Watching this market over the last year has been absolutely amazing. I have to hand it to the bulls. You have been a stubborn bunch. I knew I was right this year when I was literally one of the few bears standing. I was abandoned by all except a battle scarred war torn veteran futures trader who refused to go long and would only short the rips, a former convertible hedge fund PM, a Belgian futures trader and my cycles guy Tim Wood. We would hand hold each other through this range trading nightmare. I have a massive levered swing short I put on close to the May top in SPY. I plan on riding it for awhile. I have some massive individual shorts in stock specific names. My shorts are basically frauds. I use index options to trade the ranges (puts in SPY, IWM XBI).
What is amazing to me is the complacency of the bulls, twitter finance and the institutional buy side community even after the break in the Market on August 19th. Most of you believe that the economy is fine and that sentiment is too bearish because of such and such an indicator and that we will rip higher because the CB’s have your back. I am here to tell you to throw all that crap away. You all are about to know what real fear is like. I, and my compadres, believe that after this rally completes (highly likely it has) we will begin the real move down. I expect the market to implode an additional 15-25% by the middle of October. I believe that move has either started or will after one more squeeze higher into next week.
Why do I know this? Because we have seen the statistical set up complete on Friday August 21st that has been seen at every major 4 year cycle top. I also know that when the 4 year cycle top is in the first move happens quickly and is deep. Due to the excessive money printing and demonic stretching of the cycle the correction will be ungodly in nature and rip most peoples faces off (think 1929 or 1987). You see when you mess with mother nature and alter its path there are unintended consequences. The amount of debt that is going to be delevered is staggering. I usually do not buy lotto puts but I did buy some today at the top of the move at ES 1969 resistance. I think we see SPY 170 by the middle of the month. I have laid out the fundamental case for this top in all my previous posts and now we have the statistical set up that has completed. I know that the trend has changed to bearish and when the other 95% of you figure it out that’s when we get the OMFG moment and the losses really begin to pile up.
Most folks are still not positioned short nor think we will go much below the low of last Monday if we get there at all. This time is different. I suggest as you are freaking out that you refer to the wisdom of Paul Atreides of Frank Herbert’s Dune series below.
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an alternate forecast from an astrologer who’s been to astro w regard to finance for decades .. fwiw, of course
“This is the moment of the fed announcement on September 16th. As you can see looking at the chart there is a red line which is the opposition between Jupiter and Neptune within a few minutes of being exact. This tells me that EXPANSIVE LIQUIDITY IS THE FLAVOR OF THE MOMENT.. This aspect is the reason I am not calling for a crash in the stock market at least NOT YET. This aspect tells me to expect the opposite as a reaction to whatever the fed does or DOES NOT. So far the market pattern has been on the same track as it was 3 months ago when I posted my no crash in September call.
This does not mean that the shit is not going to hit the fan. I have a feeling that the US dollar is going to do a swan dive at least for a few days after and the supports my notion of a stock market advance as stocks are the only way to protect yourself at present. How long the advance lasts is not set in stone but it should last long enough to make those who have been calling for a crash look like fools. Once that piece is in place then the actual bear can get started and it is going to be a long drawn out thing lasting into the election in 2016. The bear ahead is likely to be a double whammy as the stock market AND the USD go down together which in the most extreme case could be an 80% loss of PURCHASING POWER over 18 or so months.
I will let you know if I change my mind as this end of the market nightmare that started in 2000 will run it’s course as a VALUE BEAR and not bear measured just by the nominal price on the Dow. “
we go to 1400 sp then we climb back
btw many knows we’re in for a greater correction -not 5%
about your timing and forecasts ( and not only for indexes trend.. ) it’s been pretty bad all across 2015
BlueStar any chance you could share the fraud equities that you short please and Thanks!
Fear does not exist I this dojo does it?
Hope you’re right and we get a 1938 style crash.
