Today I give out a daily, weekly and monthly update of what I think is to come. Today’s last 10 minute of trading was probably due money managers and institutions wanting to have some of that long exposure to show their clients and tell them that they have not totally missed the 4-5% move up for the month of may. In the past 2.5 weeks we have been trading in a descending triangle formation, and we managed to break out in the last 10 minutes of trading, just to find resistance at another descending resistance which dates back to november and the january 6th high. In the first 5 minutes of the afterhours trading both the ES and the SPY hit the 200 SMA, even though the S&P remains 1 % away from the 200 DMA, there is a chance, that it may never touch it, since it’s been touched in the after-hours. We could however, see a small push on the S&P to touch that 200 SMA at 924-926 only to back off later in the week. Note: The Dow Jones 200 SMA is still about 4-5% away though, and that a fakeout slightly higher is possible. The financials today were weak, and kept the market from breaking to new highs, although at around 3:15pm the financials finally caught a bid and helped this market break out of a symmetric triangle on the 10 minute candle scale and then we saw the massive shoot up higher. Today I also look at the VIX, XLF, and explain why i see that we could move lower for the next month or month and a half.
Thanks Idan, today was a rough day. Have a good weekend.
SELL SHORT IN MAY….and lose your mind
That’s for sure
IDAN, interesting idea but we have called for so many Monday sell offs after Friday moves up only to find the market doing nothing or heading higher.
guess we find out on Monday.
That worked almost all the time in March/April. In May there were 3 big up days on the first day of the week and one small down day. It’s almost like somebody tries to induce a Pavlovian response by setting people up with many down Mondays, only to take advantage of that. Anything can happen, but looking at the SPY chart 3 up days in a row only happened about 3 times since the March low. There’s lots of churn up and down.
Just FYI…end of day surge was due to a huge Morgan Stanley BUY Program
oh yeah, how do you know that?
I’m a trader at a prop firm in Chicago and we monitor buy and sell programs.
Well a Junior Trader, I recently graduated.
at what Cy group or something? How can you tell that the majority of that came from MS?
Are they fourth market trades or what?
I’m not going to say what firm I work for, but whenever an institution buys or sells, it’s through their market maker, and MSCO is Morgan Stanley.
The actual reason was that beautiful chart I made (and posted a link to)showing $DJUSFN poised to fall thru its 20-day MA and FAZ possibly heading for about 7 or 10 or somewhere else near the moon.
Glad to have you here Chim Chim. A question that’s bugging me is “So where did MS get the funds?”
MS only needs a small portion of their money to do it.. and it doesn’t matter if its MS or GS or nay other institution.. it proves the point that the surge was due to an institution missing out on the strong move higher in the month of may, and trying to convince their clients that they didn’t miss it, by buying in in the last 10 minutes of may trading.
Idan, I get that it’s window dressing. I totally get that. I wasn’t aware however that GS could fund it internally. So thanks for clearing that up.
Wasn’t that ending volume equivalent to over $4 BILLION in trades?
well there was also afterhours action.. so around 10 billion total.. but yeah.. that’s easy money for an institution like that
what is a buy program? did the buying need to happen in May?
A Buy Program is when large institutions buy a basket of large cap stocks and hedge their position in the underlying futures market concurrently. Institutions do buy/sell program trading daily many times, I just do not know why it was so large with MS this time. I don’t work for MS, but I am going to try and find out from one of my friends who trades at JPM.
so are you looking at INSTINET or other fourth market trading?
I’m not trying to grill you Chim, it’s juat curious minds want to know!
I agree with Chim Chim….I have a friend that works with Stifel and concurred with the Morgan Stanley buy program.
Thanks Chim Chim….you have to protect your sources and info, but thanks for posting what you could, it makes sense.
this is the second site where I have seen a post from someone that works at a prop firm in Chicago talking about the MS buy. Seems like all angles are covered no matter how small.
This eternal chop for a month or three during the death agonies of a bear market annoys me as much as everybody else even though I know it happened like this time many times before:
http://i43.tinypic.com/207qnhh.png
4,43 . . . 4.62 . . . 4.70 (4.76 now in AH just as Idan said) . . .
