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So, maybe Monday is hard down and Tuesday is reversal day.... or not...:o)
Pessimistic little sucker aren't you.... :o(
Zeev, curious to what you see beyond the imminent bottom. Will 2004 be generally strong or do your turnips see a herky jerky early half with a sharp rise as the election approaches...?
Hey, hands off my money....<g>
Re: << That can change rapidly (thus the "dangerous"), but you got to stay with the short term trend. >>
Precisely my point Zeev....
Zeev, this market continues to climb a wall of worry and you continue to contribute to the worry. Fortunately you are a master trader or you would have missed an awfully good market...:o)
I suspect, however, that those who have listened to your market concerns and who play both long and short, haven't fared nearly as well....
Sorry Zeev, my comments were not intended to even appear a criticism of any past commentaries of yours.... I think you've had a remarkable run of calling market moves. My point was simply that you are challenging a runaway money supply, an accommodating Fed and an approaching election year.
You want a little fear in the market to set the stage for a good market next year and I'm not sure how you get that. I think there will have to be a "big surprise" market turning event to promulgate your scenario....
Zeev, you went against the Fed at a time when the yield curve was inverted and money supply was struggling....Those are different conditions than those that now exist.
Zeev, weak internals in a cyclical bull market are often a transient event which can be obliterated by the next surge of activity. There is seldom good reason to go against the tide of money supply (a friendly fed) and the concomitant normal yield curve.
I realize that you are looking for the conditions which set the stage for a more significant move upward later this year and in the election year....but, that is a generally expected reaction (pundits have been calling for this "correction" for months now) and hence may not materialize.
This process may require a longer period of "consolidation", loss of patience, whatever, but perhaps no real scary dip between now and October. That doesn't mean we don't have a rousing market next year...Just means that the following correction could be harry....:o(
Yes, I read that message twenty years ago...I'm still holding my breath.
Zeev, how do you see a serious market drop on the horizon with M3 exploding, a normal yield curve and next year's election on the horizon...? While I can't argue with a seasonal strain in September and (maybe)October, the market continues to demonstrate good breadth and reasonable leadership...(without expanding new lows)....
I'm having trouble envisioning the conditions for the kind of severe correction you are calling for any time soon....
Respectfully,
Mike
The easiest way to get "update" is to read the last few posts Kayaker has selected...
I think we need another thread that updates nothing but the "bullishity" index...<g> Zeev, you "dung" good coming up with that one...
Well so much for that idea....
Zeev, you may have tried to fine tune this one too much today.... Doesn't look like we get the morning hitch at all....
Considering the breadth, I wonder if we get the reversal this afternoon....Volume is unimpressive...
What do you think Zeev...looking for a G&C this AM...? Are we oversold enough for a bit of a rally?
My best guess would be an attempt to follow through yesterday's aborted rally before a little more churning toward 1575...
I don't see much rally before July...
Do you view this as the "move before the real move Zeev"?
Typically, in a bull market corrections are limited by about 7% drops...That would put about a 1562 floor on the correction. We are indeed due for a slide. The topping action is near complete....with a few days of up moves on poor breadth and diminishing leadership. The decline, if it materializes, won't be pretty but should be over rather quickly.
Re: <<Electricians are turning my power off, see you guys when they are finished.>>
Gotta pay those light bills, Zeev...<g>
Zeev,
How do you expect it to behave? Lunch deployment? After lunch swoon?
The part that has to blow one's mind is the breadth...Advancing volume of over 4 to 1 is huge... Makes calling the top an exercise in futility...
Actually, I think it suggests that the short sellers are more nervous than the buyers these days. In this phase of a bull, it will likely require some catalyst which allows a quick sharp sell off.
Sorry Zeev, I think you may have misinterpreted my comment. I didn't mean to say "where is the sharp correction?"... I was trying to say I don't see it in the cards today. I think yesterday's sharpness mitigates today...especially since folks are buying the dips at this point.
I don't yet see a vicious swoon coming this afternoon...
Actually that local top I called was for the AM....Now I think we need a PM local top a we bit higher....This train looks to be still going down the track...Whatcha think?
OK...+ or - 1.02.<g>
Well, if we're just trying to guess local highs...My bid is 1596.92....
