Recession Imminent

[cypherdoc]

Actually I'm waiting any kind of rebounce to buy several put option tomorrow  

trading declining mkts is a b*tch.  if we get a bounce, be careful about shorting too soon as we could get a week long bounce or so.  long term we're all dead though...

I'm thinking we'll have a bounce too.  I see it happening between 1175 and today's close at 1200.  However, I think it fizzles out around 1260 or the 200dma, which is currently 1286.  Trading below the 200dma seems like a bear market to me but I'm waiting to see how the market reacts to the bounce.  The market is oversold short term and is due for a healthy bounce.

That being said, the last support before bigger losses is around the 1175-1180 area.  If we break that support, look out below.

it looks like we have a Dow Theory violation.  we're in big trouble.  i clearly remember trying to trade the 2008 crash.  it was challenging b/c several days like today would be interspersed with a huge ramp on some trivial announcement which would get me into a margin call.  this top i've been all over so far and i hope i can trade it better.  the key is to not get those margin calls by not leveraging up.  its tempting when the gains to be had are so great to the downside.

i had an absolutely huge day today.

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[cypherdoc]

i actually think that the Fed is going to try and get PM's to crack to the downside.  there was that article i saw a coupla days ago about how the bankers were complaining to Berspankme about the fall in the dollar.  if they've convinced him to sacrifice the stock market to save the dollar and bonds we could be entering a huge deflationary wave.  this has been my theory about whats going to happen all along which is why i've been selling PM's and sold a bunch more today.  down to my last few ounces.  God i hope this doesn't affect BTC as i've shifted all my PM gains into BTC.

my shorts on silver and silver stocks paid big today as well.

edit: if i'm right this will absolutely kill the inflationists.  i think i am...

[johnyj]

i actually think that the Fed is going to try and get PM's to crack to the downside.  there was that article i saw a coupla days ago about how the bankers were complaining to Berspankme about the fall in the dollar.  if they've convinced him to sacrifice the stock market to save the dollar and bonds we could be entering a huge deflationary wave.  this has been my theory about whats going to happen all along which is why i've been selling PM's and sold a bunch more today.  down to my last few ounces.  God i hope this doesn't affect BTC as i've shifted all my PM gains into BTC.

my shorts on silver and silver stocks paid big today as well.

edit: if i'm right this will absolutely kill the inflationists.  i think i am...

I'm your trading opponent and I still have lots of silver long position 

Compare the equivalent value of 1 ounce gold in 80's and today, they still have 4X uppside potential

[cypherdoc]

i actually think that the Fed is going to try and get PM's to crack to the downside.  there was that article i saw a coupla days ago about how the bankers were complaining to Berspankme about the fall in the dollar.  if they've convinced him to sacrifice the stock market to save the dollar and bonds we could be entering a huge deflationary wave.  this has been my theory about whats going to happen all along which is why i've been selling PM's and sold a bunch more today.  down to my last few ounces.  God i hope this doesn't affect BTC as i've shifted all my PM gains into BTC.

my shorts on silver and silver stocks paid big today as well.

edit: if i'm right this will absolutely kill the inflationists.  i think i am...

I'm your trading opponent and I still have lots of silver long position 

Compare the equivalent value of 1 ounce gold in 80's and today, they still have 4X uppside potential

LOL!  you're right; this will be interesting indeed!

[cypherdoc]

i actually think that the Fed is going to try and get PM's to crack to the downside.  there was that article i saw a coupla days ago about how the bankers were complaining to Berspankme about the fall in the dollar.  if they've convinced him to sacrifice the stock market to save the dollar and bonds we could be entering a huge deflationary wave.  this has been my theory about whats going to happen all along which is why i've been selling PM's and sold a bunch more today.  down to my last few ounces.  God i hope this doesn't affect BTC as i've shifted all my PM gains into BTC.

my shorts on silver and silver stocks paid big today as well.

edit: if i'm right this will absolutely kill the inflationists.  i think i am...

