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It will likely take the institutional money managers a few days yet to figure out where to take the market, and that will likely depend in large part on their take of the Fed's continued loose monetary policy. In the meantime, we still have a few retail bulls who are buying on the new year's "feel good" and/or "got to be invested" trade, not to mention new 401K money that has to be invested. Those buying at these levels, except for short term trades, will yet again be the bag holders, IMHO. With the S&P at historically high P/E ratios, how long can they maintain the charade with 4Q earnings that start being reported in ~ a week? Remember, 70% of the economy is consumer spending, and only so much can be squeezed out by cost cutting or inflated by Government spending (i.e. robbing Peter to pay Paul) and eventually continued lackluster consumer spending will take its inevitable toll on the revenue numbers. How many of you, your neighbors, and/or friends are going on spending sprees and taking on more debt, especially for big ticket items? You had better be hanging on to every cent you can so you can send it all to Obama and his socialist cohorts when you get the bill for HC, Cap and Tax, and income taxes, since they know so much better than you how your money should be spent.
Sorry, my good woman...
New year, same old story. As long as the Fed keeps the liquidity tap going full bore (Dec saw the highest Fed balance sheet on record), the market simply has to keep pushing prices higher in anticipation of the massive inflation that is just around the corner.
It is the socialist way, my man. Welcome to Obamanation...
Yes, and isn't it laughable how few seem to realize that declining lost jobs numbers (i.e. fewer people getting fired) means that people are still getting fired, i.e. unemployment hasn't peaked yet?
Yes, just like the nation that always prepares to fight the last war will forever be playing catch up.
A good two-thirds of the so-called stimulus wasn't, because it has not yet been spent (and, aren't we being told that the recession is over???). The fact was that it was largely political payoffs (e.g. $30M of *your* tax dollars to study the habits of the marsh mouse in Pelosi's district), and is due to kick in in the months leading up to the 2010 mid-terms. With the passage of healthcare and cap & tax, the Dems will need all the help they can get. The average American is mad as hell and is not going to take this anymore.
"Never let a crisis go to waste" - Rahm Emanuel.
It took 43 presidents and over 200 years to rack up $10T in debt, and Obama and his socialist party have added another 20% in less than one year. Just incredible...
Thanks for the correction. Maybe those events were in part responsible for the fact that they *now* have the most effective security measures.
FYI, El Al, the Israeli national airline, definitely profiles, and they have *never* had a terrorist incident on board a single flight.
What I think we have is an “anti-profiling” policy. Whatever the terrorists have last tried, that now gets applied to the general population, but with those who share the narrow terrorist attributes such as race, religion, country of origin, age, sex (i.e. Muslim males between the ages of 17 and 40), etc. excluded, because that would be profiling and of course we can’t have that. On our quarterdecks, we conducted “random” searches for weapons and “illegal substances”, and you can bet your a** that known druggies, i.e. the ones who parted their hair down the middle, always ended up in the “random” group. I guess we just randomly and arbitrarily changed our selection criteria, i.e. “today, at this moment, anyone wearing purple pants gets searched”.
If this has been posted here previously, I apologize, but I could not find it in the message queue.
Can this be so??? Remembering helps!
A lot of Americans have become so insulated from reality that they imagine that America can suffer defeat without any inconvenience to themselves.
Pause a moment, reflect back. These events are actual events from history.
They really happened!!!
Do you remember?
1. 1968 Bobby Kennedy was shot and killed by a Muslim male extremist between the ages of 17 and 40.
2. In 1972 at the Munich Olympics , athletes were kidnapped and massacred by Muslim male extremists between the ages of 17 and 40.
3. In 1979, the US embassy in Iran was taken over by Muslim male extremists between the ages of 17 and 40.
4. During the 1980's a number of Americans were kidnapped in Lebanon by Muslim male extremists between the ages of 17 and 40.
5. In 1983, the US Marine barracks in Beirut was blown up by Muslim male extremists between the ages of 17 and 40.
6. In 1985 the cruise ship Achille Lauro was hijacked and a 70 year old American passenger was murdered and thrown overboard in his wheelchair by Muslim male extremists between the ages of 17 and 40.
7. In 1985 TWA flight 847 was hijacked at Athens, and a US Navy diver trying to rescue passengers was murdered by Muslim male extremists between the ages of 17 and 40.