Blue Star what about your conviction trade on AMZN not long ago??? Are you trying to scare someone again.
bood,
you sound like a superstar. maybe you should get your own blog.
golflover123,
Sorry no. No interest in getting squeezed. Maybe later but not now.
goose20,
made a lot of money on my short in 2014 then lost 15% the first day it popped and trend changed. covered and never looked back. My thesis hasn’t changed and I will short it again.
Nicely done BlueStar!
I found this site looking for bearish confirmation bias a few months back. Although I enjoy the daily manic commentary of the others, the true value here imo is Blue’s longer term view of things. Thanks Blue for your honest (and free! I tells ya) guidance. I too am into puts on a bunch of dogsh*t companies that for some reason people refuse to see are clearly on bearish trajectories.
Good luck with shorting AMZN this should be a core holding for everyone. Also maybe 15% correction but no bear market without a recession and that doesn’t look possible anytime soon.
Excellent post !! Thank you.
I know this may sound odd but I would have preferred to have been squeezed today.
Blue, quick question for you. I read all the blogs on iBankCoin, and enjoy all of them. Could you give me a little insight as to what exactly is the statistical set up that you refer to as being complete August 21st? Thanks for the feedback.
@Bluestar
why ( you would have pref a short squeez today )
boyaj,
I am sorry I cannot as they are not mine to give. However the Problem with them is that you need four out of five to get a top. If you wait for them to fall in place the move has begun without you. So there is an element of front running and anticipating the signals. FYI they have been trying to set up since last April. Now that they are here I am confident of the trend change. By the way even those who knew about this potential set up missed it because it had dragged out so long.
I’m not a superstar in fact I need to do this shitty job instead of going around and party all my life , you sound too tragic though and your visions are too catastrophic.. i ‘m dshort subscribed even though they’re usually negative evaluating outlooks and forecasts ( based on some very pertinent dat anal isys ) their “lil” more weighted and ponderated then you ..no apocalypse around ..
this is just some seasonal turnaround and the ( bull ) game will eventually restart when we get down to that support we have to check . it’s not neat but not too far and we’ve a long week end with china market alone on monday .
bood,
I wish I was wrong but I only report what I see. Sorry you have a shitty job. Have a good weekend.
thanks you too . still don’t get why you would have preferred to be squeezed
boyaj,
Tim Wood is a friend of mine as well as Blue. His dna markers can be found at his website http://www.cyclesman.net it’s worth the price of admission.
But it is common knowledge we had a Dow Theory Bearish Primary Trend change
Can someone block ‘Bood’. Thanks.
i’ve finished for today ..thx..
Guys,
I am monitoring an interesting chat room. Futures trader pros. They are currently discussing the fact that inverse head and shoulders (like the one we had yesterday) used to almost always break out upwards in the bull. They are saying that the character of the market has changed. So one by one folks are flipping bearish. Its starts with the pros and it ends when we get real capitulation at much lower prices.
Juice,
Thanks. It may happen. I am open to all possibilities. Not positioned for that one at the moment.
“that’s when we get the OMFG moment and the losses really begin to pile up.” Funny, I call it the “pants pissing moment”. I don’t think we have had that yet. The daily NQ futures is forming a triangle. Could go either way BUT the currently forming daily candle appears to be a hanging man.
Hey guys,
I would not be shorting down here. This feels like a trap to me. Baring some really bad news I would expect a rally on Tuesday.
I meant to say establishing new shorts. I am not doing anything. Not covering because I believe LT lower.
Blue,
I have an $SPXU long from $39, you would close it out before close?
Noni,
I am not a day trader. I am short from much higher prices and I uses options tactically. Tough to say. OA has a better read on such things. He kicks my ass on short term stuff.
Do you think there is 0% chance we just take out the lows one more time in a couple months and then rip higher as we have done in previous years or you believe absolutely there is no chance of that and this is a massive multi decade long bear? Serious question.
JP,
There can always be rips higher.
longer term the trend is down.
http://kingworldnews.com/dr-marc-faber-9-5-15/
I just found this blog. We are on the same wavelength. How can anyone buy into this global mess? Congrats on being right about this crash…and yes, I do believe we break the low of August 24th, and eventually the low of March 9, 2009.
