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The Hindenburg Omen Blog - December, 2010 155 comments
This is the continuation of a discussion led by reader Albertarocks. The preceding blog can be read here. For further reference, see the original post.
Disclosure: Long positions in several S&P 500 and nasdaq stocks.
Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.
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This post has 155 comments:
Here's a sample to use:
stockcharts.com/h-sc/u...
And I'm not a subscriber or registered user.
At least we don't have that problem here. Such good news. Thanks again.
However, on your most recent link at the bottom of this comment stream... ... I can't see the annotation...
HardToLove
I can see the chart and your notation. The problem may be a system problem for individual users. Let me give you some examples:
1. With my new system I can not use the Instablog input screen using Windows 7 and Internet Explorer 8. I can access the input window with Windows 7 and Firefox.
2. Another site that I post to sometimes can't recognize my log in using Windows 7 and Internet Explorer 8. Staying with Windows 7 Firefox works.
3. My older systems which are Windows XP and Internet Explorer 7 work fine in both cases.
Some users may be having problems of this sort. If one browser doesn't work, try another.
I am not a registered user of StockCharts.
Sorry, but that chart was one I had to select in order to try to solve a problem. It's just the $DAX index with basically no information or annotations on the chart. It was just a test. But I do put up some very informative charts. This is a series of instas that has been ongoing for over a year now, courtesy of John Lounsbury. If you're interested, you might click on this link which will take you the the insta previous to this one, which concluded only today.
seekingalpha.com/insta...
Once there, you can see some of the charts I've posted recently. The main intention here is to share info with my friends and try to give alerts to a market correction that seems imminent. The focus on this series of instas is keeping an eye on the components of the Hindenberg Omen and anticipating it's signal before it occurs. We have been very successful in pinpointing every single 'near miss' so far. We were also successful in calling the first official signal back in August. ZH reported it later in the day and then the media went nuts with it. We also spotted all subsequent signals and were able to dispel reports of signals when they in fact 'had not' officially occurred. So stay tuned if you're interested because it's definitely making serious rumblings right now.
my personal market timing indicator triggered 11.16 and I've been short since. it's been volatile, but I'm holding it out.
www.safehaven.com/arti...
But basically yes, it is a warning of potential total market mayhem. It does not have any ability to predict the degree of the pullback, only that one is likely to occur. We stick strictly to the rules out of respect to Jim Meikka, the originator of the Omen. But I also report all near misses here, just in case. Because what it takes to register a 'near miss' is, as far as I'm concerned, is good enough. For example, it issued a near miss which we discussed here on the morning of the flash crash. However, it never did issue an official signal until August, half way through the August pullback. As a result, it more or less got laughed off as a farce. It is no farce, I assure you. It's simply mathematics, pure logic.
Funny you should mention your personal market timing indicator. I have methods as well and they began to issue serious warning in the latter half of Oct. One of them historically issues a sell signal about a week early and it put up the red flag during the week of Oct. 18-22. No indicator is flawless and this one seldom issues a false signal. But damned if it didn't do just that in August. So I'm never 100% confident and the orcs are very powerful. With all the shenanigans going on with overnight gaps becoming the expected norm, they have every opportunity to mess with this market on a grand scale. It's criminal. It's exasperating. It's illegal. It's immoral beyond description... but it is what it is. The one thing they can't do is change the nature of mathematics, so I'm going to stick with the math and just trust the indicators. Good luck and thanks for stopping by. Stay tuned.
I decided I had been on this site long enough it was time I interacted more with the community. This was the first place I landed from some random surfing on the site.
Speaking of whipsaws, my signal got short in late August, then reversed, then I got short back on May 4th, just in time for the flash crash. I'll never forget the date because it's my wife's birthday.
Look forward to the dialogue....
stockcharts.com/h-sc/u...
If you can not see it, then the question has been answered (about why some people can see all my annotations and some can not). If you 'can' read it, then the mystery remains unsolved. Thanks!
HardToLove
P.S. Opened Explorer 8.0.7600.16385, doesn't have the compatibility updates, no can see annotations.
lower, those links you see "annotate in flash" or "annotate in java" are methods of adding the annotations (for me or any other subscriber to use). I can use either, but I prefer flash.
Man... it appears there's going to be yet another massive gap upward tomorrow. When is this manipulation going to end? It's putting horrible stress onto those who are long as well as those who are short. 10 years ago this type of thing was unheard of. Nowadays it's getting to be every single night. It's very unhealthy, for the market as well for market participants.
there is a way around this for non subscribers. add it to your public list and then you can share that link with anybody and they can see it
like this.
stockcharts.com/def/se...
