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sorry meant baymare...my apologies...I screw up names here and there... Just getting those senior moments that I just can't shake at times...
Great Baymere. J Murphy is one of the great analysts out there and sometimes we don't pay enough attention to him (given all the talking heads out there). Reasonable projections (up or down) is what is good here (and some unreasonable ones if based on logic and sound technicals). Thx Much Mike.
Thx baymare, I must say that the 400 sma is not something I normally pay attention too.
But like Generic, BT others here I pay attention to Moving avgs above and below that one. Interesting to me that J Murphy likes this one...will try to look at this more in time. Regardless, its near the penultimate worst case on the market move down-- so an interesting addition to our thinking here... Mike
re: IYR/REITS
Thx Jerry & Generic for the update here, as you likely know already I'm pointing to this trade as a bit of a safe haven in a downturn...But I certainly don't mind being re-calibrated by you, the recent news, or the other fine traders on this board. Much appreciated and I'm in your debt.... Mike
TNA--Tanked a buck down after hours to high $63 area. Might pop for a short term trade, but not convinced here the we won't see one more soldier to the downside to give us 3 big down days as a blow off. Mike
Big...I actually copied it off onto my notes file I keep every day. 1200-1220 seems like it could be in question here. But I'm not convinced this is going to last long so thinking we bounce somewhere here between this level and 1248-50. Seems over done to me. But is hard to say when you see a bit of panic on an intraday basis. That said, I need to reflect more on what you said in that post. Will try to post a few thoughts later. Thx for posting that item. It did make me think... . Mike
1249 was march 16 low. Thinking that we are seeing a lower vol move into that price action. Volume though has been decreasing over time -- so at times it is hard to overly rely on volume as a measure we can rely on.
Jerry...if we are going to pop with a short squeeze think it will be right here with a little of an hour to go. interesting vol on TLT. Looks like its getting larger price action to upside with somewhat decreasing volume (especially with respect to 2 days ago)
Thx 2Bit. In meantime here is chart from uplata (Ahsan) that he sent to me via TheSmarttrader board--
http://stockcharts.com/c-sc/sc?s=JVA&p=D&yr=0&mn=9&dy=4&i=p69098872527&a=236613327&r=9011
BT....Thx, Will go to link.... Been out of commission with a fair amount of pain....and just having a bit of trouble thinking as clearly as I would like. So a refresher here will be good. Mike
CBOU Bounce off of 9 ema. Sorry I can't remember how to paste the .png file I just saved off.
At any rate, a nice setup it looks like and perhaps JVA as well. The coffee trade seems long in the tooth, but charts seem to indicate it may have a bit more in it. Will try to remember what I did wrong so that I couldn't post chart. Mike
Of course I missed 2-bit here (and Jerry earlier..) Love those charts. T
Thinking that we got a deal here or House wouldn't be voting soon. And its a done deal in Senate since they essentially brokered the deal. So if House actually gets a decent cut of Democrats and GOP voting for it then like the target (extreme factions of course will vote agains).
If I remember right you were talking about the potential stall there at 610 last week. Nice call. Mike
Orange--- Much thanks for your posts today. I saw where you got undercut so to speak on one of your posts soon after you posted...but regardless, very good stuff. And truly helpful to me...I'm limping around after cutting my leg p (19 stitches) late last week and then today had to muck with upgrading one of my systems. That said, saw multiple other posts from big, bt, also saw skid street, etc. All very helpful. Thanks folks. Mike
Michael
My point is that the Tea Party is now in a significant area to hold a gun to the heads of its own party and the US. The Democrats have their own faction but so far don't have the spine that the Tea Party has shown. That presents a different paradigm in our political force (especially since it is the newest members of Congress that have historically been seen but not heard" regardless of party they came in on).
So I'm not saying one extreme faction is any better or worse 'cause of their particular views. More that since they aren't willing to compromise a centimeter that this presents a continuing issue for governing especially when at a critical area as this.
