Short

SP500 - The Crash-Part 4 (SPX 1 HR Wave Count)

By FibMarketWatch

Updated

Hey! I hope you haven't missed me!

Analysis Method: Fibonacci and Wave Theory

SPX - STRONG SELL

Will update!

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BTC vs. SPX - Very telling chart...

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Same Chart -

Changed BTC to Blue...

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BTC (Probably Hash Dump in China) is already recovering

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Daily Chart

SPX literally has no support...

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If you were watching my Instagram feed @FibonacciMarketWatch

I said a 3rd Wave Extension was likley...

Well, we have our extension...

Now, the question is how far?

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Now, if you are new...

Why is the SP 500 going to crash?

Main Reasons:
1. The Central Federal Reserve
2. EU Breakdown
3. Geopolitics
4. Corporate Debt

How many CEOs have either been Fired or Retired?

How many Fortune 500 CFOs been Fired or Retired?

Corruption?

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Turnover among CEOs of U.S.-based companies soared in August, as 154 chief executive officers left their posts during the month. This is the month with the highest number of CEO changes on record, according to a report released Wednesday by global outplacement consultancy and executive coaching firm Challenger, Gray & Christmas, Inc.

August’s departures are 64 percent higher than the 94 CEOs who left their posts in July, and 60 percent higher than the 96 departing CEOs who left their posts in the same month last year. The next highest month for CEO departures occurred in September 2006 when 152 CEO changes were tracked.

So far this year, 879 CEO changes have been recorded, 15 percent more than the 765 CEO departures recorded last year.

Source: challengergray.com/press/press-releases/august-2018-ceo-report-154-ceos-out-22-percent-new-ceos-are-women

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youtube.com/watch?v=eICiLRykTFg

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U.S. stocks traded lower Tuesday afternoon, after President Trump criticized CHINA in a United Nations speech, undermining investor sentiment that had been improving on hopes for successful trade talks in October.

Equities extended their losses after U.S. House Speaker Nancy Pelosi, when asked about launching impeachment proceedings against the president, said she would make an announcement later Tuesday after meeting with Democratic Party leadership and House committee chairman.
What are major indexes doing?

The Dow Jones Industrial Average DJIA, -0.57% was down 92 points, or 0.4%, to 26,851 while the benchmark S&P 500 index SPX, -0.81% was off 17 points, or 0.6%, at 2,974. The Nasdaq Composite index COMP, -1.38% fell 91 points, or 1.1%, to 8,025.

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Source: marketwatch.com/story/stock-futures-edge-higher-as-investors-keep-eye-on-us-china-trade-developments-2019-09-24

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Trump UN Speech: politico.com/video/2019/09/24/trumps-full-un-speech-at-the-2019-united-nations-general-assembly-video-068862

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Hold on tight...

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Lets look at the smaller waves...

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A new micro-wave is forming now...

The extension looks to continue...

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Above: 1 Min count

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ZOOM IN:

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Good Morning!

I know everyone is dying to see the charts...

Let's get to it...

:)

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Start with the Daily Chart:

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Actually, lets rewind real quick...

Previous Analysis:

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The First Analysis Predicting a Stock Market Crash

Date: July 2018

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The first analysis was on target but I underestimated Human Denial.

"The Stock Market cannot crash"
"That will never happen"
"China will make a deal"
"Trump will back down"

Excuse after excuse...

Excuses are running out fast...

We now have a Federal Reserve having to supply cash to money markets...

What does that signal?

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Every now and then, just when you think the markets have completed one of these corrections, you will see a pause, and another round of corrective moves taking place. What you then get is a complex correction, which is basically a combination of two or more of these patterns.

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-The Federal Reserve on Tuesday sold $105 billion in market repurchase agreements, or repos, in a continued effort to calm money markets and bring interest rates within its intended range.

The bank offered $75 billion in repos expiring overnight and $30 billion in repos expiring in 14 days. Banks bid for more than was available of each repo, signaling strong demand for the government-backed asset.

The bank began a streak of repo offerings last week, marking the first time such assets were sold since the 2008 financial crisis. The central bank said the offerings would continue through early October.

Is this policy sustainable?

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markets.businessinsider.com/news/stocks/fed-repo-injects-105-billion-into-market-continuing-injection-streak-2019-9-1028549481

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Key Phrase: Banks bid for more than was available of each repo, signaling strong demand for the government-backed asset.

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Current High Count:

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Current Sub Count:

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Higher Count: Currently in Wave 3

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2945 is a KEY LEVEL

Let's see how the price action reacts to the 1.618 Level...

Based on Sub Counts, I expect an extension

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Recap of the day:

Daily Chart:

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Add Trend-Based Extension of Sub Wave 1 & 2

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Look at 1 Hour:

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PUMP PUMP PUMP to FAIL

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Well

1Min Sub-Wave shows double extension (3 & 5)

Hell to break lose tomorrow?

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Impulse Wave 3 traveled to Fib Level 4.236

Impulse Wave 5 traveled to Fib Level 1.0

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Sub-Wave Count:

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Pay Attention to Futures...

Correction Sequence just completed

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Good Morning! Hope everyone has read their fake news for the morning.

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5-D Chess is in play

RUSSIA COLLUSION-Projected-Failed

Now,

UKRAINE WHISTLEBLOWER-Projected

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Joe Biden w/ Richard Hass at CFR: “if that prosecutor (who is investigating my son for bribes and corruption) is not fired, you will not get that billion dollars.”

Definition of Quid Pro Quo

How do you defend? Projection

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Don’t believe me

Do your own research

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Two hundred and nineteen House Democrats and one independent — a majority of the chamber's 435 members — now favor some kind of impeachment action against President Donald Trump, according to an NBC News tally.

House Democrats reached the milestone a day after Speaker Nancy Pelosi announced a formal impeachment inquiry into the president following claims that he might have withheld aid to Ukraine to pressure officials there to investigate former Vice President Joe Biden and his son.

nbcnews.com/politics/congress/majority-house-members-now-back-some-type-impeachment-action-against-n1058596

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Full Transcript of Ukraine Call:

nbcnews.com/politics/trump-impeachment-inquiry/read-full-transcript-trump-s-conversation-ukraine-s-president-n1058581?icid=related

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The New York Fed takes up 75B of Treasurys and securities in an oversubscribed overnight repo operation, that resulted in 91.95B of bids submitted.

By collateral type, 44.35B of Treasurys (out of 56.3B submitted) were accepted with stop-out rate of 1.81% and weighted avreage of 1.856%;

All 1.0B of agency debt that was submitted was accepted at stop-out rate of 1.86% and weighted average of 1.860%;

And 29.65B of mortgage-backed securities (out of 34.65B submitted) were accepted at 1.84% stop-out and weighted average of 1.869%.

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Source: google.com/amp/s/seekingalpha.com/amp/news/3501717-new-york-fed-repo-ops-show-liquidity-demand-still-elevated

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Political Fires

Monetary Fires

Brexit Fires

Currency Fires

Hong Kong Fires

Trade Fires

Kashmir/India Fires

Missing Anything?

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Lets see where we are today...

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Overview:

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5 Min Sub-Wave Count:

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Above:

5 Min Chart:

Completed Leading Diagonal & Correction Sequence

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ZOOM IN:

Current Wave Count

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Above: Completed Sub-Wave Count (Green Circles)

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Flat Correction: Blue Circles

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Above: Zooming out, you can clearly see the leading diagonal.

Wave Theory states Wave 3 will travel to at least the distance of Wave 1.

That level is approx. 2927.

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Here may be a better view.

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And Zoom out to daily.

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Market is literally holding on threads...

At the same time China is Dumping BTC Hash

CHAOS

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China is, by some distance, the undisputed world leader in bitcoin mining — with Chinese mining pools controlling more than 70% of the bitcoin network's collective hash rate, the measuring unit of the processing power of the bitcoin network.

Many in the bitcoin and cryptocurrency industry have expressed concern about how much control this gives China over bitcoin, with the Beijing-based Bitmain Technologies mining more than half the world’s bitcoins.

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China's Bitcoin Dominance Is Worrying Trump's White House -- And Pushing It Toward Ripple

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Now it appears U.S. president Donald Trump's White House is also worrying about China's bitcoin dominance, with a Ripple Labs executive suggesting the U.S. administration is interested in ripple (XRP) adoption to offset China's bitcoin strength.

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forbes.com/sites/billybambrough/2018/10/16/chinas-bitcoin-dominance-is-worrying-trumps-white-house-and-pushing-it-toward-ripple/

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Wall Street Democratic donors warn the party: We’ll sit out, or back Trump, if you nominate Elizabeth Warren

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In recent weeks, CNBC spoke to several high-dollar Democratic donors and fundraisers in the business community and found that this opinion was becoming widely shared as Warren, an outspoken critic of big banks and corporations, gains momentum against Joe Biden in the 2020 race.

“You’re in a box because, you’re a Democrat and you’re thinking, ‘I want to help the party, but she’s going to hurt me, so I’m going to help President Trump,’” said a senior private equity executive who declined to be named.

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cnbc.com/2019/09/26/wall-street-democratic-donors-may-back-trump-if-warren-is-nominated.html

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Here we go...

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Ukrainian efforts to sabotage Trump backfire

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Ukrainian government officials tried to help Hillary Clinton and undermine Trump by publicly questioning his fitness for office. They also disseminated documents implicating a top Trump aide in corruption and suggested they were investigating the matter, only to back away after the election. And they helped Clinton’s allies research damaging information on Trump and his advisers, a Politico investigation found.

A Ukrainian-American operative who was consulting for the Democratic National Committee met with top officials in the Ukrainian Embassy in Washington in an effort to expose ties between Trump, top campaign aide Paul Manafort and Russia, according to people with direct knowledge of the situation.

The Ukrainian efforts had an impact in the race, helping to force Manafort’s resignation and advancing the narrative that Trump’s campaign was deeply connected to Ukraine’s foe to the east, Russia. But they were far less concerted or centrally directed than Russia’s alleged hacking and dissemination of Democratic emails.

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**PROJECTION 101

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Source: politico.com/story/2017/01/ukraine-sabotage-trump-backfire-233446

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S.Res.322 - A resolution expressing the sense of the Senate on the trial, sentencing and imprisonment of Mikhail Khodorkovsky and Platon Lebedev.

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congress.gov/bill/109th-congress/senate-resolution/322

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Expresses the sense of the Senate that: (1) the criminal justice system in Russia has not accorded Mikhail Khodorkovsky and Platon Lebedev fair treatment under the laws of the Russian Federation; (2) the Russian Federation's status among the democratic nations of the world would be greatly enhanced if Russian authorities were to take the necessary actions to dispel concerns that the criminal cases against Mr. Khodorkovsky, Mr. Lebedev, and their associates are politically motivated, the transfer of Mr. Khodorkovsky and Mr. Lebedev to prison camps thousands of kilometers from their homes represents a violation of the norms and practices of Russia law, and in cases dealing with perceived political threats to the authorities the judiciary of Russia is a dependent instrument of the Kremlin; and (3) Mr. Khodorkovsky and Mr. Lebedev should be transferred to penal facilities with locations that are consonant with the norms and general practices of Russia law.

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Cosponsor Date Cosponsored
Sen. McCain, John [R-AZ]* 11/18/2005
Sen. Obama, Barack [D-IL]* 11/18/2005

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The Harvard Boys Do Russia

Essential to the implementation of Chubais’s policies was the enthusiastic support of the Clinton Administration and its key representative for economic assistance in Moscow, the Harvard Institute for International Development. Using the prestige of Harvard’s name and connections in the Administration, H.I.I.D. officials acquired virtual carte blanche over the U.S. economic aid program to Russia, with minimal oversight by the government agencies involved. With this access and their close alliance with Chubais and his circle, they allegedly profited on the side. Yet few Americans are aware of H.I.I.D.’s role in Russian privatization, and its suspected misuse of taxpayers’ funds.

