Delightful cartoon, via Guidepostings

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Well, maybe we were there a few days ago . . .

Category: Markets, Technical Analysis, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Dead Cat Bounce”

  1. in all seriousness, It’d be tres` telling to understand how many ‘angry’ e|mails the cartoonist/editor received from the PETA crowd..

    past that, too bad he didn’t date it–all kinds of ways to signal calls

  2. Chief Tomahawk says:

    They could change it from a cat to a bank CEO.

    And to think I sold my SRS in after market yesterday. Enjoy the short side today folks!

    I think I’ll take swing at DUG.

  3. Boomer says:

    This technical charting is always so confusing for me :)

  4. constantnormal says:

    What’s with the split between QID and SRS today? Normally, they both tend to move in basically the same direction, with small differences in magnitude.

    At 11:26, QID was down 1.18%, while SRS was up 2.20%

    What am I missing here?

  5. constantnormal says:

    Oh — I see, plotting both alongside each other showed this to be pretty much nothing of consequence — nevermind.

  6. MorticiaA says:

    Dorsey Wright would be proud.

  7. leftback says:

    I am not trading today unless we get a big sell-off in which case I will be a buyer in commodity stocks. I don’t see how you can trade this political arbitrage so I am sitting mainly in cash.

    A bloke called Bernie apparently made off with $50B? Impressive due diligence by the hedgies…

  8. Mannwich says:

    @leftback: Ditto. Time to be a spectator today as I’ve been the past few days……..

  9. mcc99 says:

    LOL.. question is, is that cat going to land on the ground, or is he falling to another yet-lower level, perhaps off the edge of a cliff that the building is next to? And if so, how far down is the canyon bottom?

  10. the economic fractalist says:

    From a saturation macroeconomist’s view: This cartoon would be made more accurate by a tiered skyscraper.

