31 August 2010

31 AUG 2010, Tuuesay (Part 2)

  • For the President's address...I was initially impressed.  But, then he launched into an economic discussion in a speech that was supposed to be focused on military conflict / objectives.
  • I don't get it.  But...then again, I'm one of the naive, apparently. 
  • Even with the cost of operations in Iraq and Afghanistan, U.S. military spending is still near historic lows (as a percentage of GDP less, than what we averaged during the Cold War).  Is this the "peace initiative" that the Administration is hoping to find savings to fund their socialist agenda (ie. healthcare expansion)???
  • Sooo...I still don't know what this Administration stands for clearly.
  • "I voted against the surge in Iraq led by General Patraeus but then I supported a surge in Afghanistan led by General Patraeus."  C'mon...what is your opinion?  For real?
  • Which should we believe in?  Which is true???
  • I'm personally glad that I'm no longer in the military and left wondering as the politicians swing in the breeze.
  • God bless our men and women serving...their's is the toughest job dealing with these political uncertainties.

31 AUG 2010, Tuesday


  • SP500 1040 continues to be defended mightily.  Someone doesn't want it to drop through there for whatever reasons.  (Courtesy of http://blog.afraidtotrade.com/)

29 August 2010

29 AUG 2010, Sunday (Part 2)

  • Possible bounce...retail investors are very bearish here.
  • And...c'mon...a potential inverted head and shoulders setting up?  So, a head and shoulders within a head and shoulders followed by a potential inverted head and shoulders?  This market has been schizophrenic and is testing both sides with the question..."What do you see and what do you believe?"  Red pill or blue pill...how deep does the rabbit hole go?
  • It's exactly the reason why I'm waiting to see how any bounce plays out...still negative...just trying to be patient.
  • These are just "musings of a madman"...
  • Kick in the teeth to the bulls would be to make it above the 1135 level and then fail as they would feel good about the inverted head and shoulders playing out and then be trapped.
  • Kick in the teeth to the bears, currently, as they were so close to breaking the 1040 brick wall but couldn't do it.
  • Isn't this fun?  No...it's exhausting...which is just how Ms. Market likes it.  No one rides for free (ie, without stress)

29 AUG 2010, Sunday

  • Markets seem ready for a bounce...will see how it plays out.
  • The person who gets my vote does stuff like this and steers clear of emotional issues such as flag burning, gay marriage, abortion, illegal immigration...all the emotional "hot button, red herring" issues.
  • I agree with Karl Denninger's thoughts below...
  • The candidate that says this to the TV cameras and his opponent wins:
    I am running on fiscal responsibility which I define as (insert your platform), and on the removal of embezzlement and fraud from our government and financial system, (insert your platform), including the reversal of the bailouts my opponent voted for and supported.  Where fraud and embezzlement took place I will do everything in my power to see that each and every person involved goes to prison, starting with those at the top of these large corporations and, when necessary, current members of our government.
    If you insist debating other issues the microphone is all yours, and you may monopolize it all you want.  We may agree or disagree on those issues, but that's not what I'm here to discuss, and it's not what I'm running on.
    If you elect me you will get the following (list of corruption and fraud that you intend to excise, along with your fiscal responsibility promises, including charts, facts and figures.) 
    I understand that these other issues are important to virtually everyone, but I also understand that almost exactly half of you who hear me speak now are on each side of these issues and none of you are going to change your mind.  Therefore, the question I ask you is this: Are those issues more important than getting rid of the fraud, corruption, and scamming in our government and economy?  If they are, no matter which side of those issues you happen to be on, then I'm probably not your candidate.  If, on the other hand, fixing our economy, locking up the fraudsters and putting a stop to the rampant theft from each and every citizen in this room, which has personally indebted each and every man, woman and child in America by more than $40,000 over the last three years, is the most-important issue before you as you head to the polls, then I ask for your vote.