Those are higher lows in FAZ. At least they are better than lower lows.
Should read
” . . . death agonies of a bear market RALLY . . . “
http://3.bp.blogspot.com/_FM71j6-VkNE/SiBBUA4c-uI/AAAAAAAAC7o/95yqvJZE3GQ/s1600-h/SPY+Vol+5.29.09.jpg Check out this volume on the SPY at end of day surge
Sick. It reminded be of seeing Barry Bonds hit the ball into the bay at Pac Bell Park…..the ball just kept going and going and going…like it was gaining speed.
Interesting. My friend just started yesterday at MS in Time Square. I wonder if he will tell me.
Does anyone discuss good undervalued plays on this site? Sure some/much of the market is probably/maybe overvalued,. but is anyone really sure? Even the financials may be in better shape than perceived here. Got alot of funding at good prices and the big banks, especiially investment banks are probably making a killing this current Q off trading profits and selling swap agreements to the leveraged funds, that you guys kindly keep contributing to so foolhardedly.
Here is a great small cap that broke out on massive 15X volume today. yes half of it was in the the last hour after breaking out, but volume was VERY heavy all day. HGR
Yes the overall market does influence individual stocks, but everday there are great plays out there on the long side. JCG had a real nice short squeeze tioday on a blowout ER, and will likelyy continue. Lots of breakouts today, and not just in the last hour either. i don’t fight the tape.
TKO.TO
DOES ANYONE UNDERSTAND where all this money is coming from and what program allows it and are these fundings approved by people you vote for?
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5.0mf1XuAeA&refer=home
isn’t Chrysler a private company? my head is really starting to spin. tough to trade a market with so much intervention.
My question is where did all the sell orders come from – were there that many “sell” blocks stacked up in the system?
Always be careful Shorting the last 5 trading days of the month unless the market is very overbought on a short term basis. With that being said I would be on the lookout for a pullback next week. The triangle pattern is still in play as the D Wave may have completed today so the E Wave down would be next possibly back to the lower 880′s by the end of next week. Also on an intra day a nice bearish looking Gartley Pattern has developed as well.
A NOTE ABOUT WFT.TO
the founding family Ketchams are still selling and at lower prices than i am short. sold more short today in the 28.50 – 29.00 range
http://canadianinsider.com/coReport/allTransactions.php?ticker=wft
here is another ive been considering long. directors buying:
http://canadianinsider.com/coReport/allTransactions.php?ticker=cax
http://stockcharts.com/charts/gallery.html?cax.to
My two cents…..
Forget about the charts and forget about the shorts. History is being made here with the United States Government pumping billions of dollars into the economy and total irrational exuberance among those that still have jobs. We are going to see hyper inflation kick in very soon (I think its already started) and inflation will bring higher prices of everything, including stocks. The devaluation of the dollar and the fact that Russia, China and Germany are hording gold in order to dump the US dollar and start a new currency backed by gold some day tells me that precious metals are where you should be putting your money.
Call me crazy but I think the end of the dollar is fast approaching (I mean fast…like by the end of 2009) and gold and silver are going to blast off like you have never seen before or could have ever imagined.
Buy Gold, Silver, Oil and the Miners and hold them all long. You will make huge profits. Take a look at the charts on these, time is running out.
Thanks for the lecture. Come back when you know what you’re talking about. Deflationary forces are still much stronger than the Federal government. Don’t believe me? Look at how the 7 year treasury bitch slapped Bernanke this week. FIgure out the lost value in real estate and compare that number to the government stimulus number and the phrase “pushing on a string” makes perfect sense.
That is scary… only.. if i’m right.. and we’re still going to have an incredibly long recession.. and never really get out of it for 3-4 years… then the dollar will not devalue.. and we won’t have inflation until 2012..at least not hyper inflation.. i do believe we’ll have a prolonged period of stagnation though.
Get your head out of your ass my friend. You will be broke by the time you figure the whole thing out.