I have ORCL on my screen and I still plead ignorance....<ng>
Zeev, I think I have seen you trade ORCL a time or two...Do you see a trading range? Where would you buy and sell?
Re:<<We may just have printed the high here around 1575 going down...>>
It is not entirely practical to try to put a high on a rally in a bull market...cyclical or otherwise...<g>
I wouldn't be surprised to see a technical retracement of the euro to just above one. Also would not be surprised to see the euro over 1.20 by the end of the year.
Not so sure about your 2:22 call tomorrow...<g>
Come now TJ, not another "glass is half empty" guy? <g> The world is going to have to pull together to climb out of this "recessionary" spiral.
Perhaps fiscal stimulus and monetary inducements in any number of other countries along with a few technology "breakouts" could fill the bill.
Warm Regards from,
The Other Side of the Glass
Re:<<Now, 111111 that is a grand grub, is it not?>>
Indeed Zeev, but as my good friend TED would suggest, four in a row is poor form....Tsk.
Re:<<Excess capacity is remedied with increased demand, not with increased investment in additional capacity.>>
Shouldn't there be increased foreign demand as a result of a weaker dollar?
Hmmmm. The reverse of supply side economics...would that be raising taxes? Ouch.
Seems to me we have a chance for one more run to 1550 before a correction. Even a shot at an upside breakout but it is time for consolidation and so we could fail anytime. But I would be surprised if we don't attempt to make a run today and tomorrow.
You still like Wednesday for topping action?
I not only don't mind, but believe that every American (and even the French<g>) should read this article. Those soldiers certainly made me very proud, mlsoft.
mlsoft, being a retired soldier, I enjoyed this piece as few others. I hope others will read in the same spirit that I did. We do have a remarkable make up:
James Lacey: Time magazine correspondent, was embedded with the 101st Airborne Division. Since returning from Iraq a short time ago I have been answering a lot of questions about the war from friends, family, and strangers. When they ask me how it was over there I find myself glossing over the fighting, the heat, the sandstorms, and the flies (these last could have taught the Iraqi army a thing or two about staying power). Instead, I talk about the soldiers I met, and how they reflected the best of America. A lot of people are going to tell the story of how this war was fought; I would rather say something about the men who won the war.
War came early for the 1st Brigade of the 101st Airborne when an otherwise quiet night in the Kuwaiti desert was shattered by thunderous close-quarters grenade blasts. Sgt. Hasan Akbar, a U.S. soldier, had thrown grenades into an officers' tent, killing two and wounding a dozen others. Adding to the immediate confusion was the piercing scream of SCUD alarms, which kicked in as Sgt. Akbar's second grenade exploded. For a moment, it was a scene of near panic and total chaos. Just minutes after the explosions, a perimeter was established around the area of the attack, medics were treating the wounded, and calls for evacuation vehicles and helicopters were already being sent out. Remarkably, the very people who should have been organizing all of this were the ones lying on the stretchers, seriously wounded. It fell to junior officers and untested sergeants to take charge and lead. Without hesitation everyone stepped up and unfalteringly did just that. I stood in amazement as two captains (Townlee Hendrick and Tony Jones) directed the evacuation of the wounded, established a hasty defense, and helped to organize a search for the culprit. They did all this despite bleeding heavily from their wounds. For over six hours, these two men ran things while refusing to be evacuated until they were sure all of the men in their command were safe.
Two days later Capt. Jones left the hospital and hitchhiked back to the unit: He had heard a rumor that it was about to move into Iraq and he wanted to be there. As Jones-dressed only in boots, a hospital gown, and a flak vest-limped toward headquarters, Col. Hodges, the 1st Brigade's commander, announced, "I see that Captain Jones has returned to us in full martial splendor." The colonel later said that he was tempted to send Jones to the unit surgeon for further evaluation, but that he didn't feel he had the right to tell another man not to fight: Hodges himself had elected to leave two grenade fragments in his arm so that he could return to his command as quickly as possible.
The war had not even begun and already I was aware that I had fallen in with a special breed of men. Over the next four weeks, nothing I saw would alter this impression. A military historian once told me that soldiers could forgive their officers any fault save cowardice. After the grenade attack I knew these men were not cowards, but I had yet to learn that the brigade's leaders had made a cult of bravery. A few examples will suffice.