The Democrats aren't ready to concede here as well. But why would they? This level of gamesmanship over the budget has been a constant strain on everything since January. Having a short term deal that just drags this into December is stupid from their standpoint. It just provides more time to have political fire fights on the news, blogs etc that will do no one any good. So I see they have no motivation for them to cut a deal that just drags them down the same fox hole week after week. At a point we have to say enough is enough. Have a deal here that cuts the political crap out for some time but gives some authority to make real and lasting changes to the longer term budget. Thats what we want.
As well remember the default ceiling has always been raised by Congress. Yes there has been posturing on both sides over the years and the vote is tough to get at times (hence Ronald Reagan's plea/admonition to the Congress to raise the debt ceiling during his tenure). But its never faced this level of brinkmanship. Its a stupid thing anyway. The Default ceiling should be paired with actual budget and debt when it is incurred. Having it separated like this as separate vote from the actual passage of the previous budget just makes it a political football (and just ramps up the underlying cynicism tyat folks have for our current way of doing business over past 10-15 years or so.
Okay fine. Lets say the Tea Party position here is admirable (which in many respects I think it is)--- the ultimate solution will likely exclude some of the views that they hold dear because they didn't get all they wanted. The ultimate bill to pass will like do so without the majority of the individuals in the Tea Party (and they will get a worse deal likely than they would have gotten).
I don't blame either side here for trying to use leverage, but at some point you have to have these guys set aside the bricks and bats and do something that furthers our interests whether their own.
You certainly can blame anyone and everyone involved in the Legislature & Presidency over past 10 years or so. But at some point...we need to get that gun out of the hands of that sheriff in Blazing Saddles....you know when Cleavon Little is getting ready to be lynched by a whole mob and then he turns the gun on himself and threatens to kill himself.
Thats where we are here. You can point to how pathetic the Democrats are here and that they have sold us down the river... But the Tea Party is controlling the agenda right now and until we find a gentle way to remove that gun from their head (ours by default) then we still have a mess here, and, no amount of finger pointing about how horrible this person is or what lack of integrity that individual has will fix that.. As well if one side is saying that there is no way they will raise the debt ceiling and a default threat is not a real issue then how do you ever get to a consensus with that kind of thinking. SO again, I'm saying that there aren't extremists causing problems on both sides. But this looks to me to be a different sort of the political extremism we have seen before and calls into question Gov't/Financial stability if ti persists for very long.
We can go tit for tat here forever, its basically becoming a circular argument I think so I think further discussion on this is probably not very fruitful and detracts from the mission of the board. Good luck, Mike
re: third party
Yes but that may get us into the way the european governments operate (multiple parties actually seem to get us into more extreme policies since you have to accommodate those third party view points). More often it seems to make those countries more liberal. However there are notable exceptions that drift extremely to the right as I remember....
You know the founding Fathers, wanted to see no parties...just a veritable ton of "specialized interest groups" that would in he end balance each other out (see Federalist #10)
Overall we are too a very dysfunctional place in our politics due to last election...good or bad. Not sure how we will get an improvement unless a very decisive election is held in 2012....and right now I have no clue here who is in the Drivers seat.
That said, that is likely the last political input for me. I think its refreshing from time to time that we do this,but we need to cut the emotions, rhetoric at some point and get back to the minute by minute charts. Very respectively, Mike
Some comments on your post to BT
"...I have NO respect for the guy that KNOWS he will or may use an unconstitutional method instead of trying to find a shared solution."
Comment: Well Obama advisers have said repeatedly that he has doubts that this solution would ultimately work. That said I tend to agree with BT's comments here. No President should the Financial system go down the abyss. For Obama to even pursue this solution I think we would need to see a huge sell off and the leaders on both Senate Parties demand that he use it. On the other hand I disagree that O'bama hasn't tried to work a bipartisan solution. Remember its the Tea Party caucus that has fairly entrenched heals and yes they are a significant portion of GOP. But they are only 1/3 of the current US government. Yes they got elected on their campaigning but so did the other portion of the US Government - we all have to bend here to get what we ultimately want. Do I like what I see on the liberal side - no not atall, but the criticism about that side is that they always wimp out out and give in to threats like this....you hear no such criticism of the tea party caucus on this.So all said, it appears at lest on the surface that the GOP has won substantial concessions and the war so to speak, but aren't as willing to compromise on a deal in the last mile.
