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Thursday, November 19, 2009

Froms Cracks to Fissures

Short term T-bills went negative today.

The TED spread chart I have posted looks like it wants to run higher, perhaps in a wave (iii).

Sentiment ($BPSPX) remained flat today. Thats bearish for the markets. When bullishness remains in the face of declining prices, it allows prices to go lower.

The dollar chart is showing a lot of positive divergence.

And on the other side you have both Dems and Repubs asking him if he will resign.

You got O-man slip of the tongue in that he mentioned the word "double dip".

You got Benny B., well, just being his usual bumbling self, probably feeling cornered. The Fed bought all the MBS and, well, he is the only buyer. Think he feels dumb? Does he really want the moniker "Helicopter Ben?"

Is the Fed too big to fail?

You have the government announcing they want to accelerate the bankruptcy of GM so they can IPO the new entity and dump their stake.

You have the government wanting to sell warrants on the big banks they have invested in

Hrmm, is all this spelling the end of the rally?

You got passage in committee of the Paul-Grayson amendment on auditing the FED.

In addition, its pretty apparent that all the trillions in bailouts has done is enrich GS and the like. You got Congress looting whats left of the "good credit" of the US Treasury.

You have a public that is ready to snap. And its from all sides of the political spectrum.

The writing is on the wall. Perhaps we will have a nice Christmas rally or perhaps we will experience the worst December stock market ever. I suppose its due.

I have an uneasy feeling as I add all these data points together.

It must have been because I just read the latest Elliott Wave Theorist by Robert Prechter. He does have that bearish effect.

So the cracks that have formed are turning into fissures. Can the fund managers make it to finish line in a beat-the-clock fashion until January and have their best year in likely a long long time?

And who would doubt they unload come the new year?

We all just want one more payday then we'll "get safe!"

Or will the cruel fate of the markets turn on them at the very hour of need and insidiously slip away at light speed lower and lower until they are left holding the bag?

Of course its not their money....

And oh yeah, Oprah is gonna hang it up in 2011.
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