Terminator Analog

By -

No, don’t worry, this is going to be another one of those “the indexes look just like the Norwegian Salmon Futures from 1587-1591!” type posts – - it’s a different kind of analog.

0821-teetwotwoIt occurred to me this morning the perfect representation of this equity market: the T-1000 robot from Terminator 2. Most of you have seen the movie, and as you’ll recall, no matter what damage is done to the robot, it simply heals itself, whether the assault is performed by shotgun blast, handgun bullets, or liquid nitrogen.

As the Wikipedia entry describes it, “The T-1000 is effectively impervious to mechanical damage, such as being dismembered, riddled with bullets, or attacked with explosive devices. Wounds close almost immediately, and any detached parts simply flow back into the T-1000′s body.”

And that, my friends is what we’ve got on our hands, because the threat of rising interest 0821-teetwoonerates (as exhibited by yesterday’s Fed minutes) was like a series of bullets being fired at the market, which was, for about five minutes, slightly beaten down. But the liquid metal healed up the wounds, and the T-1000 (embodied by Yellen) was as good as new, ready for more action and more lifetime highs. The same goes for what happened this morning (a swift dip that lasted, oh, about 3 minutes).

The weary pledge, trotted out by everyone from Cramer on down (or up……..) is that “this will end badly someday.” As I’ve stated before, I think this is simply a verbal insurance policy on the part of pundits to make sure that, in the year 2398, or whenever it is, when things do end badly, they’ve got a clip they can play to say that they “warned” us. As with the T-1000, however, the “bad” ending will have to come in the form of something so destructive and overwhelming, that even liquid metal can’t put itself back together again. Hasta la vista, baby!

Terminator 2: Judgment Day (1991)

Bigger Picture Options

By -

SPX made the IHS target at 1987 and is now close to testing the current all time high at 1991.39. I’m expecting to see a new high made, very possibly today. So what then?

Assuming that we don’t see a strong rejection at the highs retest, the obvious next target just above is at the daily upper band, currently at 2000. I would very much like to see a decent retracement shortly, at the least to give me more to work with in terms of trendlines, and the obvious place to see that retracement start is now at a test of that daily upper band. On the bigger picture, if the rising wedge from the January low is still the main pattern here, then I would not expect this move to close a day back over rising wedge resistance, currently in the 2015 area. SPX daily chart:

140821 SPX Daily Trendlines BBS MAs

(more…)

Amazon vs Hachette: Why An Axe May Beat A Hammer (Part 1)

By -

For those not up to speed on the war of words (quite literally) between Amazon™ and Hachette™, it basically revolves around one central theme: Amazon believes a price should be X, and Hachette believes it should be Y. So the question everyone is asking is, “Who’s right?” In my view that’s the wrong question to even begin with.

The reason being is this (and I’m not trying to be coy) both are correct if you understand what the real question and answer should be, and that is: Whomever owns the product owns the right to price. Whomever owns the distribution point (or the store) owns the right to carry it or not. Period. (more…)