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- Psst...Hey bub, it's Tuesday.
- Short term market is sideways in a wide 100 point range with swift reversals often via overnight gaps.
- With high volatility comes this crappy action. That's why I've been cautious.
- Longer term still down.
- Sorry...saw this and just had to post it.
- I think Thomas Jefferson said something to the effect of, "Democracy dies when most people realize that they can simply 'vote for a living'."
- Appears that we're getting perilously close AND....
- Reinforces THE MOST IMPORTANT reason why everyone should pay taxes despite income level. People who actually feel the government grabbing the "fruits of their labor" to provide for others are much less inclined to support unsupportable programs.
- I'm all for helping those unable to aid themselves; the elderly, infirmed and orphans. Noone with a heart and mind would oppose that. But, what explains the spike?
- Monthly Seasonal shows that September is historically the weakest month for the stock market. Doesn't mean always, just the tendency.
- Will be out of pocket for awhile. I'm flat. Anticipate next update around 11 SEP.
- Enjoy Labor Day!
- Corporate tax is a joke! It's written by the lobbyists for the Congress to be favorable to corporations and Congress passes it so they can get the campaign contributions from BIG corporations. Seems just a tad bit incestual to me!
- As depicted above, it is to the point where it really doesn't matter much anyway.
- Besides, us consumers pay their taxes as a "pass thru" cost of doing business anyway. Don't think so? Just sit and think about it. What business doesn't exist to push off costs elsewhere when able?
- So let's just get real!
- OVERHAUL THE TAX CODE...NOW!!!
- Eliminate the corporate tax which will have companies scampering back to the US to do business which will bring jobs here as well!!!
- Then, for individuals, eliminate all deductions and all other taxes / fees and just go to a Flat Tax!
- Hell, at least that way we'd know when our taxes are being raised! But that doesn't suit CON-gress since they want to nickle and dime you at every turn knowing that most folks are absolutely too lazy to piece the whole puzzle together. So far, pitifully, they are right. Sadly, "we deserve the government which we allow".
- Corporations and individuals would save tons of money and wasted time trying to comply with the current crap tax code that is spun out of Congress for who's benefit? You got it! Theirs!!!
- Had enough of the insanity yet?
- Rant over...."Move along people. There's nothing to see here."
- Volatility still high, starting to come down a little. Friday was crazy due to the Fed talk at Jackson Hole. No surprise there.
- Daily, top, has been going sideways. May try to get above it's 20MA this week and challenge the recent swing high...possibly the swing lows from the spring?
- Weekly, bottom, short term momentum indicators are just turning up.
- So, maybe we start to see more of a bounce for a few weeks to mid 1200's but I'm thinking that it will be very choppy similar to what happened after the Flash Crash 2010. That's the environment. For the nimble, no doubt.
- Back drop of European nonsense is keeping a high level of uncertainty as well.
- It will be thin trading, too, as many will shorten their week to bug out early for the Labor Day weekend.
- Below, interesting historical view of crude oil and gold...indicates that commodities prices may have seen the bulk of their run or put another way "the easy money has been made". They can continue to go up but not at the rate they have. And if we go into recession, which it seems we're tipping toward, demand will decrease and their prices will fall. This could put a dent in the hyperinflation theory. And here is another counterpoint to the hyperinflation theory. If anything, imploding financial systems and several sovereign nations defaulting on debt would be deflationary for the overall world economy as it would result in a retrenchment of economic activity for many nations at once (ie, 1930's)....just my opinion.
- And this is hardly inflationary...US Government / FHA largest owner of foreclosed real estate tries to move properties without swamping markets. Supply = monstrous, Demand = non-existent. Just ask anyone who's been trying to sell a house. Not inflationary!
- Soooo...we're on the eve of the Fed's Jackson Hole meeting. The question is up or down. No one knows...yet every one awaits the outcome.
- The above pic sums it up...either way.
- I wait.
- Well, seems like the relief bounce is finally starting...back to 1220-1250 area? All momentum indicators are pointing up. Just in time for the stupid Jackson Hole Fed Party this weekend. Personally, I think you'd be foolish to be on either side this weekend....anything can happen. Let them make their announcement and just come back next week.
