They say a picture is worth a thousand words...

Pictured from left to right: Taxpayer, Barney Frank/Bernanke tag team.

Your 2010 outlook can be found here.

...and a lot of [brave? bold? insane?] bias.

[clarifications in italics]
In summary (3-6 month outlook): Dollar Up, Gold Down, Nasdaq Down and the S&P meanders about. I'm seeing gold between the 980-1000 eventually but there will be interim support at 1035. In the short-term I would anticipate a run to the 1135 resistance as the dollar eases back some. The Gold/Oil ratio should come in the 12.50x range (linked) but this, in and of itself, does not imply a floor in gold prices, just they should move in tandem for a brief period (down). SPX/Gold suggests the index will outperform the metal by 10% as well as outperforming the Nazdaq during the same period. The latter scenario (SPX::COMPQ) needs to be monitored because when the Nasdaq rolls over there is follow-through in the broader market. [The Short Nasdaq trade is what I'm most interested in.] Just note the Nasdaq is more sensitive to currency moves than the Dow and S&P.

In the short term it's likely we'll see a retreat across the broader markets (5-10% seems imminent now). There is resistance on the S&P at 1136/1140. The IYR:XLF correlation (linked) leads me to believe the IYR will re-establish the mean correlation (down). [But I am not messing with either of the two, because you are playing with fire. I am watching the Nasdaq for the short and already long USD. The IYR will pullback, but do not assume this is CRE crashing...Be nimble]

Lastly, a geopolitical event (such as Iran) does not mean people will flock to gold. In fact, I could see people buy Oil (in this case) and also go to the dollar as a safe haven.

[Note: The graph for the S&P shows a probable bounce off the 1060 area. It is not out of the question 1000 comes into play again, or perhaps 950. But for the time being I would suggest looking no further down than the nearest major support area]

Before and After Photo
(See: USD/SPX Short-term)

Dollar breaths in, now the Dollar should breath out. I've just added (blue arrows/rectangle) to the previous projection where I think the Dollar will pullback to in the short-term (~$76/$76.50). Gold has been taking a major shellacking (1095) and it's right near the 1080. target. It's quite stretched so I would expect a relief rally is coming soon. Therefore the S&P will try to get back over 1107.

PS. Score another one for TA.

Gold Bugs can Breathe (for now).

Closed this one out for now. It was a good run from $38

Stimulus Checkup - 100 Ridiculous Projects Funded by the American Recovery Act

The following was lifted from Mish (click below and read his)

Stimulus Checkup - 100 Ridiculous Projects Funded by the American Recovery Act

1. .Almost Empty. Mall Awarded Energy Grant ($5 million)
2. Renovations for Federal Building as Expensive as New Building ($133 million)
3. DTV Advertising Agency Generates Three Jobs ($5.9 million)
4. Research to Develop Supersonic Corporate Jets ($4.7 Million)
5. Water Pipeline to a Money-Losing Golf Course ($2.2 million)
7. Program to Control Home Appliances From a Remote Location ($787,250)
20. Repaved Georgia Road . . . Getting Repaved Again ($88,000)
23. Studying the Icelandic Arctic Environment in the Viking Age ($94,902)
33. Study on "Hookup" Behavior of Female College Coeds ($219,000)
35. Study of Wildflowers in a Ghost Town ($448,995)
38. Recovering Crab Pots Lost At Sea ($700,000)
50. Arizona Ants Work While Some Arizonans Remain Unemployed ($950,000)
51. Study On Why Young Men Do Not Like Condoms ($221,355)
56. Homeland Security Funds Assist Boat Tours of Alcatraz ($50,783)
60. Town of 838 to Renovate Old Hotel into a Welcome Center ($300,000)
79. Money for Lighthouse Repairs on Uninhabited Island (Nearly $1.5 million)

I guess after $1T in wasteful spending we better assemble the best minds to figure out how to create some jobs. Apparently $1T in miracle grow did not germinate those green shoots.

