a Bloomberg article today indicates Fed Chairman Ben Bernanke may hit an obstacle as he considers whether to purchase more treasuries in order to spur growth: owning too much.

 “Excessive Fed buying of Treasury securities may reduce liquidity by leaving less for private investors to buy, said Nathan Sheets, global head of international economics at Citigroup Inc. Bernanke instead may favor buying mortgage-backed securities or using new tools for easing, he said.

Purchasing too many Treasuries may “have a serious long-term effect on the market,” Sheets, who until last August was the Fed’s top international economist, said in a phone interview. “The Fed implicitly has a mandate for financial stability, and as part of that they’re concerned about ensuring the functioning and integrity of financial markets.”

Bernanke testified to Congress last week that the Fed is evaluating additional steps to create jobs and reverse an economic slowdown, including buying mortgage bonds or changing language for its policy outlook. Unemployment hasn’t dropped below 8 percent even though the central bank has held its main interest rate near zero since December 2008 and purchased $2.3 trillion in bonds. Policy makers plan to meet July 31-Aug. 1.”

I read  Fly’s post on Tony Robbins fire walking fiasco and got a chuckle.

First, let’s all agree – Tony Robbins is a fucktard. If you need to spend $300 to get motivated in your life, leave me a response with your e-mail address and /or phone and I’ll be glad to yell at you for an hour for half that much.

I’ve been in sales for over 20 years and was forced to sit through multiple “seminars” by my previous employer. Most of them repeated the same “if you believe it you can achieve it” drivel. Few really focused on what it takes to be truly successful – expert listening skills and analytical thinking.

But I digress. One of the seminars involved walking on fire (embers). There were around 80 people in our group and no one was burned during our event. I found the experience banal (as you can see from the expression on my face) but others in our group really seemed to get something out of it – so good for them.

Successful firewalking really invloves just two aspects. One the is the set up – using the right wood (cedar for example), shallow depth of the the firebed and length of the walk (8-12 ft.). The second involves the user walking briskly over the coals without hesitation.  There is some risk involved for people with thin skin (seriously) – but all in all it’s not a big deal.

This San Jose fiasco sounds like poor set up more than anything. Even though you must sign a waiver to do it, I’m sure we’ll see some happy lawyers ready to torch Tony in the coming weeks

Since the June 4 Low – the SPX has been moving up in a very defined channel.

Take a look at how the sell offs coincide nicely with the CCI

Based on this … we should sell off to 1346 – with a break below 1333 pivot marking a trend change

In the wake of the tragic shootings yesterday in Colorado, the Government Conspiracy Theory blogosphere is already out in full force.

I’ve already read that he was brainwashed during his studies in neuroscience research at Colorado – armed and equipped by CIA and or FBI black ops and the attack staged just in time for a vote on the UN small arms treaty.

uh huh…… Please excuse me now so you can go take your lithium.

Every time an tragedy like this occurs the lunatic fringe emerges in full force. It’s usuually subscribing to a nefarious plot that first involves disarming Americans. It then transcends to the formation of a one world government which heards us all into concentration camps for re-education ( or the Zyklon B showers)

Sorry Folks. Just like Gabby Gifford, Virginia Tech, Columbine and Oklahoma City before it, this was the act of a criminally deranged individual(s)

To put the levels of conspiracy theorists it into context:

Google “congresswoman gifford shooting government conspiracy”   you’ll get 59 million hits

Google “virginia tech shooting government conspiracy”  1.6 million hits

Google “columbine shooting government conspiracy” returns 847,000 hits

My wife just walked in and asked some of the same questions I’ve read in today’s articles.

Here’s the answers:

“How can a college kid afford to buy guns ammo and the rest of that?” – Credit Cards – they’re very easy to get for college kids

“Where would he get full body armor and gas maks?” – Any Gun show or anywhere on the web

“Where could he learn how to booby trap his apartment like that?”   On the web – Just Google it

Unfortunetly a % of America’s gun owners have an irrational fear of those boogyman in Blue UN Helmets parachuting in to take our guns away. This phenomena really took off about 4 years ago this November. Not so coincidentally around the time Obama (alleged Muslim Socialist) was elected.

If you’re still not convinced of the paranoia – go take a look at the charts of Smith & Wesson (SWHC), Sturm Ruger (RGR)  and Olin Arms (OLN) to a lesser extent. These stocks are not up because Hunting has suddenly replaced Xbox as our national pastime. (Not to get off my rant here, but any of these stocks could be a quick buy on Monday)

And before any hate replies come in – I’m a proud gun owner, sports shooter & hunter for over 30 years.

I just don’t see any black helicopters

I love it when I see headlines like this

“3 Stocks Near 52-Week Lows Worth Buying” http://www.fool.com/investing/general/2012/07/17/3-stocks-near-52-week-lows-worth-buying.aspx

“Top-Ranked GameStop Corp Getting Very Oversold” http://www.forbes.com/sites/dividendchannel/2012/07/16/top-ranked-gamestop-corp-getting-very-oversold/?partner=yahootix

Then I open the chart and see something like this – Gamestop hitting 3 year lows. It’s like Motley Fool and Forbes are just begging you to catch their falling knife.

So why is Gamestop falling? – look at their numbers.  Sales down 12% YOY – Earnings down almost 11% – But Hey they’ve got that great 3.6% dividend. Which is fine if you buy now and the stock doesn’t fall more than 3.6% in the near term. It’s called a value trap and I see them all the time.

I’m not sure if the writers of these articles even understand the business they write about. Gamestop has competitors on all sides selling the same product cheaper than they do. Even the trade in / used game market is dropping as gamers are moving to subscription based services like Gamefly or Rent them at Coinstar’s (CSTR) Redbox kiosk

Anyone wanting to play this short should target $13.20 /S2 level

Stop would be 17.05 which is S1 on the daily chart (bottom chart)

My Last chart was a one year view. Here’s what the last 3 years of contraction in China look like. Would you buy this chart?

If you want a macro view – here is what GDP and Fixed Asset Investment looks like over the last 3 years (Thanks to Tim Knight / Slope of Hope blogspot for the charts http://www.slopeofhope.com/)

And finally 3 yr view of Industrial Production & Retail Sales

I look at charts and think one of two things – This chart is good or this chart blows goats

With that caveman approach in mind – let’s take a closer look at China

– Just like the SPX the June bottom trend line was broken with conviction

– 200 DMA crossed the 50 DMA – Chartist call that the “Death Cross” for a reason

– RSI trening down

– MACD rolling over – But hasn’t turned negative yet (trying to be objective here )

All in all it’s maybe a  1in 4 that it breaks back above that 50 DMA at 19249 AND holds to reverse trend

Sorry guys but these numbers are not blowout: http://ibankcoin.com/news/2012/07/12/key-figures-from-china-gdp-report/

I’m still reading “buy the dips” on $SPX – why?

• June 4 bottom uptrend is broken (which I mentioned here http://ibankcoin.com/kcscott/2012/07/10/spx-1332-a-line-in-the-sand/)
• MACD rolling over
• RSI on confirmed downtrend

The only question left is if the Bulls can save the 50 DMA today – and I sure wouldn’t make that bet without a tight stop

Even with the sell off over the last 5 sessions (today may make 6) the VIX is hardly moving at all

That shows complacency in the bulls and raises the likelihood of a crash scenario