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P&F Chart Porn

This is a Monthly view of the NYSE New Highs-New Lows since 1999

Daily View


Notice that the oscillator rarely trades above 0 during bear markets.

~2% of the NYSE is trading above the 200DMA, less than 40% is no good for investors.

Black Friday

The Euro and Pound are crashing, S&P Futures are limit down, Gold is falling, the Yen is at a 13 year high... This is going to be an epic Friday. I'm waiting for a Russian Debt Default, a Tsunami in London, and a Terrorist Attack in NYC.

Dollar Dollar Bills Ya'll

Perhaps the dollar is finding its strength in the massive liquidations and margin calls... perhaps market participants think that the numbers coming out of the foreign markets are more bogus than our own... perhaps the markets are pricing in the implicit military threat of not accepting dollars. I've heard comparisons of the US to the Wiemar Republic and Zimbabwe... neither had nuclear arsenals or a predilection for preemptive military action for dollar support (Iraq).

Many have predicted the demise of the dollar during the credit crisis, and though the argument appears economically logical, it isn't happening. There are a multitude of reasons for this phenomena, none of which are important to a trader.

Beliefs about fundamental economic data are a personal bias that allow you to quantify the degree of cognitive dissonance in the believer. If you believe that the USD is a worthless sack of crap, but price action says otherwise, it means that your understanding is not serving the pragmatic rational for developing a thesis; price prediction.

The dollar may fall, it may not, I certainly don't know what to think. Either way, I don't have to. There will be a trend created by the price action in various notes on financial exchanges, and that trend will generate wealth.

Follow Dead Cats with Moon Shoes

The market looks poised to rocket up after an explosive weekend of *gasp* nothing. If the speed of the recent decline is any indicator, this is setting up to be one of the sharpest bear rallies in history. TBT for a bet on rising Treasury yields as the TED spread narrows.

6 Months Later

A tip of the hat to people who can actually blog for more than a month... I certainly couldn't. Now that we're plumbing the abyss of financial Armageddon, it seems prudent to comment on these so-called historical times.

Does anyone remember Hank Paulson's "strong dollar policy"? People (including myself) scoffed at ol' Hankie every time he uttered those words. I wonder if any of those people still think its funny.

Since late July, the USD has been one of the best performing assets since the massive unwinding began. The "worthless greenback" is proving its value in this crisis, and plenty of the fuckers who stubbornly said it was going to zero are eating their hats as their poorly managed accounts get liquidated.

Via fortune and tact, I'm emerging from the wreckage unscathed. How?

Technical analysis.

Over the last 3 weeks, the major averages NEVER closed above their 5 day moving averages... NEVER. Since early September, the Nasdaq has been falling below a declining 50 & 200 day moving average. These are not conditions for investors as the biggest players are clearly selling.

Those who say this is the product of irrational decision making have never faced a margin call. Finance is a feedback loop, and the system is experiencing an auto catalytic flight to low yield currencies. Selling will beget more selling so long as there are leveraged participants on the wrong side of the trend facing forced redemption and margin calls.

For a weather vane in this storm, watch TBT, ProShares 20 year treasury double inverse ETF. Expect this to rise once people stop shitting themselves and notice the high yields offered by companies with low debt.