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S&P500 Expert Lounge Update – September 13, 2018

Good morning everyone,

These are key MA levels:  5EMA 2880, 10DMA 2890,  20DMA 2876, 50DMA 2837, 100DMA 2777, 200DMA 2740

These are key Fib Levels: 2929, 2896, 2859

Here is today's market look at the S&P 500 for Thursday, September 13, 2018

We have a couple important premarket releases in the form of Consumer Price Index and Jobless Claims at 8:30 followed by the EIA Natural Gas Report at 10:30AMEST, and finally the Treasury Budget at 2:00PMEST.  The technical picture since putting in the intermediate pivot marker, while very choppy, has slowly shifted to an overall positive stance for buyers with breaking out over declining resistance to finding support on the 5DEMA.  The only real hurdle for them at present is to maintain the 10DMA on a closing basis as they attempt to take price back above the intermediate minor level at the all time highs.  Sellers will need to push price below the 2870 to 2865 basing area if they are to have any hopes of gaining downside momentum in the coming sessions.  Good luck today!

Primary and Intermediate Levels Detail

 

http://mcm-ct.com/blog/sp500-expert-lounge-update-august-10-2018/

Good morning everyone,

These are key MA levels:  5EMA 2852, 10DMA 2833,  20DMA 2824, 50DMA 2782, 100DMA 2727, 200DMA 2707

These are key Fib Levels:  2929, 2829, 2821

Here is today's market look at the S&P 500 for Friday, August 10, 2018

Happy Friday everyone!  We have three items for the last trading session of the week that will give traders and investors something to ponder with regards to the economic health of the country.  We have the Consumer Price Index at 8:30AMEST, Baker Hughes Rig Count at 1:00PMEST, and the Treasury Budget at 2:00PMEST.  The shallow declining resistance held yet again yesterday and we closed the session on a very weak note as buyers begin to lock in gains and sellers see an opportunity arising for a reversal trade after hitting broadening resistance.  Given present price levels of the overnight session we are set to start the day off roughly 12 points lower then the close yesterday.  A gap down open will be important if it is below the intermediate minor level at 2848 because that would then serve as solid resistance on any subsequent near term bounce.  Primary targets remain the same for both sides of the tape as sellers look to do some technical damage on a long standing rising support level that currently is located in the 2830 area along with some close proximity moving averages.  Buyers will first need to reclaim the 2848 intermediate minor level and 5DEMA in an attempt to challenge the shallow declining resistance level that is cutting through the 2860 mark if they have any hopes of overtaking the all time highs and primary minor level at 2872.  Good luck today and have a great weekend!

Primary and Intermediate Levels Detail

S&P500 Expert Lounge Update – June 12, 2018

Good morning everyone,

These are key MA levels:  5EMA 2770, 10DMA 2745,  20DMA 2734, 50DMA 2689, 100DMA 2709, 200DMA 2649

These are key Fib Levels:   2822, 2775, 2771, 2747, 2734

Here is today's market look at the S&P 500 for Tuesday, June 12, 2018

Happy FOMC Day everyone!  While the announcement of said meeting isn't till tomorrow, price has a tendency not to do very much during the period of the meeting so expectations for something dramatic between now and tomorrow afternoon at 2:00PMEST are rather low.  Outside of that we have the Consumer Price Index at 8:30AMEST, the Feds Redbook at 8:55AMEST, and the Treasury Budget at 2:00PMEST.  The technical picture saw us tag the intermediate minor level at 2789 and then finally break down below rising support just before the close.  The overnight session hasn't had anything in the way of follow through and we are currently set to open marginally higher from yesterday's lows.  Buyers will be looking to establish a new base in and around the 5DEMA and intermediate minor level at 2765 with eyes on the broadening resistance and the primary minor level at 2800.  Sellers have plenty of targets below starting with the primary minor level at 2779 and if they can manage to crack the 2765 level it opens the door all the way down to the 10 and 20DMA stack, rising support, and primary minor level in the lower 2730's.  Good luck today!