But occasionally I present charts on different articles within the SA world that might pertain to currencies or ratios or interesting and important relationships (like between the yield on treasuries and the S&P for example). I don't think it would be appreciated, to tell the truth, if I 'did' attract E-wavers here. One guy who's very welcome here is Eric McCurdy because he presents excellent analysis, but it isn't based on Elliott Wave theory (although he uses it and understands it perfectly well as part of his analysis). That type of guy really fits in nicely here.
seekingalpha.com/autho...
I'd like to follow - and looked over your fall 09 with all that drama - glad that's not an issue now - pretty inspiring to see your insight and sharp contributions from all...looking forward to learning
fyi/disclosure
I suscribe to EW and have read the book. I don't count waves but understand the premise. Also followed Charles Nenner for a bit.
From 100% long equities, went to cash/money mkt mid Dec 07 - hopped in and out quickly pre Sept 08 and in & out Oct 08. 3/9/09 went all in - and got out May 09 - thought 35% was enough...so I've missed a bunch but still net ahead v Dec 07 - and was burned badly enough with the tech bubble - to prefer preservation v thinking i know more than i really do.
I mention my timing - not so much to pat myself on the back - except the last 1.5 years has been frustrating - but I didn't learn about EW until last fall. Fascinating stuff and looking forward to following.
foolish mortals!
Yup, I know what you mean. I'd mentioned the other day that if the HO were based on the NAS rather than on $NYA, it would have triggered on Tuesday just before the close.
Immediately after the market closed, 10 minutes later, the futures embarked on a little jaunt that ensured the following morning would present the largest gap higher we've seen in 925 years. Incredibly, during the following Wednesday and Thursday when the markets ramped higher on Bennybucks, the internals continued to decline, or some cases remain basically flat.
But if this ramp job continues, the components of my best indicators might be in the process of proving that they've given me second straight head fake... a head fake that occurs in these indicators very seldom. The last one occurred in August. IOW, against all logic (for example, in light of the reports released this morning), the market internals might be improving here. I just don't know what to think anymore. Perhaps the Fed has created so much money that they have been able to purchase the rights to "logic" and now control it as they wish.
I always thought mathematics worked, but apparently not.
I find it very saddening that 99% of investors are completely oblivious to the dangers. My dear sister and her professor husband to two prime examples. 99% of investors have never even heard of Seeking Alpha. They don't even realize that their money, which is in the "safe hands" of their fund managers, is not in safe hands... not even remotely.
seeking alpha didnt publish this one...it's on satwavespro since 7 am...here it is on the instablog for the rest
seekingalpha.com/insta...
But what is noteworthy is that the required number of new 52 week lows and new 52 week highs have both met the minimum requirement (as a percentage of shares traded today on the $NYSE). In fact, the number of new 52 week lows has exploded higher today, up 65% from Friday's number and is currently at the highest level since mid November. The problem lies with the fact that at the present moment, the number of new 52 week highs is also higher and is more than double the number of new lows. The market is clearly getting very seriously polarized here, simply indicating that it is nowhere as robust as the manipulators would have us believe.
.
Throughout most of the day there was a second rule that was also negating the chances of a signal, but as I'd mentioned, should there be a sell-off, that condition would possibly correct itself. That is indeed what happened.... the market sold off in the final hour and that second condition concerning the McClellan Oscillator did turn lower as required.
But here's the most important aspect we must take from today's action:
The number of new 52 week lows exploded higher today, closing higher than Friday's number by 77% (according to the official source of HO data which is the WSJ). Just as a side note, I need to once again thank Eric McCurdy for challenging me on that issue back in August, causing me to research the actual rule a little better. In any event, here's a link to another technical analyst who's on the HO's case today and he's pointing out pretty much the exact same concerns I am. But it might be a nice change of pace for you to hear all this from somebody else. Michael Eckert is an excellent technician but he does make one error here in that he states that the number of new 52 week highs was 93. The official source records the number at 87 and that's what we have to use. But Michael knows his stuff, very, very well. Here's what he has to say about the Hindenberg Omen today:
ewtrendsandcharts.blog.../
Stay tuned because things are definitely heating up. The odds are growing daily that a correction of some form is very likely not far away. If the HO is wrong... so what, at least we're on our toes. Here's a comment I posted on a different site today and it was a fairly big hit, so I'll post it below for your consideration. It was in response to one article which declared that in August the HO signal turned out to be an effing joke:
==============
Most common opinion of the Hindenberg Omen and any other form of technical analysis?
"Good morning ladies and gentlemen, this is your captain speaking. I'd like to welcome you aboard HO Airlines flight 666. We've just passed the half way point on your trip to Honolulu, where the temperature is a beautiful 88 degrees under sunny skies. We're currently cruising at 37,000 feet anticipating arrival in 3hrs. 12 minutes. Our fuel gauges are now reading 'empty' but other than that we're expecting smooth sailing through the second half of your flight. So sit back and relax because as far as I'm concerned fuel gauges are a f##king joke."
