It’s very curious that Obama is on a mission to cut the deficit. Weren’t the Keynesians just arguing that we need to dramatically increase deficit spending to stimulate the economy and pass a gigantic stimulus bill? You know the rationale: it doesn’t matter what the government spends money on as long as money is injected into the economy. They could buy cars from GM and drive them into the ocean, and the jobs created at GM would still be a net gain for the economy. And now Obama is going to cut the deficit?
I’ll bet that nothing is cut from the deficit. In the end, money will be shifted from Republican constituencies to Democratic constituencies. Politics will be done as usual, and nothing to truly help the economy will be done as usual.
Matt,
Is it possible that they are afraid of a bond market revolt? Obama is talking about cutting the deficit. Bernanke today was saying that the government cannot run large deficits indefinitely. What has changed?
Another possibility is that they are trying to calm the fiscally conservative constituents.
I do agree that nothing substantial will be done. That requires leadership of the kind we no longer have; one which is willing to state the unpleasant truth and steer people into difficult but long term healthy choices. The current leaders only look at polls, assuming they look at polls
Yerk, I’ve been on a very short walkabout in SE Asia. Cliff-dive in action in certain sectors. Let’s pick up the discussion in 6 mths on which region will do the least worst
In the meantime, conserve capital.
I think we could say Obama is a puppet spokesman that knows what to say for public information and is good at it – like a TV preacher. It’s all part of those rules for radicals.
Larry oh-oh. The race to the bottom – here’s the European dive angle:
http://financialsense.com/Market/wrapup.htm
Look at the dax chart
Regards Japanese govt buying stocks… They did that already in early 2002 so we should go lower from here. Trust the governments!
Larry, conserve capital. Didn’t you say you made 4% this year whilst being hedged? That’s a nice yearly return. I like your definition of a hedge
Yerk, I’m down to 1% now. My discount airline is cancelling out my short this week. The cheese company is doing great.
You staying above water?
Great article Yerk. He’s spot on and he reminds people to thread carefully.
So far above water, though this year is a bit tricky. Have lost track as they changed the damn capital tax system and I had to do play tax optimization games late last year on top of it all. Gains are taxed immediately since Jan but losses do not give you a tax refund. Hedging is a huge drain on liquidity – I will get the tax back from the govt but earliest next year. (If they still have money then and – that’s the bigger if – my bank still exists and has some records). Have to rethink my whole approach and all of this sucks.
As Matt put it, it is difficult to profit from a systemic meltdown.
Warning: ? Bernanke testifies at 10am. i know he propped the markets yesterday but its only a matter of time
K, are you saying Bernake is going from “propped” to “pooped”?
Yerk,
I’ve read the paper you posted yesterday written by the UK’s FSA (with references to some American gurus out of Princeton).
I’m going to have to understand how Europe handles mortgage assets in order to fully gauge where we are going here. Does the whole region use covered bonds?
As an aside, I see the CEE as an asset – not a burden. I find it appalling to see the Ukranians or any other people taken advantage of during dislocations.
Let’s get this party started! The DAX needs a fullback – was yesterday a screen play from the U.S.?
What is that on Art Cashion’s head – injury from too much marination?
MKB, basically yes. There are different flavors, highly regulated in Germany and Switzerland, less so in other countries. There are also CMBS transactions, but primarily so in the UK and Spain.
Dax has been lagging over the last days – falling below 4k did hurt
MKB
It is Ash Wednesday, and Art is an Irish Catholic no doubt.
String
George I have a feeling that fool me once good for you. fool me twice I poop on you.
he might essentially say the same thing again but is it me or does his voice crack when he lies? LOL
Phil-
I have Elliott’s 1946 book, and if I understand
him correctly, W4 should retrace from 0.382
to 0.5 of W3. This would mean that W5 starts
at or above SPX 790. Do you agree?
K,
One thing that will be different is that Bernanke will be grilled by plain old congressmen rather than senators today. The congressmen are more ignorant and hostile than the senators and will likely devote a lot of time to shouting at Bernanke.
Matt
Stringm,
When i was a broker, my best friend in the office who was Irish Catholic said to me “The regional VP is coming today. Wait until you see so & so. He has a face like the map of Ireland.”
