The Ascending Triangle

December 15, 2011

Briefly I wanted to pen a quick post here on what I am expecting to see over the next few days and my intentions heading into 2012. I’m visiting New York City for the first time and have closed all positions while I intend to be double fisting watered down beer, blacking out for another NFL game, and touring the famous concrete jungle (not a big city guy, so I expect to breathe a huge sigh when I return to laid back Canada).

Without dabbling too much into specifics as Jake, Cain, and others touch on the US Dollar and forex almost daily, I suspect we take a breather here or slight flag out and test the 80 level again. For equities this should spark another quick short covering bear market rally, which I hopefully embrace (see long term below). I think there is opportunity to enter the market, especially on gap down, on Thursday with the intention of holding positive positions with stops through the weekend (talking 10-30% invested long here). Obviously, I would not be a good investor if I didn’t advocate sizeable cash, or at least straddling, position bases in your aggressive portfolios. Below is my drawn Ascending Triangle formation that I believe will resolve in the bull trap of traps heading into 2012. Upside target still in the 1260-1300 area, and would begin layering into long term shorts at 1280, add in as we go higher towards (possibly if obtainable) 1340 highs. I will be working on my short allocation, especially how I intend to attack certain geographies, sectors (well financials is a no brainer…), and broken down companies with an incomprehensible amount of debt in a credit crisis or large economic downturn. This I intend to complete over my few days off around xmas.

With that simple and really not helpful post, I look forward to more of these. My life went through a career upgrade whirlwind recently so between packing, moving, and rearranging all my accounts it has been one hell of a month. Cannot wait to kick back, eat some holiday grub with the extended family and returning friends from around the globe.

Any NYC suggestions please let me know, will be staying in the Financial district.


Follow up on CMG short

December 13, 2011

Taking a quick break from studying for exams I notice one of my short setups significantly outperformed the market to the downside today which may signal the start of a potential longer term short trade:

Daily

Weekly with notes:

 

Longer term I think this could unravel to the point of it’s primary breakout around 190.

No position.

TJWP


A Marc Faber interview ranging on topics from debt to geopolitics

December 11, 2011

Another Marc Faber interview – well worth the listen.

http://www.youtube.com/watch?v=yLKUB98OU4o


The Republican Primary – and American politics is a joke

December 10, 2011

Newt – with a campaign that is in debt and leading the poles – decides to take time out of campaigning to sell books to enrich himself. Other politicians guilty of this shit include Obama, Cain, Palin.

9% unemployment, troubled times ahead but there is no reason for people aspiring to be president to work on real plans. Until the electorate wakes up America will continue to be ruled by self-serving clowns who rally support by polarizing issues.

http://www.nytimes.com/2011/12/09/us/politics/gingrich-the-front-runner-is-still-selling-books.html?_r=1&hpw


Interview with Faber

December 1, 2011

Great bloomberg radio interview with Marc Faber on bonds, gold, equities, Eurozone and monetary policy.

Proposes Euro as a pan-Europe reserve currency with individual countries having their own currencies as well.

Q: “Marc what keeps you up at night, between the US government debt, all government debt, a slowdown in china?”
A: “Well what keeps me up at night is nightclubs”

http://www.youtube.com/watch?v=87Ke1fotVIY

Also foresees electorate imposing higher taxes on the electorate, a middle east in flames and an attack on Iran.


If banks don’t trust banks, why should you?

November 30, 2011

LIBOR continues to rise despite injecting liquidity into the system. A cancelled POMO is a good indicator of how fragile the system is right now.

Additionally TED (h/t @gappingandyapping) continues to rise despite central bank intervention. From the definition of TED spreads: “A rising TED spread often presages a downturn in the U.S. stock market, as it indicates that liquidity is being withdrawn.”

However put this into the context, the elastic was stretched very far to the downside, mean revision favored a rally. Now that central banks have stepped in and implicitly guaranteed the bottom isn’t falling out yet stocks may rally all the way into Christmas as burlap clad people relearn their fear of the Great Bearded One and everyone else gets in the holiday spirit but the underlying situation continues to deteriorate.


Macro Perspective, Eurozone style

November 17, 2011

Global Financial System Explained

But fear not because China has the fire power (not) to save failed European sovereigns via easy access to dumb money that will then grow their way out of their debt with their uncompetitive labour markets, massive austerity measures, and inability to devalue to boost exports all while competing on a par currency basis with Germany. You can see that the leading financial minds have already come to the forgone conclusion, that everything is fine, as they are so willing to lend money to each other. Meanwhile the good times continue to roll for Italian banks as they have found another way to extend and pretend, which as everyone knows is an obvious solution.

As we can see, the giant circle jerk continues unabated, and leading financial experts at Baron’s have made it clear that a bailout is the only option because god forbid anyone who made a retarded decision actually incur a loss. It is common knowledge that the solution to a decade long asset bubble, low interest rates and loose monetary policy is looser monetary policy, because clearly the Portuguese austerity measures are working wonders for the economy. They will be able to grow their way out of that debt in no time.  So as soon as Germany’s government figures out how to overcome the constitution, the high court and the very real risk of being skinned alive by the electorate they can begin printing in a way that would put the great bearded one to shame. All this, naturally, shall not cause further inflation as everyone knows it is “transitory.” Quite simply put, re-inflating a massively inflated asset bubble, be it in retarded internet companies, housing, or sovereign debt just doesn’t count.