I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Friday, April 30, 2010

Boring Title #8

Possible count that I like (mostly)



Here is how it could fit in the bigger picture

Some more Gold Miner charts that I like

Continuing along with the theme from my last post (A look at a miner that I continue to remain very bullish on - AEM) here are some more gold miner charts that I like:







A look at a miner that I continue to remain very bullish on - AEM

No need to lay out the fundamentals for Agnico-Eagle Mines (AEM). They were intact years ago when I first valued them and the case for their continued favorable valuation still remains high. Instead, let me point you to a few articles from the man who really knows his Gold and GSMs, Christopher Barker (TMFSinchiruna)

-- Enjoy the View From Gold Mountain
-- Agnico Braves the Cold for Gold
-- Our Little Eaglet Is All Grown Up
-- Agnico-Eagle Will Shine in '09

But what I am more interested in focusing on here are the technicals. And I think they are still *very* favorable for AEM. Of course, this presupposes you are bullish on gold as well (and I obviously am).

I think we have a large bullish ascending triangle in the making and getting close to completion (both a sym-tri and an ascending-tri are continuation patterns, but the ascending tri is marked by a top line that is down-sloping/nearly horizontal with a bottom support line that is clearly uptrending). And as the notes on the charts suggest, there is still a lot of upside potential.



(Disclosure: I am long AEM)

Thursday, April 29, 2010

Wednesday, April 28, 2010

Boring Title #6

Current thoughts



For conversation below

Tuesday, April 27, 2010

Vix Mix Zwei

My last VIX update was a month ago: Vix Mix. But today was a *very powerful* up move on the VIX.

The Weekly VIX has still been maintaining a stance of positive divergence. Is the borrowed time finally up? We will see. But this VIX spike combined with the broken 20 day MA on the SPX makes it seem like it will be correction time for *at least* a Minor Degree Wave down, I'd wager.





XLF by request

Boring Title #5

Mid-Day idea. Ending diagonal option is out. I don't love this count, but it does work. I still adamantly do not buy that the move since Feb is an overall impulse. So this last Y (Minor/Blue) as an overlapping double three does have some promise. The move since the high yesterday does look nicely impulsive down, volume and breadth very bearish (largest down volume on the 60 minute ES chart in the last month). Also the 20 day MA has been broken for the first time in over 2 months.

Top or not, it looks like correction time is likely starting.

Monday, April 26, 2010

Boring Title #4

Continuing with ideas from yesterday's post


Sunday, April 25, 2010

Boring Title #3

My thoughts in this post indeed look to be panning out: Hit Me!!! (One more time)
  • BUT WHAT IF?

  • Next week goes exactly according to plan for the bulls? The dip does get bought and we make a higher high? ... [and that did indeed happen]

  • 1. Uber-bullishness will become uber-uber-bullishness

  • 2. ISEE sentiment reading *which are already OVER 2007 peak levels* will go even higher

  • 3. The bear population, having another correction swept away from them, will feel like cows going to the slaughter in pens pre-Dr. Grandin's curved corrals. And the market will receive another short covering burst

  • .... This would then bring us to major resistance with a dead bear population, bulls hopped up on testosterone and hubris (having just beaten another correction by buying the dip), and sentiment readings now rivaling 2000 levels.
I like this spot here for a turn. ... But I would actually prefer the above scenario to play out. I think that would be a lot more fitting. And based on the market behavior the last year, what this is really building up to, my gut is saying something similar might just happen.

Here is a possible count that I like for this, that takes us just a little bit closer to the 1228 target.

The count is a valid one. See Robert Balan's Elliot Wave Principle Applied to the Forex Market, Section 3, pg 9 for more details.




