Stock Market August 2011

[sidewinder]

Dang one post in 3 days?

Must be all the drama on Capitol hill.  Or the current "correction" going on in the market and everybody is holding on for dear life without a free hand to type.   

[pinetree]

An update on the channel discussed back in June.  If prices can't reverse by Friday we'll have a break out of the channel.

I've now drawn in the yellow channel, the lower rail of which is a possible bounce zone if this breakdown holds.

...your crystal ball offering any hints?  

[sidewinder]

I made a post last night sorta talking about the same thing.

http://sidewindersview.blogspot.com/

I was figuring 1214 or so today but we already broke that as of now 3:33 EST.  little chop last hour but this ain't finished yet.

I don't think 10-15% is going to sink the ship just yet.  The reason are unimportant but think Europe got shaky and money is moving in to our currency.  that has the effect of driving the market down.  Not to worry they will panic in a few day and sell off the dollar and off we go again.  I must have had 8-9 phone calls from friends and family about to shit themselves.  LOL  Told em don't ask me I'm not about to take the blame for this.

This could be the big one but I don't think so.  Just a wake up call and it sure has shook some out of the equities.  My paper account is up just shy of $30 k today and it ain't over yet.   Trade 1X on that from live.  Damn it would be nice to grow a set.  LOL

I think this may be driving many into the bond markets as they are getting toppy.  That could be the next bubble and the source of a the big one.  Still think we got another 18 months or so before this all falls apart.  The two weeks of drama in DC was a big fizzle but the new Repub jr. guys were put there by tea party and all stood against the old line farts for Cap, Cut and balanced budget amendment.  This could split the party and lead to another choice in a couple election cycles but I wont be holding my breath.

Technically, I see nothing to keep us off testing 1200 now the 2 day 200 is at 1202.  after that 1116 but that's off in the distance still... One step at a time..  They been trying like hell to get it back up to 1230 all afternoon but I thing the bears are winning for now. We broke some MAJOR support. 

This is all making Obama and the Dems look pretty stupid for now.  Half the people I know would throw his ass tomorrow if they could.  Reid got on TV and went on about how the system worked and this was truly a bi partisan effort blah blah.  The he said the most profound thing. something like 'these new guys just refused to do thing as we have always done it here, apparently they don't know how things get done."  WELL YEA .......  the problem is the way these idiots have be "doing thing" for the last 40 years.  It is so amazing to me NOT that they don't get it but the DEPTH of the "don't get it"

Personally, I think somebody is trying to teach somebody a lesson here and this will turn as soon at the rest of the world gets all cranked into the dollar and goes OH SHIT what have we done.  The dollar drops and the market goes up.  Hey what do I know? 

As I type this the ES just went through 1200 like a knife through butta.  LOL  Okay, PT enjoy, keep yer gold hid and buy some more on this dip.  Oh the drop in Gold.  The increased the damn margins.   Soon they may as well just trade with themselves and government.  Wait?  did I say that?

Alright enough rambling been up all night riding this beast down and watching another chapter in history.  sleep now. 

[sidewinder]

SnP downgraded US debt tonight.   Wonder how long the socialist will take to blame it all on the new Republicans elected by the tea part interest. 

Already read on article saying gridlock created by intransigence on the part of the Tea Party contributed to this downgrade.  And Reid was crying about those guys "not doing business like we have always done"  Duh .. Harry, business as usual is why people elected these guiys  and sent them to Washington to stop all the nonsense. 

Somehow, I know this will all turn out to be racist. 

[onlooker]

First, the debt ceiling was raised in July.

Next.  More quantitative easing to come?   QE 3 in late August?
 
See:     

PIMCO'S Gross says Fed to unveil QE3 at Jackson Hole
By Jennifer Ablan   Wed Jun 22, 2011
 

Bill Gross on Wednesday said the Federal Reserve will likely hint at a third round of bond purchases, better known as "quantitative easing," at its next Jackson Hole meeting in August.

