THE DOT - if this turns orange or red be alert

Tuesday, November 9, 2010

defcom 1 for ndx and 30year bonds - the shit is about to hit the ......

1. NDX makes a triple after being in count 13 monthly and having finished week 13 last week today a daily 13 has been reached as well today ( Combo - will be followed by a Seq daily tomorrow). A serious drop is imminent only the slightly lacking SPX and DOW might delay the action to next week as the SPX is still on a 10 daily count. We have a big intermarket divergence developing since the NDX has reached the 2007 highs again thereby all over markets are far away due to under-performing financials. That will change over the cause of the next weeks as SPX and DOW after the upcoming correction will rise to a higher high til Jan/Feb before a crash will drive prices to the old lows of 2009 likely. The DOW still applies for a Head and Shoulder pattern being in the right one which might easily rise to the 12000 level before things get really ugly.

2. One possible catalyst for the correction starting any day now is a little Bond crash after China has downgraded US debt to single A a sell off in 30 year bonds is imminent also by tachnical patterns a drop by 6 points is very likely short term.


China Downgrades US Again, From AA To A+, Outlook Negative, Sees "Long-Term Recession", Blasts QE2, Expects Creditor Retaliation

Fan, meet shit: "Dagong has downgraded the local and foreign currency long term sovereign credit rating of the United States of America (hereinafter referred to as “United States” ) from “AA” to “A+“, which reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment. The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency. The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government’s intention of debt repayment. Analysis shows that the crisis confronting the U.S. cannot be ultimately resolved through currency depreciation. On the contrary, it is likely that an overall crisis might be triggered by the U.S. government’s policy to continuously depreciate the U.S. dollar against the will of creditors."

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