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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 Rising Wedge Resistance (Again)

    Most of the bearish chart configurations that appeared in the spring have flitted away harmlessly. The breakdowns that were teased never came to fruition. There is one major index that remains in the long term pattern that (still) portends trouble: the S&P. SPY has formed a clear rising wedge from the 2009 bottom. SPY is currently testing the upper bound of that pattern.

    (click to enlarge)

    The iShares Financials ETF (NYSEARCA:XLF) remains an interesting short candidate to me. I was duped into declaring early victory a month ago and XLF has since rallied. But it continues to contend with 50% retracement Fibonacci resistance from its 2007-2009 decline. It is also at the very end of a multi-year rising wedge pattern.

    (click to enlarge)

    Another interesting short candidate to me is LLL. It has been in a steep rising channel for over a year. A rising channel is typically a bullish pattern, so I am not overly bearish... but flat revenue and profit growth for years, and a double in price over the last 12 months. It seemed tempting. The doji star a couple weeks ago looks like (at least a temporary) top.

    (click to enlarge)

    Disclosure: The author is short LLL, XLF.

    Tags: SPY, SDS, SSO
    Jun 23 10:45 AM | Link | Comment!
  • JC Penney Inverse Head And Shoulders Breakout?

    I posted a bullish note about J.C. Penney (NYSE:JCP) a few days ago on Stocktwits, but forget to put it elsewhere! Drat. Anyway, it's a pretty nice inverse Head-and-Shoulders that would seem to portend the prospect of much greater upside in the longer term, even with today's earnings jump. It's interesting that the after-hours rally hit $10.62, which is awfully close to the that upper line of resistance in the chart below. If we hit that price today, I will sell and look to buy back. Once that trend line is broken, I think JCP can probably run a good bit higher.

    Tags: JCP
    May 16 10:41 AM | Link | Comment!
  • 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!
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