I'm your trading opponent and I still have lots of silver long position  

Compare the equivalent value of 1 ounce gold in 80's and today, they still have 4X uppside potential

the thing you should note is that the silver stocks and gold stocks are not confirming the bullion.  i know, i've heard all the excuses about why but i'm not buying them.  also that silver is below its April highs and not confirming gold.  and then remember what happened in 2008.

[cypherdoc]

look at AEM a former gold stock darling.  absolute carnage.  NEM, ABX, and GG getting smacked as well.  none of the juniors are performing either.  this is a repeat of 2008 when they got destroyed.

[netrin]

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

edit: if i'm right this will absolutely kill the inflationists.  i think i am...

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.”

[cypherdoc]

i have confirmed tonite that we have a confirmed bearish primary trend change according to Dow Theory.  this is the first time we have seen this since the March 09 lows.  this is bad news and i would caution all commodity inflationists that a bear market means DEFLATION.

[CurbsideProphet]

In a mass selloff like today, just about everything gets liquidated as margin calls come in and people flee to safety.  Treasuries and the USD were about the only long positions that fared well today.  Interestingly, the Swiss Franc held up despite the gov't attempt to devalue the currency.

If we're heading for 2008 redeux, the miner stocks will be taken down with the rest of equities.  

[cypherdoc]

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation DEFLATION, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.”

this is the money quote.  the problem with the system as it exists today with bankers knowing when they're going to ramp liquidity AND when they're going to shut it off, means the rest of us shleps continually have to play catch up.  in other words; we never win.

[cypherdoc]

In a mass selloff like today, just about everything gets liquidated as margin calls come in and people flee to safety.  Treasuries and the USD were about the only long positions that fared well today.  Interestingly, the Swiss Franc held up despite the gov't attempt to devalue the currency.

If we're heading for 2008 redeux, the miner stocks will be taken down with the rest of equities.  

everything you say here is absolutely correct.  my only slight disagreement is the "flee to safety" part. 

i'd say its more like "forced to buy dollars by having to liquidate assets".  yours implies a choice; mine implies force.

[johnyj]

i have confirmed tonite that we have a confirmed bearish primary trend change according to Dow Theory.  this is the first time we have seen this since the March 09 lows.  this is bad news and i would caution all commodity inflationists that a bear market means DEFLATION.

A tripple top breakdown...

If it will be DEFLATION, FEB still have lots of room to play around

What I'm fraid is that Inflation rate eventually pick up because of the raw material price rising, but no serious money were put into new hiring(only invest in machine/robots) thus jobless rate keep climbing. STAGFLATION is a dead end for any kind of  monetary policies

I think recent down trend is more of a psychological effect rather than fundamental, but sometimes fundamentals were also driven by people's mood, especially when most of the people havn't get out from the shadow of financial crisis. Actually their risk tolerance ability have improved. I believe QEs and stimulates already helped, but not enough and visible. People argue that they are not useful, but just a month after QE2 ended, the market looks like this

It's still difficult to explain to people that saving hurts economy

[cypherdoc]

It's still difficult to explain to people that saving hurts economy

wow, that hurts.

i've grown up a saver and always will be.  i don't mind debt when necessary like for my mortgage and business but i've since paid both off given the crisis which has been debt driven.

you seem to be doubling down and i'd be careful given what i feel is a large topping formation since 2001.  we just can't assume anymore debt.

have you studied demographics?  we and China are getting much older and these elders are moving into the dependent state.  they also sell stocks and RE during retirement not to mention draw on SS and Mcar.  they'll be many fewer workers to support those dependents. 

did you see the labor participation rate this AM?

[netrin]

you seem to be doubling down and i'd be careful given what i feel is a large topping formation since 2001.  we just can't assume anymore debt.

topping measured in dollars (and Euro, etc). I think we all agree. But the bet on the table is whether the Fed and central banks will continue to devalue their currencies or let the party stop cold turkey. Why do you think the Fed will stop printing money? Do you think the US will default on Social Security and Defense?