8.2 million investors/traders are bullish …except 6 guys on this site. i use this site as a contrarian. Its great, although they are slightly turning bullish so be careful.
Everything I have been predicting for the past couple of years about the collapse of the U.S. Dollar and the biggest boom of our lifetimes in Gold and Silver is beginning to come true right now… we are at the early stages of hyperinflation and those who continue to doubt me will soon get wiped out!
May saw the biggest monthly gain in the price of Silver in 22 years. Gold made its biggest monthly gain since November. Meanwhile, the U.S. Dollar index has absolutely imploded to a 5-month low!
Did you know… 1 to 2 million people per year will signup for Social Security from now until 2032, up from only 500,000 per year in the 1990′s?
Did you know… more than 1 million babyboomers will enroll for Medicare each year beginning in 2011?
Unfunded liabilities for Social Security and Medicare are now $55 trillion! Up until now it has worked like a ponzi scheme with Americans paying into Social Security and Medicare to fund those who are on it… but this house of cards is about to fall!
U.S. income tax revenues fell by $138 billion or 34% last month over a year ago, the biggest drop since 1981… at the same time that we are seeing record increases in government spending. It looks like the budget deficit this year will likely surpass $2 trillion… but in a few years the deficit could reach quadrillions!
Total Federal Reserve and U.S. Treasury allocations for bailouts and stimulus’s have now reached $14.1 trillion, of which $3.3 trillion has been spent… but considering the assets the Federal Reserve is taking onto its balance sheet are worthless, the whole $14.1 trillion will inevitably be spent which will add to our $11.3 trillion national debt!
Some say this is small compared to our annual GDP of $14 trillion… but since 70% of our GDP is consuming spending, we are already past the point of no return!
The only way to get out of this mess is to inflate… and monetize everything. Inflation is guaranteed to be worse than the 1970′s… when we saw Gold reach an inflation adjusted high of $2,300 per oz. Considering that we were the world’s largest creditor nation in 1980 and today we are the world’s largest debtor nation… Gold is without a doubt going a lot higher than $2,300 per oz!
Historically, Silver has always returned to a 16 to 1 ratio with Gold. Therefore, with Gold at $980 per oz, Silver should be around $61.25 per oz right now but it’s only $15.75 per oz! Clearly, Silver has a lot more upside than Gold.
Or you could also say gold could DROP DOWN to $256 ???
Hahahahahahahahaha…. I sure hope you aren’t betting on that.
is there some rule that says Medicare, Pensions and the like have to be paid in full to those entitled? im not so sure about that. CA is now saying they need to scale back welfare payments. Unions are accepting wage concessions. that sounds deflationary to me. one stock i was short had the whole staff accept a 15% chop in pay. RUS.TO. now those people need cheaper goods to survive so they demand lower prices and the store that sells those goods asks thier employees to take a pay cut or they won’t survive.
im not 100% sure about deflation or inflation to be truthful. none of us can be 100% sure about anything. however, the herd trade is definitely to buy gold. what im seeing in my own business — rapid deflation. beads i bought a year ago for $3.00 a strand and sell for $9.00 are now being offered by the same supplier for $1.35 a strand and im discounting them to $6.30. these are semi-precious stones and have true meaning and value to many.
good luck trading!
What you are seeing is the deflation due to the lack of buying which is due to the shortage of money. The United States Government has started printing money on a scale that is impossible to comprehend. Obama has spent more money in three months then every single President did combined. People have no idea how much money is being printed and spent and once that money trickles down into the money supply it devalues all the other dollars to the point that it takes many more dollars to purchase the same item (inflation). This is why everything goes up… including stocks (thats why I say don’t short the market). Inflation causes everything you buy to take more of your dollars, bread, milk, gas, shares of stocks. This is why people rush into gold and precious metals. If you take $1000.00 in $20.00 bills and put them in your safe at home in a year you still have $1000.00 in $20.00 If you take $1000.00 worth of silver coins and put them in your safe, with inflation they may be worth $1500.00, $2000.00 or more, its a hedge against inflation. If the dollar collapses then thats a whole different story and then the fact that you have hard assets such as silver or gold takes on a whole new reason. Do your homework on this one. There is a “Perfect Storm” coming and it isn’t going to be pretty. If you play your cards right you will actually be able to do very well though. Gold, Precious Metals and Oil.
