Wednesday, January 20, 2010

Market Comments and Bear Reality

The market is fractured.  The MM's are ramping it up and down....they make money when they withdraw their bids, then they make money when they know the gov is asking them to throw down a few hundred million at the market to "bring confidence back".

The rest get whipsawed and scared.

I see all the time "Bears got to get going". 


The bears cannot make the market go down by shorting.   When bears short, all they do is set a number of stops which are known to the market makers as targets for a mini-rally.  By shorting, you become a target.
That has been the game since July.   Taxpayer money and bear money have been the only thing that have jacked this market up.  Mutual fund money is fleeing on a consistent level...for many many months.

This is yet another Ponzi scheme.

Bears CANNOT "GET GOING".   It is impossible.   Bears are like Aikidoists.   Bears must use their opponents energy against them, just as an Aikidoist does.   A good Aikido student, say a 110 pound woman, can beat  an in shape 200 pound man, seriously.  But not by going head to head, and not by being drawn into the battle by emotion, or on the attackers ground. 

But the smaller victor wins by using the opponents energy against them, and by using the opponents ego against them.  And by endless practice, and a beautiful confluence of physics and mindgames.

And thus is the story of the successful bear....until the market is clearly in their favor...and then boldness will magnify the fruits of their labor.

BUT -- Bears cannot "get going".   That is absurd.  The energy of the Bulls must be exhausted, and the Sheeples must get scared.  Then the bears can profit.  Until then....shorting is only a target that  will be gamed.  This is clear enough now....even the Government wants "confidence to come back" when in reality, real economic conditions and a work and savings ethic, and an elimination of "union" type entitlement thinking, is what really must come back.

AND reasonable valuations of the S&P (around 350 would be reasonable).  And tha's why I pick 200 as an overshoot(which always happens...reversion beyond the mean), at which point I will consider taking a position trade as long. Dow to 400 as EWI predicts, is a bit of an extreme, but it could happen.   S&P 500= 200 Points seems totally reasonable...even without a "Primary 3" in which we are selling silver coins to buy gas.

Until reasonable valuation occur, I am a bear.

Until bullish uptrend is broken, I am a non-shorting bear.

We may be close, however, never underestimate the power of Government Intervention.

Bear Out.

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Insightful and Useful Comment!