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I was born and raised in southern Alberta and graduated from the department of Structural Engineering Technology at S.A.I.T. in Calgary. My background is mainly in construction management although I spent 10 years selling real estate where I gained some very valuable knowledge about how... More
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  • Hindenburg Omen - November 13, 2012 230 comments
    Nov 14, 2012 12:22 PM

    This is the continuation of a discussion on the Hindenburg Omen which was originated by our friend John Lounsbury over 3 years ago. The preceding chapter in this series can be read here. For further reference or to read about actual Hindenburg events we have covered including the near misses which occurred in the "week before" and the "day of" the flash crash, the entire series began with John's original post found here.

    In the chart below we see the latest picture of what the NYSE is doing as well as a very easy-to-follow method of monitoring whether or not the Hindenburg Omen is obeying one of its most important rules, that being whether or not its 50 day moving average is rising. As you can see, as of the close on November 13, 2013 that moving average is on the verge of heading south. In fact, unless the NYSE puts on a spectacular rally over the next 10 days the HO is about to go off line. And of course if that happens the HO as an indicator can no longer issue a signal. But we will continue to monitor the new highs and new lows anyway since they still provide a great view into the market internals and can help identify when the market is highly polarized with an unusually high number of new lows being achieved at the same time as an unusually low number of new highs.

    Click here for a live and updating version which I try to keep updated each day.

    As a brief summary of recent activity, we can just state that the HO has really been humming for the past couple of weeks, particularly the past 5 days or so. We've had what should probably be considered as a series of "near misses", the closest one having occurred on Monday, Nov. 12th. On that day had the NYSE been able to register just 9 more new 52 week highs the HO would have issued its first signal since it last went off in August of 2010. As I told the readers back then, even though the Hindenburg Omen hadn't officially gone off, the message was still abundantly clear... the market is at a degree of polarity not seen very often (meaning that while the steady heavy horses were still trying to pull the stock wagon up the hill, nearly as many were on the other end trying to pull it downhill). And as one could easily imagine, those that are trying to pull a wagon 'downhill' are likely to be the winners. And when one of those heavy horses named APPLE (pictured below) is pulling 'downhill', guess which way the market is going to go.


    Nevertheless, all this scary activity doesn't mean that a rip-snorting rally can't still occur. It certainly can and don't be surprised if it does. In fact, I personally expect some upside action at any time now... at least a bounce. But that's all we should be expecting... A BOUNCE. That's the message from the HO... to be long at this stage in time is a very dangerous proposition.

    So we continue to monitor the situation. As always, comments are welcome.

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Comments (230)
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  • Author’s reply » I'd better start off the comments section by pointing out that as of today the HO is officially "off-line". The 50 day moving average of the NYSE ($NYA) has turned down and it absolutely 'must be rising' in order for the HO to be able to issue a signal. Also, unless the NYSE puts in a stunning rally over the next 10 days the HO is going to be off-line for a few weeks.


    So we look back to Monday's readings when the NYSE registered 78 new 52 week highs and 88 new lows. That was the nearest miss we've seen since the HO last went off in August of 2010 (Aug. 10th I believe it was).


    So although officially the HO didn't go off on Monday, we have to recall that we saw this same type of activity with one near miss after the other leading up to the last two severe market declines, one of which was the flash crash and the other was the August, 2010 decline. Readers will recall that although the HO didn't go off back in 2010 until the August decline was nearly over, it 'did' issue a series of near misses in the days before that decline began.
    14 Nov 2012, 11:51 AM Reply Like
  • Agreed AR - Thanks - Cashy & cautious!
    When the HO goes off line -- No TA needed -- your local pub visits should go 2X sigma with winter settling in......
    14 Nov 2012, 11:58 AM Reply Like
  • Author’s reply » I should make it known though DigDeep, that there are some pretty darned good Elliott Wave people out there who are foreseeing a substantial rally from somewhere in here. I tend to agree with them. The fact that the HO has come very close to issuing a signal does not necessarily mean that the market can't be influenced by Money Bags Bernanke and put in a hell of a rally. All it means for the time being is that until we actually see that happen though, all systems are on "TANK MODE". That 'can' still change.


    So if a person were to take the chance on maybe catching a good chunk of the 'possible' rally, I'd just suggest that they do so with a minimum sized bet for now.
    14 Nov 2012, 12:06 PM Reply Like
  • substantial rally from somewhere in here.


    That makes a lot of sense. I'm thinking Santa Clause rally. After people have finished repositioning based on their speculations about the changes in cap gain taxes and other taxes, the market finds a new equilibrium. Then people get swayed by a "compromise" for the Fiscal Cliff and start thinking that is a good thing. European can kicking keeps them out of the news through the holidays, and officials there start taking time off. BB is still engaged in QEi and don't forget Twist is still going on. Everything shapes up for the risk-on trade to set in through the end of the year.


    Then Jan and the innaguration and its euphoria are over. All the while the markets have been trending up, just before reality starts to kick in. 2nd qtr next year, might be the next time the HO starts rumbling. Sell in May and go away may have a special meaning in 2013.
    14 Nov 2012, 02:33 PM Reply Like
  • Wow. That's the smallest cow girl I've ever seen. She makes that horse look huge!
    14 Nov 2012, 02:34 PM Reply Like
  • Author’s reply » That's one beautiful impressive horse is it not? I heard that woman was 6'4" tall too. Probably just a rumor, lol.
    14 Nov 2012, 03:32 PM Reply Like
  • I've seen a horse at least that big in Ohio amish country on a farm. Biggest one I'd ever seen.
    14 Nov 2012, 08:25 PM Reply Like
  • Author’s reply » Have you ever seen a moose this big? These pictures were taken either in Ontario or New Brunswick a few years back. As hard as it is to believe, this big bruiser is as real as the trees around him. There are several pictures of him so I don't have much doubt. On a side note, the population of moose is so high on The Rock (Newfoundland) that hitting moose while driving is the leading cause of traffic deaths in that province. One moose for every 4 people.


    There used to be a giant elk roaming Ireland 10,000 years ago that had a rack 12 feet across. I imagine they would have been as big or bigger than the moose in the pics above.
    15 Nov 2012, 11:38 AM Reply Like
  • When a deer is hit, the grill hits the deers body. When a moose is hit. The body of the moose come through the windshield. We lost a relative that way.
    15 Nov 2012, 03:27 PM Reply Like
  • I saw a moose in northern Minn when I was younger that was so big I swear we could have almost driven the Oldsmobile Delta 88 right under his belly. I was in total awe. Fortunately, he didn't pay us any attention and slowly walked off after crossing the road about 20 feet in front of our car. Very cool! I think the one in the pictures above was more massive, though.
    16 Nov 2012, 08:36 PM Reply Like
  • Author’s reply » Just a quick note to point out that the HO came back on line today because the 50 day MA of the NYSE turned higher at the open. Barring a decline of some size next week that MA should stay pointed upward for a few days. But after Monday, all of next week and thereafter there will be pressure for that MA to turn lower again. The only thing that will keep it pointed higher is more upside from the markets... enough upside to match that of 49 and 48 and 47, etc. days ago. The week after next that pressure on the MA to turn lower is going to increase substantially. So we'll just have to wait and see if the HO is going to be up and running or not. As of this morning's open... it is.


    Have a great weekend!
    7 Dec 2012, 05:41 PM Reply Like
  • Thanks AR.
    8 Dec 2012, 04:03 AM Reply Like
  • AR - Unless the press or the Hill concoct a positive story about the fiscal cliff debates over the weekend (or Monday) I suspect equities to drift lower. But the caveat I mentioned is a very distinct possibility and could very well create the rally the HO needs. Without news, their just isn't much to boost this market, imho.
    9 Dec 2012, 09:54 AM Reply Like
  • "Without news, their just isn't much to boost this market, imho. "


    There is another possibility. The Fed is buying MBS and MBS tend to settle around the 20th of each month. If you look at the growth of the Fed's balance sheet, it grows right around this time. This could provide a boost right around the middle of the month.
    9 Dec 2012, 09:23 PM Reply Like
  • Rocks: Down in Copan, and loving it. If you would like to track my 12/21/12 Ending Of The World Fiesta journey, as well as others soon arriving from the US, I invite you to go to the following link, and to scroll down to about comment 180 (beginning Dec 5).

    11 Dec 2012, 12:23 AM Reply Like
  • Author’s reply » Thanks Maya... I'll be right there.
    13 Dec 2012, 12:41 PM Reply Like
  • Author’s reply » Just a quick note to let you know that the numbers of new highs and lows are now back into the range that the HO is looking for. It's starting to buzz quite a bit right now, and the change has come about very quickly. So stay tuned. I imagine there will be more to report tomorrow. See ya then :-)
    21 Feb 2013, 04:05 PM Reply Like
  • We are all scanning the airwaves Rocks!


    We won't miss your posts!


    21 Feb 2013, 04:06 PM Reply Like
  • Author’s reply » Thanks H.T. The chart at the top of the page is updated and the best news is that the HO is not threatening to go off-line any time soon. It's going to be fully alert and 'able' for quite a long time here. We haven't had this luxury the last few times it got close.
    21 Feb 2013, 04:08 PM Reply Like
  • Rocks: Happy New Years! ;-)


    Do you think the HO has sensed the 13 year long triple top in the major indexes?
    21 Feb 2013, 04:12 PM Reply Like
  • Author’s reply » No it wouldn't be able to detect anything like that Maya because it's only focusing on the most recent 50 days worth of action at any given time.


    Happy New Year to you as well my friend. Gotta run now but I imagine we'll be here tomorrow. Have a great night.
    21 Feb 2013, 04:38 PM Reply Like
  • Nice to see your stll on the green side of grass Rocks. Will be watching this post closely over the next few days.


    How is the family doing? All fine I hope.
    21 Feb 2013, 05:19 PM Reply Like
  • Author’s reply » Hi DG. The family is ok but I never see them much any more, the kids are just too busy. My little girl is on loan to the US offices of Deloitte & Touche because her education and experience is so rare and in very high demand. She's consulting on the transition from one computer system to another for 40 Washington hospitals. Her degree is in Health Information Science and it's focused on the technology of medical records sharing systems.


    My son is still the hardest working man I've ever met. Just work, work, work. But I got the great news at Christmas that he got engaged to be married. He went to high school with the young lady and I had even noticed her back then because she was such an athlete. But they hadn't seen each other for 10 years. When they crossed paths 10 years later though they were pretty awe struck with each other and they've been together ever since (3-4 years now). She's freakin' awesome too. Beautiful, tall, athletic, has her own residence already and is a high school phys. ed. teacher. So she's one of those rare ones who doesn't "need" my son, she "wants" him. That's a good start. And she treats 'me' like gold, so how could I not be happy with his choice? That young lady is just awesome.


    I hope you're doing well too pardner. I hope your boy is doing well. Is he still in Okinawa?
    22 Feb 2013, 11:00 AM Reply Like
  • He is still in Iwakuni Japan. Just 20 miles south of Hiroshima.


    All is well on the home front for our family. Wife and second son head for Japan in March to visit. It will be a bit of a treat for them to not be there in the winter time for once. We went to Copan this December for the "End of world Fiesta" so she is making her yearly trip to Japan now. I will be up your way in May to hunt but not the moose. Flying into Edmonton.


    Now back to our regular channel......
    22 Feb 2013, 12:25 PM Reply Like
  • DG: "Flying into Edmonton".


    I presume you be flying via the Hindenburg, O man?


    22 Feb 2013, 12:35 PM Reply Like
  • Author’s reply » As Calgarians like to say, "if god wanted to give the world an enema, Edmonton is where he'd stick it." lol


    Just kidding of course. The people up there are great, it's just a big sports rivalry thing. Edmonton is more blue collar because that city is the gateway to the north... the oil area. Calgary is more white collar where all the strings are pulled. Both cities are identical in size at about 1.15 million each. Edmonton is almost always a tad colder too, being just that much further north (180 miles). In fact it was in Edmonton where a couple of years ago you might remember me saying that I was in the coldest spot on earth that Christmas night (officially). It was -46C (-51F) and -64F with the slight breeze that night. I've never felt cold pain like that before or since.


    But you'll be up there in May so you're in the clear. It should only be about -35 by then, lol.