How to invest successfully to beat inflation
Inflation is generally bad for investment in both bonds and equities and a friend to real estate and commodities. Precious metals, in particular, are seen as a hedge against monetary inflation, with a tendency to rise in line with monetary aggregates and then to out perform as investors jump on board.
The traditional hedge against inflation is gold and silver.
Inflation has a corrosive effect on corporate profits if input costs rise ahead of selling prices, and is therefore not usually good news for equities, although over time stock prices also tend to drift upwards if inflation really begins to rage.
Bonds loathe inflation because central banks have to raise interest rates in order to combat inflation and so fixed-yield bonds fall in value. Hence, inflation and a bear bond market are bed fellows.
Debt destruction
On the other hand, rising inflation can amortize debt most effectively as a debt will remain unchanged while salaries might well be increased to keep up with inflation. Thus inflation is a cure for an over indebted economy. Russia in the 1990s was an extreme example of debt destruction. Perhaps the US needs a dose now.
On the other hand, if high inflation also brings high interest rates then the attractiveness of debt is reduced. But inflation does tend to carry the prices of all assets higher, including real estate and commodities; or at least to disguise a real fall in real estate prices by sustaining nominal prices.
The most recent example of surging commodity prices is the so-called ‘agrinflation’ of agricultural commodities, reflected in higher prices on the supermarket shelves. But it is true that bear markets for bonds and equities are usually counterparts to bull markets in commodities, as in the 1970s.
Buying opportunity
Gold and silver hit their highest values ever back in 1980, and could surge much higher if similar economic conditions are repeated today. Indeed, it is surely a peculiar anomaly that precious metal prices are lower now than they were 27 years ago, while monetary inflation has picked up sharply worldwide.
And once investors get the scent of an opportunity they are likely to jump on the relatively fixed supply of gold and especially silver and drive prices up again. Investment history does tend to repeat itself, and it is probably safe to assume that it will be no different this time!
WABOB, thanks for the wake-up call…what if anything will our Government do to prevent commodities hoarding? How soon until other nations demand a new world currency reserve system? What are good sources of independent
information to gain more insight and knowledge about this trend towards the end?
The arrogance of the shitheads in our government is amazing. They want the Chinese to do to their economy what Americans have done to their economy in order to prop up the American system and bail out Americans. After which, of course, the shitheads promise Americans will change their ways. Anybody got the Chinese Premier’s EMAIL address ?
“The U.S. will work to reduce its budget deficits once the crisis ends, urge Americans to save more and shrink the trade deficits. To replace diminished U.S. spending, the Chinese will be asked to step up spending and stop saving so much. The administration says this can be done if Beijing improves pensions and health insurance so Chinese households don’t feel pressured to save so much.”
http://finance.yahoo.com/news/Geithner-wields-little-apf-15390826.html
A very thorough article on the PPT and related entities:
http://baltimorechronicle.com/2009/052909Lendman.shtml
Thanks for that link; it’s one of the most illuminating articles I have ever read. Perhaps the GM bankruptcy on Monday will provide the perfect excuse to destroy the market and allow the “PPDT” to once again profit on the downside.
This article is inflammatory; it really makes you want to get a pitchfork. Those f*ckers.
Thanks MJ–a lot of info. that I thought I knew, but now know. Wish I had realized this earlier when continuing to short at the peak in March.
“The government’s visible hand and insiders control markets and manipulate them up or down for profit.”
OK, I’ll certainly buy that the markets are manipulated both upwards and downwards. However, what we don’t know is the extent to which this is happening. How much of the rally since early March is due to manipulation of the markets? How much of the move downwards prior to that was due to manipulation?
I’ve seen many posts (from bears) complaining about the PPT running up the market but I’ve never seen a post complaining about a manipulation of the market downwards on a red day. Why is that?
