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I was thinking pump, dump, dump...
Is that fear we smell on the street for a change??? VIX/VXN have not been this high since the start of the Fed-pumped bull run in early July.
As children, we also believed in the tooth fairy and the Easter bunny...
Yeah, I know. As children, we believed in the tooth fairy and the Easter bunny. Then, we grew up and experienced critical thought...
Under the EW theory, I still don't understand why any of the things you mention (bubbles and whatever the dollar is doing) makes a whit of difference and why therefore the need to continue pointing them out. I understand if it makes you more confident of your call, but again *how can it make any difference?* If the wave pattern is known ahead of time, how can the pattern have any knowledge of (or care) what might be happening macroeconomically or newswise that would affect it? My apologies to the Master for my continued difficulties understanding, but I must be a *lot* dumber than others of your loyal following.
Thanks. Glad you cleared all that up. heh heh
You da man!
Yeah, I am almost sure the market checked your EW prognositications to see what it was supposed to do. heh heh
One thing continues to bother me though. If the market's moves are preordained by EW, why does anything else matter, like macroeconomic considerations or what Bennie and the Feds did today or last week? BTW, even though it is most identified with the Presbyterians/Calvinists (*not* those who liked "Calvin and Hobbes"), did you know that the belief in predestination is a tenet of most Christian sects?
Also, what is the difference between Cavalry and Calvary (although "smart" news people screw it up all the time)?
Max pain on the Qs is about evenly split between 38 and 39.
http://www.optionpain.org/option/OptionPain/Option-Pain.php
Looks like a prime cliff dive setup to me, even more so than yesterday. BBs are tighter than a nun's ar*e...
Please try again. 20/20...
How are those puts now? heh heh
Yes, of course, the bottom line is the most important, but if you practice good money management (i.e. Stops) you should be able limit your big losses while letting your big winners run. "Hope" is the biggest obstacle (hoping it will come back) to limiting losses. If you can find anyone with a significantly higher winning percentage, I would quietly go with them if I were you and keep it a secret.
I don't know or follow Swenlin, but 62% is a *12%* improvement over a coin toss, and on any sort of a long term basis, that is a *significant* advantage, statistically speaking. Try going to Vegas with those odds and see how long they let you play.
Okay, try now...
That's my macro view, and I'm sorry if this disappoints you, but it has nothing to do with you. Shorter term, there will be more back and forth.
All this massive Government spending has to be paid for, and if we can't get enough sucker foreigners to buy the debt, then the Fed does (i.e. we buy our own debt and thereby devalue the dollar). It is the excessive pumping that will have to come back out of the market at some point, but their hope is that they can convince the sideline cash to come in to replace it. The question is, will the bulls bite or won't they? July was a concerted effort to try to convince investors that it was safe to get back into the water. I believe the catalyst for the next big leg down that you have been predicting erroneously for *months* will be piss-poor 3Q earnings.
Anyone know what happened to the Slosh Report? (which used to be found here):
http://www.gmtfo.com/reporeader/OMOps.aspx
Seems also the NY Fed stopped reporting on TOMO ~ 12/31/08.
http://www.ny.frb.org/markets/omo/dmm/temp.cfm
With TARP, Stimulus, and all the other bailouts, maybe they just couldn't keep up with the massive increases in the balance sheet.
Well, I am not talking about Zimbabwe, but compared to the relatively low inflation of recent decades, likely back to the double digits of the Carter era until all the profligate Government spending and endless creation of fiat money is brought under control. It may not get fully in gear until sometime next year, but the early signs are unmistakable. Every time the Fed executes some new "facility" (Fed-speak for a way to push more fiat money out the door), the dollar's reaction is swift and immediate (i.e. down) with commodity prices spiking up. For the time being, consumers are still holding back, essentially forestalling any upward pressure on prices in general, which will likely remain the case until housing prices finally bottom and unemployment peaks, but once that happens and the consumer thinks the worst is over, the lid will blow off prices like an overheated pressure cooker.
New System on C2 - Rule-Based Trading (#42123706)
Statistics are for combined open and closed positions. If open positions are included, results calculations may be delayed by several hours.
Realism Factor 100.0
Trades 16
Profitable 16
Losses 0
Win % 100.0%
APD Ratio 0.76
Correlation w/ S&P 0.580
Cumu $ $6,500
after typical commission $6,100
Keep after worst-case slippage 92.3%
Avg Win $406
Avg Loss $0
Profit Factor n/a
P/L per unit $81.25
after typical commission $78.75
Avg Trade Length 4.6 hours
Compound Annual % 3,240.1% over 15 days
Sharpe Ratio 14.786
Max Drawdown 1.71% (20090813 to 20090814)
Risk of 20% account loss n/a
Risk of 50% account loss n/a
Risk of 100% account loss n/a
I respectfully disagree. Higher energy prices eventually affect the price of most everything that moves via truck, rail, plane, or ship. Instead of deflation, we will have stagflation (remember Jimmy Carter?)-- higher prices (to the extent producers can pass them on to the consumer) in a stagnant economy. They will continue to try to stay in the game by cost cutting, but there is no way the Fed can increase the money supply by 900% and the Government continue to run $1T+ deficits *without* it causing hyperinflation down the road, and the Fed will not be able to put the brakes on fast enough to stop it.