It seems today people are either on one extreme or the other when it comes to viewing equities and the dollar. We either hear the USD or the Market will crash...Neither is a likely outcome any time soon. What we can have is a large trading range for an extended period of time up until mid-term elections. Chances are anyone taking either extreme will be wrong, at least for a while. Advantage will likely be to the neutrals unless you are good at trading in choppy markets. There will be 800 Etraders a day churning their accounts into a margin call.

Warning: Copper is overheated

Pictured are the major pivot points for PCU. There will be several retraces, including the first very soon (Will look for entry at retrace). It's funny how quickly the reflationist have changed their tune over the last week. From "Gold Bitches!" to Bitch-slapped. The bull market is not over in gold, it just needs to shake out the momos.

It should retrace some before being poleaxed again.

There really isn't much to say as action continues to suggest the indexes easing back to major support levels. The DXY held 76.00 at the close of regular trading but I would not be surprised (but not required) to see it ease back to 75.75. As long as the S&P is south of 1100/1107 it will continue to come under selling pressure.

This made me very happy... Especially since I bought them on Monday :) Nice little breakout there . Should be able to post 42.50 in short order although a pause/pullback to 40 is possible.

Here we see a weekly view of the ratio between the USD and the SPX. The swing in the relative performance of the SPX went from approximately -20% to +20%. Expecting a mean reversion on the order of about 15% (relative) is not out of the question in the near term. As long as this scenario unfolds the commodities will cotinue to come under pressure. Also take note of the MACD making a turn.

In the very near-term I would expect the dollar to pullback slightly near 76.00. Today it found support at the 75.50 level before making a new high near 76.31. Immediate upside target cotinues to be at the 77.20-77.40 area.

Joke of the Day
Obama says US must continue to spend way out of recession

So far, so good with 74.27. Let's plan for a pullback near 75.10 before heading to 77.20. This will certainly lure the Gold Momos back in, at least for a short while until the yellow metal more than likely turns down towards 1,050/oz.

[Addendum] Just realized 77.20 is also the 50% retrace off the recent lows.

• Senator DeMint's Q&A is MINT (Must see)
• Honorable Mention: Senator Bunning

I'm looking for a sharp reversal near 74.27 (where the WTF is pointing to in the daily chart, give or take a pixel) on the dxy...More than likely /not/ a bottom for the dollar but my gut thinks it will be a tradable bottom for the short-term. This implies a stock market retreating to the Dow 10,000. Just be careful to protect your dollar denominated holdings (commods).

[update] Sitting at 74.25 at the close of regular trading.

Where are all the kool-aid drinkers sporting the 'Endless War' bumper stickers now???

More Forces (Bloomberg)

Among the decisions before Obama is whether to grant a request from the top commander in Afghanistan, General Stanley McChrystal, for 40,000 more troops to fight the Taliban, which harbored al-Qaeda before being toppled in the invasion following the Sept. 11 attacks. The U.S. contributes about 70,000 of the 110,000 foreign forces waging the Afghan war...

White House Budget Director Peter Orszag has estimated that each additional soldier in Afghanistan could cost $1 million, for a total that could reach $40 billion if 40,000 more troops are added...

Michigan Democrat Carl Levin, chairman of the Senate Armed Services Committee, said last week that higher-income Americans should be taxed to pay for sending more troops to Afghanistan...

An “additional income tax to the upper brackets, folks earning more than $200,000 or $250,000” a year, could fund more troops, Levin, a Michigan Democrat, said in an interview for Bloomberg Television’s “Political Capital With Al Hunt.”

What's the deal with the $200k and $250k as the magic number for taxes?

Senate Leadership
Majority Party Leader - $193,400
Minority Party Leader - $193,400

House Leadership
Speaker of the House - $223,500
Majority Leader - $193,400
Minority Leader - $193,400

I present the 2010 theme song.


Sincerely,
Congressional Budget Office

PS. I wanted to say 2010++ but the middle class will be nonexistent by then.

From 0:40 onward.

