Quote from SiSePuede!:
Jim Cramer has enabled a whole class of idiots to invest who otherwise should be kept in cages and studied I guess.[/B]
Now that's some funny shit.
The Face of Things to Come
- Thread starter michaelscott
- Start date
Now that's some funny shit.lol Why not cover it on monday rather than wait for the stop to trigger?
As Grimes has so astutely pointed out, today's rally was on low volume. In other words, not very convincing. It would seem that MichaelScott's interest analysis is reasonable and we should expect rates to rise further.
I have said elsewhere, and i believe this with great conviction, that Greenspan went overboard in providing liquidity when the Fed took the discount rate to 0.75% in November of 2002. (I believe Greenspan was politically motivated, but i don't want to get into that.) Since, he as much as anyone else, was responsible for the subsequent real estate bubble, I find it ironic that he is now going around predicting a recession. It would seem that, so far anyway, Bernanke has acted rather sanely compared to his predecessor.
I certainly would not agree with those who say that what is needed now is a rate cut. In a non-deficit, non-inflationary environment that might be just the thing, but not now. I don't believe Bernanke has quite as much freedom to set rates as many think. Fed policy surely must be dictated to some extent by real world financial exigencies. It is politically desirable, naturally, to inflate as much of the debt away as possible, but there are limits to our creditors' gullibility.
What in my opinion would be very helpful in improving the long range investment picture would be a much more realistic approach to "defense" spending. More than one country has gone bankrupt by wasting their money on useless military hardware, and we are following in those footsteps. It matters little whether i'm a trader or an investor, i'm better off when my country's economy is strong. In my opinion, an economy built on borrowed money used to prop up the military- industrial-complex is not a strong economy. And finally, if military expenditures don't ruin us, then health care costs will. These are the two issues that most threaten our long-term economic stability. We will eventually be forced to do something about both, but let's not wait until then to act.
Good luck to everyone. The coming weeks should be quite interesting. Let's hope there is some decent volatility we can trade on.
I have said elsewhere, and i believe this with great conviction, that Greenspan went overboard in providing liquidity when the Fed took the discount rate to 0.75% in November of 2002. (I believe Greenspan was politically motivated, but i don't want to get into that.) Since, he as much as anyone else, was responsible for the subsequent real estate bubble, I find it ironic that he is now going around predicting a recession. It would seem that, so far anyway, Bernanke has acted rather sanely compared to his predecessor.
I certainly would not agree with those who say that what is needed now is a rate cut. In a non-deficit, non-inflationary environment that might be just the thing, but not now. I don't believe Bernanke has quite as much freedom to set rates as many think. Fed policy surely must be dictated to some extent by real world financial exigencies. It is politically desirable, naturally, to inflate as much of the debt away as possible, but there are limits to our creditors' gullibility.
What in my opinion would be very helpful in improving the long range investment picture would be a much more realistic approach to "defense" spending. More than one country has gone bankrupt by wasting their money on useless military hardware, and we are following in those footsteps. It matters little whether i'm a trader or an investor, i'm better off when my country's economy is strong. In my opinion, an economy built on borrowed money used to prop up the military- industrial-complex is not a strong economy. And finally, if military expenditures don't ruin us, then health care costs will. These are the two issues that most threaten our long-term economic stability. We will eventually be forced to do something about both, but let's not wait until then to act.
Good luck to everyone. The coming weeks should be quite interesting. Let's hope there is some decent volatility we can trade on.
The reasoning behind my long winded explanations is to demonstrate how I came to such logic. Its so people can learn from my work or present a counter-argument and then I can learn from them.
Jesse Livermore had stated the usual stock trader does not want to think and wants to be shown the easiest path. While I was at the Westchester airport today test riding luxury jets, I met a woman from Dubai who had told me a story about how she lost her shirt trading with a highly leveraged strategy. She said that she had been trading for 10 years.
I then started talking to her about a business idea I had involving the middle east and she did not want to hear it telling me that the faster way to make money was through trading. When we deboarded the plane, I looked her in the eye and told her that what she was doing was not trading, but indeed gambling. Highly leveraged options plays where an entire account can be blown in one day...thats gambling.
She didnt want to think about what was going on, she just wanted to make money and in the process lost her account. By the way, she was pretty cute.
If you want me to put things in simple terms, then here is the big picture:
http://stockcharts.com/charts/gallery.html?$TNX
Pay attention to the weekly chart. Look at that W bottom, that concerns me. If that price exceeds 5.24, then we have higher to go from there. Last summer seemed like a nightmare to some with no end in site. A larger nightmare might emerge if the ten year yield goes to 6.0. The TNX has become a momentum play!!!
There is a dangerous situation taking place right now that could result in SPX 2200 or SPX 800. First, we have the ultimate resistance (the top of 7 year SPX cup) and then the ultimate support (the trend 20+ year trend line that the market always bounces off of). These two ultimate lines of support and resitance are converging on each other forming a triangle. When price gets into a triangle such as this, then it means a large scale breakout to the upside or downside.
No, Im not attempting to be "vague" by this conclusion, just pointing out the obvious. There is no way to know which way the price will break out of a triangle. When I have attempted to guess, then I have been wrong each time. I only know that when it does break out of one side of the triangle then the move will most likely be explosive and extreme.
The other conclusion I have reached is that while everyone has been paying attention to the SPX, they have turned away from the bond market. While the SPX made its rounded bottom and reached multi-year highs, the bond market has been moving up in a similiar manner. The highest tnx yield of 2000 was 6.8. I dont see a price of 6.8 just yet as possible, but I do see a move to 6.0 as more then 50% likely.