Let's say, purely hypothetically, that the Fed provides several hundred billion in temporary account authorizations to the trading desks of a few select institutions, e.g. Goldman Sachs, with instructions to "support the market" in the short term, for whatever political or economic motivations they might have. Now, we all know when the Fed provides "quantitative easing", "monetizes the debt", "prints money", "expands its balance sheet", or whatever other euphemistic term you want to apply to it, they are simply creating the "money" out of thin air, which has the immediate effect of devaluing the dollar. When the dollar is devalued, the cost of things that have a perceived intrinsic value (oil, commodities, stocks, imported goods) goes up. According to Dennniger, approximately $1.5T additional "Fed funny money" found its way into the market in July, hence the otherwise inexplicable 19 - 20 day bull run. Call it the "dollar/inflation trade". According to what the Fed said on Wed, they plan to keep the fiat spigot open until ~ Oct, when hopefully the economy and the markets will be better able to withstand the withdrawal pains of bringing their balance sheet back in line with historical norms. The old saw for the markets is "don't fight the Fed", so we could see another month or so of "propping" until the piper has to be paid. If yesterday's retail figures are any indication, 3Q earnings will be horrible, especially for retail, since all the efficiencies from cost cutting have already been taken in the 2Q. With all the uncertainty surrounding the Orwellian HC bill, small businesses in particular are simply not hiring. However, prices that consumers pay are also governed by demand, and so due to the weak demand, the retailers have no pricing power. So, even though the CPI may show as flat, the inflationary pressures are certainly building. The last time I bought gas, it was ~ 20 cents higher per gallon that the previous time.
I am not in any way, shape, or form a proponent of *this* HC bill (HR 3200), but this characterization which can be found at various placed on the web contains a lot of interpretation, hyperbole, misrepresentation, and perhaps outright lies. If you want to check a few for yourself, you can find the actual bill here, all 1017 turgid, gut-wrenching pages:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3200ih.pdf
It is perhaps what the bill does not say rather than what it says that lead many to jump to certain conclusions. For example, nowhere in the bill does it say that illegals will be covered, but neither does it say they will be denied, and as we all know, the way medicine is practiced in this country (at least so far), any warm body who shows up an emergency room is not denied care, and the cost is passed on to the rest of us. The real danger of this bill is in its vagueness. However, if a Government commisssion is given the power to dictate what benefits will be available and under what conditions, that will be tantamount to the "Death Panels" that Obama swears won't exist. "A rose by any other name would smell as sweet."
If universal coverage is truly where we are headed (and which many think is where we ought to go), then there are numerous ways it could be made more palatable *and* which would receive a fair amount of bipartisan support. First, private options must be maintained as the last recourse for those with the desire and the means to pursue treatments that the taxpayer should not be saddled with funding. Every person could be issued a voucher of X (or X+Y for a family) which could be applied to his own HC selection or he could opt for the bare bones Government plan. It has to be a voucher instead of a credit so that all those who don't pay taxes would also get it and so that it could only be spent on a qualified HC plan and not a big screen plasma TV. Even though the extra revenue generated would be a pittance, if we really want to screw the rich purely for populist reasons, then they would get no voucher and would simply purchase their own plans on the open market, sort of how the rich folks pay their taxes and then fork over the big bucks to send little Johnnie or Susie to Harvard or Princeton. Premiums over and above the HC voucher allowance shold be charged and paid as a surtax to those whose personal lifestyle choices affect their risk category (heavy smokers, drinkers, the obese, extreme sports enthusiasts, having more than the Government prescribed number of children, etc.), as determined by an august panel of Government medical bureaucrats, since there is no reason the taxpayer should be on the hook for their bad choices. Lastly, even though the Larsen E. Pettifoggers of the world poo-poo it, the practice of defensive medicine to protect against liability suits is estimated to add at least 25% to the cost of care, and any "universal solution" which continues to line the pockets of the ambulance chasers while denying care to the elderly is simply morally bankrupt.
Smart *and* easy on the eyes...
Nope, I am the sheriff here, not Poker...
