Another Example

Take a look at FCX this morning....

For those who my not know what a bear flag looks like, I drew it in for you with the red trendlines within the red box. This is how a bear flag "used" to act before Wall Street's black box trading systems started taking advantage of technical traders and causing false upside breakouts before the flag truly broke down. Again in the case of FCX, it looks a lot like they didn't have time to run the game which probably means they are more worried about repositioning their portfolios quickly then making a few extra bucks. This all suggests that these commodity margin hikes are working as intended. It also seems like Wall Street doesn't really know what's going on as they are just trying to get out of the way. Further evidence which would back up that view is the number of funds coming out of the woodwork talking about the significant losses they have taken, losses they would not have taken if they had a heads up on what was coming down the road. From Bernanke's perspective, I doubt he's shedding too many tears after 4 nearly consecutive hikes in silver. If they didn't get the message, they only have themselves to blame. It seems with the oil margin hike, Wall Street has finally confirmed they "got the message".

Now, where's the money going? Pimco is sitting on significant levels of cash as of the last report, which would suggest their not sure which way to go with this. Last week we also saw the Yen Carry Trade totally obliterated. As I mentioned yesterday, equities would seem like a rather benign place for money to flow toward as far as the chairman's concerns over inflation, but an even better place that would be more helpful (especially when considering yesterday's auction of treasuries and the very low indirect bidder interest) would be into treasuries. Bill Gross came out with some unexpected comments about how and when he might reverse his position on Treasuries.

TLT's pullback has been pretty benign