The retest of the August lows is on the horizon. The question is do we bounce off and go to all time highs or do we blow through it like butter and seek a new level with much lower price discovery. Personally I believe we have begun a major new leg of the correction last Thursday. I believe the second chance rally is in the rear view mirror and we will begin going lower fast. Above you see a painting called The Scream. The general public should begin doing that soon as we accelerate lower. Liquidity is leaving the building and I can smell liquidation and fear building under the surface. Take a look at the Goldman Sachs Financial Conditions Index below. It should be improving if this rally were for real. Unfortunately it is getting worse and heading back up. I have been stalking this 4 year cycle top for a year. It began in May, made its presence felt in August and is about to send genuine fear and loathing throughout the land. I have shared with you my fundamental thoughts as to why this is happening and some of my technical thoughts as well. In my humble opinion the time is now. A sublime perfect moment of convergence between price and time. I reiterate that I am not giving advice as talk is cheap but I am positioned for the shock and awe that is about to unfold!
at this point in time would you place a bet on some OTM puts?
Jimmy,
I am loath to give advice. But yes I have a wee bit of those in addition to many other things.
Don’t be afraid to change your mind. You don’t have to keep convincing yourself that we topped in May. Open you mind, face the fact that we may be going higher and never looking back very soon. Very soon my friend, as long as we can make it to midnight!
You post this at 9:23 pm?
freebie,
I would change my mind if evidence presented itself. However it has not.
jts5362,
lol. nope 2:22 my time.
It’s not looking good right now, but every storm has an epicenter. Where do you see the epicenter of the upcoming storm emerging? 2000 was Internet, 2008 was banks, and 2015 would be ….?
‘they’/someone keeps throwing money in a few anointed stocks which hold up the indices, like FB AMZN GOOGL TSLA, etc., while everything else gets tossed. That is NOT bullish! and in fact is delaying the ultimate destiny of this market, so another hard plunge awaits.
Great post and thanks for the work Blue’
Prices are set at the margins and that means by people like me and I’m not buying right now.There arn;’t enough people like me in the market to make a difference.The institutions have to start
dumping to turn this into a panic and
they might if their year end bonuses
are in danger.
Blue –
I sold all my remaining puts yesterday. In retrospect early, but can’t be upset with the recent gains. Appreciate your insight and thanks for keeping me involved on the short side. Very hard to be short. IMO we bounce hard for a day or two and I will re-load.
PM stocks are ripping titties off to the up side.
still didnt buy the puts on biotech lol thats what i get for waiting
Hi Blue,
Could you give me a quick rundown of how to interpret the GS Financial Conditions Index? What do high levels and low levels mean?
I was trying to find some information on it, but all I got was what it’s components are such as fore-ex, commodity, dollar value, etc.
I appreciate the feedback and knowledge.
Boyaj,
Up is bad down is good. Essentially a cocktail of financial conditions. When low everything is loose and life is good. When tight there is financial stress. FyI we are higher now than in 2011.
Off to Europe for an important business matter. I will likely not post for several days. Carry on.
Bluestar,
Late last year you did a post titled someone is holding the Old Maid. You specifically mentioned Deutsche Bank. Do you think the Old Maid is being held by Glencore, Petrobras or both? Or am I totally off base. I am trying to get a handle on Glencore’s counterparty risk but do you think it is large enough to cause serious damage? Zerohedge called them the AIG of commodities but I am considering the source of info. I would love to hear your commentary on this. Many thanks for the awesome work you do.