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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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Playing the Ponzi
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  • Breakout Or Breakdown?

    U.S. markets have rallied massively in the last month and have returned to previous highs. Resistance is at hand, and we should soon discover whether the late summer breakdown is re-confirmed by failure here, or another leg higher is in store.

    Here is the S&P (NYSEARCA:SPY) chart, with strong resistance around 2100. I am view this most recent rally as another small rising wedge.

    (click to enlarge)

    Here is the longer term view of that same S&P pattern.

    (click to enlarge)

    One stock that may be a useful companion to that trade idea is MMM. Like the S&P, MMM broke down from a rising wedge, and has returned to the underside of old support.

    (click to enlarge)

    I remain of the view that we are witnessing a topping process. As such, I see the current action as perhaps a final re-visitation of this price area. Naturally, it is a belief I hold loosely as recent years have made all such bearish wagers dangerous business on which profits needed to be taken pretty quickly. We'll see if this plays out any differently.

    Tags: SPY, SSO, SDS
    Nov 05 12:34 PM | Link | Comment!
  • Market Breakdown In Play

    The major indexes appear to have pretty conclusively broken down. There was a large bullish wick put in place at the bottom of the initial breakdown, but upon returning to the old support, major indexes have since retreated. Here is the long term Nasdaq (NASDAQ:QQQ) weekly chart that shows a (7 year old!) rising wedge failing at the old 2000 high, forming a double top, and now breaking down. Just based on the time and percentage moves involved in this chart, I'd imagine we have a good ways to fall.

    (click to enlarge)

    Same ugly story in the S&P, minus the double-to (this one is a 1.61 Fibonacci extension of old highs) (NYSEARCA:SPY).

    (click to enlarge)

    At this point I am settled into my shorts and have taken most long exposure off the table. Bear markets are typically incredibly volatile (much moreso than bull markets), so I am viewing big rallies as opportunities to add shorts and trim longs.

    Sep 28 11:08 AM | Link | Comment!
  • 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!
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