31 Jan 2013

 New highs falling off.

 Buying climaxes starting to rise again.

 Medium term stalled a bit today.

Short term did the same.

Is there one more push for new highs in the cards?  Possibly for the indexes.  I'm guessing most stocks have rolled over already.

(During World War II, Joseph Stalin) was once asked by an American writer, according to Professor Dean Russell, how he could justify conscripting all the property of all the people for use by the government to fight the war. Stalin answered by asking why they considered it more immoral and illogical to conscript lifeless property than to conscript life itself, as was being done in the United States and all other capitalistic countries. His American challenger had no answer, because there was no answer.
"Freedom Under Seige", Ron Paul

30 Jan 2013

 The McClellan is about as high as its ever been.  The TSV readings are also high, but the RSI is severely lagging previous highs.

 Medium term appears to have turned.

Short term is actually no longer overbought.  It is back in neutral territory.

From NowAndFutures.
"Derivatives markets guarantee a winner for every loser, but they will over time concentrate the losses in vulnerable sectors. Nature obeys Mayer’s Third Law, which holds that risk-shifting instruments will tend to shift risks onto those less able to bear them, because them as got want to keep and hedge while them as ain’t got want to get and speculate. The logic behind margin requirements in stock markets and capital requirements in banking also holds in the derivatives markets. Permitting highly leveraged institutions to hold private parties behind closed doors is the political version of selling volatility: the predictable likely gains will one day be overwhelmed by an equally predictable disastrous loss."
Martin Mayer, Somebody Please Turn on the Lights, Derivatives Strategy, 1999 

29 Jan 2013

Quite impressively overbought in all time frames.  It's amazing that buyers keep piling in.  Good luck.  The Dow is at the top of its upper channel (not drawn on chart) as well.

What will FOMC bring tomorrow?

28 Jan 2013

 Medium term remains overbought.

Short term diverging from the index melt up.

24 Jan 2013

Long term is about as overbought as its been.

Short term seems to have formed a negative divergence.

Medium term has also slightly rolled over near its most recent peak.  It is hard to see on top of the black.

Buying right now is about as risky of a move as one could make.  The odds are horrendously bad.

This quote may not apply in the short term, but nonetheless, it applies.


Get gold, humanely if possible, but at all hazards—get gold.
King Ferdinand of Spain

23 Jan 2013

19 Jan 2013

Short term is headed back up again.

Medium term has also turned upwards.

 Long term has overtaken the previous peak barely.  It still has some room to get to the March 2012 readings.

 New highs are lagging recent previous peaks.  They are above readings from March of 2012 though.

I find it amusing how human emotions are so feast or famine.  It seems like the market will either get very overbought or very oversold.

17 Jan 2013

 Medium term continued lower today despite the push higher in the indexes.

Its hard to see, but short term rose about 3% today.

Gold is near its downtrend resistance line and near its 200 and 50 day moving averages.  The same can mostly be said for silver.  GDX continues to tighten in its descending triangle pattern.  It also sits near long term support line connecting the lows in 2008 and 2012.

"In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil."
Frederic Bastiat, "That Which Is Seen and That Which Is Unseen", 1850

16 Jan 2013

15 Jan 2013

 Please give us an exhaustion day where this fails to make new highs.  Short term looking like it may want to try for higher.

Medium term starting to roll over.  Obviously, remains overbought.

Course of Vitamin D Reduces Body Fat  Ensure you get it from a natural source and take it with your biggest (fattiest) meal of the day.

I'd like to thank nowandfutures.com for the quotes I use from their great site.

"Too large a proportion of recent "mathematical" economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols."
-- John Maynard Keynes, "The General Theory of Employment Interest and Money", Book 5, Chapter 21,Section 3, pg.298

14 Jan 2013

 Still a negative divergence in the number of new highs.

 Overbought in long term.

 Overbought in medium term.

Neutral to overbought in short term.

A wise and frugal Government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities. 
Thomas Jefferson 
 

12 Jan 2013 (Gold vs Nasdaq vs Silver vs USAGX vs Crude)

 Brent crude is showing some coiling.  It is hard to argue for a break down (considering the global monetary easing) through the lower support, but I guess with recessions, it could happen.  The problem is that either way we get a recession - if the price rises, recession, if it falls, it is likely because of demand falling in a recession.