[cypherdoc]

you seem to be doubling down and i'd be careful given what i feel is a large topping formation since 2001.  we just can't assume anymore debt.

topping measured in dollars (and Euro, etc). I think we all agree. But the bet on the table is whether the Fed and central banks will continue to devalue their currencies or let the party stop cold turkey. Why do you think the Fed will stop printing money? Do you think the US will default on Social Security and Defense?

my question to you is who does Bernanke pay homage to?  the people or to his banking handlers?  i say the latter.  therefore why would he destroy the asset side of the bank's balance sheets to the benefit of the ppl?

what currency is the elites billions if not trillions held in?  USD.  therefore why would his handlers allow him to destroy their wealth savings?

who enables the banks to do their dirty work?  the Fed.  therefore why would the Fed let the USD self destruct which is the Fed's only franchise product?

[cypherdoc]

you seem to be doubling down and i'd be careful given what i feel is a large topping formation since 2001.  we just can't assume anymore debt.

topping measured in dollars (and Euro, etc). I think we all agree. But the bet on the table is whether the Fed and central banks will continue to devalue their currencies or let the party stop cold turkey. Why do you think the Fed will stop printing money? Do you think the US will default on Social Security and Defense?

they are defaulting on SS by artificially lowering the CPI.  they're cutting Mcar benefits as well.  defense is being slimmed down.  look at NOC, RTN, LMT defense stocks.   they're telling a story.

[RodeoX]

I love how the press talks about "the recovery" as though it is destine to happen.  I will believe in a recovery when I see a reason for demand to increase.

[netrin]

they are defaulting on SS by artificially lowering the CPI.  they're cutting Mcar benefits as well.  defense is being slimmed down.  look at NOC, RTN, LMT defense stocks.   they're telling a story.

OK, then by default you mean price inflation through debt monetization, right? The government will pay its debts with worthless paper. My vote (bet not choice) is that nearly all democracies will devalue their currencies and the few that don't (Denmark and Switzerland) are going to lock down their borders.

[johnyj]

It's still difficult to explain to people that saving hurts economy

wow, that hurts.

i've grown up a saver and always will be.  i don't mind debt when necessary like for my mortgage and business but i've since paid both off given the crisis which has been debt driven.

you seem to be doubling down and i'd be careful given what i feel is a large topping formation since 2001.  we just can't assume anymore debt.

have you studied demographics?  we and China are getting much older and these elders are moving into the dependent state.  they also sell stocks and RE during retirement not to mention draw on SS and Mcar.  they'll be many fewer workers to support those dependents. 

did you see the labor participation rate this AM?

Well, it's exactly this way of thinking put the recession much prolonged. But there is nothing to blame, people should always seek for security when there is uncertainty. Unless saving has accumulated to a very high level, they dare not to spend again.

This careful and planned thinking is supported by Austrian Economists, if everyone in the society act like this, then we have a perfect stable economic system. But the problem is, the majority of people are not like this, they don't even know how to manage their personal economy. I looked around my friends nearby, none of them without a debt bounded on a house.

So, even you can handle yourself very well, we are all on the same planet, if most of the other guys got problem, you can not get out of it

[CurbsideProphet]

they are defaulting on SS by artificially lowering the CPI.  they're cutting Mcar benefits as well.  defense is being slimmed down.  look at NOC, RTN, LMT defense stocks.   they're telling a story.

OK, then by default you mean price inflation through debt monetization, right? The government will pay its debts with worthless paper. My vote (bet not choice) is that nearly all democracies will devalue their currencies and the few that don't (Denmark and Switzerland) are going to lock down their borders.

Switzerland is pulling out all the stops to devalue the Franc.  So far it hasn't been all that successful but it's definitely something they are trying to achieve.  Record CHF compared to other countries is very bad for their economy.