"... If you know you have a fail safe, it lends to the situation that you will not be as flexible, even to the degree that you will preemptively say you will veto something that comes your way before you even see the details. Knowing that you will use the alternative suspect avenue may just embolden you to be less agreeable. :"
Comment: Everyone knows the components of the House Bill. So saying that they will reject it out of hand is what all these guys normally do. Its a negotiating position for the end game here. We will continue to have posturing on both sides until we get to a solution ande then there will be reluctant hugs and kisses (I hope) as they get a deal that can work for both sides.
"Therefore the knife cuts both ways and I have no respect for someone that does NOT give every effort to work something out. The Dems and President want the Reps to write a bill that THEY want."
Comment: I see no instance that either side isn't going the extra mile here. You have two widely divergent interests here with the Tea Party's entry into the Legislature. That makes any deal very very tough to get. I think pointing out one side is not really trying to provide every effort based on their principles is wrong. One side or the other is misguided (or both). But you can see they intensity of the debate and discussions here...the rest is pure spin to ramp up their respective bases. This what has been a characteristic of politics for last twenty years on crises like this and this crisis is no different.
"I mean what do you think makes for the R or D at the end of someones name? For the president to SCOLD the other side for not being flexible when from the get go he wants a bill that HE wants is disingenuous. "
Comment : They are both scolding each other (listen to McConnell, Cantor, Crapo, rhetoric - it ain't no love fest either). However, the President whether R or D has the bully pulpit and we would expect him to use it. The GOP is doing the same, just not as effective in the short term (and that's because they down own the biggest bully pulpit. This is the way it work in politics and has for as long as I can remember - and i've studied politcs as a side hobby for 40 years.
"Dems reject a bill that they have not even seen and there is no outcry of THE PARTY OF NO, etc yet when the Republicans write a bill that Dems say there is NO WAY they will even allow debate and THAT somehow is the Reps fault is just plain wrong. Both sides have political philosophies, but when both side play the game, 1 side is accused of certain wrongs that the other side does in the same way without an ounce of vilification. "
Comment: Again, they know what is in the bill - the Dems own 2/3 of the US Government - they are going to use any leverage they have and the GOP is too. Its a negotiating tactic here so that the GOP and Democratic Senators can get enough votes to pass a bill in the Senate and then get the non tea party members in the GOP side of the House to go along. That is what this is all about. Nothing more, nothing less.
"So the respect you hold for someone using that option may just be undeserved unless your sure you know what his motives were in reaching that point because if he drove the debate and situation into that scenario by his lack of flexibility I would say he does not deserve respect but he deserves condemnation. "
Comment: The Democrats are the ones always accused of being weak kneed or a lack of a spine. Kind of refreshing to me that they have stiffened up at least some. (thats the Centrist coming out me I guess since I have no love lost for Pelosi, Reid etc....))
"I guess it depends on what letter you have behind your name"
Comment: Yes and its gotten worse. But I like and respect each member of the Gang of 6 plus (and I would include the very conservative Senator from the State of OK (Sen Tom Coburn). I love this guy. I disagree with him at times, but I do believe that he has the best interest of the country at heart as I do believe that about the Democrats in that "gang". Wish we could see a team from the House of Representatives do the same....but they are hard to find at this point. Maybe they will surface in the next two days or so.
All that said...with the Tea Party now in a significant position to hammer its own leadership -- well we have a new paradigm. They think that there is no default coming...perhaps a modest technical default but no recession as a result and its good for the country at this point anyway. That is a tough set a views to compromise with in IMHO. However, I like their attitude overall (with some notable exceptions). But I don't like playing chicken with the "Full Faith & Credit of the US" There are plenty of mechanisms for them to to this in the legislative process. This is the wrong place for folks to hold a gun to the head of the US Gov't and citizens at large.
R or D doesnt it?
