{"id":192,"date":"2009-08-03T19:00:25","date_gmt":"2009-08-03T23:00:25","guid":{"rendered":"http:\/\/www.cheapiv.com\/?p=192"},"modified":"2010-09-30T19:04:26","modified_gmt":"2010-09-30T23:04:26","slug":"trade-the-markets-8-3-2009","status":"publish","type":"post","link":"http:\/\/www.cheapiv.com\/?p=192","title":{"rendered":"Trade the Markets 8-3-2009"},"content":{"rendered":"

Weekly Comments:<\/p>\n

The markets stayed in the \u00e2\u20ac\u0153it\u00e2\u20ac\u2122s all good\u00e2\u20ac\u009d<\/strong> state of mind last week and it looks like they are trying to extend the good feelings into this week judging by the opening indications.\u00c2\u00a0 We risk sounding like an echo of ourselves but we have to reiterate that this is \u00e2\u20ac\u0153thin trade\u00e2\u20ac\u009d.\u00c2\u00a0 Markets are being pushed around in ways that they typically are but with much less effort than is typically required.\u00c2\u00a0 This has made it possible for \u00e2\u20ac\u0153great things to happen\u00e2\u20ac\u009d if we judge the amazing returns of this summer to date.\u00c2\u00a0 As we\u00e2\u20ac\u2122ve always said \u00e2\u20ac\u0153it won\u00e2\u20ac\u2122t take much at all\u00e2\u20ac\u009d to get our bullish buddies all \u00e2\u20ac\u0153amped up\u00e2\u20ac\u009d and indeed it hasn\u00e2\u20ac\u2122t.\u00c2\u00a0 The mere slowing of deterioration and the alluring \u00e2\u20ac\u0153greener pastures\u00e2\u20ac\u009d of tomorrow that \u00e2\u20ac\u0153by law must follow\u00e2\u20ac\u009d have apparently done the trick.\u00c2\u00a0 A great example of this type of attitude can be seen in the revisions.\u00c2\u00a0 A prudent person would want to be sure that things are \u00e2\u20ac\u0153just so\u00e2\u20ac\u009d when committing their hard earned capital to investments that entail the risks that stock investing presents.\u00c2\u00a0 Bulls?\u00c2\u00a0 Not really as concerned, not in the least.\u00c2\u00a0 A report came out just in front of the weekend that cited how things were actually much worse than believed in the past<\/em> if measured by the NOW REVISED<\/strong> government reports that are available.\u00c2\u00a0 Now, while this is not always the case, it is normally the case and if you don\u00e2\u20ac\u2122t believe that the government tries to cast everything in the best light for its political goals then you haven\u00e2\u20ac\u2122t been following things very closely for the past quarter century<\/strong>. And these types of episodes have been one of the reasons why we\u00e2\u20ac\u2122ve been trying to impart to readers that we\u00e2\u20ac\u2122ve found it best to avoid trying to make sense of it, or in other words, ignore the cognitive dissonance in terms of trading but stay apprised in terms of investing.\u00c2\u00a0 A report is out from the New York Times that will help in this area (via Marketwatch):<\/p>\n

Unemployment benefits to dry up for 1.5 million: NYT<\/em><\/strong><\/p>\n

<\/em><\/p>\n

Up to 1.5 million unemployed workers are set to lose their jobless benefits by the end of the year, according to a media report Sunday. <\/em><\/p>\n

As many as 500,000 unemployed are estimated to use up their benefits by the end of September, the New York Times reported in its online edition, citing statistics compiled by the National Employment Law Project. <\/em><\/p>\n

According to the statistics, 31 states have three-month average unemployment rates of more than 8% with 400,000 jobless workers losing benefits by the end of September. In 13 states and the District of Columbia which have unemployment rates of more than 10%, about 230,000 workers are set to lose benefits by the end of September. <\/em><\/p>\n

About 9 million Americans currently are collecting unemployment insurance, according to the Times.<\/em><\/p>\n

