31 MAY 2010, Memorial Day

• Thanks and remembrance of those who've made the greatest sacrifice so others may know freedom.
• Now to some esoteric stuff this weekend....
• Info on potential 4 year cycle low coming this year.
• Analog of market from 2006-2007 and similarities to now???
• Building a potential Head and Shoulders top for SP500?
• .....and the NASDAQ 100?
• Be careful out there...don't get...
• Truly esoteric timing coincidence?  666 (MAR 09 low) number back in play for 4 JUN 2010 (6th month)?  I'm not trading it but it will be interesting to watch.  By the way the 6 MAY (6th day) "Flash Crash" found it's SP500 low at 1,066.
• Below...reminder of monthly tendencies...

27 MAY 2010, Thursday

• An up move like Thursday's should have had some volume behind it.  Look at the volume bars for the SP500...yesterday compared to recent ones.
• Then you'll ask that age old question, "Where's the beef?"
• We're bouncing...now to see where and how it goes.  Bounce to 1140's to form a right shoulder of a head and shoulders pattern then rollover to complete it with a drop to 930 area?  Is it too obvious?
• Dayum that "Flash Crash" screwed up the charts!
• Looking for clues.  Using the moving averages as guides in the meantime which are still negative.

26 MAY 2010, Wednesday

• Highly volatile psycho market.
• Tuesday gapped down 3% and then went up all day to unchanged.
• Wednesday gapped up 2.5% and then went down all day to finish 1/2% down.
• Thursday morning...6AM futures are up 2.75%.
• Whippy ass crap!

25 MAY 2010, Tuesday

• Big 3% gap down overnight and then it slowly climbed all day to just about unchanged.
• Trying to hold that black uptrend line...even broke the FEB lows and rallied back.
• Appears the bounce is trying to come...question is what kind of bounce?
• Investors...still below 90dMA so caution is called for.

23 MAY 2010, Sunday

• Still negative below 50 and 90dMA...and now the 200dMA (black dots).  
• Interesting...the black uptrend appears to be offering temporary support.  Will it hold?  Watching.
• Some short term oscillators are as oversold as they were during the OCT 2008 and even the SEP 2001 crashes.  Heck, even the RSI is showing a low swing value on the daily (not weekly).  Bounce wouldn't be unreasonable.
• Just thoughts here...bounce to 1150 area to form a right shoulder of a head and shoulders pattern projecting to low 900's / high 800's?  Just thinking aloud.
• High volatility environment currently...difficult for investors.

19 MAY 2010, Wednesday

• Not much to add...SP500 still negative (below 90dMA).
• Interesting chart above provides some historical perspective using technicals alone.
• Oversold...Bounce coming?
• One day at a time!

18 MAY 2010, Tuesday

• Sooo...now the Germans are banning short selling in an attempt to salvage their markets.  Instead of addressing the root issues.  
• "Get Shorty" all over again.  I will pound this drum forever folks.  The shorts are not the problem.  The problem is the problem.  The shorts merely notice it first and position for it...simple!
• We have seen this play before. It's hopeless.  Politicians cannot battle markets and expect to win. Wage price controls do not work. The Bazooka ploy failed a dozen times, and the ban on short selling financials in the US failed miserably.  Check Fannie Mae chart above.
• All these short sale restrictions are going to do is create a vacuum. Once the shorts are driven out these shares will plunge.  If history is any guide, there will be a brief rally in German banks, followed by a collapse of unknown duration. 
• Politicians are not bigger than the markets, no one is.  However, politicians can and do frequently exaggerate the existing trend. In this case, the trend is down. Short sellers are not the problem, if anything, short sellers are the cure, exposing problems and failed policies that politicians refuse to address.
• Hubris of politicians...“In some ways, it’s a battle of the politicians against the markets” and “I’m determined to win,” Merkel said May 6. “The speculators are our adversaries.”
• Just hope that it doesn't wash up on our shores due to Hedge Funds having to unload leveraged positions in any and all markets jsut to meet margin calls (ie, why the collapse unfolded as it did here in the US in SEP-OCT 2008).
• Dunno...but we'll soon see.
• More downside in SP500 today...below 90dMA...not favorable...getting oversold.  Bounce would not surprise.  If it doesn't bounce soon...could get ugly.
• OK, OK...so let's see here.  Goldman Sachs who has not had a losing day in the past quarter (of which the odds are like you're being struck by lightning...twice...in your lifetime and survivng both) but their 10 Top Trades for 2010 for their clients were 7 losers out of 10.  Hmmm...sorta makes you think...no?

