Short

SP500 - THE WARNING - CRASH - Part 5

Updated

REMAINS A STRONG SELL!

ANALYSIS METHOD: FIBONACCI & WAVE THEORY W/ A DASH OF FUNDAMENTALS

SPY has completed a 5 Wave Cycle and is now in a correction phase. The market has been held up by unsustainable monetary injections from the Private Federal Reserve. This has caused SP500 to essentially be range bound for almost 2 years. It is my opinion, the Private Federal Reserve is now out of monetary ammo since the private bank can no longer raise interest rates and is now forced to cut rates in an objectively 'good economy'.

I have been tracking the 'Wave Count' since I warned about the completion of the 5 Wave Cycle in July 2018. After the Terminal 5th Wave we had an 'Irregular Correction'. An 'Irregular Correction' is when the B Wave exceeds the Terminal 5th Wave. After the B Wave, the C Wave retraced the SP500 down to approx. $2,300. When the C wave completed, the market made a 3 Wave move to new highs which signals a 'Complex Correction'. 'Complex Corrections' are sequences of ZigZag's or Flat Corrections. Also, 'Complex Corrections' insinuate that a very strong move will occur when the correction sequences are complete.

The Hedge: Cryptocurrency

Monthly Wave Count:

THE PERFECT STORM

1. Private Federal Reserve
-Modern Monetary Theory
-Fiat Currency
-Loss of Credibility

2. Global QE (UK - Eurozone - Sweden - Japan - Switzerland)
Quantitative easing (QE), also known as large-scale asset purchases, is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy. An UNCONVENTIONAL form of monetary policy, it is usually used when inflation is very low or negative, and standard expansionary monetary policy has become ineffective. A central bank implements quantitative easing by buying specified amounts of financial assets from commercial banks and other financial institutions, thus RAISING the prices of those financial assets and lowering their yield, while simultaneously INCREASING the (Fiat) money supply. This differs from the more usual policy of buying or selling short-term government bonds to keep interbank interest rates at a specified target value.

Expansionary monetary policy to stimulate the economy typically involves the central bank buying short-term government bonds to lower short-term market interest rates. However, when short-term interest rates reach or approach ZERO, this method can NO LONGER WORK. In such circumstances, monetary authorities may then use quantitative easing to further stimulate the economy, by buying specified quantities of financial assets without reference to interest rates, and by buying riskier or longer maturity assets (other than short-term government bonds), thereby lowering interest rates further out on the yield curve. (In other words, manipulation of the money supply)

3. Global Supply Chain Reset
- The World's Supply Chain Reset (Trade Deals)
- Blockchain Technology

4. Geo-political Tensions World-wide
-Governments refusing the will of the people
a. Brexit
b. Hong Kong
c. Spain
d. Italy
e. Chile
f. Venezuela
etc...

5. US Constitutional Crisis
-Impeachment

WHY IS THE MARKET GOING TO CRASH?

1. The Private Federal Reserve: Credibility Gone

The Test (1961): The Federal Open Market Committee action known as Operation Twist (named for the twist dance craze of the time) began in 1961. The intent was to FLATTEN the yield curve in order to promote capital inflows and strengthen the dollar. The Fed utilized open market operations to shorten the maturity of public debt in the open market. It performs the 'twist' by selling some of the short term debt (with three years or less to maturity) it purchased as part of the quantitative easing policy back into the market and using the money received from this to buy longer term government debt. Operation Twist: Through Operation Twist, the Fed was moving investors away from ultra-safe Treasury's into loans with more risk and return. Demand for Treasury's was still high, thanks to concerns over the eurozone debt crisis. By intentionally lowering yields, the Fed was forcing investors to consider other investments that would help the economy more.

The Execution (2008): The U.S. Federal Reserve System held between $700 billion and $800 billion of Treasury notes on its balance sheet before the recession. In late November 2008, the Federal Reserve started buying $600 billion in mortgage-backed securities. By March 2009, it held $1.75 trillion of bank debt, mortgage-backed securities, and Treasury notes; this amount reached a peak of $2.1 trillion in June 2010. Further purchases were halted as the economy started to improve, but resumed in August 2010 when the Fed decided the economy was not growing robustly. After the halt in June, holdings started falling naturally as debt matured and were projected to fall to $1.7 trillion by 2012. The Fed's revised goal became to keep holdings at $2.054 trillion. To maintain that level, the Fed bought $30 billion in two- to ten-year Treasury notes every month.

In November 2010, the Fed announced a second round of quantitative easing, buying $600 billion of Treasury securities by the end of the second quarter of 2011.[27][28] The expression "QE2" became a ubiquitous nickname in 2010, used to refer to this second round of quantitative easing by US central banks.[29] Retrospectively, the round of quantitative easing preceding QE2 was called "QE1".

