THE DOT - if this turns orange or red be alert

Friday, September 19, 2008

sucker rally on--its gettin tricky- welcome in the ultimate communism for the privildged

The technical parameters clicked in perfectly at the end. The XBD at a 13 weekly combo reversal with this pathetic but necessary bailout move. The VIX makes a weekly reversal as well, with a 43 high and many indicators like RYDEX and other short-term oversold and producing buy signals. The first wave up might last until the end of closing, since massive shorts need to be covered but around 1240/50, it should come to a hold and a pull back might occur. The curb of short selling in financials will make the financials the 'go-to' area, since we produced a low and have full government manipulation for covering shorts.

The SPX is now on its way up to 1300, even 1340 is possible but do not take that for granted, the overall picture is bearish. This sucker rally was overdue and unfolds now on basis of market manipulation.

Astrologically, we come to a tricky period that fits perfectly to the events unfolding. First of all, on Sunday sun squares Pluto, which is a point of distress and anger and it might unfold on many levels. Plus, on September 23rd, Merkury goes retrogade for 3 weeks, which means misinformation and misleading setups. The rally will mostly be during this period and hence be of no real value for investors, but a last resort to get out on higher levels. Merkury retrogade also has a tendency for twists and turns, so moves are kind of inconsistent. Another major aspect that will have its way over the course of the next weeks is the opposition of Uranus with Saturn, exactly on Election Day. Every week, they get closer and the impact increases, so after mid October, the negative effect will be more and more prominent and slowly the next down wave will get started (unless the government pulls the last trigger and bans future trading).

In 1990, we all cheered because we thought communism was defeated but, in 2008, my impression is that communism won. America has turned into a communist government under Republicans. That is kind of funny. They dictate now what market participants have to trade and in what direction. They do the biggest bailout in the history only for Wall Street, Main Street has to pay the bill. That is what Uranus opposition Saturn implies, a revolution is around the corner. The people get screwed twice. First, they make the rich ones richer and do not tax them. Now, they take the taxes from the ones who earn far less to bailout the mistakes of the rich thieves (dark middle-ages, the king and the lords do as they are pleased). In any case, this is not democratic and, by no definition, capitalism.

Let's come back to the facts and make some simple assumptions of what these morons are doing. They need to finance between $1.5 - 2 tril. of new capital for these bailouts. This $500 bil. is a fairy tale like where they claimed the cost will be contained around $50-100 bil. To pick up the toxic stuff, they need at least another tril. on top of what the other bailout cost. America's debt is officially at $9 tril. Now we will have to add another $2 tril. on to that within a short time. I said in an earlier post that an exogen bailout shock will turn around the Dollar once again and we might even go to 1.65 at least 1.60 again. Nevertheless, my assumption was that the next big bubble to burst is the bond bubble. Taking up $1 tril. alone is a huge shock to the system but that is not enough, the global effect will be on an even bigger scale.

Keep in mind that America has, through the actions of the last weeks, lost its credit (no one speaks about it but as a matter of fact they screwed their own credibility). Therefore, lenders will ask for more risk premium, which is pure poison for the ongoing mortgage situation. Against most claims, we do not enter deflation - we have officially entered hyperinflation. America has a shrinking economy and assets (asset implosion is not equal to deflation), but produces more money that just dilutes the worth of the existing money. That is called inflation. The more severe rally we see after Q1 2009 (and after reaching lower levels) will be driven by pure inflation not a rise of value before another asset implosion will be starting around Q4 2009.


No comments:

About Me

I am a professional independent trader