On any given trading day, how can we look at our screens and distinguish legit buying/selling from manipulation? We can’t. We can guess and speculate but we have no real evidence. It is an unknown variable in the equation.
Good point. However, when you look at trading action such as occurred at the end of the day Friday, and many other days, involving billions of dollars of exposure common sense would indicate something is going on. Unless, of course, you think millions of individual buyers simultaneoulsy clicked the submit button.
I also believe there will be downside manipulation in the stock market at some time to drive money to the bond market and drive down yields. When that happens is anyone’s guess unless you have contacts with Bernanke and Geithner, in which case there will be no need to guess.
There was some speculation in earlier posts that some of the action at the end of the day on Friday was due to a Morgan Stanley buying program. If that was the case, what can we really do about it? They are free to buy and sell whenever they like and in whatever volume they like. As individual traders, we all know that we have no chance of competing with someone like Morgan Stanley in terms of resources and information (which are the two most important tools needed for making lots of money in this game). We have to make whatever feeble attempts we can to account for such variables and integrate them into our overall trading strategy.
I agree 100 %.
Morris, agree, as the market corrected to the downside those in the know were positioned for it prior to the fall. if you are on the inside of this manipulation your account and power to manipulate keeps growing. imagine how much $$ you would have if you could position yourself perfectly days before each major move. truly believe that this is happening and as this centralised control of markets grows it is going to get tougher and tougher to make money as a trader. look at some stocks: 80% owned by institutions and government.
look for stocks like DNDN to buy long term puts on . low institutional involvement in small caps is they way to play the short side.
Except dndn is not a good example of a stock to short for the long term. Read up on the company and their Provenge drug before you assume this is just another inflated small drug company.
This article, when read in conjunction with those relating to the entire TARP debut, provides possible support to those bloggers who argued at the time that Paulson was about to pull off the greatest heist of all time. That is to say, the collapsing markets which were “threatening to bring down the entire financial system” may simply have been market manipulation (to the downside) to create an artificial panic. Whether true or not, we are still suffering the lingering effects of that crash.
A man hit upside the head with a 2×4 might be heard to say: “Well now wait a minute. I grant you that it was made of wood but how do we know that it’s dimensions were actually 2″ by 4″. It could have been 1-3/4″ by 3-3/4″. And we can’t say for sure that this alleged “someone” actually intended to hit me with this so-called “2×4″. He may have been carrying the piece of wood on his shoulder and suddenly turned thus inadvertently hitting me upside the head in the process. Or there could have been no actor involved at all. The 2×4 may have been leaning up against a wall and been blown down by a sudden gust of wind. I do grant you it was made of wood though. But I don’t think we can say any more about it than that. To do so would be engaging in speculation.
Un-fucking-real.
The speculation isn’t about whether or not the markets are manipulated. All the posts above seem to agree on that. The speculation comes into play when discussing how much manipulation occurs on any given day.
And, in the end, the most important thing is for us to recognize that we have to trade the market we are given. The amount of manipulation is really a moot issue since we have no way of knowing exactly what they are doing or when they are doing it (which is one of many reasons why trading is so difficult). It is out of our control. We know the odds are stacked against us yet we still choose to participate.
I wish participants on this site would focus less on complaining about the market conditions (which is useless) and more on how to trade the conditions.
Best of luck to all of you next week. If you get a chance, go see the movie Up that just came out. Those people at Pixar are just amazing and this is the most adult-friendly movie they have done so far.
Anyone notice that the faz/fas decay reversed o
After May 15th? I find that very interesting.
I’m not sure what you mean by the decay reversed? Do you meqn they stopped their decay? or do you mean that one is now decaying faster than the other.
I don’t see that 3min. They are both still rapidly decaying and ALWAYS will over time, with consistently lower highs and lower lows.
For instance, if $RIFIN were to only rise back to it’s May 8 high of 687.25 ( a rise of only 6.33%), and assuming it were to do this on Monday, in one day, FAS would not come close to it’s May 8 high. No, it would fall short of it’s May 8 high of $13.27 by about 10.3% to about $11.90. Likewise, FAZ would go much lower than it’s May 8 low of $4.43 to the tune of about 14.2%, or about $3.80.