A third round of quantitative easing, "QE3", was announced on 13 September 2012. In an 11–1 vote, the Federal Reserve decided to launch a new $40 billion per month, open-ended bond purchasing program of agency mortgage-backed securities. Additionally, the Federal Open Market Committee (FOMC) announced that it would likely maintain the federal funds rate near zero "at least through 2015".[32][33] According to NASDAQ.com, this is effectively a stimulus program that allows the Federal Reserve to relieve $40 billion per month of commercial housing market debt risk.[34] Because of its open-ended nature, QE3 has earned the popular nickname of "QE-Infinity".[35][better source needed] On 12 December 2012, the FOMC announced an increase in the amount of open-ended purchases from $40 billion to $85 billion per month.

On 19 June 2013, Ben Bernanke announced a "tapering" of some of the Fed's QE policies contingent upon continued positive economic data. Specifically, he said that the Fed could scale back its bond purchases from $85 billion to $65 billion a month during the upcoming September 2013 policy meeting. He also suggested that the bond-buying program could wrap up by mid-2014.[38] While Bernanke did not announce an interest rate hike, he suggested that if inflation followed a 2% target rate and unemployment decreased to 6.5%, the Fed would likely start raising rates. The stock markets dropped by approximately 4.3% over the three trading days following Bernanke's announcement, with the Dow Jones dropping 659 points between 19 and 24 June, closing at 14,660 at the end of the day on 24 June. On 18 September 2013, the Fed decided to hold off on scaling back its bond-buying program, and announced in December 2013 that it would begin to taper its purchases in January 2014.Purchases were halted on 29 October 2014[42] after accumulating $4.5 trillion in assets. en.wikipedia.org/wiki/Quantitative_easing

The Planned 'Super' Hikes: money.cnn.com/2015/12/16/news/economy/federal-reserve-interest-rate-hike/index.html

Yellen: "I feel confident about the fundamentals driving the U.S. economy, the health of U.S. households, and domestic spending," Fed chief Janet Yellen said during a press conference. "There are pressures on some sectors of the economy, particularly manufacturing, and the energy sector...but the underlying health of the U.S. economy I consider to be quite sound."

Investors were pleased to see that the Fed expects "only gradual increases" in rates next year and that the committee explicitly said it would take into account "readings on financial and international developments."

Note: We did not get 'Gradual Increases' - We went from 0-100 in 60 Seconds

October 11th, 2019: Repo Crunch = No Liquidity?

How can financial markets lack liquidity when the Fed between 2008 and 2014 created literally TRILLIONS of dollars in reserves, the basic stuff of all market liquidity, and in the years since has removed few of them? Banks still hold abundant unused reserves. Yet for a brief period a few weeks ago the shortage of liquidity was so profound that repo rates jumped from 2-2 ½% to 10%.

With the federal government running huge budget deficits and selling billions in new notes and bonds, markets hardly faced a shortage of collateral. At the same time, banks had ample reserves laying idle in deposits at the Fed. Some 90% of the reserves, almost $1.5 trillion according to Fed statistics, were uncommitted. It would seem that some of these funds could have easily served the system’s cash needs, especially as repo rates rose during those few days of the scare. But as it is, the Fed had to inject yet more money into the system.

Incentive NOT TO LEND: New policy tool, it began to pay interest on reserves held by banks above the amounts required by regulations, the so-called “free” or “idle” reserves. So now banks not only are inclined to ingratiate themselves with regulators by holding more reserves then are required by law, they also get paid for doing so. True, the rate comes no where near the 10% briefly offered on repos, but earning even a small amount on reserves makes bank managements that much less eager to commit their them to a repo or any loan for that matter. - forbes.com/sites/miltonezrati/2019/11/08/the-recent-repo-scare-carries-a-deeper-warning/

Past Threads:

Original Idea: Jul 27, 2018 - SP500-SELL-BUY PUTS

Idea: I was expecting a C Wave to break downwards, instead the B Wave climbed above the Terminal 5th Wave creating what is called an 'Irregular Correction'.

Original Idea Updated: Oct 5, 2018 -SPY-SHORT-UPDATE

Idea:-AMEX:SPY has completed a 5 Wave Cycle and is in the midst of an Irregular Correction. Irregular Corrections have a phenomenon which Elliot called, "Double Retrace". Irregular Corrections most often manifest after a 5 Wave Cycle. An Irregular Correction occurs when Wave B goes above the terminal point of Wave 5. Double Retracement corrects Wave 5 and then the entire wave sequence.

PART 1: Nov 19, 2018 : SPY-CRASH IMMINENT-UPDATE

PART 2: Jan 27, 2019 : SP500 SHORT - THE CRASH - PART 2

PART 3: Mar 7, 2019 : SP500 - THE CRASH - PART 3

PART 4: Sep 24, 2019 : SP500 - THE CRASH -PART 4

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

Weekly Chart:

Daily Chart:

Will update.

FMW

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Above: Entire Monthly Wave Count

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668 Day = +8% = Performance?

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Please leave comments if you have questions...

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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 correction.

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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.

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Daily Chart Review:

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Note: Sloppy/Gaps in Price-Action...

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1 Minute Count:

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30 Second Wave Count:

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Look for Micro-Wave 3 tomorrow...

