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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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  • SPY At Critical Support

    Wow. That was fast. Now the rubber REALLY meets the road. Big test at hand for the S&P (NYSEARCA:SPY).

    (click to enlarge)

    Tags: SPY, SSO, SDS
    Oct 01 3:45 PM | Link | Comment!
  • Rubber, Meet Road

    I recently wrote that I felt the timing was right to get short. Since then, we have seen a bit of a sell-off. Nothing severe in the U.S. markets, but enough to have those shorts in the green. If you are squeamish, I think now is the time to take profits or at least get even. The S&P (NYSEARCA:SPY) has pulled back to the shallow support line that has held since early 2013.

    (click to enlarge)

    The Russell 2000 (NYSEARCA:IWM) is near the bottom of channel support. You can read it as having broken the tight support or still having some room before it hits looser support. Either way, it's near support.

    (click to enlarge)

    Both of those charts would suggest it's a good time to cover shorts and go flat (or long).

    However, there remain good reasons to stay short. In addition to the long term rising wedge that still lurks as the ultimate challenge for the S&P, there is also the matter of weakening peripherals. XIV, an inverse VIX fund that has served as a decent indicator, may be starting a more serious breakdown.

    (click to enlarge)

    More disturbing is the Vanguard All-World Equity fund, VEU, which has clearly been rejected at resistance and meaningfully declined in recent weeks.

    (click to enlarge)

    Emerging markets have been crushed in the last week, as has much of Europe, not to mention commodities (have a look at DBC!). With Nasdaq still hovering near all-time highs, one has to wonder how long the U.S. can hold out as global markets weaken?

    Disclosure: The author is long RWM.

    Additional disclosure: Also long calls on RWM and QID

    Tags: SPY, SSO, SDS, IWM, RWM, XIV, VXX, VEU
    Sep 30 9:52 PM | Link | Comment!
  • Calling A Top?

    I'm on my invisible soapbox. And I'm short. Everything (not really, but maybe rhetorically). I meant to post this little note on Friday, and then over the weekend, and now I've missed the top on my little blog. Fortunately, my positions are in place. I will bail if this moment proves wrong (the S&P pattern can continue the uptrend into 2015), but it seems like so many parts are in place.

    The Alibaba IPO, the largest in history, seems almost comically ordered for the explicit purpose of a providing a market top. We have small caps diverging from larger caps for months, a sign of weakening risk appetite. Major indexes are pushing technical resistance. Europe is ready to fall apart again and world leaders are playing Warmonger again. Anyway, it adds up to enough that I'm happy to take my short shot here.

    Now to the charts (these are all from last Friday or something, when I intended to post).

    First the S&P (NYSEARCA:SPY). Yep, still hugging resistance.

    (click to enlarge)

    Short term maybe you can see that bearish candle from Friday. It has played out as bearish indeed in the two days since.

    (click to enlarge)

    Small caps (NYSEARCA:IWM) continue to show relative weakness. Since capturing this chart, IWM has pushed towards support.

    (click to enlarge)

    Disclosure: The author is long RWM.

    Additional disclosure: Long many RWM calls too.

    Tags: SPY, SDS, SSO, IWM, RWM
    Sep 23 9:48 PM | Link | Comment!
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