Date to watch - 9/12/12

[Mark Lytle]

On the dates of 9/12/12 and 9/13/12, several important events from the perspective of bonds will occur.  The list of these is as follows:

9/12/12 6:00am German Court Ruling on ESM 

9/12/12 9:15am Washington, DC FOMC Begins Two Day Policy Meeting  

9/13/12 12:30pm FOMC Policy Directive (September Statement) 

9/13/12 2:00pm FOMC Economic Projections Following Sepember Statement 

9/13/12 2:15pm Ben Bernanke To Hold Press Conference Following September FOMC statement

This comes from a larger list of events for dates before and after this period, given here:

http://www.freefdawatchlist.com/2012/08/greece-out-of-cash-upcoming...

Some time back, I did an analysis of the 5 year T-Bill yields, looking for a bottom.  I found a tentative date of 9/21/12.

That link is here:

http://yorbatv.ning.com/profiles/blogs/9-month-and-10-week-cycles-h...

That chart and info are a few pages into that link above.

Now that we're getting close to that time period, I've done a quick chart of Node concentrations in the near future, to possibly fine tune this analysis.

That produces this:

There's a minor concentration coming up after Labor Day, as you can see, but a very significant cluster on 9/12/12.  My original 9/21/12 date shows as a lone vertical orange dashed line just after the 9/12/12 cluster.

Probably the real kicker is the German vote on the ESM.  Could make or break the Euro in one fell swoop.

So, the day after the 9/11 anniversary, is a date to watch.

[Ron Tan]

Hi Mark,

Great work, key cluster beginning 2nd wk and 3rd wk. Likely mild correction, and move to new high.

What is yr 9months and 10week suggesting (green lines) ???  S&P500 ?

Regards,

Ron Tan

[Mark Lytle]

Hi Ron,

  This post is more bond specific.  The 10 week cycle bottoms in a few days, but the uncertainty and the fear will probably overwhelm that.  The next Lehman Brothers is just a few weeks away. 

Note this:

http://finance.yahoo.com/news/exclusive-morgan-stanley-smith-barney...

and this:

http://nakedempire2.blogspot.com/2012/08/jim-willie-morgan-stanley-...

On the $SPX, another thing to look at is futures:

Slightly out of the money puts are forming a bottom, with positive divergence:

The tightening Bollinger Bands suggests a fast move coming.

New highs for the stock market are not visible to me.

[Mark Lytle]

While I'm at it, there is a lot of speculation that the next 'Lehman style event' could implode quite a few 'TBTF' institutions.  The Federal Reserve is choking on bad paper from the last crisis (2008).  The banks have been told to produce 'living wills', to handle the wreckage after the next disaster.

Further speculation based on the non-performance of regulatory agencies, suggests that many segregated accounts will pass into vapour in the next crisis.  Think MFGlobal, here.

Links like this can be found:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/...

These warnings are not coming from the mainstream, but I don't think it's prudent to ignore them.

Meanwhile, Russia is ready:

http://en.ria.ru/russia/20120816/175253411.html

I'm glad somebody is.

[Mark Lytle]

It looks like I'm not the only person putting out this warning.  Here's a Goldman Sachs guy saying the same thing:

It's Coming: One Pro Sees Big Stock Selloff in 10 Days

http://www.cnbc.com/id/48896105

[Darrell Martin]

Free webinar event on how to trade this event (9/12 Court Ruling) with limited risk and high reward potential (without any risk of being hit by a stop loss and without using call or put options). http://apexinvesting.com/good-cause-great-webinar-free-signals/

Free webinar on how to trade the fed on 9/13 live trades http://apexinvesting.com - in free members area

[Darrell Martin]

http://Guardian.co.uk - Germans could be consigned to serfdom to save the euro http://m.guardian.co.uk/ms/p/gnm/op/view.m?id=15&gid=%2Fcomment...

[Mark Lytle]

Yes they could.  The German Supreme Court, like ours, is not necessarily always going to do the right thing.  I understand a flood of lawsuits have been filed by various citizen groups against the ECB, trying to attack the root of the problem.   It's a clever strategy, but maybe too slow.

[Darrell Martin]

German Supreme Court Ruling on Constitutionality of the ESM for Europe
3 AM Central Time. Attend webinar at 8 PM Central: Details at http://apexinvesting.com/good-cause-great-webinar-free-signals/ (link near top of page)

[Mark Lytle]

Post decision update on 5 year Treasuries as a proxy for U.S. bonds in general:

An uptrend that started after Labour day, seems to have accelerated somewhat today, after the German decision to largely support the ESM. 

http://www.marketwatch.com/story/german-constitutional-court-declin...

So far, short term US Treasury chart (6 months, daily) continues to show a bullish bias, note the MACD pending bullish crossover:

Almost looks like a triple bottom..

Below, a much longer term chart (5 year chart, monthly), shows a similar pattern, note bullish divergence on momentum:

If we are now in the twilight of the 'Bond Bubble', then because the U.S. is so heavily leveraged many levels of government (city, county, state, etc.) may go into extreme distress in the coming months as these interest rates rise.  I doubt the Bernanke's coming speech will change the scenario much.  Things are passing out of his hands...

[Mark Lytle]

Bond yields are showing resilience and gains since Bernanke's speech.  I'm sure this is not what he had in mind, as high interest rates will ultimately bring down the financial system. 

The financial cartel that Ben represents, distorts our economy and will fail when the system does... 

This is why Bernanke is nervous, he gets to eventually preside over the destruction of the system he was hired to rig (oops!) maintain.  Pressing the 'pedal to the metal' will ensure collapse, as he trashes the dollar, and removes purchasing power, and with it, consumption.   A clever high school student can figure this out, but a strict Keynesian never will.

Here, the 10 year bond yields, like the others, shows the urgency in buying bonds:

  It goes without saying that the Fed is buying more than just Mortgage Backed Securities.  They're buying everything, and it's not working, except for stocks.  But problems can come to the bond market while everyone is celebrating about higher stock prices.  The expected spikes in energy and food will have political repercussions, and that is even while discounting the effects of a looming possible middle eastern conflict..