Saturday, November 14, 2009

The Boy and the Barber

A young boy enters a barber shop and the barber whispers to his customer, “This is the dumbest kid in the world. Watch while I prove it to you.” The barber puts a dollar bill in one hand and two quarters in the other, then calls the boy over and asks, “Which do you want, son?” The boy takes the quarters and leaves. “What did I tell you?” said the barber. “That kid never learns!” Later, when the customer leaves, he sees the same young boy coming out of the ice cream store. “Hey, son! May I ask you a question? Why did you take the quarters instead of the dollar bill?” The boy licked his cone and replied, “Because the day I take the dollar, the game is over!”

NASDAQ Internals extremely weak

Thursday, November 12, 2009

Another View of the Dollar Carry Trade

The slightly upward sloping channel needs one more little pop to fill. I saw a great chart of this earlier today...but I think the trend lines needed to reflect the channel. Nice moving average resistance above also.

those of you with stockcharts may want to watch this chart live, enclosed is the link to the live chart. live chart

Tuesday, November 10, 2009

Market Observations - parabola

I have not been posting much for personal reasons but did want to post something about this market situation.

  1. Everyone and their brother went short when trendlines were broken
  2. Those people feel hoodwinked again
  3. The dollar pattern failed
  4. Big fractures in the market
  5. Extremely low volume

I am going to restate my thesis from quite a while back. We need an emotional bottom for the dollar. With a dive below 74.50 the market can panic people into buying and covering inflation assets and dollar longs can capitulate. I hear people looking for a positive seasonal move and this and that...however, volume is weak, the dollar sucks and conditions are ideal for fumes to be lit...we need this little parabola to complete to the upside...I think it is very difficult to set an exact level to short here since we could see a one day spike that could be dramatic.

Apparently, EWI may be about to retract their P3 thesis. Hochberg has certainly had his challanges calling the rally from the lows. First he waited until we got to the 800's on the SP to call P2 and then he promptly used the whole trip from 800 to 920 looking for wave B down. In July, I believe he called P2 complete also, but handled that rebound much better. Recently, his bearish bias (which I can certainly rationally understand) is so strong that nearly every squiggle on the Dollar chart down from 80ish is a bottom and every pop on the markets is a top. And finally, just when a little potential parabola sets up he's addressing folding the forecast...Hochberg has been (and generally is) too bearish in opinion and thusly interprets his forecasts in that light rather than objectively. His interpretations have impacted many a waver - I am sure. It is important to remain detached from the market and convictions - apparently this is something that Hochberg needs to do better.

Sunday, November 8, 2009

Warren Buffett investments vs bailout funds

Somebody certainly is in on the government game...interesting to ponder.

Highest Unemployment Since the Great Depression

Of course the real numbers are even higher...but at least we can reference U6 data for a less contrived and deceptive number.
"Officially, the Labor Department’s broad measure of unemployment goes back only to 1994. But early this year, with the help of economists at the department, The New York Times created a version that estimates it going back to 1970. ...
If statistics went back so far, the measure would almost certainly be at its highest level since the Great Depression.
In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous high was 17.1 percent, in December 1982."
From David Leonhardt at the NY Times: Broader Measure of Unemployment Stands at 17.5%

Elliotwave Freeweek

A reminder - our collegues over at Elliott Wave International are hosting their occasional free week - so this a great chance for all of you to take advantage of this opportunity to register (yes it's free) and have access to the authoritative Elliottwave site. It is easy, fast and you get their Short Term Update, Monthly Financial Forecast and Prechter's Theorist. Good Stuff.

Costs of Health care around the world...

Will Mr Obama's plan raise or lower the US costs? I think you need only to look at any government take over of anything to get a good idea of past results not being indicative of future performance.

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. 
The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first.
The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." - Thomas Jefferson
Obviously, we have thrown out the constitution a long time ago...but these attacks on it are getting more and more grotesque...and will only decrease the quality and increase the cost of healthcare in the US.
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