Saturday, May 22, 2010

Bail out whom?...not us...not definitely not us...the Fed is not involved in any bailouts

Friday, May 21, 2010

TF Income System Closes

RVS Systems Update

UWM Swing System and Income systems looking to add...UWM income is not shown on this chart.

Bid is still under the market

EURO 1 minute system...hitting ball out of park

The above trades represent 25 trading days with $22,000 in full margin average trade size and $11,000 on day trade margin. Of course you need reserve allocation of $180,000 to 200,000 to do these trades safely.

Please keep in mind that this is not a finished system...I would say that it is 80% complete...I have not modified it for several months...and it has performed consistently well...but there are a lot of improvements yet that I am planning.

SPY is sustaining a bid at this poing the leveraged "risk-on" is at a premium to the cash index

Mean Price Reversion

After a 10 to 11 point move away from the mean...the market likes to come back and retrace entirely to the mean as shown above...we should bounce there.

TF Overbought at 10 points above computer mean

Markets like to trade in price ranges. Oversold and overbought is best measured by the number of points away from the controlling price. This is the Computer Mean that i refer to and where the algo traders like to take prices. In the case of TF above you can see the it hit 10 points above the mean and also it likes to bounce at 10 points below the mean. Yesterday every time we hit 10 to 11 points below the mean the market bounced. 7 to 15 points.

Systems Update

SPY showing up cheap for the first time in a while

We need to keep this up...and remain discounted to leverage for a while for the rally to remain bid.

More lies everywhere...things are really whacked

Click for video regarding the oil spill in the gulf if you do not see it below its not 5,000 barrels a day leaking from the spill in the Gulf its 95,000. That's quite a big difference...I have not seen anything of that sort being discussed in the press.

More at The Real News

Votes for sale

In case you want to know who voted for this crony capitalist and "trade your vote for Fed and bank payola" bill, I am including a complete list for the record of who the losers are who supposedly are running our country and trading votes for money.

I simply can not believe that the FED is now SO DAMNED POWERFUL. Where in the real world could you blow up the banking system, crash the economy and kill the currency all at the same time and use that resume to get vastly more power? You can't. There's your answer. In the real world if you had that resume, it would be good if you could print money out of thin air, because you definitely would have to buy your votes and credibility.
“The recession we’re emerging from was primarily caused by a lack of responsibility and accountability from Wall Street to Washington. That’s why I made passage of Wall Street reform one of my top priorities as president, so that a crisis like this does not happen again.” - President Barak Obama
There are many problems with the above statement. One of the most blatant is the most surreptitious, especially coming from a guy who classifies as "from Washington" himself and who is owned by the finance community more than any other. Ironically, the main little problem with Obama's statement above is simply manipulation and fraud by both Wall Street and Washington. This bill is a great example of that. Additionally, if you want to refer to the problem with the words "irresponsible" or "lack of responsibility" - great - that's not much different than manipulation or fraud. Way to go Mr. Obama, suck up to your buddie, I mean boss, Bernake. As a side note, the reference to the recession that we are emerging from will be another anachronism for a president already prone for such things.

None of this bodes well for the stock markets throughout the world aside for a potential pop...a drop looks much more probable when frauds like this are conducted in the open and promoted as sound, honest and productive legislation.

Below is a list of the politicians that are for sale and a few who are not:

Thursday, May 20, 2010

More fraud from the regulators

We are seeing light at the end of the tunnel,” Sheila C. Bair, the head of the F.D.I.C., said in a recent interview.
If you believe that I have a bridge I would like to sell you.
  • In April, Thomas H. Lee Partners spent $134.7 million for a minority stake in Sterling Financial, a lender based in Spokane, Wash., that has been hobbled by bad real estate loans.  
  • More recently, Gerald J. Ford, the billionaire investor who made a fortune during thesavings and loan crisis, invested $500 million for a 91 percent stake in Pacific Capital Bancorp of Santa Barbara, Calif. The bank had been trading at around $4. Mr. Ford paid 20 cents a share. 
  • When it bought three banks in April, TD Bank agreed to swallow a bigger share of their future losses than is typical in an F.D.I.C.-assisted deal. On Monday, TD paid a mere 20 cents a share for South Financial. Although the F.D.I.C did not provide any aid, TD did get some federal help. The Treasury Department agreed to sell $347 million of South Financial preferred shares and warrants for a bargain-basement price of $130.6 million. 
  • “Without a doubt, there is more confidence than a few months ago,” said Bharat B. Masrani, the head of TD Bank’s United States operations. “There is more transparency and confidence in the ultimate losses of these institutions.”  
  • Andrew Williams, a Treasury spokesman, said that it had agreed to the discount, as in previous deals, to “minimize or eliminate our chances of incurring further losses” on its investment in the bank.
This sounds like an interesting scam...what else will they offer to support these deals? what prevents these investors from claiming that the Treasury and FDIC sold them a bill of goods? Not much. Expect to see this get very complicated.

The Fed got what it will we get manic monday on a friday

Similar to the trading session during last vote to break up the big banks, we had a crash. Today we have a financial overhaul bill and we have another crash on a two day level rather than in one day. The Fed got what it wanted, just like the banks and the fed did two weeks ago, I wonder if they will provide the liquidity to manipulate the markets again now (like they did two weeks ago) that they are more powerful and corrupt than ever!

My take on this situation is that it is very sad and amazingly corrupt. There is no question that Ben Bernake and his minions at his buddy banks did an absolutely amazing job of lobbying...if they were in jail where they belong they would not be able to have successfully manipulated the votes so powerfully.


Regarding the systems...I have stated over the last few days/weeks, that the systematic outlooks were mixed...meaning some systems have been looking short and some have been looking long. In that kind of situation, I have suggested that commitment to the market in either direction be moderated to manage risks in a way that is constructive. For my trading models, I have reduced size allocations by 50%. This means that we will be able to return to full allocations when the majority of the systems are committed in complimentary biases. In this case many of the RVS systems are looking for downward bias shifts. This is not unanimous yet and tomorrow will be a big tell. If we bounce hard, which is a reasonable outcome to expect, then the mixed bias will continue for a little bit. However, without a sustained move to the upside the long positions that are currently on the table will look for a good bounce for an exit and then the systems will likely turn their attention to the short side.

I will post details as soon as they are available.

On another topic, the Releverage/Deleverage analysis today did an outstanding job of demonstrating commitment to the "risk-off" trade. There were only two times during the day that the market made minor attempts to catch a bid under the risk trade as represented by this tool. I have to admit, I jumped on it when it happened and posted the chart. I did take longs at the support level I indicated earlier...but the market never demonstrated committed bids and premiums being paid for leveraged risk. I will continue to post those charts in the next few days. If anyone is interested in understanding more about them please feel free to comment on this post or contact me directly.

Systems into Close

System Updates

EURO target based on my pervious bottom analysis

Target: 1.4000 .

SPY still not finding anything more that little bids...but we are nearing strong levels

SPY FINALLY Gets Cheap (a little)

SPY still not finding much of a bid

SPY Rich but bounce conditions starting to emerge

Systems will not add seend by the red will look for shorts to sell.

I do think we get a bounce from these levels...these particular systems almost never lose on their trades. Also, One thing of  note is that the TNA is now trading cheap vs there is starting to be some traction possible for a rebound.


In economics, austerity is when a government reduces its spending and/or increases user fees and taxes to pay back creditors. Austerity is usually required when a government's fiscal deficit spending is felt to be unsustainable.

Austerity measures are typically taken after a government's bond rating is downgraded, making it more expensive to borrow money. Government bonds are typically downgraded when debt grows substantially as a portion of GDP. Government debt grows as spending exceeds tax revenue. Such excess occurs when tax rates are such that revenues are kept low while government spending is increased. Such excess can also occur when the economic activity stagnates or decreases, such as in a recession, thereby reducing the government's tax revenue.
Banks, or inter-governmental institutions such as the International Monetary Fund (IMF), may require that an indebted government pursue an 'austerity policy'. This typically occurs when the government must refinance loans that are about to come due, for which the government cannot pay. The government may be asked to stop issuing subsidies or to otherwise reduce public spending. When the IMF requires such a policy, the terms are known as 'IMF conditionalities'.

Typical effects

Development projects, welfare, and other social spending are common programs of spending for cuts. Taxes, port and airport fees and train and bus fares are common sources of increased user fees.
In many cases, austerity measures have been associated with short-term declines in standard of living until economic conditions improved and fiscal balance was achieved.

Wednesday, May 19, 2010

Money Masters....interesting movie from the 1990's

Food for thought...

End of day RVS trades...

RVS System Update

m3SwitchPercent shows good long risk here for TF

and there's a .618 retracement on the daily index.

BGU is being sold for a substantial discount to SPY

People are willing to sell leveraged risk at much larger than normal discounts!
BGU is represented by the gray far today it has been drifting relatively far beneath the SPY cash price and the parity prices that would reflect a balanced market. When people will sell a leveraged instrument at a discount the market is valuing the "risk-off" trade.

This situation is currently on the extreme side...and I would look for some sort of bounce back closer to parity soon.

EURO Setup

SPY is expensive

Monday, May 17, 2010

TF Daily Income still has not confrimed

TF Daily Income still looking for a long entry at the close

TF Daily Income looking a possible long entry at the close

This trade is not confirmed...I will post if it these markets its best to be careful.

UWM Daily Income currently looking to add on the close

BGU short works nicely

wish it still had the previous short...

Market Finds a bid

If the SPY can continue to trades at a discount to leverage then there should continue to be a bid under the market and dips may continue to be buyable.

Sunday, May 16, 2010

Hyper inflation will be the result after hyper deflation...

First, DEFLATION...then monetize with currency devaluation = HYPER INFLATION in 2014 to 2016. This movie is too optimistic about a linear path to inflation...I think characteristic to the market's pattern, we will get deflation first and then currency devaluations that attempt to compensate for fiscal deficits and other obligations.

Bear markets like EVERYONE to lose money...if we get deflation people who make money on that decline will most likely lose it on inflationary activity when currencies become worthless.

Works for me!

Bank of New York...interesting lawsuit

© 2009 m3, ltd. All rights reserved.