What Do You Make Of This?

228
Wed, Oct 12, 2011 - 3:47pm

As you know, pattern recognition is one of the main practices that we preach here. It's one of the primary reasons I've had some success with my technical analysis over the years. Well, do I ever have a doozy for you this time.

My buddy, Trader Dan, (https://traderdannorcini.blogspot.com/) has some fancy-schmancy TA tools. He uses those applications to draw some of the coolest charts you'll ever see. Every once in a while, he'll post one that I'll save for posterity, with the idea that it may be a useful tool to refer back to in the future. One such chart was a daily chart of the Continuous Commodity Index (CCI) that he posted on September 6. The chart had the appearance of something that could go up OR down and so I saved it to my hard drive. Here it is:

large_cci_index_as_of_9-6-2011-1_1.jpg

Note that, after a steep selloff, the CCI had been essentially range-bound for a while. Sure, it looked like there was resistance around 663 but it didn't necessarily look like the bottom was about to drop out, either.

With this buried in the deep recesses of my turd-like brain, I stumbled upon this daily chart of the ES ( the mini S&P futures contract) earlier today. Take a good, long look:

paper_10-12pmes.jpg

Note here that, with the addition of trendlines similar to the lines Dan added to his CCI chart, we get an S&P chart that looks startlingly familiar.

"Well, that's interesting", you say. "So what"? I'll tell you what...Trader Dan posted yesterday an updated CCI chart that shows the action since 9/6. Take a deep breath and look below:

large_snapshot-941.png

YIKES! Let's just say that you've been officially warned.

Now, does past performance ever equal future results? Of course not. However, if a lack of current QE and a global economic slowdown can be blamed for the current plunge in the CCI, why wouldn't those same fundamentals eventually have an identical effect on the equity market?

This is definitely something to watch as we move through this month. TF

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  228 Comments

BostonMatrix · Oct 13, 2011 - 6:51am

Spread the information

Nice Charts, Turd. Reading Trader Dan made me start following the CCI more closely a while back. I do remember someone posting a chart (somewhere on this site i think), a few weeks ago, showing a pretty steady CYCLE to the CCI. Can't remember now if it was an 11-year or 31-year cycle, but I do remember it showing that, according to the cycle, it was due a drop in Sept.

Sorry for not being able to pull the chart up here, I will do a search for it later and post it for everybody if I find it - rushing to get out the door at the mo'.

Anyway, it will be interesting to see if the ES follows suit.

I'd also just like to say on record that I think this site is freakin' great; not just the main posts but the comments and the community that creates them. Sometimes people blow off a bit of stress in an unnecessary manner, but on the whole, this is one hell of an information hub. The hardest thing is keeping up with the comments these days! Thanks to all who contribute and share on here. Keep on spreading the information. Awareness will bring about change moreso than bullets in the long run.

Peace, y'all.

Rick Holmes- Remember to Remember (Pass the Information, Extend the Knowledge)
Chicken Little · Oct 13, 2011 - 7:01am

EXK Revenues UP 93%

More positive miner news to come.

https://www.edrsilver.com/s/newsreleases.asp?ReportID=484492

Regards, Chicken

Perfidious Albion · Oct 13, 2011 - 7:02am

The Academy of Turd..

It would be interesting to see the mitochondrial dna tree of our sovereign ruling elite's ancestral lineage

how far back do the bloodlines run.

Meanwhile.. the charts look like a Stegosaurus in profile.. 

¤ · Oct 13, 2011 - 7:39am

JP Morgan Reports drop in 3rd Qtr. Profits

JP Morgan Reports drop in 3rd Qtr. Profits

By plesova[at]marketwatch[dot]com (Polya)plesova[at]marketwatch[dot]com ( Lesova), MarketWatch

LONDON (MarketWatch) — U.S. stock futures fell Thursday, tracking declines in European markets, as investors awaited economic data and as J.P. Morgan Chase & Co. reported a drop in quarterly earnings.

Futures on the Dow Jones Industrial Average /quotes/zigman/2976950 DJ1Z -0.31% dropped 28 points to 11,388 and those on the Standard & Poor’s 500 stock index SP1Z -0.38% slipped 4.20 points to 1,194.

Nasdaq 100 futures ND1Z -0.16% declined 1.25 points to 2,295.20.

Click to Play

The State of U.S. Banks

A discussion on the health of U.S. Banks and the Volcker Rule. David Reilly joins Evan Newmark on Mean Street.

J.P. Morgan /quotes/zigman/272085/quotes/nls/jpm JPM -1.75% said its third-quarter net profit slipped to $4.26 billion from $4.42 billion in the same period last year. Earnings per share fell to $1.02 from $1.01.

J.P. Morgan’s results included several items, including a $542 million pretax loss in private equity, $1 billion pretax litigation expense and a $1.9 billion pretax debit-valuation-adjustment gain.

