Wednesday, September 21, 2011

Onward ho!

FAZapalooza (daily, July 7 to present)
A surprising goose egg from the Fed and FAZ is now pushing hard on its current resistance level
in the megaphone pattern. Without an intervention by the Fed, recent highs of 73 and 81
are in plain sight.

FAZ 1-minute chart
Action got fiery starting at 2:25 pm Eastern when the Fed
said "No mas trillones."

11:46 am (Hawaii) The market tanked. The market stank. That's why it's always wise to steer clear when Helicopter Ben takes the podium. Have not turned on the TV this morning, but from what I gathered from Le Fly and Turd when I got up around 9 am here (3 pm Eastern), the Fed laid a goose egg.

This precaution is better long term for the economy than printing a trillion Bernanke bucks, no question. But the market didn't respond well, of course. When I got up, the Dow Jones was down about 90 points, hovering in that area. But in the final hour, el-crasheroo! I kept track of FAZ, which opened today above 57 — up from yesterday's 55, though I was busy working and didn't check on the market at all. By the time the Fed/FOMC announced a paltry boost to the economy, FAZ went up immediately. At 2:25 Eastern, FAZ began its rise from 57 to 61.

It came back to 60 or so, and when I woke up, it was in the 61+ area. I almost scaled in at 61.50, but I kept my distance as it kept climbing, waiting for a pullback. There was no real pullback from the point. FAZ hit 62, then 63, then 64 and kept going. I knew FAZ would eventually get back to 66 per my megaphone pattern on the chart, but I didn't get in at 55 as I probably should have when the opportunity was there. I expected a lot more from the Fed, and a possible dip in FAZ to 50 or below.

Instead, FAZ went to 66+ today. Today! As for the recent high of 81, it's coming unless the Fed makes an unprecedented move real soon. I've said before, FAZ is going to 100 eventually. At this rate, if the Fed doesn't print another trillion in fiat dollars, 100 is coming to FAZ this year instead of next year. It could happen extremely quickly, as the chart indicates. Wild, parabolic swings from 60 to 100 to 70 to 120 to 80 to 140. But it's going up. Our lazy-ass lifestyle perpetuated this ponzi monetary system. It worked just fine when our soldiers returned from WWII and worked their asses off to build this nation's economy. But 60 years later, work ethic has largely yielded to grab-and-run. Whether that means unions have forced jobs overseas or banksters/corporate owners are greedy, I don't know.

All I know is FAZ is going to keep rising, slowly or quickly, but probably the latter. I scaled in too late today, but it was time to scale in at 65. I'm willing to let this go at 63 or 62 on a pullback and get back in at 60 or 55. At some point, I'll be on board for the ride higher.

Gold and silver tanked with the market, though I admit being stunned at seeing AAPL near 420 earlier. Goldman Sachs upped its target to 520. AAPL's recent run had me thinking that it would lead a rally, as it usually does. But AAPL sold off in the final hour, perhaps the last psuedo-safe haven big boy on the block.

My Regular watch list is 21% green, 79% red, which is as bearish as it gets. Winners were TVIX (+15.5%), FAZ (+14.2%), EDZ (+12.7%), HGSI (+12.5%), TZA (+11.9%), VXX (+7.9%), QID (+3.5%), TLT (+3.1%), ZSL (+1.3%). Big losers included YOKU (-10.8%), CHG (-9.8%), RLOC (-8%), FSLR (-7.5%). FCX (-8.2%) and X (-6.1%) may have reflected a severe slowdown coming to copper and steel, ie China's economy.

All in all, precious metals didn't falter too badly. My Metals list was 32% green, 66% red, 2% neutral. DGP is actually flat (+0.1%) and AGQ is down only 1%. That's good news considering both were muc hlower earlier. DGP's low of the day was 64.08 and AGQ's low was 200.26. That's the second time I can recall AGQ bouncing off 200 in recent days.

The market has all kinds of weird responses to Fed meetings. Can gold and silver break higher tomorrow? Brother Turd had been looking for a move up by gold. In a dollar-friendly environment, maybe gold struggles, but it has moved up with the dollar at certain times in the past few months. With the Euro nowhere near stability and the general climate there favoring austerity, it may take longer than expected for spot gold to hit $2,000 and silver to reach 50 again.

Last hour of the session, Dow went from about -90 to a close of -283. S&P 500 finished -35 to 1,166. Nas down 52 points to 2,538. Scott Bleier called for S&P at 1140 when the Fed news hit. That's possible by tomorrow morning, but is everything priced in? The recent rally probably lured in a lot of traders to the long side, and they're still marching out the exits.

Bottoms up! Less is more

No comments: