Thursday, September 29, 2011

29 Sept 2011

 This shows the underlying decimation of the Nasdaq advance decline line versus the index itself.  The index is largely being floated by the Nasdaq 100 which has a better advance decline line than this.
 Seems to be spiking again.  This ordinarily occurs near bottoms, but it is designed to get one out before the last whipsaw.  We will see if it happens again.  Notice that sometimes it did mark exact bottoms in the past.
 A bit higher today.
 About the same.
This turned out of its slowing to head upwards again.  Now we are at 50%; much worse opportunities here compared to an oversold condition.

"It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world."
 Thomas Jefferson

Wednesday, September 28, 2011

28 Sept 2011

 VIX broken out of pennant pattern?  Target 55?  I don't see how considering how oversold we already are, but I gotta go with what the charts are saying. We'll see.
Unfortunately, we don't have data on this for another bear market.  I'm guessing 85% downtrends is probably reasonable considering it happens in the medium and short terms.
 It is hard to see, but hold short medium term increased today.
Same for the short term.

"ECCLES: We created it.
PATMAN: Out of what?
ECCLES: Out of the right to issue credit money.
PATMAN: And there is nothing behind it, is there, except our government's credit?
ECCLES: That is what our money system is."
-- Federal Reserve Board Governor Marriner Eccles in testimony before the House Committee on Banking and Currency in 1941, during questioning by Congressman Wright Patman about how the Fed got the money to purchase two billion dollars worth of government bonds in 1933.

Monday, September 26, 2011

26 Sept 2011

 Oversold in long term.
 Oversold in medium term.
Oversold in short term.  This I expect could bounce a few days and then challenge the lows.

Sunday, September 25, 2011

25 Sept 2011

 Oversold in the short term.
Oversold in the medium term.

It seems that a Greek default is finally being considered as possible.  Amazing that it has taken this long.  I went and looked at what happened when Bear Stearns went under.  About three days after the market found a bottom (using breadth indicators) and rallied from Mar to late May.  I'm not sure if that is where we are or if we are at a Lehman point.  I'm thinking the former, but that is just a guess.  It seems this has become unraveled too fast to not have some settling before shit hits the fan again.

Friday, September 23, 2011

22 Sept 2011

 closed below recent lows.
 broke out of triangle, but stalled somewhat.  hit bollinger band and reversed.  not above recent highs.
 nearing oversold in the medium term again.
oversold in the short term.

i closed about 60% of the shorts that i initiated last week, and was worried about them then, but was happy today.  i didn't want to, but with my short term indicator so high, i figured the world's bailout circus would fire up again soon and reignite some animal spirits for a day or two.

Thursday, September 22, 2011

22 Sept 2011

Widespread risk off today.  As of now, silver has broken its supporting trendline going back to August 2010 which does not bode well for the "inflation" trade. 

Gold appears to be back in its long-standing channel, and sitting right above its 50 day EMA.

Wednesday, September 21, 2011

21 Sept 2011

 Not that profound, but the advance / decline line has less of a slope than the DJ-30.  We need to watch to see if this breaks lows before the indexes.  Dow still has this line as support.  Advance / decline broke its trendline.
 Strong day today for the medium term hold short.
Getting oversold in the short term, but not there yet. 

Tuesday, September 20, 2011

20 Sept 2011

 Heading up or a tease?
 Hold long short term down the past two days.
 VIX seems to be at a support trendline.  Please remember the triangle that it broke out of in June/July that I had talked about for months - see what ended up happening?
70% of stocks are in long term (50 ema under 200 ema) downtrends. 
McClellan Oscillator declined again today.  It produced a red candle for the summation index as well.