28 August 2010

27 August 2010

28 AUG 2010, Saturday


  • GREECE...
  • A small country in the southeastern corner of Europe.  Small, yet currently significant.  Significant in that it, currently, is a microcosm of both Europe and, now unfortunately, the US in that it is a socialist country reaching it's limits.  Below is a discussion of how a socialist society collapses (ie, the USSR is a recent example not to be forgotten and China has chosen to move closer to capitalism in an attempt to avoid the inevitable...but, they are still a command economy, and unless they change...they will meet a similar fate........my opinion.......time will tell......you read it hear first).
  • Before I proceed, this is not meant as an insult to Greece (ie, some of my best friend's families are Greek immigrants to the US...you know who you are and God Bless that you are some of the most successful Americans and most genuine people that I have ever known and I'm blessed to have enjoyed my life with you...let's keep it going...yes?).  
  • Instead, this is seriously intended as an insult to all governments anywhere and everywhere who choose to play this "socialist" debt loaded game of  "tease the Tiger".  I merely use Greece as a current example to all those that choose the similar trail of politicians who promise everything at no cost to the present or future generations.  Greece is just meeting the inevitability first.  So, let's continue...
  • The government has taxed, over promised and overspent and is now broke because they're running out of "other people's money to spend" (thank you Margaret Thatcher for that quote).  
  • This is a lethal combination!  Sound familiar to you Americans???  Yes?  No???
  • So...what do they do?  Then government raise taxes, on an already struggling population, to support the unsupportable non-sensical promises of the past.  Smart???
  • Well, how does that work out?  An already struggling population responds!  They realize that they are being unrepresented, disregarded and eventually just used / abused by the oligarchs.  They seek to evade the government's impact against them by developing an "underground economy" to evade the taxman.  Heck, they're already hurting and need to avoid any further drain that prevents them from providing for their family and themselves.  They merely want to be free...left alone to live their lives responsibly in their local community.
  • So the government responds due to the expected revenues not rolling in...and raises taxes AGAIN to increase revenues for the oligarchs to distribute to their special interests in order to maintain power.  But, it doesn't work out due to the underground economy.  So, the oligarchs are infuriated!
  • Next step....The oligarchs respond by further cracking down on the underground economy for tax collections (ie, normal citizens) through the use of government force.  
  • This is THE critical turning point!  
  • It's at this point that some of the people decide (ie, Boston Tea Party) that there's nothing left to lose and it's time for them to take matters in to their own hands and remind the current government that they are accountable to the people vice the people being accountable to the government.
  • Yes, IT...IS...THAT...SIMPLE.  That's how societies descend into revolution (ie, change not necessarily violent change).  
  • Think about it.  Think of all the major countries in history that have experienced revolution...ours included...(ie, governmental change).  Didn't they all follow a similar path?  
  • Let me know of ones that have escaped that path.  I entertain alternate ideas!  I am an ignorant in so many ways.  I'm sure that there are others out there who are able to share alternate opinions and I welcome them because I need to maintain a reasonably open mind.
  • Help me to heal my country...for my countrymen!
  • "Why?', you ask.  Glad you asked....let's get to it.
  • God Bless America!

27 AUG 2010, Friday


    25 August 2010

    24 AUG 2010, Tuesday


    23 August 2010

    23 AUG 2010, Monday

    • Would like to see some bounce here prior to considering shorts.  
    • Second chart above (from http://evilspeculator.com/) is a good chart showing how much of a battle this market has been.  Basically it's a monster 10 month sideways movement.  If it does break lower, we go to the JUL 09 region (lower left hand corner of the chart).  If it breaks upward, back to the APR 10 highs (or "to infinity and beyond"???).
    • My guides are mostly negative...thus I lean that way.  If the wind changes, I will try to change with it.  It has been very tough since the "Flash Crash"...these very broad sideways ranges are just that way.  They suck in the bulls and destroy them...then they suck in the bears and destroy them.  Over and over again.  It does get fatiguing for both sides.  Eventually, one side will tire and withdraw from the battle and the other side will rule the playing field...for a while.
    • One heck of a battle between the bulls and bears.  How does the song go..."stuck in the middle again."

      20 August 2010

      20 AUG 2010, Friday


      • Just tracking this as it goes...
      • Third Hindenburg Omen observed today.
      • Now, to the weekend!