Warmest Regards,
Thurgy

Watch yourself at 1050; there is good support there right now.

The 21st came today along with a new intraday high for the rally, only to get sold off hard the final hour. I'll post up some charts tomorrow.

My numbers are off, but wondering if the Fib extensions are close? I've yet to find my original work on this chart in the eleventy-seven incremental builds for Tradestation, each with eleventy-seven desktops named 'Blah[1..n]'. I'm still looking...It would appear all my links on this site is busted now.

[addendum] Ignore the downside targets for now. Who knows what's going to happen with the dollar right.

Dear Bloggers - keep it clean and above the belt. You are all passionate about what you do and believe in. No need to tear each other up!

PS. I'm pretty much on the sidelines and not tuned in to the market right now. I'm not interested in playing ball right here. I'll let the pundits, action-junkies and the know-it-alls hammer this one out. You gotta watch out for the payback cycles that follow the payouts because Gold Horseshoe wants your money. You will be hard pressed to ever work a short position for very long. Be nimble in each direction.

Damn, From 2:40-3:40 is unreal.

The target of 40.95 I gave for the cubes has been reached (40.72). Things are quite stretched on the oversold side for the very short-term, so be careful. With all the talk of October being the worst month, etc... it's deffo a recipe for you being the grease on the Fed's perpetual motion machine. If 1017 gives way on the Sippy then there is 1000. I personally do not like the tame action in the DXY the last couple of days...I was expecting more out of it. Therefore I'm cautious here (too soon to render a judgment)

This breaks my heart...NOT! It has filled a gap at 22.8 so I'd cover

Goldman upgrades Ralph Lauren to Buy

Goldman Sachs upgrades Polo Ralph Lauren Corporation (NYSE: RL) from Neutral to Buy with a $90 price target. The firm sees the brand capitalizing on near-term US cyclical recovery driving sales and margin upside, and longer-term multi-growth unfolding across marginaccretive geographies and categorie

Pfffffffffft, whateva. Will Goldman be underwriting something for them soon? I can't wait to see the 17 pages of disclosures probably goes with this one.

If this is still valid then I would expect the DXY might pullback once/if it reaches 77.40'ish. I am also watchng the Nikkei to see if it holds 10k or not. However, I could see it moving back towards 10,300 simply as a retracement first.

One thing I can assure you is there will be a select few computers firmly in control of the market. If program and HFT trading account for 70% of the volume how can that "force" be "opposed"? Here are a few statistics off the top of my head I would like to see broken down by MM, SLP, HFT, etc...:

• Total Volume
• Total Volume from program trades
• Total Volume program to program trades
• Buy Side / Sell side transactions and their respective average holding period
• Orders submitted and orders filled
• Overnight risk

These I would really like to see for the SLP program...Specifically SLP to SLP transactions.

I haven't much to say in my sleep deprived state, but I saw some heavy Call activity the other day in WYNN over the next few expirations. I was unable to ascertain from the time and sales data what sort of activity this might be. Irregardless of where that POS might go, I don't want to be tied up in it right now because of the recent price action. And that, my friends, is all it takes for me to drop it like a bad habit. Besides, I'm giving RL and LTM a noogie right now so I don't need to babysit another position.

Big trouble. Riots are breaking out at the Bingo Parlor. The MawMaw-Momo daytrading club are flinging dab-inks in a panic stricken state. Mpeg at 11

BerTanke,

I have assumed the position (ankle grab). You have the green light to body drop the DXY to 75.09 now. Get it over with already or put me down like a wounded horse. A better idea would be to cut the crap and you and your banksters eat your own fucking losses and let the necessary and inevitable debt deflation take place.

Signed,

The Boggler

I'm chatty Cathy today. I'm not sure why this even popped into my head just now...I failed to recall that Sir, Buddy Pal Kudlow actually one-upped himself on the Goldilocks thesis when he was adamant this entire economic correction was going to be a soft-landing. This guy supposedly has credentials too - but like most academics they can only recall rote memorization from college and apply the best-fit method to a new problem. If you watch Laureate Krugman on Television and someone asks him to ponder a situation notice how he pauses for about 300ms, looks up to the corner of his eye while scanning a quadrillion braincells full of academic garbage written by a bunch of Keynesian idiots, then spouts out gospel.