From Atlas Shrugged:

Rearden heard Bertram Scudder, outside the group, say to a girl who made some sound of indignation,
"Don't let him disturb you. You know, money is the root of all evil – and he's the typical product of money."
Rearden did not think that Francisco could have heard it, but he saw Francisco turning to them with a gravely courteous smile.
"So you think that money is the root of all evil?" said Francisco d'Aconia. "Have you ever asked what is the root of money? Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?
"When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor – your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money. Is this what you consider evil?
"Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions – and you'll learn that man's mind is the root of all the goods produced and of all the wealth that has ever existed on earth.
"But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man's capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made – before it can be looted or mooched – made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can't consume more than he has produced.
"To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except by the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss – the recognition that they are not beasts of burden, born to carry the weight of your misery – that you must offer them values, not wounds – that the common bond among men is not the exchange of suffering, but the exchange of goods. Money demands that you sell, not your weakness to men's stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best your money can find. And when men live by trade – with reason, not force, as their final arbiter – it is the best product that wins, the best performance, then man of best judgment and highest ability – and the degree of a man's productiveness is the degree of his reward. This is the code of existence whose tool and symbol is money. Is this what you consider evil?
"But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires. Money is the scourge of the men who attempt to reverse the law of causality – the men who seek to replace the mind by seizing the products of the mind.
"Money will not purchase happiness for the man who has no concept of what he wants; money will not give him a code of values, if he's evaded the knowledge of what to value, and it will not provide him with a purpose, if he's evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?
"Only the man who does not need it, is fit to inherit wealth – the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve that mind that cannot match it. Is this the reason why you call it evil?
"Money is your means of survival. The verdict which you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men's vices or men's stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment's or a penny's worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you'll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?
"Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices. Money will not give you the unearned, neither in matter nor in spirit. Is this the root of your hatred of money?
"Or did you say it's the love of money that's the root of all evil? To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men. It's the person who would sell his soul for a nickel, who is the loudest in proclaiming his hatred of money – and he has good reason to hate it. The lovers of money are willing to work for it. They know they are able to deserve it.
"Let me give you a tip on a clue to men's characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it.
"Run for your life from any man who tells you that money is evil. That sentence is the leper's bell of an approaching looter. So long as men live together on earth and need means to deal with one another – their only substitute, if they abandon money, is the muzzle of a gun.
"But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride, or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich – will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt – and of his life, as he deserves.
"Then you will see the rise of the double standard – the men who live by force, yet count on those who live by trade to create the value of their looted money – the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law – men who use force to seize the wealth of disarmed victims – then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
"Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.
"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: 'Account overdrawn.'
"When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, 'Who is destroying the world?' You are.
"You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it's crumbling around you, while you're damning its life-blood – money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men's history, money was always seized by looters of one brand or another, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves – slaves who repeated the motions once discovered by somebody's mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer. Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers – as industrialists.
"To the glory of mankind, there was, for the first and only time in history, a country of money – and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man's mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being – the self-made man – the American industrialist.
"If you ask me to name the proudest distinction of Americans, I would choose – because it contains all the others – the fact that they were the people who created the phrase 'to make money'. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity – to be seized, begged, inherited, shared, looted, or obtained as a favor. Americans were the first to understand that wealth has to be created. The words 'to make money' hold the essence of human morality.
"Yet these were the words for which Americans were denounced by the rotted cultures of the looters' continents. Now the looters' credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, like the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide – as, I think, he will.
"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns – or dollars. Take your choice – there is no other – and your time is running out."

Monday, September 19, 2011

19 Sept 2011

 I had to scour for some negative confirmations.  For bulls, McClellan Summation beat its last high.  For bears, Oscillator failed.  Advance / Decline has failed so far as well as seen above compared to the Nasdaq (green).
 Negative confirmation, so far, on hold long short term.  The other side of this is that the lows of hold long have been progressively higher.
A stall in the medium term indicator today.

We will see what tomorrow holds.

"…the United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."
-- Laurance Kotlikoff, Federal Reserve Bank of St Louis "Review", July/Aug 2006  -

Sunday, September 18, 2011

18 Sept 2011

 Pretty much overbought on the Mc Oscillator.
 Overbought in short term.
Neutral in medium term.

