Broken record here again

Ive been saying it for 3 weeks..but the Top is in folks.

Don’t know what the catalyst will be but it will presumably need to be big.

The market has now faded both the PBOC easing as well as the surprise Indian Central bank easing last night.

The past month’s vertical ascent seems to be merely a “buy on the rumor, sell on the fact” front-running of ECB QE which is now looking questionable given the improving numbers out of Europe.

Does Germany really want 60B Euro/month in bond buying? With rates already going negative ? Doubtful.

 

YT558472-197

 

And if this is the top, notice how we would have a bearish gap, wherein we couldnt make it to the previous resistance this time around.  So the probability of breaking previous support once we get there is quite high.

YT558472-199

 

 

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Broken Record – Top caller

Been saying it for a couple weeks now.. It’s getting old i know..

But everything i see in treasuries and equities says we have a big downleg coming.

Here’s updated Nasdaq futures weekly going back years..

YT558472-174

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Once again the hope of Central Bank intervention overrides all

The past few weeks ive had a high conviction that the markets are due for a sell-off and this is both a technical case as well as what i see as fundamentally overstretched in terms of multiples and just a general high level of risk overall. Almost all forward indicators are declining globally. This is also true of the US, though to a lesser degree than the cliff-drop we’ve been seeing throughout the rest of the world. The market continues to ignore this as the mania phase of the bull market runs it’s course.
Over the past 6 years market participants have come to know one truth above all; Central Bank intervention is all that matters.

ECB QE

With the ECB set to begin it’s 60B EUR/month QE blitz in March it would probably take Russian troops on the White House lawn for us to see a substancial down-tick. My mistake has been to discount this.

This is the chart i try to keep in the fore of my mind. US 30YR Treasuries futures on the monthly:
More QE whether European or US will see part go into Treasuries and in the event of an equity sell-off this would only increase. I still believe this recent 5 week sell-off in Bonds to be a counter-trend move but a solid rally may not coming until equities can get some pressure and i think the inept nature of anything coming out of the European apparackicks could give us exactly that.

“Buy the rumor sell the fact”

The market is currently immune to reality because of upcoming ECB QE. If anyone could name anything that the Europeans have done in the past 10 years that actually worked i would like to hear it. But from where i sit i dont see any way this will not be screwed up..somehow.  It wouldnt be surprising if market expectations on QE are not dissapointed and with akl the declining forward indicators there could be a rush for the exits and US Treasuries would be the recipient.

But having been burned badly over the past 3 weeks trying to build shorts on the equities i’m really going to watch this one before taking positions.
Technically equities have around +1% possible upside left compared with the -10%/20% downside but this daily grind of seeing my shorts get absolutely hammered will get me back on the sidelines until around the time of the start of QE.

For larger time frame context of this counter-trend move in Bonds.

YT558472-169

 

And Nasdaq futures

YT558472-168

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

The end of the bull market

I dont know what the catalyst will be but everything is telling me here that the peak of the market could have been today Feb 19th 2015.

Bonds, USD, Gold, ES, Dax..all signalling that the party is over.

I could go into it both fundamentally & technically but you can look at my other posts from this week to get a good idea of the technical side. Fundamental will require another post.. ive been traveling a lot and really just dont have it in me right now.

But it’s the monthly ES chart that i posted late yesterday that gives me the heaviest confirmation that we are about to do at least -200 points at some point soon…

Like i said..i dont know what the catalyst will be..and it will need to be big to compensate for the buy-back mania and upcoming ECB QE (If the EU can really get anything right even there).. But i’m short.

Here’s Dax:

^8EBC135A74DA0447672388BC5248FEB34A6C09A8AC1E3A8521^pimgpsh_thumbnail_win_distr

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Counter-trend move in everything has run it’s course

I think so anyway..

Bought more gold yesterday as this new slope hasnt a ton of validation but i am fundamentally bullish right now as i have been for the past 2 months and looking for reasons to buy. Lets see if it holds.

Bonds also observed what i think was just a counter-trend move..

Here’s gold.

YT558472-159(1)

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan

Slope Analysis vs Horizontal

What we just saw in the ES on the 240 is a great opportunity to explain on of the advantages that slope analysis has over horizontal analysis.

How many times have you seen a high (in this case an all time high) taken out to the upside by a few points only to collapse and fall back hard. All the “break out” traders see that high taken out, get long then all get destroyed. See the red horizontal line on the chart below.

Now see the green slope that today’s visit tagged with perfection before dropping off.

That is the advantage we have when seeing support and resistance within the context of a slope rather than the other 90% of traders that are focused on the horizontal. And a simple reason that my returns are generally better than most traders out there..very simple difference here but very important.

Probably a very good short here.. But see my earlier article from today which discusses the mania phase to which are currently in. Not sure if anything mates at this point after we just saw yet ANOTHER data poit miss..and this one missed big. Largest UMich Consumer Confidence miss on record…but who cares right?  It’s about time us shorts caught a break..lets see.

es2400

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan