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One thing I've learned about wave theory is from Moe. And that is, fibonacci is useless without understanding elliotwave. They work together. The reason why is because obviously you don't get a retracement without a completion of a wave. And because patterns repeat over and over, wave lengths and patterns also do.
The reason so many got beaten this last 6 months is because although now in hindsight you see those wave patterns clearly and they do conform pretty well to all wave rules, it's the magnatude of them that has thrown everyone off. No one thought the market would fall as far and as fast as it did and therefore many bought at higher fibo levels thinking those were the bounce points, yet the projections contintued.
The biggest reason for the large selloffs (again, now in hindsight) is because of a market mechanic thing that has nothing to do with fundamentals. When the fed let Lehman and Bear Stearns go, what they obviously didn't understand was that a large part of their bizs' was as market makers and specialists. What a market maker does is 'make a market' in a stock. In order to do that, they have to have stock to sell to buyers. Therefore, they take 'inventory' of a ton of stock in order to make a market. Well, if they go bust, they then have to dump all that stock. Hence, you get a selloff of massive porportions. That then leads to the false impression of a crash and then that leads to everyone piling on on the selling. Combine that with no uptick rule for shorting and it just gets worse.
So, had they let LEH and BS remain in some capacity, then we probably wouldn't have seen the level of the selling we did and probably wouldn't be here today at these levels. Much of the S&P's earnings levels are directly due to the pshycology of investors out there. It just piles on. So PE ratio levels on the SPX are really bogus now because it's an anomoly. Normalized earnings are what's important to focus on and that's probably more around +$70 a share, not $50ish now.
That said, LOOK AT THAT RUSSELL OUTSIDE DAY KEY REVERSAL FOR THE WEEK! NICE! ANY pullbacks are buy opps now.
My brain must be good because I found all of them in seconds. Without the mouse.
What I was getting at was that in order for Wave B to retrace 38% of the move down in wave A, the index would have to trade above the 200DMA. I say that because of the fact that since the 200DMA uses data going back about 10 months its slope will continue to be negative for at least 3-4 more months. Once the drop at the beginning of October rolls off, the slope of the 200DMA will turn less negative unless we make new lows...
Each day that goes by a high number from 10 month ago (June) gets replaced by a number about 700 points lower which means the MA drops, just simple math. As such, the 200DMA will fall below 1000 well before the index retraces to that level. Which means that in order for wave B to retrace to or above the 38% level of wave A, the market would have to trade above the 200DMA for a few weeks...that is very unlikely to happen unless the markets think the economy is improving significantly.
That can only happen if the government intervention that people having been griping about actually works...in which case Obama will become virtually untouchable.
The cheap money out of the Fed is obviously helping the banks since they can raise their own capital by virtue of earning profits through old school banking (positive yield spreads). A revision to mark-to-market that would allow them to show assets without necessarily having to hold capital reserves against them would open up even more capital to work with. Those two things alone will loosen the choke hold the financial industry has on what little capital they have right now allowing them to make more loans and raise even more capital.
If TALF then does what its supposed to and helps the loan securitization market get flowing then consumers with less than perfect but still good/very good credit will be able to get access to credit they are currently cut off from thus enabling them to work through the ridiculous levels of inventory in the economy. Once that happens industry can get back to work and the death spiral will become a virtuous circle; recession will be over.
Not to mention Treasury's plan to deal with toxic assets is still behind the curtain...another potential driver for a true bull market.
At that point we would only have a Housing problem but hey, who wouldn't take that right now?
There are definitely HUGE catalysts that could make S2's projection to 1200 possible but those are a lot of IF's that need to go our way. In that case I would have to conclude that this A wave was actually the C wave for a corrective that started in 2001. This would be the Doug Kass scenario.
Just my take. That's a lot of imagination.
S2, Happy B-day to the girls from the board! Ya still have a few years 'till the prom, but it'll be here before you know it. GL
Thx for the heads up on TNA. I've been doing some of the other ETFs. Mostly DDM/DXD. Some SSO and UWM runs if/when the move is long. I can't stay overnite in the markets of late. Fleeting moments of exposure and it seems that if I stay too long all the profits go back. Nuts, but it's moving.
later, bbq
YQ. Hot vs. Cold. Maybe it's warm. Re. the two charts that you just posted, I don’t think you have enough data to conclude whether the A wave ended or not.