That’s what I call decay, and those buying these without certainty to direction, and understanding the very high risk, are contributing to the scheme perpetrated by the investment banks selling those swap agreements to the leveraged funds.
Another instance; $RIFIN gets back to 687.25, but does so with a steady uptrend over several days. FAS would then see a bit more than $11.90, with FAZ going even lower than $3.80. A little less decay on FAS and a little more on FAZ.
Yet another instance; $RIFIN takes several weeks or more, in choppy fashion to finally arrive at 687.25. The decay in BOTH FAS and FAZ would be SUBSTANTIALLY worse than the 10.3%/14.2% probable decay given in the first instance.
Of course, $RIFIN can drop also, and at any precise point in time, either leveraged ETF can, and will, double, triple, quadruple or more during a major trend, from that precise point, but the trick is to figure out at what point that is, very hard to do in a rigged market. FAZ could even double or more beginning Monday, but what if FAZ reaches $1 or less first before it eventually triples or more?
There are plenty of individual equities that can triple or more (or lose 75% or more, and gain on short) without going against the huge decay factor of these ETF’s, and thats a very big obstacle to overcome, as you are always fighting the LT trend of these ETF’s which is always down.
Again, i say it is useless to try and find chart patterns in these ETF’s. Like trying to find a double bottom or top, or support and resistance levels. IMO, there is no such thing, unless by total coincidence, it appears to do so. Yes the underlying indices can double top or bottom, and there are S/R levels on them, but the price of the ETF’s inverse or not, will ALWAYS be lower on the second peak (or dip) than the first peak, and coinciding S/R levels on the indices will also always be lower on the ETF’s even though the underlyiong might reach an equivalent price on the second peak or dip. or S/R levels.
I think this may be the worst time to be in these leveraged funds without being certain of any continuing trend or reversal of trend, there’s also the possibilty that there will be no immediate defined trend and the market remains sideways for an extended period. Unless you are one of the few VERY lucky at skimming quick profits from them on a consitent basis, or you are one of the few with priviledged info.
Somebody is laughing all the way to the bank on these, My opinion is that there isn’t far to get to the bank as most of it is direct deposited.
Just take both prices and add them. Check the EOD movement of the sum.
just looking at May:
on May 1, FAS closed at 7.82 and FAZ closed at 8.61
sum on May 1 = 16.43
on May 29, FAS closed at 10.00 and FAZ closed at 4.70
sum on May 29 = 14.70
That is a 10.53% decrease in the sum for the month.
Also, if FAS dropped 36% and FAZ increased 36% from the closing prices on Friday, they would be close to crossing at 6.40. I believe they were both around 8.20 the last time they crossed.
Morris, I said May 15.
I don’t think the sum tells the story. The fact that a potential crossover point keeps dropping steadily with time shows that they are both decaying. I’ll use your date:
On May 15, FAZ closed at 5.90 and FAS closed at 8.74. If FAS had dropped 19.4% and FAZ had increased 19.4% from these closing prices, they would have crossed near 7.04. This is a lower crossing point as compared to the actual crossing point in early May (around 8.20 if I remember correctly) but a higher cross than we could get given the closing prices on Friday (which would be around 6.40).
It seems that from 5/15 till now it has slowed and reversed. It is worth keeping a eye on. I’m thinking a fas/faz long during a volitle period could be easy money. More thought needed, though.
The decay of the crossover point was about 1.16 for the first 2 weeks of May and about 0.64 for the latter half of May so you are right in saying that the decay has slowed (but it has not reversed). Volatility amplifies the decay and the VIX has been dropping so maybe there is a connection.
The flaw in the sum method is that the two ETFs are inversely related via percentages. Let’s say that FAS is 10.00 and FAZ is 5.00; the sum is 15.00 and the average is half the sum at 7.50. The 7.50 number (and the 15.00 by direct relation) isn’t really significant since a drop of 2.50 in FAS to get it to 7.50 (which is a 25% drop from 10.00) would not be accompanied by a 2.50 increase in FAZ (it would only be at 6.25 after a 25% increase).
