Friday, September 24, 2010

9/24 11:30

Durable goods data ex-aircraft was up 2%.  I believe we are stealing investment from 2011 to escape tax consequences of expiring cuts and new legislation by fed and states.  Companies are scared of D.C. and the states are so strapped they have to tax higher.  If the data indicates stealing from next year there will be selling after the data rush wears off.
Tuesday's high is the orthodox high for the bull move from the August lows. 

14 comments:

  1. Steve
    the analogy we are competing with is the 2004 where the market went up and down 3 times before breaking out to the upside and running until 2007. The key differences being not a presidential election year, the I1 looks dramatically different (up in 2004 vs down here), and with close above 1110 today we get a weekly DeMark sell signal. Not to mention housing bubble was launching then too and the mortgage fraud was being ignored.
    Charles

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  2. I hope that is the USD low in the CHF.

    Need the dollar to turn in a few of these currencies and especially the AUD.

    Everything seems TOO much in sync.

    How do you feel lately about a crash or a steady stepping downwards?

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  3. steve: r u sure this is going down? this bull looks very powerful

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  4. Steve,

    What is your thinking regarding the Fed and POMO? Apparently they are printing money to buy assets and some of this money-out-of-thin-air ends up in the stock market.

    I have always held that the Fed is just one part of the overall group of investors/government/public/mutual fund managers/hedge fund managers/etc that makes up the social mood that is reflected in the Elliott Waves on the charts. But with the Fed pumping money-from-nothing into the markets I wonder sometimes whether EW can truly work in this kind of environment. For example, if the overall mood is dark, EW would expect prices to go down. But with a dark social mood that would be the very time that the Fed would pump and buy more assets, no?

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  5. Steve

    That is right on.

    Jack C

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  6. Andi
    It would please you to see me stopped out, wouldn't it?

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  7. The last time I had this gut feeling that it would take a miracle for stocks and commodities to fall was back in early January, right before SPY's first cliff-dive from 115 to 104. Things can change in a hurry. A nice gap down sometime next week will trap a lot of late-to-the-barmecidal-party bulls.

    Ray

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  8. Steve, I think Pima's concern over the dollar is worth considering. DXY death cross today. Having said that, something seems terribly wrong with this market.

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  9. I posted by thoughts on the dollar in the 9/22 pre-open post. Dollar reflects risk acceptance, does not cause it. Left on it's own the dollar would decline into November, but a stock market decline will give it life.

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  10. The bulls are betting that the Fed is powerful will stay spineless forever. I admit the Fed is spineless and I admit they will stay spineless, but they are no longer powerful. So, this rally is a plebiscite on Tuesday's FOMC wording, which stated that they will generate inflation to get it up to their target. With what? Maturing MBS of $4B a week is a whiff in a whirlwind. Buying Treasuries is their way of getting cash out the door. Ben already flew his helicoptor last year. This is more like him spinning his propellor beanie. The Fed is having knife fights over reigning in their balance sheet, much less expanding it.

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  11. Steve...love your analogies. Like all the other humans playing this game we want the market to do what we think it should do right now, or more like yesterday. Looks like it will push until there is no one left standing its way and then turn around. I suspect there will be very few who make money on this. Reminds me of Larry Tisch when he shorted the Nasdaq a little early and was reputed to be underwater by a few hundred million before it crashed. He was considered nuts and they a guru. As they say, markets trend up but crash down. Hard to get in on a bear mkt move if you aren't already committed at least a bit at the very early stages.

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  12. thanks for restating your thinking on the dollar. I think I now get what you're saying: Dollar is NOT the dog and the stock market the tail, nor is the stock market the dog and the dollar the tail. Rather, risk appetite is the dog, and both the dollar and stocks are the tail, each inverse to the other.

    In other words, it's risk appetite or risk aversion that drives both asset classes. When traders begin to shift into risk averse mode, stocks will fall and the dollar will rise, but moves in stocks are not caused by moves in the dollar nor vice versa. Risk appetite is the fundamental cause for moves in both.

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  13. pima
    Exactly, people are unconscious thinkers and will stay fearful until risk assets move up enough to embolden them. Then, they'll get on blogs and beat their chests until they're a bunch of monkeys swinging from the trees, snatching risk bananas as they go.

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  14. Professional money managers become monkeys over lunch and drinks.

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