Michael--
I haven't had time to digest this and I think I'm more of a center right thinker than you are (you strike me as being a bit more to the right to me on some things). But this looks thoughtful. Political in some respects on this board, but okay I think given where we are at. Likely I have a disagreement or two and when time permits will comment on that. At any rate, I think I like your overall approach here to working thru this mess. Mike
Yep with you on the Copper thing and thx for Acknowledging I had an argument here that was slightly counter to yours & worthy of consideration... I'm a big fan of "Big". Mike
Big--
One thing I wanted to point out was that we are ignoring news like the China market and emerging mkts of late. We may sell off a bit on it initially but then we track higher. Right now the US news is the most important. If/When that gets resolved then Italy/Spain likely come up again. If all that stuff gets resolved then China?india, etc becomes a big deal since we know how that influences everything.
So for the China ISM to really affect the markets for very long I'm thinking we have to have a really terrible number. The reason I say all this is that it seems to me that market is largely myopic (with some exceptions).
So data from "external sources" (from the myopic view the market has at the moment) may detract but not drive the market. Of very late, China data hasn't really driven the US market all that much. Once we get thru the US mess and Euro problems with Spain/Italy etc then we will in turn embrace China data again with more vigor (but again, if the data is really sufficiently negative then that will drive the markets to some significant degree regardless of the current focus of folks that trade the US market...). Mike
BT/RCKS, I missed this post -I basically repeated what BT said in my post above. Sorry. I think BT's post here is more to the point so ignore mine. Mike
re: Reid's proposal, Leadership role etc
Remember it is the job of the Congress to almost automatically raise the debt ceiling (but you know with some folks posturing and the like but the thing still being passed). Obama just needs to be there, be present and provide some degree of comprise to allow his side to facilitate a deal with the other side. He has done that. The other side may not be willing to strike a deal. Many of those folks have said that they in essence don't mind driving this economy off the cliff. Its a very refreshing trend in some regards, but in others if you are a trader or an investor in our markets its also a disturbing thought that we will go into next week holding the US economy hostage and perhaps tempt a recession out of the bag.
I'm not big fans of either of these guys on the House or Senate side. I do think they are trying their best, but they still seem to be caught up in the paradigm of how to best best promote their interests and get re-elected rather than what is in the US or World's interest. A very disturbing trend to me over past decade.
re: vote. Yep it appears he is about 10 votes away. He might be able to make up that difference tonight...but the remaining folks left to be convinced are very tough tea party folks and don't care about a US debt default (or recession that may result even if don't really default on servicing our debt).
Even so, if it passes, it gets rejected in the Senate. So that bill would then see some negotiation between the two Houses of Congress.
But f he Boener is having this hard of a time getting his folks "butt in line" -- then how is he going to do it with a compromise to the "Satan like" Democratic party (said "tongue in cheek" on my part, but that's what most of the folks believe I think that are in the Tea party).
Note I have a lot of affinity for the tea party folks and their obnoxious attitude toward Congress and its heritage (at times), but they do tend to show an ignorance or obstinence to more simple facts about how financial markets work. That is very troublesome t me even though I tend to greatly appreciate their "trouble-making" ways at times...
thx Big, that helps. Mike
If I remember there was a preliminary read on ISM at 48 a couple of weeks ago. A beat of that would be positive (after some initial sell off if 49 or thereabouts). If sub 49-50 area and if especially worse then would agree - this would just compound the problem the US and other developed countries have.
Monthly Comments
I make this mistake quite often but just in case my fat fingers (so to speak) didn't hit the right button I will try to remember my thought here on the Monthly:
Great chart and really like the Moving averages used. Sorry I missed this previously....
I think we see a breach of 1301 and hit that 1275-1295 area that several have talked about in recent postings.
However, interesting to me that we have seen some relatively negative candles at highs (in the previous posts that may not have posted - I believe that said last 2-3 months...you can extend that out a bit). That is, we may potentially be seeing topping candles over past few months with doji looking candles at highs (with exception of this month so far).
Basically, Look at the tails that I think coalesce around approx 1250. If we happen to breach that area then the volume/action should be instructive as to whether we hold the 1250-1275 are or traverse lower.
Also look at a potential magnet area around 1200 where it looks like the 20 is getting ready to cross over the 150. If things do sell off hard, then that could be a great area to watch for a bounce (or just underneath).
