sl62

Today May Be Markets' Turning Point

max12345..

some excellent points. Our job as market parasites, lol (the retail investor in general) is to follow the money and get out of the way of oncoming trains. Stocks go up and down when the decision makers say they do (i.e. GS). Look at C for example. Cramer flip flopped on them in a heartbeat because the word came down from his former bosses that C was to be shored up taken higher. No more "fortress five" lol, but suddenly they were a banking institution to be trusted and Vikram Pandit was a genius again. Overnight. Again, being successful in the market means closely slaving to the money flow.

I see in Pre this morning, catch-up hedge money/ probably foreign money continues to pour in. What we don't know is, the ratio of that money, to that which went long in March and helped create this entire move from the March low. Though I do believe there will not be a breach of the July 8,093 attempt at creating the double bottom, it will be interesting to see what happens when this current secondary money flow dries up. Congress is soon back, political issues come more to the fore again, and you have to believe there will be some attempt/opportunity to take this thing down at some point through about the end of October. 'If' that gets some traction, I would look for somewhere in the 8,700 range before then a turn back to here and a bit higher going into the end of the year. That wouldn't be that horrible and might then lastly quell all this talk of too far too fast and bring in even more money early next year. gl.


On Aug 23 03:12 AM max12345 wrote:

> I think Mr. "Albertarocks" above is more likely right than not. I
> am not sure if it's Bankers, but somebody out there certainly is
> manipulating markets.
>
> Something related to his argument that also may be useful to keep
> in mind is that nowadays there is not just one market, but several
> markets (with an "s") and although they are not totally decoupled
> from one another they are partially decoupled.
>
> For instance I don't think that Rothschild bankers manipulate the
> Chinese stock market all that much. (whether directly or indirectly)
> Though there is no doubt whatsoever that bureaucrats in Beijing DO
> manipulate it...and a whole lot. (so different countries have different
> rip-off artists and different schemes through which they operate)
>
>
> I would suggest that people (particularly Americans) start to apply
> the concept and basic principles of "political risk and country risk"
> ALSO to their investments (if any) in the U.S. and in U.S. markets.
>
>
> That is, in Russia one has to worry about the oligarchs, Mr. Putin
> and assorted Russian Mafiosi. In China one has to worry about Mr.
> Hu Jin Tao and the communist party. And in the U.S. one has to worry
> about mafiosi bankers, Goldman Sachs, lying and duplicitous Congressmen,
> and a bunch of other Wall Street rip-off artists.
>
> I also would add that generally speaking (and in international affairs
> in particular) the United States seems to be a lot more capable at
> coming up with fairly subtle and sophisticated propaganda and related
> practices (including in the financial and markets arena) that are
> "plausibly deniable" than -let us say- the Russians or the Chinese
> who tend to use much older and much more "crude" methods. (for example,
> arresting some innocent Rio Tinto employees and locking them in jail
> without charge)
>
> In the U.S. those who do the equivalent of "stealing state secrets"
> are rewarded with mega-jumbo bonuses or huge trading commissions
> instead...and the terms of the argument are ably shifted to become
> about the size of the bonus, not the length of the jail term.
>
> Two or three markets around our sorry world that seem to me to be
> marginally more honest are the Norwegian stock market (Norway has
> the World Bank's highest ranking on its good governance index) and
> the Canadian and Australian markets. Those countries are also resource
> or commodity countries and their markets include lots of small and
> medium-sized businesses.
>
> The preceding characteristics make it harder (though of course not
> impossible) for assorted rip-off artists to concoct schemes to steal
> from the small retail investor investing in those markets.
>
> So watch out for that "country and political risk" (as understood
> more widely and more properly) and good luck with your foreign investments,
> including those you make in the United States.
>
> Caveat Emptor.

Today May Be Markets' Turning Point

logan...

good presentation..esp. showing the trend line. And how clearly we can see the dreaded double top. Folks, the next time you see a double top in the Dow (or whatever it may be called in the future now that it's for sale lol), I would run for your investor life..I will be. But...looking at my Dow candle chart and using closing prices not intraday, my trend-line is essentially the same as yours. In which we see the down-trend tops staying very true to this line...except in the case of wk of April 14, 2008 - wk of May 5, 2008, where it broke up past the trend briefly...then immediately turned back down. Wk of 14th it closed @ 12,849 and wk of the 5th, it closed @ 13,058 or a gain of 209 pts past the trend. So here we are as of now. As said, by my candle chart, it is saying we officially broke through the trend line wk of August 3 with a close @ 9,370. Yesterday the close was 9,506..a gain for the period of 136 pts...again pts breaking the trend line. So. Is this the same small peak past then a dip back below in a significant way? Hard to say. The upcoming time period would suggest it's certainly plausible. Notoriously, post Labor Day, a certain down mentality seems to want to pervade the marketplace through October..but this year we have a wildcard...which is that coming off such a historic meltdown, slowly improving economic metrics..which would keep any major down initiative at bay (provided those metrics do continue showing improvement. Case in point is housing per yesterday's numbers. Overall the headline was positive and slowly improving..yet a closer look at the numbers show that only lower priced and foreclosure properties showed increases. But the headline is what generally drives the sentiment as we know...which it did yesterday also. So as I believe we will continue to get enough "headlines" over the next 60 days, I would expect more of a stable period. Not up wildly, but not seriously crashing back below the trend line either.

