Monday, April 18, 2011

4/18 Daily Commentary

This is an historic day, the first day that the Congress got a restraining order since Keynes took over 70 years ago.  Prior to Bozo the Clown, economists testifying before Congress unflichingly reminded them that they had the public responsibility to balance the budget.  The debt limit increase will be bought only with some deep cuts in the 2012 spending attached.  Republicans will have to concede to not cutting taxes or raising them.
The U.S. has less than 2 years to get it's fiscal act together, otherwise they will join the list of second-rate powers that torpedoed their national capital on the way to mediocrity.  Within 2 years the rating agencies will cut U.S. debt to AA.
I wet my whistle with 1% SDS at 21.63 and waited for the bounce that took us into the close.  I also bought 2% SOPIX short NDX mutual fund.  I count wave iv of c complete and wave 5 in progress, on it's way to DJI 12,240-12,250 tomorrow morning.

The trading rule is that when I1 is declining (it will not peak until tomorrow at the close) and the price has a prior sell signal 1.35% below the critical M/A (it has),  then sell at that M/A, 50 points above it, and finally 150 above it.  I think we'll get to the M/A and turn once this wave c up completes.  The SPX count shows 1 more wave up, but world events override such short-term wave counts.  If nothing happens I expect a pop at the open.

I have been running a cycle baseline for the markets I follow.  This is still in progress.  The cycle charts that I posted in the Weekly for DJI and silver are tentative, pending the completion of the computer runs. This has 2 multiprocessor machines dedicated since Friday and will not complete until after the close Wednesday at the earliest.  I'll post the final results when the runs complete and the composites are assembled.
The precious metals spiked on the S&P negative watch news, but gave up the gains only to recover in the afternoon.  I have my toes wet with .5% ZSL and 1% DZZ.  I've posted the silver 90-minute M/A several times recently so I won't post it again.  When that M/A falls I'll add to the positions.
The dollar ran up to it's 90-minute M/A, which I consider key.  An hourly or 90-minute close .55% above this M/A gets me long.


  1. I thought Keynes took over 80 years ago, not 70.

  2. Our country has been hollowed out from the inside and it's been going on for decades. We are selling it piece by piece. The problem is that we have let first the Japanese, and then the Chinese, manufacture most of our stuff. They give us stuff, we give them dollars. Now they have trillions and with that they can pretty much buy us out.

    I don't have a lot of hope in the US getting its fiscal act together. We don't have the political will. The people want their entitlements but want someone else to pay. So we pay by debasing the currency.

    The elephant in the room is defense spending. It's the biggest part of the Federal budget but NOBODY talks about it! As long as we continue to pour hundreds of billions down the drain in the form of military spending we will never balance our budget. 1000 military bases worldwide! And we are not an empire? Who are we kidding?

  3. 1936, split the difference, 75. Eleanor used him as cover for her programs.

  4. pima, cut defense, eliminate Homeland Security, then cut or eliminate Education Dept enriching private colleges, there's a lot of agencies and bureaus that can just leave. GOP has to give on taxes, though. We have 2 years to get it done. Getting it down to 1Trillion deficits is not going to avoid the ratings cuts IMHO. So if America gives the House back to Dems then it's all over. U.S. will be an A soon thereafter.