      19 August 2010

      19 AUG 2010, Thursday


      • "Oh, the humanity!"
      • Second sighting of the Hindenburg Omen confirms the first sighting...pattern complete.  
      • That's the message...don't shoot the messenger.
      • For a review of the Hindenburg Omen and it's record I recommend you read through the links contained within my "Hindenburg Omen" post from 12 AUG.
      • It indicates a highly confused market often subject to decline.  Some declines are mild (5%) while others have been more severe (15-25%, 1987 was 38%).  It has had failures but not many percentage wise.  
      • The decline can come within days but may not happen for up to 3 months (about half occurred within 41 days).
      • Read all the links for specifics from the 12 AUG post then make your own decision.
      • Now...this is by no means a lock, lead pipe cinch.  We are in a world where the HFT bots are potentially painting the tape (afterall, they are responsible for 70%, or so, of trading).  Is it possible that "Da Boyz" are painting the tape to their liking?  Heck, anything is possible when you have the Fed pumping money your way as a Broker Dealer...which is exactly what they said in their last FOMC meeting.  It's what happened in MAR 2009...and I was amazed at the effect and have learned.  But, I as always, err to the side of caution.  The question is, what will you do?  And, only you can answer that question. 
      • NYSI is still moving downward and price is below both 50 and 90 daily moving averages (negative).  So, I will watch and wait.  Sometimes, the sidelines are best.  Heck, I'm in no hurry.  Price will have to improve quite a bit to lure me in to any potential upside.  Below, another concern is when the monthly close is below it's 12 month moving average.  Admittedly, we're not at the end of the month yet, but it does provide an additional warning (black line is the 12 month MA...1095, currently... and the oscillator at the bottom is negative vice positive).       
      • Now with the pattern complete, I'm curious how this will play out.  Time will tell I guess.

      17 August 2010

      17 AUG 2010, Tuesday


      • OK, OK...not the normal post.  Just re-read a good book that I'd like to recommend to those curious.
      • Ever wonder how the "little devil on your shoulder" influences you?  Well, here's a well written tale by C.S. Lewis from 1942.  Interesting how it applies across time.  ( http://www.amazon.com/Screwtape-Letters-Proposes-Toast/dp/0060652896/ref=sr_1_1?s=books&ie=UTF8&qid=1282094321&sr=1-1)  Check your local library.
      • As to the market, bouncing from short term oversold.  I'm currently thinking sell bounces but not quite yet as this is Options Expiration week and Da Boyz have a tendency to ramp prices into Friday...especially, after the previous week was down which last week was.

      16 August 2010

      15 AUG 2010, Sunday


      • Remember back in JAN 2008 when the Democratically controlled Congress railed against the Bush Stimulus as too large? Well, the above graphic puts the Bush Stimulus (upper right corner) to comparison against the Obama Administration's efforts.  By the way, both Administrations have gone out of their way to increase expenditures without choosing to pay for them.
      • The item that lurched out at me was how the current Stimulus was pitched as an investment to "repair our crumbling roads and bridges."  Does anyone else remember that?  If that was the case, why was less than 19% spent on infrastructure?
      • Hey!!!  Here's some good news regarding the recent difficult times...consumers are deleveraging and, surprise, credit scores are improving.  This is exactly what recessions are to do...clear the excesses and, over time, rebuild a foundation to eventually initiate the next true growth phase.  Psst...this happens one individual at a time, not via government stimulus.
      • Below...good depiction of Secular Bull and Bear Markets through history...each tend to last ~17 years.  Good news...past the half way point?  
        • How long have these multi-year swings existed?  Hmm...here's an analyst's 1897 paper demonstrating similar cycles he observed in the past and then projected forward.  Being they are cycles they are not pinpoint accurate...but it does show you a similar recurring rhythm.
        • More on the 56 year Benner Cycle.  And a little more here, too.

        13 August 2010

        13 AUG 2010, Friday

        • Run away...bring the pets and small children inside...shutter the windows and lock the doors!
        • OK...now that that's over....
        • Below....Hmmmm....now just how to get those two lines closer together?  Let the tax cuts expire or cut spending?  Well, it looks like the biggest change point in the pic was....well, whuddyano...look at that spending increase in 2009.  You make the call.