    Make sure you bring rain gear... that's a transition time of year where we could get a foot of snow one night or a ton of rain. We just never know. Either way, it's precipitation for sure. Probably rain.
    22 Feb 2013, 01:14 PM Reply Like
  • Author’s reply » Nothing special to update about really. The NYSE has generated 92 new highs and 14 new lows so far today. The number of new highs is of course very low for a market that is so close to all-time highs. But so is the number of new lows quite 'unremarkable'. There are enough stocks currently hovering right around their own 52 week low that a big sell-off could theoretically cause the HO to trigger but I don't think it triggers today. Maybe not next week either. It just bears special monitoring right now and that's about it.
    22 Feb 2013, 02:48 PM Reply Like
  • Author’s reply » It's early in the day and already there have been 42 new highs and 35 new lows. This is exactly what the HO is looking for. If that ratio continues we 'might' see a signal today.
    1 Mar 2013, 10:44 AM Reply Like
  • AR -- I was just thinking before your post that the day is ripe for a signal. Thanks as always for sharing your tracking.
    1 Mar 2013, 10:56 AM Reply Like
  • Author’s reply » You betcha MJ. There are 72 new highs now. And 37 lows.


    I'm not sure if you were here back in August 2010.. But back then when we had a couple of near misses (and even when the HO went off), the market action was just like this. On those past occasions the market first opened with a big gap lower which produced a fair number of new lows. Then it recovered 'just enough' to get the number of new highs that the HO requires. Then the market sold off again and completed the number of new lows required... OR VERY CLOSE TO IT in the case of a near miss.


    Then a day or three later it happened again, except in reverse. So if the market cannot hold this incredibly stupid bounce that's happening right here, and drops into the close... that's most likely when the HO is going to be closest it's going to get today to issuing a signal. The last time it issued a signal was at 3:50 p.m. as I recall, just before the close. And that makes sense. So the next time the HO issues a signal I'd expect it to be late in the day.


    All that said above is not to imply that this ridiculous bounce courtesy of Goldman can't continue. It could indeed. So stay tuned because if the market sells off to finish the week...
    1 Mar 2013, 11:13 AM Reply Like
  • Thanks for keeping us informed, AR. I am still lurking in the weeds out here and will be watching more closely than usual over the next week or so. What is going on in Washington, DC (inside the Beltway) could spark a move in either direction. The Prez just announced his willingness to make cuts to Social Security and Medicare publicly today (Sunday) so that may give the markets a buzz on Monday! It all depends on how it gets spun and how well the offer is rec'd by Republicrats. Then, in April, we've got another earnings season and I expect it to be lackluster. The economy seems a little tepid, growth-wise, in Qtr 1 to me, so the expectations will need to be revised downward more between now and then to ensure enough companies beat expectations, imho. But that usually happens with precision on Wall Street. The big concern will be guidance. And that depends on a few things like what happens inside the Beltway between now and then and whether companies are looking out to Qtr 2 or further out. Further out could actually be encouraging, but the shorter term could be more sluggishness. Hard to say what is going to happen between now and then. So, with confusion and enough uncertainty in the air, the market could be ready for a correction. That would be healthy after the run we've had. But I am not expecting another huge bear market unless we have another Black Swan event to trigger it. Just my thoughts. But I'll be watching as one never knows where the Swan will come from or when it will show itself again.
    3 Mar 2013, 07:02 PM Reply Like
  • Author’s reply » Hi gang. Just a heads up that today the HO is really starting to hum now. Yesterday, and in days previous, there were just too many new highs still being attained. Today... a totally different story. There were 123 new highs and 48 new lows, with 86 of each being required today.


    So the market is suddenly hanging around right in the zone where the HO is paying very close attention. I post the occasional updates on my blog as well.


    For those of you on Twitter, I finally got hooked up with that thing and have found it to be far more useful than I thought it would be. So if you're on Twitter you could find me @AlbertarocksTA.


    See you tomorrow or Friday most likely, at least for more updates.


    Hope you are all doing well :-)


    BITCOINS? You'd better believe it.
    3 Apr 2013, 04:12 PM Reply Like
  • Thanks AR
    3 Apr 2013, 04:24 PM Reply Like
  • Sound like ADP was a wake up call. If NFP misses, then you might get some real movement, depending on how much it misses.


    Don't forget though, bad news is good news. The $85 billion the Fed is buying is flexible. They could ramp that up just as easily as they could ratchet it back.
    3 Apr 2013, 04:34 PM Reply Like
  • Author’s reply » You're welcome. Thanks for checking in, even though you're still dazed.
    3 Apr 2013, 05:36 PM Reply Like
  • A.R.: Winter near done? Rays of sunshine? Weather suitable for floating a dirigible?


    3 Apr 2013, 06:16 PM Reply Like
  • Author’s reply » Hi H.T. Yeah, we're through the worst of it. There's not much snow left, just in places where it drifted into thicker patches or in shady spots, etc. But we never know up here. We've had heavy wet snowfalls of 2 feet in May several times that I can remember. In April (I think it was 1967) we got 4 feet on a Friday-Saturday combo. Sunday was bright and sunny and everyone in the city broke out the shovels. A few days later a chinook wind came and most of it was gone in 2 or 3 days. The river rose 10 feet and caused some minor flooding. But those kinds of blizzards are fairly rare, But then it starts raining and usually doesn't stop until the end of June. Then we go nuts with Stampede Week followed by 8 weeks of glorious weather and then right back into winter. As we say up here, "In Alberta we only have 2 seasons, summer and hockey." Mind you, there are other places up here where the climate is just superb in the summer (a much longer summer) and then there's the west coast. Almost a mediterranean type of climate over there.


    As for floating a trial balloon, at this moment there are 58 new highs and 28 new lows. So yeah, the market is kind of hanging around in the HO's neighborhood. We'll see what happens I guess :-)
    4 Apr 2013, 10:33 AM Reply Like
  • Thanks for the update AR!!!
    4 Apr 2013, 04:40 PM Reply Like
  • Author’s reply » Just a quick update then I gotta run. New highs are currently at a very anemic 89 with 85 required. New lows are at 33. So the only info we can really glean from stats like that is that although the HO won't be issuing a signal with these numbers, the market is pretty darned fragile at the moment.
    4 Apr 2013, 03:40 PM Reply Like
  • Author’s reply » Here's a fabulous video presentation on Japan's debt problem. I found it on Sprott's site:


    And an eye-opener of an article by Antal Fekete on the bond market:
    5 Apr 2013, 10:52 AM Reply Like
  • Author’s reply » Highs and lows are at 43 and 36. This is definitely getting the HO's attention.
    5 Apr 2013, 11:46 AM Reply Like
  • Author’s reply » Hey gang. I just posted an update on my own blog and if you don't mind I'll just direct you there for today. Busy, busy.

    5 Apr 2013, 04:00 PM Reply Like
  • Thanks AR but my handlers have that site blocked. Probably because it resides outside of the US.
    9 Apr 2013, 11:35 AM Reply Like
  • Author’s reply » Sorry to hear that RBF. That's probably because it's a blog and quite often blogs are considered as "off limits" sites by employers. Can you not see it from home though? Or god forbid... by "my handler" you're not referring to your wife are you? :-)
    15 Apr 2013, 12:54 PM Reply Like
  • Rocks: Greetings. No I have government watch dogs looking over my shoulder to keep me out of trouble. LOL.
    23 Apr 2013, 02:25 PM Reply Like
  • Is it working, the staying out of trouble thingy.
    23 Apr 2013, 02:26 PM Reply Like
  • Author’s reply » Well friends, we're an hour and a half into the trading day and the market has generated 65 new highs and 64 new lows. It looks like today's going to be the day we get the first signal. Stay tuned.
    15 Apr 2013, 11:01 AM Reply Like
  • Thanks, AR.
    15 Apr 2013, 11:58 AM Reply Like
  • Author’s reply » You're welcome pardner. It's at 77 and 74 at the moment. Nice to see you again.
    15 Apr 2013, 12:52 PM Reply Like
  • Author’s reply » With 74 new highs and 68 lows it looks like a signal today is all but inevitable. If it happens, I have an article ready to go and I'll post a like to it here.
    15 Apr 2013, 12:00 PM Reply Like
  • Thanks, AR.
    15 Apr 2013, 12:32 PM Reply Like
  • Author’s reply » By the way John L., if the HO does go off I have an article ready to publish. If you'd care to read it and then if it meets with your approval, publish it, please feel free. I'd love to get the word out. Thanks for considering that.


    The market is stuck at 77 & 76 for the moment. So with 8 more of each required I'd say the odds are high that article will be published within hours.
    15 Apr 2013, 01:19 PM Reply Like
  • We'll repost it. Thanks.
    15 Apr 2013, 02:53 PM Reply Like
  • Author’s reply » Thanks John. It's too important of an event to remain under-reported on my own little blog. Your readers literally 'deserve' to at least get the straight goods on it. Much appreciated.
    15 Apr 2013, 02:59 PM Reply Like
  • Author’s reply » It almost seems that at about 1:30 Eastern the numbers from WSJ stopped updating. There's no way the numbers of new highs and new lows can suddenly get pinned at 77 and 77 when there are 3100 different companies trading. Sure makes you wonder doesn't it?
    15 Apr 2013, 02:23 PM Reply Like
  • Author’s reply » Ok, the minimum requirement has been met for the number of new highs. It just hit 85 and the new lows sits at 79. Six more and the HO goes off.
    15 Apr 2013, 02:51 PM Reply Like
  • One would think in gold miners alone we would get the 85 lows.
    15 Apr 2013, 03:20 PM Reply Like
  • Guns: Here's a list of John Paulson's gold holdings, many of which hit 52 week lows today:



    -- Paulson has lost just over $291.5 million on these stocks so far today.
    15 Apr 2013, 03:34 PM Reply Like
  • I think a buying opportunity in gold miners will be coming that will be unbelievable. I hope I do not have a stroke first.......
    15 Apr 2013, 03:37 PM Reply Like
  • I agree, but there's lots of cross currents to consider; will Cyprus, Spain, or Italy sell down gold stockpiles? Will hedgies like Paulson throw in the towel, and if they do, who is going to buy in and give support? Then there's the new bipartisan Brown/Vitter Bill being bandied about, which could affect Basel III (I need to learn more about this bill's ramifications. Below is a taste).



    Today, seems to be as much about margin covering as anything else that I can determine.


    My bottom feeder whiskers are twitching.
    15 Apr 2013, 03:46 PM Reply Like
  • At what point do the shorts get scared the price will go the other way and they start to buy. They are sitting on gold right now but it could all go away quickly if they do not buy to cover.


    Thats the side of the coin most do not consider. How well do they sleep worrying the price could take off upwards again. I think we might see some more downside just from the margin calls but after that.......short covering could send the price northerly.
    15 Apr 2013, 03:51 PM Reply Like
  • DG - - -


    Last week I posted a note that pointed out the long-term trend lines provide support in the $1,100 +/- right now. If we did get to those levels it would be a great time to make a big bet.
    15 Apr 2013, 04:49 PM Reply Like
  • Thanks John. Just saw this article at silver doctors that might interest you.

    17 Apr 2013, 08:49 AM Reply Like
  • Thanks DG - I put on our Reading List for tomorrow with a disclaimer that we had not researched the claims of the article.
    Posted with hat tip to doubleguns.
    17 Apr 2013, 08:07 PM Reply Like
  • Author’s reply » I'm going to call it either way folks. The god damned WSJ shows 84 lows with 87 required. StockCharts is shedding more truthful light on that stat by reporting that 136 issues have clearly recorded a new 52 week low. How much do you want to bet that the WSJ pins it at 84?


    Screw the manipulation or "incomplete market data" or whatever you want to call it. The HO has gone off.
    15 Apr 2013, 03:57 PM Reply Like
  • Rocks: Thanks for tracking the HO.
    15 Apr 2013, 04:02 PM Reply Like
  • Many thanks AR -- right call!
    15 Apr 2013, 03:59 PM Reply Like
  • Author’s reply » John L, I 'have' published that article and you can find it here:
    15 Apr 2013, 04:19 PM Reply Like
  • Thanks - I'll go get it.


    I'll send an email when we post this evening. I won't grab it until 7pm EST. If you make any updates before then I'll have them.
    15 Apr 2013, 04:46 PM Reply Like
  • Author’s reply » Ok thanks. I don't think there will be any more updates since I have to run now. Won't be back before you grab it up.
    15 Apr 2013, 05:24 PM Reply Like
  • Author’s reply » John I saw the article on GEI and I thank you for adding the paragraph headings. That was a great touch and I should have done that myself. I've actually never done that very much but I plan to do it more often in the future. In fact I went back to my own article and improved it by adding your headings. Thanks for doing that and thanks for the great idea.
    16 Apr 2013, 02:40 PM Reply Like
  • How does the Fed printing $85 billion a month factor into this event?
    15 Apr 2013, 05:04 PM Reply Like
  • Hey Rocks! Thanks for the tracking, buddy. Don't we need a confirmation though? Or did I not read back far enough an miss the first signal?
    16 Apr 2013, 01:30 PM Reply Like
  • Okay. Read the article and see that you are clear on the 2nd signal in there. Thanks. I shared your blog article.
    16 Apr 2013, 02:14 PM Reply Like
  • Author’s reply » Yes in order to be able to make the claim that the HO has issued an "official signal" a second occurrence is required. But that's not to say the decline couldn't be well under way by time that second signal happens.


