A few days ago while discussing the lack of volume in this rally, I linked to this story about pension funds shunning stocks. But perhaps the problem goes beyond that as described in this piece by ContraryInvestor.com. It seems that foreigners are taking a rather dim view of US financial assets. Here is a quote:
“In short, on a twelve month moving average basis, the foreign community has become a net seller of US government agency paper. This is a first in historical experience…”
This makes sense to me as the USA is relocating its economy to Asia. Why would anybody invest in the financial assets of a country that is dismantling itself? Why not just run ahead of the plan and buy the stocks of Chinese and Indian companies?
So, not only does the stock market face the headwind of reduced leverage, but it must also now face the prospect of fewer sales to foreigners for a long time to come.
Matt, spot on. You should read Mr Noland every weekend on Prudent Bear. He dwells into this issue.
When the dax hit ~5580 again eg double top with yesterday and intraday it reversed hard, futures lost 3pts. Let’s see how far the whale will roll over…
Matt, if it were not for the Fed flooding the banking system with gambling coins the market would be far lower. This thing will reverse when the spigot is shut off. Besides lack of foreign investment the refinaincing of govt debt should push the market lower. QE’s most visible effect is the stock market bubble imo.
for those of you that follow eliot waves.
is this guy reliable?
http://www.distressedvolatility.com/2009/08/prechter-of-elliot-wave-expects-market.html
only if he is right… Tactically he was very precise in March. I suspect he might do the Neely as long as the bubble blowing is not getting stopped.
Missed the bull in the nineties, and waited for a lower low in 03. So not without stains.
Oil at 4$ is bs.
You can’t make this stuff up, hilarious logic applied by the SEC. The judge has not opened his account with GS yet so he writes: “This seems so at war with common sense that the Court will need to be shown more than a single, distinguishable case to be convinced that it is, indeed, the law” I thought the SEC to be incapable because the lawyers working there don’t understanding the market, but it seems they have issues with law and common sense, too.
http://www.zerohedge.com/article/judge-rakoff-set-expose-every-detail-wall-streets-usage-sec-bidet
Latest in Stimulus: ‘Cash for Refrigerators’
http://news.yahoo.com/s/bw/20090824/bs_bw/aug2009db20090821304909
haha wow
K, there are also rumors about “cash for wankers” to help a key segment of the film industry
K….i want to sell you my TLT soon ….are you ready to buy?????
97 seems fair to me ….ok???
Another elevator ride on the inverse today? Goes up, turns over and seeks hades.
Will the duo-dojis be another Market Myth Muff or the real stuff?
All to be answered shortly.
Phil! i’m still waiting to sell my TLT 95 call to someone. would you want to bite?
after, VXX buy signal.. just am being courteous and giving you a live signal
Don’t forget TLT.
K…..it wont work .. u need a buyer and a seller…..we both want to SELL
george…i am try to sell my TLT to K…
trying
TLT should peek above 96.81.. the july 8 high…..i will unload my TLT on any breakout above that
i paid $130 and now have a profit of $80 on it. come on phil. i’ll take $75 profit if you take it off my hands
98 would be a gift K
$112 would be better
phil,
LOL, I’ll buy your TLT.
Yep, Bouncing Betty has already begun. SPY is nearing 5min 36MA resistance.
Lot of juice in the past 2min to the upside, must have been bad news coming out.
Good example of stochastic cycling within MACD is SKF hourly.
GEORGE….the wave up from aug 17 low is OVER…..now the correction will tell us how bullish this market really is….if stocks explode higher TLT will be crushed
buy mine george buy mine!!
btw am out for the day. my aig short (sold a 35 call for sept lol close call!!!) will turn out good
damn phil $80 turned into $62 !!!!!!!11
phil,
TLT getting crushed now… It’ll be back…
Another example of stochastic movement within MACD is SPY 30 or 60min.
It’ll be back with a vengence. Like Arnold.
i dont hear anyone talking about all the good news coming out now….and the market cannot go up…is anyone paying attention to this??
phil,
Do you mean new home sales and durable goods up?
in general…the news is good
things are getting better
this is what is seen at a near term top
Yerk: K, there are also rumors about “cash for wankers” to help a key segment of the film industry
Yerk, you are a piglet. That’s disgusting.
its possible that the whole up wave from the so called failed head and shoulders ,,,which i noted was a fraud…..will have to be corrected
This up cycle in the market has provided capital to business maybe. Or, the market is going to play out its cycles regardless of the news. News may affect it on a periodic daily basis, but it is what it is and the market will make these cycles come hell-or-high water.
What does it mean when there is a disconnect between the market and news? Most explain this by saying the market is forward-looking. Others say it is cyclical.
I donno.
above spx 1018 we continue UP…. below that 1000 to 977 looms
Phil, every day I read about Uber-bears capitulating. Even some in the inflation camp are caving in. So now we have the hard-core deflation camp left.
The recession is over according to mainstream media and economists.
I asked about that enormous inverse HS four weeks ago. You said it would be a fake, just as the HS in July was a fake.
