Will the Real [AAA-rated] PIG Please Stand Up! ~ The Risk Averse Alert

Friday, July 29, 2011

Will the Real [AAA-rated] PIG Please Stand Up!

The U.S. economy grew less than expected in the second quarter as consumer spending barely rose, and growth braked sharply in the prior quarter, a government report showed on Friday.

Growth in gross domestic product—a measure of all goods and services produced within U.S. borders—rose at a 1.3 percent annual rate, the Commerce Department said.

First-quarter output was sharply revised down to a 0.4 percent pace from 1.9 percent.

Economists had expected the economy to expand at a 1.8 percent rate in the second quarter.

In addition, fourth-quarter growth was revised down to a 2.3 percent pace from 3.1 percent, indicating that the economy had already started slowing before the high gasoline prices and supply chain disruptions from Japan hit.
Economy Grows at Sluggish 1.3%; Consumers Pull Back (CNBC, 7/29/2011)

Bravo Herr Bernanke! Bravo Herr Geithner! Bravo fascist-in-chief Barack Obama!

And what is Congress' response? Accelerate hyperinflationary breakdown by cutting demand! Brilliant! What's the price for an Ivy League education these days? Subtract a penny and you will have the exact figure revealing how much was overpaid.


Here we go again ... knock, knock, knockin' on Hades door.

Since March '09 bottom the market consistently has been subject to protracted bouts of selling whenever the NYSE Bullish Percent Index's relative strength crossed below 30. Oddly enough, too, $BPNYA's momentum (bottom panel) is flattening at its 0-line, much as occurred in February, as well as leading into May 1st peak (two points of reference that, coincidentally bear significance in what increasingly appears a distribution whose ultimate culmination finds hopelessly insolvent financial institutions reduced to desperately petitioning elected representatives).

So, open up Satan! Your children on Wall Street have met the appointed hour secured by the man who on this side of analytical heaven is disdainfully known as King Ponzi, Alan Greenspan.


Sometime next week we are likely to witness a crush aiming to coerce alignment of Femocrats with their Rethuglican colleagues in Congress, this that increase in Treasury's tribute laid at the likely soon-to-be bloodstained alter of Adam Smith's Leveraged Ponzi Scheme might be more assuredly secured (with such swindle having become standard practice made necessary in the internet age, as cover once provided by faux journalists protecting enemies of the state more or less has been obliterated).

Yes, it is true. I have been all over the board of late. Yet this not so much in assessing the market's technical state, but rather in projecting what likely was most immediately to develop as a result. This present conclusion, then, might prove equally inaccurate.

However, volume's pickup this week is confirmation fear is growing. We know already that, wherewithal to absorb any increase in supply brought to market is thoroughly shattered. Indeed, through selling restraint alone since March '09 bottom has the market been kept levitated. Diminishing volume consistently registered over the entire course of the market's counter-trend rally since March '09 is conclusive confirmation that, the market has been living on borrowed time paid solely with will to restrain, healthy, fear-driven selling typical in bull markets that possess staying power, the likes of which find volume increasing as prices advance.

Most recently we see evidenced in formation of the rising portion of the right shoulder of a prospective head and shoulders top this ongoing tendency since March '09 for volume to shrink during the market's advance. A head and shoulders, among technicians, is a well-known pattern indicating distribution of shares into weak hands and finds confirmation of its prospect via muted volume at this specific point in its formation (i.e. the advancing phase forming the right shoulder). Long-time readers are aware of this critical, distinguishing characteristic, as detailed by Edwards and Magee in their classic, "Technical Analysis of Stock Trends." And so there it is.

Up next, then, should be a high-volume break below the head and shoulders neckline (this, again, according to the same source). Expect this development sometime over the next week or two.

Looking beyond this upcoming prospect, the month of August could find useful comparison to August 2008 and set up for a vicious ten year commemoration of 9/11. Were the neckline to the head and shoulders top violated over coming days, a period in which develops a reaction back up to the neckline likely would follow. This, again, would be typical behavior according to Edwards and Magee. Thus, too, might striking similarity to August 2008 take shape, as this was the brief period when the market more or less flat-lined following its May-July '08 sell-off, and set up the market's breathtaking swoon initiated when Lehman Brothers took a dirt nap.

Speaking of the market's May-July '08 tumble, be aware that, the S&P 500 has declined for three straight months now, albeit ever so modestly. Likewise, on account of this week's rather soft trade the worst appears nearer on the horizon than has been supposed of late. Observing theatrics surrounding a still-developing debt ceiling swindle, the risk of an orchestrated flight forward making 9/11 pale in comparison is, I am afraid, all too real, as well. Desperate times call for desperate measures, and plainly Team Fraud is out of gas and sinking fast, as developments throughout the trans-Atlantic continue portending chaos ahead.

(For a review of the one chart proving that, the United States in fact is in the midst of a hyperinflationary breakdown see: "Assorted Nuts and the Nuts We Need.")

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