Adding my New High / New Low chart based on discussion below

Tuesday, April 20, 2010

Boring Title #2

Gapped above resistance. Gap still open. Maybe this scenario is going to play out after all? Hit Me!!! (One more time)

Monday, April 19, 2010

Boring Title #1

I am so busy I can't even come up with a funny title :)

I think the count is still, at the very least, short term bearish. And since I am a bear, this makes me very happy :). I still have a sneaking feeling that me market is going to throw us one last curveball before a possible crash Hit Me!!! (One more time), but lets just take this one wave a time.

Move looks like it is retesting resistance. Count also supports that theory.


Crazy

Yeah, the market is crazy too. But I am referring to myself. I am crazy busy, and probably will be for the next several weeks. I will try to do an update here and there, but I will not be able to post and comment as much as I would normally be doing. And just when the market is getting interesting again :(

Saturday, April 17, 2010

Hit Me!!! (One more time)

Random Thought:

Nothing to do with wave counts per se. I was just doing some reading this weekend, looking at both bearish blogs and bullish blogs. The bullish media and blogs (especially on Caps) are all saying that this is the perfect dip buying opportunity. The market needed a short pullback, GS and Greece issues are overblown, BUY!!!

You are a chump (very conspicuous use of this word in a number of places) if you don't buy. It is a bull market, buy the dip!

We who look at market sentiment and the Elliott Wave Principle realize this is a sign of a top. Sentiment is very one-sided. There is no opposition by the bears (we are all extinct and/or hibernating).

The bulls are doing exactly what the market has trained them to do over the last year. BUY THE DIP!!! The amount of uber-bullishness that accompanies this admonition is the very telling thing.

But to the real point of this post

Again, this is just a gut feeling. I am not going to support it with a wave count, just thinking out loud.
  • Friday has the shaping for an impulsive sell-off into next week. It *could* develop ... or it might not

  • Bulls are in full hubris mode buying the dip and telling everybody and their grandmother to do the same

  • Bears perked up a bit on Friday. Rousing from hibernation?

  • We are *near* the critical 62% retrace at 1228 on the SPX, but not quite there (peak ~1214). Many of us (including me) think it is "close enough"

  • BUT WHAT IF?

  • Next week goes exactly according to plan for the bulls? The dip does get bought and we make a higher high?

  • 1. Uber-bullishness will become uber-uber-bullishness

  • 2. ISEE sentiment reading *which are already OVER 2007 peak levels* will go even higher

  • 3. The bear population, having another correction swept away from them, will feel like cows going to the slaughter in pens pre-Dr. Grandin's curved corrals. And the market will receive another short covering burst

  • .... This would then bring us to major resistance with a dead bear population, bulls hopped up on testosterone and hubris (having just beaten another correction by buying the dip), and sentiment readings now rivaling 2000 levels.
I like this spot here for a turn. ... But I would actually prefer the above scenario to play out. I think that would be a lot more fitting. And based on the market behavior the last year, what this is really building up to, my gut is saying something similar might just happen.

Friday, April 16, 2010

I can get a hell of a good look at a T-Bone steak by sticking my head up a bull's ass, but I'd rather take the butcher's word for it

Or Tommy's version:

Tommy: Hey, I'll tell you what. You can get a good look at a butcher's ass by sticking your head up there. But, wouldn't you rather to take his word for it?

Mr. Brady: [confused] What? I'm failing to make the connection here.

Tommy: No, what I mean is, you can get a good look at a T-bone by sticking your head up a butcher's ass... No, wait. It's gotta be your bull.

Richard: Wow...

Mr. Brady: Boy, I'm at a loss for words here -

Tommy: Forget it, I quit, I can't do this any more, man. My head's about to explode. My whole life sucks. I don't know what I'm doing, I don't know where I'm going. My dad just died, we just killed Bambi, I'm out here getting my ass kicked and every time I drive down the road I wanna jerk the wheel into a goddamned bridge abutment!

Richard: We'll keep in touch.

---- My point is there is a head up a fairly large ass here. As a bear I am certainly not sticking my head up this bull's ass. So if the bear doesn't have their head up the bull's ass, then which of the two does?