Something else to consider regarding the trend line… As we see, it is a down trend, and has been so now since the double top in Oct of 2007. One has to ask the question: how long do major downtrends generally last? Over the past 20 years, the only other major down trend we've seen is Jan 2000 - March 2003...another bubble. So a period of 3.3 years until a recovery had begun. Currently we are @ 1.9 years peak to trough..however with the caveat that we also dropped much faster during this trend and have already bounced off of the ostensible low. The only other major down turn the Dow has seen in the last 20 years was a quick drop the summer of 1998 where it fell from a high of 9,368 to a low of 7,400 July to September...which also leads to something that may spark a debate of its own. That '98 low of 7,400, the 2003 low of 7,197 and this March's low of 6,470 essentially could be perceived as a triple bottom..a sign of support (speaking in general vicinity terms since we're talking such a large time window). Now, however, on the other side of that debate...this can also be interpreted as making lower lows (which many of us know is not known to be a good sign for overall upward momentum).

OK. So. what's my take? Given much of the above, I believe the only real litmus we have for "modern times" as it were, is the 2000-2003 downturn. Anything else prior is just too different in scope and historical times. Meaning...Dow 4,000's (which we left behind in Nov 1995) is just no longer realistic unless we have an even worse meltdown from here..and I do not see that happening anytime soon short of some geo-political catastrophe. If I look at the lows of 2003 (double bottom), I see what I believe sets this March '09 low slightly apart. In '03, the second leg of the double bottom happened after a high of 9,043 and that was in Dec of 2002. The first leg of that bottom was a selloff to the actual low of the period (7,147) from April - October. Then a climb back to 9,043, then the second leg bottom of 7,417 (all intraday lows). Now in '09, we set the March 6,470 low in March. In July, after hitting a high of 8,878, another low was registered that same month of 8,093..which I would call a pretty healthy sell-off of what I believe was intended to be the test for the double bottom. However, what cut that short of completion was improving economic data (which we continue to see to-date). So my thesis is, I consider 2003 and 2009 to be very similar in nature (both uniquely prolonged down-turns based on massive bubble bursts), so I would expect very similar bottoming action. I believe the July 8,093 was actually the second leg of the double bottom (or as much as could be gotten out of it due to ever-improving economic metrics). So given my belief that the bottom is in, the double bottom was successfully attempted, and that this down trend must end at a bottom as in 2003, we should be poised not for a fall takedown of any significance and should begin to see us begin to maintain traction above the current down-trend line. As in 2003, we should see a range in the next year of 9,400 - 10,800. From there it will all depend on how the Fed manages all the monetization that has been done and inflationary issues. I say keep Bernanke on and let him keep flying the plane. He should be allowed to finish his own vision (which will take the next few years to complete). that's my take. gl to all.

Big Stocks Under a Buck

Oh yeah...

Douglas A. McIntyre...he's a real genius, let me tell ya. Great non-article!

Reconsidering Penny Stocks

You've done the right thing. This is an extraordinary time in the market's history. Some have called it once in a generation or once in a lifetime or once in 100 years event. Other mjaor rules have been adjusted to acommodate the current circumstances, so yours is right in step. I think if you didn't you would have your head in the sand.

Within six months, you wil be able to once again resume your previous standards bar...almost by defacto. These companies to which you refer will not be under a buck then...one way or another.

Appreciate your site and contents...

Bill Gross: 'Pick Me! Pick Me!'

Bill Gross makes me sick. He basically has a license to print money. His formula is simple. All he has to do (as a go-to expert/guru for and advertiser on CNBC--and of course also as a still active investor) is go on TV and say which way he wants the markets to go. Sadly, all the sheep follow him and he makes a killing--up or down. Nice set-up if you can get it! Buy another house Bill! It's a tough call about who is more irritating, manipulative or self-serving: Cramer or Gross.