Saturday, June 19, 2010

Interesting Inverse Correlation

The Oil Spill

Charts or Methane, sorry, today it's methane. 

The Gulf of Mexico receives the outfall of the Missisippi River, which drains a good portion of the US.  It picks up a good amount of bio-materials and dumps that into the Gulf, and has been doing that for a long time. 

One route of production of oil and methane is through decomposition of bio-materials.   So of course the Gulf has lots of oil and methane.

In a previous post I pointed out that Methane Hydrate is some very interesting stuff.   It is an ice-rock that can burn.   It is found only in high pressure and cold places, like the bottom of the ocean, deep.   Some claims have been made that the energy stored in MH is much greater than all the oil still buried in the earth, but this claim is disputed also.   Bottom line---there is lots of MH hiding in the ocean floor and, sure, in the land areas too, as over tens of millions of years, the ocean and land areas move around.   MH is very stable, it will just sit there forever, as long as the pressure and low temperature are kept up.

However, once you hit the sea floor the temperature is very cold, right around 0F.   But as you go deeper into the sea floor, the rock mass heats up the further down you go, so MH won't exist really far under the sea bed, it will instead turn back into methane gas and water.

"They" say that there is lots of methane being released with the oil, and that the methane can be very detrimental to the earth. 

The pressures involved in an oil well are in the thousands of PSI.
And Methane "kicks" are a well known and common issue involved in all oil well drilling.   Methane is usually a gas, and as a gas rises in a liquid environment, it expands as the pressure decreases (as the depth below the surface decreases)

Oil drililng is "real man" stuff.   Unfortunately "real man" stuff also attracts overly risk taking cowboy type of attitudes.   There is big money and big egos. 

Just look at some of the audacious comments by BP personnel.   They cannot even cover up their attitudes while they know that they are under the microscope.   Look at the Grand Flubber himself, who is "devastated", and "wants his life back", as he sails one of his yachts around an island in England (today) as the spill goes unabated.  I am glad he gets a chance to relax....
There are multiple players with overlapping responsibility.  There are government regulators who are too cozy with those they oversee.  It is a ripe field for growing a disaster.

All that said, there was a similar oil spill in the Gulf in 1979, caused by similar circumstances, they tried the EXACT same manuevers as they have tried on this latest spill, in the same order, and with the same results.   Bottom line here?   The gulf recovered pretty well.   The high temperatures allow biological degradation of the oil, much better than in say Alaska.

I guess this is a good time to be in the solar business, except no one except the governments appears to have the money and willingness to do projects.   And it appears that the Gov in now pumping out lots of  PV projects kind of designed so that only the biggest companies (that can provide big campaign contributions), can win.    This is creating PV panel shortages and cost increases.   Sigh---another bubble---benefiting big business and hurting small business and the small customer who has to compete with the gov for product.

Friday, June 18, 2010

Dirty Harry and Strong Resistance

Hope you folks find this stuff entertaining and useful -- I don't go read other sites to come up with ideas on what to post and analyze.   DROP SOME COMMENTS!  

If no one is reading this stuff, I am not motivated to post.

Timmay, doing the dirty Harry look...tough on inflation, tough on China, tough on tax payers....ouch.

Euro will be golden if it punches through this resistance, or it could plummet to .8 (a 50% drop) if it gets rejected by my line in the sand.

Fear Factor is kind of in no man's land, the horizontal line is not signifying anything except where we are now....and that doesn't match up with any longer term horizontal resistance.

CPI components, Contributors, neat website

I didn't want to lose this link so posting it here.
"Economic Eye Candy"---gotta love it.

Thursday, June 17, 2010

Speech by Winston Churchill

Summary: follow this link and read the Churchill Speech. sorry if I am a bit short on charts, I think it is all about the Euro and until that is an upward slog that I mostly refuse to play overnight except on futures.   A limit down gap is well within reason.   Normal equities and ETFs, especially leveraged ones could be decimated.   The risk reward doesn't make sense to me.

I have never read a whole speech of his, just some quips like "we will never surrender", but this was truly worthy and inspiring of not just fighting the good fight, but fighting that fight with the forethought and preparedness that encourages and expands unity and purpose.
As our battle for free markets, we will someday win them back.

A good link to a less biased news source.