Longer term remain bullish, but if these dopes can't get it right in several days, then we could see a self-inflicted wound here (that could spell a modest recession at least as the dominoes unfold). A critical area here. Longs chancy here -- but there is also a fair amount of "headline risk" to shorting here too. Mike
BT, Monthly...interesting. Great MAs....
On the daily we are currently failing the 50 after trading a bit above it. Normally a short term sell signal - so you're target at that 1290 ish area may be good to watch for.
I noticed that there is a potential magnet point down there at 1200 (where the 20 ma is getting ready to cross over the 150 MA. 1250 a possibility. But in short term, I like that 1275-90 area as a bounce area if a breach of 1301 occurs though.
Not saying either way, but you can read the monthly a couple of different ways - especially given the kinda of candles we have seen over past 2-3 months (long tails at highs it looks like...so the action around these candles may be a key area to watch.
Politico (non-technical) but you may want to be apprised of the general trend here of the resolution to debt default issue (tends to support the idea that market lemmings will run this market down and up & all over the place as the clowns in DC play this scam of an issue out....
Basically, the rhetoric here is now in over drive...see article on Politico.com on GOP infighting and Dems increasing call to invoke 14th amendment--
http://www.politico.com/
Here are specific articles on site if interested in keeping up with are the trash talk between parties (and within....)
Conservative Bloggers at odds
http://www.politico.com/news/stories/0711/60027.html
GOP old guard says Fire Teller---
http://www.politico.com/news/stories/0711/60035.html
Calls to invoke 14th by Democrats--
http://www.politico.com/news/stories/0711/60038.html
Article related to White House view on default---
http://www.politico.com/news/stories/0711/59997.html
I must say this is great...The Debt Ceiling Rap....it actually gets better as it gets a minute or so into it... Nice catch to add some levity to everything....
Hitting 60 min 200 ma at approx 1319 and pulling back on low vol. Looking I think to at least tag the underside of daily 20 ma just a couple more points up at approx 1322.
Just saw TLT spiking though out of middle of nowhere need to check that out
DNKN started trading 5 mins ago. Priced last night at $189, opened at approx $25 and moved to 25.50--26.50 pretty quickly. Seems like it has more to go, was hoping for $21-$22 to get in, but thinking I won't get that.
SPX attempting to stabilize/bounce off of 50 MA see BT's chart below
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=9&dy=18&i=p23445557188&a=80568870&r=7804
RCKS
I'm a bit mixed here on the interpretation of this chart. For instance, towards end of day over past two days we essentially gave up the gains of the intraday sell off & mid day up move.
But, I do get your drift here....That is, I think that this market is very strong given the very bad news and early sell offs of late.
It just points to me as being an overly bullish trend with some consolidation given our overbought status and just a bit volatile given the circumstances.
However the "circumstances" here are very significant and subject to change and that could drive currencies crazy (e.g.. Big Money).
The "footprints of big money" in the various currency spreads are easy to see at times, but often not easy to interpret. So reluctantly I'm saying that we are seeing some gradual flight to safety given the low volume and the type of currency moves, but that could change in a heartbeat (in either direction).
That said, I'm thinking that we will have some added chop here given the mixed market reaction I'm seeing, but we could get a nice move up if Congress gets its collective act together (i.e., the uncertainty here is not good and feeding the bears nicely in my view...so a change will be good for the markets if it occurs).
So far though, the political maneuvering looks too cynical to me. So I expect further turmoil and market uncertainty intraday at times (which is not good for aggressive moves up to the upside other than short covering at different times of the day).
However, I haven't done a recent count on the Tea Party folks (and they are really running this show/turmoil) for good or bad.
Not sure that these guys will even agree to Rep Boehners plan. They are very ideological and not subject to pragmatic thoughts like Cantor, Boner and Obama. So I have doubts that we will get some good concessions here in the next couple of days even though the House and Senate plans are not all that far apart. That is, Boener has less control over his forces than Reid, so that is a problem since tea party forces are driving the train here in most respects.
Overall, I'm not sure that there are enough votes as yet to guarantee that their won't be further trouble ahead or not (e.g. there could be a more substantial sell off vs a modest selloff due to Congress abdicating its responsibility to lift the debt ceiling after the debt they already authorized). A very serious question IMHO (especially for market stability).
