Party Could Be Over - At a Minimum All Cash the Prudent Move

Atlass,   I've personally never seen a market with so little upside, other than 1999-2000. TZA baby

Always enjoy reading your stuff.   Mac

Prepping for potentially making some meaningful moves fellas.  I need to see what happens between 1407 and 1422.

looking for confirmation in the following three charts:

TZA

UUP

TYD

I like the potential setups in these. 

For you fundamental only guys - I'm still seeing confirmation of no new QE in the metals, debt markets, and currencies.  Even if he does do it looks to me like it's already baked in the cake.  he would have to do a massive new QE which expanded the balance sheet beyond the wildest dreams of even the most pie in the sky cheerleaders.  Do that with food prices ramming higher and oil threatening to send gas above $4/gallon? 

Looks like the boys are gonna wrestle over this 1407 just like they did with 1365.  I had 1365 earlier as a key level and they sure did throw the kitchen sink at it to move it above that.  they had the media person endlessly cheerlead imminent QE and Draghi came out with his tough guy act threatening to use his secret weapon (which btw does NOT exist).  Note how some type of central bank activity takes place at damn near every key level.  seen many times where they pop it above a level like this as if to trap as many longs as possible.  if this were to happen could be a quick drop in USD and rise in UST yields as well to really crank up the cheerleading.  so let's watch for any movement above 1407 to 1422 or even 1429.  if there is minimal volume (volume has been embarassingly light) and it kind of floats around (perhaps leading up to Jackson Hole where Bernanke will save us all with his magic wand) then maybe that sets up TZA and the others.

Leaning to TZA because this move since June is 110% based off of central bank Kool Aid and driven by large caps.  Smaller issues have shown less relative strength.  when the short term trend changes they should show more weakness. 

Also considering shorting EWP (no offense if you live in Spain).  Looks tired and sluggish and the cat is obviously already out of the bag on all these so called solutions for Spain.   

long TZA at 16.65.

added to long UUP at 22.37. 

It's like I said all along.  The Fed and ECB are in a box and they do NOT have any magic wand.  Their current tactic is as I have noted in this thread to lay the coke down on the table and lay the hookers on the bed without letting the junkies actually touch them. 

I can argue that the Fed can not and will not do another QE in the same form as it was previously.  if they do new QE it will have to take another form.  up until now QE purchased primarily treasuries off the balance sheets of the primary dealers.  they get the "wink wink" from Bernanke and use the cash to jack up risk assets.  there's just one problem and Bernanke has even stated exactly this in front of congress.  treasuries are the most reliable and strongest asset on the balance sheets of these banks.  bernanke can't keep buying them because it will actually make the banks less stable.  that's how fucked up this circle jerk is. 

so far in 2012 deposits at Spain's banks have dropped by almost 18% and it is picking up steam.  that's called a bank run.

don't worry though, tune into CNBCheerleaders on Tuesday morning and they will assure you that "everything is fine".  it IS all connected and it doesn't matter how many times they try to convince you otherwise.  the entire system is 100% reliant on faith and confidence. 

Mostly bad news today, with most indexes off slightly. Yet, the Russell 2000 up 1.2 percent.  Insane.

Only a matter of time before this fantasyland takes a nasty twist.

120K may not create much of a reaction.  remember this is the "bad is good" and "awful is great" market.  awful news is considered yippee because the thinking is that it just means the Fed will definitely print more money.  this is how many people view it not myself.  120K might be viewed as so so.  not bad enough to guarantee free money being printed and not too hot that it negates the need for money printing.

i think closing above or below 1407 or 1391 is the key for this week along with the ECB spouting a bunch of "blah blah blah" tomorrow.  it doesn't look like they have that magic bullet after all.