16 MAY 2010, Sunday

• Market is still trying to figure out what it wants to do after last week's shock.  Could go on for another week or two.
• Daily chart...On Monday it recaptured the 90dMA (green), the yellow trend line it had broken down through and the JAN highs (1150's).  Held it Tuesday-Thursday, met resistance at the 50dMA (red) and RSI 50 area, then gave 'em up on Friday.  And volatility is still 3 times what it was just last month.  
• Weekly chart...Interestingly, the plunge stopped at the 50wMA(red) and the black up trend line.  90wMA is below in the low 1000 area.  RSI held the 50 area but MACD has rolled over.
• Messy market...wish it were otherwise.  Thus, for investor types, I fall back to the daily chart and its guidelines of the 90 and 50 day MA's...price above both is a positive, price below both is a negative, price between is neutral.
• Just trying to keep it simple until I get a clearer picture.  One day at a time.

9 MAY 2010, Sunday

• It happened fast...really fast.
• Skynet failed....once the HFT computers were turned off...there were no bids at all and, thus, the markets plummeted seeking the next bids which were way down there...perfect reason why machines should not be trading markets.  Same situation that exacerbated the 1987 Crash once it got rolling.  Less reliance on human intervention as a "slowdown reality check" has led to this brave new world.  Crappy and unfortunate but it is the market we have.
• Volatility is high as you can see by the daily ranges.  Will more than likely take 2-3 weeks for this to settle out whichever way it is going.  
• As stated in recent posts, the risks were getting very high...just needed a trigger.  We got it.  Of course,   there is no real way to time it with the utmost of precision.  You can only try to pick a price area or general time area.  
• It's now short term oversold...I would anticipate another 2-3 weeks of chop with a general downside drift toward the Thursday lows but it will be whippy.
• The key will be the "bounce" that comes out of that.  Do we drift down to 1050, rally back to 1150 and set up a Head and Shoulders which brings us back down to the low 900's, high 800's?  Or do we go back up to pop slightly new highs and set a double top which then fails and projects down toward the same area?
• No hurry hear right now...shocks like that aren't dealt with in merely the next day or next week.  For me, I'm going to try to be nimble or sidelined as it is a skosh short term environment.   

6 MAY 2010, Thursday

• That's quite a shock bar...interestingly, there were next to no pivot areas of support built in that 2 month steady up move and when it did correct it went to and bounced from the only areas of support that existed. 
• There was a time today reminiscent of 9/11 as the market water-falled this afternoon...you start asking yourself "What the heck is going on?"  
• I had mistakenly tried to go long at a support area...and it melted away in minutes.  Fortunately, for me, I bailed quickly.  Damn!  Should've been short.  Oh well...such is life.
• Three day weekend as far as I see it!  All market structure was annihilated today and it will take a little time to settle out....suitable only for day trading if even any of that.
• Looks negative to me...solidly below the 90MA...but I'll let it sort itself out some.  
• No heroics here...One day at a time!
• Flash Crash CNBC Video footage.
• Flash Crash Pit Squawk Box Audio....sorta reminds you of "Oh, the humanity!"

5 MAY 2010, Wednesday

• A sign that you will NEVER see at a "Tea Party" gathering.
• Now, isn't that odd?  I didn't realize that I owed anyone anything except common courtesy and respect of their rights as provided under the Constitution.  I don't see a rights discussion there.  More like a wish list.  I wanna be better looking...but that ain't going to happen either!
• And since respect is earned...well, he's wrong...I don't owe him anything.  Especially, since he is not affording me the common courtesy of keeping his hands off my wallet and its content (ie, wanting the government to seize my property and then provide it to him).
• Perhaps I'm missing the point....."I WANT, therefore I am...and deserve!??"
• And, just in case you missed it...his bottom line in red..."We're happy to kill all that it takes until our demands are met."
• Such pleasant people those protestors on the left.
• Soooo...to all the mainstream media who were foaming at the mouth for violence that could be linked to a Tea Party member....why aren't you reporting this?

4 MAY 2010, Tuesday

• Short term (days to weeks)...Broken pivot lows...definite sideways.  Will have to wait and see how bounces act.
• Intermediate term (weeks to possibly months) still positive above 50 (red) and 90 (green) moving averages but sideways.  The mid point between those lines often provides a reasonable guide for long term...above positive...below negative.
• Long term (months) someone might use the 200 MA (black dotted line).  
• As indicated in prior posts, risk levels have been getting worse over the past weeks.  Sentiment has been very high and the NYSI is high and has been rolling over.  That and conditions in Europe may be providing the reason for recent corrective action.  
• Are we dropping to test the 1150 break out highs?  Perhaps.  The 90MA is there and also a yellow uptrend line.  If that holds, then maybe we get another rally to new highs.
• Waiting and watching...as indicated in mid April, I've been in defensive posture. 