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thenation.com/article/harvard-boys-do-russia/

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Super Cycle Count:

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There are two main types of diagonal triangles. One is where the two boundaries of the triangle converge and the other where they diverge. The second type is known as Expanding Diagonal Triangles. Irrespective of whether they are converging or expanding diagonal triangles, if they occur in the first wave position, where they are known as ‘leading diagonal triangle’, the internal waves are made up of 5-3-5-3-5 sub waves. If they occur in the fifth wave position, they are known as ‘ending diagonal triangles’ and the internal waves are made up of 3-3-3-3-3 sub waves.

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Chart: Expanding Diagonal in 5th Wave Poistion

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Here is a better view of the Sequence of an Expanding Diagonal

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Note Fib Time Line 8

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Fib Time Line 8 Highlighted

9/30/19 - KEY DATE (Based on Super Cycle Count)

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Feels like Chaos is about to be unleashed.

Prepare for a Red October.

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Above: HYG v. SPY v. BTC

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Good Morning

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September 27, 2019 3:18 am
WASHINGTON — A crucial cache of evidence in hand, House Democrats moved quickly on Thursday with an impeachment inquiry they said would be focused tightly on President Trump’s dealings with Ukraine, using an incendiary whistle-blower complaint as a road map for their investigation.

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Who is the lawyer for the “Whistle-Blower”? Follow the money... ;)

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Why did Joe Biden Sponsor (Senate Resolution 322) a bill for Russian elite?

Why was there only 2 co-sponsors?
1. John McCain
2. Barack Obama

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How do you catch criminals?

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With Bait...

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Do you honestly think Trump didn’t know spy agencies were listening?

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DC is in absolute PANIC.

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Above: Ending Expanding Diagonal Triangle

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Minute Wave Count:

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As expected Sub-Waves are showing Double Extensions...

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Leading Diagonal (Wave 1 & 2 Complete)

Primary Wave 3 is underway...

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Reminder: Extension have no predetermined end points...

This is where you can incorporate Fibonacci Spirals into wave theory to get a good approximation of a Waves terminal point.

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Reminder: 2945 is KEY

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We are just getting started...

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-America Divided-

“War. This is war against truths. This is a war against the highest noble man who has defended our country and made us safe and great again,” the Jon Voight said. “Let me stand with our president. Let us all stand with our President Trump in a time of such evil words trying for impeachment.”

“And what does the radical left do for such greatness? They want to destroy. They want civilization to be run like a corrupt ring. I say stand now with Trump. Let truth prevail. And may God show all the truth, that we are truly a nation stronger because of our president. The left are afraid, for their power is lessening with every deal that is accomplished by Donald Trump.”

“In the name of God, and his power for this nation, let us stay strong and without such evil among us. God Bless.”

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Democrats subpoena Pompeo as part of impeachment inquiry

The House subpoena was accompanied by a schedule of depositions for senior State Department officials who have been identified as important players in the Ukraine episode — which was first brought to Congress' attention by an intelligence community whistleblower. The whistleblower, whose story was deemed "urgent" and "credible" by an agency watchdog, indicated that Trump had abused his power to pressure Ukrainian President Volodymyr Zelensky to help his reelection chances during a phone call -- and then the transcript of the call was inappropriately hidden on a highly classified server.

Think Chess.

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politico.com/news/2019/09/27/democrats-subpoena-pompeo-as-part-of-impeachment-inquiry-000159

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DUBUQUE, Iowa — It was a day like many across the divided states of America, brimming with anger, resentment and festering grudges.

For just the fourth time in history, the House of Representatives — the people’s house — began formally weighing impeachment of a president..

Impeachment, the first step in ousting a president, is a political sanction — and provocation — like no other. In a country already blazing with animosities, the mere prospect was like adding matches and several buckets of gasoline.

The facts — a Trump phone call seeking “a favor” from Ukraine’s leader, a president reaching overseas to excavate dirt on Democratic rival Joe Biden, foreign aid possibly held up as leverage — were fuzzy to most. Indeed, in dozens of interviews from Winooski, Vt., to Southern California, the Democratic move on Capitol Hill seemed not to change very many minds; opinions were formed a long time ago.

For those opposed to the president, the effort to impeach was a long-awaited and much-belated reckoning.

“I feel like we all knew this is what happened with Russia,” Alex Worthy said of interference that helped cost Democrat Hillary Clinton the 2016 election, “and we couldn’t get the evidence and now have it.”

The 28-year-old Democrat, a Laguna Hills, Calif., attorney, was rooting for impeachment even before the Ukraine scandal broke.

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Overview...

I'm constantly checking counts and redo charts for accuracy...

Monthly:

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Add Horizontal Markers for Impulse Wave Terminals

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We got two extensions in a five wave sequence. When these are the third and fifth waves respectively, there is an even greater chance for a sharp correction once the extended fifth wave is completed.

Which is now...

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Between May 2018 and August 2019, the intelligence community secretly eliminated a requirement that whistleblowers provide direct, first-hand knowledge of alleged wrongdoings. This raises questions about the intelligence community’s behavior regarding the August submission of a whistleblower complaint against President Donald Trump. The new complaint document no longer requires potential whistleblowers who wish to have their concerns expedited to Congress to have direct, first-hand knowledge of the alleged wrongdoing that they are reporting.

The brand new version of the whistleblower complaint form, which was not made public until after the transcript of Trump’s July 25 phone call with the Ukrainian president Volodymyr Zelensky and the complaint addressed to Congress were made public, eliminates the first-hand knowledge requirement and allows employees to file whistleblower complaints even if they have zero direct knowledge of underlying evidence and only “heard about [wrongdoing] from others.”

thefederalist.com/2019/09/27/intel-community-secretly-gutted-requirement-of-first-hand-whistleblower-knowledge/

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Expecting End of Wave C to end between 2976-2974

Reminder: Big Super Cycle Fib Time Marker Inbound

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Big Day ;)

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Let's see...

A-B-C (FLAT) Completed

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Expecting a SHARP fall today...

Brief Support at 2878.50 (Terminal 5th)

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1 Min Wave Count

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Here are the Detail of the Sub-Waves

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Zoom Out to 5 Min View:

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QE Infinity & Beyond

In the days, weeks, months and probably years ahead, the Federal Reserve will be conducting operations that look and sound a lot like what it did to pull the economy out of the financial crisis.
However, the process this time around will be different in the details.
Where the Fed under the quantitative easing of a decade ago was buying assets to pull the economy out of the Great Recession, this time it will be looking to meet demand for cash as it tries to calibrate the proper level of reserves that banks need.

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***I mean really, you have to almost laugh...

One Year Ago the FEDERAL RESERVE was raising rates and reducing the balance sheet...

Now,

Complete 180 Degrees

Why do we trust these people?

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Source: The Fed will be growing its balance sheet again, but don't call it 'QE4'

google.com/amp/s/www.cnbc.com/amp/2019/09/25/the-fed-will-be-growing-its-balance-sheet-again-but-dont-call-it-qe4.html

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Fed is on Life Support...

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Lower = Higher

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SHARP DROP...

INBOUND!

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300 EMA is Resistance...

1 Hour Wave Count....

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A radical world of “helicopter money” - where central banks fund government spending - is “inevitable” as policymakers run out of ammunition ahead of the next recession, top economists have warned.

Central banks are likely to “explore more unconventional policies” in the next downturn and blur the lines between fiscal and monetary policy with radical new tools, such as monetary financing, Deutsche Bank argued.

Recession fears are mounting but central banks have very little firepower remaining with traditional monetary policy - the control of the money supply and interest rates - blunted.

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telegraph.co.uk/business/2019/09/29/helicopter-money-may-weapon-confront-next-recession/

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Trying hard to stay up...

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Above: Added Fib Spiral

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President Xi defiant: "No Force Can Stop"

Speech:

youtube.com/watch?v=p5qgd1lzWRo

-Hong Kong Civil Collapse-

Police shoot 'schoolboy' activist, 18, in the chest with a live round as streets of Hong Kong turn into a protest battlefield on China's 70th National Day

Pieces of the bullet were lodged only an inch from the pupil's heart and he is in critical condition, reports said

Footage shows a police officer shooting a protester at close range while being hit by him with a baton

Anti-riot squad fired another two live warning shots in Yau Ma Tei as they tried to disperse demonstrators

Protests and fresh clashes broke out in Hong Kong today as China celebrated the 70th National Day

Organizers said at least 100,000 people marched along a broad city thoroughfare in defiance of a ban

Activists threw eggs at President Xi's portrait and burned the Chinese flag to voice their anger about Beijing

They are determined to overshadow Beijing's festivities, using the anniversary to step up their movement

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Remember the rule which says that wave 4 in an impulse wave cannot overlap the top of wave 1? Well, there is one exception to this rule. Every now and then, either wave 1 or wave 5 will take the shape of a wedge. Elliott has called this formation a Diagonal Triangle. A diagonal triangle differs from a regular (horizontal) triangle in that it slopes in the direction of the trend. So when the eventual break out happens, the next move will be in the opposite direction.

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Critical 48 hours for a Brexit deal
The essential question in EU talks is about the customs border and island of Ireland

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ft.com/content/3bab2e58-e445-11e9-9743-db5a370481bc

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Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at ft.com/tour.
ft.com/content/3bab2e58-e445-11e9-9743-db5a370481bc

Boris Johnson will on Wednesday send the EU his formal written proposal for a possible Brexit deal. It will be the most critical moment in his turbulent premiership.

As one Whitehall insider told me this morning: “The next 48 hours are going be crucial to deciding whether there’s a deal that can be done.”

In other words, if the EU engages with the British proposal, then both sides could enter a tunnel of negotiation that leads to the October 17 European Council. But it is also possible that the EU will immediately reject the UK paper outright and a deal will look dead by the weekend.

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Multiple Catalyst Inbound: The Perfect Storm

Fed lost control of Monetary Policy
EU lost control of Monetary Policy
Japan lost control of Monetary Policy
Most of the World’s Bonds are Negative
British Pound Collapse (Brexit)
China surrounding Hong Kong (War?)
China defiant on trade
EU (Unelected Union) on Death Watch (Who is the Juncker Family?)
German Economy collapse
Trump Impeachment
Fiat Currency Death Spiral
Worldwide QE and the Ultimate Devaluation
The Rise of Cryptocurrency

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Good Morning...

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Next Key Level: 2886.50

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According to Sub-Wave Counts this level will be shattered...

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Above: Noted SW 3 Traveled over 400% of SW 1

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Hong Kong (Global Financial Center)

"This means war."

The shooting has shocked residents of the leafy neighbourhood in the north of the city and exposed how young many of those on the front lines of the protests are.

Former Hong Kong leader Leung Chun-ying, in a letter to the school, demanded it expel Tsang and that the principal resign.

The student representatives said they had met the principal of the school who had promised the teenager would not be expelled but declined to take a stance on what they described as escalating police brutality.

SELF-DEFENCE

Police have said the officer who fired the live shot was under serious threat and acted in self-defence in accordance with official guidelines.

Representatives of the school could not be immediately reached for comment.

"We didn't get a good response from them," said Alan, a former student in his twenties, who said he was in the meeting with school authorities.

