The Panic is Over!
That’s the good news. Now the bad news: the Depression has begun. The explosion on Capital Hill today was the political version of Dick Fuld’s suicide bombing of Wall Street a couple weeks ago. Confidence in both our financial system and political system has been lost. And in case you are wondering, none of this is “healthy” – this is a total disaster. Some traders are looking for a giant rally after today’s panic selling. Not me. I’m sticking a fork in America.
McCain Knows He’s Toast
John McCain spoke briefly after the market closed. He sounded like he was delivering a eulogy at a funeral – and he was – his own. I wonder how many decades the Republican Party, a.k.a. The Depression Party, will be consigned to opposition status in Washington?
It’s Time for Congress to Abdicate
It’s pretty obvious that the USA’s experiment with democracy has been a failure. As Congress’s last act before abdicating, they should hire a management team from Singapore to take over. It is no longer acceptable for the world’s largest economy to be managed by rubes.
America is Stupid
Stop and think about what just happened. Ben Bernanke is an acclaimed scholar who has distinguished himself by doing groundbreaking work on the causes of the Great Depression. And here in this new Depression, the American people have told him to pound sand!
Hank Paulson is no scholar, but he is a top practitioner, and is the perfect compliment for the egghead scholar. Even if you don’t like Ben and Hank, you have to admit that you couldn’t find a team with better resumes for this job. But now they are pounding sand. Well, I’m sure that the masses will come up with a better solution…
Stomach Turning
Watching my country commit suicide has interfered with my concentration. But now that I am cheering the rubes onto their new Depression, I am back to enjoying life and should be posting more comments.
Watch the comments for updates throughout the day.
Matt – that’s the sound of two hands clapping. Here, here, Encore.
As long btw as you’re applauding the bald twins let’s add they both perform well under extraordinary pressures that perhaps only a combat veteran would know worse of. But that veteran wouldn’t be responsible for the well-being of millions of his fellow citizens nor be called on to tolerate being treated like a sub-human cretin in order to do his job.
This is public service at its’ finest.
It is a singular tribute that literally within less than an hour that Paulson was issuing we shall continue to strive press conference and headed back to the White House and up the Hill to plot the next moves.
The guy’s stamina, resilience and discipline are amazing.
Matt,
it’s time to go long again. Nikkei and Hang Seng in Asia recovering. The losses are not too big and the American futures are up. Biggest losers of yesterday’s bailout rejection:
1.) Pres. Bush
Nobody is listening to him any more. Lame duck.
2.) Pelosi
She is completely unprofessional.
3.) McCain
Interrupted his campaign last week. Obviously nobody listened to him either. Lame duck already even before becoming something like a duck.
Don’t let yourself down, Matt. Life goes on. See the opportunities. “Going long” is the motto of Tuesday’s trading.
Dblwyo,
Yes, I was surprised to see Paulson talking to reporters Monday evening, and then going back to work. I would have given up and been in a bar drinking.
Matt
Dressguard,
I’m long in the futures, though I might get stopped out while I’m sleeping.
Matt
Guys,
are you going to be continuing to short any and all rallies here for a while? Futures are way up right now, but it is expected. I think that there was panic during the final few minutes of trading today and it took a while for the ticker to correctly calculate the exact total of the bloodbath today. I wonder what tomorrow brings??
Paulson’s big mistake was his original plan that he submitted to Congress. He asked for a LOT of power and no oversight. Perhaps it was a negotiating strategy (ask for more than you want), but now he has lost some credibility. Coming from Goldman Sachs, he already had that to overcome in the trust department, and blew it in my opinion. I’ll refrain from judging Paulson (positively or negaively) until I see how he uses the power that he will get. Maybe I have been judging paulson harshly, but I’m not forgetting that he was a huge part of the problem as head of GS.
Bernanke has been put in a difficult position. Looking back, I really can’t fault the guy. Plus he has to take public sh*t from @ssholes like Cramer that ignore their own big mistakes (but admit their little ones) and trumpet their own successes. Spotting a problem is SO much easier than coming up with a solution.