While out on what he called "battlefield circulation," Col. Hodges was surveying suspected enemy positions with one of his battalion commanders (Lt. Col. Chris Hughes) when a soldier yelled "Incoming" to alert everyone that mortar shells were headed our way. A few soldiers moved closer to a wall, but Hodges and Hughes never budged and only briefly glanced up when the rounds hit a few hundred yards away. As Hodges completed his review and prepared to leave, another young soldier asked him when they would get to kill whoever was firing the mortar. Hodges smiled and said, "Don't be in a hurry to kill him. They might replace him with someone who can shoot."
The next day, a convoy Col. Hodges was traveling in was ambushed by several Iraqi paramilitary soldiers. A ferocious firefight ensued, but Hodges never left the side of his vehicle. Puffing on a cigar as he directed the action, Hodges remained constantly exposed to fire. When two Kiowa helicopters swooped in to pulverize the enemy strongpoint with rocket fire, he turned to some journalists watching the action and quipped, "That's your tax dollars at work."
Bravery inspires men, but brains and quick thinking win wars. In one particularly tense moment, a company of U.S. soldiers was preparing to guard the Mosque of Ali -- one of the most sacred Muslim sites --when agitators in what had been a friendly crowd started shouting that they were going to storm the mosque. In an instant, the Iraqis began to chant and a riot seemed imminent. A couple of nervous soldiers slid their weapons into fire mode, and I thought we were only moments away from a slaughter. These soldiers had just fought an all-night battle. They were exhausted, tense, and prepared to crush any riot with violence of their own.
But they were also professionals, and so, when their battalion commander, Chris Hughes, ordered them to take a knee, point their weapons to the ground, and start smiling, that is exactly what they did. Calm returned. By placing his men in the most non-threatening posture possible, Hughes had sapped the crowd of its aggression. Quick thinking and iron discipline had reversed an ugly situation and averted disaster. Since then, I have often wondered how we created an army of men who could fight with ruthless savagery all night and then respond so easily to an order to "smile" while under impending threat.
Historian Stephen Ambrose said of the American soldier: "When soldiers from any other army, even our allies, entered a town, the people hid in the cellars. When Americans came in, even into German towns, it meant smiles, chocolate bars and C-rations." Ours has always been an army like no other, because our soldiers reflect a society unlike any other. They are pitiless when confronted by armed enemy fighters and yet full of compassion for civilians and even defeated enemies. American soldiers immediately began saving Iraqi lives at the conclusion of any fight. Medics later said that the Iraqi wounded they treated were astounded by our compassion. They expected they would be left to suffer or die.
I witnessed Iraqi paramilitary troops using women and children as human shields, turning grade schools into fortresses, and defiling their own holy sites. Time and again, I saw Americans taking unnecessary risks to clear buildings without firing or using grenades, because it might injure civilians. I stood in awe as 19-year-olds refused to return enemy fire because it was coming from a mosque. It was American soldiers who handed over food to hungry Iraqis, who gave their own medical supplies to Iraqi doctors, and who brought water to the thirsty.
It was American soldiers who went door-to-door in a slum because a girl was rumored to have been injured in the fighting; when they found her, they called in a helicopter to take her to an Army hospital. It was American soldiers who wept when a three-year-old was carried out of the rubble where she had been killed by Iraqi mortar fire. It was American soldiers who cleaned up houses they had been fighting over and later occupied-they wanted the places to look at least somewhat tidy when the residents returned.
It was these same soldiers who stormed to Baghdad in only a couple of weeks, accepted the surrender of three Iraqi Army divisions, massacred any Republican Guard unit that stood and fought, and disposed of a dictator and a regime with ruthless efficiency.
There is no other army-and there are no other soldiers-in the world capable of such merciless fighting and possessed of such compassion for their fellow man. No society except America could have produced them.
Before I end this I want to point out one other quality of the American soldier: his sense of justice. After a grueling fight, a company of infantrymen was resting and opening their first mail delivery of the war. One of the young soldiers had received a care package and was sharing the home-baked cookies with his friends. A photographer with a heavy French accent asked if he could have one. The soldier looked him over and said there would be no cookies for Frenchmen. The photographer then protested that he was half Italian. Without missing a beat, the soldier broke a cookie in half and gave it to him. It was a perfect moment and a perfect reflection of the American soldier.