Regardless, this points to how very "iffy" this market is currently (and we are seeing it in the charts of late). But I want to reiterate, its hard to ignore the very bullish posture overall we are seeing in the charts and sentiment of late.
Once we get thru all this and the subsequent market chop....we should see a very nice move up given how resilient the markets have been in the face of all this negative news. Mike
re:TZA, some divergences
TZA appears to be holding in while other sectors looked to get a short squeeze going here just a bit ago(IWM/RUT looks to be the weaker index here anyway).
At the same time, .DXY (US dollar) moved down somewhat hard, but TLT continued to stay at highs of day. FXY (yen) also moved higher. FXA (aussie) continues to look strong. Shows to me that underlying market still mixed, since of these movements imply a a gradual flight to safety (e.g., move up by TLT & FXY). FXA seems to counter this idea (as does .dxy). But .DXY in this case is the currency under pressure that folks may be fleeing from (hence the negative divergence between TLT & DXY - which you normally expect to see moving together).
Right now I'm not expecting much from all this - just some continued chop. But if the movements get more extreme or volatile (regardless of direction) in the currencies and Treasuries then that would be something to keep an eye on. Mike
michael
would tend to agree with your idea about how folks could get trapped (and that is why I thought delta neutral here may be safer...even though shorting maybe a good bet).
BT, Much thanks.
And thanks for the chart. I agree with your sentiment.
I was just trying to give a heads up the other day...not make dire predictions on how Monday will unfold (just that we could see an initial spike down in pre-market).
A lot of this stuff is baked in anyway, so its hard to say with any degree of certainty that we have a game changing event as of yet.
Do I expect a spike down in US markets? Yes. But in pre-market that is often quickly reversed (or at least mitigated to a large extent) by the time we get to the open (or by a half an hour later or so after the open).
We are still in a Bull Trend until these clowns conclusively decide that they are willing to sell their soul to take us down the abyss of Political absurdity. We aren't quite there yet...but getting a bit too close for my comfort as the next set of days unfold.
But even even so...I think its tough to gauge the technical action based on the intermittent heresy we hear from the various floor traders that have their own political views that they seem to tirelessly interject or overlay on what is actually occurring in the underlying market (quite often we just seem to be climbing a wall of worry here (and the various proclamations from folks at the CME and other traders on the exchanges at how dire the US and the world is just seems to reinforce the idea that we are climbing the wall of worry)).
That said, I think we are in a potentially different ball park here on the debt ceiling, Spain, etc but even so, this stuff always takes way more time to play to out than we normally expect.
So from my point of view you still buy the pull backs...but we need to take extra caution over the next week. Mike
Mike
By the way...my comment here on "this encapsulates my thinking" was in response to sdpro's post on this article
http://zerohedge.com/news/white-house-cheif-warns-about....
Note --- go back to sdpro's original post -- I had to get a new key board tonight after a thunderstorm rocked our world and it doesn't seem entirely compatible with Apple IMAC (cause I just spent 10 minutes trying to cut and past his link and now a tad a frustrated....so I actually typed in that portion of the link above but didn't have enough "visual insight " into the entire link to fat finger in correctly....).
By the way the Dynex board I bought is apiece of junk and I'm having to go back and repair what I typed in...so until I get this worked out -- well expect some added editorial errors from me....Mike
sdpro/bt...this encapsulates my concern I raised on friday.
I agree largely with BT that quant funds drive the market and of course we cant be driven by the minute by minute news stream.
On the other hand I have maintained that we have "event risk" here that can drive us crazy on an intraday basis if not during short 2-3 day spells. That said, I tend to agree with BT that we are in a bullish trend and that shuld work itself out.
Just remember though the real event risk here are the House Republicans. Many have said that all Congressman ultimately listen to Wall Street and they will close the deal so to speak on the default ceiling. I'm convinced that this is not a done deal.
Remember these guys won their elections by arguing against bailoutsTARP/the bailout Wall Street Firms and that there biggest threat now is whether they will be "primaried" for caving into some senseless understanding that the Financial Markets could cave here (e.g., they are less afraid of a default of US Debt than having someone run against them from their own party in 2012)..
