A Chaos From the Rear "Bull" Market ~ The Risk Averse Alert

Wednesday, September 05, 2012

A Chaos From the Rear "Bull" Market

With so many technical measures on my radar pointing down, the trend line off early June bottom is a fair approximation of where support probably had better develop if the market is to delay its upcoming, anticipated decline to the vicinity of last year's lows...


All the effort since early June faking some desirable value in what still is garbage—this evidenced by both RSI (top panel) and MACD (bottom) remaining painted to the positive side of their respective ranges—fairly remains intact, and so suggests the market might remain levitated for some indeterminable days yet to come, this while an ominous technical backdrop further evolves to more surely set up the market's decided turn lower; a decline otherwise already being amply signaled at present.

Not that support at the short-term trend line is either assured or necessary, but also being in the vicinity of the S&P 500's 50-day moving average, it seems reasonable to expect support here, particularly given persisting capacity to pretend a hopelessly insolvent banking system can be "saved" with but another extraordinary tweak put in place by equally criminal and incompetent central banks.

Extending yesterday's expressed outlook and picking up where I left off pointing to the fact that, equity strategist recommended equity allocations are as low as they have been since 1985, today we learn "help wanted" ads have plunged by the most since Lehman Brothers' collapse.
"The two-month drop for headline help wanted online ads was -262.3K, while the two-month drop for new ads was -325.7K. Both were the worst two-month stretches since Feb 2009."

February 2009, eh? That was just a month shy of March '09 bottom. This news seemed fitting circumstantial evidence supporting yesterday's view toward a wave c of B [up] upcoming once wave b of B [down] completes in an anticipated swoon challenging last years lows.

Per prospect of a screaming rally completing a 5-3-5 "zig-zag" up from March '09 bottom, who in their right mind would anticipate this being anything other than the same short-squeeze-a-thon levitating the market these past few years? Likewise, open-ended hyperinflationary Hail Mary's sans any Acts of Contrition only means the Fuehrer will be more aggressively attacking from the rear, no matter if further frontal assaults on national sovereignty — the austerity regime — fail or succeed.

So, straight ahead appears the New Era of rising rates, ballooning sovereign finance needs, chaotic debt markets, accelerating shutdown of the physical economy (possibly masked in a stream of hype involving "buyouts" serving to consolidate the Fuehrer's control over physical assets while sold as something promising salvation), increasing want — crushing desperation keeping "retail" investors in sell mode for as far as the eye can see — and total political dysfunction but furthering a warmongering police state. Most certainly, then, "less pain" is not in the cards. Yesterday's suggestion to the contrary — this assuming Germany is being forced to retreat from its bailout quid pro quo demanding counterproductive sovereign concessions — simply fails the likely reality upcoming in an open-ended hyperinflationary regime. Mine was a poor choice of words describing an anticipated market advance whose underlying circumstance should be far more than head scratching, much as best describes the market's persistent levitation over the past couple years in the face of a flat-lining global economy whose only notable expansion is indebtedness and the pooling of slave labor. The "slicing and dicing" of the physical economy — a trait of the Greenspan era generating cash flows necessary to maintain ballooning debt burdens — is taking a different form in the New Era of hyperinflationary madness.

Fast Money
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