Jackson Hole is an annual global central banking conference, led by the Fed, which takes place at Jackson Hole, Wyoming. It was at this event last year that Fed chairman Ben Bernanke said the U.S. policymakers were prepared to make a major new investment in government debt or mortgage securities if the economy worsened significantly or if the Fed detected deflation -- a prolonged drop in prices of wages, goods and assets like homes and stocks.

http://www.reuters.com/article/2011/06/22/us-pimco-fed-gross-idUSTRE75L4L820110622

and see:  http://articlesofinterest-kelley.blogspot.com/2011/08/august-25-2011-economic-meeting-shabibi.html

~    ~    ~

The following article comments on the benefits of QE – 1 and 2

See: 

Reaping the QE-2 Whirlwind
Gary Dorsch, 13 Mar '11

The Fed's QE-1 scheme was designed to stop the horrific slide in the stock market, which had just been bludgeoned by the worst bear market since the 1930s. The S&P-500 Index closed below the 700 level for the first time since October 1996, losing more than half its value over the previous 17-months, and General Motors was seeking bankruptcy protection.

In the first 10 trading days of QE-1 alone, the S&P 500 stock index surged 21.6% higher, its best two-week rally ever. On March 24, 2009, the Dow Jones Industrials soared 6.8% to the 7,776 level. Investors in US stocks regained $700 billion in paper wealth that day. One year later, the S&P-500 extended its QE-1 rally to a 75% gain, nearly double the historical average for the first year of a bull market.

The QE-1 rally was the most hated and non-believed rally in history. It finally began to run out of steam, soon after the Fed's QE-1 injections had dried-up. It wasn't until May 6, 2010, whenthe bears got a token of vindication, when the Dow Jones Industrials plunged 998-points, on an intraday basis, the biggest one-day point decline in the Dow's 114-year history, only to recover half of those losses within 20-minutes. The trigger for the "Flash Crash" was a spike in Greece's bond yields, and soaring credit default swap rates, amid heightened worries that Athens might default on more than $300 billion of debt.

The upward spike in Greek CDS rates hit Wall Street like a lightning bolt. At 2:42pm, the Dow Industrials was languishing 300 points lower for the day. Then the yield on Greece's 2-year note suddenly soared to as high as 17.95%. The Dow Industrials began to fall rapidly, dropping more than 600 points in 5 minutes to as low as 9,922, for an almost 1000-point loss on the day.

The sell-off wiped out $1 trillion in market value at its lowest point. However, twenty minutes later, by 3:07pm, the Dow had regained most of the 600-point drop.

The May 6th "Flash Crash" last year did prove the trigger for a 17% correction in the S&P 500 index, and briefly knocked the Dow Industrials below the psychological 10,000 level. The setback whipped-up latent fears of a "double-dip" recession in the United States, and a freeze in European bank lending, due to the debt woes of Greece, Ireland, and Portugal.

The old investment adage "sell in May, and go away" was starting to make the rounds. But on August 27th, Fed chief Ben "Bubbles" Bernanke rode to the rescue of Wall Street, telegraphing his decision to start a second round of QE, to keep the stock market's rally alive.

Much of the spillover from the Fed's new $600 billion QE-2 scheme started seeping into the commodity markets, however, pushing global food prices to all-time highs, and the price of unleaded gasoline in New York increased $1.25 per gallon over the ensuing six months. The Continuous Commodity Index (CCI) of broad commodity prices soared to all-time highs, led by explosive rallies in cotton, cattle, copper, corn, sugar, silver and Gold Bullion. In Shanghai, the price of steel, iron ore, and rubber jumped into the stratosphere. Most recently, North Sea Brent crude oil, the benchmark used for pricing two-thirds of the world's oil, jumped sharply higher towards $120 per barrel, and dramatically increased energy and transportation costs around the world. Unleaded gasoline prices jumped by 60 cents a gallon in the last two weeks alone.

In summary, Bernanke’s QE1 and QE2 have paid off in higher for stocks (and I add, precious metals).