<\/em><\/p>\n

AND \u00e2\u20ac\u00a6At nearly the same time from <\/a>:<\/p>\n

2 Obama officials: No guarantee taxes won’t go up<\/em><\/strong><\/p>\n

<\/em><\/strong><\/p>\n

2 Obama administration officials can’t guarantee middle-class Americans won’t see tax hike <\/em><\/strong><\/p>\n

<\/em><\/p>\n

WASHINGTON (AP) — President Barack Obama’s treasury secretary said Sunday he cannot rule out higher taxes to help tame an exploding budget deficit, and his chief economic adviser would not dismiss raising them on middle-class Americans as part of a health care overhaul.<\/em><\/p>\n

As the White House sought to balance campaign rhetoric with governing, officials appeared willing to extend unemployment benefits. With former Federal Reserve Chairman Alan Greenspan saying he is “pretty sure we’ve already seen the bottom” of the recession<\/strong>, Obama aides sought to defend the economic stimulus and calm a jittery public.<\/em><\/p>\n

Treasury Secretary Timothy Geithner and National Economic Council Director Larry Summers both sidestepped questions<\/strong> on Obama’s intentions about taxes. Geithner said the White House was not ready to rule out a tax hike to lower the federal deficit; Summers said Obama’s proposed health care overhaul needs funding from somewhere.<\/em><\/p>\n

<\/em><\/p>\n

Aside from potentially channeling G. Bush 1 in terms of possible noteworthy tax pledge breaks, this is potentially big news when actually 3 top administration officials mention this on the Sunday morning propaganda push.\u00c2\u00a0 Our guess is that funding issues and thus deficits may actually have Washington concerned at least momentarily.\u00c2\u00a0 But rest assured that everything is getting better even though none of us general public types can really tell.\u00c2\u00a0 You see, D.C., Wall St., and notably Alan Greenspan have all assured us in some way that \u00e2\u20ac\u0153it\u00e2\u20ac\u2122s all good\u00e2\u20ac\u009d<\/strong> now or it will be shortly.\u00c2\u00a0 Can you think of 3 more reliable or trustworthy sources?<\/strong> We\u00e2\u20ac\u2122re about to extend those unemployment benefits because things are improving so dramatically?<\/p>\n

What\u00e2\u20ac\u2122s actually happened is that corporate America and the corporately owned media and the corporately owned government have done their thing<\/em>.\u00c2\u00a0 They\u00e2\u20ac\u2122ve got things marching back in the opposite direction and the spin apparatus will do everything that it can to convey that to us general public types.\u00c2\u00a0 That\u00e2\u20ac\u2122s why it\u00e2\u20ac\u2122s possible for there to be a bid under the market all day long, all summer long and that\u00e2\u20ac\u2122s exactly what there has been if you\u00e2\u20ac\u2122ve watched it as we have.\u00c2\u00a0 A bid that doesn\u00e2\u20ac\u2122t take a breather because it has to work so hard to convince us all that things are improving, \u00e2\u20ac\u0153why just look at the market\u00e2\u20ac\u009d!\u00c2\u00a0 But it is doing so at the opportune time and in \u00e2\u20ac\u0153new\u00e2\u20ac\u009d technical territory which helps.\u00c2\u00a0 BUT, trying to make sense of all of this in real-time is nearly impossible.\u00c2\u00a0 You can\u00e2\u20ac\u2122t wait around because, trust us, the bulls won\u00e2\u20ac\u2122t wait around for any of it to be true or let alone make sense.\u00c2\u00a0 Many of them believe that a rally must follow a selloff and that an expansion must follow a contraction.\u00c2\u00a0 \u00e2\u20ac\u0153It\u00e2\u20ac\u2122s always been so.\u00c2\u00a0 It must be so.\u00e2\u20ac\u009d\u00c2\u00a0 That\u00e2\u20ac\u2122s the playbook that\u00e2\u20ac\u2122s worked for them for quite a long time but in the aftermath of the popping of this latest epic bubble we\u00e2\u20ac\u2122re still hard pressed to really buy into it.\u00c2\u00a0 And that is despite the fact that several factors are already in place to make reports and statistics appear to be improving over the next few quarters far more impressively than is likely to be the case.\u00c2\u00a0 Corporate America has played the quarterly game well but they were enabled to do so as expected.\u00c2\u00a0 They\u00e2\u20ac\u2122re now running very lean thanks to massive cost cutting but where is the real growth going to come from?\u00c2\u00a0 How much more cutting is possible and what effects will it have on the economy?\u00c2\u00a0 With the incomprehensible expansion of the monetary base should we be surprised to see price spikes at all, anywhere, especially in stocks?\u00c2\u00a0 Probably not.\u00c2\u00a0 That\u00e2\u20ac\u2122s what makes it so difficult at times like these.\u00c2\u00a0 In the long run (investing) more of the nonsense can be discounted but in the shorter run (trading), we know that the gamesters can get away with a lot, nearly all of it for a good long while.\u00c2\u00a0 Thus it follows that the markets can be taken on one hell of a joyride for much longer than most would believe, regardless of how dangerous it looks from afar.\u00c2\u00a0 Stay nimble.<\/p>\n

.<\/p>\n

The Technical Picture:<\/strong><\/p>\n

\"\"<\/p>\n

\u00e2\u20ac\u0153This chart is labeled and has accompanying commentary within it.\u00c2\u00a0 Our intuition tells us that this was the boys doing what they do best:\u00c2\u00a0 Using the convenient news to rake pattern traders and those expecting a correction over the coals.\u00c2\u00a0 The volume levels suggest less than impressive buying or adding by institutions but this is a wildcard at the moment considering that we\u00e2\u20ac\u2122re near the Heart of the Summer trading at the moment.\u00c2\u00a0 Assuming as we did in our comments above that trading profits are paramount, nothing can be ruled out volatility-wise despite our macro-picture based cynicism.\u00c2\u00a0 Another stage of what would be an epic short squeeze could trigger if the head is blown through and a retracement could easily occur given the slope of last week\u00e2\u20ac\u2122s yeoman\u00e2\u20ac\u2122s work by the boys.\u00c2\u00a0 We\u00e2\u20ac\u2122re trading it that way until we have greater technical conviction.\u00e2\u20ac\u009d<\/p>\n

Those are the exact comments that we made from last week.\u00c2\u00a0 We\u00e2\u20ac\u2122re staying with them as they still apply.\u00c2\u00a0 The chart is updated however with new comments.\u00c2\u00a0 This is truly historic and we think that has been made possible by the computationally enhanced performance chasing combined with modern pipes and of course the always presented hyperinflated monetary base.\u00c2\u00a0 They\u00e2\u20ac\u2122ve got a lot of institutions all \u00e2\u20ac\u0153ginned up\u00e2\u20ac\u009d and they\u00e2\u20ac\u2122re keeping their foot on the accelerator pedal.\u00c2\u00a0 It has to be excruciating for those that not only want to get in but have to get in to keep their jobs and investor\u00e2\u20ac\u2122s funds.\u00c2\u00a0 Push anything long enough and hard enough and you can force the hand of most people.\u00c2\u00a0 We saw the same thing but in the opposite direction over the winter when forced liquidation was only game in town.<\/p>\n","protected":false},"excerpt":{"rendered":"

Weekly Comments: The markets stayed in the \u00e2\u20ac\u0153it\u00e2\u20ac\u2122s all good\u00e2\u20ac\u009d state of mind last week and it looks like they are trying to extend the good feelings into this week judging by the opening indications.\u00c2\u00a0 We risk sounding like an echo of ourselves but we have to reiterate that this is \u00e2\u20ac\u0153thin trade\u00e2\u20ac\u009d.\u00c2\u00a0 Markets are […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[98,22,99,17,54],"class_list":["post-192","post","type-post","status-publish","format-standard","hentry","category-week-ahead","tag-benefits","tag-economy","tag-health-care-overhaul","tag-market","tag-unemployment"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=192"}],"version-history":[{"count":0,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/192\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=192"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}