crash indicator

[dtrader98]

posted this about a week ago.
That would be a miracle indicator if something big happened by tomorrow.


Interesting to see how that flag consolidation is tightening up.

What could make volatility explode either way? Rate cut? Bombshell?

Gut feelings aren't very reliable, but if I had to take a WAG, I'd say it's to the upside. Scary thing is pennants usually resolve in the direction of the underlying channel (short in this case). And that record oil sure doesn't make a great argument to the upside, either.

Of course the masses are seeing this as well, and betting accordingly (short). My WAG (long) is somewhat based on that sentiment.

 

[dividend]

Hmm...
Jobless Claims# and NG report.

My guess is claims# will be important. Plenty of selling S&P500 today. If it is worse than expected the market tanks tomorrow. Since a big chunk of the mortgage market was fired on top of housing bear market, I'd expect the # to be way up.

Some more reports on Friday.

Rate cut already baked into price.

 

[dtrader98]

Jobless claims does look like it could be a catalyst of sorts for tomorrow. And unlike payroll numbers, it actually looks (for the most part) negatively correlated to the market (as we would logically expect).

Notice katrina disaster did actually zilch in the face of liquidity infusion (that large impulse spike in late 05). This spike was also matched in the consumer confidence index (if you pull it up, there is an equivalent downward spike). Which sort of tells me that the short term sentiment of the masses means nada against liquidity infusion. Don't tell me it was the masses that fueled that continued run in 05.

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Also notice the breakout in jobless claims early 95 was, ironically, the beginning of the parabolic bull run.

There are just too many sentiment parallels mirroring the short term disaster/ long term upside scenarios played out in early to late 90s, IMO. How this is going to play out against looming recession is beyond me, but I'm highly sensitive to sentiment extremes leading to market defying gravitation. Although sept-oct is typically dirty laundry month, and we could get a seeping basket of subprime goods this October, the basic scenario still seems to resemble a lot more of the late 90s short and swift volatility disasters from my vantage pt.

 

[piezoe]

Traditionally, the market dislikes both full employment (labor shortage and high labor costs) and high unemployment (labor glut and lower labor costs, but retracted consumer spending).