~    ~   ~

If the combo of a raised debt ceiling and an August QE 3 does occur, then I suspect that price of stocks, precious metals will bounced back to go higher and higher.   And, that Bill Gross, who thoroughly knows the workings of the US government is one guru investor who is worth listening to.

[sunseeker]

Good one SW.............

http://www.theblaze.com/blog/

In response to the threat of a downgrade, the White House today chose to attack S&P as “amateur hour” with fuzzy math. S&P promised to double check their figures and obviously came to the same conclusion: the U.S. has bitten off way more than it can chew. But even after the official announcement this evening, Obama administration officials are insisting it’s S&P who is wrong.

http://www.eurasiareview.com/dagong-chinese-rating-agency-downgrades-us-debt-despite-debt-deal-03082011/


Dagong Chinese Rating Agency Downgrades US…..........to A+. Much lower than the AA+ that S&P announced.

OMG.. You've got to read this....

Drunken Ben Bernanke Tells Everyone At Neighborhood Bar How Screwed U.S. Economy Really Is.

http://www.nakedtrader.com/don%27t-shoot-the-messenger.aspx

My plan. Get all the politicians and bankers in one room with unlimited booze. The public might get some answers and a reality check.

ATB 

Having major problems with my broadband and emails at the moment. 

[sidewinder]

SS, I have a theory that the S&P thing is orchestrated by...... maybe the White House..... or some surrogate.  This will be fuel to blame "those guys" who held their feet to the fire on the debt deal.  I won't put ANYTHING past this crowd.  ANYTHING. 

In other "News" I talk frequently with another trader in Tel Aviv.  He has been telling me for the last two weeks that there are plenty of demonstrations going on over high rents and the fact that 5 families are running everything there.  The last two weeks the amount of the crowd is growing very large and he thinks unless BeBe resigns there will be an 'Israeli Spring".  Now those folks are getting concerned that the government may break western on Syria should their chemical WMD fall into the wrong hands.  OR that may be used like Bush did as an excuse for some military action in order to get the people quiet and rally them towards national solidarity.  Thereby quelling the unrest.   Should get interesting. 

[sunseeker]

SS, I have a theory that the S&P thing is orchestrated by...... maybe the White House..... or some surrogate.  This will be fuel to blame "those guys" who held their feet to the fire on the debt deal.  I won't put ANYTHING past this crowd.  ANYTHING. 

In other "News" I talk frequently with another trader in Tel Aviv.  He has been telling me for the last two weeks that there are plenty of demonstrations going on over high rents and the fact that 5 families are running everything there.  The last two weeks the amount of the crowd is growing very large and he thinks unless BeBe resigns there will be an 'Israeli Spring".  Now those folks are getting concerned that the government may break western on Syria should their chemical WMD fall into the wrong hands.  OR that may be used like Bush did as an excuse for some military action in order to get the people quiet and rally them towards national solidarity.  Thereby quelling the unrest.   Should get interesting. 

I no longer know what to believe and what not to believe. Which of course is the plan.

You're one of the very few people who's opinion I rely upon to keep a grip on reality.


I must have stung my broadband  provider into action. As full service seems to have resumed and I can catch up.

Good video on Sidewinder's Blog.....

http://sidewindersview.blogspot.com/2011/08/lets-tax-rich.html

It's very fortunate for you that you're a still country of vast resources and militarily strong. When the default happens you should/will be cushioned from its worst effects. IMO The US will come up smelling of roses after the dust has settled. How the rest of the world views it and whether you're bothered about world opinion is another matter.


I watched a program this week based upon this....

Milgram's Obedience to Authority Experiment.

http://www.youtube.com/watch?v=IzTuz0mNlwU


It's frightening to believe the number of people who would go along with authority to torture and kill their (innocent) fellow human beings. They feel that they can absolve themselves of blame for any harm they do if a person in authority tells them to do it. In the recent study (in the USA and UK) I watched this week nearly 70% of the people who took part would have “knowingly” delivered the fatal shock to an innocent person when ordered to by a figure in authority.