    And on that topic, the market is working on that second signal right now. The required minimum number of new highs sits at 78 which is almost there. The number of new lows sits at 37 with 85ish required. So theoretically it would be possible for another signal today although I don't get the sense at all that the market wants to decline much today. For one thing I expect that if the market is planning on heading lower, it still has to put in a proper looking correction of yesterday's carnage. And that "proper look" would be some sort of 3-wave sequence higher which I don't think is in place yet. We'll see what happens.


    I'm not at all confident though that there will be a second signal but am totally convinced that the market could decline sharply anyway. For example, it's possible that the 50 day MA could theoretically roll over which would "switch off" the HO but the market could decline hard anyway. In that case the HO might well have issued its second signal had that darned 50 day MA remained pointing higher. Missed it by a day sort of thing. We've seen that happen before.
    16 Apr 2013, 02:52 PM Reply Like
  • Author’s reply » So today the number of new highs came in at 86, bang on the minimum required. And the number of new lows punched in at 47, half of what is required. So the market is definitely hovering right in the zone where trouble is brewing.
    16 Apr 2013, 03:57 PM Reply Like
  • Author’s reply » Just for the record... as you know the HO issued its "initial" signal on Monday. Yesterday and today it came relatively close but did not fire the second round. The missing piece of the puzzle on both those days was that there weren't quite enough new 52 week highs to trigger. 85 were required. According to the WSJ there were 60. According to StockCharts there were 80. In either case... not quite enough. In both cases... too close for comfort.
    17 Apr 2013, 04:35 PM Reply Like
  • Author’s reply » With a little over two hours behind us in this trading day the HO is right on track to issue the second and 'confirming' signal. No guarantees of course but at the moment the numbers for new highs and low sit at 50 and 53.


    If the HO 'is' going to issue that second signal it had better do so soon since the 50 day MA is threatening to roll lower. And of course that's something that always happens at market tops. The market doesn't necessarily have to be declining for an HO signal but once that decline starts the 50 day rolls over fairly soon thereafter. So really, the HO only has a relatively small window of opportunity within which to issue signals. We could certainly get one today but all we can do is watch and see what transpires from here.
    18 Apr 2013, 11:53 AM Reply Like
  • Author’s reply » Well, that's another fairly close call. According to the official data source, the WSJ, there were 68 new highs and 59 new lows issued today. And just as a check on WSJ's often-faulty work, StockCharts shows 85 new highs (enough) and 57 new lows. So with the added comfort from StockCharts that the WSJ isn't too much out of line today we can safely say that we just had another "near miss", the third in as many days since the 'initial' signal on Monday. And this one was closer than those that occurred on Tuesday and Wed.


    A very important factor is that if the market drops even one point tomorrow the HO is going to be switched off because of the rule regarding the 50 day MA.
    18 Apr 2013, 04:03 PM Reply Like
  • So, the HO may not signal officially that the market is falling because the market is falling! Works for me!
    18 Apr 2013, 04:52 PM Reply Like
  • Author’s reply » Yeah, isn't that the irony of it? That is why I've always warned readers not to depend on that second signal. I mean once the HO issues its first signal isn't it clear as a bell already that the market has reached a very dangerous state?


    On the other hand, the second signal only has to occur within 36 days of the first. So the market could make a recovery over the next week or two and that would keep the MA still headed higher. The perfect set up for the second signal theoretically.


    If you look at the chart at the top of this post, or here... we can see that as of this moment the MA is still heading higher. All is well.


    Looking at the left side of that box shows us where the price was 50 days ago. So we can tell that over the next 6 days there is gentle pressure for that orange line to rise. The NYSE had better stay above it. After those 6 days have passed though the action of 50 days ago starts to drop and therefore ease up on the pressure on that orange line and will allow it to fall. Again, that's good because it keeps the 50 day MA heading higher.


    So there's no harm in waiting for that second signal as long as we're not depending on it. And if it comes it will have come on a retracement of the recent mini-crash... a retracement upward that failed.
    19 Apr 2013, 11:54 AM Reply Like
  • Thanks Rocks!
    23 Apr 2013, 02:31 PM Reply Like
  • Author’s reply » Buenos días mis amigos.


    I'd like to draw your attention to two interesting items. Firstly, if you refer to my comment just above Mr. Ferguson's gracious TY, we can see that things have developed pretty much as I suggested it "might".


    Specifically, the NYSE did indeed stay above the all-important orange line, meaning that the 50 day MA never did roll lower during the recent decline. As well, since the market has surged sharply the moving average is in no immediate danger of turning lower which fits the scenario exactly as I suggested in the comment above, namely...


    "the market could make a recovery over the next week or two and that would keep the MA still headed higher. The perfect set up for the second signal theoretically".


    And on that note, here's the second interesting tidbit. After this snappy little recovery, the number of new 52 week highs is still very anemic for a market that is so close to all-time highs. Basically nothing has changed in spite of the rally. For example, at this moment there are 140 new highs. Granted, that is better than only 85 as were recorded on the day the HO issued its signal, but a long, long way off what we normally see in a market that is so close to all-time highs. In a healthy market that number is closer to 300-600. In fact, at this moment the number of new highs sitting at 140 is a legitimate HO qualifier.


    In no way do I mean to imply anything other than the fact that the HO is very much alive and well here and that the market is definitely still hovering around in the HO's back yard. A dangerous place to be playing.


    So the bottom line is that it is entirely possible that the second and confirming signal 'could' easily happen over the next few days or weeks. And it would still be "in time". (36 days max. between 2 signals).


    That is all... just a wee update.


    I hope all of you are well.
    26 Apr 2013, 02:25 PM Reply Like
  • AR: Hope you are well too! Just wanted to mention that I expect that CBs around the world now committing to buying equities, we might see some previously unexpected effects.


    The risk then changes when CBs decide to exit their long positions, unless they are also hedging those positions.



    26 Apr 2013, 02:43 PM Reply Like
  • Author’s reply » Hi HTL. For sure, we're living in a world where new extremes and "never-before" events are happening every day. Who really knows how much longer the CBs can live in their own dream world?


    From that article on ZH "The Bank of Japan, holder of the second-biggest reserves, said April 4 it will more than double investments in equity exchange-traded funds to 3.5 trillion yen ($35.2 billion) by 2014."


    Geez, there's nothing like telegraphing the next 10 punches they're going to throw. They are probably telling the truth but a statement like that just reeks of desperation in that they're openly trying to influence the rest of us to do the same thing.


    The phenomenon of all the CBs buying equities it is definitely a concerted effort. But when it comes time to unwind those positions, I highly doubt any of those CBs will tell the others that they are about to pull that trigger. So I fear that the unwind, when it does come, will be horrid. When it comes time to head for the exits where is the liquidity going to come from in order for the banks to unload? Who are they going to unload to?


    And just as important I guess is the question "what is going to trigger it?". My guess is that it will be a surge in rates which of course are the competition for equities. The moment rates start to look more attractive than potential gains in equities I think the bond market collapses. Even if it collapses to the point where rates only rise by half a point or a full point, the decline in bonds and equities 'at the same time' could be spectacular.


    I think the days are gone when money that exited the equities markets was funneled into the bond markets, and vice versa. Today if the bond market drops (rates rise) I fear it will be for all the wrong reasons... specifically, rates would be rising not so much because of inflation fears but because of realization that liquidity is about to unwind. Meaning that all the money printing has failed and that ultimately there will be defaults. And defaults are literally the most spectacular example of "deflation", the disappearance of money right back into the imaginary void that it came from in the first place.


    So far the CBs have been able to avoid defaults. Even at the expense of raping the poor citizens of Cyprus and clearly setting up every other central bank in the world to do the same "when the time comes". Did you know that in the Canadian national budget last month that they included a clause that clears the way for the gov't up here to steal from Canadians' savings? Yes sir... in Canada, the one country identified as having the most solid banks in the world. If Canada is clearing the way to steal from the citizens then the message is abundantly clear... the CB's are expecting the worst and they're planning on robbing the entire human population in order to save their own sorry asses.


    God, if that doesn't just take the cake. It gives a whole new meaning to the word "infuriating". Not to mention an entirely new meaning for the words "grand larceny" and a dozen others I could provide. Argggh!
    26 Apr 2013, 03:31 PM Reply Like
  • Time to invest in lanterns, rope and pitchforks.
    26 Apr 2013, 03:36 PM Reply Like
  • AR: There's concerns down here too about "savers" getting a haircut in case of "dire emergency". Since the bank legally owns our deposits, there'd be little stop it.


    Corruption of basic ethics knows no bounds when it comes to the financial system we've built.


    26 Apr 2013, 03:39 PM Reply Like
  • Author’s reply » Literally. And food. People should definitely be considering buying some great quality storeable foods and there's a great supplier in the US.
    26 Apr 2013, 04:13 PM Reply Like
  • learn to can and build a garden and/or greenhouse.
    26 Apr 2013, 05:18 PM Reply Like
  • Dr. Copper still diving.
    26 Apr 2013, 03:03 PM Reply Like
  • Nothing like a disjointed withdrawal from a tactical blunder! This will undoubtedly get messy!
    20 May 2013, 05:13 PM Reply Like
  • Author’s reply » Howdy folks. Well I guess it's that time of year again, blimp season. As you know, the Omen issued a signal on April 15th. In order for a second 'confirming' signal to be issued it has to happen within 36 days if it's going to fit within the rules. Today is the 38th day. So technically we're starting all over again and should consider the next signal as another "initial" signal. And if well known TA specialists like Walter Murphy are correct, the market is currently in a wave 4 correction, which means higher prices ahead. Yesterday he tweeted "Close call, but we are counting today's reversal as wave 4 within a five-wave rally from the mid-April cycle low."


    In any case, yesterday there were over 400 new highs established so the HO wasn't even buzzing. Today... a different story. Currently there are 29 new highs and 36 new lows, which of course are numbers that the HO would be paying attention to since the polarity is beginning to show up once again. So we'll just keep our eye on the markets and see what develops from here.


    I hope all of you are doing well.
    23 May 2013, 01:47 PM Reply Like
  • AR: I suspect we're off the Hindenburg hook until the seasonal Eurozone crises fires up again. I can't wait - I want to see more Nigel Farage(sp?) videos! :-)


    I'm well, and hope you and yours are also. Heading into summer up there I expect it's getting breathtaking again?


    23 May 2013, 01:58 PM Reply Like
  • Author’s reply » Hi HTL. Yeah, snow has disappeared and won't be back for a while. Amazingly, about 3 weeks ago we had a record setting day at 82F already. But right now it's perfectly normal with the rainy season (at least on the prairies) about to begin. But yeah, it's lovely... trees starting to bud, lawn mowers starting to hum, etc. Not really warm enough for my liking yet though.


    This summer will be special for me since my son will be getting married. Woohoo! And man, did he ever pick a nice bride. A beautiful tall blonde athletic girl who he went to high school with. They hadn't seen each other in 10 years, but when their paths crossed again it was like "Wow, look how gorgeous 'you' grew up to be!". It's quite funny actually, and a great story. I just love that girl too... an excellent choice. So it'll definitely be a special summer for me.


    Nice to see ya bud. Stick around while we watch to see if the HO wants to issue another signal.
    23 May 2013, 03:15 PM Reply Like
  • Sounds like Congrats are in order. Glad to hear all are in fine fettle up there. Keep up the most excellent work here and many thanks.
    23 May 2013, 04:06 PM Reply Like
  • Headed your way AR.
    23 May 2013, 04:08 PM Reply Like
  • Great news. Congrats, AR!


    Yesterday, I was seeing all kinds of signs a rollover was imminent, even deeply considered shorting this morning, especially with what Japan did last night.


