Financial topics

[Trevor]

If there's a quadrillion dollars, printing money really isn't going to help. Personally, I do think they are going to default sometime in 2012. They're on their third bailout and Europe can't afford to do this forever, especially since Greece is using this as a weapon, essentially stating: "we're not cutting a damn thing; screw you." Portugal's talking about using this as a weapon as well.

[Higgenbotham]

As stated previously, timing markets is extremely difficult and should never be attempted on the basis of Internet forum posts. There's ample evidence of that over the past few months, with many posts giving the opinion that the market was going to crash.

Also, I decided to quit posting trades because it was getting the forum away from GD issues and toward an emphasis on short term trading, which in my view is sort of a waste of time to discuss on a forum. The following does seem to relate to GD, though, as it presents sort of a countdown to a potential upcoming as yet unknown event which may be just over the horizon.

Also, I would caution anyone who is looking at known news items and trying to project anything. Contrary to what people think, the Fed is most likely not ultimately in control of these markets even as recent history has surely given that impression. Consider post Fukushima Japan as an example.

Briefly, I am 100% short as of Friday and plan to take a stab at being 200% short over the next few hours for the largest short position I have ever taken. But I won't hold on long if the market doesn't behave in accordance to what I see could happen here - a major long term turn in the market due to some as yet unknown event similar to Lehman Brothers or Fukushima.

http://i44.tinypic.com/2wqzc5d.jpg



To start, here is a list of 3 new moon and 3 full moon dates and times.

New Moons

October 11, 2007 05:01 UTC
May 3, 2011 06:51 UTC
October 26, 2011 19:56 UTC

Full Moons

May 20, 2008 02:11 UTC
July 15, 2011 06:40 UTC
January 9, 2012 07:30 UTC

On October 11, 2007, the SPX made an all time high at 1576.09, fell to an intermediate low on March 17, 2008 at 1256.98, then retraced to a May 19, 2008 high at 1440.24.

The SPX then fell to its decade low on March 6, 2009 at 666.79.

On May 2, 2011, the SPX made a 2 year high at 1370.58, fell to a low on June 16, 2011 at 1258.07, then retraced to highs on July 7, 2011 at 1356.48 and July 21, 2011 at 1347.00.

The SPX then fell to its 2011 low on October 4, 2011 at 1074.77.

On October 27, 2011, the SPX made a 3 month high at 1292.66, fell to a low on November 25, 2011 at 1158.66, and is currently testing the October high.

Comparing these dates to the new and full moons listed above, the SPX made a significant high on or within a day of the new moon dates. After these new moon highs, the SPX then retraced to a high near the May 20, 2008 full moon or retraced to highs a few days around the July 15, 2011 full moon, where the full moon was between the two highs.

Below is a list of the new and full moon dates, followed by the calendar days to the next new or full moon date.

October 11, 2007 222, 1300, 1373, 1477, 1551
May 20, 2008 1078, 1151, 1255, 1329
May 3, 2011 73, 177, 251
July 15, 2011 104, 178
October 26, 2011 74
January 9, 2012 0

These dates and the calendar days between these dates are shown on this 5 year daily chart where the narrow lines at the top of the chart connect the moon dates and the calendar days are noted for each line.

The thick lines on the price chart itself show the calendar days between significant highs and lows in prices that have occurred since the March 6, 2009 low.

Some fibonacci and whole number relationships between the common times are noted on the chart. Some of the actual values when multiplied out may differ a small amount from the chart numbers listed; the numbers listed are strictly those found on the chart.

57*1.272 = 73
73*3.382 = 248
73*6.618 = 483
74*1.382 = 102
74*3 = 222
97*2 = 195
97*1.272*2 = 248
97*5 = 483
99*1.272*2 = 251
104*2.382 = 248
222*1.618*3 = 1078
248*2*2.618 = 1300
1300*2.382*0.5 = 1551
222*7 = 1551

Some of the relationships in the above list are probably more coincidence than anything of significance but everything is listed.

It seems significant that there are 3 highs near the new moons listed and 3 retests of the highs into the full moons listed. From a wave standpoint, it could be reasonably concluded that the first pair of new and full moons occurred at the top of waves 1 and 2 of a 5 wave sequence down to the March 6, 2009 bottom. It could also be reasonably concluded that the second pair of new and full moons occurred at the tops of waves 1 and 2 of a 5 wave sequence down to the October 4, 2011 bottom of one lesser degree than the 2007/2008 pair. And it could be reasonably concluded that the third pair of new and full moons may be the tops of waves a and c of a retrace from the October bottom. As such, wave c can theoretically exceed wave a in price.