As well the Tea Party Republicans have little...if no respect respect for Wall Street and the previous Republican administration that developed the TARP program(they believe Bush, Obama , etc are n virtual collusion with Wall Street..so they hate all of them so to speak...).
Yes, The "Leaders" of both parties have learned the lessons of the past.... regarding: the defaulting the Debt/seizure of credit markets...but the current Rank & File Republicans do not believe that these are lessons learned that they can count on.....
As a matter of fact...Ron Paul and most of the folks in this group of new tea party Representatives believe that it is better to get a default over now (but most seem to doubt that a default is something that will be of consequence). And even if it is they are prepared to spin it to say that we should do it now cause it will be worse later.
Of course that sentiment seems crazy to most of us that invest in the world markets day to day. But time and again this is their position (and for the most part as much as I think they are misguided in this understanding of how our Financial Markets work...I don't think they are kidding with the idea that it is better to avoid lifting the deb ceiling.
All that said, it is very unclear to me that most of the new House Republicans that ousted the somewhat conservative Bluedog democrats in the last election will ever sign up to anything that the Senate is proposing (the Bluedog Democrats would have agreed to the Gang of 6 or 7 plan)...but the Tea Party Folks likely will not agree unless there are some significant concessions that they can sign up to).
And in particular, they don't believe the markets will sell off if the debt ceiling is raised (they believe everyone is BS'ing them here)....and even if the markets do sell off '...well it needed to be done 'cause it would happen later since the debt issues aren't solved to their liking.'
My point is regardless of your politics here we are dealing with a very different political animal in the House of Representatives these days. And what you may think is common sense to you doesn't strike them as common sense at all.
That said, my point on Friday and now is be careful of being long here without adequate protection (and think more about being "delta neutral" until we figure out how this will really unfold).
Yes we could sell off hard, but we could easily whipsawed by the quant funds here as BT talked about. Its better to wait this one out in many regards.... rather than taking a very aggressive position one way or the other. For my part, I'm largely neutral, but do have a couple of short term bets on the short side. But that can change in an instance and I'm not pretending at all to know how this market will react in later premarket or during the next day or two. Mike
Heads up
Bohner has left the debt discussions. So no deal on a big deficit reduction deal. Unless we see resolution of this through the weekend, then would expect the markets to at least a significant hit in pre-market. I'm a bit doubtful that they will get to some resolution that will allow the debt ceiling to be raised by Monday. There also is little economic news and earnings data (on major firms) due on Monday, so there may not be much help there. At any rate, they could get this resolved by Monday, just wanted to make sure everyone was aware in case they needed to square some positions....
Agree.
Also, FCX looks like it may printing a bullish engulfing candle on daily (its in the ball park but not exact). However, the weekly is showing an impressive consolidation on the recent move up (and suggests that after this modest consolidation that it may explode to upside).
As well, RIO strikes me as weaker here than FCX...interesting. But not all that weak.... so a modest pull back into low $71 range or $70 area may be the right place to get back in there (and ride the markets up).
By the way....SWC may be a nice short swing trade here (not sure if just intraday or a couple of days...but this looks way overdone and if prices trade tomorrow above today's doji then it should get some traction here in coming days).
You know this all strikes me as '.... the economy is good and metals will outperform because of that ...but the markets seem to be showing that they are shaky here...'
For instance, Gold should no longer be outperforming here if the market eres confident that we weren't going to have a "come to Jesus moment" (alternatively...in the spirit of world harmony,,,,, pick your favorite spiritual leader/prophet....an replace what I just said if appropriate to your faith....).
I just think the markets here are giving incredibly mixed signals. Thats often a negative, but normally takes some days/ time to play out.
skidstreet: Also, nice touch today of the 9 ema on the miners (GDX/NUGT). Recently the trade here has been interesting when Gold/Silver/Oil wants to move higher --- it seems like a good paired trade has been in those instances to go long those commodities and short one of the industry sectors like small caps or financials (but financials are awfully beaten down). Will be watching to see if this idea is still valid in coming days. Mike