I said “What do you mean ?” Patrick said “He has a face like a spud.”
I think it was of Cashin’s daughters that another friend in the late 80′s who showed me their pix. They were gorgeous.
Dave
Have you ever noticed how often an old sour puss non-descript old man has beautiful daughters. I often get the old milkman joke laid on me because of my daughter’s beauty.
String
Stringm,
Ever since my ex-gf Ruth told me that often girls look facially like their fathers & sons like their mothers, i have noticed how often it’s true …..you handsome dude.
I think i hear K knocking on your door.
Stringm,
Every time i see your name i think of this distinguished intellectual http://en.wikipedia.org/wiki/Stringfellow_Barr
George,
“U.S. salmonella outbreak count hits 666 people sickened”
sounds like the Devil’s work
will be very surprised, but VERY grateful if we take out yesterday’s lows; otherwise a series of inside days…bad stuff
Dave
Thanks for the tip on Barr I will pursue more on his works. I love gardening and cooking myself. My wife wishes I would stay in the garden.
You are a very astute gentleman to detect my true name from my handle. Mike Stringfellow be me. Now that I am retired I often think of getting into genealogymaybe this will sput me. Barr was born the same year as my grandfather was here in Dallas.
Dont bother knocking K my baby girl was a blushing bride last year.
String
that was spur me not sput or spud.
Stringm,
I love those old Anglican names like Stringfellow; Wainwright; Coopersmith which often connoted their occupations.
If you’re familiar with Barr’s college St. John’s College in Annapolis, Maryland, there cannot be two more different institutions than St John’s & the Naval Academy in one small town.
dave,
I’m going to start cooking my peanuts and peanut butter.
awwww so K is outa luck
My last name is Cleanlatrine – I think it’s French.
George that’s funny!
My last name is Jyndal – I’ve been known to make appearances on Blue’s Clues.
George,
remember the Andy Griffith scene in Onionhead ?
If you’re making penaut sauce, that will be me knocking on your door.
dave,
Yes, I’m a big fan of Andy Griffith. I’ve met him at the Outer Banks, NC. Nice man.
I make an awesome peanut butter soup. It doesn’t taste like peanut butter, but sure is good.
George,
have never heard of peanut butter soup, but it does sound good. Haven’t had one of my favorite desserts in quite a while …peanut butter pie.
George
Are you into fried peanut butter and bannana sandwiches like the “Big E”
was?
String
Stringm,
makes my upper lip curl
Dave
Drugs weren’t the only thing that killed the Big E early
String
« Tuesday’s TradingWednesday’s Trading – 2/25/09 »Game Plan – 2/25/09
Now that Bernanke has shot down the Obama bank-nationalization trial balloon, all is well. The crisis is over. The banking crisis has been solved – yet again. In fact, we should have a big party on March 14th to celebrate the first annual anniversary of the solving of the crisis when Bear Stearns, the black sheep of Wall Street, was put down.
Oddly, after March 14th, the banking crisis just kept coming back, like the Terminator, alternately crashing and rallying the stock market. Funny how that happens. And the black sheep just keep on multiplying somehow.
But I’m sure everything is fine now! I’m sure all the toxic assets were magically wiped away while Bernanke testified before Congress. Hurrah!
The XLF rocketed upward 13% in relief today. Take a look at the moonshot on this hourly chart of the past few days (click to enlarge):
The XLF has completed a full 100% Fibonacci extension off of its low. I drew
………………………………………………………………………………………………………………………………………………………………………………………………..matt …..i was trying to show the picture you had of xlf ….it wont show….anyway what you drew with your 100% fib was a beautiful abc upward correction with 2 equal waves……that could be all of the correction or just wave a….perhaps we are in a b wave now and there will be a c wave up further into the gap of doom…as ed hart of fnn used to say….we will know in the fullness of time
George,
Has BBT taken the 15.51 ground? Can we put a flag on it?
Stringm, I’ve not had fried peanut butter, but I have had it on veggies and ‘naners.
MKB, sure, put a checkered flag on BBT and let’s ride it up.
