Friday, June 4, 2010

Cosmic meanderings

1.5 years ago, I joked with my brother about what would cause people to so obviously pursue courses of greed that would be catastrophic to so many, but almost obviously result in a huge backlash.   I pondered, what if a massive asteriod were known to be likely to hit the earth, and ogliarchs were poised to transfer as much wealth to themselves regardless of the backlash.  

Funny thing, the next day, Tim Knight posted a video of a massive asteroid hitting the earth.     Weird!

Back to the tin-foil hat......
http://cosmiclog.msnbc.msn.com/_news/2008/09/30/4351039-action-urged-on-asteroids

3 Ways to look at Fear (the Fear Factor going postal)

Charts and Thoughts

Picture thoughts....

Tuesday, June 1, 2010

Reducing this blog by 90%

It has been rather disappointing that as as this humble little blog approaches 100,000 visitors (total, since inception), that there are almost no comments at all, even with 500 visitors in a day, maybe only 1 or 2 comments.  

I was hoping this would turn into more than a 1 way street, and perhaps it will.

For now though, I will concentrate on making money and making money at trading.   There has been a small circle of "email" alerts that has started circling and I think I will restrict my majority of chart and indicators posts to that group of fellow bloggers who work hard to share with the others.   Thanks for everyone who has come to visit and added something to the conversation.

For the lurkers out there....check out Jing.....great screen capture and it links to screencast to easily post your screen caps.

I'll be back if there is any sign that this blog has more activity than a graveyard / after the oil gusher is subdued.

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.  

Out.

Hopeful new Future!

I lifted this from Tim Wood, who lifted it from
David Knox Barker’s book The K- Wave


Tim Wood is the Cycleman, look him up on the net, he has a pay service that is probably one of the top 3 as far as being worthwhile.

I really couldn't have said it better myself, this very much reflects my views.   And they said it very well!


“Global Stock Markets Enter Extended Bear Markets”
I have said since 2007 that this is where we are, and ever since the 2009 low I have explained that we have been in a bear market rally. The Phase II decline is out there and it will be global in nature.

“Trends During Winter: Stocks Down, Bonds Up, Commodities Down”
I believe that the bust in commodities in 2008 was associated with this trend change and that since the 2009 lows, commodities have also been in bear market rallies.

“Interest Rates Spike In Early Winter Then Decline Throughout”
In June 2004 the Discount rate was at 2.00%. By June 2006 it was at 6.25%, and in August 2007 the Fed once again began to cut the Discount rate. This too fits.

“Economic Growth Slow or Negative During Much of Winter”
I doubt that many will argue this point at this time.

“Commercial and Residential Real Estate Prices Fall”
This obviously began back in 2006 and is still ongoing.

“Bankruptcies Accelerate and High Debt Eliminated by Bankruptcy”
This has obviously begun and was no doubt been related to the housing and credit bubbles. But I suspect it will worsen as the Phase II decline and the deflationary forces take hold once again.

“Social Upheaval and Society Becomes Negative”
Just wait!

“Banking System Shaken and New One Introduced”
The banking system was shaken in 2008, but there should still be more to come.

“Free Market System Blamed and Socialist Solutions Offered”
Just wait, we have only seen the beginning!

“National Fascist Political Tendencies”
More to come.

“Debt Level Very Low After Defaults and Bankruptcy”
This has not happened.

“Trade Conflict Worsen”
It’s coming.

“View of the Future at a Low Ebb”
When the cheerleading on CNBS stops, we will be there.

“New Work Ethics Develop Since Jobs are Scarce”
If I can assure you of one thing, it is that this has not happened.

“Greed is Purged from the System”
I can absolutely assure you that this has not happened yet.

“Real Estate Prices Find Bottom”
This has not happened.

“There is a Clean Economic Slate to Build On”
Not happened yet.

“Investors are Very Conservative and Risk Averse”
Again, this has absolutely not occurred.

“Interest Rates and Prices Bottom”
Not happened.

“A New Economy Begins to Emerge”
Has not happened

“Stock Markets Reach Bottom and Begin New Bull Markets”
Again, we aren’t there yet.

Steveo here----see--a bright new future!

Euro to .80

As you all know this is not trading advice.   Nothing on this blog is trading advice.   Well except the one little quip below.....



Why not let the Euro go to .80 per USD

?  That would maybe keep the Euro countries from tearing apart, and certainly increase their exports.


Monday, May 31, 2010

It is not Logic that drives humans

I have a few sites that I feel obligated to review every now and again.  The one I picked for today's lashing seems to be "real"-- however they never get bearish, right now they are "neutral" because there is lots of good news out there.

Below excerpts from their latest--A Dash of Insight

Studied Bulls
The European situation is going to take many months -- perhaps even years -- to unfold. The best thing investors can do is to understand that this is not a replay of 2008

The "real world"  has moved on from the European debate.  You can look at any MSM (mainstream media) source from this weekend to discover the top concerns. 
  
The Truth about Europe
A reasonable projection of impact for the US is not that significant....
The Good
The economic news hit the right notes for the key indicators.
Home prices moved higher and sales were much stronger.

Last Week's Data
The actual data from last week generally beat expectations .  If you had just been reading the news flow from the US, you would never have predicted the wild swings and negative bias
Bear response--

You have no idea what moves markets.  Get this--the markets are not moved by the continuously onslaught of "news".   Some news will move the market, at least temporarily, but most won't matter at all.   The Gulf Spill...this will seep into the pysche and affect things.  Most market moves are fractals caused by the collective human consciousness combined with fear, greed, hope, desire, and all the things that really drive humans---IT IS NOT LOGIC that drives humans, OK?