"They are trying to say something which is irrelevant to our questions: 'Violence is not correct. China is our mother even if she did something wrong'."

As the students spoke, dozens of primary schoolchildren shouted slogans of the pro-democracy movement: "Revive Hong Kong" and "Revolution of our time".

But later, the group and members of the media were pelted with eggs by residents as a drone hovered overhead.

Other residents said they supported the students, despite the violence.

"I am heart-broken," said Cheung, 30, a mother of young children.

"The kids are just expressing their demands. Even if they take out a stick they are just trying to protect themselves, they are not aiming to hurt anyone. But the police is trying to take his life away."

Standing outside the school gates, two former students, also masked, said many of those actively involved in the protests were teenagers, and some as young as 12.

One of Tsang's classmates, 17-year-old Cheung, said they would not be deterred by the shooting.

"Our generation is fighting for the next generation's future, so we are forced to risk our lives to fight for Hong Kong," he said. (Reporting Jessie Pang and Poppy McPherson Editing by Robert Birsel)

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Source: news.trust.org/item/20191002101155-g7mgs

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As expected, 2886.50 Broke...

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Next Key Level: 2871.75

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Expected to be broke...

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Put them seat belts on...

No relief in sight...

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Next Key Levels:

2771.50 (100% Higher Wave 1)

&

2614.50 (161.8% Higher Wave 1)

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The Expanding Diagonal Broke Triggering Primary Wave 3

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Turning up the heat:

Trump explodes as Democrats ratchet up impeachment push

The president lashed out at Hill Democrats as House leaders announced a fresh round of potential White House subpoenas.

WASHINGTON — President Donald Trump on Wednesday ripped into House Democrats' ramped-up impeachment inquiry, calling the effort "BULLSHIT" on Twitter as lawmakers signaled that White House refusal to comply with their requests would be used as evidence against him.

“The Do Nothing Democrats should be focused on building up our Country, not wasting everyone’s time and energy on BULLSHIT, which is what they have been doing ever since I got overwhelmingly elected in 2016,” Trump tweeted as House Speaker Nancy Pelosi and House Intelligence Committee Chairman Adam Schiff spoke to reporters on Capitol Hill.

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google.com/amp/s/www.nbcnews.com/news/amp/ncna1061281

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The Fed’s Life is on the line... and it’s pulse is weak.

Fed Has No Choice But to Tackle Both Repo and Recession

The central bank already faces something of a credibility problem for not anticipating the strains in the repo market. Now it looks as if the Fed will have to drop its benchmark rate again, just a month after policy makers’ median projection called for no more rate cuts through 2020. To reiterate: The median on the “dot plot” not only implied that interest rates would stay where they are this year but that they would be unlikely to move next year, either. That’s not to say that forecasts can’t change, but it calls into question the usefulness of the Fed’s forward projections if they wind up having little to no bearing on what actually happens.

The Fed doesn’t want to be seen as reactive. That’s one reason for the past two “insurance cuts,” after all, and why Powell has repeatedly emphasized that his main goal is to take appropriate action to sustain the expansion. It would be one thing if he could just use his next news conference to explain away the stress in the repo market by saying policy makers have found the appropriate level of reserves necessary to control short-term rates. But should economic data continue to miss estimates, the central bank would face a two-front war on its credibility that would be difficult to win.

Powell has admitted that the central bank has no playbook for dealing with a prolonged trade war. So far, his answer has been to drop interest rates time and again. This time might be trickier: He might have to both announce another cut and reveal that the Fed will increase the size of its balance sheet just a few months after shrinking it — and avoid spooking markets at the same time.

google.com/amp/s/finance.yahoo.com/amphtml/news/fed-no-choice-tackle-both-170125381.html

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Very Weak FLAT correction (3-3-5)

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SW 3 Broke 1.618 - Very Strong Momentum Down...

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Above: 1 HR Chart

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Turn Now?

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BP chief executive Bob Dudley will step down from his current role at the end of March next year, the oil giant announced Friday.
Dudley will be succeeded by Bernard Looney, currently chief executive of Upstream.
"The Board of BP announced today that, after a 40-year career with BP and over nine years as group chief executive, Bob Dudley, 64, has decided to step down as group chief executive and from the BP Board following delivery of the company's 2019 full year results on 4 February 2020 and will retire on 31 March 2020," according to a press release from BP.

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Above: 6HR Chart

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Excuse Typo: Above Daily

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6 Hour Chart:

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Lets Dig in...

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We had a 'normal' flat correction...

Then, out of no-where price-action jumps into a complex correction...

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This would be a good place to buy near the money puts...

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Understanding Helicopter Drop (Helicopter Money)
Helicopter drop is an expansionary fiscal policy that is financed by an increase in a economy's money supply. It could be an increase in spending or a tax cut, but it involves printing large sums of money and distributing it to the public in order to stimulate the economy. Mostly, the term 'helicopter drop' is largely a metaphor for unconventional measures to jump start the economy during deflationary periods.

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While 'helicopter drop' was first mentioned by noted economist Milton Friedman, it gained popularity after Ben Bernanke made a passing reference to it in a November 2002 speech, when he was a new Federal Reserve governor. That single reference earned Bernanke the sobriquet of 'Helicopter Ben', a nickname that stayed with him during much of his tenure as a Fed member and Fed chairman.

Bernanke’s reference to 'helicopter drop' occurred in a speech that he made to the National Economists Club, about measures that could be used to combat deflation. In that speech, Bernanke defined deflation as a side effect of a collapse in aggregate demand, or such a severe curtailment in consumer spending that producers would have to cut prices on an ongoing basis to find buyers. He also said the effectiveness of anti-deflation policy could be enhanced by cooperation between monetary and fiscal authorities, and referred to a broad-based tax cut as “essentially equivalent to Milton Friedman’s famous ‘helicopter drop’ of money.”

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KEY TAKEAWAYS
Helicopter drop, a term coined by Milton Friedman, refers to a last resort type of monetary stimulus strategy to spur inflation and economic output.
Helicopter drop is an expansionary fiscal policy that is financed by an increase in an economy's money supply.
Mostly, the term 'helicopter drop' is largely a metaphor for unconventional measures to jump start the economy during deflationary periods.
Source: investopedia.com/terms/h/helicopter-drop.asp

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MORNING!

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Let’s see what the hell is going on...

Reminder: Always DCA

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into a trade...

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Above: Monthly Overview

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Entering a new FIB TIME Period....

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Added: Total Crypto Market (TOTAL)
Added: HYG (Corporate Debt)

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Monthly Chart Recap:

Super Cycle Sequence Completed + ABC Correction

After the ABC Correction, SPX made a new high in 3 distinct waves...

This implies weak price-action and a complex correction...

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When two correction patterns are combined, with an intervening separator move which is labeled the X wave, then we end up with a Complex Correction. (Elliott used the term inverted zigzag to refer to the corrections happening during a down trend, but for clarity we will only deal with the normal patterns. Just remember that any of these corrections can occur in an uptrend or a down trend.

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Just as one could get a complex correction in the form of a double zigzag, one could also get a complex combination of two flats! Not surprisingly Elliott called it a double flat! (If you get a combination of three flats, it will be called a triple flat) Just like a normal flat will have as its internal waves a 3-3-5 pattern, so also each of the two flats that combine using an X wave in between will also have a 3-3-5 pattern.

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Weekly Chart:

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Zoom In on the Weekly Chart:

We see what appears to be a Primary Wave 1 & 2

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Now to the Daily Chart:

We can clearly see a 'Normal' Wave 1 & Wave 2

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Wave 1 is rarely a clean formation. The markets tend to build a base after a steep decline, and very often we will get repeated tests of the low. Occasionally, the move will resemble a wedge, which is known by a special name: diagonal triangle

So we will have to take our chances if we wish to get into a trade at the very bottom (or top)! Some traders will use oscillators and divergence studies to gain in confidence. Most standard technical analysis books explain how to use divergences to trade. You can also find lots of websites that discuss this technique. What I urge you to do is to keep Elliott Wave Principle as your main tool, and use these other tools to support your main view.

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I incorporate Fibonacci Spirals, Fib Time, and other Fibonacci Sequences into Wave Theory to get clearer resistance/support 'curves'.

These Fibonacci Sequences allow me to confirm Wave Counts as well.

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Here is an example of using Fibonacci Spirals...

Price-Action adheres to the 'curve' almost precisely...

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Now we look into the Minor and Sub-Waves

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Minute Wave Count:

Hope you added some Near-dated PUTS

;)

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Winter is Coming! ;)

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MANPOWER GUIDANCE FOR ACTIVATION AND DEACTIVATION OF RESERVE COMPONENT MARINES ORDERED TO ACTIVE DUTY ISO DEFENSE SUPPORT OF CIVIL AUTHORITIES

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Date Signed: 10/3/2019 | MARADMINS Number: 550/19

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*NOTE*

Purpose. This MARADMIN cancels MARADMIN 300/14. In accordance with (IAW) REF A, this MARADMIN provides guidance for the activation of Reserve Component (RC) Marines under §12304a, Title 10, U.S. Code, following a request for Federal assistance in response to a major disaster or emergency WITHIN the United States. Requests for Federal assistance will come with little warning. As required, the Marine Corps must rapidly mobilize RC units and personnel IAW this MARADMIN in order to respond to threats in the Homeland.

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Source: marines.mil/News/Messages/Messages-Display/Article/1979422/manpower-guidance-for-activation-and-deactivation-of-reserve-component-marines

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Good Morning!

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Let's look at the Sub-Waves...

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Above: Daily Chart...

Those Near dated PUTS should be paying out nicely...

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Above: 1 HR Wave Count

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Wave 1 & Wave 2 are 'Normal' impulse and correction waves

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Impulse Wave 3 has broken the 1.618 Level which alerts us to an extension...

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Lets Add a Fib Spiral to Impulse Wave 1

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Key Level: 2867.75

If this level is broke, look for another strong move down...

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Above: Sub-Wave Count

Sub-Wave 5 broke it's trigger level of .618...

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Here is an example of a 'Broke Fib Spiral'

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Overview:

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Relevant:

Antifa calls for 'America is Canceled' protest to 'disrupt' Trump's Minneapolis rally

Activists urged to join 'anti-capitalist bloc'

Antifa activists Thursday announced a massive anti-Trump protest entitled “America is Canceled” at the president’s scheduled speech next week in Minneapolis.

“Trump is having a campaign rally in downtown Minneapolis. He wants to keep America great, but … AMERICA IS CANCELED,” said the notice posted on It’s Going Down, an online anti-fascist forum. “Join us to celebrate with an anti-capitalist bloc.”

The notice asked activists to “bring your friends, bring your crew and come prepared to disrupt the nightmare that is Trump,” while the site predicted “thousands” would show up “in opposition to Trump and his world.”

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Link: washingtontimes.com/news/2019/oct/4/antifa-america-canceled-rally-trump-minneapolis-/

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In order to accurately implement Wave Theory you must look at Sub-Waves...

WAVES MOCK EACH OTHER

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SW - Sub-Wave

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EXT - Extension

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Wave Theory - The very basic concept...

3 Impulse Waves (1,3,5)
2 Corrective Wave (2,4)

Normal Corrective Wave 2 Retraces 61.8% of Wave 1
Normal Corrective Wave 4 Retraces .382 of Wave 3

Correction Sequences: A-B-C
Flat - 3-3-5
ZigZag - 5-3-5

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Corrected Text Box for SW 4 Retrace

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Third waves usually extend! Prices will typically take off in a powerful fashion, Stop loss orders will all get executed and push the prices more and more.

