I am sensing through the use of all my various voodoo methods that we may be in the process of trying to top out very soon. If we are topping out we can do so in one of two ways: 1) a correction in price or 2) a correction in time. I think we are opting for the first given the continued weakening of credit and the implosion of the underlying economy. The action of the central banks has been nothing less than frightening. The BOJ has effectively begun the loss of faith in the power of the central banks due to their insistence on implementing negative interest rates which has caused the exact opposite in it’s intended outcome: that being a collapse of the USDJPY and the Nikkei. We also have James Bullard up tomorrow for a 2 hour interview rehashing what he said last week and I have to ask my self why? Is he going to Jawbone the markets more ardently tomorrow? I have established that Jawboning seems to have lost its effectiveness in causing rallies and prolonged periods of short covering. Additionally, just in the last week, we also have the seemingly more serious trial balloon of banning cash eminating from Lawrence Summers and the Editorial Board of the New York Times. The reasoning of course is to prevent the criminal element from thriving. What a pack of lies. NIRP does not work if one can hoard physical cash. The speed with which they are trying to push this cash ban on us makes me believe that behind the curtain is even worse than I thought. I watch what they do not what they say. Cash banning is a prerequisite of NIRP policy so this likely means the Fed is quietly freaking out behind the scenes.
If we top out here and take out the 1805 S&P level with conviction then that is extremely bearish. The reason why is because this would be an extremely left translated intermediate cycle top. We had an intermediate cycle low on January 20. If we were to have the intermediate top this week that would be a top in 5 weeks. The typical intermediate cycle runs 22 weeks from low to low. An intermediate top here would imply that we would not see the next intermediate term low for 17 weeks or around the third week of June at much much lower prices. I have been adding shorts again this week and will add more upon confirmation of the turn. I can’t emphasize enough that the set up here is extremely dangerous and in my mind has a high likelihood of electing. If the the 1805 level holds then this is just a trading cycle top and we will chop around in a range and correct in time.If you enjoy the content at iBankCoin, please follow us on Twitter