- Overall, trend is still down. Volatility still high but dropping now. Possible corrective bounce of the AUG down move coming. I may cautiously entertain some long side day trades...no holds.
- Just trying to trade what I see.
- Kidding!
- Below, good news....delinquency rates for credit cards and all loans are at low levels not seen since before the recession.
- Just for grins...above is a weekly chart of SP500. Even the weekly is below all its MA's.
- But, if you want to see why I respect the 90 day MA you can look at the blue line in the above chart which is the 20 week MA or roughly the 90 day MA. Draw your own conclusions.
- Market is getting oversold again but that in itself doesn't mean it's a buy. Nothing goes in a straight line.
- Really not much to say still. Volatility remains high permitting only some light trading and not much else for me.
- Interesting...What do you do with your time (above)?
- Big gap down overnight...isn't this fun? If you want to play, gotta play by their rules and be prepared to play 24 hours. September...I will be going toward that mode after studying the overnight movements for the past several months. At the very least, it will avoid the surprises and hopefully improve a few entries, too.
- And now for some really good news for a change...America may be back in the energy production game....big time! Peak oil may not be a concern for a long, long time due to...drumroll...human ingenuity and technology!
- Global Warming Update: Why didn't this report, from NASA, demonstrating less heat retainment than computer models predicted get headlines??? Chicken Little...what a flipping farce it's been. If you fell for it, promise yourself not to fall for the next bit of alarmist hype coming down the pike...OK? I mean, honestly, remember how Swine Flu in the 1970's, AIDs and Legionaire Disease in the 1980's, SARs in the 1990's, and Bird Flu & Swine Flu (again) in the 2000's was supposed to be worse than the Black Plague and wipe out a third of the human population? Oh yeah...and there's an al Qaeda on every corner just waiting to kill you, too. What crop!!!
- Still below all MA's (20/50/90) so negative...quite a ways. Indicative that dust still needs to settle some.
- Bounce has relieved some of the oversold. Yesterday paused. Ready to forge higher or test recent lows?
- I have absolutely no clue and the volatility is still higher than I like. So, trading intraday...keeping it simple and trying to go with the flow. My best guess tends toward at least a test of the lows but I have to balance that with the fact that we did get pretty oversold during the down move so any bounce can also be bigger or take more time. Watching.
- If we have entered a recession again, they historically average 15-18 months. Did the recent market swoon price all of that in already? That is the question that we'll only know over time.
- BUT....fundamentals don't matter as demonstrated the past 2 years. The market will do whatever it needs to do to separate the most people from their money. Don't forget that the market is in fact "Da Boyz". They run it, rig it and get rich from it by letting us little guys in to play...when at the casino, the House never loses.
- Thus, I will remain closer to my guides than I have been in the past and will be flexible in order to avoid any emotional bias.
- Per Intrade....the spike was Osama bin Laden killed. Since then has been a steady downtrend.
- Yet, still above 50%.
- Oh no...not again! Don't they ever learn??? Europe considers ban on short selling from NY Times. Those evil short sellers!
- It failed in the fall of 2008 here in the US (MISERABLY) and it will fail there as well. The Securities and Exchange Commission (SEC) banned shorting in US financials on 18 SEP 2008 and a month later they were down 48% (chart above)...how'd that work out for them...huh?
- Politicos think that they can eliminate risk to the big banks (which are disintegrating due to poor business practices). But ya know......we just have to....must...bailout the bankers. Right? Hmmm...how has that worked since 2008? All's well...sunshine and rainbows? Maybe, something different, novel, should be tried...capitalism where failures fail.
- Eliminating short sellers, especially in a falling market, eliminates the first source of buying pressure to halt the decline. Think about it....when a market is falling hard, who would be more likely to step up and buy first? A short seller who has made his money and must buy to exit his position? Or a fresh new buyer who can't resist the value despite the downward momentum being overwhelming?
- It's a progression that halts the decline. First, shorts cover which slows the downward momentum and then bulls noticing the slowing momentum start to look for buy spots after a base forms. Simple!
- Hasn't been much to say regards markets. Volatility is outrageous...feels like 2008 in many ways. And many people know that, learned back then and are going a little slower this time.