Euro and ES Perspective

Ye' Ol" Range of Horizontal Resistance, It is busting the lowest line, but how else to catch those shorts hiding behind that "obvious" line.   We will see, the Euro has been pounded recently.

Last day of expiry, expect some ramp up and down, scaring people out of position.   And then a pretty neutral close, with some buying at the end as Pavlov's dogs salivate over ramp up Monday.

Thieves in the middle of the night

One chart below shows a massive stop sweep.   This can’t happen without coordinated effort, and/or coordinated algo’s.


I saw this on the NQ futures, but was surprised to see this blatant sweep on the ES futures as well.   The pop in the Euro was last night, not anywhere near this pop /sweep.


Also, here again is the bouncing Ball Chart.  Note that the pricing and timing are coordinated.  Look at the Sep/Oct time frame.




Wednesday, June 16, 2010

What part of the wave are we in

I thought the wave 5 on the Euro and the USD (DXY) were both really short looking, like 5 wasn’t done.   

That would put a world of hurt on the trained bulls.  

Euro, Like a ROC (solid as GM Gov Motors)

Small Day Trade

Here is the point.  

The STD choice on execution of a stop price is set by TOS as the “Mark”, usually the Mark is about the average price on say an option.   But on futures, the mark is spaced one unit apart, for ES that is 0.25, and the Mark will flip flop between the two.

This give your friendly broker the right to “take your stop out” with much more discretion on their own….and that isn’t good for you.

When setting a stop, on a short order, I set it to execute only on a  sufficiently high bid.   This removes one of the shenanigan they can play to take your money.

Ping-Pong or agressive long

Based simply on support and resistance, AND this being the backend of expiry week (the bears already been screwed), I am thinking 2 likely scenarios:

1) We meander around a narrow range for a while

2) More aggressive and fast longs

How to make money in this market?

I am thinking a call spread, thus limiting downside and with significant upside should market charge ahead.

The risk of massive moves to the downside is omni-present.   The HBB does not want retail (yeah, that's you and me) to participate in the drop like in 2008/2009.   They want it all for themselves.

See my previous Euro chart, its a good one.   Almost shocking. 

Tuesday, June 15, 2010

Ready for the Bull to fly, or is this a Euro Backtest?

RE: Earthquake 7.0 Indonesia

Hey, leave some comments!!!!!!!!!!!!!!!!!!!
Testing new system, well, new Disqus anyway. Let me know if you have any problems. John M posted a few comments, that I received by email, but havent shown up yet on the comment section, so I am observing for the next day or so.


Government Services are Increasing

A congressman interacts with a student.

Fireman attacks and punches barbequer
There is a video on the link if you want to see the video.

And be careful if you are a jaywalker, even a woman gets punched by a police officer. They were approaching the officer and contacting him, and in theory could have grabbed his gun or something, but all that said, this guy went way over the top.

ES backtest of the rising wedge

Everyone is so bullish they can't see this rising wedge.

Back test of the broken rising wedge, AND a  double top, however, the 800 lb gorilla in the room says upward pressure on the SPX as long as the Euro is rising.   Sure they downgraded Greek debt the other day, BUT that is also classic Cramer manipulation of old school days.....down grade the stock near the bottom, shake out the shakables.

Monday, June 14, 2010

Earthquake and a Minor Unification Theorum (MUT)

Chart of Earthquakes, not to brag, especially about someone else's misfortune, but the mass human psyche, which is all of us, an in particular the market, is affected by big things like earthquakes (related eclipses, although none right now), moons, and who knows what else.   I have this Google gadget that plots earthquakes, and it is on my home page.   I have relatives in Japan and someday they will see an 8.0, and in Hawaii just last year we had a pretty good tsunami scare, so forgive me if I have this little macabre Google gadget.   But it is pretty cool in way, besides the capability to possible protect my family and friends. 

It shows a more important thing...even this thing called the Earth that we like to think of as "being on solid ground", is transitory.   You can find stability in your own thoughts, your comfort level with instability, mojo inner peace, what have you....but if you wish for and expect stability in the Earth itself, the markets, or other peoples reaction to shall be sadly disappointed.     And that is one reason why I chart Earthquakes, and why last week I predicted some odd earthquakes to come with this new moon.   And actually it seems like they come a day or three after the moon.   When the moon and sun are aligned the planet gets stretched, then when it slides to the side, it pulls the planet section to the side, a so-called pop me pull me effect. 