My suggestion is that you can use the time and amplitude based criteria to project the B wave and compare that to those two analysis's. The B wave peak should be the right shoulder of a head and shoulders reversal (The B wave = the 3 wave) in the “grand” cycle. (I don’t have subscription to stockcharts.com for me to go back that far)
YQ, very good work! Can you elaborate on “by the time the SPX gets to the 38% (1,010) retracement, the 200DMA will be that level meaning, we’d have to conquer the long term moving average in order to resolve this wave…”. Are you taking in the context of the past iii wave or the coming projected B wave. TIA
Cold Shower
Ok I see it....Maybe
S2:
How is your brain doing?
Please take a test below before you are going to do any trading...
This is a REAL Neurological Test.
Sit comfortably and be calm.
In other words, put your thinking process aside - i.e. put your brain in neutral gear.
1- Find the C below. Do not use any cursor help.
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOCOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
OOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO
2- If you already found the C, now find the 6 below.
9999999999999999999999999999999999999999999999999999999999999999999
9999999999999999999999999999999999999999999999999999999999999999999
9999999999999999999999999999999999999999999999999999999999999999999
9999699999999999999999999999999999999999999999999999999999999999999
9999999999999999999999999999999999999999999999999999999999999999999
9999999999999999999999999999999999999999999999999999999999999999999
3- Now find the N below. It's a little more difficult..
MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMNMMMM
MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM
MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM
MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM
MMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMM
This is NOT a joke. If you were able to pass these 3 tests, you can cancel your annual visit to your neurologist. Your brain is great and you're far from having a close relationship with Alzheimer.
Congratulations
Oh One more test....
Find the 44th USA President...
Sorry! Somehow, he is late again today ...will let you picking up tomorrow...
Make sure come over first before you place you order, he will give you a lot of tips....
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S2, In bear Market, The Elliot wave is inversed. The move from A to B is downward with a negative slope.
In reply to
Robert Prechter of Elliotwave Internation calling this the end of the A wave
I get most of my info on it from Moe Ansari on the radio. You can listen to back shows at his website at 'marketwrapwithmoe.com'. Register and then listen to the archives. Or, you can listen to him live everyday at 4pm PST on KFNN in Arizona or live on the web.
He is very good with cycle timing and wave projections. But you have to listen to his show everyday to get those as he mostly talks about general market stuff.
I count the 2007 high as the beginning of wave 1. I just showed a chart that didn't go back far enough to show the entire thing.
Now Doug Kass is making a major call in that he says yesterday that we've seen the low of your lifetime. And this from one of the biggest bears out there who's been dead on in terms of not only the timing of this entire debacle but in its projection. He runs a short selling hedge fund by profession. So, couple that with his being dead right for the last 3 years and you otta take that seriously. Add to it Robert Prechter of Elliotwave Internation calling this the end of the A wave and you have to be long here.
But the final projections look like the 'C'wave comes in in 2010 to new lows. But for now, ride it!
Look at that chart of BRCM. Breaking out? Or head fake? We'll see!
S2, you're ITM! Good call. This wave count is confusing. Is there any website that explains this stuff. TIA
Not a bad call, S2. Maybe its a little too early but a move like this doesn't seem to be a fluke. Uptick restore plus possible mark to market revision plus better than expected operations at the banks looks to be the fuel for a solid bear market rally. Not to mention that at some point Geithner will flesh out Treasury’s plan to deal with toxic assets. Sure, he hasn’t been all that smooth but at some point he has to show why people liked him so much in the first place. Time will tell especially with this market.
Just a quick question, which wave are you using to draw your expectation for the rally that looks to have started today? I’m a little confused by your chart on the main page because you only show three waves yet refer to 3 and 5 then wrap it all up in an A wave retracement projecting to 500-600 on the Russell 2000. If A truly is an impulse, composed of 5 legs by definition, then wouldn’t the retracement have to include the entire span from 1 to 5? The only reason I ask is because, by my estimation, the A wave from the peak in 2007 isn't resolved yet, I think we have 1 wave to go.