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Key Level will be $306.07...

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I use Volume as a Confirmation indicator
100MA - Volume Declining; a divergence from the price-action trend...

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The other two indicators I use for Confirmation purposes is the Elders Force Index and Ultimate Oscillator.

Both are showing divergences from trend.

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Good Morning...

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Target:

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I try to let the charts speak for themselves but I will try my best to better explain them...

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Still looking for Micro-Wave 3...

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Instead of the Micro-Wave 3, we got a complex correction...

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Wave 2 retraced Wave 1 by 78.6%...

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Reminder from last thread: Daily CYCLE Fib Time 8 = 26 NOV 19

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We have formed a leading diagonal...

Leading Diagonal form in 5-3-5 Sequences and is the only formation that is allowed to break Wave Theory rules...

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TicToc

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Micro-Wave 3 has begun...

Target Area: Shaded Box

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Cycle Daily & Monthly Fib Time Markers

Pink: Monthly
Yellow: Daily

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Based on the Price-Action today, I believe the next move down will be very strong...

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Almost every time the market starts to turn there is a miraculous injection of capital...

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Above: 1 Minute Wave Count

Note: Complex Correction Marker

Note: Correction Target Area

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SP500 V. Total Crypto Market V. BTC

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SP500 V. VIX

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Strongly believe everyone should have a hedge to protect their portfolio right NOW!

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Time is running out...

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Well now I know why we have a failed wave...

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The New York Fed added $104.293 billion to financial markets Thursday.

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wsj.com/articles/new-york-fed-pumps-in-104-293-billion-in-temporary-liquidity-11573744698

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Deja Vu: Fed Adds $111.909 Billion in Temporary Liquidity to Markets (Tuesday)

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wsj.com/articles/fed-adds-111-909-billion-in-temporary-liquidity-to-markets-11573568940

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Here is a chart that should worry you...

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Price-Action? or Straight Manipulation?

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Powell Faces Doubt That Fed Really Has Repo Under Control

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Federal Reserve Chairman Jerome Powell says short-term interest rates are back under control. Not everyone’s convinced.

There’s evidence traders expect pressure to build in the weeks ahead. Brokers on Thursday are quoting repurchase-agreement rates for year-end around 3.25%, or roughly one-and-a-half percentage points higher than today’s levels, and they’ve mostly been above 3% for months. That’s even after Powell’s attempt to reassure markets on Wednesday and the central bank’s announcement Thursday of its latest round of liquidity injections, some of which will span the end of the year.

The central bank has been injecting liquidity into the funding markets since Sept. 17, when the rate on overnight general collateral repo jumped to 10% from around 2%. The Fed also started buying Treasury bills last month to add reserves into the system. These efforts have mostly calmed repo rates. But many are yearning for more fundamental adjustments to how the market works.

Almost two months after the chaos, “the Fed has used a Band-Aid to ensure the money markets don’t seize up and spike again,” said Mark Cabana, head of U.S. interest rates strategy at Bank of America Corp. “The short-term fix is in, but the longer-term plan remains very unclear.”

bloomberg.com/news/articles/2019-11-14/powell-faces-doubt-that-fed-really-has-repo-market-under-control

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The Grand Super Cycle...

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26 NOV 18 - One More Day....

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26 NOV 19***- Excuse Typo...

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Judy Shelton, President Trump’s most recent pick for the Federal Reserve board, recently questioned why the U.S. central bank needs to operate free of political influence.

The conservative economist shared her view that policymakers at the Fed should work closely in line with the White House and Congress at an event in mid-October on the sidelines of the International Monetary Fund’s annual meetings.

“I don’t see any reference to independence in the legislation that has defined the role of the Federal Reserve for the United States,” Shelton said, according to Bloomberg, which first reported on her remarks.

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Reminder: Fed is on Death Watch...

Credibility Gone...

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foxbusiness.com/markets/trump-federal-reserve-nominee-judy-shelton-independent-central-bank

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The Federal Reserve Bank of New York added $80.6 billion in temporary liquidity to the financial system on Friday.

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wsj.com/articles/fed-adds-80-6-billion-to-financial-system-in-latest-repo-transactions-11574442617

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NEW YORK (Reuters) - New quarterly data from the biggest U.S. banks suggest that some will need to back away from short-term lending markets by year-end to avoid triggering requirements that they hold more capital.

The data, posted on Friday by the Federal Reserve, showed four of the six biggest U.S. lenders were above or close to thresholds that would increase their capital surcharges.

An easy way to get the scores down would be doing less lending through overnight repurchase agreements and foreign exchange swaps, said analysts who track the filings.

Those markets have experienced stress in recent months. Retreats by lenders would make them more vulnerable.

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reuters.com/article/us-usa-banks-repo-swaps/u-s-banks-cram-for-fed-risk-test-with-ripple-effects-in-repo-idUSKBN1XW2AS

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BTC Dumped to Support SP500?

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It’s Official: JPMorgan Chase Is the Riskiest Big Bank in the U.S.