I am looking for a short lived pop to SPY 116 to 118 then back down lower. with the futures up now and a gap up tomorrow, if this sticks, this is usually not how a bottom works. I should have stuck with my first take on that false bottom the government put in last thursday. the stochastics on the weekly is still too high. no near term bottom has ever been made in this bear market under these conditions. After further review I also take back my capitulation comment I posted earlier. It still was the second worse distributuion day in ten years though.
Sorry to disagree, but Paulson is “working” for GS and not to save the country. There are three ways to motivate – fear, sex, and money. Paulson needs to help his friends of Hank club and if left alone, the markets will recover and a great bull market will begin. He is driven by money as everyone else on the Street. I know, I was one of those masters of the universe for many years.
Many years ago and long forgotten by just about everyone, Paul Volker did what many thought was a desperate attempt by an out of control lunatic to stop interest rates from truly going “banana republic”. Bad, bad recession, but look what followed.
Consumers incorrectly became drunk on MEW and the choking off of credit is the reality of a borrower who has no capacity to take on more debt.
Everyone is talking about the equity losses. Huge profits were made in the long end of the govie market, consumers enjoyed a huge uptick to purchasing power with the decline in oil prices and the jump in the USD. It is not so one sided and for once, everyone needs to understand buying stocks is not an video game with the buyer always a winner.
The bailout bill should carry a huge stick to those who need and use it. Over the past several days there have been some huge rescues and major amounts of equity have been invested in the deals. The free market works and it only needs a little bit of govie lubricant. Not the huge amount of grease Hank and Ben are proposing.
Anyone want to take a bet that Ben ends up at Goldie with a huge pay package? He is being motivated by one of the three things I mentioned at the start of this sermon. Thx for reading it.
Boat52;
Welcome. Nice to have your insights.
Food is a motivater for me.
BBT – dropped $6 close to the closing bell yesterday. THAT’S why I’m out until the “deal is done”, if ever.
On the other hand, had I been watching closely, I would have jumped in at EOD.
Please watch this video if you think John McCain is toast. http://www.rightsidenews.com/200809302090/editorial/burning-down-the-house-what-caused-our-economic-crisis.html
Jim;
Revealing video. Like I always say, things aren’t always what they seem to be.
Jim:
We’ve been pretty suspicious of the entire process for a while. Hopefully the McCain campaign does a good job of marketing that, I’m surprised that they haven’t been pointing fingers already.
This video is from the McCain campaign. Wake up, Awake! LOL
lol, whoops, I don’t think that was made clear in the vid, or maybe I missed it
was watching another video that is a carbon copy of that last night on youtube, some kid ostensibly made it.
Kinda sick of barney frank and pelosi tearing the republicans up all over the place when its pretty clear whose policies are to blame for this mess…
This is called guerrilla marketing.
Here we go
damn NCC haha
I got stopped out of my long position in the futures while I was sleeping last night at 1144. I got in at 1133, so I caught 11 points. At the open, I bought some SDS and went short in the futures. I have stops set just above opening prices.
I just got stopped out of my short futures position, but not my SDS yet.
We’ll have a 777 point up day today (lol).
Man, I knew I should have gotten BBT last night. But my rule says no.
SSO 15 minute MACD went positive. Will see if it clears it okay.
K;
You should be doing okay with NCC. Good trade.
I got stopped out of my SDS and it looks like the rally will stick for a while. The NYSE TICK is in a very strong uptrend, volume is light, the market is still oversold, and it’s the last day of the month. So, the big funds are having their way with the tape.
I flipped over to the long side and am long in the futures at 1144.
The way I figure it, just about all the bad news has been absorbed, anything else will be noise or perceived as good news. That doesn’t mean we can’t tank more though, but the bias should be toward the upside for a while.
Only 500 more points on the DOW will give us a 777 point gain.
Ya gotta love this stuff.
The futures are a few points ahead of the SPX today, so my long position at 1144 is 4 points into the money.
There will be a lot of folks bailing out on the way up.
