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Friday, April 16, 2010

E-minis [Update 13:18AM]

[Update: 13:18:  The first thing that came to mind when I heard GS was charged with fraud is "the government has  just announced the Ponzi for all to hear."  What else can one conclude?  This is the "backstop" admitting that what they are "backstopping" is a massive pile of fraud.  I don't think they had intended those consequences but thats the way I see it.  And I think thats the way its going to play out over the long term. Questions beget questions and if this is politically initiated, it is intended to get wide airplay.

Any regular reader of this blog knows that one theory I have on how P3 can continue downward even in the face of negative sentiment extremes is that it behaves as the first rule of Ponzi schemes which is: "When a scheme is recognized to be a Ponzi, it collapses despite massive negative sentiment.".

I like to put it this way in trader terms: There is no upside surprise in a Ponzi.

Personally I think politics is very much involved (isn't it always?) . The Democrats have been pummeled lately in the polls for a variety of reasons and the best popular choice is to take on Wall Street in order to back Republicans into defending them.  They have been signalling these intentions. Its a devious strategy and is likely to have some effectiveness. So the biggest Wall Street house is taken on and it will fire up the base and try to win back independents.  In the end you know I am against the "banksters" so naturally I support the action.  

However I think the unintended consequences will reach far and wide. Every government action always has unintended consequences.  First, if GS is going down, they are likely to try and burn the house down on the way out. Second, the "protectors" have just announced what they are protecting is a massive pile of crap, i.e. - Ponzi scheme, particularly since the "innovative financial products" still very much reside all over the world hidden in "mark to fantasy" balance sheets. Third, GS wasn't the only one doing it so why would fraud charges end there?

Not that it wasn't ready to turn as sentiment was getting pretty giddy. Its also convenient it was announced on OPEX. LOL.  Wonder what insiders got in on the knowledge? Ahh, things never change.

Well, I don't know how else to mark the waves other than what I have below. If there is a new high coming, then this entire thing would have to be yet another ending, and expanding, diagonal with a wave [v] up but it would have to start soon.  Or some other wacky count.  However the down volume is pretty heavy. 

[Update 10:42 Something just blew a gasket. Figures just after I post a perfect squiggle chart LOL. Things may be getting unstable...]
[Update 10:34 AM: I have the day off and gonna go run some errands but here is a gee whiz squiggler count.

Nothing is guaranteed of course, but so far here is a possible interpretation of the ongoing C? wave structure.  Again, the blue box area is key. It must remain open for this count to be in effect.  If it closes  perhaps Minute [iv] and not Minuette (iv) is in play.  But then we wouldn't have a good viable 5 subwaves for Minute [iii]. So I favor the count like this at the moment.
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