I would agree this is not 2008.  Now--- there are no jobs being created.   Millions have been thrown out of their houses, and they are mad.  48% of Americans say they are stressed with debt.  Millions are underwater on their houses, maybe for a decade or more, there is no escape for the most part.  USA has drastically increased it's debt, without proportional changes in future competitiveness.  Many of our good jobs have gone oversees.  We are chasing out the illegal aliens who did all the work during the boom time that Amercians are "above", but now Americans are happy enough (desperate enough) to be happy with any job.   In fact the "take away" from the reckless spending to fix the mess is that recklessness is rewarded or at least made whole.  A complete lack of trust of business, finance, and government has been generated.  Contract law is now regularly violated.  None of the problems of the financial system have been fixed, they have just been covered up and we all know it.

So I agree, this is not 2008.

and PS, you are listening to MSM (Main Stream media) in order to figure out what is really going on?   Huh?  I don't think I can help you.....ever.

PRS 133 comes through again

Shorted ES around 1190 and closed at 1181, not bad for a weekend mini-flash crash.

Reshorted at 1182.75 on ES bear flag, and EURO bouncing off it's 38 Fib as resistance.  Stop now moved to .25 above entry to give it just a little room, no use taking a loss at this stage.

The "Oil Spill" will be a great headline to blame if there was a 2% down opening.  Plus while everyone is still in a daze from the weekend the panic will be easier to start.

Holy Grail Part 2

I posted this holy grail chart about 2 weeks ago.   It seemed very good at indicating downturns, and I thought we were at one.
http://oahutrading.blogspot.com/2010/05/methinks-holy-grail.html

This is what the current chart looks like.   I would say we are in for a sled ride.   90% of other classical long term indicators are now pointing down.

I didn't annotate the second chart.  The secret is when the indicator bust the bollinger to the downside and then pops up (it doesn't have to pop the bollinger on the upside, just has to pop upward), then at the point, the market often turns down.

We have just completed a "drop and pop" on this indicator which is bearish.

Comments appreciated. 


 Close up view of recent action

German President Quits His Job

http://apnews.excite.com/article/20100531/D9G1U6C00.html

These things are very rare, and are usually caused by a multitude of factors.   After all, reaching the position of ruling over one's fellow men is somehow hardwired into us as being very important, the "Alpha male".  However to quit and leave this situation means things are very serious.  

Germany will need to quit the Euro, and then live with the anarchy and riots that will rout Europe.   Or it will be taken down bit by bit by it's less well off and more fiscally irresponsible neighbors. 

There will be a whole new age of "austerity" and "responsibility" that will perfectly reflect that all attempts for countries to inflate their way out of debt (default by printing) is not working and that deflation is already on the way.  

Walmart dropped their already low prices, China is operating on 2% profit margin.  How will precious metals do in this environment?   Really, I think that is the question of the day/decade.  

All paper assets are at risk.  All future promises are at risk.  People and countries have been enslaved with debt and laws, now the beginning of the endgame starts.

Lack of productivity, lack of demand for buying, and poor resource utilization (we invested in a lot of stuff that won't be put to good use), as well as the socio-economic-anthropology (SAE)effects of a grand Super Cycle top will play out. 

Sunday, May 30, 2010

Lifting from MISH

The same bozo maneuvers that have been tried in the past, and failed, are the same as what BP has tried.   Watch this video.  The same exact thing happened in the gulf of mexico in 1979, and that flowed 10's of thousands of barrels per day for 9 months.

Finally, it was stopped with 2 relief wells.

Chart of Charts

Tricky, so tricky.   Euro says US equities ought to rally.

Credit spreads say that the poop is about to hit the fan.

Chart of Charts is implying Armageddon starting now.

Please comment.  And if you haven't already, sign up as a follower, its easy, free, and can assist your news aggregators.  SIGN UP!  Thanks

Methane Hydrates

These "ice like crystals" are supposedly what clogged up the "collection dome" that BP tried.

Methane hydrates are a big thing.   Watch this video it is really nifty. 






http://www.youtube.com/watch?v=ahmjHLyF9GM

Euro going on a bull run


Euro retraced 61.8% of the push up, so I call that a wave 2 down, now perhaps will be 3 up.   3 is normally larger than wave 1.

This would also be likely to push the US equities up.   It doesn't have to, but they have been highly correlated in the past.  The theory is that as the Euro goes up (USD goes down), people from Europe can more easily buy US equities, and in the US, they feel that it is better to hold "hard assets" i.e. stocks, instead of US currency.

I am not sure this really "makes sense" but the markets don't have to make sense
BP keeps talking about how much money they are spending on this out of control gash in the ocean floor that is polluting our country.

I am sure they are trying hard, but the arrogance and lack of immediate backup plans is also obvious.

Link below is worth watching.   It explains alot of the technical aspects of the well, the problem, and solutions tried so far.   It is clear that BP wants the oil down there.  

The joke below is attributed to Warren Buffet.
 A very successful oilman dies. He faces Saint Peter, who says, “You’ve been a good man and normally I’d send you to heaven, but heaven is full. We only have a place in hell.” The oilman says, “Any chance I could talk to other oilmen who are in heaven? Maybe I can convince someone to switch places with me?” Saint Peter says, “It’s never happened before, but sure, I don’t see any harm in it.” The oilman goes to heaven, finds an oilmen convention and yells, “They found a huge oil discovery in hell!” Oilmen are stampeding out of heaven to hell, and our oilman is running with them. Saint Peter asks him “Why are you going to hell with them? I have a spot in heaven, you can stay.” The oilman answers – “Are you kidding, what if it’s true?”

http://bp.concerts.com/gom/kentwells_update24052010.htm