Similar?

• Analog time...do these Dow Industrial charts look similar (ignoring flash crash)?
• If it plays out the same...BIG if...it's bad for the bears short term but good longer term. 
• The top chart is the end of 1976 and the middle is current.
• 1977 was not a good year for stocks (JAN 77 - MAR 78).  Dow went from 1007 to 737.
• To dream.

31 JUL 2010, Saturday

• Goodbye July!  The first three charts show how these wide swings have made it tough for both sides.
• We're stuck in the middle of this big sideways area.  Literally, could go either way.
• Final 2 charts just show some unusual similarities (analogs) between current and past timeframes.  Correlations don't last...it's just interesting when they occur.   

28 JUL 2010, Wednesday

• Currently neutral but being repelled by the 90dMA.  (Between 50 & 90dMA's = neutral...Trader's Choice, above both = positive, below both = negative). 
• I'd be interested in seeing some flat topping action over the next week or two and perhaps consider shorting.  The longer term folks would then have some swing points to use as stop areas.
• As for me, since the flash crash, my hold periods have been very short due to volatility pick-up.  That's worked for me some and against me some.  Volatility is an evil mistress...two-edged sword.
• It, honestly, has been a tough environment since the end of April.  It's as if a herding instinct has taken over (beware running with the lemmings)...as soon as someone swings bearish, everyone follows and as soon as someone swings bullish, everyone follows.
• I don't feel comfortable in these broad big swings...leads me to hunker down toward shorter term trading because it can turn and bite you in the butt so fast and hard.
• Gosh!  I miss the straight-forward simplicity of flying as a Search & Rescue pilot in hurricanes trying to find folks.  Believe me!  That was much simpler than the environment that we've been dealing with...honest!
• For the unconventional...entertainment ... http://www.thingsiwoulddotobangscarlettjohansson.com/
• And there's always Financial Reform hope...

27 JUL 2010, Tuesday

• Do you notice the similarity?  Or is it just me???

25 JUL 2010, Sunday

• Via the daily chart, it's turned neutral with the recent rise.
• My personal opinion is a no man's land...take a look at the weekly chart and you'll see what I mean.  Right in the middle.  Could go either way.
• My personal opinion is that fundamentals are swinging negative and that, while we could see more upside, I find it very hard to commit to it for more than very short term trades...until more information comes available.  Very unclear situation.
• Wish I could be more forthright...but maybe I have been.

22 JUL 2010, Thursday

• Well...market, like Lucy, will keep you guessing.  
• Took the trendline and 50MA.  So, neutral.  Still below 90MA and prior pivot highs.  Could it improve?  Sure.  Anything is possible...past few years have shown that.
• Something to consider...Ben Bernanke (Fed Head) said yesterday in his testimony before Congress that the economic future is filled with "unusual uncertainty".  So, even he's hedging.  And this from the man who in 2007-2008 kept saying that sub-prime was contained.  Oops!  He was optimistic then and cautious now.  What to make of that...I'll let you decide.
• Market has been tough...many indicators are all twisted after these multiple up/down 7-10% moves.  Their is little clarity...I feel for Ben here. 
• Lately the market has been like this...

21 JUL 2010, Wednesday

• I've been quiet since there isn't much to say for longer term investors.  I warned in mid-April and May was not pleasant going negative below the 50/90MA's and staying below despite hearty bounces.
• There is a battle going on right now between the bulls and the bears.  Big overnight gaps that immediately reverse and go the other way big....treacherous.  When volatility starts picking up it can often indicate a negative outcome...it's a warning but not a guarantee.  Possible swoon to the 930/880 area by the fall?  August and September can be some harsh months. 
• Careful out there.

16 JUL 2010, Friday

• Ha ha...very funny mother forker (honoring Eddie Murphy).

14 JUL 2010, Wednesday

• Interesting video from Harry Dent above.
• And here's a follow on document.

13 JUL 2010, Tuesday

• The bounce came and once it showed it hasn't stopped...of course that was after it was down day after day after day, as well.  Not much to talk about when you get these streaks...multiple consecutive closes in one direction or the other.  
• Chart above kind of sums it.
• Market has expended a lot of energy to the upside and it has just gotten back to its falling 50 dMA (not pictured).  But has yet to get above it.
• So far, since the flash crash, this has been one big wide sloppy swinging up-down affair inside the pictured channel with an overall downward bias...knocking at the door to break this nonsense?  Or return to the lower level?
• It's been a market only suited for trading recently...Dayum Da Boyz play this game well.  Gotta respect that.   