In other news, rumor has it that there was an algorithm merely cogitating a scenario and one of Goldman's SPARCs and 50 of their best clients were already there to front-run it.

Song (unrelated to topics)

I'm not sure why it is that I keep mentioning S&P resistance when, imho, it's this number (and a possible VIX party like it's 19.99 print). More of a psychological target and considering that's what this entire ramp has been about I see no reason to deviate from that. Sorry, it's just that I read the letters CNBC somewhere and my IQ went to single digits (slightly higher than their latest ratings). Please forgive me and enjoy some Norah Jones

It finally dawned on me what Golddog is trying to do. They will run the momentum indicators up so far on the indexes that they will exceed the 32-bit boundary causing them to flip negative. This, in turn, will make the mean-reversion algorithms see things are extremely oversold and will start backing the truck up with 10,000 share blocks on the sippy.

(maybe a little commentary) Notice in '06 it can go from OB to OS without much of a downward move in the market. However that was during a real bull market. It's been a while since I posted this chart - draw your own conclusions. I'm not going to call tops or bottoms in this shenanigan called a stock market.

The Q's continue to quasar out of the Milky Way. In fact, the weekly is measuring G-forces not seen since Maverick and Goose took a Polaroid of a Mig-29. $40.95 (downside) jumps out at me.

RL and Wynn, two of the best safe havens known to man, continue their orbit near the Hubble. They're also registering cpu instructions per second not displayed by a SPARC since WOPR solved Global Thermonuclear war. I see a correction in their future.

[addendum] The downside to trying to play consumer related names right now is every silicon wafer in the market will jam them higher when the dollar moves higher (correction). As if the 1 penny drop in dollar denominated commodities will have the consumer buying a polo shirt (at a Simon Property Group owned mall near you) on the way to a Wynn resort/casino (via CAL). If there is true downside momentum in the market then they will eventually succumb.

Well there you go. If only I had that account I spoke about, brazillions of dollars could have been made.

---

Speaking of things that rhyme with arbitrage, 'cept starts with G-A-R-B. LTM is in a precarious spot and is looking somewhat vulnerable.

Activate! Shape of a SPARC! ... Form of .... water (wtf with that dude).

Although I'm expecting 1070 to hold as resistance for a bit, Let's see if we get that last half-hour ramp today, courtesy of the twins. So far Lazlo is winning but the market is starting to churn here.

[addendum] Gobbled up some DEC UUP 23 Calls. Anybody want to go in halfsies with me? Something about the thought of losing dollars on dollars just seems wrong. Clark W. Griswald, "This is crazy, this is crazy, THIS IS CRAZYYYYY!" Can't rule out a smooth 75.09 on the DXY though. Bernanke is dying to make my ankles look like handgrips. Hopefully sometime between now and Dec someone will tourniquet the USD.

Strangest thing happened. Last week I got a text message from a 202-872-xxxx saying, "Golddog likes PEE-EEE-RRR; pass the word". I'm pretty sure that message wasn't meant for me and I wasn't sure what to think about it, but I went ahead and took a chance and loaded up on all those calls last week (right-most graphical)

See Also: Zero Hedge

PS. Riiight

This is interesting. If I had access to JPM's BNY taxpayer funded account I would just start gunning the SPY and shorting the cubes (for liquidity purposes)

PS. Haven't loaded the sarcasm font yet. But I would pay attention to this

Give me a break. If $75 gives way it should be a quick move to the next support level; right about the time Goldman's MoMo algorithms promptly run this to par. That is if they do not do it straight away. $79'ish is still a threat here but this is a weekly chart, therefore I'm looking out a couple months here.

Daily chart for reference and comparison.

I would imagine it will try to fill the gap before heading lower (if it does).