I invite you to ponder that for a moment.

So even though the last few weeks were up, I was not counting them as impulsive. See I Will Not Count Corrective Moves As Impulses and Bees! Bees! Bees in the car! Bees everywhere! God, they're huge! They're ripping my flesh off! Run away, your firearms are useless against them!.

... But then the ending diagonal count was broken, so I acquiesced and started counting the last wave as an impulse. That just makes me want to puke all over your head, sir.. But you can see on my chart the deep reservations with that count. And I was *still* not convinced that the overall move was an impulse (I was still counting the overall move since Feb as a WXY).

But Elliott_Trader had a very nice corrective option for the end of the wave. We were discussing it in the CIL this morning just minutes before this selloff. Thanks ET!!

Is this the top of P2? One wave at a time first. But I have a lot of optimism that this nightmare wave since Feb is finally done. Hence the promised Tommy Boy quote for the title :)


Thursday, April 15, 2010

That just makes me want to puke all over your head, sir.

Sorry, no Tommy Boy for this title. Just some Arrested Development.

I really hate this count. Because the subwaves do make me want to vomit. They are not clean impulses. But yesterday we did get acceleration, which we expect in a 3. Breadth did increase. Which we also expect in a 3. And we got follow through today.

So until proven otherwise, the count after the triangle is most likely an impulse. Just don't zoom in past a 15 minute chart. .... (BS). I hate counts where you have to hold your nose to believe them.

.... oh well, that is the nature of the beast and the counts in a bear market rally I suppose.

Now it's sale time, so remember, we don't take no-- No shit from anyone! No. Um, we don't take no prisoners! We don't take no for answer. Oh yeah.

Except me, I should take no for an answer :(.

Ending diagonal is dead, impulsive it is. (golf clap from the gallery)

Well This Is Very Interesting

The ED count on the SPX had a very large overshoot today. The count is hanging on by the skin of its teeth as far as viability goes. We need a large down day tomorrow or the count is done.

But I was just looking at the ES, and the move stopped almost perfectly on the trendline.

Don't know if this is foreshadowing or just consolidation. We will see in the morning.

Wednesday, April 14, 2010

Bees! Bees! Bees in the car! Bees everywhere! God, they're huge! They're ripping my flesh off! Run away, your firearms are useless against them!

I do NOT buy the count the last few days as impulsive. I do NOT buy the count today as impulsive.

Here is still the count I like best. We will see if it has any shot at all of panning out tomorrow.


I Will Not Count Corrective Moves As Impulses

I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses. I will not count corrective moves as impulses.

.... All work and no play makes binv a dull boy.

Did you eat a lot of paint chips when you were a kid? [laughs] Why?

LOL! This action is just funny. ... funny is the word I am looking for right?

I had a great alternate title lined up for today, but I may not get to use it :(

Oh well. Let the Tommy Boy shtick continue!!!

Tuesday, April 13, 2010

Hey Gilligan, did you eat the Skipper?!

You better pray to the god of skinny punks that this wind doesn't pick up, cuz i'll come over there and jam an oar up your ass!

... Come you pig market. Just turn. And this shtick will end. But, in case it doesn't, I have plenty more Tommy Boy quotes where that came from!!

ED is almost done, just a little .... bit .... more. (Ending Diagonals can also undershoot their trendlines, you know).

Hey tubbo you ain't movin! Yeah need a little wind here. No you need to drop a couple hundred pounds blimp!

Rascals.

... Here's the deal: I will stop making "Wedgie the Whale" puns and "Tommy Boy" jokes when this stupid rally finally turns over.

Speaking of which, I think that can happen soon. Like in today, soon. Certainly by tomorrow morning. Assuming this Ending diagonal count is correct (and based on how no-impulsive the last few days have been, I think it is)

Wedgie the Whale (Free Willy) Count on the ES

Sorry, you know me. When I have a dumb joke stuck in my head, I use it up until it is no longer funny [except most of my jokes are not funny to begin with ... :( ].