If people where asked weather they would go along with such things if ordered to, then unsurprisingly everyone surveyed answered “No they wouldn't.” The reality was very different.

Milgram wanted to know if we would behave any differently than the Germans did under a Nazi regime?
I think we have the answer.


ATB 

[pinetree]

SS - you know the Bernanke story is a fake, right?  I was looking into and and found out it was started by The Onion and looks like it really started making the rounds.  Not to say it couldn't just have easily been true of course...

SW - Just saw the video on your site - way cool.  What are you using to make vids?

By the way, have you ever looked at Hurst cycles?  I'm not sure where to start, or if it's too complicated to bother getting into.

[sidewinder]

PT it's camstudio and the good news is it's FREE.  I like FREE.  Just goggle it and simple download and install.  There are plenty of youtube videos on the best setups ect.  This is a very good tool to make instructional material out of.  The quality can be made much better with tweeking. 

[pinetree]

Thanks, I'll have to take it out for a spin.  I have been thinking that recording myself trading would be the best way of reviewing my day trading performance so this will be perfect.  Seeing things unfold at the right edge will be much more useful than looking back over static charts.

Oh well I'll be looking forward to your future videos.  Since you got so many phone calls when the market started tanking I imagine there must be quite a demand for your market insights. 

[sunseeker]

SS - you know the Bernanke story is a fake, right?  I was looking into and and found out it was started by The Onion and looks like it really started making the rounds.  Not to say it couldn't just have easily been true of course...

Hi PT 

Even Bernanke would have lost his job if it were true.
What they say he said could easily be right though.

ATB 

[sidewinder]

Oh well I'll be looking forward to your future videos.  Since you got so many phone calls when the market started tanking I imagine there must be quite a demand for your market insights. 

Yea too funny.  Good sign of the panic out there.  Been getting about 2-3 call a day and some emails all asking the same question.  I should start charging em.

But really , who knows?   I think its going to tarry around this low and go on to make new highs ONLY if the PTB can continue to hold the charade together and judging from the gullibility of that Average person I think they can pull the wool over their eye for several more year at least.  These new highs I speak of are simply the value of the money going down as it relates to equities with hard assets.  But really, WTF do I know. 

Here's what I told one guy.    Liquidate all your assets.   put 1/2 in gold .... take the other half and go hang out in Thailand, VietNam, PI and all the fun places that are warm and have beaches.  Enjoy the comforts and partake of massive quantities of Beer and LBFM's.  Came back in about 6-7 years and buy all the downtown property and other stuff you want.  Sit back and watch that grow ... rinse ...... repeat..........

[pinetree]

Any normal person would be asleep now, but I'm up trading euro futures.  Got whipsawed around a few times on this possible double top forming on the 5-min chart but looks like it's heading my way now.

How anyone can do this for a living is beyond me.  Not saying I don't like this but sometimes I think to myself this day trading thing is simply nuts.  LOL  If it was possible to figure the market out to the point where I could have 80-90% winning trades I could do it.  But when I'm only right 50-60% of the time... there will be losing streaks... and it is more difficult than one could imagine to stick to a gameplan when that happens.  

Case in point, this session got a winner to start it off, then got messed up trying to play this double-top/breakout at 1.4212 area.  The POS proceeded to stop me out three times before I finally caught a move and just got taken out at 1.4234 for 20 ticks profit and with that I'm going to sleep.  But it's scary... having lost 3 trades in a row... do I have the balls to risk making it four in a row?  I'll tell ya, it ain't as easy as it seems.  But I've been making money most sessions lately so go figure.

Total for session:
+24
-12
-4
-9
+20

Total $202.50 per contract after commissions.

I'll have to learn how to use camstudio so I can record this craziness.

[sidewinder]

Just download it.  It should take all of 20 minutes to learn to make the recordings actually less.