[Update] When I saw lower, I'm looking at 1036.

Sometimes I just like to re-watch an old-fashioned video This is one of them:

There are at least a few good Democrats and Republicans in congress (lowercase intentional)

"Every morning before the opening bell we have a brainstorming session at the dart board. This strategy has yielded only three losing days in the last quarter. To add to the competition in the office any trader with less than a 90% win rate has to buy a case of Red Bull"

1. One reason it's time to exit stage left (close enough to the targets)
2. Second reason over at ZH (CAL in the top 20 most likely to go bankrupt)

In other news the DXY turned positive today resulting in a barrage of phone calls, sms messages, e-mails and alarms at the Federal Reserve, none of which will be FOIA'able. Bernanke assures us he will have the problem resolved shortly.

Picked up From ZH .

Thurgy: UBS recalls IYR shorts...I'm guessing they'll be underwriting something soon too. Anyway, I was off on the down leg but does this look familiar?

See Also: IYR

PS. Since I've looked silly with that Silver blunder I'm going to misdirect your attention with a good call, or something. Maybe even the HUI, lol.

An incomplete list of some ETFs and their short-term momentum. Stocks have gone plaid.

Lazlo: Market Correction not needed before waving goodbye to the celestial body known as Earth. More to follow.

In other news the Bernanke/Geithner tandem continue to do Diving Headbutts from the top turnbuckle on the USD. I'm wondering if the bludgeoning will continue precisely until Oct 1? Also Simon Property Group plans to purchase Malls from the bankrupt General Growth Properties...Next up? A conviction buy list, upgrade and secondary offering from Goldman Sachs/Merril.

Pretty much following the path so far, therefore there is no need to update the chart. This is the spot I want to take on the SHORT side. According to my book I've got about a 50% chance of being right. I'll stop out above 33.00.

• Bonds up, Stocks up
• Bonds down, Stocks up
• Volume down, Stocks up
• Dollar down, Stocks up
• Dollar up, Stocks up.
• Record Consumer deleveraging, Stocks up.
• Failed Polish Bond Auction, Stocks up.
• 19 multiple of the S&P (mean is 15), Stocks up.
• Official Unemployment 16+% (as measured by U-6), Stocks up.
• Record bad (insert random economic indicator) report, Stocks up.
• Diverging Tick, 5 banks Stocks up.

I'm forgetting several more, but they all end with 'Stocks up'. No bitterness, just humorous. Which one of you will be without a chair when the music stops? I guarantee you it will not be an UltraSparc.

So the SPY analysis is bunk and my Silver short is tarnished. Nicely done thurgy. My analysis in the dollar was flawed because it was charting UUP instead of DXY which do not trade the same (market hours vs 24x5) nor do the technicals line up. This wasn't a good idea while all the talk of 'China putting a floor in Gold'is going around. Bad thurgy

Golf Clap to Bernanke and the US Wampum. At this point it's become humorous to see how low it can go. 75 is an area of interest in the DXY shown in 'WTF' if it continues to fall.

I'm not sure Goldman would allow agree with my analysis, but this is how I see it (97.50). I put on a short trade in Silver today at 16.50 (futures) . Wall Street Pro will not be happy with that either.

Follow-up to: Breakin

Related Posts for LTM

[addendum: Grr. There is a pivot at 28.12 that I failed to spot before making that chart.. Was in a hurry]

Watch 1000 right here on the Sippy. Look for a possible bounce to 1010 then to 980. [addendum: Some EURUSD areas to watch is 1.423 then 1.417]

Pictured left is another stellar performance by the 3:10-3:15 futures Bandit yesterday. If it were not for the Bandit we would be without liquidity and price discovery in the free markets.

Enjoyed the breakin' away from the market. I have put on some shorts in RL, LTM and PCU. Nothing too aggressive and will not look to overstay my welcome. I'll chart these later today.

This is a follow-up to this post.