K
nice play on NCC overnight
in SKF here
Will ICE make the $10 move up today? We’re at $6 and counting.
soy estupido sold at 1.80
in hopes i;d get back lower. never did. quotes were lagging for me. oh well I still can;t control the urge to trade after 1PM
getting there
I got stopped out of my long position with a 2 point gain. I am keeping stops tight since I don’t trust this market any farther than I can throw a cat. Two points on a futures trade is good money.
George
how would i go about tradin ICE
have accounts @ td amer & thinkor swim
ICE lol i think you can buy
damn george. when will the ice melt? i want some melted ice to freeze again
Average guy;
My broker has it available for me. I just put the ICE symbol in the trade screen. I would assume it is readily available.
ICE trades on the NYSE. So, when you buy or sell ICE you don’t need access to ICE’s exchange. You trade it just like any other stock.
Ameritrade and scottrade have it too. (ICE that is)
Good call George
I won;t trade till later again.
so tempting but yes i must follow MY rules
Just remember that ICE is a creature with a bipolar personality. But when it moves – wow.
SDS nearing 15 minute 36 MA, when it hits, expect something to happen.
Be careful with ICE at these levels. Follow indicators for exits.
Matt,
Bernanke is a self-proclaimed scholar of the Depression, but his conclusions were wrong. He concluded the Fed did not come up with enough creative ways to inject new money and credit. Hence the Fed’s recent unprecedented maneuvers. But the reason they were in the mess then and we are in this mess now is because of an over-saturation of money and credit. I have not seen your analysis on this, but I believe this crisis is an unnatural phenomenon that had nothing to do with the free market. Money has a supply and demand like everything else, and when you hold interest rates below market equilibrium (1% following the popping of the NASDAQ bubble), you create excess. In this case the excess credit poured into homes. That coupled with Fannie and Freddie and various Community Redevelopment Acts, Banks, etc. supporting loans for people who otherwise would not qualify created a massive, unsustainable distortion in the markets.
Do you or anyone here agree with this assessment? I believe it to be critical because if you do, how can you reason that a problem caused by inflation can be cured with more inflation? Also, what about Paulson and Bernanke’s comments in months past? Bernanke actually said the sub-prime market was “well anchored”. And Paulson was parading around on television saying the markets are strong and flexible. Now these people are going to save us?
Freewheeler, I think something needs to be done but no bailouts. Not for wall street and not for the people who borrowed excessively during the credit binge and now are defaulting. Maybe guarantee bank deposits and money markets and let the investors and bondholders understand that investing can make OR LOSE money.
thanks 4 the help
ICE is an exchange ?
So is everyone staying out of the market right now?
freewheeler
i agree . i also think inflation is the
only tool left to control the “Mob”
I will. except my gold position which is small and today going down thanks to the rally. Got me a lunch date so screw making money hehe
be back later
The DOW traced exactly 38% of the move from yesterdays high to it’s low at 10,676. The 50% fib is 10,767.
But there is also a tendline going down on the 5 minute that looks to be lining up with the 38% fib at 10,676. That would appear to be a key point as resistance for at least today.
Oh, and BTW, I don’t think much of Bernanke. He is smart academically; you can see it from the way he talks. But he built a life and a career on blaming the FED for the great depression. Yes, some of the policies during that period worsed the problems. But the depression was caused by silly lending in the 20s (i.e. FED policy of the 20s which I think was an attempt to help Britain). Plowing grain and liquidating blindly just made everything worse.
Some balance of punishment and bailout via inflation is in order. Handouts are not. We have some serious issues raising their ugly heads like retirement of the boomers, SS, medicare, peak oil, global warming, inflation if China finally decides to give a living wage to its workers, etc. The federal governments fiscal house is in disarray and we need to have something left to fight all of them with.
Too much money printing and we will have a currency crisis. And we definitely DO NOT want that.
My 2c…..
I went by a gas station today and saw a line. Hot Dang, GAS. They were having a sale on Cokes & stuff, going out of business.
All I want is some gasoline.
