Morning Audibles 7.22.10 - Annotated Bernanke

"The Beard" - Before the Senate Banking Committee - 7/21/10


Bernanke said the debt crisis in Europe, which has rattled Wall Street, played a role in the Fed's "somewhat weaker outlook." Although financial markets have improved considerably since the depth of the financial crisis in the fall of 2008, conditions have become "less supportive of economic growth in recent months," he explained.

Translation: The stock market has gone up. With all our PHD's over here at the FED, all we really know how to do are foolish maneuvers that make a stock market that go up, for awhile. Lately though, we're lamenting the fact that it's in the process of giving back those gains...

As a result, Bernanke said progress in reducing the nation's unemployment rate, now at 9.5 percent, is now expected to be "somewhat slower" than thought. Unemployment is expect to stay high, in the 9 percent range, through the end of this year, under the Fed's forecast.

Translation: Nothing we ever do will save your job. However, from TIME (Magazine) to TIME (Magazine), we'll get voted "Person of the Year" honors in the HOPE that we'll save your job... Luckily, our jobs are safe because we are appointed by a President who is not really sure what a job is in that he has never run so much as a Dairy Queen in his life.

High unemployment is a drag on household spending, Bernanke said, although he believed both consumers and businesses would spend enough to keep the recovery intact.

Translation: Because of our proxy, we keep funneling free credit to the banks hoping they'll cooperate and lend it to you. Unfortunately, people aren't as stupid as we are and are not taking that bait and hook.

Bernanke also said it would take a "significant amount of time" to restore the nearly 8.5 million jobs wiped out over 2008 and 2009.

Translation: What we're REALLY hoping for is that we can devise some kind of virus that will selectively kill only unemployed people. The rest, with jobs, we're hoping they'll keep listening to our clap trap and borrow more money from our banks to live lifestyles they can't afford.

And, Bernanke said the housing market remains "weak" and noted that the overhang of vacant or foreclosed houses are weighing on home prices and home construction.

Translation: If we could just round up all the unemployed people and lock them inside vacant houses, pour gasoline over the whole thing, and take a match to it... That would be sweet!

Given the weak recovery, inflation is not a problem, Bernanke said. However, Bernanke didn't talk about deflation, a prolonged and destabilizing drop in prices for goods, the values of stocks and homes and in wages. Although most economists think the prospects of deflation are remote, some Fed officials have expressed concern about it.

Translation: Inflation is a phenomenon caused by supply and demand (not monetary policy in a fractional reserve banking system). But we were all absent in the corridor doing bong hits during that economics lesson in college.

To strengthen the economy, many economists predict the Fed will hold a key bank lending rate at a record low near zero well into 2011, or possibly into 2012. Doing so, would help nip any deflationary forces.

Translation: We hope. Maybe the problem is that we need to do even MORE bong hits until that appears to become reality.

And keeping that bank rate at super low levels also would mean rates on certain credit cards, home equity loans, some adjustable-rate mortgages and other consumer loans would stay at their lowest point in decades.

Translation: The banks don't really lend any of this credit out, but the US Government needs these rates to stay low so that it can spend itself into the position where it will have to gobble up your private savings.

Ultra-low lending rates, however, haven't done much lately to rev up the economy. Consumers and businesses are cautious and aren't showing an appetite to spend as lavishly as they usually do in the early stages of economic recoveries.

Translation: We only WISH people were as stupid as we are, but since they're NOT, we'll just wave our PHDs at them and keep them distracted.

Bernanke, meanwhile, welcomed Congress' new revamp of financial regulations signed into law by President Barack Obama on Wednesday. The new law, he said, "will place our financial system on a sounder foundation and minimize the risk of a repetition of the devastating events of the past three years."

Translation: Any bill that DOESN'T include "AUDIT THE FED" in it, is fine with us.

237 comments:

«Oldest   ‹Older   1 – 200 of 237   Newer›   Newest»
AmenRa said...

This market is BS.

AmenRa said...

Why is GM buying Americredit? Doesn't GMAC have enough subprime borrowers already?

CV said...

@Amen

With a 10yy at 2.9, something is going to yell "uncle" soon...

I doubt it will be bonds...

Anonymous said...

Same old, same old. Two step forward, one back. National bank of Greece(NBG) up 6% already. Nothing changed since yesterday morning.

I Can

AmenRa said...

This must be the hail mary for 1100. I see bumper stickers on the back of their cars saying "1100 or Bust"

CV said...

Interestingly...

The move in EUR-USD this morning fits perfectly into a backtest of a broken GANN line (from yesterday)...

Maybe this is just a last gasp...

Frankly, I don't put too much weight into that, but it's worthwhile to note (as it MAY explain temporary insanity)...