The bank’s revenue was $23.76 billion compared with $23.82 billion in the year-ago period. On a managed basis, revenue was $24.37 billion in the third quarter. Shares of J.P. Morgan slipped 1.5% in premarket trade.

Investors are also awaiting data on weekly jobless claims and August trade which are due at 8:30 a.m. Eastern time.

By plesova[at]marketwatch[dot]com (Polya)plesova[at]marketwatch[dot]com ( Lesova), MarketWatch

LONDON (MarketWatch) — U.S. stock futures fell Thursday, tracking declines in European markets, as investors awaited economic data and as J.P. Morgan Chase & Co. reported a drop in quarterly earnings.

Futures on the Dow Jones Industrial Average /quotes/zigman/2976950 DJ1Z -0.31% dropped 28 points to 11,388 and those on the Standard & Poor’s 500 stock index SP1Z -0.38% slipped 4.20 points to 1,194.

Nasdaq 100 futures ND1Z -0.16% declined 1.25 points to 2,295.20.

Click to Play

The State of U.S. Banks

A discussion on the health of U.S. Banks and the Volcker Rule. David Reilly joins Evan Newmark on Mean Street.

J.P. Morgan /quotes/zigman/272085/quotes/nls/jpm JPM -1.75% said its third-quarter net profit slipped to $4.26 billion from $4.42 billion in the same period last year. Earnings per share fell to $1.02 from $1.01.

J.P. Morgan’s results included several items, including a $542 million pretax loss in private equity, $1 billion pretax litigation expense and a $1.9 billion pretax debit-valuation-adjustment gain.

The bank’s revenue was $23.76 billion compared with $23.82 billion in the year-ago period. On a managed basis, revenue was $24.37 billion in the third quarter. Shares of J.P. Morgan slipped 1.5% in premarket trade.

Investors are also awaiting data on weekly jobless claims and August trade which are due at 8:30 a.m. Eastern time.

Element 47 · Oct 13, 2011 - 7:51am

QE

If you look at Fed's own numbers, the printing is very much on, without any formal announcement. Look at the annualized M2 growth, it's on the level with the late 2008: https://www.federalreserve.gov/releases/h6/current/

Percent change at seasonally adjusted annual rate M2, June 27, 2011 (13 weeks previous): 19.9%

Not bad for a "no QE yet" policy.

· Oct 13, 2011 - 8:06am

re QE by stealth

QE on the QT - seems to have most of the negative effects, with none of the short term positive ones. A real lose/lose for everyone but the immediate recipients of the easing. 

GS_PHYS · Oct 13, 2011 - 8:13am
· Oct 13, 2011 - 8:21am
debtless · Oct 13, 2011 - 8:24am

AGQ

This morning the ticker on AGQ is down 50%. Looks like a buying opportunity. LOL.

Did it split last night 2/1? Why yes, yes it did.

BlackHawk debtless · Oct 13, 2011 - 8:24am

@debtless

AGQ did a 2:1 split today.

It's a 2 for the price of 1 sale. System works fine.

Shill · Oct 13, 2011 - 8:32am

BREAKING U.S. Aug. trade gap

  1. BREAKING

    U.S. Aug. trade gap holds steady at $45.6 bln

  2. 8:30a

    Weekly U.S. jobless claims dip slightly to 404,000

  3. 8:30a

    Aug. trade gap close to consensus of $45.4 bln

  4. 8:30a

    U.S. Aug. trade gap unchanged at $45.6 bln

  5. 8:30a

    Aug. trade gap with China record $29.0 bln

  6. 8:30a

    July trade gap rev $45.6 bln vs $44.8 bln prev est

  7. 8:30a

    Continuing claims drop 55,000 to 3.67 million

  8. 8:30a

    Four-week claims average falls 7,000 to 408,000

  9. 8:30a

    U.S. jobless claims barely changed at 404,000

· Oct 13, 2011 - 8:46am

Conspiracies to rule the world?

Conspiracy theories have been with Americans since the founding of this nation. In the 1750’s British colonists feared the combined power of France, Rome, and Hell as colonial ministers preached up enlistment sermons. By the 1760s, Two prime ministers of England were suspect: the Earl of Bute was possessed by the devil, and Lord North had converted to Catholicism and was loyal to the Pope. But do such conspiracies really exist are they just paranoid delusions of those who see a demon behind every bush. A notable colonist and our 2nd president wrote ...

“a series of oppressions, begun at a distinguished period, and pursued unalterably through every change of ministers, too plainly prove a deliberate and systematical plan of reducing us to slavery.”

If that’s not the logic of a conspiracy theorist, I know not what is.

So then Thomas Jefferson wore a tin-foil hat.