Primary and Intermediate Levels Detail

S&P500 Expert Lounge Update – February 15, 2017

Good morning everyone,

These are key timing for today: 10:00AMEST,  2:30PMEST

These are key MA levels:  5EMA 2325, 10DMA 2307,  20DMA 2293  50DMA 2274, 100DMA 2215, 200DMA 2172

These are key Fib Levels: 2338, 2322, 2213

These are key primary and intermediate: 2275(intermediate minor), 2254(intermediate minor)

Here is today's market look at the S&P 500 for Wednesday, February 15, 2017

With red, magenta and white all viable MSP options up to this point 10:00AMEST timing will be important discerning which is the most probable.  We have a health dose of economic reality today with the Consumer Price Index, Retail Sales and Empire State Manufacturing Survey at 8:30AMEST, Industrial Production at 9:15AMEST, Atlata Fed Business Inflation Expectations, Business Inventories, and Housing Market Index at 10:00AMEST, and lastly the EIA Petroleum Status Report at 10:30AMEST.

MSP

 

The technical picture still continues its relentless climb higher maintaining the most extreme of rising support and successfully backtesting broadening resistance.  On a break of the extreme rising support, another test of broadening support would be expected at the very least.  Good luck today.

Primary and Intermediate Levels

S&P500 Expert Lounge Update –August 16, 2016

Good morning everyone,

These are key timing for today: 2:00PMEST

These are key MA levels:  5EMA 2183, 10DMA 2178, 20DMA 2174, 50DMA 2130

These are key Fib Levels:  2191, 2171

These are key primary and intermediate levels:  2180(minor), 2155(minor), 2148(minor)

Here is today's market look at the S&P 500 for Tuesday, August 16,  2016

HAL took on a position at close yesterday from the short side which also plays perfectly into the long standing 2191 technical target that was achieved yesterday morning.  We have a healthy portion of morning data to hit the tape with Consumer Price Index and Housing Starts at 8:30AMEST, Redbook at 8:55AMEST, Industrial Production at 9:15AMEST, and E-Commerce Retail Sales at 10:00AMEST.  While we are still six trading days away from the MSP intermediate term turn date, we are within the one week window which needs to be respected if still in long positions and especially now that HAL has committed to a trade from the short side.  Good luck today!

MSP

MSP

Primary and Intermediate Levels

Primary and Intermediate Levels

S&P500 Expert Lounge Update – May 18, 2016

Good morning everyone,

These are key timing for today:  8:00AMEST,  1:00PMEST

These are key MA levels:  5EMA 2054, 10SMA 2058, 20SMA 2069, 50SMA 2059

These are key primary and intermediate levels:  2020(minor) 2021(minor primary) 2040(minor) 2060(minor), 2072(major),

Here is today's market look at the S&P 500 for  Wednesday, May 18th, 2016

With a heavy data lineup first thing this morning, timing at 8:00AMEST is likely to be key and set the tone for the remainder of the day for the appropriate MSP.  At 8:30AMEST we have Housing Starts and the Consumer Price Index followed by the Red Book at 8:55AMEST and Industrial Production at 9:15AMEST.  Chart wise we bounced off the all important 2040 intermediate minor level again during yesterday's session.  Although this area has provided support numerous times in the past, each time it is tested decreases the odds of it holding for each subsequent test.  This is something to keep in mind going forward for those who have been trading from the long side against this area and also that the 2040 level coincides with the daily BR.  Below 2040 and the next levels for the primary and intermediate that come into play are down at 2020.  Trade safe.

MSP

MSP

Primary and Intermediate Levels

Primary and Intermediate Levels

IMAGINARY NUMBERS – Part 2: The Shattering Mirror of a Centrally Planned Monster

If you can think like a teacher who cheats, and look again at the sea of data - patterns come to light. Patterns, which are subtle, buried under mountains and mountains of data. When looked at through varied lengths, suddenly it's just as clear as day. And when you know what to look for - You can't help but say [when] it has to be cheating.What he's really good at is: "PRETEND[ING]". He's a cheater a criminal, a thief, a cheat - all these things because really he's not far from it. I mean if you really think about what an economist is - the line between an economist and criminal is terribly thin.