8. In 1988 , Pan Am Flight 103 was bombed by Muslim male extremists between the ages of 17 and 40.
9. In 1993 the World Trade Center was bombed the first time by Muslim male extremists between the ages of 17 and 40.
10. In 1998, the US embassies in Kenya and Tanzania were bombed by Muslim male extremists between the ages of 17 and 40.
11. On 9/11/01, four airliners were hijacked; two were used as missiles to take down the World Trade Centers and of the remaining two, one crashed into the US Pentagon and the other was diverted and crashed by the passengers. Over three thousand Americans, more than at Pearl Harbor or on the Normandy beaches, were killed by Muslim male extremists between the of 17 and 40
12. In Afghanistan, the United States is fighting a war against Muslim male extremists between the ages of 17 and 40.
13. In 2002 reporter Daniel Pearl was kidnapped and beheaded by-- you guessed it -- Muslim male extremists between the ages of 17 and 40.
No, I really don't see a pattern here to justify profiling, do you? So, to ensure we Americans never offend anyone, particularly fanatics intent on killing us, airport security screeners will no longer be allowed to profile certain people...
Absolutely No Profiling!
They must conduct random searches of 80-year-old women, little kids, airline pilots with proper identification, secret agents who are members of the President's security detail, 85-year old Congressmen with metal hips, and Medal of Honor winner and former Governor Joe Foss, but leave Muslim males between the ages 17 and 40 alone lest they be guilty of profiling.
Ed note - And now we have a closet Muslim/sympathizer as president who may not even be a naturalized citizen. No wonder we won't profile Muslim males between the ages 17 and 40. Just brilliant, America. What exactly were you thinking???
Maybe not so much, re: big capital gains taxes. If they were Buy and Hold investors, they are not even back to break-even yet, i.e. it takes 100% gains to equal 50% losses, so they will likely be using current years gains to offset capital loss carry-overs.
This mini-Santa rally since ~ 12/17 that has been driven largely by the retail trader may continue through next week, but come Jan 4 or 5, it will become much more risky for the bulls.
Fund managers have too much to lose into year end, so with the second string at the levers and instructions not to allow things to get out of control, expect a sideways to slight grind up as retail traders take turns driving the bus. When the big boys are back in the left seat after the first of the year and have assessed the situation re: the dollar, government spending, healthcare, cap and tax, etc., etc., we might finally see some real movement. Costs have been cut about as much as possible, so with continued lackluster spending by the consumer, posting good 4Q earnings will be even more of a challenge.
No top yet. NDX closed near HOD, and is continuing to grind higher AH.
Has anyone seen a top around here? We seem to have lost one...
(yawn...) Somebody buy or sell something.
It is my own strategy, but automated with the trading tools that the TS Desktop provides. In addition to an extensive array of TA indicators and Stops for money management, TS has many, many features that allow you to control execution and position size, including pyramiding. You have to be careful not to invoke unintended consequences, but it does give you the freedom to walk away from the computer for a few minutes. If you would like more information, my private email is: "tmgsignal@comcast.net"
Now even *more* OB, and pushing higher every few ticks. When the bulls are running, there is no denying them...
Anyone at home here in the Bears' Den today?
Starting off here very OB on the day after OE, so if everyone is presuming the apparent Santa rally of Fri will continue, perhaps we'll see a sustained sell-off on light volume. However, the dollar is down, so that would break the inverse trade pattern.
I had a sense that it must be somewhere around there. So, if you have $1000 worth of puts or calls that expire worthless on OE, is that the max you can lose? (I realize that you would prefer to trade them for whatever you could get for them sometime prior to OE).
What is the underlying margin when you trade options? For NQ futures, each contract is "worth" $20/pt, so at NDX 1800, the full value of one contract would be $36K for 1X margin, but the futures brokers will let you trade for as little as $3K/contract on deposit, which would be an effective *12X* margin. So, if you could show $500/contract/week net of commissions, the weekly ROI would be 16.7% for a $3K account balance, or 1.4% for a $36K account balance. However, in case you catch a crab or two in a row, having an extra $K or so is not a bad idea, since the brokers take a dim view of an account that falls below its minimum margin requirements.
Whether 10% a week is "sufficient" sort of depends on how much you have at risk. At $100K on the table, that's a living, but if it is only $100 at risk, that is not even beer money.