Yesterday’s conspiracies are today’s history. The colonists were half right and Katie Rose may yet be proven right. Although these theories may be outlandish, the coincidences sure are odd. I would cut her some slack and keep an eye on things, just as most of the colonists did with TJ. There may indeed be some secret religious society working some futile plot to take over the world that happens to have enough money and power to move the markets. For my part, buying a few put contracts on SLV on October 28 (and/or the 18th) and holding them a few days “just in case,” seems like cheap insurance. Wish I had done it on Friday, April 29 and Tuesday September 20th

Jefferson, T. (1775). A Summary View of the Rights of British Americans

BostonMatrix · Oct 13, 2011 - 8:51am

CCI long term cycle?

ok, here's the chart i mentioned earlier which shows the long term cyclical trend of the CCI. It suggests a ~31 year cycle of peaks, followed by a retrace then years of sideways action.

I found this on my hard drive - I'd saved it back in June when I initially found it. Turns out its a bit older than I thought - I seem to have had a 'lost summer' heh heh.

Hopefully this doesn't mean that we have fallen into the current range for the long term.

I Run Bartertown · Oct 13, 2011 - 9:06am

Bump in the Night

I would consider some level of conspiracy theory a given. It's silly to think that a handful of uber-rich families would do something other than plotting to remain in power. What else would they do? So the conspiracy is self evident to me in a power/wealth sense.

As to the occult elements, I think alot of people are dismissive about what THEY don't believe. I think it's an important distinction that YOU or I don't need to believe it. I can accept that people raised in 'little emperor' style to be a 'master of the universe' could quite easily develop rituals/initiations/traditions (skull & bones, etc.) that define them as part of 'their' group. The Satanic stuff? Bohemian Grove? I'd wager that they don't even believe it, but it is an interesting "F-you" to the little good folk that they're already screwing. And an arrogant, cynical response to any sense of guilt or morality that might creep into their midst. It could (feasibly even up the more hardcore sacrifice stuff) just be their best way of expressing their disdain for the rest of humanity. I don't consider one a quack for taking note of huge 'coincidences' of the calendar.

· Oct 13, 2011 - 9:22am

who said quack?

I didn't say Katie was a quack - and I agreed that powerful people plot - but pointing out coincidences after they happen is very different from predicting things accurately, and two, the numbers we use on our calendar are fairly arbitrary and have been changed over the centuries. Reducing an argument to a falsely attributed ad hominem attack is also silly.

¤ · Oct 13, 2011 - 9:28am

Good morning all

Xty...your awesome! 

I've been looking for a chart exactly like that for about a week or so and was going to put a shout out to all of you to see if anyone has such a chart with that exact comparison and lo' and behold, there it is.yes We think a lot alike, as I think you realize.

Shill had some charts up last week with the Fed. Reserve M2 money charts and it got me thinking other countries M2 supply. I posted something last night about China actually fooling around and adjusting their M2 calculation methods.

The chart you just posted is probably the most relevant chart that actually matters at this point concerning PM's going forward. Maybe TF can drag that into a update or something.

I went to ZH a little while ago. I haven't been there since early last night and went there to catch up and to validate some thoughts or perceptions about what is happening or relevant and it's good to see that a lot of us are firmly grounded in our views imho. Lots of good relevant news articles today as always.

It hasn't been talked about too much lately in the MSM or Govt. talking points worldwide lately but the whole currency war lingo they were using has died down. Probably by design. I don't even hear Russia or China harping about it lately or Brazil.

What I see going on is a "eye wink" situation where just about everyone (major player counties) are giving each other a break right now to do almost whatever it is they need to do to get their house in order.

The U.S. pushing the Yuan bill while China does QE out in the open for their banks (probably with U.S. reserve funds while their still worth as much as they are today) and the U.S. or market community for the most part doesn't really call them out on doing so? The EU and the U.S. publicly talking about many trillions more in QE or TARP-like stimulus and China and Russia etc. say nothing?

I just read at ZH about China starting to actually weaken their currency a bit in retaliation for the Yuan Bill. No surprise there. We'll see what happens on this end but I suspect not much. It's all window dressing by the U.S. and China and the EU etc. Everyone is doing what everyone needs to do and no one for the most part is calling each other out. 

When you read things at ZH about how JPM and the other big banks do what they do to their balance sheets and the market has no problem with it then you know just about anything is possible. These accounting methods and balance sheet adjustment and restructuring techniques have been their savior forever imo. (besides the Fed. always being there no matter what)

All the major countries are engaged in fudging the books and smearing the lines between debits/credits by use of creative valuation methods. The fancy accounting will intensify as things get more distorted due to the increasing supply of the M2 worldwide. They need to turn the blind eye because of the massive (and increasing) currency swaps that need to take place everyday. There is literally too much at stake for any one major country to throw a monkey wrench into "their" system.

