Tuesday, September 15, 2009

TRADING ALERT - LIQUIDITY CRISES TO RAPIDLY INTENSIFY


Wednesday Update:

I'm leaving this TRADING ALERT up. Look Out! This counter-trend rally is done. Any mini blow off will give way to steep declines, sooner rather than later.



11:01AM EST UPDATE:
BERNANKE DECLARES RECESSION OVER

***** WARNING WARNING WARNING *****
MARKET CRASH POSSIBLE
***** WARNING WARNING WARNING! *****


Please see my previous TRADING ALERT for perspective. Wave 3, the most powerful leg of the liquidity crises, is likely underway!

USD against the EUR:


Apologies for the quick screenshot, I'm not at my desktop and I want to publish this before the market opens.

A 1 year long Wave 1 and 2 has now completed, or is extremely close to complete. The USD will move strongly higher from here in a powerful several-year upshot; asset prices will fall in proportion. The most powerful leg of the liquidity crises is starting!

18 comments:

  1. Wellwell - a Market Crash should always be counted in the realm of the possible.

    I guess you are suggesting it is imminent.
    What is your time frame?

    ReplyDelete
  2. Fdr, I find your blog fascinating. What is with the flashing "Market CRASH Possible" though? Why is Bernake's declaration of the end of the recession such a tell? Seems a bit presumptuous.

    ReplyDelete
  3. looks like one big descending wedge to me. I hope you are right.

    ReplyDelete
  4. I'm trying to figure out how this all plays out, I guess we all are. Thanks for answering my questions.

    Here's what I've got:

    Strengthening dollar implies increasing demand for U.S. Treasuries which means U.S. gooberment can borrow lots more.

    What's the problem? Where does this lead?

    ReplyDelete
  5. "Wellwell - a Market Crash should always be counted in the realm of the possible.

    I guess you are suggesting it is imminent.
    What is your time frame?"

    The target will be achieved regardless of how, but these kinds of extremes in optimism coupled anemic volumes suggest a quick drop.

    Time frame for the impending dollar move is over several years, so getting it right within a few hours would really be something.

    ReplyDelete
  6. It is odd that many have called an end to the recession when they never said it was here until well after the fact.

    Therefore, I would have question the motive of those involved who now say it is over.

    Who was the major buyer of stocks in march of 2009 and who would they now like to sell them to?

    If they can't convince the retail investor come in, they may just dump them fast. First out gets the most.

    Is this an unreasonable analysis?

    ReplyDelete
  7. "Is this an unreasonable analysis?"

    Not at all. The only thing I would add is we don't need buyer"s" for the price to rise on low volume, you only need one buyer.

    That is basically the situation we have right now. It makes calling the top a little tricky, but not that tricky since volume reads near 0 and the entire run will retrace quickly; this thing is about done.

    ReplyDelete
  8. Is there any threshold on the dollar's decline that could trigger an alternative event?

    ReplyDelete
  9. "Is there any threshold on the dollar's decline that could trigger an alternative event?"

    Personally, I don't think so. In order for a debt-based currency to decline in value, you must have credit expansion. We have some gov't-sponsored craziness, but overall we are quickly moving toward very poor credit conditions as unemployment rages.

    The dollar has one way to go in this scenario, up, fairly rapidly and steadily, and that time is upon us (within days).

    ReplyDelete
  10. Glad to see you posting again FDRAOA, there's lots of us out here observing your comments. And your 100% track record so far.

    ReplyDelete
  11. "The dollar has one way to go in this scenario, up, fairly rapidly and steadily, and that time is upon us (within days)."

    I respect your opinion FDR to a great degree, but there may be forces at work here that just wont let the dollar off the mat. Also, it seems that Prechter has more trouble calling equity tops than bottoms, and many of your theories resemble that of Prechter, although I prefer your angles on various subjects. You called the Oct. 2007 and Jan 2009 tops (and the March bottom) almost to a tee, so I am a bit perplexed.

    What is your make/break point for GOLD by the way? many people are throwing around 1033, and I know that a nominal value has less meaning on low volume, but niominal values do matter when you are short and something continues to climb, low volume or not. Silver seems like an even bigger bubble than gold by the way.

    ReplyDelete
  12. "I respect your opinion FDR to a great degree, but there may be forces at work here that just wont let the dollar off the mat. "

    But the $ is already off the mat, and sprinting.

    The dollar is up sharply in terms of asset buying power (plunging asset prices like real estate and stocks; even food and energy are very much participating now). The dollar is also up very sharply off year ago lows in exchange rates (which don't matter much since all currencies are deflating).

    ReplyDelete
  13. "What is your make/break point for GOLD by the way? many people are throwing around 1033"

    It's a B wave so anything can technically happen. Given a cash implosion in the works, both silver and gold are definitely in bubbles. I agree with you on silver being the bigger of the two, particularly since silver is dual - precious and industrial.

    ReplyDelete
  14. FDR, isn't there a danger that too many people are expecting a pullback of some kind in equities, either in this month or in October because of the reputations of those months? The markets rarely behave as expected and instead operate in such a way as to cause the maximum amount of pain to the maximum number of people. Doesn't that suggest that equities will continue higher for at least a little while longer?

    ReplyDelete
  15. "The dollar is up sharply in terms of asset buying power (plunging asset prices like real estate and stocks; even food and energy are very much participating now). The dollar is also up very sharply off year ago lows in exchange rates (which don't matter much since all currencies are deflating)."

    I agree; however relative exchange rates do matter when foreigners use the dollar as the new carry trade to prop up everything, especially PM's. It is baffling to me since we are nowhere near done with delevering, and dollars will continually be sucked from the system. In my estimation the suspension of MTM rules has alot to do with it, aside from the various other frauds going on unabated.

    ReplyDelete
  16. "In my estimation the suspension of MTM rules has alot to do with it, aside from the various other frauds going on unabated."

    I agree. The MTM suspension, like most prop-up frauds, will lower asset prices a lot more in the end. It creates more distress by allowing yesterday's leverage to ride when it should have been called.

    ReplyDelete
  17. well,FDR, we are losing this battle. again a nominal value on low volume is still a real value. we'll see if they can carry this thing to october OPEX.

    ReplyDelete
  18. They are not making it easy for those who are taking shorts in this area.

    ReplyDelete

The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

 
Free Hit Counter