Steven D. Levitt & Stephen J. Dubner (23 minutes into documentary Freakonomics)

As the Steven & Stephan said above, when data is looked at via varied lengths and modalities - suddenly things can become as clear as day. This article is not seeking to endorse Austrian economics or debase Keynesian economics - rather it is focused on the data. We are probability and data analysts/statisticians. This article seeks to go into some considerable depth regarding the examination of the statistics and data whose subject was begun in the previous article: IMAGINARY NUMBERS. Hopefully, this presentation also derives implications that can be clear as day.

These days, the line between monetary planning and criminality appears to be very thin indeed. Malinvestment, asset manipulation, unimaginable leverage, theft, distortion & falsification, goal-seek & curve-fit data, false pretenses, special interests and every form of systematic, media & political manipulation - central planners/bankers have metamorphized the benevolence of their supposed task into an art form of criminality on a scale that even the largest criminal syndicates in history would and could not conceive or dream of executing in their wildest fantasies. If this paragraph sounds like a stretch, let alone a mouthful, please consider the accompanying charts and content before making your interpretation.

Shattering Mirror -  unmasking the FED Monster

Shattering Mirror - unmasking the FED Monster

REPRISE

Previously, on examination of the machinations of GDP (and by reference CPI and PPI) it is clear that the greatest area of innovation and growth in the US economy (and others too) is in the areas of "productive" economic contributions that do not require official transactions, can not be proven (and, therefore, can not be easily disproven) and employ new and fantastical techniques of conjuring. MAGIC.

We have touched on the subject of the astounding growth rates of imputations and hedonic adjustments but have not put them into broad perspective. This article seeks to add detail and perspective for the earlier observations. In light of broad data that can lead to some objective conclusions, we, therefore, examine many dimensions of data in detail: government/FED data, reporting, statistics and analysis.

The Federal Reserve System provides a database called FRED that is available from the St. Louis Federal Reserve. This database presents a whole host of variables with which one can see a vast amount of data - much of it useless and inaccurate. If the huge amount of effort that has been put into these data stores were accurate and useful, it follows that the FED would have at least been aware of any one of the issues leading into 2007 and 2008.

In 2005, 2006 and certainly by 2007, at least ONE of these should have been identified:

  • An Approaching Recession
  • A General Bubble
  • Asset Valuation Extremes
  • Statistical Aberrations
  • Housing Bubble
  • Credit Risks
  • Derivatives Risks
  • Earnings Risks

However, as is most often the case when one seeks to engineer data to bias a specific scenario, it becomes quite impossible to look at and for that which one is struggling so very hard to avoid. As it stands, most all Central Planners, especially the FED, missed every single one of the above issues.

IT'S NOT WORKING

Since the 1960's debt and leverage have expanded by orders of magnitude over earnings as reflected in the charts below. Tremendous leverage seems to be primarily shifting money from one account into another, with inevitable risk, depreciation and spread eating away at it. This is providing negative real economic impact, which can also be seen in the charts below. This negative impact can be interpreted directly from a look at the unimaginably large leverage increases resulting in a roughly net zero impact (or worse) in real economic terms. Globally, central planners have attempted to leverage as much as possible. More than imaginable. The thinking apparently is that ultimately this persistence would at some point break the resistance of people to accept finally the virtuous cycle they imagine. In most cases, central planners have more and more often resorted fiddling with data, as it is clear the FED has been doing. However, this is just another ploy to try to break the psychological resistance people have to the central planners ever near virtuous cycle. These are the basis for ever more and more credibility destroying, unsustainable and highly questionable policy.