(I'm almost assured that is is the last post on this thread at this point)

I Run Bartertown · Oct 13, 2011 - 9:37am

Xty

My comment was about the broader discussion that generally envelops the topic and in no way a response to you. If it had been, I would have mentioned you, or quoted you. How, pray tell, is something falsely attributed when it is not attributed at all?

Whilst striving to take offense, you seem to have missed my point anyway. I'm not saying the dates matter, I'm saying that if enough of the right people think that the dates matter, then they begin to matter, mysticism aside.

¤ · Oct 13, 2011 - 9:45am

Perfidious

Love the beautiful art work you put up at times. It breaks the thread up nicely at times and I do look at them. I never scroll by a masterpiece.

Thanks, it's a nice visual break and a chance to appreciate some masterpieces from the pages of history. I wish I knew the names and works of the masters and could go look up some of these online. Any good links to something artsy? 

I could use a little cultural infusion into my life and not knowing about different types of art and the background etc. kind of bothers me a little. I feel it would make me more rounded as a person.

Same thing with music. I like certain classical works and for the most part just don't know the names or background of the composers or their category of works etc. I get very lucky every once in awhile radio surfing and a beautiful old piece will come on. I know what I like when I'm hearing it but keeping up on it and getting totally into it just hasn't happened. if anyone has any good music vids or links. You can post them over on the music/documentary vid thread I have going in the Frivolity Forum.

I'll edit the link in after I post this.

Perfidious...I promise not to start posting a bunch of artworks. That's your turf smiley

pforth · Oct 13, 2011 - 9:48am

Raid alert

Damn this is getting old. Let's see how far it goes....

frankly · Oct 13, 2011 - 9:49am

Evening star on the SPY?

Another clue as to what is developing. Also, I wasn't convinced by the upmove monday and tuesday this week on the spy with the light volumes. I would have expected more volume for a price move that big. We'll know by tonight if the evening star plays out. Dirty tricks are proly in the works to prop the market up tho.

treefrog · Oct 13, 2011 - 9:54am

boatman, re cryptic directions

assuming you are leaving directions to your stash(s) for your heirs, a "family code" may be useful. such as: start where frisky had her puppies; go xx number of feet north. the first "x" is the number of grandchildren "nanna" had. the second "x" is the total number of times uncle bubba's children have been married....

this type of code would be easy for your kids to read, but almost impossible for a stranger.

FFF boatman · Oct 13, 2011 - 10:00am

@Boatman re: SDB

Thank you for your very great suggestions and hints!

Shill · Oct 13, 2011 - 10:00am
Tom L · Oct 13, 2011 - 10:01am

Everything's moving

with the SPX right now. IF the USDX is up, everything else is down. Simple.

The USDX is short-term oversold and the SPX is short-term overbought... so, everything else gets caught in the x-winds. These aren't raids... this is just capital moving around looking for a safe haven at this point and having no freaking clue what to do. There should be a little resistance at 77.80 on the USDX (Dec) and we'll see if that stops this or not.

Ta,

Tom L · Oct 13, 2011 - 10:04am

30 year bond prices

have just broken a downtrend on the daily chart. We likely have a few more days of this if bond prices are going to put in a small rally from here. 140.06 is the next target on the upside.

This just happened within the last hour... capital moving into bonds right now.

Ta,

· Oct 13, 2011 - 10:06am

bartertown

Sorry for being over sensitive. But nobody called her a quack, except for people saying she shouldn't be called one, as far as I recall from reading the discussion. It is something I am very aware of in arguing - misrepresenting the opposite side and then arguing against that position. I was not striving to take offense, it just comes naturally.angry

JackPutter · Oct 13, 2011 - 10:10am

Camo Techniques

When politics was born, so began dis-information. The history of confusion is deep.

Sometimes, for my part the most empowering thing I can do for myself is to say; "I don't know."

· Oct 13, 2011 - 10:12am

DPH re money supply

I think this is something that deserves far more attention. It has, as you point out, become impossible to measure, as debt is now credit, etc. but the rough figures are astonishing. And growing daily. I agree there seems to have been a time-out on the name calling in the currency war - started with the Swiss franc, it seems - very little criticism there, and the BoE 75 billion went down with out a blink. The price of gold is going to have to bounce to reflect this sooner or later. Unless there is an equal and currently invisible contraction going on - when the banks go belly-up does it all just go poof in a cloud of accounting magic?

Tom L · Oct 13, 2011 - 10:13am

And this is why H/T's don't mean that much

I just H/T'd a guy b/c his handle is an Innerspace reference

The only good Martin Short movie ever!

Joe Dante FTW.

Ta,

I Run Bartertown · Oct 13, 2011 - 10:15am

Xty

wink

Thanks for the M2/Gold chart. My amateurish opinion is that will be the best predictor of gold (and I'd think most commodities) until a currency collapse. I mostly think of it as a given, but like Marla said in Fight Club, sometimes the real doom is that the doom never comes.

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