.
online.wsj.com/mdc/pub...
online.wsj.com/mdc/pub...
So stay tuned because at the moment, it's very close.... perhaps only minutes away.
Warning siren.
www.gold-eagle.com/edi...
He assures me that his family wants to meet me and that they would be more than happy to "take me in" as a man of status (being 'el padre de la hermosa mujer'). lol So perhaps I'll be living in Nicaragua in 2012, who knows? I'm kind of excited about this whole new development since I just love this kid and I already speak Spanish un pocito. I just thought you'd find that interesting since this young man is possibly a descendant of the Mayans or the Aztecs. In truth though I'm almost certain he's of Spanish decent.
An added bonus is that I was concerned about the safety issues in South America and upon researching that topic, was very pleasantly surprised to discover that Nicaragua is considered hands down the second safest country within which to live in all of the western hemi... second only to Canada. I could live with that.
Ans: Nicaragua
Maybe I'll be coming over to see you! Better than this cold weather!
www.belessdumb.com/snd...
Man your battle stations. Slaughter possible.
melis.bbaron.sk/wav2/s...
AR, I just could not help myself. LOL
www.prankcallsunlimite...
Does the H.O. need another signal to confirm?
Since the August cluster is far enough back in time now (there's also a rule about that), we're starting over. Yesterday's signal is referred to as a "Hindenburg signal". The next one will be considered as an "official Hindenburg signal"... the 'confirming' signal. For those who might be impatient for the second signal... as of this moment we nearly have it already today. But it won't be confirmed until we see whether or not the NYSE closes higher or lower and more specifically whether or not the McClellan oscillator for that index is higher or lower on the day. If the $NYSE finishes in the red and there are more stocks lower than higher, we'll almost assuredly have the second signal today. If the market finishes higher, but the number of declining stocks is greater than the number of rising stocks, we'll still get the signal. Early today, the number of rising stocks far outnumbered the stocks which were lower. That has reversed in the past hour and for a short while, the decliners outnumbered the gainers. And now they are about even. So hang in there and let's see how this transpires. At the moment it's all about the A/D line. We might have to wait until the final hour before we have a pretty darned good clue about how it's going to end up.... or we might have to wait for the close. I'll let you know.
bullish sentiment alone enough to get me short - HO seems to be a confirmation that can't be ignored.
looking forward to your update
If I read correctly, 1 of 13 confirmed signals happened in August that didn't produce a drop. Seems a pretty remote probability that 2 confirming signals in a row wouldn't produce a drop,
It's becoming apparent that the second and 'confirming' signal is all but assured to happen today. But we'd better wait for the close because the number of new 52 week highs is too close to being more than double the new lows. That would disqualify everything else. They currently sit at 152 highs and 88 lows. If the market continues heading south, this won't be an issue.
August was a failed signal - I'm saying 2 failed signals in a row is remote...if we get it tonight - probabilities increase for all levels of drops
Very interested to see if today confirms.
There is nothing like carrion to attract vultures. As a market vulture, I can bear testimony to that.
There's plenty of room on the carcass Jeff.
We are just waiting to see if it's dead yet.
HardToLove
1stbn4thmarines.com/so...
satwavespro.com/2010/1.../
I'm totally convinced that 99.9% of people have absolutely no clue where money comes from and that in due course it has to disappear back into that imaginary void that it was birthed from in the first place. In fact money isn't even money, it's a debt. It is in fact a note (a Federal Reserve note) which must eventually be repaid 'with interest'. The 'interest' portion is not only the interest on the loan, but the invisible 'cost' caused by the devaluation of that same money (inflation caused by the same entity who created that money in the first place). If the Fed were at least owned by Americans there would be some hope. But it's a foreign owned entity, owned by the offshore banking cabal. And in 1913 they received authority to create the American money for use in the United States of America and rent it back to the people of the USA.
Another word for it is "usury" or "rape". Those two words mean the same thing as far as I'm concerned. We're coming up on one full century of the rape of America and the result is about to become all too obvious in the next few very short years. It has already begun but strangely, the American media is reporting none of this:
www.youtube.com/watch?...
www.youtube.com/watch?...
blogs.stockcharts.com/...
If the market is being stretched in both directions at the same time and is becoming really fractured and polarized, how is it going to make one iota of difference if the 'masses figure this indicator out'? It's not any different than the gas gauge in a car warning that the car is about to run out of gas. If the occupants of the car figure out what that gas gauge is telling them, the gas tank doesn't suddenly fill up by magic. That's not much different either, than saying, "hell, now everybody knows what the MACD indicator is, so now it'll never work again." The HO has signaled, warning that the stock market is on very shaky ground. The fact that the public might all of a sudden be a little more aware of that fact isn't going to fix the market.
Don't worry, it's meaningful.
