Wednesday, July 21, 2010

7/21 Daily Commentary

Today was the I1 top date.  The daily technical composite remains mired at +16 and it still on a buy signal.Bernanke testified and implied that the economy is not strong.  Geez, who doesn't get it?  These events can be turned into money.  Events can dominate a single session, but unless the news is really new, they don't last.  I was long DJ futures but got stopped out for a 30-tick loss on the testimony.  I caught the low within a DJI point and bought DJ futures and SSO.  I have since sold these positions for a decent profit.
To assuage all of you bears out there that have been waiting for this day to short the stock market. I am going short.  I don't need to wait for the 5-minute, 380-unit M/A support break at 10,040 because it is already on a sell signal from the decline a couple of days ago. A decline below 10,040 will merely confirm the downtrend.  Here is the I1:


The reason that I don't want to hold long is that there is a conflict between the cash wave counts and the futures wave counts.  Futures are bearish and cash are bullish.  Since this is the turn date I gave the futures the benefit of the doubt.  There will be no wave count charts because these two time frames are in conflict.

I wish the market had been allowed to follow it's natural course today, but the pols had other plans. Bernanke said that his helicopter was standing by on the Fed rooftop to shower us with fiat if necessary. He's got a tough audience at the Fed meetings nowadays. What has happened to our mortgage-backed portfolio? Where did all of the Treasury securities go?


4 comments:

  1. It would be nice if - just once - our stellar Congressional representatives would ask the two questions you just asked along with how another money bomb from the Fed will benefit someone else other than the TBTF. I guess that is asking too much.

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  2. Ed,
    The actions of the Fed have progressively linked the major banks with the Fed to the point of moral hazard. This, along with the military-industrial machine and the other government-sponsored entities has shifted our country politically in a bizarre mixture of leftist and rightist government programs that I dub the socialist-fascist state, where both exist simultaneously in a misguided progression of bad policy over the past 70 years. When the fiscal bomb goes off America will be reborn politically. I believe that the Fed will exist up to that point then will exist no more.

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  3. I don't see the socialism. Mussolini would be proud of what the USA has become, a true corporatist state, run by and for the benefit of the malefactors of great wealth. I have less faith in a rebirth than you do.

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  4. We've got Obama, Universal Health Care, Social Security, the Great Society, the New Deal, and 14 trillion in debt. Whenever the Dems are in they add socialist programs that outlive them and their children pay for. When the Republicans are in they expand the military-industrial machine that outlives them and their children pay for. We're caught in an ideological conflict that is bankrupting us.

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