Even fundamental news will get interpreted to suit the move (i.e. even if the news was bad, the market will somehow interpret it to mean the worst is over!)

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Expecting Wave 5 to be Very Strong...

Will be watching closely...

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*Tensions Building*

*Do you still believe in a Trade Deal?

The Trump administration put visa restrictions on Chinese officials Tuesday amid ongoing abuses of Muslim minorities in the Xinjiang region.
The State Department says the measures target officials "who are believed to be responsible for, or complicit in, the detention and abuse of Uighurs, Kazakhs, or other members of Muslim minority groups" in the territory in northwest China.
"The United States calls on the People's Republic of China to immediately end its campaign of repression in Xinjiang, release all those arbitrarily detained, and cease efforts to coerce members of Chinese Muslim minority groups residing abroad to return to China to face an uncertain fate," Secretary of State Mike Pompeo said in a statement.

Link: cnbc.com/2019/10/08/us-puts-visa-restrictions-on-chinese-officials-over-abuses-of-muslims-in-xinjiang

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*Reminder: News & Information moves Markets
*Posted article Sep. 26th about this very topic; future markers (Proven Correct)
*I post articles that I believe will have implications for global markets moving forward*

Audio, Email Evidence Shows DNC Colluded With Ukraine To Boost Hillary By Harming Trump, Report

The Blaze has released an audio recording that they recently obtained that appears to show Artem Sytnyk, Director of the National Anti-Corruption Bureau of Ukraine, admitting that he tried to boost the presidential campaign of Hillary Clinton by sabotaging then-candidate Donald Trump’s campaign.

The connection between the Democratic National Committee (DNC) and the Ukrainian government was veteran Democratic operative Alexandra Chalupa, “who had worked in the White House Office of Public Liaison during the Clinton administration” and then “went on to work as a staffer, then as a consultant, for Democratic National Committee,” Politico reported.

The Ukrainian embassy political officer who worked at the embassy at the time, Andrii Telizhenko, stated that the Ukrainians “were coordinating an investigation with the Hillary team on Paul Manafort with Alexandra Chalupa” and that “the embassy worked very closely with” Chalupa.

Link: dailywire.com/news/bombshell-audio-email-evidence-shows-dnc-colluded-with-ukraine-to-boost-hillary-by-harming-trump-report-says/

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Updated 1 Hour Wave Count:

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Added Channel Line

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Overview:

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Overview: 1 Hour Wave Count

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Reminder: Expecting an Extended 5th Wave...

Key Levels: 2884.75 (.618) & 2867.75 (Wave 1 Fib Spiral)

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Hold on tight...

Not looking good technically...

Acceleration down may be imminent...

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Watch Futures...

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-War- Dem V. Republicans

White House refuses to cooperate with impeachment investigation
The latest White House move, announced in a defiant letter to House Speaker Nancy Pelosi, came just hours after the administration blocked the testimony of the U.S. ambassador to the E.U., Gordon Sondland.
WASHINGTON — The White House refused Tuesday to turn over internal documents regarding Ukraine being sought by House Democrats as the Trump administration dug in against their impeachment inquiry.
In a defiant letter that echoed the president's recent impeachment messaging — accusing Democrats of violating the Constitution and civil liberties and attempting to overturn the results of the 2016 election — the White House said it would not comply with the request from House Democrats because they were conducting an invalid investigation.
"Never before in our history has the House of Representatives — under the control of either political party — taken the American people down the dangerous path you seem determined to pursue," White House counsel Pat Cipollone wrote.

The White House argued that in order for the Democrats to make their inquiry valid the House would have to take a number of steps, including holding a full vote to beginning impeachment proceedings, allowing Republicans to issue subpoenas and granting the White House the ability to cross-examine witnesses and have access to evidence.

More than a century ago, Congress sent its sergeant-at-arms to arrest a witness for noncooperation, but that scenario is viewed as an extremely unlikely move in the present day.

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-Confusion-

Here’s some free legal advice: Trump Administration officials should reject the recent subpoenas by the House of Representatives Democrats. They read like political speeches, intended to influence public discussion, not like legal subpoenas. To answer these “when did you stop violating the law?” letters is to buy into and endorse their false premise.

If a Trump official were my client, I would recommend a short, quick letter in response. But would my client run the risk of not complying with a subpoena? Could officials who don’t cooperate be found in contempt or be accused of obstruction of justice?

There is confusion because there is no authority in the U.S. Constitution for Congress to act as a law enforcement agency. The power to investigate is only implied, not stated, by custom and interpretation. Constitutionally (not what Congress believes) the power of investigation is especially weak compared to an explicitly-stated power.

Congress surely has the implied power to investigate both the activities of the government and topical issues for the purpose of passing legislation or amending legislation. Our country’s political world has long accepted this. But there are limits.

A person receiving a subpoena has every legal right to object when Congress over-steps its limits. Therefore, recipients of these phony subpoenas should call the Democrats’ bluff, but also protect themselves by rushing as the “first to file” to the courts for a “declaratory judgment” ruling.

Congress is not empowered to act as a law enforcement agency

The response I would write as a lawyer for one receiving the subpoena would go like this:

Dear Chairman:

We are not aware of any documents that match the description of your request. First, no impeachment inquiry exists. Not only is there no impeachment inquiry provided for under the U.S. Constitution or other law, but certainly there is no impeachment inquiry simply because the Speaker of the House held a press conference.

The Constitution provides for impeachment where treason, bribery, or other high crimes or misdemeanors have already been clearly established as true. Congress is not empowered to act as a law enforcement agency. Thus, the power of impeachment exists only when grounds have already been established, not when Congress hopes to discover grounds.

But any investigative process of an “impeachment inquiry” if the Constitution would at the least require a vote of the full House of Representatives, not a press conference.

canadafreepress.com/article/subpoenas-not-valid-since-there-is-no-impeachment-inquiry

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Reminder: LIQUIDITY

Fed CANNOT maintain current Repo Markets...

What would a severe CASH CRUNCH worse than 2008 look like?

Common Sense...a beautiful thought

Chart Ben’s tenure with HYG at the FED. What did the ‘Helicopter’ Money do?

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Is it possible to soft land “Global Quantitive Easing”?

Economics: What happens when you continually print money?

I’m starting to hear a flat-lining sound at the Federal Reserve.

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Powell says the Fed will start expanding its balance sheet 'soon' in response to funding issues

The Federal Reserve will soon start growing its balance sheet again, a response in part to the jolt to overnight lending markets in September, Chairman Jerome Powell said Tuesday.
How the Fed will go about expanding the securities it holds will be explained in the coming days, though Treasury bill purchases will be involved, the central bank chief said during a speech in Denver, though Powell stressed the approach shouldn't be confused with the quantitative easing done during and after the financial crisis.
"This is not QE. In no sense is this QE," he said in a question and answer session after the speech.

cnbc.com/2019/10/08/powell-says-the-fed-will-start-expanding-its-balance-sheet-soon.html

IT’S NOT QE!?!?!?

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Well there you have it! Flatlined

Fed Credibility Score: 0

Beginning of Year: We need to raise interest & reduce the balance sheet.

9 Months later: We need to cut rates & expand balance sheet.

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Above: 1 Hour Wave Count

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*Correction: Wave 4 Placement

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Time to expand 'is now upon us'

On the balance sheet issue, overnight repurchase markets malfunctioned in several weeks ago, due in part to funding constraints caused by money getting sucked out of the system as companies made tax payments and the Treasury Department settled bond auctions. The lack of funding caused repo rates to spike as high as 10% and the Fed's benchmark funds rate, which banks charge each other for short-term borrowing, to go above its targeted range by 5 basis points.
Since then, the Fed has been conducting temporary operations in which it is providing cash in exchange for ultra-safe assets.

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We are currently in a complex correction in the 1 Min chart...

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Trade Deal?

What is going on in the South China sea?

South China Sea crisis: US tested deadly new weapon DURING Beijing military parade

CHINA flaunted its military muscle on Tuesday as Beijing celebrated the 70th anniversary of the founding of the People's Republic of China, but the US responded by testing a new weapon as the arms race between the two super powers escalates.

express.co.uk/news/world/1186409/south-china-sea-crisis-us-test-missile-weapon-china-beijing-parade-world-war-3-spt

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The United States Navy tested its newest piece of firepower in the waters off
Relevant:

Guam in the Pacific. The USS Gabrielle Giffords fired off a naval strike missile, a sea-skimming cruise missile that is difficult to spot on radar, and can manoeuvre to avoid enemy defences. The missile, along with a variety of other weapons, was fired at an old US Navy frigate, the former USS Ford, which was towed to the Pacific to act as a target in the testing. This represents significant progress in the US' military efforts as the Giffords is the first US Navy ship to deploy with a naval strike missile, and analysts say it helps even the equation in the Pacific, where China has been increasing and developing its arsenal.

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Army Lets Slip That It’s Conducting Secret Operation Around D.C.

The Pentagon has revealed a few details about a secret Army mission that has Black Hawk helicopters flying missions over the Washington, D.C., area backed by active-duty and reserve soldiers.

The mysterious classified operation was disclosed when the Army asked Congress for approval to shift funds to provide an extra $1.55 million for aircraft maintenance, air crews and travel in support of an “emerging classified flight mission.”

It’s part of a $2.5 billion request this month to “reprogram” funds in the current fiscal year’s budget to programs considered high priorities. “Without additional funding, the Army will not be able to perform this classified mission,” the Defense Department said.

bloomberg.com/news/articles/2019-07-22/army-lets-slip-that-it-s-conducting-secret-operation-around-d-c

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“Soldiers from assault helicopter company and aviation maintenance units will be supporting the mission with 10 UH-60s and maintenance capabilities for four months,” according to the document, referring to the Black Hawks. The money will also pay for a specialized “Sensitive Compartmented Information Facility” at Davison Army Airfield at Fort Belvoir, Virginia, just outside Washington.

Army spokesman Wayne Hall declined in an email to comment on some possibilities -- including whether the mission involved protecting the White House or other federal buildings and whether it’s making use of specialized commando units of the Pentagon’s Joint Special Operations Command, which includes the Army’s Delta unit and Navy’s Seal Team Six.

Hall said the operation began early in the fiscal year, which started Oct. 1, and “the duration of the mission is undetermined.”

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NEWS COVERAGE?

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Make no mistake...

We are at an EPIC crossroads in history...

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FibMarkeWatch.com coming...

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US and China make no progress on key trade issues in two days of deputy-level talks, sources say
The Chinese delegation refuses to talk about forced technology transfers, a core US grievance in the negotiations, a person with knowledge of the meetings says
Vice-Premier Liu He and his team may leave earlier than expected
Tariffs on US$250 billion of Chinese goods are set to increase from 25 to 30 per cent on Tuesday, while fresh duties of 15 per cent on US$160 billion of largely consumer products will go into effect on December 15.
The source said the Chinese delegation may leave Washington earlier than expected. The Post reported on Wednesday that the Chinese delegation, headed by Chinese Vice-Premier Liu He, may head to the airport on Friday, after completion of the talks, rather than following an earlier plan to depart on Saturday October 12.

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scmp.com/news/china/diplomacy/article/3032261/us-and-china-make-no-progress-key-trade-issues-two-days-deputy

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Dow Jones Industrial Average futures lost more than 300 points at one point and were last down 199 points, or around 0.8% as traders tried to make sense of the conflicting information from both sides. S&P 500 futures fell 0.9% and Nasdaq-100 futures lost 1%. Shares of key stocks related to global trade declined in after hours, including Apple, Caterpillar, Intel and Micron.