    But I just couldn't pull the trigger this morning with any old short ETF. Glad I didn't. As we saw, this morning, the bulls ripped the teeth right out of the bear's gaping jowl.
    23 May 2013, 04:19 PM Reply Like
  • Author’s reply » I hope the weather holds up for ya DG. We just got a weather warning... rain, heavy rain. But it's in the S.W. corner of the province and might miss Edmonton. Nope, I just checked and Edmonton seems to be in the clear. Rainy on Saturday with isolated showers on Sunday. Forecast for 64°F on Sunday. But you'd better bring rain gear for sure, 'tis the season to get wet up here.
    23 May 2013, 04:24 PM Reply Like
  • Author’s reply » Thanks RBF. Yeah, I'm happy for the kids. They're a great match, both big, both athletic types, both hard workers. It's great.
    23 May 2013, 04:25 PM Reply Like
  • Hi AR,
    Sounds like a great summer ahead, congrats.
    24 May 2013, 03:43 AM Reply Like
  • Author’s reply » Sorry for taking so long to say "thanks my friend" but I don't drop in here all that often. My bad. Are you still dazed?


    In fact the reason I opened this page was of course to offer a short report on the HO. On Friday there were about a million new 52 week highs and I'm getting so bored with the markets these days that I don't even watch them anymore. They're so incredibly broken by the crazy bastages who think they know what they're doing over there in Bankerville.


    So far today there have been 50 new 52 week highs and 114 new lows... right in the HO's sights. So we'll just have to wait and see if there is enough steam left to generate those remaining 35 required highs. But what can I say... the bankers are interfering so much, to an extent never seen before, that I don't even have any faith in the HO anymore. I can't see the markets doing anything but rising until the insane lose control of the asylum. Maybe that's "exactly" what the HO will be identifying when it goes off... who knows?
    29 May 2013, 11:31 AM Reply Like
  • Hi AR,
    Yep, stilldazed and confused. The stock, bond and commodity markets are all over the map. I can't figure how to play them or time when the music stops. I did some research on the great depression a while back and we seem to have similar situations setting up. Lots and lots of margin accounts, the market going up seemingly forever for no reason. Everybody and their brother in the market through direct or indirect (401k) investment, talk of the market at company lunch tables. Something new are the HFT computers having the ability to cause flash crashes to take out stop loss orders and then minutes later have the stock price back to normal. A flash crash could start a domino effect of margin calls and stop loss sells that turns into an avalanche. I get chills thinking about it. Sure wish I could time when to short the whole mess. Smoke, mirrors, hopium, QE and greed can't prop this up forever, maybe the HO will give us a little notice. ;-)
    29 May 2013, 02:53 PM Reply Like
  • Author’s reply » Yup, what we are witnessing is pure madness and with 100% certainty it's all going to come crashing down. Japan is finished. There is no way out for them and they have the second largest market in the world "of any kind", their bond market. It's finished too. So hopefully the HO will perform as it did in the past and give us some sort of warning. But I admit that I'm so disillusioned right now that I don't have faith in it other than it will tell us when the market has reached a degree of polarity where in the past a serious event occurred. It's just that I doubt the "serious event" will occur this time because the satanic bankers are still breathing.
    29 May 2013, 05:10 PM Reply Like
  • QE ending could set it off. QE ending and shrinking the balance sheet could set it off. Sudden, full, and rapid implementation of Obamacare and Dodd Frank could set it off. Basically anything that will result in net destruction of Fed notes. Without those notes (not that I'm arguing for the system mind you, I'm just pointing out the realities of what consumptions subsidies do in the real world) in existence to bid up asset prices, then asset prices will fall. When that happens people panic. They start to save instead of spend, which means risk-off. Everybody runs for safety bonds, instead of equities. Lower spending means lower earnings and GDP. So you get a full on flight to safety.


    So what you have to look for, are large macro changes in the subsidy mix. BB did this in 2006 when he inverted the yield curve. In other words he changed the consumption subsidy mix by taking fed notes out of the system, and we all know what happened next. He may do this again by ending QE, or ending QE and shrinking the balance sheet. Obamacare and Dodd Frank are large macro changes in the subsidy mix. They are basically taxes, or you could think about them as round about minimum wage increases that will increase unemployment. That means Fed note destruction and risk-off.


    Until we get these changes, I see the S&P at 2000 and the 10yr going up to 2.30 or 2.40 or maybe even higher (especially if they keep the cameras off in Europe, thus muting capital flight to US treas).


    Keep an eye out for the macro changes in the subsidy mix. That will be your signal.
    29 May 2013, 06:09 PM Reply Like
  • Hoop - I'd think that Japan equities tanking in such short fashion, if in fact the top has been reached, is an example to many traders that we're on thin ice. I suspect we'll see some risk-off sooner than not - just can't imagine sp 2000.... anyway your points are well taken.
    30 May 2013, 10:09 AM Reply Like
  • Hoops and DigDeep: Yesterday on CNBC's Squawk Box, Larry Fink, CEO of BlackRock, spoke plausibly of seeing DOW 28,000 by 2019.


    I see the same old summer doldrums potentially occurring this summer, only not as deep a retrace as in recent years past. S&P 1700 should be a cinch by the end of this year. Caveats aside, we actually could breach 1800.


    The "old" saying, "Don't fight the FED," has now switched to, "Don't fight the Central Banks."


    Looking for the MLP bubble to continue inflating. For several years, and especially this year, I've been enjoying the ride, and will continue to add to this sector on pullbacks.


    Here's a partial list from the May 6th Wells Fargo Outlook regarding MLPs I posted in QuickChat:


    Guns and anyone interested in the MLP sector:


    From the Wells report on MLPs that I received on Friday, LINE is rated outperform, with a low valuation rating of $40/share, and a high valuation rating of $44. The "potential return" is 29%. This report was based on the closing price May 6, of $34.98. LINE's YTD performance so far is down 1%.


    I never knew there are so many MLPs out there. Scads!


    Here's a selection from the lengthy list of Outperform and Market Perform ratings, all designated with a higher than 10% "potential return." All data is intraday from May 6.


    BretBurn Energy Partners L.P. (BBEP) $18.95, yield 10%, YTD performance +3%, low valuation $22, high valuation $24, potential return 32%. Rated Outperform


    Crestwood Midstream Partners L.P. (CMLP) $24.90, yield 8.2%, YTD performance 8.2%, low valuation $26, high valuation $28, potential return 17%. Rated Outperform


    Capital Product Partners L.P. (CPLP) $8.87, yield 10.5%, YTD performance 10.5%, low valuation $9, high valuation $10, potential return 18%. Rated Outperform


    Eagle Rock Energy Partners L.P. (EROC) $9.00, yield 9.8%, YTD performance 4%, low valuation $10, high valuation $12, potential return 32%. Rated Market Perform


    LLR Energy LLC (LRE) $15.58, yield 12.4%, YTD performance (9%), low valuation $18, high valuation $20. Potential return 34%. Rated Market Perform


    Mid-Con Energy Partners (MCEP) $23.27, yield 8.7%, YTD performance 8.7%, low valuation $23, high valuation $25. Potential return 12%. Rated Market Perform


    Memorial Production Partners L.P. (MEMP) $19.07, yield 10.7%, YTD performance 7%, low valuation $21, high valuation $23, Potential return 26%. Rated Outperform


    Ns ka Gas Storage Partners LLC (NKA) $15.10, yield 9.3%, YTD performance 39%, low valuation $16, high valuation $18. Potential return 22%. Rated Outperform


    QR Energy L.P. (QRE) $16.94, yield 11.5%, YTD performance 2%, low valuation $17, high valuation $19, Potential return 18%. Rated Market Perform




    I may have to look into selling my Buckeye Pipeline (BPL), as it's up 48% so far this year, and Wells has the potential return going forward as negative 4%.


    If anyone has an MLP not listed above, and wants to know what Wells Fargo thinks, I be happy to provide the data.
    30 May 2013, 01:23 PM Reply Like
  • Hi Mayascribe - - -


    The Dow 28,000 by the end of 2019 amounts to about 9% compounded per year. If there are two years with a 10% decline each (or one with a 20% decline) the remaining years need be about 15% for the five up years (or +12% for the remaining 6 years).


    All these numbers are quite conservative IF we do not succumb a dive back into the Great Recession depression.
    30 May 2013, 05:00 PM Reply Like
  • Hi, John: I agree, and, caveats aside, think we could actually be above 28,000 by 2019.




    Beneath I wrote that I will be on Mad Money tonight. Unfortunately, after calling in and listening to the terms and conditions, which mandate that I'm not allowed to buy LINE after learning that I would be on the show, I had to hang up. I bought 800 shares today, and would be rattling the SEC's cage, if I did indeed appear in The Lightning Round.


    In short, I won't be on Mad Money tonight, and am a little peeved that the Mad Money employee who called me, did not inform me of these rules.


    BTW: LINE hit a 52 week low today, and mysteriously plunged with a huge increase in volume within minutes of me learning the I would be on Mad Money tonight, asking Cramer about LINE.


    Sheesh! As the world turns....
    30 May 2013, 05:13 PM Reply Like
  • Author’s reply » There was no signal issued today with 73 new highs and 131 new lows being recorded. By now all of you know those kind of numbers should be chalked up as a relatively close call. I'm not sure it matters though. As long as the bankers are still breathing they're not going to let the market fall. All we can do is pray they all stop breathing... not "so the market can fall", but "so that sanity might return to this planet".


    If all the bankers were dead, 98% of all the troubles humanity has ever faced would have never happened, and 99% of all future problems for humanity won't happen at all. For one thing... no more wars. Ever.
    29 May 2013, 04:54 PM Reply Like
  • Author’s reply » Today's numbers are more or less opposite of yesterday's. There are currently 133 new highs and 56 lows. Those kinds of numbers are right in the zone but I don't think the market will generate another 30 lows today unless it tanks big time. But at least we know the polarity is there.


    On a side note, the pattern 'does' look to me like at least another down leg is in the cards.
    30 May 2013, 02:43 PM Reply Like
  • Rocks and All: Amazing timing, after my above post. Won't explain all the details, but tonight, I will be on Cramer's Mad Money, in The Lightning Round, with Linn Energy as the MLP I want Cramer to talk about.
    30 May 2013, 02:53 PM Reply Like
  • Author’s reply » Golly, this is the 'first' time this has ever happened! I wait until half way through the trading day before I check the numbers and find out that the HO has just gone off. It was quite close yesterday too. So this is a legitimate signal new HO signal, completely unrelated to the one we saw on April 15th.
    31 May 2013, 12:46 PM Reply Like
  • Author’s reply » Haha... what in hell were you trying to say in that last sentence Dan?
    31 May 2013, 01:13 PM Reply Like
  • Author’s reply » Just for interest sake, the numbers are as follows:
    new 52 week highs = 94
    new 52 week lows = 135


    Classic :-)
    31 May 2013, 02:28 PM Reply Like
  • AR - - -


    Zero hedge is proclaiming an HO moment:


    31 May 2013, 03:44 PM Reply Like
  • AR - - -


    Is the 36 days calendar days or market days? Today is 34 market days after April 15 (last signal), but 45 calendar days.
    31 May 2013, 03:50 PM Reply Like
  • Author’s reply » Hi there Johnny :-)


    Well for the first signal on April 15th, a second signal was required within 36 days. I never did see a ruling on whether or not that was calendar days or trading days but I'm almost certain it's calendar days. In any case, it 'already did' give that second and confirming signal two days later. The market reacted with a drop of only 3.6% and since then has surpassed the high at the time. And more than 6 weeks have passed, as you point out.


    So this is a new and separate event rather than "one of a series of events within 36 days that are redundant". So this signal is a new one and requires another second and confirming signal.
    31 May 2013, 04:10 PM Reply Like
  • Author’s reply » Yes, ZH took their cue this afternoon from Arthur Hill who falsely reported a signal about 6 months ago because he was misinterpreting the 50 day rule. Once I pointed out that he was in error, he amended his article at the time and changed the title to say "The HO 'almost' Issues a Signal". But I looked at his blog today where he published an article on it and he has the rules 100% correct now. He's the only other 'reporter' I know of who knows the rules. I'm proud to have educated him, lol. And I don't mean to demean him in any way, it was an innocent mistake. He truly is a great analyst. Here's his take on it:

    31 May 2013, 04:14 PM Reply Like
  • I have been away for a while but noticed market activity so I thought I'd better check in today. Glad I did!


    AR - A belated congrats to you and your family! Hope the two of them live a blessed life together!
    31 May 2013, 04:08 PM Reply Like
  • Author’s reply » Thanks MB. Yeah, I think the two of them are a wonderful match so here's hoping...