LOL George. damn them.
I’m back on schedule for trading after 1pm.
That’s not all I want, I’d like to have my charts sync up. They’re out of whack again.
George, et.al. – SPX bumping into resistence at the G-line of 36MA on both 5 and 15 min. G-line is my new name for the George-derived indicator btw.
For all the folks condemning Uncle Ben you understand that the GD was in fact causes by the Fed cutting money supply in 1/2, tax increases and a lack of fiscal stimulus ? This is rather well-documented by some sixty years of empirical and theoretical studies.
What we don’t understand well is how booms and busts propagate because we don’t have a good understanding of dynamics.
But far be it from me to disrupt your thought processes with actual facts. Trade as you like and if it works sobeit !
Thanks Dblwyo…
Dblwyo, nice catch!
ICE – also note those little dips, depending upon market conditions, turn in to $1-2-3 scalps.
See, this is screwed up. SSO has a way to go to get to the overhead 36MA resistance, while SDS is trying to break down below its 36MA resistance. Skewed charts = screwed trader.
Thank you My Master.
s/Grasshopper
Political Pathology of a Failure: http://tinyurl.com/539ajb
I’m diggin DIG today, too.
i should have DUG DIG instead of selling at 57 hehe
Crimson Ghost,
I have deleted your last comment. Exactly what part of “stop pirating content from other sites” don’t you understand?
I have had to delete three comments in the last 24 hours. Just because you can copy-and-paste something from another site to here doesn’t mean that you should. In fact, it is against copyright law and punishable by very steep fines.
This is distracting me from my trading. If it continues I will shut down comments.
does the dollar’s strength relate to the massive swap transactions taking place between the central banks? I have no idea how these things are settled – anyone have an idea?
Yerk – mainly ignorant myself but mechanically it’s largely a movement of existing credits on the books of the BIS.
Perhaps more importantly the $ strength is more a reflection of the flight to safety. Ironic in light of the comments here and elsewhere.
Fascinating socio-pathology if you’ll pardon the observation that people who make their livings in markets take their existence for granted while not understanding their ecological roots. Ecological in the sense of institutional foundations.
Matt;
Looks as if your month-end analysis is playing out as predicted.
This move on SDS is still playing off the 15 minute 36 MA. It over shot it 3/4 of a candle, then is attempting a move back up.
Simultaneously, as Dblwyo pointed out, the 5 minute is bumping up against the 36MA resistance. In this case, the 1 minute is the arbiter.
why are bank stocks trading flat now? that’s why i got out of NCC hmm
Always drop down to a lower time frame when support or resistance is hit. That will tell immediate direction.
Go to a higher time frame when finding the overall direction or verification of a lower time frame move.
That’s what I do. After a while, getting used to the time frame relationships, it will literally tell you when to get into and out of trades.
“Crimson Ghost, … Exactly what part of “stop pirating content from other sites” don’t you understand?”
Every part of it. LOL
Btw, I am 100% in cash right now. Don’t see any good opportunities right now. Made some bucks earlier this day in European trading though. But it was pure luck. Actually was one second late with my original trading plan. Obviously I hadn’t enough courage to pull the trigger. Missed a 30% gain. Now watching on the sidelines how you are making some dough.
dressguard i missed a nice gain too NCC. oh well
@K: Can happen.
Crismon Ghost. you can quote a paragraph and post a link. ok? better explanation?
The cycles being created are the ones being scalped. I just make sure a move is not false.
Another tip. If watching say, the 1 minute stochastic, it will bottom out, check the 5 minute to see if that stochastic has bottomed out. If so, there is a high probability of a move up. Wait until a price bar clears the higher time frame
This differs with my overall method in that it doesn’t require the stochastic to bottom out. That method allows you to get into a trade when a trend has already begun instead of waiting until it plays out.
Look at a 1 and 5 minute chart and you’ll see them all the time. When I was trading only 1 or 2 stocks, I would keep a 1 and 5 minute screen side-by-side on one monitor and just trade that setup.