        12 August 2010

        Hindenburg Omen


        • The Hindenburg Omen...an initial sighting, uncomfirmed by a second, was made today, 12 AUG 2010.
        • It is suggestive of a market out of balance indicated by an unusual confluence of a high number of new 52 week highs and a high number of 52 week lows at the same time on the NYSE.
        • If interested, for your reading pleasure....http://en.wikipedia.org/wiki/Hindenburg_Omen.  There are several External Links at the bottom of the page that you may want to review as well.
        • Again, if interested, a 10 minute video and additional article... http://www.ambgtrading.com/2010/08/stock-market-crash.html.
        • Hindenburg Omens 2007-2008 pictured above (courtesy of http://cobrasmarketview.blogspot.com/).
        • 1985 to 2008 stats can be found in this article by Robert McHugh.
        • It's a warning, not a specific timing tool, and not a guarantee.  However, after reviewing the information, it appears to have warned of declines in the past...some mild and some not so pleasant.
        • Overly curve-fitted coincidence?  After looking at the stats, you make the call.
        • If more hit, I'll try to mention them.

          12 AUG 2010, Thursday


          • What a difference a day makes?  Wednesday had a big blast down, Thursday, initially, too.  In AUG 4's post, indicated the 1135 (June's swing high) and 1165 areas as prior areas of importance and 1135 did offer resistance.     
          • Top chart is the SP500 and bottom chart is the SPY (ETF that tracks SP500).  You can see via the SPY chart that Da Boyz are making it very difficult for folks by doing most of the move overnight via gaps and then leaving tight crappy ranges for the normal trading day.  It feels very similar to how they ramped it up in MAR 2009, only in reverse. 
          • Looking negative again...the 90 MA held the upside and now below the 50MA too.  Also, below 50MA on weekly at 1102 (check weekly chart in sidebar and review a bunch of years using the time box to select start end dates).  In addition broke the swing low pivot at the end of July.  The past 3 months has been a very broad swinging sideways range.
          • NYSI is starting to rollover....Possible shorting bounces ahead.    

          08 August 2010

          8 AUG 2010, Sunday


          • From Terry Laundry (http://www.ttheory.com/) who's been at this for 40 years...here's an interesting recording from his 1 AUG post in which he talks about how "Da Boyz" may be trapped by their own game....http://ttheory.typepad.com/files/tto20100801audio-b.mp3.  Perhaps this explains the recent wild gyrations and maybe the "Flash Crash" showed the first cracks?    
          • Basically, they ferociously bought up stocks using the free money they got from the Fed / TARP and are now trying to unload their inventory to the public.  Only, this time the public doesn't believe the "all's well" calls from Wall Street and they're not willing or unable to take the bait.
          • Sooo..."Step right up, my friends, and buy your tickets to the greatest show on earth....The Circus of Disbelief."
          • Be careful out there...fundamentals are faltering, stimulus has reached the end of its useful impact, the Baby Boomers are hunkering down not spending and trying to ensure retirement, employment isn't improving (thus, housing and auto sales probably won't either which would lead to the improvement in employment)...it's a very sketchy environment like none we've lived through before.  
          • Long term investors must ask themselves whether to stick, lighten up, or run and just wait for the next down cycle to play out.  It's a personal choice.  Traders will trade...and we'll change our minds swiftly, as necessary, in order to follow the price action.
          • So, here's a pro/con for both sides.  SP500 chart above (http://thechartpatterntrader.com/)...in the bottom right hand corner is a pattern that the bulls are hoping plays out...an inverted head and shoulders pattern that projects to 1250.  Now, step back and look for the big black LS, H, RS...this is potentially a very big head and shoulders top which the bears are aware of and projects down to the low 800's.  Can "Da Boyz" pump this up to another new high?  I dunno...how much firepower do they have left?
          • Market has been improving (above 50MA)...but still neutral below the 90MA.  Daily is getting overbought while weekly is stuck in the middle.  Sentiment is not at extremes so offering few clues.  So, it's clear as mud..."You make the call".

          06 August 2010

          7 AUG 2010, Saturday


          • Da Boyz are good!  They lured the bears as best they could in order to trap them.  Glad I didn't take the bait.
          • Top chart is the daily with an up trendline drawn a few days ago.
          • Bottom chart is the 60 minute chart.  After Friday's unemployment report, Da Boyz shocked the market downward.  Hmmm...it didn't break the trendline on an hourly close and then did a complete reversal upward erasing the bulk of the day's downswing.
          • So...upchannel or upward wedge?  The market is wild...will just have to follow along behind it.
          • Just thought this interesting how, sometimes, something as simple as a trendline can hold such significance and this is a good demonstration.  
          • Oh...another point...Treasuries rallied, pushing two-year note yields below 0.50 percent for the first time in history, after the government’s payrolls report showed the economy lost more jobs in July than economists forecast.
          • At some point, one of the surest bets to make may be shorting the US Treasury 7-10 year Notes via buying PST.  Afterall, how low will interest rates go and how long will they stay down there?