    My son has asked me to speak at the wedding. I'm not surprised because the father of the groom always says a few words. But the fun part is that he has asked me to 'kick it up a notch'. He describes his fiance's family as being "cold porridge", meaning good people but boring wallflower types. He said "If we're going to make this thing into a party, it's gonna have to be our family who will have to spice it up." So it appears he has given me the green light to take the microphone and see if I can crack a few people up. Somehow I don't think that's going to be a problem. I've already cracked a rib laughing at some of the funny stuff I've come up with regarding escapades he and I have gotten ourselves into in the past. It should be a lot of fun.
    1 Jun 2013, 01:02 AM Reply Like
  • The two of you should do a little practicing and perform "Bad to the Bone" in George Thorogood and the Destroyers style. That should break the ice and leave a memorable impression.

    3 Jun 2013, 08:57 AM Reply Like
  • Re-balancing today causing the HO to rear it's ugly head?


    CNBC reported at the close there was ~$3B in shares for sale.


    31 May 2013, 05:01 PM Reply Like
  • almost yesterday - HO today - HO signal 34 trading days ago per John.......... That's a bunch of signals in a fairly narrow range. You'd think that whatever the consequences of the HO are....we'll see em


    Thanks AR
    31 May 2013, 05:13 PM Reply Like
  • Thanks, Rocks! Looking like we're entering into the fourth consecutive year of summer doldrums. Maybe I need to get back down to Honduras this summer, from where John and I PMed each other and called the S&P 2010 bottom, a few days before Doug Kass so famously did. Of course, JL and I later joked that neither of us took advantage of that call.


    BTW: I was on Mad Money tonight, and Cramer, though he likes Linn Energy, he wasn't enthusiastic about buying right now, due to sector rotation. I'll probably take the hit and sell in my gamer account, but will keep recent adds in the brokerage account, and then add a little more when we get beyond the annual summer swoon. The yield with the new monthly dividends coming next quarter, already compound to beyond 9% annually, and it looks like that yield will only go higher. Plus, Linn Energy will be the first ever MLP that will also begin producing oil, when the delayed Berry Petroleum acquisition kicks in.


    Not exactly what I wanted to hear, but it was fun to be on Mad Money.
    31 May 2013, 06:52 PM Reply Like
  • Author’s reply » Folks, I owe you an apology... especially John Lounsbury.


    I had told John earlier today (Friday) that in the April event the HO had issued its required second and confirming signal two days after the initial signal. I WAS WRONG ABOUT THAT. I had inadvertently referred to a draft article that I had prepared 'in anticipation' of that second signal. I never published it, because that second signal never did materialize.


    So in my hurry today I accidentally opened up the wrong article so that I could refer to my own work. And based on that 'draft that was never published', I erroneously told Mr. Lounsbury that in the April event a second confirming signal had occurred. It had not.


    Just wanted to man up and admit my mistake in that regard. My apologies John.
    1 Jun 2013, 01:10 AM Reply Like
  • Tsk! Tsk! You had me convinced I had terminal CRS. :-)
    1 Jun 2013, 02:11 AM Reply Like
  • Author’s reply » Gawd... that would just another in a long list of atrocities I've accidentally heaped upon my fellow man by having the occasional brain phart of my own.


    You know, even as I was responding to your comment above on that topic, I could not actually remember that second signal as having occurred. But I read it... in my own words, so it must have happened, right? But I was reading a draft based on 'anticipation'. It was all just a real dumb mistake on my part which I only realized after checking it out again. I simply could not remember that second April signal and it was gnawing at me until I looked into it a second time. Sorry about that John.
    1 Jun 2013, 02:05 PM Reply Like
  • AR,
    Wait till you find your car keys in the freezer, my wife still reminds me about that (which I quickly forget). ;-)
    1 Jun 2013, 07:50 PM Reply Like
  • Author’s reply » Funny you should mention car keys SD. I'm not kidding about what follows:


    Just two weeks ago I decided to start up an old vehicle I have that had been sitting in the parkade and hadn't been started for 16 months. The battery was dead. So I arranged for a friend to come over and give my vehicle a boost because my other vehicle was elsewhere. I had the booster cables already attached when he arrived and it took all of 60 seconds to get the old girl fired up. Just to make sure I didn't have any ugly surprises, I made sure the passenger door was unlocked as well. My friend was in a hurry so as I thanked him and waved 'good-bye' as he drove off, I pushed the driver door shut so the vehicle could run for a while.


    As my buddy's car disappeared around the corner of the building, my attention returned to my old clunker. The next thing I had to do was to gather up the jumper cables and put them back in vehicle. To my horror, the door was locked. Good thing I had unlocked the passenger door, right? So I scurried around to the passenger's side and wouldn't you know it... LOCKED. Apparently I must have inadvertently pushed the little "lock doors" button on the remote as I was fiddling with other things. So now my vehicle is running with the keys locked inside it. But I have a spare set of keys in the apartment.


    Did I lock the apartment when I left? I always do! Oh god, if that apartment is locked I've got a real problem. So I waited at the front door of the building for someone to open the door so I could get in, ran up to my apartment and... I don't have to tell you. So now I've got a vehicle that's finally running again, with the keys locked inside it, and that set of keys happens to open the door to my apartment where I have spare keys.


    BUT WAIT... not all is lost. I know how to get inside that old vehicle very easily by popping off the sun-roof. All I need is a screwdriver... and luckily I have the right one... in the apartment. Doh! So now I'm going to have to bother some friend again. I'm going to have to call someone on my cell phone... but guess where 'that' is.


    So I had to go back to the front entrance of the apartment building and do my best impression of "brother can you spare a dime". Only this time I'm asking everyone who passes by, "brother can you spare a screwdriver?". Fortunately one of the guys had some tools upstairs and he brought me a screwdriver set. So I was able to pop that sunroof off and reach down and open the door.


    Long story short... I eventually had to put a battery charger on that battery and believe it or not... it was brand new. It's just that I had installed it 16 months earlier. The last time I got into this kind of trouble it 'was' my son who bailed me out. This time... I had no way of contacting him or anybody else, lol. Gawd... nobody needs days like that but I pretty much invited that disaster by not doing it the right way... with my other vehicle. On the other hand... that's what inspired me to fire up the old one, lol.
    3 Jun 2013, 12:37 PM Reply Like
  • Author’s reply » On a side note to the true story above, for the entire duration of time that I've lived in this high rise building (8 years maybe), I've been aware of the fact that I was vulnerable to the possibility of such a situation occurring. When I lived in a single family home I always ensured against such an event by hiding a spare set of keys somewhere on my property. But when living in a high-rise that's a very difficult thing to do. So to be perfectly honest, deep down I 'knew' that day would come so I guess I have to admit that I asked for it.
    3 Jun 2013, 12:55 PM Reply Like
  • A.R: Don't feel too badly. When I used to travel a lot for a big company I lost about four sets of keys while on the road. In each case, the car was parked at the airport and locked.


    My wife got tired of me calling her late at night to come and bring the spare keys.


    I finally figured a way to avoid all that - when rushing from anywhere where I had opened my brief case, I checked the contents first and made sure my keys were still in there.


    Don't even know how they managed to get up and walk out of the case. :-((


    3 Jun 2013, 01:03 PM Reply Like
  • Author’s reply » At least when you returned home after 3-4 days of being out of town, and went to your car for the welcome drive home, you didn't find the keys were in the car and the car had been sitting there idling for 4 days, lol.
    3 Jun 2013, 01:30 PM Reply Like
  • HI AR,
    I learned the hard way (twice) about locking my keys in a running vehicle far from home when I was a long haul driver (got lucky both times thanks to AAA). I started carrying two full sets on me at all times, and still do today. Maybe we should write a comedy skit?
    3 Jun 2013, 01:37 PM Reply Like
  • Author’s reply » I'm not quite sure how Alcoholics Anonymous could bail you out SD, but whatever works.
    3 Jun 2013, 02:59 PM Reply Like
  • Still dazed, ask her if she would like a trip to the freezer next time she reminds you...instead of the keys.
    7 Jun 2013, 10:42 AM Reply Like
  • Author’s reply » Just to demonstrate that the HO was probably "on to something" when it went off last week... with a little over 3 hours left in the session there the numbers of new highs and new lows are as follows:


    new highs - 39
    new lows - 230


    We could still get another legit signal today if the market were to bounce sufficiently and inspire about 48 new highs. That wouldn't be difficult I don't think... if the market were to burst higher.
    3 Jun 2013, 12:49 PM Reply Like
  • Author’s reply » Geez... the HO darned near went off again with the late day surge. Quite a few new highs emerged at the end of the day and finished at 76. New lows ended up at 246.
    3 Jun 2013, 04:24 PM Reply Like
  • Author’s reply » It looks like the HO is almost assuredly going to go off again today folks. With half the trading session remaining, the NYSE has generated 78 new highs and 113 new lows. Only 84 highs are required today (that number always varies by one or two issues depending on how many stocks have traded and how many of those are 'unchanged').


    If it happens, the discussion about whether or not the recent signal of May 31st was the second signal that confirmed the April 15th signal will become a moot point, because at the end of today we will have the second HO signal in 4 calendar days. Today's signal will therefore give us only the second "official HO signal" since August of 2010. In other words "it's game on" and we're about to get a rather rare opportunity to see if the HO still works in the face of central bank intervention. I honestly don't know what to think about that.
    4 Jun 2013, 12:18 PM Reply Like
  • Author’s reply » Wow! The market is selling off and the number of new highs is still stuck at 79 (StockCharts is confirming). The late day surge yesterday nearly set the HO off as well. Maybe it's not going to happen today after all. Those last 5 or 6 new highs might be nearly impossible to attain with the downside starting to accelerate like this.


    EDIT: Here they are... 81 now and counting. But now 86 are required, lol.
    4 Jun 2013, 02:13 PM Reply Like
  • Author’s reply » Both the WSJ and StockCharts are showing 84 new highs. Two more would give us the first "official HO signal" complete with the second and confirming signal since August 2010.


    It would really tick me off if it falls short because surely one of the other analysts out there will declare that it happened. What's a guy to do? Do we adhere to the rules so strictly that we ignore such an incredibly near miss? Or do we call it? After all, there is so much subjectivity connected with the argument about the big increase in bond funds and ETFs over the past few years that one could argue that that subjectivity alone is a greater factor than missing by just one or two new highs. Geez... what a nuisance. I'm seriously torn about what to do here. Hopefully the market will just shove the new highs up to 90 and I won't have to worry about it.


    Amazingly, the Nasdaq is looking stupidly strong with 136 new highs and only 13 new lows. Gawd almighty, what in hell is going on here? Those numbers for the $NDX have been stuck there for a long time. I'm wondering if they are the numbers from yesterday? Doesn't matter really... we're not focusing on the $NDX anyway. Just an interesting observation.
    4 Jun 2013, 03:19 PM Reply Like
  • Its sort of like a fire that want's to go out or burn lower for a lack of wood, but BB, via QE, is able to take the taxpayer by the legs and pump them so as to make the taxpayer blow on the fire and heat it back up.


    So while all the economic data suggests the fire should burn lower (equity prices), QE keeps shoving Fed notes into the system, which causes other Fed notes in the system to not need to chase bank deposits, so they chase risk instead, hence BB grabbing the taxpayer by the legs and pumping them so they blow on the fire thus heating it back up even though the fuel supply (economic data) suggests the fire should be colder than it is.
    4 Jun 2013, 03:37 PM Reply Like
  • Author’s reply » I can almost envision Bernanke pumping the legs of the collective taxpayers. What I want to know is which end of the taxpayer is the 'air' exiting from? One is more explosive than the other you know.


    4 Jun 2013, 03:44 PM Reply Like
  • Author’s reply » Ok, there we have it friends. The second signal has gone off. I'll be publishing an article on that in just a few moments. I'll post a link here after I've done that.


    EDIT: Here's a link to that article for those interested.
    4 Jun 2013, 03:52 PM Reply Like
  • Thank you Rocks.
    4 Jun 2013, 05:24 PM Reply Like
  • Ditto.
    4 Jun 2013, 05:34 PM Reply Like
  • A.R: How perverse are we that we thank the bearer of bad news! ;-)


    But it can't be helped - thank you big time!


    4 Jun 2013, 05:44 PM Reply Like
  • Author’s reply » You're welcome H.N.T.L. You're welcome Mr. Ferguson and all of you who are Stilldazed.


    You know, I even commented to a friend on my own blog the other day that the only reason I still write about the HO at all is "out of respect for my old friends over at S.A."