Gold, silver and gold still all outpacing the Nasdaq's bubble from the 90s.  Gold actually looks still much like a very controlled rise in this view - not euphoric yet.

Overbought in medium term timeframes.

Percent of stocks over their 40 day is still high.

Quite high percentage of stocks over their 200 day moving average.  Looks like it will fail to reach the peaks from 2009 and 2010/2011, but the verdict is of course still out.

Overbought in short term time frames.

10 Jan 2013

Gambling fever is hitting a crescendo.

You can see it in the daily chart of the index.  The day starts slowly and panic buying towards the ends of the days recently just drifts the close ever higher.  I've been there before, and been a buyer.  I did it in 2007 quite a bit.  It felt good being up 2 or 3 percent instantly.  A few months later when the stock was off 25% it didn't feel so good.



I have no idea when it will top, but I can tell you that odds of making money on the long side are diminishing with each melt-up day.

I closed shorts that I was up on when I was saying the market was oversold in November.  I kept open the ones I was down on and unfortunately only lightly hedged them by shorting worthless extortion-scheme ETFs like FAZ.  I should have covered all and went long, but following indicators is hard when emotions get in the way.

On the bright side and quite counter-intuitively, the more money I lose in the stock market, the more I spend.  I guess I just see that either I can buy something that makes my life better now - picked up a Champion Juicer and an electric tea kettle - or I can lose the money in the stock market.  The choice is easy.  I also bought a lot of physical gold and silver on December 27th for the same reason.

 Short term's decline slowed today.

 The medium term is slowly moving like trees reaching for the sun.  Trees never reach it.

Even my long term indicator can safely be called very overbought.  Elliot wavers might like that this last wave down was the smallest and maybe completes the pattern?  I don't really study that stuff, but this cycle looks crescendo-ish as it sucks in the last few.

"Don't bother me with facts, son. I've already made up my mind."
Foghorn Leghorn (cartoon character)

9 Jan 2013

 I have no idea if this means anything, but the past three times XLF got near this level it was extremely lagging the Dow's performance (green) and almost marked short term tops in the Dow.  It looks like it could get a little higher to hit the upper most resistance.  Remember, I always say that when junk becomes leaders of an up move, the up move is getting tired.  AAPL, one of the actual leaders of the rally since 2009, has certainly fallen from grace as the dash for trash has commenced.

 Medium term is nearing all time highs.  This means 80% of stocks are in medium term uptrends.  Mean reversion anyone?

Short term has continued to fall.  It would be great to get a solid negative divergence when this tries to go up again.



"We can never be gods, after all. But we can become something less than human with frightening ease."
N.K. Jemisin

8 Jan 2013

 Made it above recent highs today.

Falling off a little.

"The conscious and intelligent manipulation of the organized habits and opinions of the [public] is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country."
Edward Bernays

7 Jan 2013

 Slight decline in short term today.

A slight slowing in the rate of increase of the medium term indicator.

Admittedly, the RSI certainly has some room to go up.  The index itself is historically quite high - nearing the highs made in 2007.  It is lagging most recent peaks quite heavily.  However, this is only until its not.  We will need to wait for the turn to come.

Whenever the economic life of a nation becomes precarious, the central government is forced to assume additional responsibilities for the general welfare. It must work out elaborate plans for dealing with a criti-cal situation; it must impose ever greater restrictions upon the activities of its subjects; and if, as is very likely, worsening economic conditions result in political unrest, or open rebellion, the central government must intervene to preserve public order and its own authority. More and more power is thus concentrated in the hands of the executives and their bureaucratic managers. But the nature of power is such that even those who have not sought it, but have had it forced upon them, tend to acquire a taste for more. "Lead us not into temptation," we pray -- and with good reason; for when human beings are tempted too enticingly or too long, they generally yield. A democratic constitution is a device for preventing the local rulers from yielding to those particularly dangerous temptations that arise when too much power is concentrated in too few hands."
Aldous Huxley

6 Jan 2013

 This shows the first four short term indicators i use.  All are showing high levels.  Please acknowledge that values can stay elevated for long periods of time if the market chooses to do so.

The third pane shows that we are historically still quite overbought from a long term perspective.  The composite indicator shows the same.

 Just a closeup of the medium term.  You are welcome to buy here if you want.

A closeup of the short term.  The same applies.  All time high for this one.

"Luck is where preparation meets opportunity."
Seneca