No exposure here but have a feeling Bears get smoked again
I’m rooting for a collapse though
“Small speculators went net short index futures by $2 billion this week, 2nd largest short position in 20 years.”
The TV series limitless starts 9/22…. The day before 9/23!!! Oh no!!!!!! Does that mean if we don’t become limitless we all die?
I share your sentiment. There will be false bottoms in the coming bear market that will take the Dow down to 13,600 and the S&P down to 1365. After six years of convincing the bulls that the markup was justified due to QE, now we are seeing Mr. Market building his case for lower prices, much lower—where he can buy low and start the profit cycle all over again. It’s amazing that people do not pay attention to this, or even have a clue of what is going on. We have not seen a selling climax yet, which would be characteristic of bottom. Aug 24th was not the shake out to end this cyclical bull market. But it is coming, all the while we hear cries of the market being “oversold”. As you said, the bulls are still too complacent. They think this is going to just be a long awaited “correction”, and are not seeing the forest through the trees.
@Bluestar– yes, there’s definitely been a change of character in the market. Compare the pullbacks in the market during the past 6 months to this recent correction. It’s pretty clear that things are different now. But it will still take some time for people to admit that the character of the market has changed. The market has to test supply down lower—and there will be a lot of supply. The Aug sell off took out the weak hands and fast money. Next will be the fund managers and the long term public.
@juice…small speculators are sometimes right when they operate as the herd during major turning points in the market. This only helps to further the cause of the bears who are on board with Mr. Market’s bear market campaign.
@bushwacker2 … yes sometimes small specs are right as you say but usually in such a case, their conviction will be severely tested as the current ramp in futures indicates. Also, the big money will make their allocation decisions later in the week, from what I hear, so the current week will be … interesting.
Blue,
Thoughts on today’s up action?
JpMorgains,
I believe we are done. Zero chance. But I could always be wrong. I am often wrong but never in doubt.
Juice,
Squeeze here. I will be adding.
9/23 alert,
LOL. 9/23 is a scam.
noni,
I love it. I get to short sell stocks to The Fly
I can’t even describe how good I feel about shorts overnight here. Everyone, and I do mean everyone, has caught on to the fact that we broke up outside of a symmetrical triangle today. Perfect time for a fast move down from a failed breakout. Gap us under 1940 please.
All systems look to be go for bulls tomorrow. I honestly couldn’t have set it up any better for a rug pull. No doubt about it, everything looks great heading into the Asian session of Globex. From equities to currencies, it all looks super bullish. That’s why I am so very short.
Pain trade up?
OA,
Who are you talking to? No pain here bro.
Just when the bears get confident, this happens. Damn tough market. Good luck guys. Still can’t get much confidence on either side here. Not enough of a low risk setup for me.
john v,
There are no bears. Most bears are pretend and never commit capital. i love rips. i get to reload. can’t short the hole. if your time horizon is longer than a day you will come to realize who is in control of this tape. The trend is down. Go with the trend.
in the fwiw dept. – Not only bulls should know what can go wrong but in this environment, bears as well, as of course nothing is written in stone. However, according to my financial astrologer friend, it’s written in planetary bodies and their effects on human psychology, mixed in with many other factors. to wit –
“Similar setup now to the Nostradamus eclipse in 1999:
In August of 1999 a much heralded solar eclipse occurred that had been touted by some financial astrologers as a world ending calamity. The aspects exact when the eclipse occurred were indeed alarming as it had a nasty grand cross in the mix. HOWEVER the markets had been correcting a month or so before the eclipse and as I looked at the situation it seemed to me there were not a lot of potential sellers left to scare. So my call was buy on eclipse day. The nasdaq doubled from there into year end. That was the last leg up and the rally weakened ONLY after year end and we know the rest in 2000.