I took a shot at a wave count I think makes sense. Following some basic eWave rules like wave 3 has to be the longest, etc. There are some unpretty implications to this chart like wave 5 of impulse A has yet to be seen and the bear market is only just about done with beginning. Then again, you could say that we’ve been in a bear market since the 2001 peak in which case we are in wave C of that 3 wave correction (trough in 2003 = A, peak in 2007 = B, trough in 2009? = C) which would mean that a new long term bull market may be about to start…have you heard anything about this type of interpretation? This type of situation is exactly what Kondratiev (the K in K-wave) described...
At any rate I think this move stalls at the 200DMA which I expect to meet us in the 950-1000 range in the May-June time frame. Need to conquer the 50DMA then pass a retest first…
Okay, interersting week ahead -- Friday's late rally has setup possibly a sucker trader's rally. Reading and listening to the pros I follow over the weekend believe the 'big' money guys are looking for that hammer type candle to end this decline. You know, that 'capitulation' selling on the open and then a huge rally out of it.
The targets have been met on the downside for all technicians. That's the great news. Now it's a game of chicken - who's gonna step up first.
The high price of the VIX along with the tons of shorting options via ETFs allow for hedging of long positions in so many new ways that you really can't expect there to be that washout event all the time because if you're properly hedged with short positions, you don't have to be a forced seller because your hedged positions offset any losses in the longs.
So, if everyone is hedged, then there's no washout event coming. And if everyne is sitting on their hands, then the market keeps drifting down with simply no bid support, not selling pressure.
I think that's what's going on now. The forced sellers got blown out in the 1st and 3rd waves. They're out. So, what gets the market going up? The belief here is that March is the turning point. But when? Everyone is talking about March 12th because of the House hearing on Mark To Market. Could be. But Friday's late day rally might set the market to SPX 730ish, which then suckers in some new money, then the market falls one last time back to this area to give you that final 'wooosh'. That's when the party starts. A 3 month rally into summer that takes the SPX over 900. 1000+ seems to be the target. But let's take it one step at a time.
Now, that said, these same guys I follow all manage money and they are worried because they are over 50% cash and don't want to be left behind. They all need to make up some ground. So, if this is the low Friday, then they are afraid they are going to be forced to chase it with the fear of there not being a fake out.
So, now the pros are bamboozled. But all agree on one thing - the trade is LONG.
I'll try to update the cycles later this weekend, but this is interesting -- March 20th is a major Gann symmetry date with S&P 640ish being the target. It's not so much the exact price levels with Gann Theory, but more so the price levels around angles of degree.
We're right there.
Now, that said, Cramer has an interesting take on the 'max risk' for the DOW on the downside. He says 5230 based on the worst case scenarios for each stock in the DOW. Makes a ton of sense and if those numbers work out, then you'll see the market move NOW upward because with that number being confirmed as the most you should have to worry about on the downside assuming absolute worst case scenarios for each 30 stocks in the DOW, then you know you're at the bottom area within 500 points.
So, the rally we're going to get will be that 'B' wave taking the SPX to around 1000 which will scare the hell out of the shorts as 718, then 741, then 800, then 850, then 900, then 950 get taken out. 40% of the gains in a bull phase happen typically in the first 10 trading days. As those price levels which were once major support levels get taken out, short stops will be blown through along with technical buy triggers bringing in tons of cash. $9 TRILLION right now in cash on the sidelines.
SPX 800 gets the TNA to $22ish.
BRCM goes to $22.50+ and the world is a great place again - until the next meltdown.
There is a game going on of 'chicken' in the market between competing technical views. Pure technicians look only at support/resistance and pattern breaks. Ed Downs is basing that opinion on that triangle he's been showing for a month. He's right, it projects to 5600. But then there's a different point of view. That's elliotwave and that really is what most of the big traders are watching.
If you go strictly in wave counts, we are in a clear 5th wave which projects in strict fibonacci levels. Those levels are now satisfied. I find it very funny how the 5 best market timers out there are now all on the same page -- BUY NOW. They all must be looking at the same thing.
BILL FLECKENSTIEN
GARY SHILLING
DOUG KASS
MOE ANSARI
ROBERT PRECHTER
Actually, Kass and Ansari are saying THIS WEEK marks the low of this 'A' wave.
So, the triangle break projects 5600. But the wave counts say now. We'll see who's right. But in any case, the bottom is right around here. The resulting rally will be fast and bigger than anyone expects. I tend to think the catalyst will be that House hearing on mark to market next week.