The data used to create these graphics come from what is known as the “Systemic Risk Report” or form FR Y-15 that banks have to file with the Federal Reserve. To measure the systemic risk that a particular bank poses to the stability of the U.S. financial system, the data is broken down into five categories of system risk: size, interconnectedness, substitutability, complexity, and cross-jurisdictional activity. Those measurements consist of 12 pieces of financial information that banks have to provide on their Y-15 forms. That data shows that in 7 out of 12 financial metrics, JPMorgan Chase has the riskiest footprint among its peer banks.

One of the 12 financial metrics measures the Intra-Financial System Liabilities of each bank. This shows how much money a particular bank has at risk at other banks by using inputs such as how much of its funds it has on deposit with, or has lent to, other financial institutions; the unused portion of any credit lines it has committed to other financial institutions; and its holdings of debt, equity, commercial paper, etc. of other financial institutions. The idea, obviously, is to understand if another Citigroup or Lehman Brothers were to occur, could it bring your bank down.

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wallstreetonparade.com/2019/11/its-official-jpmorgan-chase-is-the-riskiest-big-bank-in-the-u-s/

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Among the biggest banks on Wall Street, JPMorgan Chase has the largest exposure to derivatives, with $45.2 trillion exposure, according to the National Information Center graphic. Yes, we said “trillion.” The Office of the Comptroller of the Currency, however, which is the federal regulator of national banks and reports the derivative exposures of the biggest banks on a quarterly basis, shows that as of June 30 of this year, JPMorgan Chase’s notional derivatives (face amount) stood at an even larger $55.7 trillion. (See Table 1 in the Appendix here.) In other words, while JPMorgan Chase is backing away from lending in the repo market, forcing the Federal Reserve to effectively bail out Wall Street’s lack of liquidity in overnight lending, that hasn’t stopped JPMorgan Chase from increasing its systemic risk footprint in other areas.

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Fib Time Markers above

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wsj.com/amp/articles/new-york-fed-adds-92-7-billion-to-markets-11574779678

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The Federal Reserve Bank of New York added $92.7 billion in temporary liquidity to the financial system on Tuesday.

The intervention came in two parts. There were $72.75 billion in overnight repurchase agreements, or repos, and $19.95 billion in 14-day repos. The central bank took all the securities it was offered.

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Repo Market’s Liquidity Crisis Has Been a Decade in the Making

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t sounds crazy: even National Public Radio is talking about repo rates.

In normal times, not even Wall Street thinks too much about the arcana of short-term money markets.

But over the past week, the Federal Reserve has had to work unusually hard to rein in a key policy rate after overnight repo lending dried up. Suddenly, everyone is asking the same question: What does it mean?

The answer is sobering. Despite assurances by the Fed and others to the contrary, the stress in the market for repurchase agreements, or repos, has exposed some fundamental weaknesses in the nation’s financial system which have been a decade in the making. While they don’t pose a significant problem during good times, the risk is clear: Without a permanent fix, sudden cash shortages could lead to broader financial market turmoil in a downturn.

“The machine of liquidity management is just not oiled anymore,” said GLMX Chief Executive Officer Glenn Havlicek, who runs a trading platform for repo securities and has four decades of experience in funding markets.

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The first has to do with the unwinding of the Fed’s quantitative easing program, or QE. Simply put, after buying trillions of dollars of bonds to pump cheap money into the banking system, the Fed reversed course and started reducing its holdings (and thus draining cash) in October 2017 as the economy strengthened. It stopped altogether last month.

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Instead, the Fed has opted for a temporary fix. On Friday, the New York Fed announced a series of overnight and term operations over the next three weeks to boost short-term liquidity. That follows four straight days of repo transactions, something it hasn’t done in a decade.

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bloomberg.com/news/articles/2019-09-22/repo-market-s-liquidity-crisis-has-been-a-decade-in-the-making

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Policy Statements: newyorkfed.org/markets/op_policies

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Cycle Fib Time Marker 8 Daily Marker HIT...

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We MAY have just ended a Grand Super Cycle (142 years)

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Wave 3 Normal retrace is between .236 & .382

The Micro Wave 1 extended...

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Target Area for the 5th Wave is between $3103-$3092...

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southfront.org/european-deep-pockets-are-preparing-for-new-big-war/

Large financiers and central banks are preparing for a new global economic crisis and a possible global war.

On November 29th, Bloomberg reported that “Gold is the new obsession of East Europe’s nationalist leaders.”

Furthermore, global debt is actually growing faster than the economy, for every 1% growth, there is a roughly 2% increase in debt.

In its half yearly report on the condition of world financial markets, the IMF warned that it will be impossible to service almost 40 percent of the corporate debt in the eight leading countries – the United States, China, Japan, Germany, Great Britain, France, Italy and Spain.