I am not really sure what he does, but he convinces himself that when he changes his target and therefore his call, that he wasn't wrong. If you had gone Short per his initial call (i.e. the first time he said "the top is in" or "it is all down from here"), you would be seriously underwater unless you had covered and reshorted repeatedly on the way up, and perhaps caught a couple of day trades in your favor on the minor pullbacks. Thing is, I like Poker, except for his insufferable hubris, but he is totally delusional re: his prowess as an EW master (total bunk IMHO) and trader. His hubris is exacerbated by all the drooling minions over there who buy into it, which further feeds his ego, and so it goes. He will see this and I am sure have something to say about it, but it is nothing I have not said directly to him before. Unlike him, I can be civil and find some common ground even if I don't agree with someone (except Obama lovers).
***Poker, you do *NOT* have my permission to repost this on your board, and if you do, I will report it as a TOS violation. If anyone is interested, they can read it here.***
The high was in yesterday.
There are now -145 NDX pts needed to close the Intel gap up.
Glen, good to hear from you. Hope you are not still trying to Short AAPL...
Concurrent with the launch of our hedge fund earlier this year, we closed to new subscribers on both C2 and our site, so at this point have just a handful of grandfathered subs left to whom we are still providing the signal as we promised we would do. We realized long ago that without incurring horrendous marketing expenses, generating any meaningful income with a signal subscription service and dealing with the majority of the subs' "buy high, sell low" psychology was more work and aggravation that it was worth, when the real money was in refining the trading rules (i.e. not just blindly following the signal) and trading our own money in our personal accounts and the fund that would then accept only accredited investors, i.e. > $1M net worth and min $250K investment. We started trading the fund ~ early Apr and will need ~ 6 months of live returns to be credible, but YTD the baseline signal is up ~ 30%, which if traded according to our refined trading rules which use various filter techniques to avoid the higher risk trades, would be ~ 117%, including a nasty Short loss with this current severely OB market condition.
With 100 as high as it can go, RSI 2 of the NDX HOD is 99.89...
Poker, a trading signal is different from a market prediction, in that it has two parts, i.e. a recommended position *and* an execution window. If you have taken a signal and it turns out to be "wrong" re: what the market actually did, you take your lumps, and through good money management practices, e.g. Stops, limit the damage and live to fight another day, but constant revision and then claiming that is the way it was to begin with sounds like something Obama would say. If a position is entered and held against an uncooperative market such as we have now trying to be Short, even though on a daily basis the signal will eventually be right, the market would have to drop below the original entry to be profitable, and that would be a drop of 110 NDX pts to get below the Intel earnings gap up. A good technique for mitigating the negative effects of a run like the last 11 days against an opposite signal is to cover at some maximum acceptable loss, and then plan to reenter higher, cover on the dips, reenter, etc. You might only make pocket change by doing this, and it is definitely not the Ronco Rotisserie approach of "set it and forget it", but it gives you the best opportunity to hold your own against an irrational market and stay positioned for the eventual collapse.
Please stop by:
http://investorshub.advfn.com/boards/board.aspx?board_id=7383
and I will address your question there...
At some point it has to be more than a slight pullback from extreme OB and then a bounce right back up to set a new high, like it has for 11 days now. It may take some kind of watershed, exogenous event to generate sufficient downside momentum to make it stick.
The predictions are always right eventually, but the timing may be a little off. However, in the opinion of some, timing should never be an issue in being able to make a profitable trade as that can always be revised.
Yes, it has not been so overbought since Oct 07, so it is not rocket science to say that it will decline eventually. The missing and more critical piece of information is *when*, and by that I don't mean when a particular index reaches a particular level.
I raised my basis...
If you have been tracking it, would be interested to know your live results, and then how much the live results might have been improved by applying some trading filters, e.g. no new Longs when RSI 5 > 80 and no new Shorts when RSI 5 < 20.
Is that live or backtested?
For once I hope you are "right" (I mean, sometime in the *near* future, without retrospective revisions/extensions). I am so Short I could sit on the edge of the carpet and my legs wouldn't touch the floor.
Thanks, Poker, for staying on top of what was really said, instead of the spin doctors' opinions. In the Navy, we said "eternal vigilance is the price of safety."
The second article in that link, re: the impact of continued job losses and high unemployment, is also spot on.
Yeah, Joe Sixpack bull probably has no inkling, but if/when the option sellers step up to the sell window en masse, the decline will be swift. There's also the possibility that the option sellers could have hedged their positions in some other fashion, so who really knows what their OE target might be.
Max Pain is a *theory* which has some observed empirical validity, similar to Fibonnaci retracements. Sometimes it works, and sometimes it doesn't. Just another tool in the arsenal.
Max Pain for the Qs is now 36, 1.01 lower than the current quote of 37.01. The option sellers may be holding off to allow the retail bulls to push it up as much possible before beginning the selloff that will move it towards their MP target.