Dan this is a very bleak picture and it's too late to do it justice tonight. But at first blush I take issue with the premise that the US, by virtue of its military supremacy, will engage in military forays. Notwithstanding the war in Iraq, which I supported, I question whether it will be necessary to continue to project US power in such a manner. I think the message was perfectly clear to many countries, including those currently residing in the "axis of evil".
How countries like North Korea, Iran and Syria react will certainly dictate our course of action but I consider this far from a foregone conclusion. Kagan's views notwithstanding, the US is not a likely candidate for indiscriminate military aggression. Nowhere in the Iraq confrontation did Bush lose track of the search for Al Qaida and I remain firmly convinced that terrorism remains the focus. I doubt that the "subliminal" message regarding support of terrorism was lost on any country.
While, I don't argue the balance of payments disparities, these are issues that have been clarioned as "harbingers of doom" for most of my adult life. Someday it may come true but I'm not ready to fall on my sword that it happens in my life time. If it does then, like everyone else, I will deal with it the best that I can.
Regards,
Mike
Alex, in attempt to respond to a similar comment:
http://www.investorshub.com/boards/read_msg.asp?message_id=1001126
Re:<<Wouldn't you think that in such a situation, confounding the majority would mean taking a good dive in the near future when many, like you, announce the 'new' bull market? >>
Hi M_E. Your point is well taken. The market has been overbought for quite a while. More, in fact, than I can recall any time in the last three years. I have been expecting a correction for some time. What has impressed me the most is the significant positive breadth. Interestingly, we have had a number of days when the market opened negatively and by the end of the day it has recovered and finishes with two or three to one positive ratio.
What is going to be important, is how the market corrects. Will corrections be limited to three or four days and be supported where previously there was resistance or will the support areas be sliced like the proverbial hot knife through butter, a la the last three years.
You ask "if the majority is now bullish wouldn't that lay the ground work for a decline." That logic trumps mine but it doesn't allow for a three year bear market or a multi year bull market either. Yet we know these things happen.
When I suggest that the market confounds the majority, that isn't inconsistent with what is happening right now. First, I doubt that the majority of investors are long term bullish. I doubt there are that many who are certain of anything, even what happens the next couple days. The action of the market, in fact, belies economic circumstances. It doesn't, on the other hand, conflict with money supply, interest rates or even the normalized yield curve.
Until last month, money flows have trickled into equities while flooding into fixed instruments. Considering where interest rates are, this doesn't make a lot of sense. It is interesting to note, however, that despite the strong rally in equities, bonds have yet to slide. That suggests, as a minimum that lifting equities hasn't required selling from their "alter egos". The low volume is telling also. It isn't so much a surge to buy as a resistance to sell that seems to be moving the market higher. That would seem consistent to me with bull market conditions.
Another thing that would be consistent with a bull market would be sharp but contained corrections. If we are finally going to correct for a few days, it will be important to note if the money starts to rotate into other stocks, the breadth holds up and, as mentioned, support is respected.
My point to Zeev was and continues to be that I don't think this market is acting like a bear rally. The volume is low, the breadth is good and the declines are shallow. The only way I know to deal with this is to keep an open mind and let the market suggest where it is going.
Mike
Re:<<I think it much more likely that we are in an artificially extended bear market rally, and expect new lows before the year (probably the summer) is over.>>
Hi mlsoft. I had the same opinion for a month or two after October...but no longer believe that. I have over the years come to believe that the market will confound the majority and it is the only market belief that remains intact after thirty four years of investing.
While it is true that the market has been drawn and quartered for the past three years, if one looks at a thirty to forty year chart, they could well make a case for continuation.
http://ts-lc.sc8.finance.lycos.com/1052860545940?User=kathiemun&Pswd=0WpXeYyeaA7W.&DataType=....
Don Rowe has been around for a long time and I can remember when I thought he was loonier than a tweety bird arguing that the market (Dow) was soon headed for three thousand when in my lifetime it had never reared its head much above a thousand. He then argued that by '95 it would be 5,000 and by 2000 it would be 10,000. Well, I have decided that my instrumentation must remain flexible for there are things that just don't make a lot of sense. I get frustrated when I see so many folks that are sure until I see them drawing and redrawing those lines in the sand.
Good luck on your investments.....
Mike