    The Predictive Science of Nonstochastic Saturation Macroeconomics

    http://www.economicfractalist.com/blog/?p=4

    The complex macroeconomy operates by regular patterns akin to those of the hard sciences of physics and chemistry and is exactly represented by ideal timed-based unit, elegantly simple, quantum fractal progressions which compose the macroeconomy’s ongoing summation wealth markers – its daily asset classes’ valuation saturation curves. This quantum mathematical fractal regularity, this growth and decay patterned predictable behavior of nonstochastic asset valuation saturation and decay is the essence of the exact science that is nonstochastic saturation macroeconomics. This predictive science with asset valuation growth bounded qualitatively by asset overvaluation, asset overproduction, partially nonserviceable accumulated debt, and wages from ongoing jobs to service that debt, can be used to reckon the time frames of asset saturation highs and the time course and fractal progression to saturation asset valuation lows. The absolute values of asset class valuation highs and lows are dependent on the availability of desired assets and degree of preceding and ongoing credit expansion to obtain those assets. This credit expansion is dependent on the variables of lending rates, lending qualification parameters, and the telescoping of credit through fractional (derivative) electronic repackaging of real and virtual credit and the credit derivatives of asset artificial over valuation. Prospectively applying the empirically-derived simple asset valuation quantum fractal laws, a larger primary operating growth and decay valuation saturation fractal pattern has been recently identified which likely represents the time sequence of the US Composite Equity 150-160 year Great Second Fractal’s nonlinear collapse, The 11/27/22 month or 46/115/92 week Wilshire fractal growth series starting in October 2002 and ending in the 19 July 2007 high follows the x/2.5x/2x three phase Lammert quantum valuation saturation growth fractal sequence. A reflexive 20/50/40 day fractal took the Wilshire to an exactly predicted interday high on 11 October 2007. In the 2005 above cited reference a predicted extension of the third fractal growth period of 2x to 2-2.5x was made. The Wilshire’s 11 October 2007 nominal high fell into the time span of this predicted 22-27 month extension (11/27/22-27months). The Wilshire’s final third fractal extension to 2x-2.5x :: 22-27 month valuation saturation area now has pertinance in relationship to a larger identified fractal pattern. It is the nature of fractals that there are interpolated operative fractal patterns within yet larger fractal patterns. The largest operative macroeconomic valuation saturation fractal pattern for the United States’ primitive stock exchanges began very proximal to the establishment of its constitution. About 70 years later in 1858, the US Great Second Fractal of time length 2-2.5x began. Nonlinear asset decay within the terminal 2x to 2.5x portion is the hallmark of second fractals and 1998 marked the 2x or 140 year time length – entering the terminal 2x to 2.5xperiod of asset devaluation nonlinearity. This post 1998 entry into the time period of nonlinearity has biased this observer’s past asset valuation fractal interpretations. Retrospectively all fractal progression has been consistent with the larger picture of money growth leading to the inevitable ideal asset valuation saturation time frames. The decade or two leading to 1998 and the decade thereafter caused an extension of the 2x: 140 year second fractal length but still within the larger 35 year 2x -2.5x window. The collapse of the Soviet Union, the rise of the Asian manufacturing giants, first Japan and Korea and then China and southeast Asia supplying US retailers with less expensive robotic produced or extremely low labor cost produced items; the rise of the transoceanic transportation industry importing those goods with a correlative surge in transportation related equity valuations; the Eastern symbiotic feedback investment of US dollar profits in US debt instruments allowing continuation of the trade arrangement, the development of the personal computer and its associated software industry, the globalization of US corporations seeking higher profits with outsourcing of expensive US jobs, and the overwhelmingly predominant critical element of the computer based electronic sophisticated manipulations of the unregulated financial and banking industries who telescoped the global money and credit supply into virtual money instruments for the purpose of large front end profits and who were essential in selling US debt instruments to the emerging Eastern manufacturers and maintaining the strange paper for goods arrangement -all of these elements have interacted since 1998 to create two successive asset bubbles created by the available excessive telescoped credit. The PC and Internet equity bubble with froth spillover into other equity classes resembled the Tulip Mania and select undetermined South Sea Instruments credit-available asset saturation bubbles from 360 and 280 years before. This bubble crested in March 2000. The follow-on massive Federal Reserve imprudently low interest rate credit expansion combined with an unregulated financial and banking industries’ credit telescoped and sophisticated debt repackaged credit expansion – with unprincipled lending to the most marginal of buyers(debtors) who had no possibility of servicing the debt – created one of the greatest rotating asset valuation saturation bubbles of all time. The real estate, equity, and commodity bubbles crested in 2006, October 2007, and July 2008, respectively. The commodity asset bubble involved the world’s waning oil supply which is both finite and limited by producers’ capacity to pump it from depleted old fields or convert it from oil sand equivalents. World production capacity did not meet global demand, which was a function of explosive world economic activity expanded by the financial industries’ telescoped credit availability and by the financial industry’s assisted creation and sales of US debt instruments to the new Eastern manufacturing giants – with enormous front end profits. Within a time span of six months, a rapidly contracting real global economy, created a situation whereby available supply overwhelmed fallen demand with oil declining over 100 US dollars per barrel – a remarkable but expected – second fractal nonlinear collapse of asset valuation. It is better stated that the credit expansion leading to these recent 2000 and 2006-2008 US generational asset class valuation saturation areas began with the ‘create work’ economic policies and new entitlement programs in the 1930′s and even earlier with the debt and credit enabling private banking US Federal Reserve establishment in 1913. The rapid growth of entitlement programs have created forward governmental borrowing which further expands ongoing credit. But it is well recognized by responsible parties inclusive of the former comptroller of the United States that these entitlement programs are fiscally impossible to sustain in the out years.