See my last count for the SPX (Free Willy! (Updated)) to see where this post comes from.

And for posterity's sake, here are a few choice "Wedgie the Whale" posts: Hey, lady, look out. There's a fat whale on your boat! Yeah, Free willy! (good old Tommy Boy quote :) ), Wedgie the Whale Taking a Pause? (me being gross), and Wedgie the Whale? (Wedgie's first sighting)

Here is what the ending pattern (and that is what I believe we are in ... finally) looks like on the ES, as of o'dark:30

Monday, April 12, 2010

Free Willy! (Updated)

Adding a count revision that I like better, and showing the count since Feb in full:




What is interesting is that this diagonal apex is the intersection of a few key trenlines

The Land of Fictional Impulses: Fractally Interesting

Just some quick observations this morning, not a full study (busy day). Many people are counting the move over the last 2 months as an impulse, and many as also counting the move from March 2009 to now as an impulse. I believe both of those assessments are incorrect.

As I layed out here (Not All Five-Wave Moves Are Impulses: A Short Treatise on Elliott Wave) and here (Another Impulse Wave Study: A Look at the 1974-1975 Low and Rally), a 5-wave structure is NOT sufficient to define an impulse.

You need acceleration on the 3rd wave in comparison to the first. This is almost always accompanied by very strong internals (volume and breadth) on the 3rd as well. 3 does not have to be the strongest wave in the move (5's not too infrequently are manic buying sprees and can be stronger than 3), but 3 MUST be stronger than 1.

.... If it isn't, then all you have is a complex correction, folks.

A major fakeout: a 5-wave move that is not an impulse to embolden bulls and to deject bears.

What is very interesting is if you look at these 2 waves (Minor Wave from Feb 8 2010 and the Primary Wave since March 2009) together. There are a lot of similarities in their "non-impulsive-ness".

A fractally similar fake impulse at the end of a fake impulse? There is a certain fitting-ness to that.


Sunday, April 11, 2010

Hey, lady, look out. There's a fat whale on your boat! Yeah, Free willy!

Listen up, you little spazoids! I know where you live and I've seen where you sleep. I swear to everything holy that your mothers will cry when they see what I've done to you.

... Wedgie the Whale is about to exact some revenge on this piggish rally. Until this pig breaks definitively back up over some of these major broken trendlines, the risk is to the downside, not the upside.

If you are a bull and saying "blah, blah, blah" about great earnings coming up, think about how much just got priced in the last month, and look at what these 2 charts are saying. Hubris is about to start kicking ass and taking names.


Friday, April 9, 2010

binve's Gold Foil Hat Zone: More Thoughts on Gold's Massive Bull Market

WARNING!! binv's Tin Gold Foil Hat Zone !!


.... Just call me a Gold Bug.

I am very bullish on gold. This is no surprise. I have written on the subject of gold many times.

The main reason why I am bullish on gold is that it is in a massive bull market in comparison to fiat money. Gold is a currency. Like any currency, you don't own it because it has intrinsic value, you hold it because it is a store of wealth. So when I say gold is in a massive bull market in comparison to fiat money, I mean exactly that. Gold will hold its value while fiat money is devalued in comparison.

As Gary says: Gold is not about price, gold is about value

We have one of the final possible bubbles at it's apex: A Sovereign Debt Bubble. Economies all over the world are suffering and are trying to solve a debt related crisis with more debt. It was *never* going to work and will end badly.

So when ranking currencies relative to each other, and all the major currencies are engaging in some form of Devaluation / Quantitative Easing, they are all fighting debt with more debt.

The problem is debt.

And the Fed has made it very clear that monetizing as much debt as is necessary to keep the system going, at the direct expense to the Dollar, is not only a course of action that is open to them, but THE course of action that they are taking and will take. This plan will continue until there is no longer a Federal Reserve.