The event of triggering the HO is going to have absolutely no effect on the markets one way or the other. The market is going to do what it's going to do... and the HO is simply warning that the most likely direction for the markets in the coming weeks is to the downside. It doesn't know 'how far'. It can't predict 'when'. All we can do is consider everything else and try to come to our own conclusions about "how much" downside there might be. There's no magic to this. It's just like an instrument in an airplane or a pressure gauge at a refinery or something. It's just a very real warning that there is very real danger. But it absolutely, 100% guaranteed will not "trigger" anything. The market is going to do what it was going to do anyway.
350 new 52 week highs and 1 new 52 week low.
I think the Fed bought the rights to that indicator. lol
I will not start a new HO Insta until it appears that there may be some new action. I have a feeling that could happen at any time, but why start a new Insta until its time has come (like good wine).
By the way, I heard somewhere that the originator of the HO says he now believes that the HO is only active for 30 days after the last confirmation. Have you seen anything like that?
Happy New Year.
No, I hadn't heard that Jim Meikka had changed the rules... or his belief that it should only be active for 30 days. But after the signals were issued in August, we saw an incredible run-up which should by itself have rendered the August signals as 'dead' since we really were looking at an entirely different market once that rally got going. It's rather amazing how, just since the Dec. signals, the breadth has improved as much as it has. I don't know if it's real or not to be very honest. If the European debt crisis somehow got solved over the New Year's break then I'd have to say the dollar is on its way to falling very hard and the S&P is probably headed toward 12,000 or so. But those European issues are very, very serious and they haven't gone anywhere.
The other day a fellow Albertan asked me (on a different site) if I agreed with him that Alberta's economy was on the verge of blasting off and matching China's growth yet again (in 2006 the economy here was absolutely incredible and did in fact keep pace with China's rate of growth). My answer was that I firmly believe that the future of our economy is directly related to what happens in Europe. IOW, if the deflationary scenario does in fact evolve due to the unwinding of decades of credit (beginning in Europe), then the USD will surge and oil will fall hard and so will our economy. So I watch Europe with a great deal of interest.
I wish you the very best for the New Year John. I hope it's the best year for you ever, in every way. Tell your wife Dan says "hi".
.
The HO is on the verge of issuing a warning today. The number of new 52 week lows has been rising sharply over the last couple of days while the market continues to melt-up and the euphoria reaches levels that are enough to make one barf. This type of euphoria is typical of every top and is just about as dangerous as the HO signal itself. Thankfully the HO is non-organic and is immune to sensations of euphoria... it simply reports mathematical reality.
The reality is that as the market continues melts up here, from pressures unknown, the number of new 52 week highs has been climbing right along with it. But not nearly as high as one would expect at these lofty levels. However, the number of new 52 week lows has silently been rising as well, having risen to 39 yesterday. It has exploded higher this morning, even as the market continues to rise. It currently sits at 88 and rising.
What we'd need to see in order for the HO to trip, is almost any sell off from the current levels. The number of new highs is slightly more than double the number of new lows (highs = 205 at the moment) . That situation would be corrected almost instantly with any sell off, as the number of new lows would suddenly surge enough to reach the required range. Then we'd need end of day confirmation that the MacLellan oscillator is negative on the day. If the market sells off even slightly into the red, that is a likely occurrence as well.
Of course, there's nothing dictating that any sort of sell-off occurs today, in which case we start fresh tomorrow. But the message is still the same... the number of new 52 week lows is exploding higher as the market just melts up as if it were healthy. HO signal or not... that's what's happening. As far as I'm concerned, the message is quite clear... the market is shattering right beneath our feet and everybody's oblivious to it. So stay tuned. I assure you, if nothing else, this is at least a very dangerous market condition.
WE NOW RETURN YOU TO YOUR REGULARLY SCHEDULED PROGRAMMING.
p.s.: Thanks for your sense of humor in accepting this new reporting style. I promise not to do it again. lol
Some observations:
Interesting moment approaching for SilverCorp (SVM). There is a six month long resistance level at $10.57. Yet, there also is a 21/50 day moving average death cross occuring today. Today's money flow was out huge earlier today, but currently that's softening. MACD "buy" has dipped to the most oversold since last August. Yet, the sell/buy line continues to widen in sell's favor.
RSI has only a little further down until is also will reach the most oversold since August. Stochastic IS the lowest in six months; way over sold. MACD Histogram is screaming SELL! the loudest it's indicated, again, since last August. REI is also in the lands of way "oversoldum."
I've been attempting to figure out when to add back to my SVM postition.
Stock is trading at $10.52 right now, down 73 cents on the day, breeching (or, overshooting?) support of $10.57.
Is the death cross a sign of an even greater dip, or is this a time of major support and it's now time to buy with most all the indicators at six month over sold lows? This stock is now down some 30% from its 52 week high established December 3rd.