The rally on Friday wasnt really a rally to me. It seemed like a short covering rally where the machines were covering when the index hit the 50 day moving average.
If we move lower from here, then the next possible pivot point will be at 1437. That will be a perfect retracement to the lip of the March cup. However, it will also be scraping up against the ultimate support.
You saw what happened when the tech stocks in 2000 violated their grand supports. You saw what happened when the homebuilders violated their grand supports. Its no different with these indexes.
Now the most troubling part is that if and when the ultimate support is violated, there will be no escape. In 2000, you could flee to the bond market, gold, oil, real estate etc. This time around all of these instruments will move to the downside during such a violation and the only instrument of reasonable safety will be your traditional savings account at the bank.
Here is a picture of me in the plane. This jet was a little noiser then I would have imagined, I would go with the Bombardier Challenger because its much quieter.
Jesse Livermore had stated the usual stock trader does not want to think and wants to be shown the easiest path. While I was at the Westchester airport today test riding luxury jets, I met a woman from Dubai who had told me a story about how she lost her shirt trading with a highly leveraged strategy. She said that she had been trading for 10 years.
I then started talking to her about a business idea I had involving the middle east and she did not want to hear it telling me that the faster way to make money was through trading. When we deboarded the plane, I looked her in the eye and told her that what she was doing was not trading, but indeed gambling. Highly leveraged options plays where an entire account can be blown in one day...thats gambling.
She didnt want to think about what was going on, she just wanted to make money and in the process lost her account. By the way, she was pretty cute.
If you want me to put things in simple terms, then here is the big picture:
http://stockcharts.com/charts/gallery.html?$TNX
Pay attention to the weekly chart. Look at that W bottom, that concerns me. If that price exceeds 5.24, then we have higher to go from there. Last summer seemed like a nightmare to some with no end in site. A larger nightmare might emerge if the ten year yield goes to 6.0. The TNX has become a momentum play!!!
There is a dangerous situation taking place right now that could result in SPX 2200 or SPX 800. First, we have the ultimate resistance (the top of 7 year SPX cup) and then the ultimate support (the trend 20+ year trend line that the market always bounces off of). These two ultimate lines of support and resitance are converging on each other forming a triangle. When price gets into a triangle such as this, then it means a large scale breakout to the upside or downside.
No, Im not attempting to be "vague" by this conclusion, just pointing out the obvious. There is no way to know which way the price will break out of a triangle. When I have attempted to guess, then I have been wrong each time. I only know that when it does break out of one side of the triangle then the move will most likely be explosive and extreme.
The other conclusion I have reached is that while everyone has been paying attention to the SPX, they have turned away from the bond market. While the SPX made its rounded bottom and reached multi-year highs, the bond market has been moving up in a similiar manner. The highest tnx yield of 2000 was 6.8. I dont see a price of 6.8 just yet as possible, but I do see a move to 6.0 as more then 50% likely.
The rally on Friday wasnt really a rally to me. It seemed like a short covering rally where the machines were covering when the index hit the 50 day moving average.
If we move lower from here, then the next possible pivot point will be at 1437. That will be a perfect retracement to the lip of the March cup. However, it will also be scraping up against the ultimate support.
You saw what happened when the tech stocks in 2000 violated their grand supports. You saw what happened when the homebuilders violated their grand supports. Its no different with these indexes.
Now the most troubling part is that if and when the ultimate support is violated, there will be no escape. In 2000, you could flee to the bond market, gold, oil, real estate etc. This time around all of these instruments will move to the downside during such a violation and the only instrument of reasonable safety will be your traditional savings account at the bank.
Here is a picture of me in the plane. This jet was a little noiser then I would have imagined, I would go with the Bombardier Challenger because its much quieter.
Also test drove a McLaren too. Now that was the real fun...not a log of legroom though.
The Maybach has the legroom, but I still prefer to drive not ride in the back.
cool. i received an invite to the jet event , how was it? did you actually get to fly, or just inspect?? would you recommend attending the next one??
surf
ps. by the way, TA has nothing to do with statistics.
"The key here is Bernanke. The rates need to be aggressively cut right now, .50 or more. If they are not cut, then the ten year yield will continue its nasty rise. "
A thoughtful analysis but I think you are off the mark with this. The last thing Bernanke should do is accommodate inflation. Central banks need to maintain credibility (i can hear the snickers) and if he cuts rates in the face of higher inflation, all hell would break loose. Bonds would sell off sharply as no one would be willing to hold those worthless little pieces of paper promising to repay in dollars with no purchasing power left.
Bottom line is take a little tough medicine now or pay a very big price later.
A thoughtful analysis but I think you are off the mark with this. The last thing Bernanke should do is accommodate inflation. Central banks need to maintain credibility (i can hear the snickers) and if he cuts rates in the face of higher inflation, all hell would break loose. Bonds would sell off sharply as no one would be willing to hold those worthless little pieces of paper promising to repay in dollars with no purchasing power left.
Bottom line is take a little tough medicine now or pay a very big price later.
..."This time around all of these instruments will move to the downside during such a violation and the only instrument of reasonable safety will be your traditional savings account at the bank. "...
NOT A USA bank my friend.
Have some CASH in EURO, GBP, AUD Bonds.
30% is USA bank.
I prefer SWISS BANK with funds in EURO, AUD and a little USD.
NOT A USA bank my friend.
Have some CASH in EURO, GBP, AUD Bonds.
30% is USA bank.
I prefer SWISS BANK with funds in EURO, AUD and a little USD.