            6 AUG 2010, Friday (Part II)


            • Hiroshima...It's been 65 years.  Never again!
            • Mankind has been blessed by God that this has not happened since despite the numerous close calls.
            • Numerous posts today...review below.

            Your Social Security


            • Got this in an email.  While it's well known by a few, it may come as a surprise to others.  So I wanted to post it so I could quickly recall the information, if necessary.
            • Social Security birthday this month...it turns 75.
            • Social Security, as originally envisioned, was a wonderful program to aid the elderly who lived beyond the normal life expectancy and, thus, were in danger of outliving their savings and becoming destitute.  It was a great idea!  However, it's biggest failure was that receipt of benefits was never indexed to an increase in life expectancy, as we have enjoyed in the past 50 years.  That can and, no doubt, will be fixed.
            • Now, for some history on Social Security that you won't see in the main-stream media, now or ever.  Make a copy and learn these facts--they're relevant!!!  Be sure to show it to your kids. They need a little history lesson on what's what and it doesn't matter whether you are Democrat or Republican.  Facts are  facts!!!
            • Social  Security Cards up until the 1980's expressly stated the number and that the numbers were not to be used for identification purposes.  But, since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message was eventually removed.  An old Social Security card with the "NOT FOR IDENTIFICATION" is in the picture above.  The cards are not supposed to be laminated.
            • Franklin Roosevelt, a Democrat, initially introduced the Social Security (FICA) Program.  The way it was initially set-up to operate:
            1. That participants would only pay 2% total on the first $3,000 of their annual income into the Program.  It is now 12.4% (you pay half and employer pays half) on the first $106,800 (Medicare tax is another 2.9% total).
            2. That the money would be secured away in an independent "Trust Fund" rather than combined with the Federal Government's general operating fund, and thus, could only be used to fund the Social Security Retirement Program and no other Government programs.  However, the Lyndon B. Johnson Administration established the "Unified Budget" which combined the Trust Fund with the General Fund...he needed the extra $$$ to fund the Vietnam War AND, simultaneously, hugely expanded anti-poverty programs via his "War on Poverty".
            3. That the annuity payments to retirees would not be taxed as income.  One of the tax hikes during Clinton/Gore established taxing up to 85% of your Social Security benefits.  (How special.  So, you basically get taxed on money that you already paid as a tax.  Slick, huh?)
            • Since many have paid into FICA for years and are or hope to eventually receive their Social Security benefits -- and that 85% of it is taxable on money you've already paid to the Federal Government to 'put away' -- it may be helpful to remember some simple facts:
            • Q:  Which Political Party took Social Security from the independent 'Trust Fund' and put it into the general fund so that Congress could spend it?
            • A: It was Lyndon Johnson and the Democratically controlled House and Senate. 

            • Q:  Which Political Party started taxing Social Security benefits?
            • A: The Democratic Party.  Of special note, Al Gore had to cast the 'tie-breaking' deciding vote as President of the Senate while Vice President of the US. 
            • Q:  Which Political Party decided to start giving benefit payments to immigrants?
            • A: That's  right!  It was Jimmy Carter and the Democratic Party.  It encouraged immigrants to come to this country, and at age 65, became eligible to receive Social Security benefits!  Benefits were paid despite whether or not any payments into the system had ever been made. 
            • Then, after violating the original contract (FICA), the Democrats turn around and attempt to rile you up by telling you that the Republicans want to take your Social Security away!
            • The worst part?  Most uninformed citizens fall for the emotional bait.  Now you don't have to!
            • However, facts and history can be such a pesky thing...totally disruptive against the emotional, non-informational based argument.
            • By the way....here's probably one of the most pointed descriptions of how the "unified budget" has completely destroyed the solvency of Social Security by allowing Congress to spend the surpluses at will.