The number that connects the two at any time is the one that represents what I’ll call the “percentage midpoint” which is the value between them that would be reached by equal percentage inverse moves (which is how they are supposed to behave). For the values given above, the percentage midpoint is approximately 6.67.
Ah, yes good two points, Morris.
Random thought: Had to laugh. OMNI had it right Friday. Too bad Oscar told his “Premium Room” clients to bail two minutes before the rally. DOH!
exactly when i bailed on my URE. good god. nothing in the charts, indicators, vix could fortell a massive end of day squeeze like that. it seemed the market was in its happy place and if it stayed thier they would get thier monthly green candle.
For those of you who follow Marc Faber (BTW he concedes that there is a possibility of markets moving sideways or even higher in the short term (however, not likely)) here is his concluding paragraph of his June letter:
So, what should investors do? I would take some money off the table
right now (I partly hedged my long Asian stock positions through short
positions in S&P futures). How deep the correction will be we do not
know, but following a 39% rise, the S&P could easily drop back 10% to
20% (or even more). It is also possible that the stock markets continue to
move up right away. But obviously the risk today is higher than it was
earlier this year when we were pounding on the table to buy equities. I am
neither young enough nor Paul Krugman to know everything (Paul
Krugman: “….‘Austrian theory’ of the business cycle—a theory that I
regard as being about as worthy of serious study as the phlogiston theory
of fire”). I maintain long positions in gold, mining related companies, and
some corporate bonds.
Lately, US government bonds have tumbled and the US dollar has been
weak. Both are near-term oversold and should shortly rebound (sell
TBT).
On a US dollar rebound I would shift more funds into Canadian dollars
and into Asian currencies.
I believe that a US dollar and US government bond market rebound is
likely to coincide with a stock market correction (as liquidity would
tighten).
Jim Rogers
Buy The Chinese Currency
The renminbi is eventually going to be the next reserve currency of the world. Twenty years from now, perhaps fifteen years from now, the Chinese are opening up their currency more and more every month, every year. And that’s going to continue … who knows how high it will go.
I travel to china every three month. China is a horrific country. Always worry about a country that takes advantage of its own people. The China sun almost always red due to the toxic air. The homeless is mostly little Chinese girls being trained for begging and prostitution. Every business man gambles in the stock market. 40% of Chinese don’t brush their teeth (just something to think about)
I am not a racist and I feel very sad for Chinese homeland people. China has such major domestic problems that the government screens all news before it is written. China has too many people and the health crisis is massive and looming.
Although Jim Rogers lives in Singapore, regarding China he is making one large mistake. He pretends to understand a culture more than the people that live there.
Jim Rogers lives in Singapore so if he’s so hot on China, and he wants his kids to learn Mandarin, why doesn’t he live in Beijing? Let’s count the reasons: world’s worst air pollution; horrific traffic jams; non-potable water (unfit even for watering plants); unsafe food and harmful consumer products, generally counterfeit.
It’s not a place to live but buying the currency for longer-term growth may not be a bad idea. China’s an ecological disaster but what else would you expect of the world’s factory.
Can someone decipher this? Perhaps Uner? It would seem to me that the straight move and the double top since March resembles the 50% retracement top of the 1939 market (because we did not put in the sideways correction that occurred in the 1939 case). What do you think?
http://seekingalpha.com/article/138298-today-s-market-vs-1938
For sometime now, I have held the belief that the only way to trade this market is to determine the motivations and timing of the interventionalists. Many of us feel that the markets are being manipulated and have had little, if any, success in trading on fundamentals, TA or Elliott Wave theory. Since those “in the know” can profit handsomely by positioning themselves ahead of major market moves, they don’t necessarily have a desire to only “prop up” the markets. So with that thought in mind, it will behoove all of us to dissect the strategy that will be employed as we move forward. My thoughts…..this past several weeks have been a well planned and orchestrated consolidation to make certain that the “buy and hold” crowd as well as those that have been sucked back into the market, hold their current positions. In the meantime, bears who have been shorting the market, based on TA and Elliott Wave, have been severely punished. The next stage will involve as steady, yet substantial move to the upside. This will precipitate short covering on the part of shorts, as well as a concerted effort on the part of retail buyers to insure they do not miss this next move up. Finallly, no later than late fall of this year, the trap will be sprung. Some event, real or imagined, will be unleashed upon the masses. The devastation will be deep and long lasting, changing the way we live, in ways that most people cannot fathom. Don’t be caught on the wrong side of the trade and most of all, seek safety and love those who are dear to you. I welcome any other thoughts on where we may be headed.
