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Playing the Ponzi
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Why “Playing the Ponzi”? I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is created as debt, and running straight through a global economic model that is based on infinite growth in a finite world. This won’t end well. I’d go a step... More
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  • Reversal In Gold Miners Finally At Hand?

    Very interesting action in Gold Miners, and Junior Miners on Friday. Commodities have been obliterated this year. Gold and Silver, in particular, appear to be flirting with a major breakdown as they hit multi-year lows. But a dramatic reversal on Friday afternoon (7/24) comes at an interesting spot in the charts of mining indexes.

    The ETFs for both large gold miners (NYSEARCA:GDX) and junior gold miners (NYSEARCA:GDXJ) have placed bullish wicks at the bottom support of a multi-year falling wedges. First, GDX:

    (click to enlarge)

    And a matching chart in GDXJ:

    (click to enlarge)

    That chart pattern is promising and matched by a bullish wick at support in the chart in gold futures.

    (click to enlarge)

    Compare that with paper gold (NYSEARCA:GLD). Notice how this week's action relates to support? It broke support and never recovered.

    (click to enlarge)

    Interesting. It's particularly funny to me given that I feel physical gold and paper gold and in some ways ideologically opposite investments - i.e. in a systemic crisis where the price of gold skyrockets, the paper version will likely be worthless.

    Tags: GDX, GDXJ, GLD
    Jul 24 4:31 PM | Link | Comment!
  • What To Make Of Emerging Markets?

    The Emerging Markets ETF (NYSEARCA:EEM) is a very interesting chart. Is it a strong buy or a strong sell? It seems both cases can be made.

    The weekly chart posted a huge bullish wick last week. That is often a great reversal pattern that indicates the bottom of a selloff.

    (click to enlarge)

    But the daily chart paints a different picture. It experienced a massive breakdown and has now climbed back to the former support. This would typically be a good spot to short.

    (click to enlarge)

    So which is it? Strong buy or strong sell? I don't know, but it's a pretty interesting situation.

    Another very interesting, somewhat perplexing international chart comes from Hong Kong (NYSEARCA:EWH). It looked like a serious breakout earlier this year, then hit resistance from a decade ago. It pulled back to support and has created a very bullish wick on the weekly chart. I suspect this is a bullish setup. At the very least, it looks interesting.

    (click to enlarge)

    As an unrelated aside, Netflix (NASDAQ:NFLX) rallied 15% after earnings. Breakout? Maybe not so fast. It looks to be coming up on a 20 year old line of resistance.

    (click to enlarge)

    Happy trading.

    Tags: EEM, EWH, NFLX
    Jul 17 2:14 PM | Link | Comment!
  • Market Technical Update - On The Brink Of Breakdown

    The market has spent most of 2015 chopping sideways. The S&P (NYSEARCA:SPY) has failed to meaningfully breach 2100 and is once again threatening to turn meaningfully lower. Most eyes are watching Greece and the EU, but I suspect the far greater risk may be playing out in China.

    First, however, here's a quick survey of domestic charts. The S&P has broken the long-term rising wedge that I've been following since 2012 or so. At this point, I consider it to have "broken down." But the 200 day moving average (i.e. ~50 week MA) has held since 2012 and remains a very important support that is still in place. We'll see how it holds up over the coming weeks.

    (click to enlarge)The international equity markets (NYSEARCA:VEU) are at their 200 WEEK moving average. For comparison, SPY is about 20% above its 200 Week MA.

    (click to enlarge)

    There are reason to think this is not a "buy the dip" opportunity. One reason for caution is the huge bid that has broken U.S. Treasuries out of falling wedge, to the upside. Chris Kimble, one of my favorite technical analysts, also pointed out that the TLT/SPY ratio is topping out where it did in 2007. Here is the chart of TLT breaking to the upside of its falling wedge last week.

    (click to enlarge)

    To me, the most troubling news is not Greece, but China. The Shanghai composite (~FXI) has been in full meltdown mode, and it'll be interesting to see when and how this impacts liquidity in global markets.

    (click to enlarge)

    The weakness in China has also triggered a serious breakdown in the wider Emerging Markets picture (NYSEARCA:EEM).

    (click to enlarge)

    While much of the world is watching Greece, I think China is the boogey-man most worth watching. It is not full-fledged Flail-and-Bail time yet, but it's sensible to have a foot out the door and a finger on Bail trigger. I think the 200 day moving averages of SPY and VEU bear close watching for further weakness.

    Jul 08 1:17 PM | Link | Comment!
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