            6 AUG 2010, Friday


            04 August 2010

            4 AUG 2010, Wednesday

            • Happy Coast Guard Day!  To all those serving and retired!
            • Daily SP500 continues upward.  The thing that bothers me is that it is getting kind of overbought yet trending indicators (ADX) aren't showing a trending type move...more sideways as we approach the top of this 10 week range.  Weekly is no help...diddling in the middle.  
            • Watching how it behaves in the 1135-1165 area.  Those points have been important in the past.
            • I think that the trading community is evenly split...some thinking 1250-1290 while others seeing low 900's.  I lean toward the latter.  I think we're forming a possible big head and shoulders pattern and may be building the right shoulder now.  If it is...then it might project down into the mid 800's.  It's just an opinion....everyone's got one.

            03 August 2010

            2 AUG 2010, Monday




            RECENT SCIENTIFIC RELEASE ...  http://wattsupwiththat.com/2010/08/03/new-carbon-dioxide-emissions-model/#more-22965 ... suggests that CO2 emissions by humans must be reduced to zero to stave off cataclysmic damage. 


            CO2 emissions to zero?? So, are they planning the mass suicide by kool-aid? Or do they think we’ll have developed a different manner of breathing by then (let alone transportation, heat, A/C, light, pharmaceuticals, plastics, etc., etc.)?  I’ll gladly stand in line for the kool-aid, but every global warming supporter has to stand in front of me. When the last one drinks the kool-aid, well, we might not have to drink anymore. We’ll measure the CO2 emissions THEN and see if zero is really necessary.

            How do these guys honestly dream this stuff up?   Heck, if Al Gore stopped his heavy breathing chasing massage gals in hotels late night and CON-gress stopped their political posturing maybe that would be enough to reduce CO2 emissions?  And if we stopped CO2 emissions, what happens to the plants?  C'mon, this is really getting retarded.  

            I haven't run into one single global warming believer, in the real world, who has honestly and verifiably reduced their CO2 production by anything near 5%.  So, when they hit the 35% mark, I'll be impressed and consider that they are serious.  Until then...this is complete bullshirt!  They want anyone and everyone, other than themselves, to experience the cut while they go about their normal lives.  If they were serious, they would LEAD!!!  They'd: 1) turn off their heat (firewood doesn't help since it is carbon), A/C, lights, 2) turn in their car and get a bike, 3) stop wearing any clothes containing other than natural fibers, 4) not use any drugs generic or otherwise, 5) refuse to buy any food or other products (China is going to be disappointed) that were transported to their local store from outside a 100 mile radius, 6) grow their own food in their backyard, 7) refuse to buy any product that was manufactured since it takes energy, and 8) absolutely refuse to buy any product made from plastic, had plastic packaging or electronics in it (plastic motherboards...turn in your cellphone to start, no toys for the kids), etc. etc.  

            I'm waiting!!!  Don't preach to the rest of us...ACT!  They should all be immediately dismissed as unrealistic, unserious and selfish.  I've got bigger things to worry about.  

            Oh...WHOA...wait a minute...perhaps Obama and gang are on to something here.  We can reduce CO2 emitters via Healthcare Reform and rationed health care to the Medicare population.  I guess plugs may be pulled on Granny yet!  Gosh, those guys are geniuses!!!  How silly of me for doubting.

            This whole thing is the second biggest scam in the history of mankind (second only to TARP).  It's a way to prey on your guilt so you'll "volunteer" to pay a "Cap and Trade" tax that will:  1) double your cost for gasoline, 2) increase your utilities by 50% and 3) probably increase the cost of your food and clothing by 35%.  All that extra money goes to special interests who are writing these ridiculous laws and to the government who benefits and grows larger by getting its hand even deeper into your pocket.  

            Had enough of this religious cult yet?  Wake up and think!  Don't merely accept what "the powers" spew.  The climate has NEVER been stable...seen any dinosaurs recently?


            If it is real...guess what?  We'll adapt!  Think of all the jobs that will be created for our kids, 100 years from now, to counter the effects of advancing water levels...more jobs than the Stimulus ever created and they'll be real!

            Rant over ...Steve Out!

            01 August 2010

            1 AUG 2010, Sunday

            • First thing's first...a review of monthly tendencies.