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Get your positions ready...

Helicopter Money will not be available this time...

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Above: 1 Min Wave Count

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5,4,3,2,1....

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Think I see a minuscule wave

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Minuscule Wave 3 should begin now...

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Added Fib Time

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New Wave Sequences USUALLY begin between Fib Time Markers 5 & 8...

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How can you know that the third wave has started?

You will see prices moving up (or down) suddenly and swiftly. When you look at the chart, you can immediately see that the third wave is steeper than the first wave. Volume will typically increase during the third wave.

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Key Level for Wave 3 (Micro): 2917.17

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Understanding 3rd Impulse Waves:

A normal third wave should typically respect the relationship that INTERNAL waves bear to each other.

What are these relationships?

It is normal for any two impulse waves to tend to equality.

For example, waves 1 and 3 could be equal, or waves 3 and 5 could be equal, or waves 1 and 5 could be equal.

When I say equal, bear in mind that this is an APPROXIMATION not exact.

Inside a normal third wave you will observe each relationship between the sub-waves. If wave three (now we are talking of the bigger wave 3) travels beyond the equality measure of wave 1, then the next likely target will be 123.6% of wave 1, or 161.8% of wave 1.

So long as wave 3 does not go farther than 161.8% of wave 1, then assume that it's a ‘normal’ third wave.

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Another important thing to remember: ALTERATION between each Corrections is very important!

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Examples:

If the last correction was a Flat (3-3-5) then expect a Zigzag (5-3-5) next...

If the 2nd Wave Correction was Quick then expect Wave 4 Correction to take longer...

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Ignore the Minuscule Wave - SPX chart not Futures...

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6 Hour Chart:

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Daily Overview:

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Weekly Overview:

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REMINDER: Diagonal & Horizontal Triangles are the only Wave Sequences where Wave 4 is allowed to violate impulse Wave 1.

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SAP said on Thursday that Bill McDermott is stepping down as CEO.
Executive Board members Jennifer Morgan and Christian Klein have been appointed co-CEOs effective immediately, SAP said in a statement. McDermott will stay on as an adviser until the end of the year.
This is breaking news. Please check back for updates.

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**If anyone think it’s a coincidence that literally thousands of CEO/CFOs have either resigned, been forced into early retirement, and/or has “health issues”.

Mathematical impossible.

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*please excuse typos

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SAP CEO Bill McDermott to step down after over nine years
cnbc.com/2019/10/10/sao-ceo-bill-mcdermott-to-step-down

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WALLDORF, Germany, Oct. 10, 2019 /PRNewswire/ -- SAP SE (NYSE: SAP) today announced that Bill McDermott has decided not to renew his contract and is stepping down from his position as Chief Executive Officer. In activating the company's long-term succession plan, Executive Board members Jennifer Morgan and Christian Klein have been appointed Co-Chief Executive Officers, effective immediately, with the approval of the Supervisory Board. McDermott will remain in an advisory capacity until the end of the year to ensure a smooth transition.

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prnewswire.com/news-releases/sap-sets-course-for-the-future-with-next-generation-leadership-team-300936937.html

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Good Morning...

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If you believe there is a 'deal'...

Don't be fooled...

Looks like Helicopter money...

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Let's dive into the seconds...

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5 Seconds wave count...

Extending 3rd...

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Start Over...

Lets Zoom out...

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Great Place to Add to Puts...

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EPIC TIMES...

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Failed...

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5 Second Waves....

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This price-action is madness...

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Ok...

Let's see what happens here...

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Note Horizontal Line 0

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Should be the final attempt...

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Good Morning!

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Above: Daily Chart

Immediate Target: 2771.50

Extension Trigger: 2614.50

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Above: 5 Second Wave Count

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Daily Overview:

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Added Fib Time Marker: 29 Oct 19

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Hourly Overview:

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1 Minute Overview:

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Note: Micro Wave: 1 & 5 Trended Near Equality

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Targets...

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Good Morning...

Current Wave Count:

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Higher Wave:

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Should see a massive drop today...

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Fed Adds $75 billion in Liquidity to Markets Via One-Day Repo Operation
Move comes after a day of pressure for short-term markets due to the settlement of Treasury debt auctions

Note

The New York Fed injected $75 billion in overnight liquidity into financial markets on Wednesday.

The intervention came via one-day overnight repurchase agreements with eligible banks. The banks had offered the Fed $80.35 billion in securities. The Fed took in $72.592 billion in Treasurys and $2.408 billion in mortgage-backed securities.

In recent operations, the banks dealing with the Fed utilized less liquidity than the central bank was willing to offer. But some observers noted Tuesday was a day of pressure for short-term markets due to the settlement of Treasury debt auctions, which can affect reserve levels in the banking system.

Fed repo operations take in Treasury and mortgage securities from eligible banks in what is effectively a one-night loan of central bank cash, collateralized by dealer-owned bonds. Last month, the Fed ramped up its repo operations for the first time in over a decade to help tame spiking short-term borrowing costs.

Those operations have been largely successful. But central bankers have also sought a more enduring fix for what appears to be a shortage of reserves in the banking system, so last week the Fed announced that it would also begin growing what is a $3.9 trillion balance sheet via purchases of up to $60 billion a month of Treasury bills through the first half of next year.

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******This is Not sustainable!

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The Fed also said then that its temporary interventions would continue alongside efforts to permanently grow the balance sheet. The Fed stressed that expanding its holdings of bonds and cash is purely technical and not intended to serve as a form of stimulus, as bond buying was during the financial crisis and its aftermath.

Last Friday, the Fed announced a series of multiday repo operations that will run over coming weeks. The next 15-day repo intervention will take place on Thursday.

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Does everyone realize that the Federal Reserve is floating the market...

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Although there’s been no official announcement, the Federal Reserve has restarted QE — better known as Quack Economics.

You might know it better as Quantitative Easing, in which the central bank buys large amounts of government bonds or other assets to help stimulate the economy. There have been three of these QEs since the financial crisis more than 10 years ago. But the big question now: Is there a new crisis that has the Fed dusting off QE?

The Fed isn’t saying.

QE is simple to understand even though economists gave it a sophisticated name. Here’s how it works: The Fed electronically prints trillions of dollars in extra money, which it uses to purchase bonds and other securities.

This was supposed to keep interest rates low. And the low interest rates were supposed to help the economy grow.

Once the economy got going, the Fed was supposed to stop printing money. The economy would then stand on its own.

I used the phrase “supposed to” a number of times because QE didn’t quite live up to expectations. And there have been many vocal critics — myself included — who have argued that QE was just another version of the age-old money-printing schemes that have created enormous inflation problems in the past.

If you print too much money, then prices are bound to go up.

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nypost.com/2019/10/14/feds-back-printing-money-so-what-gives/

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Let's see...

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HYG V. TOTAL V. ES1!

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Note: Declining Volume...

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The Trifecta -

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This will be EPIC...

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6HR Chart:

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Morning....

Floating Along...

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Reminder: More Complex Correction = Harder the Fall

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Here is a Minuscule Wave Formation with an Extended 5th...

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Boom...

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HYG is a Death Spiral...

Note

Debt
The World’s Biggest Corporate Borrowers Are Dominated by Tech

Some of the most valuable companies are also the ones with the most debt.
The cheap-money era that followed the 2008 credit crisis has lured many companies into the debt market. Here’s a list of the 10 biggest nonfinancial corporate borrowers, based on Bloomberg data and recent financial reports.

AT&T (Total debt: 177b)
AT&T Inc.’s mega-acquisitions of DirecTV in 2015 and Time Warner in 2018 were largely responsible for making it the world’s biggest nonfinancial corporate borrower. The Dallas-based telecommunications carrier, which made debt reduction its “top priority” this year, plans to pay down about $20 billion with internally generated cash flow and proceeds from asset sales.

SoftBank (154b)
Masayoshi Son’s SoftBank Group Corp. almost quadrupled its debt, to more than $150 billion, over five years with investments in hot startups such as Uber Technologies Inc. and its purchase of the U.K.’s ARM Holdings. The Tokyo-based telecommunication company-turned-fund manager says investment gains offset the leverage and that near-term liquidity is adequate to handle bond maturities.

Apple (115b)
Rather than funding acquisitions, Apple Inc. began building its 12-digit debt load in 2013 to finance dividends and stock buybacks. The Cupertino, Calif.-based tech giant also used its multibillion-dollar cash pile overseas to invest in corporate debt. A change in the tax law limited the benefit to keeping money outside the U.S., cutting Apple’s appetite for issuing or buying debt.

Verizon (113b)
Comcast (112b)
AB InBev (110b)
General Electric (110b)
China Evergrande (98b)
Microsoft (73b)
Shell (77b)
bloomberg.com/news/articles/2019-04-09/the-world-s-biggest-corporate-borrowers-are-dominated-by-tech
valuewalk.com/2019/10/crescat-capital-3q19-the-hong-kong-dollar/

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Reminder: what does Quantitive Easing ULTIMATELY do?

DEVALUATION

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I will do an analysis of the Dollar very soon...

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13 days + of FALL

(If the Complex corrections are over and the Fed cannot sustain money markets...)

Brexit?
Dollar?
Sterling?

Fed Reserve Flip Flop...

Note

What did ETFs fundamentally change in the market?

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Many people only see investing through the prism of their 401(k). This limits their vision to all but mutual funds. “For most investors, it’s because they don’t have a choice,” says Merlin Rothfeld, instructor and investment strategist at Online Trading Academy in Irvine, California. “They are locked into a 401k or IRA that only offers mutual funds. This isn’t by accident—it’s by design.”

These retirement plans, now built to make saving even easier, have shifted the emphasis from investing to retirement. Thanks to this shift, more people are saving for retirement.

The downside, however, leaves many without any real experience with investing. This is critical, for, when they retire, they leave the comfortable nest of the plan sponsor’s careful eye. They’ve spent their entire career living with the Swiss Army Knife equivalent of investing, only to be handed a box full of tools with their gold watch.

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The major ETF providers are failing to challenge management when they vote at shareholder meetings highlighting a key issue the industry needs to address.

The rise of passive investing has been nothing short of dramatic. According to Morningstar, index funds now control over half the US mutual fund market assets passing actively managed funds for the first time ever in August.

Three firms, in particular, have benefitted, BlackRock, Vanguard and State Street, who control the vast majority of these assets.

According to analysis by Reuters, these leading providers, however, are rarely voting against management. For example, all three cast the crucial votes against the reform of splitting the CEO and chairman roles at General Electric despite a decade of poor returns.

Note

Furthermore, a study on the proxy voting history of the worst performing Russell 3000 companies over three years to 2018 conducted by shareholder-voting data firm Proxy Insight found the three US giants continued to back management.

According to the results, BlackRock voted with management 93% of the time just ahead of Vanguard at 91% and State Street at 84%.

Voting against management for climate-related issues has also been problematic for the three firms. In 2018, BlackRock backed such resolutions just 10% of the time while for Vanguard it was 12%.

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It's the ETF industry's new secret sauce.
The introduction of nontransparent exchange-traded funds — which are not required to disclose their holdings regularly to investors, as most ETFs are — could soon take the ETF world by storm.
That's according to Doug Yones, head of exchange-traded products at the New York Stock Exchange. He says that with the Securities and Exchange Commission's recent approval of the first confidential ETF, it's an exciting time to be involved in this corner of the market.

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Lack of Liquidity
The biggest factor in an ETF, stock or anything else that is traded publicly is liquidity. Liquidity means that when you buy something, there is enough trading interest that you will be able to get out of it relatively quickly without moving the price.
If an ETF is thinly traded, there can be problems getting out of the investment, depending on the size of your position in relation to the average trading volume.