10 JUL 2010, Saturday

• This remains THE question to be answered in this whole mess.
• Trying to tease out the fundamentals has been very difficult.  For example....
• Chart above...gold up indicates inflation...dollar up indicates disinflation...bonds up, against historic levels while government auctions more and more bonds, indicates deflation.
• Very tricky environment.  No clear signals from any direction.  Perhaps that indicates a transitionary environment?  Yet, the question remains...transitionary from what to what?  And, more importantly, how long does it last?  Timing is always the question.
• I personally think we're headed toward a deflationary environment...I'm in the minority.  It won't last forever.  But the government remains determined to do everything they can to resist those forces.  I don't think their powerful enough to overwhelm market forces and will eventually lose...just don't know when.  However, they've shown just how much they can do (while turning you, your kids/grandkids into debt slaves since debt equals future tax increases absent totally explosive economic growth)...my only question is what will be the unintended consequences and how painful will those be?  As stated in previous posts, I think they are basically setting up a situation where the pain will be stretched out over a much longer period of time but it will still be painful.  Ever heard the story of boiled frog?  PS...the frog is still gone to greener lily pads.
• I'm a "rip the band-aid off quickly" kind of guy.  Many folks aren't.  Personal preference, I guess.

6 JUL 2010, Tuesday

• WARNING:  Rant coming...Why government interference in markets never works.  
• For example, let's consider the housing market.  Congress attempted to engineer a "social outcome" and sponsored hundreds of "affordable home" programs which drove prices skyward.  And, ironically, now that housing prices are coming down and becoming more affordable, government is doing everything they can to stop the slide.  Does this make sense?
• Cash for Clunkers: program to take older cars off the road that burn gasoline.  Well, duh!  Hello...cars burn gasoline.  So, they took the cars out of the used car market and DESTROYED them.  Huh?  Perfectly usable assets and you crushed them and have driven prices up in the used car market via a government forced shortage?  What about the folks that need cheap transport?  You know, like the kids coming out of college with big loan debt into a crappy employment scenario.  Heck you could have raffled those cars off to graduating college kids and made back some of the $4,000 per car paid out.
• Bank Bailout:  I see...so we identify the banks that couldn't manage their portfolio and we then shove more money into them trusting that they'll now know how to manage their portfolio.  Heck!  Makes sense to me....NOT!
• For every policy the government makes there comes an unintended consequence.  Government, once again, jumps in with new corrective policies to meet the first unintended consequence which lead to other unintended consequences....
• Do you sense the trap of allowing market manipulation by the government?  How funny that the old communist and socialist countries are running out of the burning building and our current leadership wants to run in.
• We have learned nothing.  The script we're following is just like the FDR days...it prolonged the downturn then and it appears to be doing the same now.  
• "Those who don't know history are destined to repeat it."

 

• "Drat that blogger!  I'll get you and your little dog, too!" cried the Wicked Witch of the West.

5 JUL 2010, Monday

• HFT Market Manipulations on  Display...great video for the uninitiated / unwary.  Ought to put the whole "the market's not rigged by "Da Boyz"" argument to rest.  This happens during regular trading hours but it's much easier to conceal due to the higher volume.  But, in the after hours (Globex...which is pure electronic trading, no pit (humans) trading in Chicago) the gaming is easy to see...and is exactly how they created the 2009 up move...alot of overnight forcing.
• Cash markets (pit trading) are closed today...but Globex will have a short session.
• Daily appears somewhat oversold and is entitled to a bounce...but is still negative.  Trick is weekly isn't so what kind of bounce until you get some solid weekly oversold too?  How's that for non-committal!  Market is not very healthy...even if it were to go up there has got to be some repair to the damage that recently occurred.
• Bounce from current levels to 1,070 area first and then to 950 or 880 if Da Boyz wanna knock 'em down some more?  
• One day at a time.

 

4 JUL 2010, Independence Day

• A Star Trek salute to America.  (OK, OK...so that's the US Constitution...the ideals are the same.)
• If you haven't read the Declaration of Independence in awhile, why not take this special day to do so...go here for the text.
• But first...how's about a fireworks show near the Washington Monument?
• Interesting graphic on how laws are made.
• And now to the absolutely ridiculously pitiful...Jay Leno asking "folks on the street" what is celebrated on July 4th...disappointing performance by most...College professor was shockingly disappointing (no hope for education fixing this apparently)...heck, one entire family fails miserably but Grandpa comes in at the end for the save!