I see monetary tightening already happening in China and the U.S.
30 Short.
phil,
You perspective on a failed H&S is noted. I’ve often thought about the consequences of a failed pattern. Dues will need to be paid one way or the other. It could be that it makes another pattern more severe.
I would suspect that money managers will begin taking profits soon to have a good year – at least partial profits. It’s going to be a game of chicken as to who starts first. They will be reluctant to do so at first because of the fear of missing out on more uppage.
larry……i do NOT believe that the huge inverse head and shoulder bottom is fake….spx below 979 is a huge red flag…until that happens i am long but hedged now for the first time in months…..you have heard me saying not to short for months but now is an inflection point that could be crucial….
LARRY…the failed h and s was really just a correction that should have lead to explosion up as i described before it happened…..if what we are calling the huge inverse h and s since oct is what i think it is…..we will see a mild correction again and then an even BIGGER explosive up wave….ie i think this wave from the failed h and s is 1 of 3…….now 2 of 3 ..a shallow correction is beginning…..then i am looking for a big UP GAP to kick off 3 of 3 eventually taking out 1600 spx
I hear ya Phil.
I have no choice – when CB’s tighten I have to sit short. We can compare notes at the end of the year.
Here’s what happens when Stimulus ends.
http://www.reuters.com/article/ousiv/idUSTRE57P15720090826
the data – as expected – looked good because of cash for pigs, airline orders (yawn, so anyone believes these will not get canceled?) and seasonality things.
phil, I don’t know how far liquidity will drive this – maybe 1155 but I don’t see the macro picture for 1600. Housing was the by far most effective bubble there is to ramp up a whole economy. If they bubble commodities, they blow up the US as neither Asia nor Europe pay in dollars. Earnings are stretched above 1000 and will not support 1600. I have a hunch a ’87 like event might be in the cards, some ingredients are there.
Thanks for the link, Larry. I expect a dip in market to “sell” the next stimulus but this discussion will start later in the year.
For a good example of stochastic cycles in an MACD moving up, look at BBT 15min.
Phil, K,
The TLT chart is looking mighty good. I was going to sell at 96 and convinced myself out of it. Two auctions, one today, one tomorrow, though, could tank it. Otherwise, I will not deny that the 112 figure did pop into my head.
Also bought VXX this morning.
Yerk,
I didn’t know when to sell the bull in the 90s, so I lost at least half my potential gains…. That taught me a lesson… take the damn profits…
marty, oh yeah those were the bubble days. Behavioral finance claims bubbles work only two times – investors get smarter… Einstein’s view differs.
SPY 30min MACD trendlines nearing the zero line. Will be watching for a bounce there or something to happen, one way or the other.
Well, I’m not philosophically an optimist, but I do think I got smarter… at least a little.
MARTY….as i said tlt @ 98 will be a gift to sell into….i will be unloading most of my treasuries at that level …still expect new lows in TLT
SPY trying a bounce off of that 30min MACD.
DOLLAR upward explosion finally?? http://evilspeculator.com/wp-content/uploads/2009/08/2009-08-26_dollar.png
only drawback of options is with a slow stock it erodes value withing the day lol
phil,
dollar shoots up that means market down.
where does this leave tlt?
Hope not phil looking for a big move up tomorrow for stocks.
K…..tlt should go up …maybe we can get 98 but the whole tlt rally off the low is corrective which implies the low at 87.5 will be taken out and tremendous resistance sits at 98…..i would rather sell first and ask questions later
i’m not selling unless you’re willing to buy my TLT for $98 profit!
(hint: when TLT hits $97)
is this a triangle forming intraday with the apex es ~1025 in ah? anyone dare to guess in which direction it will break?
K resistance in tlt is 96.65 to 96.85….dont get too cute or you could be looking at a down gap at any time…the rally could be over now…the minimum reqirments have been met…we are pushing our luck here
k…..look at the miserable volume on this tlt rally after heavy vol on the down day last thur…..that should be scaring the daylights out of u if long…i may sell today
george have a look at the daily spx… does not strike me as particularly bullish and today is only a peanut pomo.
K …i am unloading TLT into this surge……good luck to you
phil – see where we were at spx 1500… Don’t see 1600 in the future – but will keep an open mind.
http://1.bp.blogspot.com/_vIR9lEpVYYw/SpV3_6uKpUI/AAAAAAAAJJk/xfr6SBbClb8/s1600-h/housing+chart.gif
Another daily doji? That will make 4 on the Qs and SPY. Undecided bunch.
YERK….i dont pay attention to fundamental stuff…just the market…it is telling me that we need to make new highs in spx….maybe not immediately….this could be a B wave sucker rally but it still could top 1600….it could also be part of a huge triangle going side ways but eventually the post triangle thrust will top 1600…..there is no bear case technically … ad line just made new highs…
Yerk,
Not bullish at all but the market doesn’t want to give up ground. When and if it does, it could recover quickly. Shorts are still trigger-happy to cover. When the pendulum swings, they will be selling with both hands. Too many juicy inverse plays coming into focus.