Northgate Minerals (NXG) is in very much the same as (SVM), indicator-wise, with a very strong support at $2.75. Right now, At $2.84.
I'm going to put in a 90 day program trade for a small amount of (NXG) at $2.75.
As for SVM I am going to wait; the entire market feels real toppy right now. If I was a squirrel, I'd be hiding some nuts right now.
####
Euro is spiking, as some TA suggested it would a few days ago. (FXE) is up about four bucks since that guess was made.
Are we seeing a hint of something new? Stronger euro, yet weaker dollar while the minerals also slide?
I reviewed a bunch of mining stocks in the last hour; (SLW), (HL), (GLD), (GFI) and many more mining stocks are showing very similar technical trends. Almost all of them, excluding (PAL) are very near or right on top of, or already have formed a death cross.
Rates on the 20 yr. were down very sharply today, meaning the bond was in high demand. That's a deflationary signal. If the bond market rules, which I believe it does, the signal from that is that the dollar crash is not warranted and that the action in equities and metals perhaps was. I dunno. lol
The Euro rally today had a lot to do with Euro bonds rallying: econintersect.com/b2ev... Successful bond auctions for Portugal and Spain relieved some pressure.
from your link; ....big declines in borrowing costs for financially troubled Portugal and Spain...
I read where they paid China 0.1% less than recent rates. 6.7% I think.
I'm not seeing where/what's positive other than additional CB & China support -- but at high service levels. I'd guess it to be a counter trend bounce - The new support doesn't change the fundamentals.
The euro rally due to bonds came right in time with a double bottom for (FXE) I noticed a few days ago. I was tempted to get in, but I didn't play it.
What I'm more intrigued about is all the death crosses I see being, or having already formed in many mining stocks I track (using six month charts). See (ABX), (SLW), (AEM), (KGC), (NEM), (BVN) for instance.
Even all the Cramer hype about Nova Gold hasn't prevented (NG) from enduring a death cross.
Doc copper also is double topping, short term. I need to see a few more sessions before I attempt a directional conclusion.
These PM pullbacks could be due to sector rotation, or, it could be a warning sign of an upcoming broader pullback.
John, Remember when we both saw (SPX) RSI back in July...how it showed a possible bottom, and Doug Kass a few days later called the year low? Well, (SPX) RSI has been floating along the overbought line of 80 since December 20th. If you take a look at the year chart of (SPX), we see that a couple weeks before last April's hefty correction, RSI was at a two year high. On December 22nd it was as high (overbought) as any time since last April, possibly giving us another heads up a few weeks in advance.
I got out of, or severely reduced my silver and gold postions weeks back, and I'm trying to figure from a technical standpoint of when to get back in. But when I see all these death crosses and the (SPX) RSI being so high, for such a duration, it makes me squeamish about getting long right now.
stockcharts.com/h-sc/u...
If you study these MAs it becomes somewhat clear that when each of them turns, it stays in that direction for a certain amount of time. Right now the direction of the green 100 day is clearly up. Notice that when the orange 50 day turns lower, it hasn't stayed in that direction for long before turning back up. And once it turns lower, you'll want to know "when" is it going to turn back up? You can get a clue about that from the white 26 day.
At the moment, the white 26 day is suggesting that the orange 50 day is probably in the process of rolling downward. If it does roll downward, and you're convinced that over the long haul gold will head higher, then I'd advise that you just stand aside and await a better entry point to go long. Theoretically, that signal would occur at some point when the orange 50 day is about to turn higher (after a trip south... probably not far south). And "when" would it turn higher? Keep your eye on the white 26 day for clues about that.
Please don't be offended if you know how to do this already. It's about the most basic TA there is... and these days it seems to be about the only system that works. It does work better for an index or a commodity than it does for individual stocks. And MA systems do not work well in sideways or range-bound markets, but very well in trending markets. Gold is a trending market for sure. I hope this helps.
All the best my friend,
~d
But then comes along the end of POMO and QE2 late March into early April. That's when things could get real interesting. Especially if Illinois' 65% tax increase doesn't pass. We may see mass layoffs in all levels of the public sector coming later this year, driving unemployment back up.
Additionally, we may see some pension entitlement cutting, as NJ gov., Doug Christy is trying to implement.
We have something like 86 or 87% bullishness right now. This makes me want to don the tin foil hat, break out the oigi board and get contrarion, or at least examine contrarion thinking, especially from a TA viewpoint.
Of course, I may be wrong, and we'll continue to happy feet it up the worrisome wall.
I don't have the data for Spain, but last week the Portugal 10-year yield hit 7.39% (www.livecharts.co.uk/s...) and the auction today - oops, yesterday - was subscribed at 6.719. That's a decline of 67 bp and well below what many feared yesterday's auction would produce.
Yes, rates further back toward the beginning of the year were about where this auction ended up, but more recently the rates had spiked.
