toss – and my coin says “down”
    http://screencast.com/t/YjE1MTEyMD

  • http://trading-to-win.blogspot.com/ DavidDT

    welcome to the twilight zone :)

  • johnny

    looks like mkt making strides for yet another year high

  • johnny

    this mkt will u folks , better stay away and chill with wine of ur choice

  • sirgiyan

    Sure, why not.

  • Thunder44

    It looks like the banks are saddling up for another ride.

  • michealr

    I keep seeing references to a post by gmak. I don't see it, is it because I'm a freeloader?

  • bananaben

    Watch the Russell – it is lagging the other indices. My TZA hasn't changed much since I bought it.

  • Thunder44

    Now that they are trying to remove risk from the entire world, I think those 1 day power stokes down might be the new type of corrections.

  • bsummertime

    i see flatlining on the zero lite. doesn't look correct. TOS issues or flat?

  • rosocecasita

    we are inside the BB 2.0 on the vix, todays close & tomorrow are the keys to if this is a sell off or a buy signal.

  • johnny

    i think identifying any signal is sheer wastage of time , noone can take this mkt down right now , may be it needs an acceleration for a blow off

  • raised_by_wolves

    I asked the Oracle of Delphi. She said “up.”

  • BobbyLow

    I was just thinking the same thing. Something doesn't look right here. I don't understand how it handled the gap up.

  • 2thguy

    ha! you are correct sir. poorly worded prediction. CLF seems to be rolling over. probably be saved by the 50dma today, but gear up for a short in the next couple days.

  • rosocecasita

    thanks btw, I just bought my SLV OCT 17 put to cover my silver holdings, not the greatest long term holding, but the best for direct price loss.

  • raised_by_wolves

    They aren't right in the head.

  • rosocecasita

    Gap downs are filled. Gap ups are not.

    Simple!

  • fisheggs

    O.K so who's doing the downgrading today?

  • johnny

    i think its repeat telecast of 1040 low . from where it just kept going up

  • rosocecasita

    ??

    Vix BB2.0 signal has some clear rules for buy / sell

    We closed on the upside of the BB 2.0, if we close back inside the bb2.0 today, and close lower today, then that is your Buy signal for a serious blow off top…

  • http://trading-to-win.blogspot.com/ DavidDT

    you might also try to say that King is undressed? Heretic!!!!!

  • johnny

    i am not a bull by choice rather by compulsion.moreover i am very afraid of such kind of vertical striaght line moves but may be this is the time to make some fast bucks ,everyone knows it'll end somewhere

  • bobthehorse

    1200 target reached but haven't put shorts back on yet. Was expecting Estoxx around 2800 and it is too low – will hold my fire.

  • raised_by_wolves

    Although I talked about the idea of a silver crash, I haven't actually bought any puts. I'll do it if/when I see it beginning to unfold. So far, we just had a (SLV/GLD) warning. I don't know how it's going to go on the timeframe you're trading. All I know is to be ready. Also, I'm more bullish after talking to you. Sounds like your more bearish after talking to me.

  • rosocecasita

    yeah, call me a 'fundamentalist' but I haven't banked 1c on this market from over a year ago. (Does holding silver count?)

    I can actually buy into something that I don't believe in. Perhaps thats why I don't have tons of money!

  • amokta

    Ok, what happend to the Bear market resumption
    Is the case for P3 finally over, are we in a secular Bull market
    I fear the risk of contagion – Bullish contagion that is
    Greece side show is just a distraction, Viva Europa

  • rosocecasita

    Protectionist after talking to you =)

    I don't feel like having my balls smashed, this way at least I'm delta neutral below 18$, and delta positive above 19$

  • johnny

    well mkt dont give us certificates for calling us fundamentalist or mental , its a big sea we just need to get our 2 buckets out silently ,noone will ever know

  • bobthehorse

    Back to small short here (2768 VGM0)

  • johnny

    where is bear mkt , i think u havent seen the tape today

  • rosocecasita

    he used to post here with a morning page, about 2 days ago him and mole got into a fight

  • bobthehorse

    And another unit, same level.

  • amokta

    all i see is spx going up!
    im sure i need to look at more technicals – will wait for EWI FF coming out friday (!)

  • bobthehorse

    There you go gsavli – I promised you.

  • Onorio

    WTF are the S&P guys? it`s time do downgrade other EU country!

    England should give at least 50pt drop.

  • johnny

    well 80% of the retracement is the key level , if it breaks then hold ur horses , this baby is going 1250

  • raised_by_wolves

    Well, it sounds like you got everything figured out given your investment objectives. Mine are different; I'm an opportunist looking to maximize profit. Also, keep in mind that I'm . . . weird. For instance, I like to develop my hedge position first before my desired position.