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6 Hour Overview:

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1 Hour Overview:

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Let's see whats going on today...

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Headlines: Banks warn of Liquidity Crisis

A growing number of market analysts are voicing concerns that the repo market shock in September may have been the first signal of a wide-ranging liquidity shortage, and now those warnings are being echoed by the heads of major banks.

"Despite the fact that bank balance sheets are quite strong, I think you’ll see more moments like this going forward," Ron O'Hanley, president and CEO of State Street, said during the Institute of International Finance's annual membership meeting on Saturday.

What's happening: Even with the Fed's commitment to pump $60 billion a month into financial markets, there still may not be enough funding because of regulations, changes to market structure, and banks' desire to keep their reserve levels high.

Strategist from JPMorgan, Goldman Sachs and Bank of America sent recent notes also warning of the funding issues.
Additionally, the increase of passive investments and major flows from pension funds and large asset managers into private equity funds is drying out typical sources of liquidity to the stock market and could mean major outflows in the face of bad news.

What they're saying: Brian Porter, president and CEO of Scotiabank, said he also is worried about the health of the so-called shadow banking sector — firms that are not banks but lend money to consumers for things like auto loans or home mortgages and aren't subject to the same regulations.

axios.com/bank-heads-warn-of-looming-liquidity-crisis-2558aa1c-4494-47d5-940f-a8696bde0ca8.html

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ZOOM IN: Micro Waves - Seconds

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We have a Micro-Wave 1 & 2 Complete...

We should see a decline in the next 28 Minutes...

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Time is up...

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House of Cards...

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31 Oct 19 will be a significant date...

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In my experience, wave 1 is rarely a clean formation. The markets tend to build a base after a steep decline, and very often we will get repeated tests of the high. Occasionally, the move will resemble a wedge, which is known by a special name: diagonal triangle, So we will have to take our chances if we wish to get into a trade at the very top!

Note

When you see a topping out 5 wave move as shown by waves 1 to 5, you will be on the alert for a down move that will take it to the prior reflex point . You will then see if you can make out 5 tiny waves within the new move down and potentially label it wave 1. Thereafter, you will look to sell on a 50% to 61.8% retracement and keep a stop loss above the top of wave 5, which tentatively coincides with the start of the new wave 1.

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The key point to remember here is Wave 2 can never go below the bottom of wave 1. Thus, your stop loss order will have to be placed a few tics below the low for wave 1.

This allows you to determine in advance what your maximum loss is going to be for this trade. Once you have reasonably satisfied yourself that wave 2 is very near its completion point, you will have to take a bold stance, (which includes the ability and willingness to suffer a small loss), and enter the market.

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Wedge Formation of Wave 1 & 2

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1 Hour Chart:

Wave 2 Retrace to .618

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Sub Waves --

1 & 3 Trended exactly to equality (.56%)

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Monthly Overview:

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Reminder: Trump's first Executive Order: Executive Order Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.) (NEA), the Global Magnitsky Human Rights Accountability Act (Public Law 114-328) (the “Act”), section 212(f) of the Immigration and Nationality Act of 1952 (8 U.S.C. 1182(f)) (INA), and section 301 of title 3, United States Code,

I, DONALD J. TRUMP, President of the United States of America, find that the prevalence and severity of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, such as those committed or directed by persons listed in the Annex to this order, have reached such scope and gravity that they threaten the stability of international political and economic systems. Human rights abuse and corruption undermine the values that form an essential foundation of stable, secure, and functioning societies; have devastating impacts on individuals; weaken democratic institutions; degrade the rule of law; perpetuate violent conflicts; facilitate the activities of dangerous persons; and undermine economic markets. The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons.

I therefore determine that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States, and I hereby declare a national emergency to deal with that threat.

Sec. 12. This order is effective at 12:01 a.m., Eastern Standard Time, December 21, 2017.

WSJ FLASHBACK: George Soros Transfers $18 Billion to His Foundation, Creating an Instant Giant, The pioneer of hedge-fund investing has transferred the BULK of his wealth to Open Society Foundations

DATE: October 17th, 2017 (2 Months before Executive Order)

wsj.com/articles/george-soros-transfers-18-billion-to-his-foundation-creating-an-instant-giant-1508252926

George Soros, who built one of the world’s largest fortunes through a famous series of trades, has turned over nearly $18 billion to Open Society Foundations, according to foundation officials

More: George Soros, the billionaire hedge fund manager and a major Democratic donor, has given $18 billion to his Open Society Foundations, one of the largest transfers of wealth ever made by a private donor to a single foundation.

The gift, made quietly over the past several years but disclosed only on Tuesday, has transformed Open Society into the second-biggest philanthropic organization in the United States, behind the Bill and Melinda Gates Foundation. It will also place Mr. Soros, a lightning rod for conservative critics, squarely in the middle of the social and political debates convulsing the country.

Founded by Mr. Soros more than 30 years ago, Open Society promotes democracy and human rights in more than 120 countries. In recent years, the organization has increased its attention on the United States, investing in programs to protect gays and lesbians and reduce abuses by the police.

nytimes.com/2017/10/17/business/george-soros-open-society-foundations.html

Make no mistake, we have been in Constitutional Crisis...the 'crisis' is now showing its full colors with the unprecedented impeachment 'inquiry' that is being conducted behind closed doors...

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Add it to the tally: Nike CEO out, Under Armor CEO out,

cnbc.com/2019/10/22/nike-ceo-mark-parker-to-step-down-john-donahoe-to-replace-him-in-2020.html

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Next:

Boeing...

Disney...

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Trump's Belief:
Our movement is about replacing a failed and corrupt political establishment with a NEW GOVERNMENT controlled by you the American people the Washington
establishment and the financial and media corporations that fund it exists for only one reason to protect and enrich itself the establishment has trillions of dollars at stake in this election for those who control the levers of power in Washington and for the global special interests they partner with these people that don't have your good in mind our campaign represents a true existential threat like they haven't seen before this is not simply another four-year election this is a crossroads in the history of our civilization that will determine whether or not we the people reclaim control over our government the political establishment that is trying to stop us is the same group responsible for our disastrous trade deals massive illegal immigration and economic and foreign policies that have bled our country dry the political establishment has brought about the destruction of our factories and our jobs as they flee to Mexico China and other countries all around the world it's a global power structure that is responsible for the economic decisions that have robbed our working class stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political -

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this this is a struggle for the survival of our nation and this will be our last chance to save it this election will determine whether we're a free nation or whether we have only the illusion of democracy but are in fact controlled by a small handful of global special interests rigging the system in our system is rigged this is reality you know it they know it I know it and pretty much the whole world knows it the Clinton machine is at the center of this power stuff we've seen this firsthand in the WikiLeaks documents in which Hillary Clinton meets in secret with international banks to plot the destruction of us sovereignty in order to enrich these global financial powers her special interest friends and her donors honestly she should be locked up the most powerful weapon deployed by the Clinton's is the corporate media the press let's be clear on one thing the corporate media in our country is no longer involved in journalism there a political special interest no different than any lobbyist or other financial entity with a total political agenda and the agenda is not for you it's for themselves anyone who challenges their control is deemed a sexist a racist a xenophobe they will lie lie and then again they will do worse than that they will do whatever is necessary the Clinton's are criminals remember that this is well document and the establishment that protects them has engaged in a massive cover-up of widespread criminal activity at the State Department and the Clinton Foundation in order to keep the Clinton's
in power they knew they would throw every lie they couldn't me and my family
and my love they knew they would stop at nothing to try to stop nevertheless I
take all of these slings and arrows gladly for you

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I take them for our movement so that we can have our country back I knew this day would arrive it's only a question of way and I knew the American people would rise above it and vote for the future they deserve the only thing that can stop this corrupt a machine is you the only force strong enough to save our country is us the only people brave enough to vote out this corrupt establishment is you the American people our great civilization has come upon a moment of reckoning I didn't need to do this I built a great company and I had a wonderful life I could have enjoyed the fruits and benefit of years of successful business deals and businesses for myself my family instead of going through this absolute horror show of Lies deceptions malicious attacks who would have thought I'm doing it because this country has given me so much and I feel so strongly that is my turn to give back to the country that I love I'm doing this for the people and for the movement and we will take back this
country for you and we will make America great again

Link to speech: youtu.be/G2qIXXafxCQ

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Executive Order Link: whitehouse.gov/presidential-actions/executive-order-blocking-property-persons-involved-serious-human-rights-abuse-corruption/

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WATCH FOR MASS PROTESTS TO BEGIN:

Examples:

1)

1, 2, 3, 4, Trump Can’t Rule Us Anymore

With impeachment looming, it’s time to take to the streets again.
Michelle Goldberg
Link: nytimes.com/2019/10/21/opinion/trump-protests.html

2)

Want Trump to Go? Take to the Streets

Another moment for public protest has arrived.

So it’s time for a sequel to that first Women’s March — an Americans’ March, in which millions of people peacefully take to the streets to say that President Trump must go. And it’s time for a more intense grass-roots campaign directed at his congressional enablers, one that conjures the respectful intensity of the save-Obamacare campaign. Even if the Senate still acquits Trump, a new protest movement can help galvanize people to defeat him, and his enablers, next year.

The country is in crisis. Right now, that crisis feels all too normal.

Link: nytimes.com/2019/10/20/opinion/trump-impeachment-protests.html

Follow Antifa here: refusefascism.org/events/

The Antifa Message:

The Trump/Pence regime poses a catastrophic danger to humanity and the planet. Concentration camps at the border… environmental devastation accelerated… danger of war, even nuclear, threatened… white supremacy rules… fascist mobs and racist mass murders… truth and science erased… right to abortion near gone… the rule of law and democratic and civil rights stripped away… THIS IS FASCISM UNFOLDING.

We must seize on the impeachment crisis now erupting, taking history into our own hands and turning dread for the future into a force for hope – joining together behind the single unifying demand: The Trump/Pence Regime Must Go– NOW!
We demand:
THE TRUMP/PENCE REGIME MUST GO – NOW!

#OUTNOW! begins with five weeks of protest to launch, spread, and grow an unrelenting non-violent mass movement of protests that continue week after week to demand that the Trump/Pence Regime Must Go – NOW! From there, we will continue to grow and not stop until the Trump/Pence Regime has been removed from power.
Protests BEGIN Saturday, October 19 in NYC & LA

****Then they spread NATIONWIDE Saturday, October 26 and continues and spreads on November 2, November 9 and November 16… until the Trump/Pence Regime is Removed from Power.*****

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Some may ask, who cares about Politics, its all about EPS and the Economy.

Sorry to say, Politics and Business in America have become extremely entangled.

Think Bailouts....

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LIQUIDITY LIQUIDITY LIQUIDITY will be all you hear very soon...

China Business : scmp.com/business/china-business/article/3034167/chinas-third-largest-province-shandong-firms-are-still

In China’s third-largest province, Shandong firms are still reeling from liquidity crunch after default scare

Shandong Ruyi, dubbed the LVMH of China, and Xiwang Group face pressure to repay short-term bond maturities despite refinancing efforts

Credit risk of private enterprises in the province remains significant with no immediate liquidity relief, S&P Global Ratings says
Private companies in the eastern province have defaulted on 28 bonds worth 13.6 billion yuan (US$1.9 billion) so far this year, Wind data shows. Only their peers in neighbouring Jiangsu have produced more delinquencies among China’s 32 provinces.