The number of new 52 week lows surpassed the minimum level required by a wide margin, but the rules state that they must be at least half the number of new highs. The new highs registered 242, so the HO dictates that the market would have had to print 121 new lows. New lows were closing the gap until that little stick save happened. They ended up at 111. (WSJ has a habit of adjusting these numbers after hours for some reason so we'll have to wait a couple of hours to see where they end up.) So no official signal today. I reiterate though... the message is still very clear.
I'm going to shamelessly cut and paste a comment I made yesterday about that very topic. I wrote it on another site where the language is quite a bit more colorful, so I've adjusted this one accordingly...
===============
George, imagine you had gotten long somewhere early in the game... maybe early Sept. If you'd been in the market since then and survived the Nov. correction, imagine how protective you would now be of your profits. Sources are saying that the vast majority of investors are now in the market "with no hedge", meaning with no puts. But you can bet your ass that the institutional managers have some protection of some sort. If they don't have puts in place, you can be pretty damned sure that they have trailing stops in place. Any who does not have protection in place would be fired on the spot. They have it in place alright. And we can rest assured that they're tightening those trailing stops with each passing day. The more wacky and contrived this melt-up becomes, the tighter they'll move them. Wouldn't you just love to know how tight those stops are, and how many shares are for sale at each price level just below the market? You can bet the farm that Goldman knows.
That's most likely why there's been no sell-off allowed. And that's why there's little likelihood of there being any sell-off that they can control. I've been speculating on this for damned near a year now. I thought they'd lost control at the August correction, but I was wrong. But the further this Fed induced insanity has gone, the more likely it is that the xxxxxxx (the Fed, GS and their minions) are probably finally trapped. This is why we "need" to see if 1130 holds. If it does, I'd bet that it would be "barely". If it doesn't, then 900 might not hold either. Anyway, that's why I'm expecting violence in the markets. I don't even know whether to expect a nice, tidy slow melt-down that accelerates (if that's even possible), or a 40 handle gap lower one of these days. But whatever it is, when those stops begin triggering, there won't be a damned thing GS can do about it other than buy them all up... or just let 'em go and throw all their own shares into the pot as well. If the bankers ever want out, the question we've all be asking is "who they gonna sell to?". Now we can add the fact that not only do they have nobody to sell to, but they have billions of shares of competition who'll want out at the same time as the banks do. Man.... I can't see how it could be anything other than a violent crash.
=======================
Yeah Jeff, the fact that the government of the United States is going to borrow from themselves (actually from your childrens' and grandchildrens' futures) in 19 of the next 20 days in order to feed their filthy spending habits rather than exhibit any kind of self imposed restraint in the slightest, can't be a good thing. But it could fuel the equities market right to oblivion (50,000 on the Dow, priced in worthless dollars) if they keep it up. It can't continue without very, very serious repercussions. Bonds will tank if Bernanke doesn't knock it off. .
New highs are now less than new lows. New highs are currently at 91 and that number meets the requirements. All other requirements are met except confirmation of the status of $NYMO at the end of the day. If the market sells off or just remains where it is, that condition will almost assuredly be met since decliners are also outpacing advancers at the moment.
What's more alarming to me is that insiders are bailing at record rates. We may have had the January effect in December. Typically, February is a down month anyway. This one might be down a little more than most.
That's exactly why I was checking into (SPX)'s RSI yesterday. Helped me figure out the July low, and it may be suggesting right now that the market is about to rollover in the next few weeks, despite all the forthcoming terrific earnings reports. Intel had a great one, yet it fell back.
Take a peek at this article:
www.cnbc.com/id/41076255
stockcharts.com/h-sc/u...
One more note...the HO still might not issue an official signal today if the market keeps chugging higher because the MacLellan oscillator has to finish lower on the day. At the moment that's not a given.
Yeah, for sure the complacency is just unbelievable. I really can't believe it, how investors are 'all-in' with no hedge, no puts. But I imagine they have stops real tight. That's the main reason I believe those who manipulate the market will not let it sell off. And for those who still don't believe that the bankstas are controlling this thing, I can only wish them good luck. It's not a good idea to run on the freeway with a blindfold on... but that's what they're doing with a closed mind like that.
But I'm also totally open to the idea that we might just see a reasonable correction before the market blasts off once again. I'm going to be watching the 1130 level real close. I'm not saying we're going to get there, but if we do... will it hold? That's a key level in my humble opinion.
You've changed me!
it would seem tight stops would trigger a quicker drop...flash crash style.
Thanks for the HO education and updates
online.wsj.com/mdc/pub...
MUB - stockcharts.com/h-sc/u...
On a side note, if we created a HO for the Nasdaq or Compq, they wouldn't be anywhere near issuing a signal today as the melt up in those markets continues unabated.
Benny can still print rocket fuel if it gets to low. Thats the sad fact in this manipulated market. Unfortunately the more they make the bigger the boom for inflation some day. Wait for QE3 and beyond.
They will not give up on this if only to prove they were right until they aren't right.
Anyway, here's what's been going on with the HO:
Since the Nov. low, the market has clearly been propped up with POMO injections to the point that the S&P hasn't once closed below its 10 moving average for 38 straight sessions now. That has never before occurred in the history of the universe... the history of the universe being 82 years. And during that entire run, neither has the S&P been "permitted" to make a correction of as much as 1% (not even if it were a 3 day 'correction'). Needless to say, this too is unprecedented. As long as the Fed is going to refuse to allow the market to ever drop again, there will never be any reaction to the HO's signal. Or maybe I should clarify that...
During several sessions last week and this, there have been many days where all the ducks were lined up to set off an HO signal. The only missing ingredient was the number of new 52 week lows. In other words, the number of new 52 week highs being produced has been rather pathetic all through this entire run-up off the Nov. low, hovering more or less continuously right in the range required for an HO signal. So at least we know that this run-up is as phony as a $3 bill. The problem I think is that it's most likely that after a run like this, the number of stops that must below this market must be just mind boggling. And we know with certainty that Goldman knows exactly where they are. I'm quite convinced that if Goldman is going to let the market fall enough that those stops start triggering, they're either going to have to be prepared to buy them all up or let the avalanche begin. Another thing that's certain is that the longer they keep this up, the worse the correction is likely to be (at least faster... very fast). And I hope nobody wants to debate the "conspiracy theory" aspect of what I'm saying because it's not a theory. Besides, I won't even entertain that debate.
Bottom line is that the number of new 52 weeks highs is anemic averaging about 175 with a slight downward bias. Back in April, when the market was roaring, that number was a much healthier average of about 450 (reaching as high as 670). So the current effort really pales in comparison to the April high because although new highs in the markets have been attained, the number of new 52 week highs have not been participating to anywhere near the extent that they should be if this were a healthy market.
Meanwhile, the number of new 52 week lows has been inching upward but not getting quite high enough to trigger the HO. On some days not even close. When it 'does' get close, the market spurts upward, putting an end to the possibility of that number rising enough to trigger the HO signal on that day. I'm not suggesting this is by design, but rather just one of the effects of a market that keeps getting cash infusions regardless of what's happening in the world.
At this rate, we're eventually going to see the day when 2745 issues are lower on the NYSE and 265 are higher, yet the S&P is still going to close higher on the strength of the final few horses who are getting all the sugar. I know that sounds awfully facetious, but that's simply a mild exaggeration of what's actually going on in the markets. It just chugs higher. That's what the Ben Bernank wants. He said so. He wants everybody to be convinced that they are wealthy once again. He said so. He's an idiot. I said so.
Sorry that here's been no commentary here, but really... what else is there to report? If the HO signal does go off I'll post a notice here. But I'm not convinced that it's necessarily going to happen now either, since it's possible that we may wake up one morning with the market so low that the number of required 52 week highs may never be attained). In that case, the Hindenberg Omen would have been proven to be about as useful as a chocolate tea pot. It's possible now that the market 'could' fold like a $3 tent without an HO signal even being registered. The longer this goes on, the more likely that's what might even happen (not really likely but entirely possible).
I don't want to see any disaster, I just want to see some sense of reality in the world. C'mon Bernanke, enough is enough already... a healthy correction is now an absolute "must". The arrogance is nothing short of infuriating. In the private message, John asked me if I was disgusted. I told him "not really". I take that back.
I have the same observation. Sometimes there is an alert visible but other times not. But when no alert is visible I often find comments waiting when I click on the note with press pin logo.
Seems like interaction has decreased as well.
So my feed may not be required.
E.g., when I came in to this insta, there were 6 "new. While I was typing this, I clicked the clipboard icon and it told me there was another new one. Since timestamp apparently works on when you enter the insta vs. the timestamp of a new comment, when I exit and click the clipboard icon again, it should show that one plus any new ones.
Just tested that. If I exit, the notification of the new one goes away. Just buggy software or design I guess. But I did click my feed to leave it and then tried to come back in.
This makes me think you don't need my feed at all, although I've not tested that.
HardToLove
Worked great.
HardToLove
I'm still chuckling about what a huge difference one letter can made. lol
I have been working very long hours on Global Economic Intersection (GEI): econintersect.com/inde... I haven't been doing as many Instablogs and the frequency of my SA articles is more variable. The last two weeks I have been nursing a sick pet and that has reduced my output, along with getting out 2010 capital gains reports for my clients.
I am not gathering as many followers as previously because I have been taken off the welcome screen for new readers who have the opportunity to sign up for some authors to follow. I had seen others who had been highly ranked lose that "privilege" and so I guess it was just my turn to follow them.