Looking at time, the 2007/2008 highs are separated by 222 calendar days, while the 2011/2012 highs thus far are separated by 251 calendar days into Monday's full moon. The question now is whether 251 calendar days is a reasonable separation in time to begin a move down or if more time is needed. The answer to that is unknown, but several notes can be made which indicate that perhaps enough time has passed:

1. There are 3 previous low to high or high to low moves in the SPX since the March bottom that have lasted 97 or 99 calendar days. Also, there is a previous move that lasted about twice these 3 moves, or 195 calendar days. The move off of the October low will be at 97 calendar days as of Monday.

2. In addition to the above, the 155 calendar day move down from the May high is retraced by a fibonacci 0.618 in time at 96 calendar days.

3. There are 2 previous high to high tops in the SPX since the topping process began in early 2011, with one lasting 73 calendar days and with the tops into July having taken place at calendar days 65 and 79 from the May high (averaging to 72). The time from the October high will be 74 calendar days as of Monday.

4. There is a previous 248 calendar day move from the August 2010 Jackson Hole low to the May 2011 high. Also, there is a previous move that lasted about half this move, or 123 calendar days. The time from the May high will be 251 calendar days as of Monday.

5. All 10 month multiples in time back from the current juncture were significant turns in the market and are noted on the chart.

[Trevor]

I don't know precisely when it's going to happen, but they can't hold out much longer. Greece is staying afloat by its fingernails.

As for all the bailouts, it hasn't happened because they haven't learned their lesson; they're still creating the CDS and CDs that got us into this. They probably think they can get away with it, that if they get in trouble they can be bailed out. No doubt some are just indifferent to the consequences.

[Higgenbotham]

50 months ago: "Nothing but clear skies ahead. Dow 20,000."

40 months ago: "This is just a soft patch. Things are on their way back up to a new high at year end."

30 months ago: "This is just a counter trend rally. The bear market will resume."

20 months ago: "This flash crash has me really scared. I think we are going back into a Depression."

10 months ago: "The authorities have averted a Depression and the market is going back to new all time highs."

Today: "This is just a soft patch and the worst is over. The market will recover strongly in the second half."

It looks like a mini generational cycle. The flash crash was like a false panic.

[Trevor]

Honestly, I'm beginning to think this will be similar to 1857, where things completely collapsed within a year. People say the worst is year because... well, what else can they say? some are trying to convince themselves and others are paid to put the best possible spin on things.

[Higgenbotham]

Honestly, I'm beginning to think this will be similar to 1857, where things completely collapsed within a year.

I hadn't thought of that but you may very well be right. The stock market made a high near the end of 1852, went down for 2 years, recovered for 2 years, and then collapsed in the Fall of 1857, so the precedent is there. Pretty scary analogy.

[Trevor]

I admit, I'm not as knowledgeable about the 1857 panic as I am with the Great Depression, but I do know it happened far more quickly, over the course of about 12-18 months. I'm fully expecting that's what will happen this time around.

[vincecate]

Here are my notes on 1857. I note there was a loss of confidence in paper money then. I expect that this time too.

http://pair.offshore.ai/38yearcycle/#1857

[jcsok]

From the DailySHTFPlan.com:

From the Daily Sheeple, the budget deficit explained:

United States Tax Revenue:--------------------------------$ 2,170,000,000,000
Federal Budget-----------------------------------------------$ 3,820,000,000,000
New Debt--------------------------------------------------------1,650,000,000,000
Fed Debt-------------------------------------------------------14,271,000,000,000
Recent budget cut------------------------------------------------ 38,500,000,000


Remove 8 zeros, and pretend its a household budget

Annual family income ------------------------$ 21,700
Money family spent----------------------------- 38,200
New debt on the credit card-------------------16,500
Outstanding debt on credit card-------------142,710
Total budget cuts, some polititions proud of-------- 385

Stop the insanity now, vote them out

"Consider the predicament you’d find yourself in if your employment or source of income were terminated as of right now and that regular paycheck on which you depend to pay the rent, food, car, insurance and discretionary consumption stopped coming your way. The world as you know it would almost immediately cease to exist.

In a country where nearly 50 million require government assistance to put food on the table and almost one-third of the population is poverty stricken, those who do maintain gainful employment are living paycheck to paycheck.

If the paycheck stops, the game for the average person is over"

[Trevor]

Here's a similar form of logic to what they're using: "Honey, I know I bought a plasma screen TV that we can't pay for, but don't worry; I cut gumballs out of my diet!"