Zerohedge has an article saying that Greece will default on the 20th. I cannot think of a better day than the day of or day before (I can't find the info for some reason...) the Bernank announces further massive easing programs. Silver and gold slow stochastics are starting to look good too.

Also, 9/20/2011 = 9 + 20 + 2 + 0 + 1 + 1 = 33.  One of the "big" numbers.  Perfect day for it as far as I can tell.  Why do I keep the 20 together, but separate the year?  For convenience maybe, but that is how I always do it.


Thursday, September 15, 2011

Wednesday, September 14, 2011

14 Sept 2011

 Nasdaq, the most strong of the indexes, still has some resistance to overcome.  Today, it failed at the 50 ema and my trendline.
 This showed some strength in that it stopped at a higher low than before.  Although it sounds very subjective, I don't like the form of this latest slowing and upside, but that might not matter.
 This seems to be forming a lower high than the previous high which is bullish.
This formed a higher low at the last bottom which was bullish.  Now we are at 52% which is neither oversold nor overbought.  Basically, we need to watch to see where it peaks.

Honestly, I'm a bit confused about direction here despite my arrogance a few weeks ago.  When I'm confused, I usually sit out mostly for a better sign.

Sunday, September 11, 2011

11 Sept 2011

 Medium term hold short appears to be headed up. 
Short term is still mostly oversold, but remember we don't buy because something is oversold.  We buy when strength arises and it is oversold.  Strength would be reflected by a lower peak of hold short.  It appears this peak wants to try going higher.

 Not oversold in terms of TSV.  Looks like it could be rolling over.  From a bullish standpoint, I would like to see this bottom above the last peak.  That would make a good buying point.  No idea how that would happen considering the slowing world economy, but this stuff never makes sense.  Next Bradley point (9/26) is right around the next FOMC minutes release.
Not oversold on the McClellan oscillator either.

Tuesday, September 6, 2011

6 Sept 2011

 Not oversold yet in the oscillator
 Dollar appears to be breaking out of a long term triangle.  Background is Dow to see historically what happens.  Looks like they can both go up or go opposite.
 Not oversold in medium term. 
Oversold in this short term indicator.

Sunday, September 4, 2011

4 Sept 2011 (Gold versus Silver versus USAGX versus Nasdaq)

It seems that USAGX has broken out from its range.

A commenter pointed out that I'm one of the few people still following the stock market due to HFT, manipulation, etc, and that I should just buy physical gold and silver.  I do think this is wise, and I already do own the metals.  

The main reason I play the stock market is I think that "this time" is likely never different.  This will be extremely painful and it already has been in the ongoing depression.  Eventually the sun will rise again, and HFT will end up making no more difference trading the market than when people started using computers to do it.  The people living during the times always think it is different, and maybe it will be, but as far as I can tell the game is to get as much fiat money as possible and then convert it into something real while it is still possible.  As far as I can tell by checking APMEX, I can still buy real stuff fairly easily.  Maybe not tomorrow, who knows.

So the reason I play stocks is that most good individual stocks at the right times are much better inflation hedges than the metals themselves - see USAGX in the chart above.  See RIC, GOLD and EXK the past few months.  As far as I can tell, owning those has been a better trade than owning physical far. 

Just saying that we shouldn't limit ourselves by always believing in destruction.  Going through life assuming everything is going to fall apart actually defies almost everything we can see in the world around us.  I know entropy, I get it.  I also see weeds sprouting through concrete against all odds.  Life wins.  Just a perspective thing.

Good luck and keep your eyes open.

Friday, September 2, 2011

2 Sept 2011

Don't you get tired of me nailing every turning point and you never paying anything for the service?

2 Sept 2011

Still overbought in short term despite the sell off yesterday (9/1/2011). 

Metals and miners are showing some strength in the pre-market today.  GDX needs a close over 63.95 to break this range.  It is not yet hitting its upper bollinger band despite the strength recently.