Followup: Or go straight there in an OEX squeeze...lol

SRS Longs jackhammered by a pinup-boob-bustin-bimbo on CNBC talking CRE time bombs. Stocktwits will be flying their flag at half-mast tomorrow in remembrance. I am eying IYR to see if it can hold over 40.50. I'll join the reindeer games if not.

Today the 2:00 futuresBandit cronjob kicked off without a hitch. Notice how effecient the market is on bth the bid and ask.

WOPR takes profit after closing... ES was worth 2.5 less than the cash index.

By way of Zero Hedge

The question is how does this bode for a planet effectively leveraged 10:1 ? I'm referring to the World GDP at $56T and total credit derivatives outstanding at $580T. What is a 10% loss rate on that? Things that make you go hmmmmm.

On 11-Aug we hear this out of Newman (date on link is the 18th, but it's an updated one):

“These stockpiles are in ‘weak hands’ as speculators have no real use for base metals,” Liu wrote. “When the market sentiment turns, they are very likely to turn into quick sellers, especially when the bank’s money is involved.” Metal prices, which have surged 66 percent this year, are looking “frothy” and increasing stockpiles are threatening the rally, Goldman Sachs JBWere Pty. said this month. Copper, aluminum and other metals shipments to China soared to a record this year as expanding loans and the government’s 4 trillion yuan ($585 billion) stimulus program boosted demand and prices. “Some of the stored metals are already flowing into the market as those investors think they’ve earned enough,” Deng Limin, a trader at Eramet SA, said by phone from Shanghai. Paris-based Eramet runs the world’s biggest ferronickel plant.

And 7 days later?

Shares of Freeport-McMoRan Copper & Gold advanced on Wednesday as a Goldman Sachs analyst added the stock to the firm's "Americas Conviction Buy List" predicting it will surge on an expected rise in demand for copper, which will drive up prices. The Phoenix-based mining company saw its shares gain $1.62, or 2.7 percent, to $62.10. Goldman Sachs analyst Sal Tharani said in an investor note Tuesday he expects a "rapid acceleration in copper demand" and a "supply-side hurdle" which will drive up copper prices to sustainable and high levels. He forecast strong demand, especially from emerging markets like China. Supply will likely be strained by challenges in the exploration and commissioning of new projects, he added. Tharani rates the stock a "Buy" with a 6-month price target of $90. That price target implies the stock will surge 48.8 percent over the next 6 months. He also raised the firm's base metals coverage view to "Attractive" from "Neutral."

Same ol' 3:10-3:15 futures closing action. It was good for 2.5 /ES points taking it nearly a full point above where the cash index settled. The action junkies pushed their chips all in at 3:14:59 and promptly received a margin call 5 minutes after futures opened back up for trading because WOPR went into sleep mode again. I really would like to see which institution is doing those trades and whether or not they are initiated by a human or a program. If it is a program then what is it seeing 7/10 days, starting at 3:10 after the cash closes? Moreover, how does transacting up to 3x more contracts than the rest of the computers/institutions help liquidity? I've seen it or recorded it all too many times now. Even saw several 1700+ sized orders at certain times throughout the day.

Anybody want to get their ass kicked in Sea Battle?

Let's call this the Bullshitish Scenario

I'm still sticking with this with a target of 1036-1058 [ 1, 2] , (Edit: Dow 10k is what I'm really looking for) maybe peaking in the first week in Sept. Perhaps down this week followed by another squeeze post expiration. This is just one way to get to 1036...Newman wants to give the sideline money a chance to scoop up 100 S&P points before they promptly take that by chain-selling everything. The bear case is not getting back above 1000-1006. From there I would assign 930 as the bearish price objective.

I'm only up to 40% of the total desired contracts of the SPY DEC 95 puts. Depending on how things ebb and flow I might sell to open the SEP 95's when it gets down there.

[update 18/Aug: With 879 maybe the bottom of that mini-leg nothing significant changes, just shifts those numbers higher a 9 points or so. 956 perhaps as the low in this scenario. Doesn't mean it has to follow it to get to the target]