We humans like the see bad guys lose. Like when the Americans overrun the Nazis about 25 minutes into Saving Private Ryan. Or when Saddam is being led to his noose. Or when Osama bin Laden is shot dead. Or when Janet Yellen and Jerome Powell’s plans go horribly awry. They’re all evil, and it’s good to see them meet their comeuppance.
The last of those examples took place today, and I couldn’t be happier. There is one more piece of this jigsaw puzzle, and that is the CPI tomorrow morning. I’ll get to that in a bit. For the moment, I shall simply applaud today’s market action, whose peak on the SPY almost perfectly tagged the underbelly of the broken trendline. In case you missed it the first dozen times, my bold call right now is for the double Fibonacci support to fail the next time it is challenged. If this transpires, we can all crown me the King of Charts for the rest of time. We shall see. My head is as yet unadorned.
No position scared me more than my gargantuan EFA short position, but it worked out great. I sold half of it at a very big profit at the open, and I am happily holding on to the rest. By way of profit-taking, I have raised cash from 0% to 16%, so I’m safer now than I was 24 hours ago.
The same pattern completion took place on the Eurozone fund (EZU).
I would also note for you Dow Theory fans that the Transports are a clear tragedy.
One of the most dramatic charts, naturally, is KBE, which is the regional banks. The diamond pattern on this, which I pointed out weeks ago multiple times, came into magnificent fruition.
Since the evil bastards in D.C. aren’t announcing another huge bailout tonight, things are on a vastly more even footing. The next big event is the fake CPI number they trot out in the morning, which will represent about one-quarter the true level of inflation. In any case, if the number comes in hot, Powell is as screwed as screwed can be. He will have no good exit.
Just remember, Powell, Yellen, Biden, and all the rest of them are shameless liars (including all the investment banks and Wall Street analysts). For the moment, it seems that the overall wisdom of the markets has managed to overwhelm their scheme. I eagerly anticipate the CPI; if it is a good number for the bears, I shall deploy my cash-in-waiting, but I am glad to have it risk-off for the moment, allowing me to sleep better tonight than I did the night prior.
