26 SEP 2010, Sunday

• OK...blast from the past...how many folks remember MC Hammer?  You know..."Can't touch this" and "Stop!  Hammer time."  He was flashy, upbeat and caught people's attention...no?  What can we say about his staying power though?
• OK, OK...I'm meandering here without a doubt.  But, for whatever reason, this popped into my head this weekend while I was thinking about the markets and what may lie ahead.
• Chart at the bottom...it's breaking out, returned to test it's breakout and then shot upward on Friday.  Sure, I see it and I should be trading what I see and not what I think.  OK...I will trade but I won't talk about that here because that is intra-day stuff unsuitable for most folks.  And it's not investment which is what most people are looking for....a multi-month/quarter window.  And I don't see that.  I'm seeing the Hammer flash and am trying to avoid the "Stop!  Hammer time" flash crash (bastards didn't get me in MAY...whew!).    
• But...I think too much.  Sure, I do indeed.  I'm always concerned more about what I don't see that bothers me.  I've studied way too much market history and...Heck, it works for me.  It's the old saw of "Plan for the worst and hope for the best."  
• One thing that I recall from the ramp into the ultimate 2007 top is that each upmove was faster and with fewer safe entries as they progressed.  Seems similar...we could still go higher, no doubt.  It's just an observation on how the top was made last time.  Heck, just for a recent example, look at the FEB-APR 10 ramp. 
• Sooo...what am I seeing in the market...it's up and overbought.  Hasn't taken any reasonable breathers that I might be comfortable taking a shot at.  That's just me.
• When I combine the fundamentals with the technicals... I just scratch my head and try to imagine what is driving this up (I mean besides POMO cash).
• Thoughts...Uncle Ben has smashed interest rates to zero...savers can't make any money in money market funds/CD's...folks that are piling into longer dated bonds at these levels must be insane (to me) when he's openly stated that he wants higher levels of inflation.  Don't you see it?  He's trying to force people to take on higher levels of risk...to step up and buy assets like....oh, I dunno...stocks, homes, mortgages, unsecuritized loans.  Who benefits from that steer?  The banks and brokerages who sell that stuff...not you.  But you're trapped.  Yeah, I'll pass in general.  Trade?  Sure.  Invest?  Hmmm....waiting for the "next bus" / significant down swing doesn't bother me.
• Are we, the masses, being played?  Sure we are!  I've no doubt about that at all.  Interesting how the Hindenburg Omen criteria were conveniently re-written on Wikipedia a week after the August signal...no?  I will continue to monitor the traditional measures and call them as I see them.  As to the August signal, it either already happened in a mild dip or it can still happen since we're still in the time window.  Will be interesting to see how that ultimately plays out.   
• Currently, we've breached the 1135 and I'm watching the 1165 area.
• In my opinion, a very hostile investment environment exists for the average person.  If you're inside with the Fed (ie, Da Boyz), you get the "word", so to speak, when to get into what and when to exit.  The rest of us get set-up to be the bag holders at the end of the run.  I am not interested in that game!  And, seeings how I write this for family and friends that may be curious, I try to be as reasonably cautious as I can in not steering them into harm's way.  Missed opportunity, to me, is more tolerable than getting slammed.  That's just me.
• Choose wisely and good luck.