- Repair / basing must happen first for any bounce. No need to rush into anything.
- Reminder...below all MA's....check charts in sidebar.
- Trying to provide alternative views that have some merit....a trading rally is near due to severr oversold. Timing it with current volatility is the incredibly difficult part. Reference this for what is possible. I will note that three of the five times did roll over to new lows at least temporarily.
- Wow....12 month up move taken back in....12 days?!!! Ms Market can be a cruel mistress. Hasn't even come up for a breath....sheesh!
- What can you say? It's going to take a while for the dust / charts to settle out....gonna be some wild movement for awhile like after the flash crash of 2010 I'm guessing.
- This sell-off is producing a lot of extremes....click to enlarge.
- My personal opinion, is that a very big game is being played. Very big. S&P downgrade of US??? Come on!!! These are the guys who gave sub-prime mortgages a high rating???
- I'm comfortably on the sidelines (have been for awhile) in a wait and see mode (90 dMA).
- I don't trust ANY of these politicians. Heck, they're all bought and paid for. For you to think otherwise just demonstrates your ignorance. They are not here to serve and represent you...they are here to take care of themselves. Simple...and real! Face it!
- I anticipate a pretty solid bounce...which should be shortable. Just my guess.
- And that's why I respect the 90 MA. Risk increases below it.
- Yesterday was bad for the bulls. Oversold is getting even more oversold. This oversold is comparable to fall 2008, spring 2009 and summer 2010...very overdone.
- Expecting a bounce. Bounces below 90 MA are shortable.
- Below, chart on historical duration of unemployment. A prayer to God for those that need His strength and comfort during these unimaginable times.
- Happy Coast Guard Day!
- Review of 1938 below. Market broke it's 8 day losing streak yesterday. A bounce would be expected. Well below 20/50/90 MAs.
- Below...Employment levels by education.
- Well, that trendline from the MAR 09 lows has been clearly broken by yesterday's action. It was oversold, but oversold can always become more oversold. One of the reasons I'm always cautious below the 90 DMA (you can check charts in the sidebar).
- Above, from http://channelsandpatterns.blogspot.com/, tosses out a possible head and shoulders pattern with a target around 1150.
- Will the market finally get out of the range it's been locked in since the beginning of the year? We'll only know it when it does. This 100 point up down box for months reminds me of the summer 2010 box....fast merciless turns with no real retracements....just a trading environment not investment. Oh well, it is what it is.
- Below, Debt deal done....well, not really...gimmickry.
- Simple trendline since MAR 2009.
- The debt ceiling deal isn't over until it's over. Can expect more whip, my guess. Short term is oversold.
- Government is (ie, spends) twice as big as it was 10 years ago. What have we got for that? A couple of protracted wars, a housing bubble, skyrocketing (7% annual increases) in college tuition costs...and not even a stinking t-shirt.
- Government is (ie, spends) 30% as big as it was since President Obama's inauguration. Because of the recession and unemployment, tax revenues (government income) went down.
- First, we're just spending too much.
- Second, if you were living paycheck to paycheck, would you increase your spending by 30% if you your income was cut by 15%?
- The math says you can't do that for long. And, it's all about the math...not, about what you wish you could do.
- With yesterday's drop, SP500 currently below all MAs (20/50/90)...risk increases below the 90. Reason, all bear markets go below the 90...BUT, just as a reminder, not all moves below the 90 turn into bear markets. You can check the charts in the sidebar.
- Below, update to the similarities between the current top and that of 2007....very interesting...doesn't have to play out the same but it sure is eerily similar. But, hey, anything can happen...debt ceiling vote saves the day? The news has been non-stop lately...makes it very difficult.
- Who owns all the federal Treasury debt anyway?
- Where does the big money go? Just wanna highlight...even with several protracted military adventures, what consumes the big percentage? There won't be much of a "peace dividend".
- Kicking the can, kicking the can, we love kicking the can...sing the politicos. It's time to fill that damn can with cement, as far as I'm concerned...let 'em kick it then! If you were running a business, held a meeting with your staff and sensed this stuff...you'd tell them to focus, then lock them in the room until they came out with a truly viable solution! If not, you'd soon be out of business.