That is pretty funny. The line, 'If I'd followed CNBC, I'd have a million dollars today, that is, assuming I started with $100 mill'.
Oh, the power of leverage. No one knew or wanted to accept the amount many were levereged in their positions. It's fun on the way up, but watch out on the other side.
But of course, the entire thing is way more complicated than Stewart could ever understand. Cramer really has put his foot in his mouth bigtime over the years. But hey, at least he goes out and gives an opinion.
S2, watch this video about CNBC and Market
http://www.breitbart.tv/?p=291003
https://www.signalwatch.com/markets/markets-dow.asp ,They say low before july,your going with low in fall,who's right?
S2:
Q: If we buy TNA July $10 call for $4.80(instead April, we have longer time to play...), then sell July $25 call (getting $0.85 back). Is it better than your's and much safe too? Please explain. TIA
MRVL's report tonight I think is what's behind the strength in the $SOX overall. These things have been doing very well. The $SOX leads the nasdaq which leads everything else.
Now you get that bottom today or tomorrow and then a moonshot in the Nas with the Russell leading.
My goal on this play with the TNA is this--- long straight the April $10 calls now with a basis of about $4. If the TNA is around $10 or under $14 by April 20th, then I just exercise the calls and take the stock long. Then start shorting $15 calls against the position.
But I think the trade works like this -- the Russell runs to near 500 by April 20th. That takes the TNA to around $25. Those $4 $10 calls turn into $15 or a near 4 bagger in a month and a half.
I think it happens.
hope you're right. Do you agree MRVLReader? Tia
THIS WEEK MARKS THE LOW. I'm saying it proud and loud. (or loud and proud - whichever you prefer)
Today or tomorrow marks it.
The rally starting will be a B wave taking us to July-ish. Possibly SPX 1000+
Nenner was dead wrong in that prediction. He said the rally would take the SPX to 1000 by March 9th. Well?
Instead it went from 800 to 690.
The wave counts us in a 5th of an A. That projected the SPX to 640 to 680. 686 was the low I think so far. That satisfies.
The 'B' wave move projects to SPX 1000 to 1100.
Then watch out below!
Well, you might like this more:
http://www.cnbc.com/id/29510966
It's funny how these elliotwave cycles always time right with events. If March 12th turns out to be a date that the House and SEC loosen those mark to mark accoutning rules, Najarian is dead on.
Short sellers are going to be bailing on those starting now in risk of getting caught in that.
S2:
Take a look again, March 9 is on the way!
http://www.cnbc.com/id/15840232?video=1020388644&play=1
http://www.mahalo.com/Charles_Nenner
BRCM's 10 EMA crossed today the SMA. Look for a trade. I'm starting to think this is the bottom with now the most bearish of bears who've been the most accurate calling for THIS WEEK to be the low of this 'A' wave.
Doug Kass of Real Money, Robert Prechter of Elliotwave International, and Cramer.
Here's a post from Prechter's EWI update--
http://theimpatienttrader.blogspot.com/2009/02/robert-prechters-elliotts-wave-count.html
So, watch for BRCM to break $18 and thus this downtrend. Also, the $RUT will(should) lead out with a move to 500.
Okay, I just answered my own question -- here's what I'm going to do -- I'm going to do a bull call spread on the TNA with the April Calls.
Here's the trade -- I'm going for a profit of $20k+ using $14,500 at risk.
BUY - April TNA $10 call at $4.30
SELL - April TNA $20 call at $.75
NET DEBIT of $3.55. (the numbers don't have to be the same as long as the debit is $3.55 or less for the $10/$20 spread)
Here's how I think it will work out ---
The TNA needs to be above $20 by April op-ex for this to be 100% profitable. The $RUT needs to be around 420 for that to happen. That seems very easy from here.
We'll see. I think the odds are very good on this trade the more I look at it. Risking $14,500 for a $25k profit seems like a good bet considering the setup.
I'm going to do something a little different - because of the way the market has probably hit many of you, I think it's time to start to leverage bets to get a lot of it back. There are basically two ways to do this - either options or futures. The problem with futures is the way the market nosedives making what used to be safe 'spread' trades hard to sit on. The SPX just nosedived almost 100 points in 3 days.