I am kind of looking for similar on the 9/13 eclipse but not a double into year end. It would not surprise me if we had a new all time high in the fall however. Markets don’t crash when too many are expecting it. The rally has to be strong enough for the bears to capitulate and that price level is not easy to know in advance. It should be easy to see in real time however. “
juice,
military intelligence, financial astrologer,
Come on. Enough of this. This is a serious financial site. Actionable not whimsical shit only please.
@? – this is a serious financial site!?
I guess you don’t understand what ‘the fwiw dept,’ means, therefore, it means, make of it what you will or make nothing of it just as you would with any so-called actionable ideas you may find on this ‘serious financial site’ or anywhere else for that matter.
There is much we don’t know and there is much beyond the scope of our perception, that even someone such as yourself should be able to grasp this fact.
And the entire point of that post was – who the hell is thinking of new highs here and now!? It’s just another possible scenario he’s pointing out in addition to the many expressed here.
BlueStar, no, not you. The commenter above. The “feel good” about shorts overnight…
I read Jeff Saut regularly and he referenced Tim Wood in his weekly commentary yesterday. Here’s his latest free public writing:
http://www.marketoracle.co.uk/Article51946.html
jon v,
Tim is the man. Good friend of mine. He is the real deal. Jeff asked Tim if he could quote him. As you now know Tim said yes.
I’ve been watching bears get blown away for 6 years. Is it different now? Why?
freebie,
because we are in a bear market. i have been writing for a year why its coming and why it will screw everyone up. i am done explaining it. you can read my past blogs to catch up to speed.
XBI scheduled for a 3 for 1 split tomorrow according to Nasdaq http://www.nasdaq.com/markets/upcoming-splits.aspx
BlueStar,
Thank you for your response. Good luck.
2 Hall of Fame Cycles analyst Peter Eliades and Tim Wood have a fire side chat. Give a listen it’s free
http://www.cyclesman.com
listening now – start at 5 mins
https://cyclesman.com/wp-content/uploads/2011/01/Carrol-Financial-090515.mp3
Fun fact
The cost of the the Monica Lewinsky scandal investigation, the most important investigation ever for the US, was greater than the cost of investigation of 9/11.
https://www.corbettreport.com/interview-1088-black-op-radio-911-research/
Blue,
Thoughts on today’s action/run up at closing?
follow the money 8.5 trillion
911
https://www.youtube.com/watch?t=3515&v=n3xgjxJwedA
rally is likely to continue besides the fact that Gartman is back to short and has an ‘official recommendation of going short $SPX .. bada-bing! $$$ 😮
https://twitter.com/sentimentrader/status/642422971047542785
“Small speculators in index futures went to $6 billion short this week. New all-time extreme.”
Blue…Still no equity short ideas?
Enjoy these quiet days.
song https://www.youtube.com/watch?v=yn4407UBuGA
The average person I see on the street seems oblivious, unconcerned and feels they are owed this, if not downright arrogant
song
https://www.youtube.com/watch?v=XLThjyfqkJg
Blue,
Has your bearish stance changed at all? What’s your outlook for the rest of the September?
Indeed, human nature has not changed; however, what is different this time is that most of the world is in on the rigging this time. That has never, ever happened in all of human history – until now.
BlueStar – will you be attending the NYC conference?
when Lehman Brothers went under in 2008, its total capital was 3% of its balance sheet. The Fed’s is less than half of, 1.3%
the Fed. They’re sitting on $4.5 TRILLION worth of existing bonds, most of which they purchased when interest rates were basically zero.
So what happens if the Fed raises rates? The market value of their entire bond portfolio will fall.
And given the razor-thin capital the Fed has in reserve, they can only afford a tiny 1.3% loss on their bond portfolio before they too become insolvent.
that.http://www.sovereignman.com/trends/the-global-financial-system-is-now-resting-on-a-margin-of-1-3-17441/?inf_contact_key=ca431800bbf89d0ebc5660f61bfedd8769a4936081a58fa84a36c8a521ce8754