Ye Olde Topping Process..

Since there is absolutely no doubt in 100% of market participants’ minds that the market will scream higher into perpetuity regardless of deteriorating data (today’s Manufacturing PMI 48!!) and looming war with Russia, i wanted to take this opportunity to introduce an old friend.. Gravity.

ESMs

 

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan
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Post from this morning – Another Fed induced credit crisis coming

This is a post i made this morning. Really sums up what i think is going on.

05:26:18 JFarro: To me the only question is best case, How long can Fed not raising rates keep this late cycle bull market going? Technically we have a few rejections from resistance in the long time frame charts and seems the obligatory Santa Rally combined with dovish speak could get the the December bar to tag resistance as well.Maybe one more tag for January then the fun begins. Every point the USD appreciates is farther into the abyss for emerging markets/commodity based economies. With these emerging markets’ debt denominated primarily in USD we just basically have another Fed induced credit crisis in the works.

ES Futures – Monthly

ES-M

 

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan
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World crying deflation – But It’s over

While the world is crying deflation we have sugar, corn and other soft commodities all up +10%-15% from their lows of 2 months ago. A solid downtrend that lasted a number of years has recently broken and has since stair-stepped up into a familiar pattern. I wont post all of them but soybeans has just confirmed the same pattern as of yesterday (chart below)

The newish USD Index downtrend we first found 2 months ago was the first clue and now with equity markets tanking it’s just more confirm that the USD strength that has destabilized the world economy is on it’s way out – Fed cannot raise.

What’s going on in soybeans is what i am seeing across most soft commodities

Resistance becomes support, then a large move up with a subsequent return back to confirm the new support.

Corn and sugar both ahead of soybeans by about 3 weeks. I got long corn 2 weeks ago and soybeans yesterday.

Here’s soybeans just at the sweet-spot now. Old resistance should now become support.

SoyD

 

 

 

 

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

I’m not planning to post here much in the future as i just really dont have time. My original reason for this blog was to have some public scrutiny on my own trading techniques so i could improve. Also the occasional political rant just to get it off my chest.

The blog has served it’s purpose for the most part. The annual returns in my own accounts are running about +1000% per year at this point. If i add any new levels to my trading and need this public forum to work out the bugs i will be back and posting as before.

I think a bear market has begun but we need to complete this counter-trend rally first..

This is how i feel the last-gasp of the 2009-2015 QE bull market will complete this last rally.

S&P

Median line in new uptrend as well as resistance becoming support on old downtrend

post2

Russell2000

Higher Floor

post3

DOW

Resistance has become support.

post4

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan
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Post from this morning

Post from this morning on the CoghlanCapital service that follows my trades. I think it’s how things are going to play out. I could back it up with tons of charts and data across commodities, FX and indices but won’t have time right now.

03:36:40 JFarro: This Fed waiting game has brought average lot size on ES down to lowest on record. Average is now 1.2. Crazy. Here’s a simple fact that no one is talking about. Every manager I know is sitting in cash allocation waiting for fed (to get long). Where is this money going to go? I don’t think it will be bonds.. So where? There’s basically two games in town and with Dollar weakness looking to seal the deal for a nice long term commodity bull-run that begins now there’s only equities.. Starting to look like we finally get actual commodity inflation that the CB’s have been so desperate to create for so long. But the beginning of this cycle shouldn’t see it effect growth for a while. But then.. Inflation and bear market? Everything I am seeing points to this.. But in the mean time I am betting we see a flood of this sidelines cash into equities, lesser so commodities..then with time parabolic commodity inflation WITH slowing growth.. Seems like a long-shot now..but it’s what I see from here.
prices
The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan
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Seven charts telling us the selling is over..for now

Friday at the close i posted here that i was buying in the midst of the panic selling we were seeing.

Think back to the pre-Bullard correction of October 2014. We went from what i see as Blatant fed-juicing of the market with VIX selling near obvious resistance levels, last 30 minute equity futures ramps and all the other usual tricks..to ZERO. No mysterious intervention of any kind, then the subsequent correction. All Intentional. Then once the number was hit it all came back first by first wheeling out Bullard to tell us everything is ok. Then the monster rally all the way to Jan 1st.

This time all the same… No Vol crushing, no mysterious ramps on no-volume.. We’re now at 10% correction and i smell some creepy fed types blessing us with their soothsaying presence come Monday..and it all starts again.

ASIA WILL CRASH MONDAY ON THE OPEN!!  No. As we speak PBOC is planning a intervention blitz for Monday’s trading session. Maybe a slight follow through of the Western selling on the Asian open then as US equities hold their ground buying comes in..  My opinion..

And here’s more of the technical case.

Emini S&P Futures

post-es2

 

Nasdaq Futures at Support

post-naz2

 

10 Year Notes at Resistance

post-zn2

 

Russell2000 Futures at Support

russell-greg

 

WTI Crude Oil

post-crude-weekly2

 

Dow Transports

dow-transports

 

And to totally Geek-Out, here’s Arms index

Chart from @bobbrinker twitter feed.

trin-brinker

 

To summarize.. The air has been let out and guessing one more up-leg left in this bull market..

 

 

 

The best charting teacher I know:
The Morning Analysis Service by Paul Coghlan
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Crude oil..finally bought

And here’s part of the story.. The crude oil weekly chart.  But really what gave me the first heads up that things were changing can be found in the post i made here two weeks ago on the USD finally looking like it’s done with it’s bull run.

This began to confirm on the EUR daily chart which enabled me to get long EURUSD as well as some agricultural commodities such as corn. I’m currently silly long a number of vehicles against the USD.

Here’s WTI on the weekly:

cl-greg

And once again this blog was WAY ahead of 99% of highly (over) paid asset managers..

 

What does it mean for equities? Like i said on twitter a couple weeks ago. The last way to rally this market..or at least keep in flat in the face of slowing growth is a weakening USD. But i will not be buying back equities unless something big happens. Still believe there’s too much risk on the table with China and the coming collapse of pretro economies such as Saudi Arabia and the Mafia-Midget’s regime in Russia.

Putin does a false flag to deflect building domestic anger? Some Western countries sanction RU oil? Could be catalyst for higher oil finally..  But Putin will need to do something ridiculous soon..

 

 

 

 

 

 

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