So, I'm looking at doing a trade here using the Russell 2000. Specifically, I'm debating whether or not to use the TNA outright or the options on it. I'm leaning toward the options. First, look at this chart of the $RUT...
Notice the two 10 period moving averages. The EMA is fighting to cross north of the SMA. Add to it the 2 period RSI is a tad higher than it was on a lower low than the last time it was under 2. Both good signs of a turn coming. The longer term chart shows the $RUT right here at 378 potentially knocking on support going back to 2001
But the 1998 and 2002 lows are still above 300 as you can see. So, your risk in the straight $RUT trade is around there. (IWM).
That said, a simple move in the RUT back to 400 would bring the TNA up nearly $1.50 to about $15 I'm guessing. It trades 3x the % gain of the $RUT. The April $12.50 calls are trading at $3 on the ask. So, your basis would be $15.50. But the time value would be enormous if the market catches a bid here. You could more than triple your money on these easily if the TNA just moved to $17. That was simply last week's price. It's tempting to take.
Everyone agrees we're in a 5th wave here. The target seems to be SPX 600 so I am hesitant to take the trade right here. But it might be worth edging into it. I'm even willing to take a loss on some other trades to gamble here with it because the payoff is so great with clear signs of a turn coming.
Hmmmmmmmm
The housing bubble isn't as simple as sub-prime lending. Yes, if sub-prime lending didn't exist we wouldn't have this problem. But the real problem started when the net capital rule was suspended for the TARP who's-who list (Bear, Lehman, Merrill). Regulation defines the problem; the market either solves it or fails to solve it. In this case it failed...historically. Thank you Bush-Cheney for creating an insolvable problem...
Tell me Philth, did you omit reference to the net capital rule intentionally or are you just ignorant?
The free market isn’t as efficient as all the brainiacs would like to think. Read on to learn more.
The effectiveness of cutting taxes to spur the economy is inarguable; it flat out works. There’s no doubt, in my lay opinion, that the fastest way to reestablish growth is through supply side economics; incentivize people to provide goods and services that are in demand. The only problem with that it doesn’t have any effect on what is in demand and that’s where things get uncomfortable in the good ole US of A.
The Achilles heel of the mythical free market is that while it is efficient at finding a solution, it is slow at defining/identifying the problem and it has no restraint. I call it mythical because the only true free market that exists is the black market and even the most hardcore yet still sane capitalist would agree that markets do need to be fettered to a certain extent. Anyway back to the heel, the free market only acts in two ways: either someone stumbles across a paradigm shift (Karl Benz invents the modern automobile; Henry Ford makes it affordable) or there is a monumental crisis (can’t think of an example perhaps because the free market has never solved a crisis).
I’ll look past the financial crisis in this discussion (caused by the free markets lack of restraint) and talk about energy in general and the automobile specifically. Energy has been a problem longer than I’ve been alive; first as a political problem (1973 oil embargo), then also an economic problem (1979 energy crisis), and now finally acknowledged as an environmental problem. The first two legs of the energy issue are less controversial but even if you don’t think climate change is anthropogenic, you must admit that its better to not dump pollution into the atmosphere. More than 1/3 of a century has passed since the energy problem was first posed and what has Pegasus given us on it own? Nothing.
In contrast we can see tangible effect on how regulatory requirements can define specific problems for the free market to solve as well as how the free market behaves when there is no regulatory demand for improvement. CAFÉ standards were first enacted in 1975 and the requirement grew from 18 mpg starting in 1978 to 27.5 mpg in 1985 and has basically stayed flat since then. The free market responded to CAFÉ by improving the fuel efficiency of automobiles by 46% in a 7 year period (18.8 - 28.8 mpg from 1978 -1985). When there was no economic incentive or regulatory requirement the market did nothing as one would expect (1985 - 2001). When there was only economic incentive the market drove a 5% improvement in performance versus a 66% increase in the price of gasoline (28.8 - 30.3 mpg from 2001 - 2006).
http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy
The point of all that is that the free market lacks the vision necessary to solve the problems that the United States faces today. And that’s only on energy policy.
Here's the problem with that - watch that video that MRVLreader posted a few posts back. They have a chart that goes back to the early 80's and shows we're at that rising support.