Anyway, check out the new site when you have more than a few minutes - it has lots of nooks and crannies: four blogs (so far), five newspapers, two econometric sites (economic forecast with a proprietary economic indicator is one and employment measurement is the second) and a just opened online store (Marketplace).
The venture is operated by Econintersect LLC, a company co-founded ten months ago with Steven Hansen.
You may have missed it. I had an Instablog several days ago with a summary of GEI and announcing the opening of our fourth blog.
So, you asked a short question and got a long answer.
"I wish you good _uck!" said the ambassador.
Thanks for the reminder. Moved your site up to the top of my wildly lengthy list of sites I regularly follow, such that I can follow your site more often.
I am sure google would find that story.
Hoping your pet rallies. Pets bring such joy (most of the time). When my months long journeys to Central America wane, I expect to get a dog.
brog.engrish.com/2010/.../
OG, to be very honest, I'm just stumped right now. The market is long overdue for a correction. The argument for an ugly deflationary scenario to unfold seems to have been proven to be pretty flimsy at this point. Yet any credit crisis that re-emerges in Europe could change all that in a heartbeat. So even though at the present time it sure appears that the world will know nothing but inflation in the future, we don't know for sure.
Sooooo... if it's the deflationary scenario that were to emerge (with massive inflation a couple of years down the road), the commodities including gold and silver (as well as the metals that Taseko mines) would take a huge hit. And when minerals drop in price, historically the miners get hit even harder. The vice versa is also true. I'm so torn right now with the macro picture that I don't even know what to say about Taseko. The May high of $6.25 might be a challenge to get through. I'm referring to TGB and not it's Toronto listing of TKO.TO. Oh... I see they're almost identical... and why not, the currencies are basically on par.
I wish I could offer more, but right now the Ben Bernank has me pretty convinced that I'm stupid... first time in my life I've ever been faced with that possibility. I don't like it one bit either.
I peeked. But you are on solid ground - more so than my reply to Mayascribe.
BTW, is econointersect the site you had in mind when you asked me to inform you about when Marco's book is ready? He was very interested that you were interested, even though he does not know who you are, or that you are well known. Wait 'till he sees what a class beanery you run... he's going to be elated. I won't forget to hook the two of you up.
As has often been the case lately, all the ducks are lined up. We're just waiting for the number of new 52 week lows to climb high enough. At the moment there are only 17 and climbing very slowly. We'd need to see 72. Given the depth of today's retracement, I highly doubt we're going to see that number rise much more from here today. The number of new 52 week highs being achieved is once again anemic today.
52 weeks ago the market was just putting in a low. So the prices today are far above those levels. Therefore it probably stands to reason that a few more days of downside would be required to see an HO signal. Ironically, the market was in this same condition back in April, when it had climbed so far in 52 weeks that the odds of seeing new 52 week lows any time soon was difficult to achieve. That's why the HO had such a difficult time issuing a signal back in April. All we got was a very near miss one week before the flash crash and then another one I believe the day before the flash crash or on the morning of. We're in that same boat once again.
Having said that though, not all stocks are "way up here" at these lofty levels. Last week there were over 100 that were within 3% of their 52 week low. With further melt up this week, that number is actually lower at the moment. So I'd imagine it'll be next week before a signal will be issued, "if" a signal is going to be issued at all. There's nothing saying the Fed can't swoop in to save us all yet again. But there's no question about it, today's action is impulsive rather than corrective, and that's a very serious situation.
If you look at a 30 min. chart of the S&P you'll notice that the move down today was basically a straight line impulse. Over the past 7 bars (3.5 hours), we've seen the market locked in a very, very tight range. All I want to point out is that very often I've seen these little consolidations end up being smack dab in the center of the entire leg down. I'm not saying that's what we're necessarily witnessing, but the oversold indicators have already worn off and the market hasn't rebounded one bit. I don't think this initial downleg is anywhere near over yet. I could be flat out wrong, so take it with a grain of salt.
The situation in Egypt is very, very serious with the fall of the regime a real possibility. I'm thinking Suez canal here. So be careful holding longs over the weekend. It seems to me there's a big potential for bad news and very little potential for anything good coming out of this weekend. I also think the VIX is up 22% for a reason.
This is definitely out of the "for what it's worth" files.
A new blog has been started: seekingalpha.com/insta...
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News and picture summary of St Louis Airport tornado damage at GEI News and also my Instablog
Apr 23, 2011
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News, picture summary of St Louis Airport tornado damage at GEI News and my Instablog http://bit.ly/dVfo22 and http://seekingalpha.com/p/3lpy
Apr 23, 2011
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Most of world finally had an up day Tuesday and all 11 major markets in the Far East are following suit, led by Tokyo and Seoul (+1.8% each)
Apr 20, 2011
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