The continuing losses show liquidity in Shandong’s regional economy has improved little since March 2017, when aluminium processor Qixing Group defaulted on 7 billion yuan of borrowings. The failure also exposed a web of interlocking credit guarantees and infected dozens of local enterprises, leading to a slew of bankruptcies.

&

Federal Reserve is DEAD but it hasn't received the memo.

FACT: US Federal Reserve is a privately-owned company, sitting on its very own patch of land, immune to the US laws.

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How much money will be wasted on failing Repo Operations?

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The Fed Is Running Scared
The U.S. Federal Reserve has u-turned too quickly and too aggressively this year, going from tightening to easing without allowing the market to react to "normalized" conditions.

The icing on the cake was Wednesday night. The U.S. Fed, out of nowhere, just came out and said "we are expanding our overnight repo operations to $120 billion and term operations to $45 billion." That is a 65% increase in Fed injecting daily liquidity into the system overnight. It smells way too fishy and is certainly not representing a system that the Fed claims to be a "temporary fix" or "not the start of quantitative easing."

Call it Uncle Sam's ice cream money or whatever you want. Any way you look at it, this is ultra-accommodative monetary policy just renamed to avoid the taboo of the U.S. Fed initiating yet another round of Quantitative Easing. This has been evident throughout history, especially in Japan and the eurozone. Decades of stimulus and low rates, negative even in some cases, have failed to boost GDP and stoke inflation. Now we are beyond negative interest rates and they still want to do more. Alas, central banks do not pay heed to mistakes of the past but use it as a guide to continue using the same principles.

Something seems to be brewing in China as well. Last week they injected about 250 billion yuan in reverse overnight operations (aka adding liquidity -- forget the fancy name, as there are people paid a lot of money to come up with newer, more-elusive names to mask the same thing). This week they added 510 billion yuan more, with 250 billion on Monday, 250 billion Yuan on Tuesday, and another 60 billion Yuan Wednesday night.

Link: realmoney.thestreet.com/politics/the-fed-is-running-scared-15138687

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The Expanding Leading Diagonal is about to break...

I think the Fed is quickly running out of Ammo to 'hold' this market up...

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Surprise Surprise - Complex Correction....

Mark My Words...Whenever the Fed does run out of Ammo...

It will be EPIC

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The Fed is compounding the issue by injecting capital...

It's called PRICE DISPARITY...

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Complex Correction looks to be a double Flat (3-3-5)...

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Wave C is always made up of 5 Sub-waves...

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More Complex Corrections in the second count...

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Zooming out a little...

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Here is a Fib Time Marker...

Since it's in the 5Min Chart, it doesn't hold as much weight as do higher wave counts...

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Fib Time Marker = 24 OCT 19 18:30 UTC

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638 DAYS!!!!!

638 DAYS!!!!

That is a hell of a long time in complex corrections...

Hence, why I say it will be EPIC when the Fed 'Ammo' is depleted...

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Bar Chart

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*Candle Chart

This is the Bar Chart...

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Pick your poison...I prefer the Ashi method.

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PUMP PUMP PUMP - All hell will break lose if the Federal Reserve is proven to be incompetent...

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Hanging by threads...still...

Who is the marginal buyer?

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Fib Time Marker 8 from the Super Cycle

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Knocking on the door...

Fib Time Marker 8 = 01 NOV 19

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Disclosure: I'm completely out of the Stock Market! I shorted the Crypto Currency Mining Market and bought as many 'Miners' AKA Servers as possible for around $100 each...

It is my belief that the future is not Centralized but Decentralized...

Great Example: The Internet

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Another Great Example of Centralized power is the Global Reserve Banks...

What are Federal Reserve Banks?

Federal Reserve Banks were ESTABLISHED by Congress as the operating arms of the nation's CENTRAL banking system. Many of the services provided by this NETWORK to depository institutions and the government are similar to services provided by banks and thrift institutions to business customers and individuals. Reserve Banks hold the cash reserves of depository institutions and make loans to them. [THEY] move currency and coin into and out of circulation, and collect and process millions of checks each day. [THEY] provide checking accounts for the Treasury, issue and redeem government securities, and act in other ways as fiscal agent for the U.S. government. [THEY] supervise and examine member banks for safety and soundness. The Reserve Banks also participate in the activity that is the primary responsibility of the Federal Reserve System, THE SETTING of monetary policy.

For the purpose of carrying out these day-to-day operations of the Federal Reserve System, the nation has been divided into twelve Federal Reserve Districts, with Banks in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. Twenty-five Branches of these Banks serve particular areas within each District.

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Favorite Chart to Watch....

Bitcoin v. HYG (Debt) v. SP500

Extremely Telling Chart...

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FUN FACTS:

How long is the life span of U.S. paper money?
$ 1 ................. 5.8 years
$ 5 ................. 5.5 years
$ 10................ 4.5 years
$ 20 ............... 7.9 years
$ 50 ............... 8.5 years
$100 ............... 15 years

What are U.S. notes, and how do they differ from Federal Reserve notes?

U.S. notes, the first national currency, began circulating during the civil war; they were authorized by the Legal Tender Act of 1862.

U.S. notes serve no function that is not already served by Federal Reserve notes. As a result, the Treasury Department stopped issuing U.S. notes, and none have been placed into circulation since January 21, 1971.

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Source: Federal Reserve: richmondfed.org/faqs/currency

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Wave Theory:

A typical B wave in a zigzag seldom goes beyond the 61.8% retracement of the A wave, and in the case of a Flat, the B wave will finish near about the start of Wave A.

In the case of an irregular correction, however, the B wave goes BEYOND the starting point of Wave A and just when everyone is convinced that the original trend was probably back in place, the price turns around and comes down rapidly as the C wave to complete the corrections.

Irregular corrections usually appear after wave 5 of a cycle, and would correct the entire five waves according to Elliott’s approach to this phenomenon.

The first move after the end of wave 5 would be a three wave affair and is labeled as Wave A. The Wave B that follows will also be in three sub waves but the price will exceed the top of Wave 5.

Thereafter, we will get a normal Wave C made up of five sub waves. An irregular correction is frequently spotted at the end of an extended fifth wave an extended fifth wave is subject to what is known as double retracement. The first retracement usually covers only that portion of the fifth wave that went beyond a normal fifth wave.

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I have to give them an A+ for effort...

Reminder:
Federal Reserve credible?
A Majority of Global Bonds have Negative Rates?
Brexit?
China?

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3029.50 is THE NUMBER

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Tic-Toc...

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Crypto is having incredible breakouts...

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1. World-wide Revolutions

a. Brexit (EU) : thesun.co.uk/news/10015632/boris-johnson-brexit-britain-faces-la-riots/

b. Hong Kong : washingtonpost.com/world/asia_pacific/i-will-die-with-the-city-a-young-womans-chilling-message-from-hong-kongs-front-lines/2019/10/24/9f51a35e-f0b3-11e9-bb7e-d2026ee0c199_story.html

c. Italy (EU) : thelocal.it/20190517/why-a-wave-of-anti-salvini-banner-protests-sweeps-italy
d. Spain (Catalina) (EU) : cbsnews.com/news/catalan-riots-tens-of-thousands-protesters-face-off-against-police-in-third-night-of-demonstrations/

e. Hungary : express.co.uk/news/world/1060030/Hungary-riots-slave-laws-viktor-orban-protests-budapest-george-soros-democracy-EU-news

f. France : express.co.uk/news/world/1181059/paris-riots-climate-change-protests-police-greta-thunberg-extinction-rebellion

g. Canada : google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=1&cad=rja&uact=8&ved=0ahUKEwiYrbzJo7jlAhUFmeAKHdWqC5YQxfQBCCcwAA&url=https://www.washingtonpost.com/opinions/2019/10/22/urban-rural-divide-is-defining-politics-worldwide-canadas-election-is-proof/&usg=AOvVaw1liQKlnULxDzm3izZtO42u

h. Mexico : dailymail.co.uk/news/article-7511681/Riots-looting-break-Mexico-City-protest.html

i. Venezuela : breitbart.com/latin-america/2019/10/21/venezuela-riots-ecuador-chile-signal-coming-bolivarian-hurricane/

j. Chile : reuters.com/article/us-chile-protests-apec/chile-says-no-chance-of-riots-derailing-apec-un-climate-meet-in-santiago-idUSKBN1X32T3

k. Bolivia : nbcnews.com/news/latino/riots-bolivia-intensify-president-evo-morales-nears-outright-victory-n1070001

l. Greece : theguardian.com/world/2019/sep/30/riots-at-greek-refugee-camp-on-lesbos-after-fatal-fire

m. USA - Antifa Plans Riots

Note

Why is there so much unrest around the world?

Coincidence?

What Zodiac age did we just enter?

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Who is Antifa?

Who controls Antifa?

What is the purpose of Antifa?

What does the Yellow Vest Movement represent?

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Is Britain's Parliament honoring the Brexit vote?

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Daily:

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New high is insignificant...

Be very cautious here...

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Reminder we are in a Horizontal Triangle in the 5th Wave Position...

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All the new high represents is a failed wave...

Failed Wave is due to the Fed's Repo purchases...

Do you believe the Repo purchase are sustainable?

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What does Wave Theory say about Horizontal Triangles?

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The Federal Reserve has gone into full intervention mode.

Actually, accelerated intervention mode. Not just a “mid-cycle adjustment,” as Fed Chairman Jerome Powell said in July, but interventions to the tune of tens of billions of dollars every day.

What’s the crisis, you ask? After all, we live in an age of trillion-dollar market-cap companies and unemployment at 50-year lows. Yet the Fed is acting like the doomsday clock has melted as a result of a nuclear attack.

Think I’m in hyperbole mode? Far from it.

Unless you think the biggest repurchase (repo) efforts ever — surpassing the 2008 financial-crisis actions — are hyperbole:

Note

nd liquidity injections are massive and accelerating. On Tuesday, the Fed injected $99.9 billion in temporary liquidity into the financial system and $7.5 billion in permanent reserves as part of a program to buy $60 billion a month in Treasury bills. The $99.9 billion comes from $64.9 billion in overnight repurchase agreements and $35 billion in repo operations.

But market demand for overnight repo operations has far exceeded even the $75 billion the Fed has allocated, suggesting a lot more liquidity demand. Hence, on Wednesday the Fed suddenly announced a $45 billion increase on top of the $75 billion repo facility for a daily total of $120 billion. Here’s the Federal Reserve Bank of New York, the branch involved in such actions:

“Consistent with the most recent FOMC [Federal Open Market Committee] directive, to ensure that the supply of reserves remains ample even during periods of sharp increases in non-reserve liabilities, and to mitigate the risk of money market pressures that could adversely affect policy implementation, the amount offered in overnight repo operations will increase to at least $120 billion starting Thursday, Oct. 24, 2019.”

And, consequently, on Oct. 24 the Fed injected $134 billion in temporary liquidity.

Note

These actions are surprising. What stable financial system requires over $100 billion in overnight liquidity injections? The Fed did not see the need for these actions coming. It is reacting to a market that suddenly requires it.

“Funding issues,” Chairman Powell called it in October. The Fed was totally caught off guard when the overnight financing rate suddenly jumped to over 5%, and it’s been reacting ever since.