Every primary trend has a correction at some time. Those corrections are measured as 'ABC' wave counts. They just do. We haven't had one yet of this primary trend. Now we are. The wave guys I follow are counting this is an A wave now ending, the B wave about to begin taking the S&P back up to potentially 1100ish, then the final C wave taking us potentially down to DOW 5000kish. That could happen between Sep and sometime in 2010 which will end this entire thing.
What's interesting is that the break of 740 yesterday didn't create a panic selloff as expected. It held up pretty well. That tells you the sellers for now are done with only technical traders trading mostly and playing games with support/resistance levels. They try to break them to see if it creates stop loss hits. When it doesn't, it proves the 'forced sellers' are out of the way.
For now.
I know many look to places like Canada and some European countries as the gold standard for how to do things. The one problem with that is take Canada for example -- you have to prove you are going to be a productive successful addition to the country in order to live there. At least move there. Here, you can be the biggest loser you can be and have everyone else pay for it. Look at 'octo-mom'. The problem here and with the Democratic party in general is that failure is rewarded by giving it money to continue.
The Democratic party's philosophy of taxing wealth to transfer it to the 'little' guy - ie, the poor who are by definition lazy and unproductive, is cowardly. They are cowards. Why? Because the true hard choice in that equation is to not steal money from the productive, it's to tell the deadweight 'no more'. The typical liberal person is a person with 'feelings'. They feel better than everyone else because in their minds they care more. They think that the typical 'rich' Republican is only out for themselves and will screw anyone at any price to get more.
When your kid does something you don't like, do you reward him/her for it? No, you punish in some way that behavior in order to set them on the right path. Why? Because you want them to succeed. Bad behavior leads to loserville. If you sit in front of the TV for hours and never get up to exercise, you get fat and lazy, right? If you workout consistently, you feel and look better, right?
Taxes successful people to make up a budget probelm is a cowardly act because it means you don't have the ability to look someone in the eye and tell them they can't have anymore. In the case of a large group of elected politicians, it means telling their voting block what they voted for won't be done. Then they lose their jobs (seats).
But in the meantime, a large portion of society is quickly becoming dependant on government which is nothing more than your tax money. And now, 'they' think the solution is to take more from those who make it all?
I just don't understand why they think that works when in no other place in history has it been proven to work. Canaday doens't have a large % of poor people. Europe doesn't have a large % of poor people. A quasi socialistic system will work if most everyone is productive and working for the better of the entire system/society in which they live. That's why Canada works. It won't work here because there are too many that are too lazy to become 'productive'.
The setup is clear - The mess in the 1970s created Ronald Reagan. The mess in the 1930s created Eisenhower. I'll even say Kennedy in 1960 only won because of the corruption in Chicago with Daley - however, he was by today's standards more conservative than just about every Republican and a pretty good Pres for what little he did.
Obama and this whackjob of a congress we have now is setting up for the next revolution. Because what 'they' don't get is that many 'middle class' people today want to be rich, not just get by.
You're absolutely right - the only reason these clowns in congress won't do what works is because to do it means they basically give up their entire source of power - the tax code. They use the tax code for social engineering. You do this with your money - you get that reward. And so on. Obama was praised as a 'pragmatist' - ie, do what works. He's on the fast track to becoming one of the biggest jokes in the country's history. And that's no small feat considering Bush.
See, I play it both ways.
S2:
Is this report below that you was talking about?
Thanks!
http://investopedia.com/printable.asp?a=/articles/technical/04/042804.asp
It's a crock. The trend will revert back to it's mean just as it did during the tech bubble in the 90's. JMHO
S2, for my example, IB said I will automatically become a Short seller.
"...Obama has stated we are in trouble because of past policy's,so they are going to do it their way,come hell or high water..."
http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&pagewanted=all
"...You think his visit to Canada was for tea.As a ex,Canadian Obama looks like he wants to follow them.Social medicine,high taxes(i was at 55%)no tax deduction on home morgages..."
S2 Obama has stated we are in trouble because of past policy's,so they are going to do it their way,come hell or high water.You think his visit to Canada was for tea.As a ex,Canadian Obama looks like he wants to follow them.Social medicine,high taxes(i was at 55%)no tax deduction on home morgages.
I have used the 5ema for years.It gives me a heads up early for daytrading.I find it easier to read the chart also.I also use a 1 min time frame for first 30 min,then switch over to 3 min,again easier to read chart.