SKF 30min is above 36MA but this time the MACD trendlines are almost crossing zero – the slow one has not as of yet.
YERK……re: your chart…..the 1981 low is at the same level as now…the huge stock bull market began in 1981…..coincidence?
George yep, early January and first half of June had similiar set-ups but the bid underneath is stronger this time.
phil, I buy you a beer at the top… No disagreement about the highs, I just prefer technicals and fundamentals to be in sync.
k….looks like they run in shorts on tlt into the close..i didnt sell yet but will by 4 pm…dont get greedy ….especially with options…..good luck
phil, 1981 was the end of the stagflation. Don’t think the surplus inventory has left the market yet. 2012/14 for a bottom. Stock prices can decouple, of course: Pink line is stock index http://www.dhm.de/lemo/objekte/statistik/infstad/index.gif
Yesterday, SKF made its lowest low ever. It’s only $7 and some change away from the teens.
Yep, old SKF did its humpty dumpty thang, it just took all day to get there this time. Maybe next time it will hang-20.
You gotta luv short-covering… it makes the world go ’round.
SOLD TLT
otherwise I’d have nailed the close exactly. whimps. Let’s punish them with a gap-down tom
Yerk,
That gap-down you ordered, do you want it with catsup?
George, yesss catsup all over the place … and on no news please
If it is served with catsup, it is called a tri-star
Holy fk me silly.
Left my aig short option out there (35) and that makes tlt the least of my problems!!!!!!!! Talk about taking a beating (300 loss aka 100%+ loss )
Great day turned horrible only because I failed to put a stop loss
Have a good one. Am off to refill my bullets even though I have a huge battle wound
I’ve been chewing on two words: 1. Markets 2. Economy.
i got credit $263 for shorting an AIG call.
now I am in debit 292
aka I lost a lot lol
What happened the last time the Nasdaq Composite Bullish Percent Index was this high… http://bit.ly/13RPvr
Well, catsup is red, it should make some nice red streaks.
HILARIOUS
http://www.youtube.com/watch?v=lcqsPZljtDI&feature=sub
K,
Your broker let you write an uncovered call w/o little options experience?
Damn thing is north of $39 AH
umm it’s think or swim. I had 3.5k to open a margin account so yes.
I did say i had some experience (learned a lesson from scottrade to lie a little so i could risk it)
Funny thing is around 2:50PM i was up $9.50 and almost wanted to cover. then i had to go to meetings and checked back around 5pm to get the shock of my life.
Dumb move on my part though
it was ted kennedys death that really made my day an unlucky one I shouldn’t have traded when a fellow like that passes on.
K, you need to start charging $79.99 per month for each sub. Doing the math, with only 100 subs you’d make $7,999 a month. You could do that as well as anyone, give it a You Tube shot.
LMAO george. btw i followed the strategy today got out of a position for a nice profit then the whole thing tanked 1hr later
so you might be right about charging but i’m not there yet. I just need to add an extra grand so i can short stocks again (going back to my evil ways)
Ya know, I was looking at SPY daily. There have been beaucoup doji’s on this move up and multiples like the past 4 days. On the weekly, two weeks ago was a doji and we’re higher now.
Could be catching its breath before another move up. So, what are we looking for with respect to candle signs? All I can figure is a reversal candle. I don’t know what that would be though. Until then, the tune remains the same.
“I burn my candle at both ends,
It will not last the night.
But ah, my foes, and oh, my friends,
It gives a lovely light.”
(by Edna St. Vincent Millay)
well basically take yesterday’s high.. if we CLOSE above it.. then possible more upside.
today we DID NOT close below yesterday’s low or else it would be peanut butter and jelly time
K,
WTG on following your strategy and profiting from it.
I’m enjoying my iPhone. I miss flash and Java (although I’m not that fond of Java). So many sites out there use those two, plus now silverlight. I may check out a pocketPC and see how it does. In the end it probably doesn’t matter because I’m not using it for sole productivity, just playtime for Bozo.
Okay, I’ll be looking for that.
Meanwhile, I’m still following my methods and like today, they look like they are going to fail but continue to be winners. Slow moving is harder than fast moving sometimes.
One thing I’ve noticed in the past month or so is that about 1/4 of them dip out of the money or have a draw-down before moving up. The last one was SSO 1min toward the close in the snail move up then one big candle where I got out.
Maybe the good ol’ volatile times will return one day.
here is what am looking at george (of course is more complicated than that but i removed all indicators for simplicity sake.
http://i32.tinypic.com/acym4x.png
also look at black candle after july 20th. the price never closed below it the following day and then the day after closed above it and continued.
i forgot to put that example there.
and of course there are fakeouts but hey i just lost 110%+ and I am getting ready for a few hundred dollar spanking when it opens in the AM.
will turn red. (hurry george subscribe 100 times to me at your proposed rate.)
btw yerk as per your comment at 9:34am i was at work so couldn’t post this but here you go
http://www.spike.com/blog/stimulus-package/85760
K,
Sign me up. I’ll find 99 more buddies.