The rules of technical analysis for this pattern are:
Pennants are continuation patterns - that is, whatever direction the market is moving when it comes in, it will move when it comes out.
The minimum target for the move is given by the length of the pole to which the pennant is attached.
In this case the pennant prognosticates a move downward of six hundred S&P 500 points from the break, which occurs at approximately 810.
That gives us a target on the S&P 500 of 210.
No, that's not a misprint.
I said two hundred and ten, and I meant two hundred and ten.
This puts the DOW at TWO THOUSAND.
Mr. President, Congress, and the rest of the fools in Washington DC, including TurboTax Timmie: You only get one shot at this and you better stop writing checks with your mouth that you cannot cash. This goes DOUBLE for Ben Bernanke.
There is no "market-friendly" solution to this mess folks. There are, however, disastrous decisions that can be taken, and continuing to hide losses - and the truth - will lead directly to that disaster.
We must deal with the bad debt by forcing it into the open. Transferring it from one pocket to another fixes nothing and if we're not careful we will wind up precipitating a bond market collapse coincident with the stock market melting down to a degree that is several times worse than what we saw in September and October.
Unless President Obama wants to be known as our second Herbert Hoover, he must not allow the game-playing to continue any longer.
Neither you or I want to see the S&P 500 collapse down into the 200s with 75% of the listed firms in this country going under. Nor do we want to see 20 or even 30% unemployment. I'm sure you're not interested in seeing not a 30 or 40% loss in your 401k as you had last year, but an 80% loss. And I'm very, very certain that having the government - both state and federal - unable to raise operating funds and being forced to cut off social services and entitlements is not on your "desirable" outcome list. Yet all of this can and will happen if the bond market dislocates and starts a cascade. The price action in the market over the last couple of weeks is a strong warning that "borrow and spend" will not work and the market is getting rather upset with papering over ever-expanding losses.
It would be nice if President Obama had several weeks or even months to coordinate a strategy. Unfortunately the market doesn't work this way, and it appears that he is being forced to either crap or get off the pot essentially now, lest the market decide for him.
LINK
Here is your List of FAILED BANKS!
LIST
Actually, transferring from one pocket to another DOES change a lot. I do not want their debt to be transferred from their pocket to mine. I want it to remein where it is, in their pockets, and I want these pockets to be burned by the debt.
ReplyDeletePeter Pan is living in wonder land. Get ready for hyperinflation,
ReplyDeleteJoe is early. Hyperinflation will not begin until deflation runs its course (12-24 months).
ReplyDeleteAccording to Bloomberg. U.S. treasuries showed there steapest decline in demand since 1984. The bond bubble implosion has begun which means helicopter Bernanke's printing press will go into overdrive to support future stimulus and bailouts this year so espect hyperinflation in the 6-9 months, no way 24 months. The world has seen enough and had enough. The jig is up. Folks, there is a reason the fed stopped making M3 money suppy expansion available since march 2006. Nothing here is by accident. It is by design.
ReplyDeleteTo anonymous:
ReplyDeleteYou are corrrect when you say the jig is up. He will be out of the whitehouse in 3 years and 352 days. But before he is through with this country he will do the following:
1.) divide the people i this country.
2.) cause hyper-inflation
3.) unemployment will reach 15% - it currently
is sitting at 10.5 not 7,2 as reported.
4.) He will show his support for Iran in a
backhanded way.
Be prepare the worst is yet to come.
Oh Yeh I forgot - Dow 5000 by the end of this year or sooner.