    It's true... if it weren't for you people who read this insta, I would have quit writing about the HO a few years ago. In fact, I wouldn't even have started writing about it if J.L. hadn't said that he always wanted to know "somebody who knew about the HO", or something to that effect. I started commenting on it only because John wrote the first chapter (and several others thereafter) on the HO, and then he just handed the ball off to me. It's John we should thank really. Man, that was about 4 years ago. Who could have known it would run this long?


    In any case, on the bright side... the odds are 77% that the big crash "is not" going to happen. And the odds that we'll see a pullback no larger than 8-10% are 50/50. Unfortunately, at some point in time there is a great reckoning that's going to have to happen. I don't know any better than the next guy whether or not we're there at this time. But I think we all have to recognize that at some point in time we're going to have to deal with history face to face. Some day the market top is truly going to be behind us where it will stay for years and years because whether we want to admit it or not, inflation (money creation) just can't go on forever. I have no idea whether we're there yet or not. Maybe another year into the future? That's entirely possible.


    I thank you as well my friends. You've always been here to read this crap, lol.
    5 Jun 2013, 10:08 AM Reply Like
  • Thanks, Rocks!

  which kind of pullback are we going to get?


    My bet is on the "meaningful decline" of 5 to 8%. If the FED and Central Banks weren't involved, I might choose a larger correction, but I'm already seeing a lot of juicy dividend plays, which have been hammered, that are looking more and more juicy.
    4 Jun 2013, 08:54 PM Reply Like
  • Author’s reply » Hi there Maya. Thanks for always checking in.


    I've got a real sense that you're probably right. The central banks are absolutely determined not to lose control and the only way the markets are going to fully crash is if they have lost control. I just don't get the sense that we're there yet.


    With all the respect for you that I can muster, I don't think the dividend situation would make a hill of beans of difference when "the time comes". "The" crash would be for reasons so bad that most of us couldn't even contemplate the final result. I just don't think we're there yet. But some day, when the crash finally 'does' happen, we would end up with dividends a whole lot "more juicier" but stocks would plummet anyway. There would sure be some great buys at the bottom, that's for darned sure... as long as the corporations could still pay big dividends after a 'severe' pullback.


    Even just looking at the charts, and at the near parabolic pattern to a lot of them, I just don't see a top yet to be honest. I'm thinking about the old saying that "tops are a process, bottoms are an event". But then I look at a chart of the Nikkei and I can envision a top in that market that is "an event". So hard to know man, but I'm just not envisioning the big crash coming out of this particular HO event.
    5 Jun 2013, 09:49 AM Reply Like
  • Oh I do agree, Rocks, that when the next major correction occurs, high yielders will get crushed, too. And for once, I agree with Dr. Doom, that late 2015, or during 2016, we may get that 20% correction JL spoke of...while on our way to DOW 28,000 in 2019, (of which, Dr. Doom did not specify a crash in his CNBC interview a day or two ago, but did talk about a correction [in my opinion, Dr. Doom is someone to NOT pay attention to]).


    2016, an election year, may in and of itself, be the cause.


    This particular correction we are in, seems to have all the makings of investment houses taking profits on long positions held for at least two years.


    In my own tiny little world, I own a tiny little bit of an MLP named Enterprise Products Partners (EPD). It has gone from $20.69 in March of 09', to $38.55 in Sept. of 2010, where I added, to as high as around $63.00 last month. The yield is down to 4.52%, which does not qualify as a high yielder in my eyes. So I sold today at ~ $58.50.


    There a lots of reasons/factors why the market is retracing, and I believe one of them, under the guise of "sector rotation," is that investment houses and pension funds are realigning themselves away from once high yielders, turning profits into cash, only to get back into other high yielders once the dust settles in a month or three.
    5 Jun 2013, 02:10 PM Reply Like
  • Author’s reply » Here's a rare opportunity amigos. An interview with Jim Meikka himself (creator of the HO):


    Do you have any idea how rewarding I find it that Mr. Meikka confirms that the only two signals recently are the ones I reported on. HOOWAA!


    Unfortunately though, that article is a debunking article cleverly disguised as an interesting human interest story. Just read the nonsense Adam Grimey said.
    5 Jun 2013, 10:34 AM Reply Like
  • Author’s reply » Now that the HO has issued a signal I feel like I can really take my eye off that topic and just kick back and relax for a while. Yup, I think it's time to do just that:
    6 Jun 2013, 02:25 PM Reply Like
  • A.R: New vernacular? "Ape out" instead of "Veg out"! :-))


    6 Jun 2013, 03:32 PM Reply Like
  • Author’s reply » Just chillin'. Hangin' out.
    11 Jun 2013, 05:41 PM Reply Like
  • Author’s reply » Just as a matter of interest, the HO went off again today although it's really a redundant signal. Nonetheless it's reconfirming that although the market has put in a rebound of sorts, nothing has changed internally... the polarity that the HO is so concerned about is still there.
    10 Jun 2013, 04:50 PM Reply Like
  • Thanks AR, Just waiting for the match to light at this point I guess. The conditions are set.
    10 Jun 2013, 04:59 PM Reply Like
  • AR does the number of times it signals been an indication of severity of decline?
    10 Jun 2013, 06:45 PM Reply Like
  • Author’s reply » No. All signals after the second one are redundant. They only 'reconfirm' that the market is still very polarized but they 'do not' give us any clues about the depth of any decline that will probably follow.


    It's actually possible that there might only be a single signal without any confirmation in the form of a second signal, and yet the market could decline any amount... 20%, 30%. And the next time we could theoretically see 6 or 7 HO signals and the market only falls by a small amount, like 5% for example.


    A good analogy would be a pressure gauge on a boiler. Once it goes into the red it's saying "there's likely to be an explosion". But that gauge has no way of giving advice about how big that explosion might be... just that the odds are high that there is going to be one. Maybe just a seam on that boiler gives way and there's a heck of a lot of 'bleeding off'. In that case the 'explosion' might only be 3 or 4%.
    11 Jun 2013, 11:48 AM Reply Like
  • Author’s reply » The HO darned near went off again today. There were 74 new highs recorded but 86 were required. New lows? There were enough... 356.


    Had the HO gone off it would of course have just been another redundant signal. But the message is the same... with these phoney rallies the market internals are actually deteriorating at a rather alarming rate. As Forrest Gump said: "To each, his own caca smells sweet. Do not be fooled by this."
    13 Jun 2013, 04:59 PM Reply Like
  • Author’s reply » Hindenburg Omen has gone off again. It's redundant though, only serving as another reconfirmation that the market is still very polarized, still on thin ice.
    19 Jun 2013, 03:48 PM Reply Like
  • I think the multiple events can not be a good sign. A slow bulging sort of like a Mount St Helens type event.

    19 Jun 2013, 05:03 PM Reply Like
  • Author’s reply » Did you know Mount St. Helens inspired an eruption in Canada? Yup... 24 hours later a baby girl landed in my arms. That's a great little video DG... thanks. I'm going to send it to my daughter on her next birthday to show her what the world was doing on the day before she was born. She's aware of the fact that Helen blew her stack on the day before, but she'll really like this video. Thanks again.
    19 Jun 2013, 05:56 PM Reply Like
  • Amazing that the markets have gone into fits over Benny announcing there will be tapering. Wonder if that means cutting 85 billion per month down to 84 billion or down to 50 billion or even lower. That is the rub no one knows what the Benny definition of tapering will be.Which could mean, panic now avoid the rush. I think the VIX will be a good place to be for a while.
    20 Jun 2013, 06:51 AM Reply Like
  • I've been wondering if all this talk of tapering is just jawboning from the Fed. Its a way to test the waters, and they actually won't back off until the suggest tapering and the markets don't react. Until then, if my theory is right, they will keep QE where it is.


    If someday, they suggest tapering, and the markets don't react, then they believe it will be safe for them to back off.
    20 Jun 2013, 08:35 AM Reply Like
  • Nothing would surprise me any more. I even wear my copper colander to bed now.
    20 Jun 2013, 09:06 AM Reply Like
  • Jhooper: Good thoughts IMO. We've seen from the Greek fiasco, EZ troubles - both recurring issues - and others that the market, from repeated exposure, eventually becomes inured to the latest brick in the wall of worry.


    So it's not just a clinical trial, but also a prophylactic inoculation.


    20 Jun 2013, 10:37 AM Reply Like
  • Just heard that the news is bonds slow down this year and end next year. Thats a bit more than tapering thats ending next year. uh oh.
    20 Jun 2013, 06:54 AM Reply Like
  • How much more decline is necessary before the talking heads will agree that the HO is a meaningful indicator.
    20 Jun 2013, 10:37 AM Reply Like
  • Author’s reply » Hi Augustus. Those who have mocked it over the years, those who took their cues from false prophets who thought they could just make errant declarations any time they felt like it that the HO had gone off when it wasn't even close, those mockers are the people who have egg all over their faces now. They won't be laughing at the HO in the future I don't think. Hopefully next time they'll get their info from reliable sources... not the Marias of the world, lol. [in reference to the Maria in the "What Happens Next" page.]
    21 Jun 2013, 03:01 AM Reply Like
  • Hi Rocks! I've been monitoring you comments and just wanted you to know I am still here. When you and Maya were discussing (above) that this probably isn't the big one I was pretty much in agreement (at that time) and so I decided not to "pile on." But I am now beginning to change my position. So, I thought I'd let you know what I'm thinking.


    I really don't expect the big down draft bear market like what we experienced in 2008 and early 2009. That all happened very quickly, which does seem to make sense because of all the program trading and the speed with which the algo-jockeys can turn the market. But, imho, there is just too much manipulation going on for another free fall like that this time around. The Fed will continue to "try" to support the market. Da Boyz will want to protect their huge paper profits. Baby boomers are searching for yield and will continue to believe that this is just another minor correction because that is what MSM will tell them. Wall Street will keep telling the little guys that we are just experiencing a buying opportunity... and so on. The MSM will inundate us with the proverbial green shoots theories and the Administration will do its best to provide jawbone support. They all have an agenda:


    Da Boyz on Wall Street will be selling into any strength they can achieve from other investors. They can't unload all at once or it will turn into a blood bath. They want to unwind gradually and thus, will try to prop up the market as long as possible, encouraging everyone else to buy as they get out of the way. Once they have gotten all they believe they can from the trough, they will stand aside.


    The MSM and the Administration both want to maintain control of the Senate and would really like to take the House so they can "get things done" after the 2014 elections. They will hang on as long as possible and put layer after layer of lipstick on this pig.


    Baby boomers only have one goal: yield for retirement. All of the above will sacrifice all of "our" hard-earned savings to achieve their own agendas if possible. Our generation's welfare is expendable. Even though we are the largest voting block, we are now the majority on our own. And, of course, those in the know will have privileged information and avoid the worst, thereby keeping the political coffers on their side of the aisle intact, while ravaging the opposition, if possible.


    The Fed has one agenda: avoid the next depression from happening on Benny's watch. It will pull out all the stops to keep stocks and bonds from falling until his term expires and he won't seek another term. His term ends on January 31, 2014. But his replacement could be even more liberal leaning, So much for independence.


    So, what I do expect is a slow grinding lower and lower with many false bottoms along the way. There will be plenty of rallies to keep folks interested after the "bottom" has been found over and over. Don't miss these great returns just like we had from April 2009 to May 2013! That will be the rallying cry to pull investors back into the markets until it doesn't work anymore. Thus, I really don't think the true bottom for this signal will be reached until possibly as late as the 2nd half of 2014. Of course, those in power will do all they can to keep it from happening until Thanksgiving of that year with a nice rally going into the elections and the bottom coming sometime thereafter.


    But the downtrend, imo, is a given. What I don't know is the timing. But the prop-meisters will do all they can to avert disaster and profit from the move. The key to why is this happening, I think, is in the evolving of demographics not only here but also in Europe and Japan. The baby boomers are consuming less, saving more, and retiring in droves. Our generation has powered the markets since the early 1980s and we are moving away from consumption and into retirement. That is not good for the economy. And as the markets swoon, the wealth of our generation will be reduced; leading to less consumption by those with most of the money. A cautious Boomer generation will end the good times, slowly but surely.
    24 Jun 2013, 11:42 AM Reply Like
  • Perhaps the mantle of control is slipping due to factors beyond the control of the FED. LT posted this on the QC. Helicopter Ben may have bigger problems and is using this as an opportunity to cover his assets. He may not be able to keep interest rates at these ultra low lows. He will still be able to keep them artificially low but not as low as he wishes. (TBT) anyone?
    24 Jun 2013, 03:38 PM Reply Like
  • K202, I think your spot on and I believe Harry Dent covers this event very well. I know he has his detracters but on this one I think its going to come down to this boomer retirement issue for sure and also add in the non-retirement as many keep working because they are not able to retire and/or wont on .25% interest payments on their savings accounts. There are a lot of factors at play here today but they all start with the boomers.