What is funny, is that this is very obvious to mechanical and gravitational thought process of physics, and yet nothing like this has ever been printed in anything that I have ever read.   Not saying that there aren't kooks out there similar to me, but I have not read anything like it, and it is far, far away from mainstream media.

I think it would hurt the human pysche to have to admit that an orbiting rock could adversely affect us "great and powerful humans" in such an extreme way.    And herein, I think we find some truths about ourselves and the way that we can relate to our own lives and those around us.

Please note post from last week, and get the gadget from Google!

Euro Cat is Out of the Bag

I am going to leave the comment below in it's entirety---it is funny how hours after I caleld the Euro "out of the bag", that Greek debt get downgraded to junk and a massive selloff occurs.   The timing is incredible, tin-foil hat type incredible.

There is occasionally some throw over even beyond the yellow outer 133 channel line. 

But this is "too much" IMHO.

So now only 2 option for the bearish position:
1) We bounced down from strong support at around 2279 on the Nas, 1106 on the SPX, 10330 on the Dow.  All with hammer candles.
1a) This is the longest shot--because the Euro and the SPX have been joined at the hip for so long.   Is that these would now decouple.

or --much more likely--

2) Euro will drive the SPX higher, pick your percent, pick a Fib, could be large.

That said, a number of intermediate indicators ought to be reversed to be bullish by an increasing overall market.   But all the other indicators and custom charts, and ratio charts say that this market is a crispy critter.

FW: Trying to auto post

There is an amazing amount of time spent in just the physical process of attaching charts, entering the blog adjustment zone. The below is a simple email I send to a certain address, and then the blog is updated automatically. Sounds cool, seems to work.

Also I am using a new HTML format for the blog. I wanted to cimplify it, and many people complained that it was slow to navigate around in. Funny thing is, the old one was always fast on my computer, this new one seems slow to scroll.


PLEASE this better or worse, in what way.

I simplified many of the links (removed many) if there was one you really like that is now gone, let me know and I will restore it.

Sunday, June 13, 2010

Look at this Balderdash

The RANT is below, but I wanted to point out something, it used to b 18 of 20 long and intermediate term indicators were pointed bearish (maybe that is too many!), now it is 15 of 20.   So a few have been popping bullish.

But this rising wedge gives a little more bearish mojo back.

Look at this top.   Seriously, is this the look of a bull market taking a breather, looking for  footing to launch from?

 Or is it the look of a Bronto whose fundamentals of environment have changed and it is in it's death throes...thrashing it's neck back and forth, up and down, as it remembers and hopes for the return of it's glory, while being angry knowing that he is going down.

Interesting reading the many people finding "excuses" to be bullish, to be balanced.   How many retail are out there somehow thinking that the new SEC rules will protect them, that they can buy and hold without worry of a huge stopout.

The set-up is perfect.  Bears and Bulls both getting crushed.   This market is nearly impossible to "trade".   You are in the fighting ring with an injured and angry Bronto.    He is going down, but can still damage you.

And a great book I read on my trip to Japan (sitting on planes, trains, buses) is called The Tipping Point.   Great statistics on how little changes can results in huge changes in direction.   This has applicability to the stock market.

Little Yellow Line in Control of our Futures

And these folks do such a great job at Astro stuff, I don't even try to play in that field, just visit their site.

Keep in mind June 21 is already on us.   That is the longest day of the year.   The solstices and equinoxes are turning points, that sometimes affects the markets.

Now is no moon.   Those freak people out more than full moons.

Like these charts?  Sign up as a follower, it's free, let's me know that someone actually appreciates this work, and lets you aggregate your news / new posts from sites you follow (try Google Reader)

These are all very bearish, with the exception of the "Fear Factor" which hints that a further push up may be in order to satisfy a fractal match to a  previous 3 drives up in Sep 2008.  Check of the GS ratio chart, it does a fine job of leading the market.

World Cup

America is pretty big on soccer, but not that big.  Tying England is a huge event no doubt. 

The World Cup is on.   These are huge psychological events on a global humanity scale.   I theorize that these type of events, like the Olympics, can alter the Elliot Wave fractals of the markets.

As if we didn't have enough "inputs" to the market already.   Be on guard though, for even more volatility.

It is all about the Euro.

 Maybe it is also about the EUR/JPY.  This has been widely discussed as a great indicator for the SPX.