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Time to Short Yet?

I have done precious little posting over the last 6 months or year, in large part because the market has been marvelously uninteresting. It has largely served as an undramatic source of steady income for those heavily invested on the long side. Despite my Trump-loathing and deep skepticism of both U.S. economic policy and the state of the global economy, the chart-reader in me sees no cause for skepticism in the S&P (SPY) chart. (That said, later I will suggest that some big-name tech stocks do seem primed for a short attempt – so stay tuned!) As it stands, SPY looks like it’s in a garden variety upward trending channel for now.

2017-06-26-SPY_CHARTS

My economic skepticism is more comfortable with the upward trend evident in long term U.S. Treasuries (TLT). TLT bounced off support, and has trended up this year. To me, only genuine economic growth and excitement would seriously damage Treasuries, and I don’t see that happening. Here is the TLT chart:

2017-06-26-TLT_CHARTS

Emerging markets (EEM) have surged over the last two years and are pushing against a decade-old downward trending line of resistance. It’ll be interesting to see if EEM can break through to the upside. I would (and maybe will) bet against it. That is some pretty well-established resistance there:

2017-06-27-EEM_CHARTS

One interesting asset class to watch is junk bonds (JNK). If the equity market is running into weakness, JNK is likely to provide an early indicator. It appears to be near the end of a slightly rising wedge pattern that basically includes the duration of the Trump election through present.

2017-06-26-JNK_CHARTS

Now for those shorts.  Amazon (AMZN) has had a phenomenal run in recent years. It recently made headlines with its purchase of Whole Foods. Surely buying governments wholesale in on its to-do list at some point in the not-too-distant future. Lord knows the U.S. government is for sale. All that said, the stock’s ascent over the last four years is a sharply rising wedge pattern. There is still room on the upside, but between the hype and that pattern, I’m taking a crack on the short side here.

2017-06-26-AMZN_CHARTS

Over a slightly shorter time frame, Google, err Alphabet (GOOG) has formed a similarly rising wedge pattern. It is still in a wider phase of the pattern so may have more room on the upside without breaking the pattern, but it’s butting against the resistance trendline, so I’ll take my chances with a short here.

2017-06-26-GOOG_CHARTS

I’ve seen nothing to alleviate my big picture concerns. If anything, they are more pronounced than ever. That said, I think the market casino is primarily self-reflective. It is not a reflection of the economy so much as a reflection of its itself. I think it will take a major catalyst to break through the momentum and market-wide commitment to self-induced price growth for the benefit of major market participants. Who knows when the spell will break or what will finally break it.

 

Rally hats back on?

It looks like it is time to bounce again.  This is the adjusted rising wedge for SPY.  This current bounce appears to be taking place where the adjusted support looks to be.  I am tired of this game.. but it appears the S&P is ready to cycle through another rally mode.  Global economic data looks terrible to me, but the stock market(s) disconnected from economic data a few year ago in my opinion.  So rallying despite bad data is nothing new.  I have entered some long positions, but am mostly a bemused bystander by now as I believe we are well into bubble territory.

2015-03-16-ES_CHARTS

SPY at upper trendline of long term Rising Wedge

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

2014-06-19-SPY_CHARTS

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

2014-06-19-XLF_CHARTS

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

2014-06-19-LLL_CHARTS

 

Gold price fixing? Surely not.

 

Not that this is news to anyone who wears a tin foil hat, but it’s officially in the mainstream now: gold prices have been “fixed” for a while now…

http://www.bloomberg.com/news/2014-02-28/gold-fix-study-shows-signs-of-decade-of-bank-manipulation.html

Big Brother IS watching.  Fed stock-pumping.  Libor scam.  We’re running out of conspiracy theories in the “crazy” basket…

 

Profits Trump People

December 9, 2013 4 comments

This is what it looks like when profits trump people:

I imagine that this is the recipe by which capitalism might ultimately kill itself.

Chart from Zero Hedge.

Reading on the Financial Markets: 8/2/13

 

Nothing new to this story, but the most recent jobs number shows the ongoing dominance of part-time jobs. From Zero Hedge.

Yves Smith and naked capitalism with the dirty on how traders game bonuses, and the system.

Perhaps that’s because the current administration (like its predecessor) continues to reward big business (i.e. its contributors) over small business (i.e. the folks who tend to create jobs).

small job creation

Reading on the Financial Markets: 7/15/13

I have for quite a while been meaning to articulate how I view the U.S. as experiencing not just a financial ponzi, but also a political ponzi (corporate/bureaucratic duopoly), and an ethical ponzi (short-sighted materialism).  But alas, I am too lazy or otherwise occupied to do so.  So I will just keep slipping some of my favorite non-financial ponzi reading into these lists.

Paul Craig Roberts wrote a fiery diatribe on The Burning Platform suggesting that, ultimately, revolution against our well-financed political class is unlikely to succeed by peaceful means alone.

An interesting read from Noahpion on the nature of belief, as applied to economics.

A list within a list.  Here’s a good compilation of articles on government spying from Washingtonsblog.

Charles Hugh Smith discusses an increasing divergence between an overworked private sector and an increasing group of chronically unemployed.  As startling as anything is this chart, as debt-driven growth looks increasingly tapped out:

Reading on the Financial Markets: 7/8/13

At the Washington Post, Daniel Ellsburg of the Pentagon Papers fame, throws his support behind Edward Snowden and his choice to flee the U.S.

Doug Short looks at ECRI’s most recent growth indexes.  About that recession call… may have been just a smidge early.

With interest rates having broken resistance to the upside, Chris Kimble looks at how high rates on the 30 year may go before resistance.

John Aziz at Azizonomics with a few charts to remind us that, equity ponzi aside, Americans in the real world continue to struggle.

percentofpopulationwithfulltimejob

Reading on the Financial Markets: 6/27/13

I am still much more interested in and concerned with the ongoing Edward Snowden/politico story than current financial markets, so here are a few links:

A New York Times op-ed piece by Roger Cohen on Edward Snowden sums up my view of him: he has done the citizens of the United States a great service.

Still on the Snowden story, Glenn Greenwald commented on the smear campaign that has been started against him.

Moving back toward the recent action in financial markets:

From Zero Hedge, Pivot Farm has done a four part series on the history of market crashes.  Here is part four.

According to an Economic Policy Institute study, CEO pay continued to be ridiculously high relative to workers in 2012.

Reading on the Financial Markets: 6/18/13

Lee Adler at Wall Street Examiner points out that, under QE, employment growth has just kept pace with population growth.  The only thing QE has boosted is equity valuations.

From WSJ, Stanley Druckenmiller says our current manipulated market leaves no place for actual analysis.

David Sirota at Salon gets to the essence of why PRISM is so dangerous to U.S. citizens: it either violates Article IV of the Bill of Rights, or by claiming “probably cause” it presumes every citizen is a suspect.

Sober Look points to further evidence that China’s slow down is much more than rumor.

Azizonomics wonders whether financial markets have gone “post-human.”

 

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