  • http://trading-to-win.blogspot.com/ DavidDT

    if this “perfect storm” conditions will not result in selloff – I am not using DeMark no more…today http://screencast.com/t/ZDE2ZjRjMWU

  • amokta

    Its not looking good, at the moment

  • johnny

    well to be frank i dont care whether it looks good or not , if it closes above 80% i am out of my shorts ,no plans to go long after that ,may be come back next week or so

  • http://trading-to-win.blogspot.com/ DavidDT

    perfect triangle play – with tight stop…so tempted!!!!!!!!
    http://screencast.com/t/ZjVlZDdhZTQt

  • bobthehorse

    Marvellous – here come the Greek trade unions to scupper the deal

  • johnny

    which symbol is that , is it nat gas

  • http://www.mylifemytrade.com MyLifeMyTrade

    I hope no one was leaning too much to the short side after mole's tuesday eod warning.

  • fisheggs

    Dollar Down
    Copper Down
    SnP Up

    What gives

  • gsavli

    thx. :)

  • johnny

    warnings are for bears only.bulls dont care for anything now , anyone who posts bearish setup is termed lunatic by them

  • BobbyLow

    Didn't the Greek Air Force go on strike too or was that just speculation. This whole on again off again Greek Financial Disaster is bizarre to say the least.

    The only positive thing about this mess is that it proves that Bull Shit is not only limited to America. :)

  • bobthehorse

    Yes – the pilots held a 24h strike. I actually think the Greeks might default – the reality is there is no willingness amongst the population to repay this money so they will not put up with the tax rises.

  • bobthehorse

    Don;t know what all the fuss is about – has been a fairly normal retracement so far.

  • amokta

    what happens when a country defaults. Ok, the creditors dont get paid, and those with paper assets take a haircut (or bald shave), but other than that life goes on?
    Argentina – its still standing?

  • Tronacate

    Familiarity breeds contempt:

    http://content.screencast.com/users/trona/folde

  • http://iberianviews.blogspot.com/ catracho

    a buy program on European close?

  • http://www.mylifemytrade.com MyLifeMyTrade

    The only thing constant about this world is that there is nothing that remains constant. Time will change… and bulls and bears will swap the neck-collar and the whip…. flogger will become flogged and flogged will become flogger.. Till then set aside bearish tendencies or else sit on the sides.

  • bobthehorse

    It has to fund itself internally – generally loses access to global markets so cannot borrow. Being in the EU it will be interesting – will Greek Banks still be able to post Greek debt as collateral? That is why it is such a mess.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Its just amazing in 8 trading hours we are up 28 points from the tuesday low… that is 3.5 points per hour. At this rate of climbing, ES will gain 3033 points by end of the year.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Look at the king of junk – IYR – up 3.x % already … it may be up 5% by end of the day

  • http://colechambers.com cc

    I closed my puts for a small profit. I am not happy with myself though, because I had a nice profit going into the close on Tuesday, but did not pull the trigger. I got to greedy…

    Now I think the fix is in for the Greek situation, and even if it is short term, I don't want to hold short now into Monday. Live and learn. Good luck all.

  • gsavli

    It's going vertical now.
    some short squeeze here…

  • Onorio

    Now that all Bulls have bought the dip, and all Bears are thinking that this was another bear trap, it`s time do go down.

  • bobthehorse

    Alternatively, in just 3 days, the ESM0 has lost 12 points. At that rate it will close the year at 644.

  • Tronacate

    Could happen if this truncates instead of hitting new highs.

  • Tronacate

    This might be a sweet short op right here on the TF

  • http://iberianviews.blogspot.com/ catracho

    yes that's the crux of it..bears are nervous and scared..not really surprising, so scrambling to over shorts plus the “buy dip” also in there….watching AAPL…for clue to a turn around..possibly setting up for a neg divergence if it can hit a new high, and TURN!

  • Onorio

    DAX is lagging since this mornig, and is now at 38% retrace os the down move. SPX is above the 68% mark.

    Risk currencies are rolling over.

  • bobthehorse

    I've never heard so much whining in my life – since the last time the market rallied! Market loses 40 points – all is normal. Market retraces 2/3rds of it and everyone is throwing in the towel! This is not the way to trade. You need to take some P's and dodge the L's. You have to expect a bounce after a sharp move lower – just play the odds people!

  • Tronacate

    I don't consider the line in the sand before 78.6 % retrace…….or wave 1 overlap

  • rosocecasita

    1200 IS a psychological number… this is the retest, better CLOSE above that today, look at the asian indexes, tomorrow is a Very bad day for them.

    The question: will is bleed over to our indexes?

  • Tronacate

    TF looks like a 123 reversal setup with the lower high on the 5 min…….