Good stuff.
dblwyo,
Do you not find it interesting that the Fed came into existence in 1913, we had the roaring 20′s, and then a collapse? The Fed pumped up a bubble with artificially low interest rates and it went into stocks. Then when it crashed, they imposed measures to keep wages and other prices up, when the market was demanding them to fall. The 60 years of empirical and theoretical studies that you claim to stand upon must have been Keynesian in nature. No fiscal stimulus? What about the causes of the Depression? How about the New Deal? I agree taxes should be lowered, especially in tough economic times. As far as boom and bust theories go, the Austrians have had that figured out for some time now, predating the GD. That is why they were able to predict this collapse. When you distort markets, they will correct. The damage was done during the housing boom, the correction is merely the messenger of reality.
And Gigi, all of your problems you listed have been either caused or exacerbated by government policy and intervention. And I disagree with your belief that what we need is more inflation. For a blog that is suppose to have a libertarian bent, I can’t understand why there is no faith in free markets (or worse, faith in those with the power to coerce), and how so many can be ok with stealing money from others, either through taxation or inflation. The government caused this. But instead of rolling back their influence, they will do what all governments do in times of crisis: grow.
I hope I explained that okay…. busy right now – lol.
The only problem with using the “bottomed-out stochastic” method, is that moves will be missed when a higher time frame is already positive and you don’t have to wait for confirmation, like in a trend.
But they come along often enough in day to make a living.
Freewheeler, I am not in favor of inflation, just offering it as a compromise.
Dblwyo, I am actually trading this bailout passes
But very small. No convictions here.
K;
How did you miss a gain in NCC?
i forgot is not 1 yet. should see some nice moves coming
TRIN is 0.56 in this past hour. going higher. sucks. lol
well george i put a limit at 2.25 in premarket it opened up high but i guess there were too many shares wanting to go and i wasn’t top priority.
If ICE gives me that $10 today, Expect to see a “YIPEE”. I’m getting my wife a wide-screen Samsung TV for her birthday.
Actually, it already has given me ten bucks, but I just want to see it go that high to give me a high.
My Master (George): 5Min now trading in 36/72MA consolidation range.
Failing rally ? Suggest so w/o catalyst.
Speaking of conviction try ROC again – seems to tell you whether a move is serious or not.
Have you considered having the local U build you a war room ala War Games ? Get them to treat it as a DSS research project.
Sellers are back from lunch.
Dblwyo… how do you play the ROC? if it’s above 0 and gaining momentum is a good move?
Dblwyo;
I don’t know what it is going to do. I’m in the SSO via the 15 minute chart (my hero) all AM. Then swing it and SDS 1-5 minute. I won’t get out of SSO 15 until MACD goes to zero. Meanwhile, I’m doing 1 minute swings which are very nice today. And, if the SSO 15 minute does turn over, doesn’t matter because that means I’m already in SDS. The two don’t offset each other because I am always swinging. It adds up at EOD.
I keep it going for sure. Hmmm, I hadn’t thought about it but I really am playing multiple time frames.
Dblwyo;
Yes, ROC is nice. I haven’t traded it yet, but I have it on my Mac ‘puter chart.
I tell ya… my broker luvs me!
“Boy, why don’t you just put that money in and leave it?”
Well, I’ll give you 777 reasons I don’t do that.
C’mon, ICE!
Just $1.50 more.
the brokers said that? haha
Only 470 more points to get 777 DOW.
I wanna trade BBT so BADLY.
Finally, SSO almost bumping up against its 36MA resistance.
come on ICE listen to george. these charts today look like CRAP so i’m staying put.
So, I have 3 choices with 15 minute SSO. Wait until 15 minute MACD takes me out, sell at resistance, or drop down and let the 5 minte take me out.
I’ll let it ride since I will get a profit if MACD takes me out, and there is a chance it can move higher.
Poop, ICE s/b going through the roof. I tell ya, it’s a mental case.
O man, what a day.
SSO 15 minute almost has clearence, Clarence.
Get ready for SDS to talk back.