Interest Rates

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Interest rates utterly collapsed at the equity market’s bottom on October 15th, and they have soared since then (as have, obviously, stocks). We are nearly a monstrous overhang at this point, however, and my view is that rates will resume their downward fall soon (with bonds, naturally, strengthening the whole while).

1030-tnx

The Flagging Dow Industrials

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Only three charts today as I’ve had a lot on this morning.

One reason I do my optic run views on my seven main US equity indices is because while SPX is often the technical leader, by which I mean not that it moves fastest, but that it is delivering the cleanest trendlines/patterns and fibonacci retracements, that is not always the case. That leader at the moment is the Dow Industrials, and my first two charts will illustrate why that is.

The rising wedge on SPX that I tweeted on Tuesday night hit the very well defined wedge resistance (tweeted at the high yesterday) and then broke down on the frankly very predictable not really news that QE3 had ended in October as planned, and the usual assurances that the Fed would be fighting hard to keep interest rates near zero until the stars fall from the sky. Now those of you who have been looking at my work closely for a while might have wondered why I was giving strong weight to a pattern on SPX that was mediocre due to the poorly defined support trendline, and the answer to that question is of course that ………. SPX 15min chart: (more…)

Not So Precious

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I mentioned off-handedly to my Slope Plus subscribers yesterday that gold was my biggest short position. Well, “precious” metals are getting slaughtered (again) this morning, with silver being hit particularly hard. It certainly is puzzling, given the trillions of new fiat dollars kicking around, but there you have it.

1030-sil

Putting The Fallacy Of QE Into Perspective

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You can’t turn on a financial news program without being bombarded by panelists as well as the hosts ready-at-the-draw to pounce on anyone with an opposing view as to the “effectiveness” of the Federal Reserve’s quantitative easing program (QE).

Once again this played out just the other day on CNBC™ where this time it was Peter Schiff who found himself in the cross hairs of today’s version of “ambush the guest.”

You can agree or disagree with anyone’s viewpoint and I even encourage people to question mine if they see fit. However, you don’t have to be a rocket scientist to watch many of these anchors to witness for yourself what now has turned into all the appearances of – an ambush. (more…)

FOMC Cites Job Gains?

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Fed Announces End to Bond-Buying, Citing Job Gains –New York Times

Just a week or so ago one of the Fed’s three most celebrated hawks jumped the mic with a ‘shucks ya know, we could always delay the end of QE’ routine as the stock market plummeted. They don’t make hawks like they used to.

So what does the FOMC really mean, ‘job gains are good so we are ending QE’ or… ‘phew, that was a close one but the market took the Bullard bait and is back near the highs so we are ending QE… for now’. I’ll take ‘B’ Alex.

I seriously wonder how people other than promoters in the media and the financial services complex can continue to fall in line behind this transparent stuff. Maybe it is not really people after all but instead a bunch of connected black boxes, dark pools and other such robo systems simply programmed, without feeling, to follow the code. (more…)