    One more thing who will the boomers sell their homes to.

    24 Jun 2013, 03:45 PM Reply Like
  • Thanks for the link, DG. Great minds...? LOL
    I just ordered Dent's latest book that appears to lay out his thesis. I can't wait to read it. I suspect that his timing may be a little iffy, as mine probably is as well. I am doing some analysis, country by country, on demographics, real income levels, employment, debt (public and private), output and consumption trends. Also looking at the commodities and transportation for some more clues. Been at this a while and intend to write a series of articles about what I'm finding. It will be very interesting to see how this all plays out on a global scale. Japan is setting the stage with Abenomics. China has so much overcapacity it is scary. The gradual migration of almost all production in Europe to be concentrated in the northern countries. Riots in S. America and elsewhere. It's a real mess.


    But there are some bright spots that continue to keep people expecting things to get better. New home prices just hit a new all-time high. Of course, there was not real mention of the change in the mix, eliminating most starter homes, which makes both the average and the median new home price rise significantly. Job creation is still hanging in there enough to give people hope. Of course, again the mix of full-time jobs and part-time jobs escapes the news. Fewer jobs with full benefits. But the headlines keep hope alive.


    I've always been a believer in "Don't fight the Fed" and have been riding along collecting some nice dividends and appreciation since I got back in during 2011. I was late and I never got deep enough into the metals to do much good either. Well, once again it will be interesting and who really knows what the timing will be?
    25 Jun 2013, 11:18 PM Reply Like
  • The boomers are in europe, and Japan too because of WWII. I suspect Australia and China are impacted too by that glut of population explosion after the war. This event is world wide.
    26 Jun 2013, 10:15 AM Reply Like
  • DG - Exactly my point! Japan and much of Europe are further along the path than the US at this point. The US population grew more and longer due to immigration. Italy and Japan are in really bad positions with their aging populations.
    26 Jun 2013, 01:21 PM Reply Like
  • Good News! Things are much worse than previously thought:


    First-quarter growth reading slashed in cautionary note on economy


    By Lucia Mutikani WASHINGTON (Reuters) - The U.S. government slashed its estimate for first-quarter economic growth on Wednesday, offering a cautionary note on the recovery as the Federal Reserve ponders curtailing its massive monetary stimulus. Gross domestic product expanded at a 1.8 percent annual rate in the quarter, the Commerce Department said. The economy was previously reported to have grown at a 2.4 percent pace after a gain of just 0.4 percent in the final three months of last year. Almost all categories were revised lower, with the exception of home construction and government. ...
    26 Jun 2013, 04:38 PM Reply Like
  • and government......


    I am sooooo looking forward to a revision lower there. Still not happening any time soon it would appear.
    26 Jun 2013, 04:48 PM Reply Like
  • Author’s reply » I hope you folks are watching this incredible event that's going on in Tahrir Sq. in Cairo. Simply stunning. 14 million people protesting. The army comes to their call and overthrows Morsi and his Muslim Brotherhood cronies... the people who hang children because they are christian. I had read back when the Arab spring was happening that the people of Egypt do not fear their military because they consider the military to be "the people themselves". They fear the bully police though. It appears their faith in their own military was well founded... at least to the extent that the military has ousted a horrifically brutal regime... a regime backed solidly by Obama. The US administration was admonishing the Egyptian military earlier today not to act. What else need be said? They acted anyway and that can only be perceived as a great event for mankind.


    Live video:
    Updates as they come in:
    Full military coup underway:


    BTW, if the market were to pull back today it's even possible for another HO signal. It would be redundant though, other than to just reinforce what we already know... that the market is still on very thin ice. But if the market heads lower today and tomorrow, today would be the last time we could see another HO signal for perhaps a long, long time.
    3 Jul 2013, 12:49 PM Reply Like
  • Author’s reply » Happy 4th of July to all you good folks south of the border.


    May you always take life with a grain of salt, plus a slice of lemon... and a shot of tequila.
    4 Jul 2013, 07:40 AM Reply Like
  • We are getting ready to use some limes, salt and tequila here at our house! Enjoy your weekend, Rocks!
    5 Jul 2013, 05:10 PM Reply Like
  • AR, Just back from a trip out west to Wyoming for a prairie dog shoot-trout fishing expedition. Shocked by the events in Egypt but love the results so far. Sorry about the train in Quebec. Wonder if there was any dirty play involved there. Runaway train indeed!!!


    That was a terrorist plot they supposedly stopped just a few months ago.

    9 Jul 2013, 08:31 AM Reply Like
  • Author’s reply » Just got in from a long weekend here in Canada and was a bit surprised to see that the HO went off today. It was one of the stranger ones I've seen as well, because the number of new highs and new lows were both higher than usual for an HO signal day. Nonetheless all conditions were met, so we have another HO signal.
    5 Aug 2013, 11:26 PM Reply Like
  • Hi AR,
    5 Aug 2013, 11:28 PM Reply Like
  • Hey A.R! Hope you enjoyed.


    "... so we have another HO signal".


    If we get a signal around Xmas, is it a "HO-HO-HO"? :-))


    <*ducks flying shoes*>


    6 Aug 2013, 06:05 AM Reply Like
  • That's 3 signals in a few months? Not that you need homework AR, but if stats are handy, would be interesting to know if multiple signals do show market patterns....vs a single signal.


    Anyway - thanks for your unpdates and insight.
    6 Aug 2013, 09:40 AM Reply Like
  • Author’s reply » My pleasure DigDeep. The general rule is that the 'number of' signals is not indicative of what size of decline would ensue. It's really just a detector of situations when an illusion is occurring and the market is actually a lot more polarized than it seems on the surface. But nobody knows what will really happen... just that the odds of something bad happening are considerably higher than in a normal healthy market. This is not a healthy market in the slightest, especially in light of the fact that it's clearly (and admittedly) the Fed who is buying it up like this. How can that even remotely be considered as a healthy market?
    6 Aug 2013, 12:22 PM Reply Like
  • AR: Greetings. Thanks. Hope you enjoyed the long week end. Looks like the market is a bit toppy so it doesn't surprise me.
    6 Aug 2013, 09:44 AM Reply Like
  • AR, Hope you had a good weekend. Maybe the HO signal was why the embassy's are closed. Al-Qaeda did it. Curious what is the Canadian take on the "Al-Qaeda is alive and American embassy workers are on the run." (Head hanging and slowly shuffles off.)
    6 Aug 2013, 09:45 AM Reply Like
  • Author’s reply » Hi there Guns. "Curious what is the Canadian take on the "Al-Qaeda is alive and American embassy workers are on the run."


    I'm sorry to admit it but the majority of Canadians gobble that nonsense up just like the majority of uninformed do all over the world. BUT... I definitely detect a significant upsurge in the numbers of Canadians who are getting informed real fast. My son's generation (30 year olds) are really onto it. It's the majority of my own generation (60 year olds) who are so 'conditioned' that they 'still' think the main stream media is a source of real news. I find it very difficult and frustrating when I try to awaken them. The younger people though... no problem there, they are awake. However, so few of them seem to appreciate the seriousness of the matter.
    6 Aug 2013, 12:07 PM Reply Like
  • AR - Thanks, my friend. Most of the pundits were predicting a stronger 2nd half of 2013. Now I see that they are predicting a pick up in economic activity in the 4th Qtr. I think that it is all wishful thinking based upon continued Fed QE. Autos and housing are showing signs of life and could keep things from falling just yet. Based upon demographic research the peak in auto buying in the U.S, is supposed to occur in 2014, but the average age of autos still on the road is a record-setting 11 years. There may be enough pent up demand to keep things in that sector rising a couple more years unless the financials fail again. Housing is being propped by the low interest rates resulting from Fed manipulation. When the Fed begins to taper QE, rates should rise and housing should slow again. Autos cannot hold the entire economy up by itself and Healthcare, while continuing to expand, is more of a drain of otherwise productive assets than an impetus for growth. In short, I don't see the prop job effectiveness lasting much longer. But I still don't expect a "crash" that happens in a few weeks; this could take months (if not more than a year) to unwind completely. It is when the banks start to post big losses that the rate of decline will hasten. Just my opinion. Thanks for keeping us up-to-date!
    6 Aug 2013, 11:20 AM Reply Like
  • Hey Rock! Is it required that the new highs number be larger than the new lows number to trigger the HO?
    6 Aug 2013, 06:22 PM Reply Like
  • Author’s reply » No sir. The number of new highs cannot be more than double the number of new lows. But the number of new lows can exceed the number of new highs. So I know where you're going with that question... and the answer is "Yes, it did... again".


    In fact in today's signal the market internals were even worse than yesterday's. Today there were 124 new highs and 191 new lows. So she's getting more wobbly and more wobblier with each passing day.
    6 Aug 2013, 07:53 PM Reply Like
  • AR: Greetings. For the second day in a row at the beginning of the week the market is down significantly. Will the PPP step in attempting to put another coat of lipstick on this pig? Stay tuned the trading day is young with plenty of potential for thrills, adventure and intervention. WSB was insinuating that comments from the FED about scaling back the bond buying are responsible. If that is the case things will only get worse as the reality of unsustainable QE infinity comes to pass. Act and invest accordingly.
    7 Aug 2013, 12:22 PM Reply Like
  • Author’s reply » The HO has issued a 3rd signal in 4 days. Not that the 'cluster' has any more meaning than a single confirmed event. It's just confirming that the market is still being pulled in both directions while the power brokers do their best to suggest otherwise.
    8 Aug 2013, 04:19 PM Reply Like
  • AR: That doggone "guy" has turned into a real yammerer hasn't "he"? ;-))


    8 Aug 2013, 06:20 PM Reply Like
  • Author’s reply » Yup... the crazy old coot:
    8 Aug 2013, 10:00 PM Reply Like
  • Author’s reply » This is getting to be old hat by now. The HO is almost assuredly going to issue another signal today, the 4th this week. We only have to see the number of new 52 week lows hit 85 as reported by the WSJ here:


    You can see the category in the 3rd major section down from the top, entitled "US Stocks".
    9 Aug 2013, 11:24 AM Reply Like
  • Author’s reply » It happened... another signal from the HO today.
    9 Aug 2013, 12:43 PM Reply Like
  • AR: Send pic # 3 over there to distract the signal-man.


    9 Aug 2013, 12:49 PM Reply Like
  • Author’s reply » There's no doubt good buddy, she's distracting alright. Do you remember her dad from the OJ trial?
    9 Aug 2013, 01:03 PM Reply Like
  • No. Watched some, but don't remember much of it.


    9 Aug 2013, 01:20 PM Reply Like
  • Author’s reply » I remember him quite clearly... Bob Kardashian. He appeared to be a very classy guy... the rich lawyer type. My problem is that my memory for past events is a bit 'too good'. I even remember my father changing my diaper and I can only assume it made an impression on me because it was "the first time" he did it. Normally it was my mom so I remember my dad's face was different... had something black on it (a day's growth of beard). But he was smiling so I figured that whoever this stranger was, he wasn't dangerous, lol.


    When I told my friends about this memory they usually said "Jesus, how old were you?". And when i tell them I was 17 it always brought a big laugh. But I'm guessing I was somewhere around 1 year old. I have so many memories from those days... from when I was 3, 4, 5... all of it.
    9 Aug 2013, 01:31 PM Reply Like
  • My earliest come around 3 or 4. And really only exceptional events - first pet, being able to read big books, etc.


    9 Aug 2013, 01:46 PM Reply Like
  • HTL I am with you. My first memory is of a tick on my belly at around 3 years old. I was in a panic. My friends dad took it off with a zippo lighter after he heated up the lid with the flame and pinched it to put the heat to it and it pulled out, more panic to say the least.
    9 Aug 2013, 02:20 PM Reply Like
  • I recall the first time I ever tied my shoes. I was four years, then.


    Before that, DG, I had a bulbous tick, too. On top of my head. Remember my dad was glad he culled those free four packs of Salems and Winstons from the airlines to have handy for parties, as he used the glowing end to get the tick to back out. I was in a fit the whole time.


    Of course there was that first stolen kiss from a cute blonde named Sally Rose, in nursery school. Gutsy move, back in the day!


    My earliest memory was during a summer party my folks threw. I had a yellow balloon and my older sister popped it. I cried, ran away into the neighbor's bushes and hid for a while. When I got up the verve to return home, nobody had missed me! I was two and a half at the time.