What started as a slow walk in policy reversion from last year’s rate-hike cycle and balance-sheet roll-off (aka quantitative tightening, or QT) on autopilot has now turned into ongoing interest-rate cuts and balance-sheet expansion:

Note

First came the hints in January. “Flexible on the balance sheet,” Powell suddenly was uttering following the fourth-quarter 2018 stock market massacre, producing a 3.5% rally in one day on that pronouncement. Then we got treated to a multi-month jawboning of Fed speakers increasingly sending dovish messages, and markets gladly jumping from Fed speech to Fed speech. Powell again rescued the market in early June after May’s market rout. “Ready to act” was the rallying cry then — and the market rallied dutifully into the July rate cut.

But then the dynamics changed. Rate cut No. 1 in July was sold. Rate cut No. 2 in September was sold. Then came the repo operations, also in September. And now, in October, the Fed launched the $60 billion-a-month Treasury-bill-buying program.

Did you note the accelerated pace of Fed actions here? The Fed went from pausing rate increases to ending the balance sheet roll-off to multiple rate cuts and, finally, aggressive daily repos and balance-sheet expansion. All of this since July. And guess what? Another rate cut is coming next week.

Note

Source: marketwatch.com/story/the-federal-reserve-is-in-stealth-intervention-mode-2019-10-25

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Add it to the tally: hollywoodreporter.com/news/mattel-cfo-depart-whistleblower-probe-reveals-weaknesses-1250982

Mattel CFO out...

Note

Responding to anonymous whistleblower allegations that Mattel made historical accounting errors, the Hot Wheels and Barbie toymaker on Tuesday said CFO Joseph Euteneuer is leaving the company after a transition period of up to six months.

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Well, I think we MIGHT be out of Ammo...

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We don't know because the Federal Reserve is never independently audited...

Note

What happened to the 'Fed Drift'?

Note

Wave Counts:

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Game time...

Let the Fibonacci Magic begin...

10/31/19 22:00

Note

***UTC

Note

VIX v. SP500

Note

Notice Anything?

Coincidence?

Price-Action of both following Fibonacci Spiral & Expanding Triangle...

Note

Very Quick Analysis of the VIX.

Note

Wave 1 is almost always sloppy and takes the form of a wedge (Leading Diagonals) in my experience...

After the C Wave finished, the VIX looks as if Wave 1 has formed a leading diagonal

Note

Wow...

SP500 & VIX have approximately the same Fib Time Markers...

Note

My thesis will be invalidated if we can break above this current horizontal triangle and successfully hold and break the .5 level (0-3-4 Trend Based Extension).

A Normal 5th Wave's Terminal is between .382-.618

Breaking .618 would definitely invalidate this idea...

Note

Here is the Terminal Area for the 5th Wave...

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As you can see you, the SP500 reached the Target Area for the 5th Wave (Crossing/Hitting .382 of Trend Based Extension 0-3-4.

After hitting the Target Area we had an irregular correction where the B Wave exceed the top of the Terminal 5th Wave.

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After the irregular correction, we have been stuck in myriad of complex corrections...

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Here we go...

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VIX v. SP500

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Second Count

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We hit the Fib Time Marker 10/31/19 22:00 hit...

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Elder Force Index (EFI): measures the power behind a price movement using price and volume. The indicator can also be used to identify potential reversals and price corrections. The EFI is an oscillator that fluctuates between positive and negative values, above and below a Zero Line

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beincrypto.com/bitcoin-thrust-into-the-spotlight-following-banking-outages-in-america/

ecently, a spate of banking failure and ATM outages have been cropping up across the world. Primarily, these have been in places like India and politically volatile regions like Hong Kong. However, reports out of America are now showing countrywide outages from Bank of America, leading Bitcoin’s lack of centralized financial authority to shine through.

Banking and financial uncertainty, as well as the threat of a global recession, has led to a more measured approach being taken in the examination of Bitcoin as an alternative to fiat currency. Most of the examples of where this financial system can work and evolve have been seen in nations under pressure, like Venezuela, India, and Hong Kong.

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According to reports, and social media, Bank of America customers, were being met with “temporarily out of service” announcements on ATMs while others said they were unable to pay their bills and that their cards were being declined.

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Banks have become susceptible to failure in times of economic uncertainty, and even as a centralized chokepoint of money, they are very vulnerable to attacks. In fact, there is a prediction from consultancy firm McKinsey that if a recession does hit, banks that are not fintech focused, may fail.

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ktvu.com/news/customers-report-bank-of-america-outage-cards-declined-atms-unavailable

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Capital One said it experienced an outage Friday that blocked some customers' direct deposits and kept some from withdrawing money for several hours.

"Capital One is experiencing a technical issue impacting customer money movement, including direct deposits, and the ability for some customers to access accounts," the bank tweeted at around 9 a.m. "We are actively working to resolve the issue and restore all services. We greatly apologize for the inconvenience." The issue has since been resolved, according to the bank.
The outage is the second to hit the bank this week. Its website and app went down Sunday, according to USA Today.

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bankingdive.com/news/capital-one-outage-blocks-customers-direct-deposits-cash-withdrawal/566491/

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7news.com.au/business/finance/st-george-mobile-banking-down-as-outages-affect-customers-across-the-country-c-528712

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Something is going on with Major Banks...

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Topline: Bank of America, the second-biggest lender in the U.S., had a major outage last night that left thousands of customers around the country locked out of their accounts for over an hour without explanation.

Reports flooded in over social media last night, with scores of customers saying that their bank accounts and information were inaccessible.

The outage apparently hit across the country, with Bank of America’s Web login, mobile app, customer service lines and even ATM services all going down. Other customers said they were unable to pay bills and that their debit and credit cards were getting declined.

Downdetector, a website that provides information about users’ issues with different services, registered more than 9,100 problems at Bank of America last night, starting at around 10:30 p.m. EST and spanning several hours. Most reports were related to online banking (73%) and mobile banking (23%).

Although several thousand issues were reported, Bank of America has approximately 66 million customers in total.

Some users speculated that this was part of scheduled maintenance, but others refuted that, saying the bank had not provided any advance updates or answered user concerns during the outage.

When asked for comment, Bank of America said that the outage was “technology related,” and lasted for about an hour. A spokesperson said that the bank now back to business as usual.

What to watch for: While it appears that the issue has largely been resolved, a few users claim via social media to still have issues with their accounts—and Downdetector shows that some scattered problems are still being reported today.

Tangent: According to Downdetector, Bank of America also had an outage with debit cards last week, with over 800 issues reported.

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forbes.com/sites/sergeiklebnikov/2019/10/30/bank-of-americas-outage-panics-consumers-heres-what-we-know-so-far/

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Interest Rates are the Key...

Why does the Fed HAVE TO cut interest rates?

Why can't the Fed raise rates in a 'Good Economy'?

What are some examples of countries with negative rates? (Google)

Japan: -0.10%
Sweden: -0.30%
European Central Bank: -0.40%
Denmark: -0.70%
Switzerland: -0.80%

Negative rates are counterintuitive, unprecedented — and to my mind — mind-bendingly insane and downright scary. They are like a parallel universe where everything you’ve ever learned about finance and human behavior is turned upside down.
Multiple red stop signs and warning indicators on the side of a Yarra Trams Melbourne Z-class tram with red traffic light in the background.

Worse, negative rates are being normalized by economists, bankers, and commentators.

Worst, I have a funny feeling this will end badly. Negative interest rates have all the hallmarks of serious trouble for the financial markets; an anomaly growing in scale which seemingly came out of nowhere that is under-recognized, poorly understood and dismissed as not consequential. (Flashing red lights here.)

In the U.S. we aren’t particularly aware of negative rates because they haven’t made their way to our shores ... perhaps yet.

Yes, the U.S. ten year Treasury yields 1.59%, not close to 0%, but negative rates seem to be creeping ever closer. For instance, negative interest rates haven’t come to U.S. corporate debt, but Euro-denominated bonds issued by the likes of blue-chips Apple (AAPL), McDonald’s (MCD), and Pepsi (PEP) carry negative yields.

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finance.yahoo.com/news/negative-interest-rates-japan-germany-france-150324580.html

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WOW...haha

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ALMOST 2 YEARS - UP 6.48% - Essentially Sideways...

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1-1-18 through 11-1-19

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cnn.com/2019/11/03/business/mcdonalds-ceo-steve-easterbrook-steps-down/index.html

Add to Tally

McDonald CEO Out....

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I have a minuscule wave...

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Broke 5th Wave Extension Level .618...

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Amazing Manipulation of the Markets right now...

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1 Second Wave Count (Above)

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We have a sloppy Wave 1 & 2....

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Are the endless corrections over?

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For those questioning what invalidates this idea...its the Fibonacci Spiral (Blue)...

Price-Action should follow the Blue Spiral and should NOT break the Spiral...

We should be hitting the high now and begin a descent...

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Example of Price-Action 'following' the spiral...

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The Federal Reserve has been pumping billions into the financial system after the mid-September tumult in very short-term lending markets known as repo.

As the central bank’s balance sheet has expanded, the S&P 500 has grown at almost the exact pace.

Some on Wall Street worry that the market is back to depending on the Fed’s monetary juice, rather than fundamentals, as the path to gains.

cnbc.com/2019/11/07/the-feds-monetary-juice-has-tied-directly-to-the-rise-in-stocks.html

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Good Morning...

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Start with the Monthly Chart:

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Review:

1. We have completed a 5 Wave Cycle (2009-2018)
2. We had an irregular correction after the Terminal 5th Wave (B Wave Exceeds 5th Wave Terminal)
3. After the B Wave we completed the C Wave which retraced to approx. $2,300
4. After the C Wave we made a new high but in a '3 Wave' move (incurs weak price-action)
5. The '3 Wave' move to new highs are irrelevant because it was fueled on Federal Reserve liquidity injections

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Why is the Market going to Crash?

One Word: World-wide Quantitative Easing

USA QE:

Quantitative Easing 1 (QE1, December 2008 to March 2010): On November 25, 2008, the Federal Reserve announced that it would purchase up to $600 billion in agency mortgage-backed securities (MBS) and agency debt.

Let's look at High Yield Corporate Debt HYG and mark December 2008....

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The Chart above shows the Monthly Chart of HYG, as you can see HYG was collapsing and hitting all-time lows in December 2008.

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Then, the Federal Reserve under Ben Bernanke started purchasing Mortgage-Backed Securities and Debt to the tune of 600 Billion a month. When the Fed started buying this debt you can clearly see HYG began to recover...

On March 18, 2009, the FOMC announced that the program would be expanded by an additional $750 billion in purchases of agency MBS and agency debt and $300 billion in purchases of Treasury securities. These purchases would be unsterilized and this date more appropriately marks the beginning of QE in the US.

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Let's now mark March 2009...

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Another Strategy the Fed executed was the Zero Interest Rate Policy (ZIRP) (December 2008 to December 2015)

Federal Open Market Committee decided to lower overnight interest rates to zero to help with easing of money and credit.

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Next:

Quantitative Easing 2 (QE2, November 2010 to June 2011 )

On November 3, 2010, the Fed announced that it would purchase $600 billion of longer dated treasuries, at a rate of $75 billion per month. That program, popularly known as "QE2", concluded in June 2011.

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Zooming in on HYG for Wave Count:

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SP500 Daily:

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6HR Chart: Primary Wave 1 & 2

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The SPIRAL is holding true... (High Degree)

New Thread Coming...

Warning Bells!!!!!!

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Monthly Fibonacci Time Marker 8 - Declaring the Top of the Market

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REMEMBER: 26 NOV 19

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FYI:
Purple is 33 EMA
Blue is 50 EMA
Red is 300 EMA

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New Thread: The Warning - Crash - Part 5

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Please Click the link to the new thread...

Trade closed: target reached

FibMarketWatch

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SP500-The Crash-Part 3

by FibMarketWatch

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