Financial topics

[Higgenbotham]

1425.

They may smack the futures up there Sunday night. The offset might come into play. Last 3 monthly turns in the futures have been May 20, June 19, and July 19. May 20 was Sunday night; August 19 will be a Sunday. The May 20 low was never seen in the next day's cash session.

[aedens]

Looks like trouble for the reds and blues. This will be the end of it one way or another.

http://workinprogress.firedoglake.com/2 ... -to-stand/

[aedens]

1425.

They may smack the futures up there Sunday night. The offset might come into play. Last 3 monthly turns in the futures have been May 20, June 19, and July 19. May 20 was Sunday night; August 19 will be a Sunday. The May 20 low was never seen in the next day's cash session.

Thin ice they are about now IMO. Best guess 22, 23 and get past the weekend. I think more than a few are not going to shoot the year
in the ass about now. Vanilla is insane to play this black ice cracking under foot. Some moaning about 25 on top of this froth. I ignored the thought map.
Far as I am concerned we d topped.

“Sales of long-term US corporate debt this week surpassed the entire amount sold in 2011 in what is shaping up as a banner year for long-term funding.
This comes as companies… sold a total of $86.3bn in 30-year bonds in the year to date. This compares with overall sales of $84.7bn for 2011, according to Dealogic. Further, the total amount sold so far this year is nearly double the volume sold over the same period last year."

[Higgenbotham]

No short term predictions are possible from here on out As you said... I tend to agree... why change now...

I think I said that in the context of whether the market can spike 50 to 100 points or not. It's not possible to tell in my opinion because the time element has been spent but past topping processes have shown the spikes (within a time element that has already passed).

On the other hand, the market reached an extreme and turned the first 2 hours of the Sunday night sessions on May 20 and June 3 at the 2 important lows before the move back up. On Sunday, June 3, the futures made the low of 1262 at 6:26 pm, which has been the low of the past few months. Going through my notes, the Sunday night reactions since the May and June lows (gap up or down) seem news driven, so somewhat random.

[aedens]

Was just a passing thought that surfaced. the time element has been spent but past topping processes
More leg than I can see being carried much longer. I am back to the new normal thought map which troubles me.
Nothing makes sense lately on stock. I will stay put. I can see the vanilla map but this is something different.
Lately monday leakage has been trended. From data sets seen it was confirmed out by lunch.

[Higgenbotham]

Nothing makes sense lately on stock. I will stay put. I can see the vanilla map but this is something different.

I agree that nothing makes sense. We had noted the Chicago PMI and the illogical reactions. The few minutes at the end of the day are still somewhat predictable, as one constant is much of the herd wants out by the close. This fear can carry over to Sunday night at the extremes. It could be theorized that some who wanted out on Friday's close weren't able to get out and may cry Uncle the first few minutes of the Sunday open, unless some news event moves it in their favor. Particularly if the forum herd is energized and bullish.

[John]

Old, Closed Britain

I have just looked too closely into a regularly renewed household
insurance policy run by HSBC and uncovered an underbelly of the life
of a British consumer.

The premium was increased by 100 per cent without notice or
explanation. The policy which I thought was with HSBC had been
outsourced to Premium Scanner which had re-outsourced it to BDML which
is owned by Capita. The insurance company is Prestige which on the
Internet has a telephone number in Spain. A premium charge is made on
the 0845 number which begins with a lengthy rambling message. But this
is not stated and the staff do not know what the charge is. In my
first call to an rival insurance company, I was quoted less than half
the HSBC premium for twice as much cover. HSBC claims to ‘search the
most competitive price from our panel of insurers.’

In two hours of household admin this morning, I have found hundreds of
pounds in small bills here and there that are being wrongly charged.

http://www.humphreyhawksley.com/blog/in ... d-britain/

[vincecate]

The way asset bubbles work is that the price starts going up, people rush to invest because the price is going up, this drives the price up more and you have a feedback loop. But eventually the high price increases production of that asset to where supply has increased enough that price starts to go down. Then the feedback reverses and people want to get out because the price is going down, which causes the price to go down more, and more get out...

When the price of tulip bulbs gets crazy high then the supply of tulip bulbs is increased till the price goes down.
When people pay crazy prices for Dot-Com companies then more and more are created till supply is way up and price is down.
When people pay crazy prices for houses, then house construction is increased until the supply is so large that prices go down.
When people pay crazy prices for bonds, then the bond supply is increased until the supply is so large that prices go down.

Bond supply is way up:
http://www.ft.com/intl/cms/s/0/f37e910c ... z23vM5PQVI

The bond bubble will crash too.
Note: It is not really possible to increase gold supply/production like it is for any of the above asset types. The total above ground gold only goes up by around 1% per year. So when demand for gold goes up it has the effect of making prices of other things measured in gold money go down. As people move into hard money then you get price deflation as measured from the hard money view. Substantial deflation in fiat money prices is a mythical danger never seen in the real world. So as gold has gone from $800/oz to $1,600/oz while I have been on this group the prices for things as measured in grams of gold has gone down. Prices of the things I buy as measured in paper dollars has not gone down.

[Higgenbotham]

http://finance.yahoo.com/q/hp?s=%5EVIX& ... f=2007&g=d
http://finance.yahoo.com/q/hp?a=05&b=1& ... EGSPC&ql=1

VIX made its 2007 low on June 19, closing at 12.85 and its 2012 low Friday, closing at 13.45. These are the 2 extremes from the past 5 years. On June 20, 2007 there was just a bit more follow through up before stock prices reversed (temporarily). I'd note that when the VIX bottoms at a higher level than around 13, sometimes it will take stock prices several days to reverse. But of course if the VIX continues going down, stock prices should continue to hold up or increase.

[Higgenbotham]

"There is a time element and a price element. The time element is spent, which argues for a peak here. However, the price element is not, which says (to me anyway) that there could be a delay in a final price burst if the market can find a reason.

As far as the time element, comparing to 2000 and 2007, on the S&P 500:
On January 3, 2000 there was a peak, a dip, then a final burst into March 24, 2000 and
On July 19, 2007 there was a peak, a dip, then a final burst into October 11, 2007.
The July 19, 2007 date could be interpreted as June 1, 2007 or so. Looking at the current situation, in any case, time has run out on the market compared to these previous topping formations."

"My prediction. No short term predictions are possible from here on out."

These statements were made a week ago. The chart illustrates some of that, with some areas of previous similarity to the current configuration noted. The question is whether the S&P can mount one last rally to or over the Bollinger Band. It already had by "this time" in terms of the various indicators in 2000 and 2007 yet, at the same time, price shows no signs of giving up.

http://i49.tinypic.com/ion87r.gif