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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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  • Warning Bells Are Ringing

    Signs are aplenty that the market is flirting with a major breakdown. The next couple of days should be telling. Nasdaq (NASDAQ:QQQ) was rejected at resistance in the form of both trendline and 50 day MA. QQQ has now completed the right shoulder of a pretty textbook Head and Shoulders pattern.

    (click to enlarge)

    Small caps (NYSEARCA:IWM) are threatening to break support. Here is the IWM chart:

    (click to enlarge)

    Perhaps more telling is the action in 30 year Treasuries (NYSEARCA:TLT), where TLT is breaking above resistance.

    (click to enlarge)

    And finally, Financials (NYSEARCA:XLF) may finally be breaking down. Both a rising wedge and a Head and Shoulders top are in place as bearish harbingers for XLF. A test of 200 MA (the dashed blue line) should be a pretty big deal as there is a good bit of support around there.

    (click to enlarge)

    Disclosure: I am long QID, RWM, TLT.

    Additional disclosure: I am short XLF

    Tags: QQQ, QLD, QID, IWM, RWM, XLF, TLT, TBT, TBF
    May 15 12:26 PM | Link | Comment!
  • Emerging Markets Are... Emerging, Again?

    While the U.S. markets continue to churn sideways, flirting with the possibility of a major top, international markets are showing much greater cause for bullishness. Of this group, India is probably still my favorite, though it has already made significant gains since I first mentioned it a couple of months ago. The India ETF I've been tracking, EPI, is only now breaking above its 200 day moving average. This, after forming a pretty textbook inverse Head and Shoulders pattern. Given some consolidation, I imagine there's plenty of upside left in the longer term.

    The iShares Emerging Markets ETF (NYSEARCA:EEM) is also breaking above trendline and 200 day moving average resistance, and perhaps resolving a multi-year pennant pattern to the upside.

    Brazil (NYSEARCA:EWZ) has been downtrending for years, and appears to have solidly broken above its trendline resistance. It has a little ways to go before reclaiming its 200 day moving average.

    Broadening the picture to include the entire ex-US world, a representative ETF, CWI, shows a multi-year ascending triangle and appears to be attempting to break out.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: EEM, EWZ, CWI, EPI
    May 14 11:44 AM | Link | Comment!
  • Switzerland As A Cue To Major Tops?

    The Switzerland ETF (NYSEARCA:EWL) presents us with an unusual picture: it is one of the few securities I have noticed that has a beautiful trendline running from around the 2000 market top, to the 2007 top, and now in play for a possible 2014 top. Here is decade-plus chart of EWL.

    (click to enlarge)

    It is worth noting that EWL has not broken down, nor shown any particular weakness at present. However, it has formed a textbook rising wedge over the last couple of years as it now hits the decade-plus trendline of major tops.

    (click to enlarge)

    It adds up to an interesting situation that bears close watching, imho.

    As an interesting aside, have you noticed the action in SPY? Despite all the grief about crushed small caps and technology darlings, SPY is actually working on a fourth straight up-week! It is coasting squarely in the middle of its ever-narrowing (rising wedge) range. Interesting.

    (click to enlarge)

    Conversely, small caps (NYSEARCA:IWM) are testing the support at what may be the neckline of a Head and Shoulders pattern.

    (click to enlarge)

    It's been another interesting week. It feel like this major cross-roads has been happening in slow motion for months now. Only time will tell if this is the formation of a major top, or the base before one final push higher. In my view, either way, the end of this bubble is in sight. Only time will tell what shape it takes.

    Tags: EWL, SPY, IWM
    May 09 1:37 PM | Link | Comment!
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