Is there any software that can search the late high volume trades and identify what stocks are being purchased in these controlled ‘buy’ situations?
I tried a manual review of several stocks looking for spikes in price in the last few minutes and what I found was that most of the effected shares relate to tech companies – eg. AAPL T, CAH, CB, CSCA, CTXS, ERTS, IBM, GOOG, IGT, A, AA, MO. Also while there was a major noticeable spike in price and volume, the total day’s volume was usually well below the 3 month average vol. One exception was IGT where the vol was 2X.
So how would they know there would be enough volume, and in many cases I observed a start of a run up in the last 30 minutes. This would iimply that others may have been tipped off that this would be happening, or they may have been encouraged to particpate. Too bizzare!
Does anyone have any other observations on this? When will these positions be reversed??
Cottonman, I agree with most of what you’re saying. It has become apparent to most that the market is very controlled, and “they” ( the Fed and large banks in concert) can and will put the market where they want/need it, and I would never underestimate their power, over the short/intermediate term. Over the longer term, they are definitely running out of “tools” to use.
Even trying to decipher all the factors in trying to figure out their next move, it is still largely a guessing game.
Some factors to consider; but there is so many;
Will the large banks and/or regionals need even more funding? How soon? I think they do need much more funding and probably very soon, even though they will probabvly show “quasi” improving earnings/losses for current Q. Do they want to have more consolidation, where the bigger, and less deserving become even more powerful through takeovers?, or do they desire to keep the smaller players in the game also?
Do they need/want to take the markets to the next level of bullishness? When? Or do they just want/need to maintain the current level of bullishness for awhile?
Would it be harmful to their agenda take take the market to higher levels, and then hold them, now? Will they pull the rug out all at once, or will there be quiet distribution for an extended period, before the masses eventually catch on?
Even though they pulled off the 2,5, and 7 year treasury auctions successfully recently with only a slightly higher cost, they will be unlikely to do as well in the future, especially if the markets are higher and inflation expectations rise more. 10 and 30 yr auctions are coming early June. And then the next round, and the next…….
I have a question: If the remaining major indices were to get above their 200MA’s tommorrow or this week, say $SPX 934.33 ( I’ll tell how arrived at that figure later), and even if they didn’t stay above very long, even if only intraday, (but higher highs) would there be a renewed sentiment of bullishness and would many remaining bears flip their sentiment at that point, at least for the ST?
I’ll remain ST/intermediate neutral and longer term bearish (and baffled with B.S.) whatever happens. In the meantime I’ll contuine taking advantage of momentum/daytrades/breakouts in individual stocks, the profit potentials of which lately have rarely been seen as they have in recent times. Even some of the junkiest of junk stocks are still having daily huge runs.
THIS GUY IS GOOD… produces few youtube videos. he is a professional futures trader that preesents around the Country. ive followed his viewpoints on youtube but forgot about him when he created his own site : powercharting.com
http://www.youtube.com/watch?v=tvrVszgTt6U
IM SEEING ALOT OF CHARTS LIKE THIS SO IM HOLDING SHORT
this is a complete fleecing. take a look at the weekly chart. it looks like a bull flag but in fact it is far from it. the volume should be slowly declining as prices decline. what im seeing happening in charts like this is massive distribution. this is a strong sign that this rally is for suckers. the chanting and cheering is sucking money in but the volume on the sell side is daunting. thier is alot of unloading going on: http://stockcharts.com/charts/gallery.html?PH