    As always, Rocks, thanks for tracking the HO.
    9 Aug 2013, 02:42 PM Reply Like
  • Author’s reply » I remember when I was about 4 I went out to the big veggie garden behind our house with one of my mom's white porcelain salad bowl shaped dishes (or pan, whatever it was) and filled it with what surely must have been at least a full pound of earthworms. Hundreds and hundreds of them. Then I proudly brought into the house to show all the women who had come to visit at my mom's house for a tea party. There were about 6 ladies and that was the first time I'd ever seen a woman scream. Scared the hell out of me.
    9 Aug 2013, 03:39 PM Reply Like
  • Great stories my friends. My first memory is pretty boring so I'll not put you through it.


    Thanks for the updates, Rocks. Holy cow! That makes 5 in a row, doesn't it? That can't be good!
    9 Aug 2013, 04:29 PM Reply Like
  • I'll contribute a few things.


    My first distinct memory is a big dog sniffing my face and putting me into a panic. My parents tell me that was about 18 months of age - I was being walked in a stroller at the time.


    My second memory has two parts:
    1. My sister was born when I was 3 1/2. I remember my father asking me if a garment he took out of the closet was my coat. I said yes and wore my bathrobe to the hospital to visit my mother. My father was reminded of this by my mother in front of friends and family for the rest of his life.
    2. The hospital said I was too young to visit so I couldn't go inside. Instead we stood outside a huge building and waved at a window where my father said my mother was waving back. Drove by that huge building a few years ago - it is a postage stamp footprint (about 60 feet square) and four stories high.


    My third distinct memory is about 4 years, 4-5 months. I got too close to a softball batter and got clocked in the head with a swing follow through. Was unconscious for a couple of minutes (or so).


    I don't have many distinct memories since.
    10 Aug 2013, 03:26 PM Reply Like
  • Would not want any more of those distinct memories. SCHMACK!!! At least you were knocked out and did not feel it until you woke up.
    12 Aug 2013, 09:23 AM Reply Like
  • l.o.l. John
    12 Aug 2013, 08:47 AM Reply Like
  • 'Hindenburg Omen' hovers over Wall Street again

    12 Aug 2013, 12:33 PM Reply Like
  • Good find, Maya. Thanks!
    13 Aug 2013, 11:33 AM Reply Like
  • Author’s reply » Hindenburg Omen has issued yet another signal, the fifth since Monday, August 5th. So that makes it 5 signals in the past 7 trading days. This is also another one of those occasions where the number of new lows is considerably higher than the number of highs... and at the same time the entire NYSE ($NYA) is higher on the day.


    At present there are 124 new highs and 171 new lows.
    13 Aug 2013, 02:29 PM Reply Like
  • Frothy I think is the word.
    13 Aug 2013, 02:44 PM Reply Like
  • A very strong in your face signal just in case anyone missed the first one, or second one (damn your slow) or third one (you must be stupid) or fourth one (gotta be an idiot) we now have the fifth one for the verified village idiots out there ( Joe Biden) to finally notice.
    13 Aug 2013, 04:59 PM Reply Like
  • Author’s reply » Just for the record, the numbers ended up at 139 highs and 198 lows. In the last hour and a half, as the market drifted sideways at + 0.22%, there were twice as many new lows established as new highs.
    13 Aug 2013, 07:27 PM Reply Like
  • AR,
    As always appreciate your keeping us apprised of the signal's timing.


    I am wondering whether the market's apparent renewed interest in fundamentals over lock-step sector rotations and passive index investments -- may be contributing heavily to the new hi/lo polarity of the HO. In other words, if the bulk of large caps tended to rise and fall with general sector movements in the past -- the new highs and new lows may be reflecting investor valuation adjustments based MORE on individual stock fundamentals and LESS on broader influences such as Fed policy, total market valuation, European growth trends, economic surprise indices, etc. We don't have a trend yet, but I thought this callout by the WSJ today will be worth watching for the stock pickers among us.


    From today's WSJ:


    Correlation among the 10 large-cap sectors in the S&P 500 – their tendency to move in unison regardless of their underlying fundamentals – fell to 69.9% last month, the lowest level in two years, according to Nicholas Colas, chief market strategist at ConvergEx Group. In the prior month, this figure clocked in at 89%.


    That means fundamentals, as opposed to macro developments, are now playing a bigger role in how individual stocks and sectors trade, a stark contrast to what predominately transpired dating back to the financial crisis.


    “If you are a stock picker, then it’s basically now or never for whatever investment discipline you might follow,” Mr. Colas said in a note to clients, while pointing out correlations have “taken a surprising nosedive in recent weeks.”


    The latest pattern suggests much of the risk-on, risk-off trading that dominated markets over the past few years has diminished, which has put company-specific news more in focus. There are a few reasons for the latest trend. Investors are now picking winners and losers based on corporate fundamentals ahead of the Fed’s eventual curtailing of its bond-buying program, Mr. Colas says. A steady stream of cash flowing into stock funds is also helping fund managers put more money to work as opposed to utilizing “passive investment vehicles,” he added.


    What’s more, broad-market trends have taken a backseat in recent weeks to individual stocks that have dominated trading volumes ..."


    14 Aug 2013, 07:02 AM Reply Like
  • Author’s reply » "their tendency to move in unison regardless of their underlying fundamentals"


    Hi Mercy...


    First of all, I'd say the phenomenon that comment speaks about is due to one thing only... the application of QE funny money regardless of anything meaningful.... "just make it go up boys".


    I would interpret the fact that this phenomenon is weakening to be indicative not so much of a rising interest in fundamentals on a "stock by stock" basis, but more about sector rotation. Perhaps in a round about way, that's kind of the same thing as looking at fundamentals in an individual stock basis... not quite sure. So I suppose it could be looked at from the "glass half empty" or "glass half full" perspective.


    To be honest Mercy I don't believe fundamentals have entered the equation to almost any extent at all since March 2009. Perhaps I sound like a blasphemer with that opinion but I think it's basically been nothing more than "here's the money boys and girls, make it go up". Of course with the knowledge that the banks have had that the money would basically be "unlimited and forever", the small caps did indeed outperform large caps over the past 4 years. And as we all know, that truly is a phenomenon that occurs during bull markets. So in that respect, this is a bull market no matter what the cause is.


    I don't think there are any private investors left, nor have they contributed even one percent of the volume. I think all the action over the past 4 years has primarily been hedge funds and banks. So I'd say that whatever is responsible for the decrease in the "they all move together" phenomenon is a result of the thinking of the hedge fund managers.


    As far as the HO is concerned, I don't think it matters what rationale we want to attribute to why it's going off so often (again today), I think it's sufficient just to know "that it is". I could be wrong about that but in theory at least, as far as the HO is concerned, it doesn't matter "why" the signals are occurring.
    14 Aug 2013, 04:18 PM Reply Like
  • Author’s reply » Holy smokes... today's HO signal was the worst HO signal we've seen in literally years. There were 102 new 52 week highs but a whopping 253 new lows. Those numbers are just horrid. We know what's keeping this market up don't we friends. The only question I have is whether or not they'll be able to 'bridge the gap' until money starts to flow into enough of the right stocks in order to stop the bleeding (new lows)... and then the market explodes higher from there. We've seen it all before, where the market was just so incredibly overbought but failed to drop one iota... it just drifted sideways until the indicators all 're-set' and then the piggy bankers were successful at just launching it again, for the 474rd time in a row.


    For the record, this was the 6th signal in the past 8 sessions, and each one was worse than the previous (generally speaking). Or I guess we could say that the trend among those 6 signals is towards the "and weakening" side. This is one of the most severe HO clusters of all time.
    14 Aug 2013, 04:22 PM Reply Like
  • Author’s reply » There will be no HO signal today... probably won't be quite enough highs attained since there have only been 14 generated so far. Mind you there are probably enough new lows now since that number currently sits at a whopping 382 and climbing.


    [tongue removed from cheek now]


    Can you believe these numbers? As I mentioned yesterday, the trend in those stats was getting worse and worse with each successive instance of an HO signal. We're at the point right now where over 12.1% of all shares trading on the entire NYSE are at a new 52 week low. This market is definitely coming royally unglued. That's not to say that new highs would be impossible, but we won't be seeing any new highs until at least all these divergences are accounted for and some serious re-alignment happens. Call it 'consolidation' if you will.



    Here's a chart that shows 3 market internals indicators. From the top: Bullish Percent (number of stocks deemed as bullish - as determined by their Point & Figure charts), Summation Index, and the turd one is the "number of stocks above their own 50 day moving average". Notice that the markets have been climbing in total divergence from what has actually been happening behind the curtain (internally). The market has been breaking apart from the inside out but the indexes were saying otherwise. And of course... so was the media shill machine.
    15 Aug 2013, 01:16 PM Reply Like
  • Damn, it looks like the market is just like the picture I posted on the QC this morning from buzzfeed that a ZH blogger led me to. The Market is at the beach but you can plainly see the internals in the back ground. Now posted here too.

    15 Aug 2013, 01:34 PM Reply Like
  • the run on the dollar has been underway for sometime now.(Massive gold purchase heading toward Asia) it started with a trickle and it is picking up steam. this happened in late 1920's with Britain when they devalued the pound and went off the gold standard and late 1960's with US going off gold standard to a total fiat based paper currency after Western Europeans redeemed dollars in mass for gold. pay attention what is happening in the gold market. there is a battle going on in the gold market between east and west.
    15 Aug 2013, 01:35 PM Reply Like
  • This is about the place where Jon Hilsenrath starts queuing his next article........
    15 Aug 2013, 03:31 PM Reply Like
  • ......or the rumor of Hilsenrath:

    16 Aug 2013, 05:15 PM Reply Like
  • As if on cue to your first comment. LOL
    16 Aug 2013, 05:18 PM Reply Like
  • Author’s reply » My god how time flies. Every 2 years Canada Games are held. 16 years ago on Saturday, my daughter won the first gold medal in rowing for Alberta in the history of Canada Games. Brings a tear to my eye because I could have sworn that beautiful accomplishment happened about 4 years ago.


    A year later, in 1998 she won 5 golds at the Henley Regatta in St. Catharines, Ontario including the Jr. Womens single sculls, which put her at #1 in the world for Jr. Women. The following morning I got a phone call on my 'unlisted' phone number from University of Michigan who offered her a full ride. Three of those five golds are recorded on this page:


    Two years after that, she won gold at the British Royal Henley on the River Thames as a member of the Canadian Women's 8 (UVic). Open 8's, meaning "all comers".


    Too bad she tore her back to shreds in 2003 because she had a plane ticket to compete at the Olympics in Athens in 2004. But what the hell, she got a heck of an awesome education out of it (University of Victoria) and just a couple of months ago completed a project where she was on loan to the USA where she was put in charge of managing the changeover in the computer systems for 40 Washington hospitals.


    But the greatest accomplishment of all... she gave her dad a hug last Saturday.


    Why did I spew all this out? I have no idea... probably because like a bolt out of the blue, my heart is welling up about the passage of time. Kinda sad.
    15 Aug 2013, 04:26 PM Reply Like
  • A.R.: It's those memories that let you know it was a life well lived and that you left it a better place.


    15 Aug 2013, 04:32 PM Reply Like
  • Author’s reply » I'm not leaving any time soon my good friend H.T.Love, lol.


    But I truly appreciate your words. It's just amazing how emotions can strike right out of the blue like that. Thanks for your generosity.
    15 Aug 2013, 05:32 PM Reply Like
  • Author’s reply » It's long overdue, but finally done. A new instapost dedicated to the HO can be found here:
    15 Aug 2013, 08:45 PM Reply Like
  • Can't wait to see the title of the next HO.


    Will it be HOHOHOHO...and maybe a few more HO, HO's?


    Hammer: One of the little things known about gold "pricing" is that the daily price is not only listed in London and New York, but also separately in Shanghai. For many, many months, the Shanghai daily price has been listed a small percentage higher than in London and New York. China is wildly clever in doing this, as western lucid traders will always take the higher price.


    Reminds me of the lyric ~~~ Anything you can do, I can do better.


    What this means is that Gold of the paper variety is "pouring" into China, and when the day comes that the dollar plunges versus the yuan, gold may have another big jump.


    What we are seeing right now is predictable seasonable stuff.


    But also right now, if you are a long horizon investor, just might be a time when buying bullion, coins, etc., may be a time to dabble.


    Gold is being bought up by China in a large way. India, a close second.


    15 Aug 2013, 11:36 PM Reply Like
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