The Market Will Crash Next Month

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Heh. Just kidding. I figured I’d join the rest of the web in the act of shameless click-baiting.

I will say, however, that the Russell 2000 has broken important support and – importantly – is at the cusp of breaking another terribly-important trendline. Plus, if the market does crash next month, I’ll just show the headline of this post without the text and be a hero. I can’t lose!

0923-rut

 

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Halfalife

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One of those “one that got away” stories for me is Herbalife, which I wanted to short when the insane Ackman/Icahn battle was raging away. I felt the urge to be short HLF only because I consider Carl Icahn to be repulsive, with the moral rectitude of Bill Clinton and the boyish good looks of Jack Ma. It was also icing on the cake that I considered the company itself exploitative and scummy. All the same, I couldn’t find a single share to short, and I’ve watched merely as an interested bystander as it has lost over half its value over the past nine months. Nice goin’, Master of the Universe.

0923-hlf

Two Down, One to Go

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SPX broke down hard yesterday and closed near the lows, giving bears their first complete day in a while. SPX broke back below the daily middle band and, as long as we don’t see a daily close back above it, the next obvious targets are the daily lower band at 1985 and the 50 DMA at 1976. The band pinch here means that it is very likely that SPX will start an extended band ride in the near future. The bulls had a shot at starting an upper band ride last week and couldn’t sustain it. If bears can get SPX to the lower band then they get a shot at starting a lower band ride instead. SPX daily chart:

140923 SPX Daily Trendlines BBs MAs

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The Macro View and the Stock Market

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Excerpted from the September 21 edition of NFTRH, #309, which went on to do extensive technical and macro work across all the key markets…

Last week we noted that Uncle Buck would be front and center in the analysis, not because the strength in the (anti-market) currency was not expected (it was), but because our big picture theme of an ongoing economic contraction had remained intact (ref: gold vs. commodities ratio) over the long-term.

It is important here to remember that NFTRH would only be on its big picture macro themes as long as indictors implied they are still viable. I will be damned if I will let us follow a Pied Piper off an ideological cliff, no matter what readers (including me) might want to hear. We must dedicate to know what is happening, not what our hopes, dreams, egos, etc. think or worse, hope will happen. (more…)