Tuesday, June 1, 2010

Point of Recognition

Last week,even the bears were finding reasons to be bullish, me included.   Fortunately except for some quick trades, I did not bet it that that. 

But this is significant.   Alternation theory, and recency theory have a strong affect on non-mechanical traders.   Most recently, we saw a 10% decline be retraced, so now even the long term bears think that every decline can be retraced.

The market is the perfect deceiver.   There is lots of ramping the market up and down, so that those playing with leverage risk huge losses, or get stopped with minor losses.   It is difficult to "get into" a position without risk of whipsaw.  

Now the game of Euro and US equities was put on hold somewhat today.   US sold off whilst Euro did not.  Perfect in a way.  Euro deserves to go on a run up.   US equities deserve to go down, although the 50/200 moving average death cross has not been broached, yet, one of the few remaining indicators of long and medium duration to have not flipped. 

  1. The DWC / DIA ratio chart is what caused me to go full tilt bear, I actually didn't see it until Sunday.  
  2. And the Fear Factor is also saying full bear.  
  3. And the Chart of Charts says very bear.   

Watch price and volume data, and indicators that are not so easily fooled, or not even known by the mainstream.   The above are all my own unique indicators, and I trust them far more than any spoon fed balderdash of a bull pimping media crowd.

Get ready.  Individual stocks could get easier to play straight short, but with leverage could get tough...as the games ramp up.  Indices are highly gamed on the futures level because of the tax benefits (a portion of profits are treated as long term gains even if only held 2 minutes).   And trust me...."they" will change portions of the game in the middle....restrictions on shorts and puts, and things like that.   Your broker is likely to trade against your positions, and if they have any subsidiary with the word "Bank" attached to them, you can rest assured that they are beholden the Fed and will do their bidding when the chips are down.  


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