In conclusion, Losev said that the current global economy was threatened by “the seven swords of Damocles,” all at the same time:

(1) a global credit market bubble;
(2) the condition of the US economy on which Federal Reserve actions depend;
(3) a potential crisis of overproduction of industrial goods, including in Germany and China;
(4) the US trade and technological confrontation with China and other countries;
(5) the risk of recession in the advanced states;
(6) the behavior of the markets; and,
(7) the financial and economic health of the developing nations.

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Breaking and holding below $3092 will trigger a 5th Wave Extension...

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Watch out below...

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$3,045 is the next level to watch...

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BTC vs. SP500

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Reminder: Wave Theory: Extensions have no specific ending fib level...

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You can place Fib Spirals on 'Waves' and 'Correction Waves' to give you targets....

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I'm suspecting a Higher Wave 1 will be completed around Dec. 17th-19th. Wave 2 could possibly last till the end of December. Look for Crypto to break out around this time-frame.

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Crypto will be rising during this time-frame but will be anticipating a VERY LARGE breakout at the tail-end of December.

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Add it to the list:

Alphabet CEO Larry Page will step down from the role and Google CEO Sundar Pichai will take over, adding to his current responsibilities. Co-founder Sergey Brin will also step down as president of Alphabet and the role will be eliminated.
cnbc.com/2019/12/03/larry-page-steps-down-as-ceo-of-alphabet.html

*Past Threads chronicle the number of CEO firings, resignations, and retirements. (Record Breaking numbers)

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Think we are just warming up here...

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$3092 broke and is not holding...

Key levels to watch:

$3040.75

$3008.00

$2955.75

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Daily overview:

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Added Terminal 5/B: $2876.00

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If the Fed is out of ammo...

Look for a very sharp drop tomorrow...

Correction Sequence is completing now...

Wave 1 & 2 complete...

Wave 3 should begin any moment...

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We had a complex correction which was most likely an injection of capital from the Private Federal Reserve...

Look for Wave 3 to begin...

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asia.nikkei.com/Economy/Online-rumors-spark-runs-on-smaller-Chinese-banks

About 13% of China's banks could fall face liquidity problems if economic growth falls further, according to the central bank. © Reuters

YINGKOU, China -- Anxiety over China's economy outside of its megacities appears to be boiling over after online rumors triggered two bank runs just days apart, a trend that sheds light on the increasingly tough business environments faced by the country's smaller local lenders.

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Regional banks are facing headwinds across China amid a protracted economic slump outside the big cities. Bank of Jinzhou, Hengfeng Bank and Bank of Jilin have all received assistance from the government or a larger bank, and the list is only expected to grow.

The People's Bank of China conducted a liquidity stress test of 1,171 banks of varying sizes as part of a November report. It concluded 159, or 13%, would fail should economic growth fall to 4.15% and the yuan weakens 4.23% against the dollar.

These institutions would be unable to secure liquidity even after selling government bonds and other prime assets, the report said. Because bank runs would directly impact their liquidity, Chinese authorities are expected to keep a close eye on the situation.

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Protesters in southern Guangdong province, China, took to the streets last week to demand the communist government not build a polluting crematorium near their town, adopting slogans common to the Hong Kong protest movement, Time magazine noted on Monday.

The Hong Kong newspaper Apple Daily, which openly supports the anti-communist movement, reported the use of slogans such as “revolution of our times,” which China considers seditious hate speech, and “just like you, Hong Kong!” in Guangdong. As China heavily censors coverage of the Hong Kong protests and bans all statements of support from the few permitted social media sites in the country, the adoption of the Hong Kong movement’s slogans and tactics is a sign that people within Communist China are informing themselves regarding the protests through unapproved means.

The presence of support for the Hong Kong pro-democracy movement within China may signal greater problems ahead for the Communist Party, which spent much of 2018 crushing dissent from its Maoist ranks who see dictator Xi Jinping as too repressive of the proletariat and deviant from communist orthodoxy.

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breitbart.com/asia/2019/12/02/protesters-within-china-defy-communists-just-like-you-hong-kong/

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Expedia CEO Mark Okerstrom and CFO Alan Pickerill have resigned, the company announced Wednesday.

Board chairman Barry Diller and vice chairman Peter Kern will oversee the company as it decides a longterm leadership plan. Eric Hart, Expedia's chief strategy officer, will be acting CFO.

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businessinsider.com/expedias-ceo-mark-okerstrom-resigns-along-with-cfo-alan-pickerill-2019-12

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Oscar Munoz, chief executive of United Airlines, will step down in May to become the company’s chairman, United announced Thursday.

President J. Scott Kirby will become United’s new chief executive, the company said. Munoz recruited Kirby in 2016, after he was let go from American Airlines, where he had served as president.

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washingtonpost.com/business/2019/12/05/united-airlines-ceo-oscar-munoz-step-down-become-executive-chairman/

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Wave 3 is beginning...

Target Area: $3036-$2982

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Added Fib Time Frame for Higher Wave 1

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Well we had a series of complex corrections today...

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Ghost Feed for Higher Wave 1

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3 Min Wave Count (Above)

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Key Fib Time Dates:

Dec. 10th

Dec. 24th

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Above: Entirety of SP500 (6M)

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Buckle up...

