Tuesday, October 25, 2011


10:55 am (Hawaii) Back to banksters.

Bank stocks were on a tear in the past few weeks. At 13.31, FAS is up big from its intraday low of 8.43 on Oct 4. FAZ is off its Oct 4 high (81.20). It'll be interesting to see how FAZ, now in the 45-46 range, can hold here. Sans headline news, Euroland skittishness, the inevitable fiat printing machinery and eventual implosion of the monetary system, FAS will run higher on bullish bankster days (France and Germany agreeing on a compromise deal) at the open and close, normally. When the Euro scene is negative, FAZ will open strong and finish strong. The HFT programs are under strict orders, after all. 

When, not if, but when the fiat printing machines go into overdrive, FAS may get to 27+, which was its recent high before the recent avalanche to sub-9. 

FAS daily
Pause that refreshes?

FAS daily
When the fiat printing machines start overheating,
FAS could go back to the recent high at 27+ and
trade in a truly insane new range as Euro cities
are filled with protests, nations default and new
"creative" (temporary) solutions are drawn up.

FAZ daily
So 42 might be the new floor, a dip that was
predictable to an extent. Sure FAZ could see 35,
but it will eventually return to 81, and then 100.

FAZ daily
For now, the bounce was due.
The trend is still on the side of bankster bulls.
However, the math is undeniably bearish no matter
who gets left holding the bag. 

Today's Debt Spiral list +/-

FAZ +7.6%
FAS -8.6%
IRE -4.9%
SCGLY -4.6%
BAC -3.5%
BBVA -3.4%
GS -3.4%
MS -3.3%
JPM -3.1%
WFC -2.9%
AIG -2.4%
C -2%
STD -1.8%
HBC -1.6%
RBS -1.2%
NBG -0.7%
DB -0.4%
UBS +0.1%

Tail end: I noted earlier that I was in and out of FAZ three times today. The bounce was due, but holding FAZ overnight is fraught with risk and can wipe out a week or month's worth of profits. Very near term, I don't mind trading FAZ intraday. In a slightly longer time frame (a few days), FAS could explode. Over the longer term, FAZ will prevail and the banksters will collapse in breadth. Consolidation will be the norm. The monetary system will look much different than it is today. 

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