DETAILS

Please click on the navigation buttons on the chart below to scroll through each chart. There are 17 charts and you can navigate via the location dots at the bottom of the chart or the left and right navigation arrow controls. We recommend that you click on the title link to view this article in detail which will then accommodate the largest chart sizes.  The method of viewing the charts below is quite effective because each fades into the next which makes it easy to track the changes from one chart to the next. If you would like to refer to a gallery, here is a dedicated page with thumbnails of all the charts.

  • Imaginary Numbers - US Population Growth

  • Imaginary Numbers - US Population Growth vs S&P500 Price Appreciation

  • Imaginary Numbers - US Population Growth vs S&P500 Earnings

  • Imaginary Numbers - US Population Growth vs S&P500 Earnings (Float Shrink Version)

  • Imaginary Numbers - S&P500 Earnings vs GDP & Earnings Per Share

  • Imaginary Numbers - S&P500 Earnings vs GDP

  • Imaginary Numbers - S&P500 Earnings vs Price Appreciation

  • Imaginary Numbers - S&P500 Earnings vs Price Appreciation

  • Imaginary Numbers - US Government Debt in Perspective

  • Imaginary Numbers - Welcome to Money Amplification

  • Imaginary Numbers - Overall Leverage In Perspective

  • Imaginary Numbers - Amplification

  • Imaginary Numbers - Overall Leverage In Perspective

  • Imaginary Numbers - Can GDP be Believed

  • Imaginary Numbers - High Wire Act

  • Imaginary Numbers - No Other Conclusion

DERIVATIVES

Since Alan Greenspan attempted to stabilize the markets out of the 1987 crash and the deep recession into the early 90's via any means necessary, derivatives and productivity became absolutely wonderful sound bytes in the 1990's to project a "NEW" era of order, stability, prosperity, growth etc. Nothing could have been further from the truth. It only takes a brief look through our charts to see that the productivity hyperbole was nearly a complete fabrication. Sure, new technology enables more efficient process and operation, however, the banking system and the tremendous debt and interest obligations of the "NEW" era quickly absorbed and re-purposed productive capital and energy into the wasteful and tangential elements that rewarded fools and penalized producers. Ultimately, producers figure out the trick to getting their slice and realize that they are better off trading and playing the game than doing something productive.

Fed Monster Hooved & Clawed

Derivatives, risks have increased for many reasons. Primarily stresses on real liquidity and real collateral. However, also because the markets have grown...now receded. Much derivative risk can not be quantified because it is NOT exchange traded performance bonded. With the FED's roughshod through the house of mark-to-maturity, mark-to-excuse-du-jour accounting - these risks are covered up behind the back room trap door. The one thing that is certain, like the Greece debt debacle is now twice the size it was just 4 years ago when every financial TV journalist indoctrinated the world with how irresponsible the Greeks were and how they would never be granted any credit with the large Central Banks if they defaulted...the Derivatives problems will likely be MUCH bigger next time. Why? Similar to Greece, AIG, Bear, Lehman the Central Banks rewarded imbeciles and have sought every technique known to man to avoid deleveraging...even if it means having to make up numbers to loan Greece 340,000,000,000 when it's clear they had just effectively defaulted on their previous obligations. Call me stupid, but Greece is not at fault here. The bankers ramming sovereign debt issued by insolvent nations to yields of 2% and below with a "take no prisoners" approach are responsible for Greek's inability to repay. Who does Greece think it is anyway - Ukraine?

From a rational perspective, central planning revolves around the concept of data dependence and disciplined application of structure and rules. What Kind of structure and disciplined application of data is it that both grants a state in full default - Ukraine - funding, and simultaneously, a state that is in paralysis but far more manageable situation - Greece - no funding? What kind of data can possibly support these types of contradictions? Most likely none. This leaves a perfect entry for discretion and data engineering to adapt the situation to a desired outcome with no discipline whatsoever. Perhaps, discipline is evident in no other form than the ticking boxes that indicate data was used in the analysis process?  If this is any example, then are central planners acting as glorified discretionary managers regardless of data or mandate? The implications are clear, for the charts presented earlier, no self-respecting data analyst would entertain the protocols that have been undertaken. However, a discretionary process supported by constantly revised data and mechanics fits the bill very well indeed. Could this be the reason that central planner decision making is so persistently rhyming with thinking that are so highly irrational and biased?

If we look at derivatives and say that we know 50% of what is going on. OTC derivatives stand at $650 trillion dollars; this creates a variable in our 50% scenario of $325 Trillion. Considering that OTC represents only a partial representation of outstanding derivatives risk, using only this 50% of reported positions as a basis is a reasonable hypothetical. A few capital calls, accidents, counterparty failures, settlement or shadow derivatives issues later and a small problem might become unmanageable risk of 12.5% of $325 Trillion - or over $40 Trillion - easily higher. These are gargantuan numbers, and there is NO plan B.

Given that the FED has proven that they have a mathematics deficiency. Could this deficiency be a side effect of having a dopamine laced “Control-P” key? Regardless, of this debilitating condition, all the issues presently are more untenable than they were in 2007. Yet the FED is sanguine and "la sai fare" of the risk of achieving negative equity of under -2% on its own equity. So, it is continuing seeks to find ways to expand leverage at just about any cost.

The quality of life and stress levels for 98% of people are high because 98% lines up very well with the little blue sliver on our charts called “the population." The population has 98% percent risk while the 2% has 98% potential as can clearly be seen in these data presented here. How can quality of life for Greeks or Americans get better when linear extrapolators who are practically, philosophically and mathematically challenged like Mario Draghi, Ben Bernanke, Janet Yellen, Alan Greenspan, Haruhiko Kuroda, Christine Lagarde are in charge? Debt servitude has only one result, no matter how much dopamine is added to the Control-P key.

DECEPTIVE DATA

The significance of the chart below is that it shows the dramatic distortions being spouted from the mouths of Central Bankers versus the facts in the real world. This chart demonstrates the dramatic amount of debasement and credit that has been irresponsibly pushed as the solution to growth problems, yet has produced little REAL growth over 120 years.

The FED knows this. However, they seem to accept that engineering numbers to suit their current mood or agenda without much of a quandary. Real Earnings Growth (a product the FED does not market) is following the trajectory of the US population growth over the last 145 years. Debt and modern financial weaponry employed for money amplification have grown in the real terms by many orders of magnitude more than earnings. Is it any coincidence then that it is those very products marketed by Central Bankers to the world? Clearly, it makes no sense to see S&P500 earnings and sales so out of kilter numbers reflected in GDP or CPI/PPI. There is simply no plausible defense to be offered by people whose math skills enable them to create the dichotomy between Nominal and Real performance as represented here that would convince a reasonably sensible person as to how 2 + 1 = 4 and the GDP numbers are perfect.

So, in closing, the Monster has still not got a face, but it is being revealed. The only way to avoid its wrath would be for Central Banks and governments to get back to sound practices with regard doing their jobs and maintaining sound data, analysis, and currency. This would require tough choices and a keyboard with more than simply a “Control” button and a “P” button that is so profoundly used and evident in our charts.

As our recent example, IMF will willingly lend to a country in complete and current default - Ukraine thereby prolonging its agony and impoverishing any potential its future economy may have had. At the same time, IMF/ECB wish to appear prudent with an impetuous Greece, who suffered a similar fate as Ukraine a few years ago. Ironically, IMF and ECB are marketing debt - its all they have to sell…how long will it take them to figure out some scheme to further leverage the > 98% and empower the < 2%?

Sadly these are not choices that the Central Bankers will make easily, or willingly. Many will likely require judicial consequences in their various lands to alter practices. This monster looms large…it has not shown its true face but the mirror is shattering and in every shard will be a reflection of the beast - a beast that looks rather unlike the sanguine figures of central bank leaders.

One thing is certain, appearance of this creature will be anything but pretty.

Imaginary Numbers - Not a Pretty Picture

Imaginary Numbers - Can You Afford to Believe Them?

 

Addendum

Imaginary Numbers: Article Charts

Imaginary Numbers: Click for Article Charts