Saturday, July 4, 2009

The Cycle of Deflation

I got this Chart last fall from Comstock which is a great site that offers original material.

Then as events seemed to line up with the cycle descriptions, I wrote downt he current month.

Comments appreciated. I know what I am seeing in the Hawaii business market is matching this process perfectly. Comments from mainland and Europe, Canada, Mexico, Australia (this BLOG's major followings) also appreciated.

Lunar and Solar Eclipse this Month

On July 7th, there is a lunar eclipse, and then on July 22, 3 days after options expiration, there is a total solar eclipse. The new moon (no moon) is July 21, and full moon is July 6th and Aug 5th. Some people say that the eclipse is not as important as the full moon after the eclipse. Interesting stuff.

See picture.

However in 1991, there weren't any big market moves around July 11 (a total solar eclipse) on either the DJIA or SPX, or following that

However, on Monday Aug 19, 1991, there was a pretty good 6% panic selloff, although there weren't any economic reports out that Monday. See below.

1991 was a problematic year, besides the overall bank failures in that era, major life insurers were in deep trouble too. See prior post.

I am hoping that if there are some Astro-Freaks out there, that someone else could research a few other total eclipses and review market action adn moon phase around same time frame.

Friday was a test of the Neckline ES

Friday was a test of the neckline, on the infamous S&P head and shoulders. The neckline slants up. I love this chart. I actually went long at 893, but any drop below that purple channel line (which is also the neckline), will cause that long to be quickly sold off. TOS now has a feature to reverse the trade....awesome feature and awesome concept....if you were wrong, do more than admit you were wrong.....cover your bad bet and place a bet the other direction.

Target is in the 800 range if the neckline is broken, however, keep an eye out for a retrace back up to the neckline....that is when agressive traders would go-all in.

I added an $SPX chart per comment from a fellow BLOGGER (is that like a bloke), in which neckline was not tested.

I found the Green Shoots

These were taken around 1992 on a Scuba Diving trip to the Big Island.

Wednesday, July 1, 2009

Delta (Nuetral) Force!!!! New ES Channels

The chart says it all. By the way, this isn't investment advice and never will be. I am a solar contractor, not an authorized financial advisor. I think that is you do not stay grounded with some type of real trade, exercise, Aikido, Yoga, sports cometitions, you will fail at the markets, or at the very least, trade minor sucess for extreme unhappiness and lack of fufilment. But then again, I might be wrong.

Tuesday, June 30, 2009

More charts and tickers

Also not shown here, some of these are getting close to shortable, ARO, DLTE,F, ROST


Quick tickers
SCHN short under 52
SHLD short, take a look at post
PAAS short under 18
CTX short under 8

Kong long over 10.90

I opened a short in OFC, one of the shorts highlighted in last weekends "Boat Load O' charts"

My main computer is effectively "blown up" one or several things are seriously wrong, with random generated hot key going, processor saturation, and just all around....bad. sorry for not coming up with good posts during this most exciting of times but this hobbled computer has made it difficult. This post is done from a laptop. I am going to "ghost" my trading computer back to an earlier state, and since it is a raid hard drive setup, I expect some type of issues.

Does SPY look like a roaring long? Me thinks not. It's too good...too tasty, it must be a trap.....Hey just because you are a paranoid does not mean the Market Makers are not out to get your money.

Monday, June 29, 2009

Channel Magic: ES and the Transports

Charts for our perusal. The Transports are sporting a nice Doji, but don't get too excited about Dojis, they happen often. But a channel kick down, and a it's time to pur that on your watchlist and maybe even have a short in queue at the channel line.

I don't believe too much in "window dressing" but I do believe there are lots of money managers out there desperate to have a good quarter and willing to put your money to use in order to have tomorrow pushed upward again.

Thinking warrior like...another gap down, another mini bear trap, and then a good run up to respectable positive numbers.

By the time Joe Six Pack gets his 401K statement in a few weeks, earnings will be on us. Hard to say how those numbers will look. I think the stock market recovery is far faster than any real recovery, and insider selling is at record levels.

Overview of S&P500 via /ES Futures

There is no strong technical information one way or the other. About 0.5% above where we are now is a61.8% Fib retracvement from recent highs to recent lows. Thats 926 on ES

Don't confuse ES and S&P they do vary from each other, I tend to watch just the ES with any occasional look at S&P. SPY is likely to be more emotional, more extreme, more retail.

For the prior posted trade, there was a nice move down that when the market reversed, I reversed the trade....say 3 futures short, when it hit my cover point, I bought 6 long.

Sunday, June 28, 2009

Deceiving the HAL 2000's

So many smart people have said we gap down on Monday...well, here is my play on that.

Remember how I said the Hal 2000's (program trade computers, quants, whatever you wish to call them), will run your stop at night..... OK I am confusing them...what the heck --which stop or buy order are they supposed to run. hehe

The open interest is HUGE... every night now. We are at a major crossroads.

Golden Cross and Other Green Shoots

Evidence should be weighed. And when it is trying to prove a point that is wrong, and the evidence is wrong or fabricated or cast in the wrong light, then you should give this evidence an extremely strong the contrarian side.

The Golden Cross....when the S&P 50 day moving average crosses above the 200 DMA, is promoted as guaranteed clear sign of higher stock prices. I did a pretty neat time chart for 1942 in which a single bottom bounce occurred, it was really cool, right after the Doolittle attack. That was a huge confidence booster for the US. It was extremely risky and costly, if you don't know about it, you should, seriously. Because not only was it important, bold, and a great indication of what the true American spirit can rise to when backed against the shows another important issue in trading.

Confidence. When you hear about a "con job" you know what that means....someone got taken by deception. But what it really means, is a "confidence job". Soemone was made to be confident, and then others took the money.

OK back to the golden cross. Sure, this "Dumb indicator" shows good results, however, the results can be very misleading unless taken in context. In 1942, 1953, and 1982 the Golden Cross showed great 1 year returns, around 40%. But these were also coming from extreme P/E bottoms around 7.

Out P/E right now is around 15 or 20. The next 3 quarters should clarify that quite a bit. Without those 3 exceptional bottoms, the Golden Cross is worthless, in other words, all the other instances averaged to zero gains.

ES and Dolphins

Here is a link to a real slice of life, Hawaii style. Friend of mine who is an amatuer photographer...yeah right "amateur"

And here is a short --strictly a daytrade, or nighttrade as the case may be. S&P Futures /ES

Funny thing is, there is a trendline from the original major breakdown in 2007 that points right around 930 on ES. and a head and shoulder that would nicely curl down around 930, and in everything in the freakin world points to 930 on ES.

And that is why I do not think ES is going as high as 930 before it goes doen to 880 or 820.

911 is a line in the sand, so to speak

Nothing has been the same since 9-11, the trade tower attack. We make decisions that lead us toward victory or defeat, but this is a chess game in reality, not checkers. So we need to be thinking 6 or 7 moves ahead. reactionary thinking and acting will not lead towards victory.

Interestingly enough, 911 seems to be another line in the sand on the ES futures.

See chart notes.
Also, please don't miss this post on "FDIC is effectively bankrupt"