- Isn't this the "Theater of the Absurd"?
- News driven market took some damage today.
- Below, interesting graphic on how long you work each day to pay federal taxes.
- Debt ceiling debate continues making markets very erratic due to ongoing uncertainty. Difficult to choose what to do...mostly sitting on hands.
- I sure hope leadership can determine the best course of action with all things considered.
- I, also, hope they finish this soon with no short term solutions.
- There has been enough drama, as far as I'm concerned.
- Lately, been thinking how all the drama reminds me of the TARP Bailout bill. Below, a historical market snapshot, is what happened while waiting for and after the final vote eventually passing it.
- President Bush got this spending behemoth rolling. Current Administration wants to top him!
- Market has been very, very whippy and gappy past week or so. (This morning looks to gap up again.) All the news out of DC and Europe is making this an extremely uncertain environment which is demonstrated in the price action.
- Tough to have any conviction. Only for the bold and very quick.
- Below, Federal spending by the numbers...
- Greece was the word. Now Italy is in the default fray. The Eurozone is cracking and will probably break sometime in the next 12 months seeing a couple of countries leaving the euro.
- Heck...even US debt has been downgraded by ratings agencies in China and Germany. And our very own Moodys ratings agency has put our debt on "credit review" (of course, Moody's rated mortgage backed securities as AAA...ha, ha, ha). And, now Standard and Poors does the same. How many Americans are aware of that???
- Global Debt Clock here...see how nations compare.
- This is making for some very wild moves in the after hours markets. Repeated abrupt moves in both directions leaving little edge.
- Also, US debt ceiling discussions are leading to a lot of uncertainty and markets hate uncertainty as is being demonstrated. Not a good time for big bets until some clarity.
- Markets sitting on 50 & 90 MA's past couple of days...right in the middle of the broad sideways range for since the beginning of the year.
- It's tough to see any direction here. If you look at fundamentals, down would seem to be correct. However, that hasn't worked for the past few years due to QE1 & QE2 (which is sort of over). Which leaves you with technicals which aren't bad just testing nerves. I don't like price beneath the 90MA and will stick with that. The most recent move up was fast and furious. Is this pullback the breather it needs to head back up? We'll see...in time.
- Below...from zerohedge.com, interesting comparison between 2007 top and now...
- Fed Fear Guage???
- I merely put this graph on the monetary base forward for your consideration. What conclusions can we draw from it? Hmmm...you see upward spikes when the Federal Reserve is uncomfortable about what may be coming. For example...
- Notice the blip just before Y2K?
- Then, notice the blip just after 911 in 2001?
- Then, notice the 2008 spike?
- Notice the current spike? What exactly are they afraid of while they're telling us that all is OK???
- Forgive me...I should probably be taking my meds I guess.
- Below, and the silly broad sideways range (mentioned previous post) appears to continue. Now, remember these areas won't be static forever. But they will serve as reference points going forward. Are we just taking a well deserved breather here? Yes. Will it become more? Tough to say. Reminds me of the 2010 summer broad sideways shredder range.
- Interesting...check the charts in the sidebar...since the first of the year we've been trapped in a sideways range. Just a few days ago we were at the lows of that range and now we are back toward the upper level of the range.
- This sets up an interesting question...head and shoulders forming, breakout or just continue sideways? This will not be an easy summer.
- Nothing day yesterday, went nowhere in smallest range in some time. Thus, no new information.
- Hope you all enjoyed the long weekend...I know I did!
- Now...back to work.
- Short term is positive but overbought. Intermediate term is trying to turn up (above all MAs). Confused? Ya oughtta be. That is exactly the spot we are at. Will be trying to determine what my next preference will be.
- Big one way run this past week. Even sprinters need to breathe eventually. Perhaps that's what this will be, a breather, before earnings season kicks off next week. So...correction in price? Or time via a consolidation. Don't know, will have to see what is dealt and play the hand. I do not chase anything. When I have, I have typically regretted it.
- Sooo....will be a slow start to the week for me as I come back out of weekend mode.
- Monthly seasonal below indicates that July is typically a positive month...August and September can be the buggers.