All signs point to the ending of a Grand Super Cycle...

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(Reuters) – Mark Wiseman, global head of active equities at BlackRock Inc (BLK.N), is leaving the firm following a violation of the company’s “relationships at work policy,” the world’s largest asset manager said in an internal memo on Thursday.

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theoneworldnews.com/business/blackrock-global-active-equities-chief-to-leave-firm-over-relationship-with-colleague/

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BOOM

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Watch for the turn...

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excellent time for some options...

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What will the headline be?

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Today's Price Action...

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Wave 2 = near 100% Retace

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Adding Fib Time to Micro Wave 1...

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Noted Fib Time Marker 8 = New Wave sequences tend to occur between Fib Time intervals 5 & 8

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Fib Time Marker 8 = 11 Dec 19 14:30 UTC

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Added Trend-Based Fib Extension to W1 & W2

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Target Area:

306.96 - 100%

301.92 - 161.8% (Extension Trigger)

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Monthly Overview (Above)

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Monthly Overview(Bar):

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Added Fib Time to Higher Wave

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Japan faces a wall of debt that can only be addressed by printing more money and debasing its currency. This means they will be paying off their debt with worthless yen where possible and in many cases defaulting on the promises they have made. Japan currently has a debt/GDP ratio of about 250% which is the highest in the industrialized world. With the government financing almost 40% of its annual budget through debt it becomes easy to draw comparisons between Greece and Japan. While adding to the markets move higher across the globe the latest move by Prime Minister Shinzo Abe should do little to boost confidence in the small island nation.

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zerohedge.com/economics/japan-again-forced-stimulate-its-troubled-economy

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WARNING!

MONDAY!

WAVE RULE: Trades should always have a stop at the beginning of Wave 1. If Wave 2 retraces >100% the Wave is invalidated. I highly doubt that Wave 1 will be invalidated but always have a risk management strategy.

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Have your positions ready!!!

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Should be a hell of a week...

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Blue is the Dollar...

Note Wave Formation...

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Note BTC's Micro Wave...

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Dollar Death Spiral...

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Fiat...

Tick Toc...

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This week should put this analysis to the test...

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30 Second Wave Count (Above)

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Big Day today...

Eyes On...

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Tullow Oil PLC said Monday that it has cut its production forecast for the near term after 2019 output fell significantly below expectations and Chief Executive Paul McDade has resigned with immediate effect.

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One Big Question I have is, why have so many CEO's & CFO's resigned or been fired?

What is going on there?

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marketwatch.com/story/tullow-oil-cuts-guidance-for-oil-production-and-ceo-resigns-2019-12-09

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The days of imperious, dictatorial CEOs who rule by fear and intimidation, backed by board of directors packed with “yes men” and cronies, may be soon over. There is a new trend emerging in the C-suite of corporations that is beneficial to employees and shareholders—CEOs are being shown the door when their questionable ethics pose a threat to the reputation, mission or growth of their companies. Activist investors, Wall Street, employees and the public are sending a sharp rebuke to the brilliant, but flawed CEOs—shape up or ship out.

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According to the large accounting and management consulting firm, PwC, a record number of CEOs—18%—were replaced last year. A significant percentage of those executives were pushed out due to ethical lapses.

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I recently reported on the questionable activities of WeWork CEO, Adam Neumann, that ultimately led to the relinquishment of his title. Thereafter, Kevin Burns, the CEO of Juul, an electronic cigarette company that found an enthusiastic customer base with young people, suddenly resigned. This was then followed by EBay CEO Devin Wenig’s seemingly sudden resignation due to a conflict with the company’s board of directors.

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The CEO of Blue Cross Blue Shield of North Carolina resigned Wednesday, months after being charged with a DWI and child abuse.

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forbes.com/sites/jackkelly/2019/09/26/four-ceos-were-dethroned-just-this-week-the-days-of-the-powerful-untouchable-ceo-may-be-over/

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5 Second Wave Count

Minuscule Wave..

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It remains a pressing question for funding markets why, even with QE4 in place and now daily overnight and short-term repo operations in place, banks continue to rush to lock in year-end liquidity, where some fear a similar explosion in overnight repo rates as was observed on Dec 31, 2018 when General Collateral soared amid a widespread liquidity shortage. Indeed, even with the Fed’s commitment to continue providing liquidity to the financial system around year-end, the market is still showing concerns, indicating that for all its telegraphed firepower, the Fed has failed to calm markets and ease counterparty risks which as the BIS observed yesterday, now involve hedge funds.As a reminder, since the Sept 16 repo blow up, the Fed has injected $208 billion via "temporary" rolling overnight and term repos, and $114 billion via permanent T-Bill purchases.

What is even more troubling is that in just 6 days, the next major potential crack in the repo market is due: on Dec. 16 there is a tax payment day looming; that's when cash is drained from the banking system, similar to the Sept 16 tax payment which many alleged sparked the original repo crisis, and as Bloomberg's Marcus Ashworth notes, "with the repo rate over the year end more than double the Fed rate of 1.5%-1.75%, this is not proving to be a temporary problem."