  • fisheggs

    Agrred, Stick some fib retracements on charts for a sanity check. I used to whine the same way :)

  • Tronacate

    No whineying here (get the horse reference)…….expected a backtest…….a little more drawn out than I expected though

  • rosocecasita

    Also: New Highs / New Lows is not looking good http://docs.google.com/View?id=dd6gf48g_40gr6dbvfc

    (Near the bottom of the chart, the HB Omen section, NYHGH NYLOW NAHGH NALOW)

    The MA(10) and EMA(23) just crossed the MA(283) bullish cross on lows, bearish crosses on the highs

  • Tronacate

    Any news on FSLR that would give it a 20 pt pop?

  • http://colechambers.com cc

    I agree Bob, but I don't like how the bulls just pile into AAPL and XOM, and that takes away the sting of any selling. It's just too easy for traders to influence the market with these big cap names right now. Are you going to hold short over the weekend?

  • Tronacate

    BAC lower high…….5 min…….might see gap fill by eod

  • bobthehorse

    We'll see what happens tonight and tomorrow.

  • Tronacate

    Not even close to being over today…….s TF 728

  • http://trading-to-win.blogspot.com/ DavidDT

    yes Sir, /ng nat gas

  • http://trading-to-win.blogspot.com/ DavidDT

    I keep watching it in disbelief

  • http://trading-to-win.blogspot.com/ DavidDT

    country itself will have to learn to “spend as we go” and no more borrowing for a while …which is the damn way it suppose to be to begin with

  • http://trading-to-win.blogspot.com/ DavidDT

    don't look at RT quotes – I trad eon 30/60min lately – and sleep better and money follows

  • lilme

    FT speaks: View of the Day: Leigh Skene, Lombard Street

    Published: April 29 2010 03:00 | Last updated: April 29 2010 03:00

    The outperformance of risk assets over the past year suggests investors appear to believe that all credit problems have been solved – but nothing could be further from the truth, says Leigh Skene at Lombard Street Research.

    “Rising stock markets and narrowing credit spreads depend on buyers being more anxious to buy than the sellers are to sell,” he says. “So who are the enthusiastic buyers of risk assets?”

    Mr Skene says that surveys show the usual investors in major rallies – pension funds, hedge funds and retail investors – have not been net buyers of equities. He says the most likely explanation for this anomaly in the biggest stock market rally since the 1930s is that large investment banks are the anxious buyers.

    “Their buying would appear to be for one of two reasons. First, because they think the authorities will prevail in their (so far unsuccessful) efforts to inflate their way out of debt liquidation. Or, second, because they are too big to fail and so can afford to take a huge gamble that enough buying will convince others to rush in and buy their inventory of risk assets at even higher prices.

    “Huge economic slack in most developed nations and falling money supplies in the two biggest currency areas indicate government efforts to inflate will continue to be unsuccessful, so reason number one is bearish for risk assets; number two is catastrophic.”

  • raised_by_wolves

    Is $TRAN leading among the indices? Notice that it has put in a new high.

    http://content.screencast.com/users/raised_by_w

  • http://trading-to-win.blogspot.com/ DavidDT

    people chase positions – they don't let enough breathing room – that is why market retraces even more…patience is a virtue

  • raised_by_wolves

    Next time, visit the oracle 😉

  • bobthehorse

    Off home – good night.

  • bananaben

    Just took another large position in TZA. This is not looking good anymore for bears. Maybe it will be a sell the news with the GDP tomorrow.

  • bsummertime

    why is the zero lite not moving much? looks like opex day

  • amokta

    lower low….and lower high……equals…..P3 ?
    Lets see if it we breach 80% retracement

  • raised_by_wolves

    Wasn't it two fucking days ago that Mole warned Stainless Steel Bears to take some profits? If you did, good. If you didn't, listen up next time.

  • Onorio

    Bla bla bla…Debt fear/bank default takes market down, Grece bailout/TARP bailout, market rallies to colapse days later.

  • johnny

    hello folks , hope everyone hving a nice afternoon with wine

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • http://evilspeculator.com molecool

    I can only make suggestions – everyone has their own trading system (I hope).

  • http://evilspeculator.com molecool

    Usually means it's coiling up for a big move. Not sure what direction yet, but if recent history is any guide…

  • http://trading-to-win.blogspot.com/ DavidDT

    Plunger Boy is awake – bulltards be afraid, be very afraid

  • raised_by_wolves

    "[E]veryone has their own trading system (I hope)."

    Sometimes I wonder about that 😉

  • raised_by_wolves

    An ($SPX/SLV) close (barely) below this 50% Fib of mine hints at a bullish short-term scenario for SLV. Tomorrow's open will be key. Will the ratio line continue pointing down or reverse to point up? If it continues down . . .

    http://content.screencast.com/users/raised_by_w

  • raised_by_wolves

    The (SLV/GLD) move below and then above the 208 MA looks like a headfake to me. The question is, which sort of headfake will it be. . . .

    http://content.screencast.com/users/raised_by_w