(BBT) today (Feb. 24) declared the 2009 second quarter dividend of $0.47 per share, a 2.2 percent increase over the $0.46 paid in the second quarter of 2008. (Source: Marketwatch News).
VIX +.88 is pathetic
Matt
I take exception to you calling our elected representatives ignorant. Well just last year one of them asked Bernanke if he didn’t see a conflict with him handling the financial crisis, given his prior post as the CEO of Goldmans. Ignorant means to ignore facts. This woman had her facts right just happened to be the wrong person. That is not ignorant, that is stupid.
I also don’t agree with your assessment of politics as usual. Well just yesterday I listened to Barama give two separate speeches. In one he said he agreed with the Republicans that extending unemployment benefits
did not need to be done. (I can see where he is coming from since the stimulus will create 3 million jobs) In the next breath he said that the 7 billion price tag was less than 1% of the total 789 Billion package so it was no big deal really.
Later in the day he was attacking the previous administration on the 1 trillion deficit he had been handed. He never mentioned we have just added 700 billion plus to it. Instead he wanted to point out how his administration was going to cut the deficit. In fact they were already going through line by line and by golly had found savings of over 18 MILLION in the AG budget.
Now Matt, I ask you. Does that sound like the “The same old tune, fiddle and guitar” ?. No I think that is refreshing change don’t you agree.
Ladies and gents we need a viable third party in this country. My dear old dad told me there are three sides to every story. Your’s mine and the truth. We need a party of the Truth.
I will shut up now and will never post like this again, but I am pissed.
String
matt …….my chart shows that the intraday nov low has not been violated yet……is that correct???
matt spx low i am referring to
I know that many of you dislike Kudlow (few as much as i do). He use to drop around our offices in DC when we were both younger. He was insufferable even then.
These two articles may give you an insight into his personality.
A Wall St. Star’s Agonizing Confession
http://query.nytimes.com/gst/fullpage.html?res=9906E2D8123FF930A35757C0A962958260&sec=&spon=&pagewanted=2
http://kudlowsmoneypolitics.blogspot.com/2008/02/i-am-blessed-to-have-known-him.html
anyone selling shorts? LOL
You go, String…
I have just posted a chart showing the head-and-shoulder bottom that SPY is working on. Make sure to study it. Comments are turned off there so that we only have one conversation to keep track of today.
Phil,
That’s right. The SPX has not yet penetrated 741.02.
Matt
IWM is testing its low from Monday.
matt, at what level does the inverted H&S pattern become useless ? I am not that good with patterns.
JO
JO,
put up an hourly chart; draw a line from 2/20 low of 75.77 thru today’s low of 75.63. Once that is broken substantially inverted H&S probably null.
Problem with a many inverted H&S patterns is they turn into double bottoms (at best)
thanks dave. to the point and well explained I know it is a basic pattern, but I do not excel at looking for these kind of things..i’m more into the “objective”/statistical tools.
Cheers
JO
JO,
I’m with ya on that, I’m clueless about these patterns.
JO,
forget to tell you it’s easier to see standing on one’s head.
Seriously, let’s say you’re looking at a H&S top. The middle high pt is the head & the high pts on each side are the shoulders. You’re probably too young to remember when women had clothing with padded shoulders.
Many, if not most, H&S patterns are slanted a little; the neckline is slanted & one shoulder is lower than the other a little.
I hear you George. I never did well in art in school..lol ! – it’s true !!!
UGA looking strong today..lets hope it pops over that 24 in change level..
inverted H&S still in play for now…maybe we can extend the MOAR for a little longer ..
JO
The more we trudge along in an uptrend the more momentum we get – testing the resolve of some shorts.
JO & George,
regarding padded shoulders:
I once had a conversation with a woman fashion editor. She had gotten her daughter into competitive swimming when she was younger. The daughter was naturally talented & swam in HS & college. But, later she told her fashionista mother, “If you had told me that i’d end up with huge shoulders like these, I’d…..”
sold my skf might hold on to SRS. dont like this market either way but being 2x short
And testing the confidence of the longs to keep adding. Although I got the feeling yesterday some bulls were holding up the bear while the bulls took a little revenge . . . .
this is the reason why i don’t like inside days
JO & George,
If you look at hourly or daily charts for DJI & Nasdaq vs SPX, you can see that the first two are more similar looking (slanted H&S). Whereas SPX is more textbook looking.
the H&S chart matt made is why i sold skf. it shook my confidence lol
K,
Good work on the SKF trade. Where are the USD/YEN currency traders stashing their coin – SWHC?
dave, you’re correct, swimmer do have broad and muscular shoulders.
a serious question:
I have a friend that’s selling his house & moving abroad soon. In this post 9-11 security environment, how would he safely transport his gold coin collection ??