    What then is the larger quantum asset saturation fractal pattern for the 140-175 year US Equity asset class Great Second Fractal nonlinear collapse? 1998 marked the beginning of the US composite Great Second Fractal’s terminal 2x-2.5x possible interval range. The successive great credit driven asset bubbles have extended the interval but made the inevitable nonlinear ending much more catastrophic for enabled debtors and last musical chair asset owners. For the Wilshire, proxy for the world’s equity valuation, starting in October 1998, a growth fractal of 2/5/4 months occurred. A decay fractal of 7/18/17 months thereafter evolved with the initiating 7 months occurring in the saturation area of the 2/4/5 month third fractal 4 month high. In credit cycles asset valuation growth begins in the antecedent decay fractal areas and conversely decay begins in the the antecedent terminal saturation growth areas. A complex 3/7/6 month growth fractal began in last month or two of the 18 month third decay fractal during the time frame of June-July 2002. This 14 month asset valuation fractal is followed by a second 35 month 2.5x growth fractal and a 28 month third growth fractal. A similar monthly fractal pattern exist for the CAC, FTSE, and DAX. For the NIKKEI, a 14/32/28 month Lammert fractal parallels the US and European composite equity valuation saturation pattern. Note that even the NIKKEI falls into the Lammert x/2-2.5x/2x fractal growth pattern. The third fractal 28th month for the Wilshire, CAC, FTSE, DAX, and NIKKEI is September 2008 – the lower high valuation sation area time frame where the Wilshire’s incipient nonlinear decline began. The Wilshire’s weekly fractal sequence correlative to the incipient 3/7/6 or 14 month base fractal is minimally complicated with a terminal decay weekly fractal series conjoined with an incipient weekly growth fractal series forming the first growth fractal of the 2002-2003 three phase weekly fractal growth sequence. The weekly fractal progression commencing in June 2002 is a decay sequence of 7/17/18 weeks where valuation growth begins in the second weekly decay fractal resulting in a nodal 17 week low – but not an underlying slope line 17 week absolute lower low. The third decay fractal of 18 weeks does end in a slope line lower low in March of 2003. The last 5 weeks of the third 18 week decay fractal becomes the base for the next fractal series of 5/11/12 weeks. The combined decay fractal series and growth fractal series occurred at the interface of a period of ending credit contraction and beginning credit expansion and had a duration of 61 weeks. The second fractal nodal lows occurred at week 150 and 155 with an average of 152.5 weeks consistent with an ideal first fractal base of 60 and 62 with an average of 61 weeks. 120 weeks after the 150 week second fractal nodal low or at 2X of the ideal first 60 week base, the final lower high third fractal saturation area yielded to the incipient area of the nonlinear 1.5-1.6x fourth decay fractal. The time frame of this the Wilshire’s third fractal 120 week final lower high valuation saturation area was during the 3rd to 4th week of September 2008 with a non linearity occurring at week 122 or about the second week in October 2008. The monthly and weekly fractal sequences for the Wilshire from June – July 2002 near the end of the internet asset valuation and credit bubble collapse are 14/35/28 months and 61/150-155/120-122 weeks – both conforming rather precisely to a x/2.5x/2x Lammert fractal growth progression. The 1.5-1.6x decay fractal for the completion of the x/2.5x/2x/1.5-1.62x Lammert growth and decay fractal series would ideally last about 21-23 months or 90-98 weeks. Currently as of 13 December 2008, the four phase x/2-2.5x/2x/1.5-1.62x Lammert growth and decay equity asset valuation saturation sequence starting in June -July 2002 is 14/35/28/3-4 of 21-23 months and the weekly pattern is 61/152.5/120-122/10-12 of 90-98 weeks. Reviewing again the Wilshire’s 11/27/22-27 month interpolated growth fractal commencing in October 2002, an interesting observation can be made about the 22-27 month extended third fractal containing the new science of saturation macroeconomics predicted 11 October 2007 nominal intraday high. A 6 month or 24 week fractal contains the 11 October 2007 22-27 month third fractal high. This could reasonably be the incipient base for a decay fractal sequence of y/2.5y/2.5y :: 6/12 of 15/15 months or as of 13 December 2008 y/2.5y/2.y :: 24/47 of 60/60 weeks. The terminal area of this interpolated weekly decay fractal in 72 weeks approximates the terminal area of the 61/152.5/120-122/12 of 90-98 week larger four phase Lammert fractal saturation valuation series occurring in 78–86 weeks with possible nodal valuation lows marked both end areas. And interestingly because this is the conclusion of such an enormous 140-175 year US equity second fractal, this fractal sequence may be an interpolated valuation fractal series and part of a 40/77 of 97/100 month larger decay fractal sequence starting in the saturation third fractal 4 month area of a 2/5/4 growth fractal beginning in October 1998 with an incipient base decay fractal of 7/18/17 or 40 months. This decay series would place a nodal low approximately 9 1/2 years. This would roughly parallel gold’s expected nodal low with a 7/17/14/10-11 year Four phase Lammert valuation saturation fractal series beginning in 1970. For the smaller interpolated global composite equity fractal series of 14/32-35/20/21-23 months and gold’s monthly interpolated valuation saturation series. proxy for the CRB commodities, of 20-21/51/41/2 of 31 months and of 17/35/34/10 of 25 months, a further 80-90 per cent decline of equity and commodity values is possible over the next 16-20 months with long term debt US instruments approaching zero yields.