Yet the market is trying to purge excesses, and the Fed and the Treasury is not allowing it to happen.

This makes the outcome both simultaneously deflationary and inflationary. The market wants to, and desperately desires to save, but the Fed is directly hurting savers behind the backdrop of *extreme* monetary inflation.

The result is and will be stagflation. It is really the worst of all possible outcomes. The economy needs savers and the Fed will not allow savers to be compensated for their risks. This will ultimately result in the collapse of the bond bubble as there is no longer any faith in Sovereign Debt. And the world will turn to real assets as a store of value.

And this sets up the final bubble ... the Gold Bubble.

Now I don't mean this pejoratively. And I am not casting a negative connotation on it. Bubbles are what they are. When Central Bank monetary policy forces all of us to become speculators by not rewarding savers, then bubbles are formed.

Gold doesn't care that it is in a bubble. It is quietly and quiescently preserving wealth. Again Gold is NOT about price, gold is about value.

I don't hold gold because I like shiny objects. I don't hold it because it makes the world go round. I hold it because it will be the last currency standing that preserves wealth as the world's economy goes through this painful deleveraging process.

No fiat currency will preserve wealth. Certainly not when this crisis has run its course. Some will fare better than others (many will fare much better than the US Dollar), but all will pale in comparison to gold.

The current trend of piling debt on top of debt is unsustainable: Debt Saturation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=357428. And neo-economists and politicians have to get their collective heads out of their collective asses and not allow a vampire industry (financials) hijack the real economy. But since that won't happen willingly, then the market will force a crisis that will fundamentally change how we view politics and the economy. Crony capitalism will go away. Good laws like Glass-Steagall will become reinstated. Too big to fail will be abolished. Grass roots companies will grow like a new forest. The Mittelstand companies of Germany (small/medium firms, mostly family owned) is exactly the economic model that most of the western world should be following, and I believe will in the future.

And when the crisis nears a real bottom, I will be the first person to dump my gold and invest in the new world economy. One that produces goods, and solves problems, and increases the quality of life for humanity.

Gold is not an end in and of itself. It is a means to an end, a way to preserve value as the economy purges excesses so that the new economy can be invested in.

It is a way to save. And since the Fed is not allowing us to save in the Dollar or Treasury debt, people will turn to saving in real money.

I don't care if you don't agree with me. I don't care if you think gold is a useless shiny rock (it is, just like the Dollar is a useless piece of green paper). I am not here to convince anybody of anything. I am just stating my opinions and why I have them.

I have complied a long list of posts that I have written discussing my macroeconomic views on the Dollar, Inflation/Deflation/Stagflation, and Gold. These might be useful in understanding why I have come to these opinions:

--- Debt Saturation - LINK
--- Moving Some Macroeconomic Deck Chairs: The Dollar, Dollar Swaps, Bonds and LIBOR - LINK
--- What the Bond Market is Trying to Tell the Stock Market: A Look at the Yield Curve and Expectations - LINK
--- Thoughts on the Euro, the Dollar, and a Long Term EUR/USD Count - LINK
--- Something Very Strange Is Happening With Treasuries - LINK
--- The Long View - LINK
--- The Gold Blog. Gold/Silver/GSMs (and a little Oil for good measure) - LINK
--- Thoughts on the US Dollar, Analysis of the USDX Long Term, Follow up on the Gold Blog - LINK
--- The Dow / Gold Ratio - LINK
--- The Gold / Silver Ratio - LINK
--- Gold Miner Performance Relative to Gold - LINK
--- Gold Miner Performance: A Look At Miner Cost Inputs vs. Gold Price - LINK

US Dollar





Bonds



Gold

Monthly Chart - tune out the noise



Elliott Wave Counts








.... at least that all makes sense if you are crazy like me :)

Thank You for visiting binv's Tin (and Gold) Foil Hat Zone