George, you can see the irony with her mother being a fashion editor
If the IWM can continue to hold Monday’s low, it will make a bullish stick sandwich candlestick pattern.
srs volume today stinks so i got out. bbt might be a real core position from now on lol
BOOO i doubled down instead of selling SRS LOL must hit selllll
Double bottoms coming up on the inverses’.
But dave, look at the bright side, she didn’t have to buy shoulder pads.
SPY just filled its gap from this morning. XLF and QQQQ are close, but IWM is a long ways away.
Girding for possible battle. Just drank some Rockst*r pomegranate energy drink. Hope that it works better than the first time. Thirty minutes later i took a nap.
SPY has also run up on less-than-impressive volume, so it could have just been a gap-fill mission.
BBT 1min looks like a stairstep.
last 5 bars (5min) on skf am kicking myself. i’ve been watching fib play out LOL
SPY, QQQQ, XLF, and IWM all have nasty bearish engulfing candles on their 15-minute charts.
George are you loving this action?
If i wasn’t in a meeting I would have traded SPY twice!
Hank, my kind of day/market. Nice moves.
SPX weekly needs to hold or start going up in the next couple of days or its going to the abyss.
Hey Charlie, I haven’t been beating the ICE drum, but it has been nice.
matt…. another 3 wave rally locked in with overlap of 766 on spx from todays 752 low….confiriming countertrend nature….we are in a wave 4 but is it wave 4 of 3 which means a couple of more new lows or is it wave 4 of 5 which means only one more new low…… again i refer you to ed hart….did you ever see him on fnn ???? …….. in the fullness of time we will know
Volume candles on the right shoulder not conforming to a breakout picture–at least on my 15 min. Sell candles higher than the buy candles, and the buy candles are dwindling rather than picking up.
Buy candles on the 30 min look wrong, but the buy candles on the 60 min are increasing with the current candle.
Obviously referring to volume candles, not price in above post.
dave Says:
February 24th, 2009 at 3:58 am
Crashes come from “oversold” conditions. Momentum isn’t a factor early in a move; it’s a factor as a move gathers speed.
>>>>Momentum isn’t a factor early in a move; it’s a factor as a move gathers speed.
The momentum has been heading up – would that effort be wasted – are shorts loading for bull?
MKB,
trouble is we’re not as oversold now
Matt, does the bullish trend on the TNX worry you? There is strong bullish engulfing candle today. The sds looks to be on a downtrend as well.
JG & MKB,
fear a prolonged symmetrical triangle or moreso a pennant. No capitulation selling but APATHY from pennant leading to a early to mid March trading low.
JG,
one source sees w 2 of (5) QQQQ & w ii of 3 of (5) in the Dow & substantially more upside before the downtrend resumes
I cannot see 2 or ii at all. Both QQQQ & DJI look like 4′s to me. Therefore if “substantially more upside” i’m really missing something.
SPX daily absolutely looks like a 4 because 2 was very well defined.
They are supposed to be announcing the results of the “bank stress tests” pretty soon. It appears that some details have already leaked out and the XLF is leading the way higher.
c wave upward blast now
There’s the 777.
JG,
Volume may be light because the market is waiting for the stress-test results. So far, it does look like it could be a false breakout, but volume may come up after the results are released. …if they are released that is… You never know with Geithner.
Matt
JG,
Well, there goes the pennant. Now, i don’t have to worry about being bored to death. . .just squeeeeeezed.
785 spx is wave equality
The bearish engulfing candles that I mentioned earlier were quickly overcome. Like any other technical indicator or pattern, candles can be blown away by breaking news like the stress-test news we are kind-of, sort-of getting now.