Monday, September 27, 2010

RS Long and Overall View

One Trade Idea, RS.   Facing strong resistance and swatted down 1.5% today.   Nicely shaped IHS pattern though, Buy above 42, stop below 41, target 49, take half off the table at halfway =45 which would be a 10% gain.    Above 43.5, move stop to just below 42, since a backtest is likely.

And for the big picture, a Deadly Bearish Big Picture (to quote Bob Pretcher).   The charts below are from data I get from a Commitment of Traders guy who occasionally sends out emails.   They help keep things in perspective, which is important since so many media outlets are acting simply as cheerleaders rather than investigating and trying to fix the root cause of our fundamental problems.  

I remember in 1988, we were driving up north Wisconsin for a fishing/drinking/wrestling trip, and our car popped the radiator.   We had a church guy stop as we were trying to MacGyver some type of field fix, failing several times now.  Church guy did not offer any help, he just said "I don't know what kind of boys you are, but you just gotta have faith".   We all guffawed and I shot out -- "Sir, we got faith, for sure we are going to get to our cabin, what we really need is a new radiator".    Church guy leaves.

Another guy stops and after a quick discussion, says aw hell, you guys got another vehicle at your cabin in Crivitz, hell I'll take you there it is only 40 miles out of my way.......

Moral of the story--

The US is screwed because China ain't gonna drive us to the cabin, and faith alone ain't gonna get the job done.

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Insightful and Useful Comment!