3 MAY 2010, Monday

• Best way to describe the day to day action lately.  Intraday volatility has been picking up and despite the big swings on the 60 minute chart below...
• We've gone basically sideways since mid April.
• There is a Bull Bear battle going on in this area.
• I'm still thinking slightly higher highs before this whole thing is over (SP 1235-1255?) but...
• One day at a time!

2 MAY 2010, Sunday

• A scathing sarcastic "Thank you" to President Bush, Hank Paulson, Nancy Pelosi, Henry Reid, President Obama and the rest of CON-gress for "looking out for the country" when the voting public was saying "No!" to TARP, Stimulus 2, New Healthcare and whatever is next to be shoved down our throats.
• Instead, you opted to "play the game" with our nation's future.  Sure!  Why not!  You won't be around looking for re-election when it blows up for us and our kids / grandkids.  Kick the can....Whee!!!  Swell!  You guys are the best!  What crap!
• You're delusional self-serving short sightedness has worked us into such a box that we will become a Greece type situation if, as the Bank of International Settlements states, drastic action is not taken to resolve current deficit and debt loads...important read for those happily unaware.
• Drastic action?  HA!  Our leadership is unable to take any action!  It has been demonstrated over the past 100 years, our politicians collectively do NOT have the integrity to do the right thing for the country which may be hard.  One trick ponies...giveaways!  They only know how to tax or borrow (which equals future taxes) so the "Good Dukes and Duchesses" can give us our tax money back in the form of "goodies" we may not need or want in order to pander to the peasants....errr, their constituents.
• Hmmm...if you had listened to the voting public's calls for "No!" perhaps we wouldn't be in such a spot.  Which merely proves that we have no representation since you have shown yourselves to be the "We'll Do What We Want New Oligarchy". 
• Suggestions:
• .....Immediately, eliminate Social Security early retirement at 62, raise SS and Medicare eligibility to age 70 for everyone who is not within 24 months of their eligibility AND then index the eligibility to race based longevity annually.  Enact a "one time" across the board 5% reduction to Social Security, federal/military pensions and welfare benefits.  Everyone must "pay the penance" for our failures as voters who have allowed this to get out of control along the way.  Noone is immune! 
• .....Repeal Obama-care and the Bush Medicare Part D Drug benefits.
• .....Then cut all remaining department's budgets by a straight 5% (including rollback of Obama's early spending spree) AND initiate a true spending freeze on EVERYTHING, nothing immune, for 3 years.
• .....Eliminate Department of Energy...they have failed in their mission to reduce dependence on foreign energy sources.  Doubt it?  Compare gasoline prices then to now.
• .....Eliminate Department of Education...all increased funding has consistently failed to raise the quality / results as indicated by standardized testing (including SAT's).  We should have the smartest students in the world yet businesses complain that they can't find good workers and need more foreigners.  Besides, it is a state issue not federal where they suck taxes from states and then skim for a bureaucracy and return no value to the states.
• .....Eliminate Housing and Urban Development...it's a state issue.
• .....Eliminate the income tax, corporate tax and capital gains tax and shift to a straight Flat Tax.  Will simplify April 15 and it will eliminate politicians ability to "game the tax code" which will go a LOOONG way to eliminating lobbyists.  By eliminating those taxes, you drastically reduce the IRS work force AND...brace yourselves...we become a "capital friendly" country again!  Highly productive people and industries will pour into our country again restoring "the business of America is business" mindset.
• .....Transfer the state's portions of the federal taxes for Education and Housing back to the states to run their own programs where the locals can hold them accountable the old fashioned way.  You know, "Up close and personal!!!"
• .....Restore the Department of Defense to it original mission...defense not offense (we should not attempt to be an empire...it never ends well).  Wind down armed conflicts as soon as reasonable.  But, more importantly withdraw from Europe, North Korea, Japan and all other places we've scattered our uniformed services.  We've provided a defense for the world and they, smartly so took advantage of the free ride, reduced their defense spending and diverted it to social spending programs.  Time for them to pony up and foot their own bills...all of them.
• Get back to strict Constitutionalism and State's Rights.  Let the states handle the stuff not specifically detailed as Federal responsibilities in the Constitution and let the best state draw the best folks and prosper.  If a state, California for example, chooses to fail...let it!  They can figure out their priorities for themselves.  You know...ones they can afford without a bailout from the federal government which merely shifts funds away from fiscally responsible states. 
• Those are for starters...but I think it's a good start.
• Enough!  Time for me to go outside and enjoy this beautiful day.
• Oh yeah...market still up longer term...short term sideways.
• Hopefully, this week will provide some clarity...I'm starting to consider what might interest me for some shorting action...been awhile!
• One day at a time!