Note

zerohedge.com/markets/feds-third-year-end-repo-oversubscribed-again-amid-liquiduity-scramble-dec-16-tax-day-looms

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(Reuters) - Canadian athleisure apparel maker Lululemon Athletica Inc’s (LULU.O) Chief Operating Officer, Stuart Haselden, will leave in January to head privately owned luggage maker Away.

Haselden joined Vancouver-based Lululemon as chief financial officer in 2015 from peer J Crew and became the COO in May 2017.

He was part of the team that guided the company after Laurent Potdevin’s exit as chief executive officer in February 2018 until Calvin McDonald took charge in July last year.

Haselden, a former U.S. army captain, will join Away co-founders Steph Korey and Jen Rubio on the board in January, with current CEO Korey becoming the executive chairman.

Note

reuters.com/article/us-lululemon-haselden/lululemon-coo-stuart-haselden-to-leave-idUSKBN1YD2E7

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1 Min Wave Count- Wave 1 & 2

Wave 2 retrace = 100%

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Looking for momentum to the downside to pick up...

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Added Fib Time Zones

Reminder Fib Time Marker - Dec. 11

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updated chart to reflect the failed minute wave...

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3 Minute Wave Count...

Still looking for momentum to the downside to pick up...

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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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Hold on tight...

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Correction - 8.34% Gain...

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6M Overview of SPX

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Bottom Blue is the Ultimate Oscillator

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According to these charts, looks like the World is about to change in a BIG way...

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Correction: SPX *3 Month Charts

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Another Complex Sequence...

Fed?

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Major Squeeze this morning...

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"Massive... Huge... Largest Ever": Fed Will Flood Market With Gargantuan $500 Billion In Liquidity To Avoid Year-End Repo Crisis

Note

zerohedge.com/markets/avoid-repo-crisis-fed-will-flood-market-gargantuan-365-billion-year-end-liquidity

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The question then is whether this will be sufficient to refute the repo Doomsday predicted by Pozsar, one which was supposed to launch QE4, or will the Fed's gargantuan liquidity injection still not be enough and lead to a collapse in the repo market. We will find out in the next three weeks.

Note

zerohedge.com/markets/fed-has-absorbed-90-treasury-issuance-september

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The Fed Has 'Absorbed' 90% Of Treasury Issuance Since September

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thewrap.com/comcast-chief-diversity-officer-david-l-cohen-to-step-down/

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The Hedge: Crypto

Above: BTC vs. SP500

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Hope Everyone is having a great Holiday and Merry Christmas...

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Note the 3 Wave Move to New Highs...

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Truly amazing, the lack of coverage on the Fed Manipulation...

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cnbc.com/2019/12/27/fixing-repo-market-trial-and-error-process-former-fed-official-says.html

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The market, which banks use to fill short-term funding needs, suffered a sharp rise in rates in September. Lockhart said on “Squawk on the Street” that this came from a “miscalculation” for the proper level of reserves and how they would be distributed among banks. And the Fed is now trying to find the right balance.

“That’s a little bit of a trial and error kind of thing,” Lockhart said. “And they have been injecting more bank reserves into the system to try to make sure the repo market first got through year-end, which we’ll see in the next couple of days, and secondly continues without undo volatility.”

TRIAL AND ERROR?!

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AKA - No Idea on how to fix...

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According to Daniel Lacalle, an economist based in London, the Federal Reserve just set a record. The record? $235 billion worth of repo market interventions on December 25th, nearly double the previous record of $133 billion set in July 2008, in the midst of the Great Recession of 2008.

Note

For those unaware, the repo market, also called the overnight loan market, is the “place” in which the Federal Reserve issues extremely short-term though large loans (literally overnight) to financial institutions to keep said institutions operational.

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newsbtc.com/2019/12/28/federal-reserve-record-report-validates-bitcoin/

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Minute Wave Count (Above)

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Waves 1 & 5 Trended toward Equality (-.30%)

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Complex Correction - Flat & ZigZag

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Added Wave Channel
Added Target Area for 5th Wave

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Not looking good this AM.

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If we break the Red Channel Line...

It could be a blood bath...

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One Word: Currency

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Watching CNBC...

You would never know that there are MAJOR issues at the FED and Central Banks Worldwide.

The Fed Cannot Print Money Forever...

If the Repo Markets go...

Banks become in-operable...

Note

“They’ve managed to inject enough liquidity to provide a strong signal that they’re going to be flexible and provide further assistance to see themselves through what was going to be a very tight period,” said James McCann, global economist at Aberdeen Standard Investments. “It looks like they’re going to catch up with a problem that had quite embarrassingly gotten out of control.”

Note

On Monday alone, the Fed injected another $18.65 billion for a two-day repo operation — exchanging high-quality capital for cash — and $30.8 billion in a one-day offering. However, both issues were undersubscribed, having offered $75 billion and $35 billion, respectively. That means there was less demand and thus lower funding pressures.

