Monday, May 30, 2011

30 May 2011

Another weekend, another bailout.  Is anyone else catching on to this trend?  No, not that bailouts always happen over weekends.  The trend that if anything starts going wrong in the economy, or there is an earthquake or the word "default" starts being used, the solution is always the same:  create more fiat via loans, and gold goes up.  Central banks can do little else.

Europe is still trying the "get rich doing bailouts or die trying" method.  The never ending circus continues.  I guess the modern generation is the generation of needing immediate results as we get from text messaging, email, and the internet.  It appears there is little thought dedicated to what will happen three months to three years from now.

Hold-long has some room to rally in the medium term, but it has been weaker in general the last four months.
Hold-long in the short term is nearly overbought.  It looks like futures are going to gap up tomorrow.  With the VIX on long-term support and this already fairly high, it will be interesting to see if it can gap and run or if it will slowly crumble throughout the day.

"The only thing we learn from history is that we learn nothing from history."
-- Friedrich Hegel

Thursday, May 26, 2011

26 May 2011

After this two day bounce so well predicted, maybe luckily, by my short-term indicator, where do we stand?
 Back towards the middle.  I've noticed that most times since QE2 started, hold-short has rarely stayed suspended above the 50% line.  The hold-long line was able to quite a few times.  However, things always change.  We'll have to see what happens with this.
 VIX at long-term support.  However, that support was broken at the end of April, and could be again.
 McClellan's downward move is stalling.  The TSV is not that low, but is below the 1st standard deviation as it as tightened substantially.  Can it reverse here and head up with strength?  Something I realized today is that the first date of the Bradley Siderograph was February 17.  That was almost the exact top of this index for 2011.
Medium term traced a bit back to the middle today.

"Perchance you who pronounce my sentence are in greater fear than I who receive it."
Giordano Bruno

Tuesday, May 24, 2011

24 May 2011

 Not oversold in the medium term.  Getting close.
Can be considered oversold in the short term.  80% has a higher confidence level.
VIX seemingly found support on the 50 day today.  Still about 25% away from my trend line top (blue/red straight line) at around 21 right now.  Could close that with a few good panic days if it wants to.

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was every invented. Banking was conceived in inequity and born in sin . Bankers own the earth. Take it away from them but leave them the power to create money, and with a flick of a pen, they will create enough money to buy it back again . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in . But if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit."
Sir Josiah Stamp, president of the Bank of England and the second richest man in Britain in the 1920's, speaking at the University of Texas in 1927

Monday, May 23, 2011

23 May 2011

McClellan Summation got hammered today - rate of decrease increased again.  SPY closed below 50 day SMA and appears to have broken through the trendline supporting the 2010, and recent 2011 lows. 

Not much you should do here because you should have already closed most longs a few weeks ago.  I was wrong about miners at that same time because I knew they topped last (we still have time for that), but I also got out of most of those about two weeks ago at small losses.  I have kept TRE from that post, but that is it.

"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.

Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage."
Attributed to Alexander Fraser Tytler; Unverified per the US Library of Congress.

Wednesday, May 18, 2011

18 May 2011

My short-term indicator (73% hold short) is pointing to a bounce sometime in the next few days.

McClellan still had a very weak day despite indexes closing above 50 day moving average.

GDX seems to be finding some support around its high from 2008 price.

SIL fought back and closed green yesterday.

I'm not going to advocate buying here, but I definitely wouldn't be initiating new shorts until my short-term indicator goes back to a more normal level.

Keep your eyes open.

Tuesday, May 10, 2011

10 May 2011

Long-term stock valuation charts.  Data source is the Shiller data - I cannot take credit for what he has compiled.  I would like to see this data calculated with Shadowstats CPI - I have generated this before, and might try doing this when I get the time. 

 Time to buy is when dividend yield is above 500 month moving average.  It used to be .06, but that doesn't seem realistic any more.
 Three peak pattern looks similar to that of the 30s and 70s.

"In all likelihood world inflation is over."
International Monetary Fund CEO, 1959
See how long interest rates can stay low?

Hold long at 60% - it is hard to read.

"Self-importance requires spending most of one's life offended by something or someone."
Carlos Castaneda

Monday, May 9, 2011

9 May 2011

Despite this latest bounce, I figure that this will challenge the 72 low.  We'll see.

Despite breaking below my 16 support line, this has rallied back above it.  It is still bounded to the top by my long-term descending trendline.

McClellan posted a green close today.  $TED rally seems to be slowing. 

Ex scientia pecuniae libertas. "Out of knowledge of money comes freedom."

Sunday, May 8, 2011

8 May 2011

"When the facts change, I change my mind. What do you do, sir?"
John Maynard Keynes

Thursday, May 5, 2011

5 May 2011

I'll keep it brief tonight.  The miners got hit hard again today - SVM broke that support line.  I guess my original idea (they were lagging recently so I was unsure of what that meant while the metals went ever higher) that they lead the metals and stock indexes has turned out true, despite me questioning it recently and having to cut a few losses.  I cut losses when the original premises for which I bought/sold end up changing (e.g. broke through long-term support line or failed to break out of a pattern). 
 Percent of stocks 2 std below 40 day moving average is jumping.
 New high for my selling climax indicator (1016 versus 1014 previously).
 Medium-term heading south, but still above 50.
Short-term hold short at 73%.   Nearing what I consider a safe area for a short-term bounce - I wouldn't be chasing any shorts here - there likely will be better entries.

GDX sitting atop the line that connects its two previous tops.  This should be resistance, but we don't buy until we have some confirmation of a trend change.  It did break its ascending trendline, so either way, it is weaker than it was.

I was looking at the long term SLV chart because this massacre looks so insane after such a run-up.  However, when SLV topped in 2008, it fell from a little over 20 to around 16 within a few week's time.  This is about 25%.  Currently, the pullback is around 28% while rounding.  I always find it interesting in long-term bull markets how inconsequential all the previous rises and falls appear compared to the latest rise.

Oh, and the initial claims numbers do not look good - the downtrend in the chart has been broken - see my Current Long Term Outlook page.  I do find it humorous how people who say to not trust government data start to point at it when it does align with their bias.

"We have four boxes with which to defend our freedom: the soap box, the ballot box, the jury box, and the cartridge box."