Market Currents
Technician Louise Yamada urges clients to keep stops tight as she watches equities with growing...
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Monday, September 3, 2012, 1:30 PM ETTechnician Louise Yamada urges clients to keep stops tight as she watches equities with growing unease. "You could call it a vacuum rally," she says, characterized by short-covering, low volume, and deteriorating new highs vs. new lows. The lagging Transport Index (IYT) has her attention as well, but following this indicator kept some out of the big summer rally.
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Agreed, Yamada does know her stuff and is worth listening to. Is looking like Tuesday will be a positive market day, based on EU and Asian trading today, but that can change very quickly in early Sept.
Can't hurt. I am very wary in here.
Capt. Brian
The Lost Navigator
That's actually very Bullish, if you believe we've passed the Nadir.
Some do. Some don't. That's what makes horse races.
I will short in such a scenario.
The one variable we are not able to quantify is the PERCIEVED notion of Bubble Blowin Ben and his Dollar debasing QE stun gun!
If we were in anything even closely resembling a true "Market Economy" we would have at the very least re tested the 2009 lows at least once,(years ago) before this parabolic move, due to the massive fed intrusion!
When we finally break to the downside, it will usher in the full blown depression we are mired in and is all of Bernanke's making!
Deflation is all around us, the inflation the shills are spouting is nothing more than a side effect of Bubble Blowin Ben's QE stun gun!
To argue otherwise is contemptible!
You would need the VELOCITY of idle money to go as parabolic as this "American Taxpayer Funded" bogus rally!
The struggling working man / woman has paid for this mirage with their standard of living being gutted,
and the final payment is for the children and their children who will never attain our once mighty standard of living!
What profligate pigs we have devolved into!
God save the republic
We are like the Chinese saying, at the end of the full-strung bow. With little more room to pulling the string of the bow, a collapse is imminent, and a major correction, ripe.
"get out if it goes to where? "
That is the question every investor answer for themselves.
Technical analysis has taught me that human nature is the relative constant ... and today's human psychology and investor reactions aren't consistent with a market top ... and, therefore, today's psychology likely trumps deteriorating new highs and new lows and a non-confirmation of the DJ Trans average for the time being.
My expectation is a September first-half consolidation, perhaps a dip to around 12,700 on the DJIA, that will set the market up for a strong finish to the year.
2013 ... well, that may be a whole different setup.
Louise is a good technician, and she has been negative on equities for quite some time.
As long as the Fed is giving away the house, whatever the technicals, and i agree that they are awful and will, in retrospect, be cited as to the preponderance of evidence that this WAS a horrible rally , you have to stand there and grab the free money.
The lesson you might learn from Louise' work, and prepare for, is that this rally has taken place on no volume. Worse than no volume. And no, it is not different this time. When the selling starts from events which we cannot predict, but can know only that they are out there based on the lousy technicals, it is going to look like cartoon capers as many, many unhedged (look at the volatility, it is close to zero) investors try to get out, or get hedged.
Can you say down 10% before the US markets open when that day gets here....? People laugh, and have short memories, about things like circuit breakers. "I'll get out, or i'll get hedged." Sure you will, but how are you going to do that when the US market never opens for several days because it is limit down? Call Goldman, they'll make you a price assuming that when things open they will be down 20%.
Those are going to be some very unsightly dog and pony show hearings in DC as they try to rewrite the rules, yet again, to outlaw risk in the equity markets.
Bwahhhhhhaaaaaaaaaaaaa...
Communication strategy is cheap and as Mr. Bernanke sent a smoke signal on Friday to the ECB "QE Works!". It does to. I caught on to that in high school Econ. 101. Has something to do with supply and demand as I remember. If you increase the supply of something, like $$$ and the demand remains the same then the price/value of $$$ goes down causing inflation which in turn concentrates wealth even more at the top 5% because only the first few people to get their mitts on this new money get to invest it in commodities (like food, energy, and shelter) which the 95% of the people behind them will have to pay inflated prices for using the 'new' devalued and debased script.
I can see why the 5% are jumping up and down with joy but I can't for the life of me see why the other 95% are so happy. They're the ones who are about to get hammered.
.http://seekingalpha.co...
http://bit.ly/NIu54y
The reason that the "technicals" haven't produced the expected results and that apparent softness, too, in some economic indicators has been equally ineffectual is because we've finally reached the point where the outflows from equities and equity funds have persisted for so long (and into Treasuries, cash, gold, etc.) that the remaining prospective sellers are not easily dislodged from their positions. Conversely, there are increasing numbers of nervous holders of "safe" investments, many with sizable unrealized gains, wondering when all those gains could evaporate. And, it's hard to keep wondering about that when one is getting paid a miserly 1.5% in yield, or even nothing, for the trouble.
The present capital imbalance will prove a very formidable obstacle for a major down move in markets unless some major unexpected negative development ensues. Everyday worries aren't going to do the trick, anymore.
"Technician Louise Yamada: Stay Defensive for Now; New Bear Market in Bonds Coming"
'Louise advises to stay defensive"
http://bit.ly/OJfjqB
I don't know the statistics other than what I have heard on the financial news, but isn't it usually true that markets do better under a democratic administration?