Due to an uncooperative market, the aforementioned automated dual RSI strategy ended the day down $15 bucks on one NQH contract, net of commissions. By using a manual pyramiding strategy, I did a little better, up ~ $90 on the day.
FYI, this dual RSI strategy does not presume to know what the market will do next, it just follows its trading rules based on what the market actually does. Sort of a Ronco Rotisserie approach, i.e. "set it and forget it."
Actually, it doesn't have to move that far to generate intraday buy and sell signals, and if you do get caught on the wrong side of a move, that's what stops are for. Then, when it does finally reverse, you get back in on the recross of the SE/LE trigger threshold.
Not much of a bounce, just sliding lower, like a wet booger on a window...
Hmmm, market isn't showing much enthusiasm so far for Bennie's committee vote...
The bulls are stirring, probably front-loading the Bernanke vote...
Yeah, I think the bulls are just holding off here until the Senate Banking Committee votes to reconfirm Bernanke. That announcement in ~ 30 min could light the fuze. My day trading indicators are hovering around the oversold level.
I am running a dual RSI strategy that is fully automated on the TradeStation platform trading NQ futures. The first RSI provides for Long and Short entries at the mildly OB/OS levels and the second captures the more extreme moves that go beyond the first level. In addition to the reversal points, Loss and Profit Stops are also employed. This relatively simple system produces ~ $4-5K per month per contract traded.
Re: day trading, I figured that out several months ago. Trying to guess which way this market will go on a daily basis is a crap shoot at best.
You would have to be pretty athletic to keep 14 mistresses *and* a hot wife satisfied...
I think that is what I said for the short term, albeit with a bit more substantiation, but thanks for your two cents worth...
The Fed has said repeatedly, and likely will again today, that it will do "whatever is necessary" to prevent a Second Great Depresssion, so presumably they are willing to keep flooding the markets with fiat money as long as it takes for the economic recovery to be firmly in place, as determined by whatever measures they deem important. So far, it has been successful, if you believe the reports of record bullishness among investors, and the purported crash has been a figment of Pokersam's imagination, at least up until now. The problem is that the Fed's balance sheet has grown from ~ $900B to over $2T in less than a year, with a good portion of that in U.S. treasuries (i.e. it has created "funny money" with which to buy up treasuries from the primary dealers to fund the massive deficit spending by the out-of-control socialists). In other words, one arm of the Government has give the other arm of the Government a loan, with money that it just "made up" (also called "monetizing the debt"). If that money were ever paid back, it would just disappear off the balance sheet as magically as it was created, but that presumes that at some point the socialists will stop spending us into oblivion. Re: the Fed "printing" money, that will ulitmately lead, as it has in many failed economies, to massive inflation (*not* deflation), and the signs are already beginning. In a recession, suppliers of goods and services have no pricing power since the are mainly focused on maintaining market share and staying in business, but when economic expansion starts with too many dollars in circulation, the lid will blow off prices like a pressure cooker. Of course, many are saying that is a part of the plan, since realistically, we will never be able to pay off the burgeoning $12T national debt, so the only alternative is to inflate our way out of it. The inverse dollar trade has worked pretty well these last few months, and if you are not into commodities, which are also soaring, stocks are the only investment that has a chance to keep up with hyperinflation. However, Meredith Whitney has opined that the Fed may be running out of bullets, and if the upcoming auctions go as badly as the last one, they may have to turn off the money spigot earlier than they planned. When you can't entice more stupid foreigners to give you a loan at ridiculously low rates of return, which will then be repaid in the future with inflated dollars, the gig will be up, and the Fed will be forced to grow a spine, say no to more monetizing, and the treasury will have to offer better terms (i.e. higher rates) to its creditors. Higher rates/tighter money, even though it is the correct course of action, would send the market into a tizzy, at least for a while.
Think we'll ever see the fat SOB own up to it? Don't hold your breath.
PS - Since we didn't get one today, I somehow knew you would say that. Agree it is looking pretty toppy on weak volume. Either there is just not much buying interest at this level, or the bulls were just taking a breather. RSI 5 is only just above 60, so based on previous buying sprees over the last several months, it still has some room to run. Short wins entered at RSI 5 > ~ 60 have been few and far between.
Or maybe neither...
Well, one of us will be right. That is why it is called a market.