While there’s still one trading day left in the year, it appears that the Fed will close 2019 in control of the banking industry’s vital plumbing system.

Note

“The repo market, in a nutshell, is brittle,” said John Lekas, founder of Leader Capital and manager of its low-duration bond fund. “The next risk is if the Fed steps away for some reason. The [repo] market could be in trouble.”

Note

cnbc.com/2019/12/30/the-fed-seems-to-have-halted-a-potential-crisis-in-the-repo-market.html

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Reminder: Small Glimpse at what will happen if the Repo Market fails...

cnbc.com/2019/12/19/federal-reserve-bank-glitch-delayed-bank-account-deposits.html

A statement from Federal Reserve Bank Services said its automated clearing house network began “experiencing a disruption on December 18 at 3:30 pm ET.” Banks use the ACH network to transfer money to each other for internet bill payments and direct deposits.

The Fed added in its statement that technicians have resolved the issue, but apologized to banks for the “inconvenience and disruption this has caused to your operations.” The central bank said payment files for Dec. 18 have been completed, though some transaction reports will be delayed.

The Fed did not comment on the cause of the temporary glitch.

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Above: Total Crypto Market Vs. SP500

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1M Wave Count

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Fed better start pumping...

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Private Fed is on the verge of losing control...

The Federal Reserve may have succeeded in thwarting major year-end turmoil in funding markets, but 2020 is likely to bring a whole new set of concerns.

The U.S. central bank has been injecting liquidity into markets through repurchase-agreement operations since mid-September in a bid to keep control of short-end rates. Earlier this month the Fed ramped up its offerings to help smooth the market’s path into January. It has also been bolstering system reserves through Treasury bill purchases.

The results of the most recent repo actions, which were undersubscribed, suggest that there is now ample funding for the year-end turn. And while the rate on overnight general collateral repurchase agreements was slightly elevated on Tuesday morning, the market is not witnessing the kind of spike seen in September -- when overnight repo rates surged to 10% from around 2%. Whether the Fed can end its interventions without chaos re-emerging, though, is less clear.

Note

bloomberg.com/news/articles/2019-12-30/fed-wins-year-end-repo-battle-but-war-to-control-rates-drags-on

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New Thread Coming Soon

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Unless the Private Fed has a few more hundred billion dollars to support the market the Target for Wave 3:

$3,195.25 - $3,170.00

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WAR: Centralized v. Decentralized

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Grim repo: how the Fed plans to return crucial market to normal

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US central bank averted a year-end cash crunch, but stepping back is now a challenge

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“I really think they hope to be in a place where they get the money markets operating in a way that they don’t have to frequently intervene and inject liquidity,” said Nathan Sheets

The question is how the Fed can remove that support. “The market doesn’t have clarity there and really wants it,” says Mark Cabana, an interest rate strategist at Bank of America.

“The plumbing of the financial system is critically important to the functioning of markets and the broader economy,” said Ashish Shah, co-chief investment officer of fixed income at Goldman Sachs Asset Management.

ft.com/content/8ffb6f9a-2be9-11ea-a126-99756bd8f45e

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Fed Adds $56.72 Billion to Markets for Calm Start to 2020

Note

After navigating a quiet end to money-market trading in 2019—greased by a massive wave of central bank liquidity—the Federal Reserve Bank of New York injected a modest amount of money into financial markets Thursday.

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'Modest Amount' - INSANITY

What happened to the FREE MARKET?!?!?!?!

Note

wsj.com/articles/fed-adds-56-72-billion-to-markets-for-calm-start-to-2020-11577978054

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Lets look at the price-action.

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The First Wave Sequence (Minuscule) had an extended 1st Wave

Extended 1st Wave = Retrace <= .236-.382

Minuscule 1st Wave Retrace = .236

Note

Correction Sequence is about to be complete...

Inverted ZigZag

Note

See if the fed comes in and starts pumping...

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The Minuscule Wave should be mocked in a Higher Wave.

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This is what I have been waiting for...

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Crypto v. SP500 inverse correlation

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zerohedge.com/markets/fed-just-monetized-64-billion-debt-sold-earlier-week

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These are not isolated incidents as a clear pattern has emerged - the Fed is now monetizing debt that was issued just days earlier, only because it was held however briefly by Dealers, who are effectively inert entities mandated to bid for debt for which there is no buyside demand, it is not considered direct monetization of Treasurys. Of course, in reality monetization is precisely what it is, although since the semantic definition of the Fed directly funding the US deficit is violated by a temporal footnote, it's enough for Powell to swear before Congress that he is not monetizing the debt.

Note

New Thread should be ready by Monday.

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Sample:

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Sample:

Note

Corrected Sample:

Note

Please find updates in new analysis here:

SP500 - The End of a Century Plus - Strong Sell - Part 6

Trade closed: target reached

Please see new thread...

FibMarketWatch

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Related publications

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

by FibMarketWatch

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