S2: I found the link below:
http://www.cnbc.com/id/15840232?video=1046477478&play=1
..."I don't understand why they can't do what's worked EVERY TIME it's been done. CUT TAXES DRAMATICALLY and then let the public do what they do best with THEIR money - BUY STUFF WITH IT!..."
yes, a holiday on tax would be the quick fix infusion of cash into the economy... makes a lot of sense right?
here's the reason they WON'T do it...
it would expose how much the government takes from us... they can't afford to have that happen... instead they do the only thing they know how to do... create a crisis, fear, and then take our money and piss it away.
we are witnessing an all out assault on capitalism.
wanna know where we're headed? the economic and social model for the rest of the country will be that of California and Michigan at this rate.
You buy on a pullback to the 10 SMA. So, put a limit buy at whatever the 10 SMA is once you see that cross.
Your exit will be typically fast - within a day or two max.
Don't get greedy. We're not in a market that is in a long bull market.
However, did anyone see CNBC today? There were two guys (one Peter Eliadias of Stockmarket Cycles) who pulled up a 30 year chart. If you take the low from 1982 and connect it through the 1987 crash low and then the 1992 (I think) low, you get a consistent trend line going up. Magically, SPX 740 is that level. That's why SPX has held that level so well. If it breaks then watch out. If not, or the longer it stays around here without breaking, the bigger and faster the short squeeze taking the market up to who knows where.
Right now I think the guys on Fast Money are right that there are only two traders in the market -- short sellers and shorts getting squeezed. No long term long investors. Those mutual fund investors hold the key to the support of the market. Right now, why? Why buy? The longer they wait it out, the cheaper they get in. The only problem with waiting too long is that the further the market overall falls, the less and less amount of people they'll find to invest - or be willing to invest. So, they end up creating a problem for themselves.
The sooner the market starts to climb, the faster the overall consumer sentiment will rise as the wealth effect will take over again making everyone not worry about whether or not they'll have any money left.
But then again you got Obama's budget. That's scary stuff. A reduction in home mortgage interest deductions? Huh? Is he insane? Raising capital gains tax? huh? Either he's going to end up being the dumbest President in history or he's going to be the smartest having out-smarted the best and brightest economists and historical examples.
Since everyone thinks he's the messiah, who knows.
The market could be signaling he's dead wrong and the market knows and senses it. This isn't the best time to be gambling. I don't understand why they can't do what's worked EVERY TIME it's been done. CUT TAXES DRAMATICALLY and then let the public do what they do best with THEIR money - BUY STUFF WITH IT!
The 1980s are the best example - Reagan came into a situation with 13% interest rates, 6% inflation and a combined top tax rate of over 70%. What in the world was Carter thinking?
What Reagan did was cut that top rate to 25%, but more importantly, allowed you to write off (if you owned a biz) literally everything. You go out to eat? Write it off as a biz expense. Imagine what that did to the restaurant biz! One of the largest employers in the country and the place where most start biz's.
Basically anything you bought for your biz you could write off. It took about 2 years, but when it all got going, WOW did it. What we have now is the complete opposite with not one real life example to go back and point to to prove the pholosophy works. Gambling with YOUR money on a liberal fantasy of how wonderful the world could be if only that tax money was spent in the 'right' way.
Boy, we'll see. The market says no way. But, the market has been proven wrong before. I don't know when, but I'm told it has.
sungolfer - so you use the three averages - 5ema, 10 SMA and 20 SMA - should not make more sense to use a 5 ema with a 5sma to compares apples to apples.?
S2 - got it - for stocks only works on daily charts. How does the entry works. Lets say tonight I see a xover, tomorrow you place the order at the open or what would be the entry strategy?
Thanks!
I don't know if we get that wave,I hope so.But after todays budget seems the market wants to go lower.
Correction.Try useing 20sma for for resistence and support on day trades.I find once the 5ema and 10 sma cross over and through the 20sma confirms a tread.Note i use 5ema.IF you look at DIS chart you will see how the 10ema and 10sma could not cross over the 20sma.
Try useing 20sma for for resistence and support on day trades.I find once the 5ema and 10 sma cross over and through the 20sma confirms a tread.Note i use 5ema.IF you look at DIS chart you will see how the 10ema and 20 could not cross over the 20sma.
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