Anonymous said...

regardless of my impressions of BB- that image of him is pretty cool-

Ra- we have the LEI and existing home sales coming out at 10:00-

futures appear to set up so they can fall to flat when the "not so" good news comes out-

that way- no harm/no foul-

that's my conspiracy angle anyway-

have to roll out to a 10:00 meeting-

all have a god day

CV said...

@Amen

It's probably just "run of the mill" distribution...

If you were a MOMO, you had the chance to make your quarterly nut during the first few weeks of July (from 1010)...

Frontrunners are out (and/or unloading their last positions)... I suppose there remain a few stragglers...

Today - the bond auction calendar gets announced...

Ticket to ride, white line highway

http://www.youtube.com/watch?v=IXuv7m-5_gw

Anonymous said...

AmenRa said...
This market is BS.


Why the markets are going up?

...from ZH

"After Bernanke’s comments yesterday pushed investors towards less risky assets data released today in Europe has reversed this trend. The data released has pushed the commodities and European equity markets higher while weakening the USD.

Data for July’s manufacturing and service output in the Eurozone grew faster than was expected. The index rose to its three month high of 56.7 which beat analyst expectations of 55.5 and the previous month’s figure of 56.0. The main reason for the strength of the index has come from the major economies of Germany and France. This data relieves fears of a double dip recession in the Eurozone.

Retail sales data released in the UK came in better than expected. Sales volumes for the month of June rose by 1 percent. This is a strong increase in sales and has been boosted by consumer spending related the World Cup."

Jennifer said...

Good Morning all,

I have a general question for the group. My two daughters ages 8 and 7 attend our local Catholic school. I have recently been appointed to the development board of the school, and the purpose of the board is to preserve and grow the school's assets. Our school is rather fortunate in that we have been bequeathed several sizeable gifts over the years. These funds have been split into 3 endowments, which provide for 1) general infrastructure and maintenance, 2) increasing teachers salaries above what the diocese pays to make pay more in line with public school pay in the area and 3) tuition assistance and similar aid. I have just become a member of this board and have no real relationship with any other parents on the board (hardly any of them know me at all.) I wanted to be on this board because I felt it was my duty to help communicate some of these larger looming economic issues which so many people fail to see (choose to ignore?) Anyway, the market peaked before I was even made a member of the board, and our next scheduled meeting isn't for 6 weeks. In the meantime, it appears that many more families have approached the church/school with requests for tuition assistance this year. I have just received notice that this issue can not wait until our next scheduled meeting and they want to have a conference call about it next week, when I will be out of town. I think I need to write a letter to the pastor, principal, and board members, explaining that I think the increased need for tuition assistance is not an abberation but the beginning of a trend. I also think I need to discuss pulling the endowment funds out of the stockmarket, even though prices are down 10% from the most recent high. Any suggestions for how to accomplish this without 1) sounding like a lunatic? 2) pissing everyone off 3) alienating the whole board before my 3 year term has even begun? My previous attempts at convincing people who know me that things were serious/worse/different this time have been less than successful. Thanks for any help!

mcHAPPY said...

@Ra

From previous re: what happened in Europe/Asia to move the futures up 1%.

This is another evidence that news may not move the markets.

Also, keep in mind 1062 and 1080.

I heart you 18.

karen said...

WISHING I hadn't gotten out of bed this morning! Today's mantra: "It's just "run of the mill" distribution..." (had to scratch the "probably" for added conviction : )

Anonymous said...

OK, I take back. NBG is back in red.

karen said...

look at $copper (JJC).. $gold and crude too.. i'm thinking this is what i mentioned to Jeff yesterday.. thots of QE forever..

72bat said...

jennifer -
i'll be interested to hear the feedback to your request as i've been contemplating taking on that same task with our exempt school district board who have just asked the teachers'union for concessions on the current contract and have basically folded at the first push-back. shades of mish. won't be easy or fun being the little boy or girl who calls "wolf."

CV said...

at 1083... we're sitting right on a 78.6% retrace back to yesterdays high

karen said...

CV, some of your translations above are a bit frightening.. I've just been thinking they will start a newer, bigger war..

CV said...

@Jennifer (9:27)

Perhaps you could piece together a collection of things like Grantham's newsletter (and others who speak SOBERLY about the situation)...

For goodness sakes though, don't refer anyone to lunatics like me on this blog...

Just find the right voices, let them make your case for you...

karen said...

DENNIS GARTMAN: First of all let's always understand that - I will steal from both schools of thinking fundamentally and technically - but in 35 years of doing this I have watched so many times that the technicals break down first and the fundamentals tell you this is what we were doing and you find out later what was happening. So looking at just the chart of gold denominated in euro terms, a lot of damage has been done. Let's be blunt about that, it's really quite that simple. We have taken gold in euro terms to approximately €1050 and then the next thing you know you are trading back under €950 and the next thing you know you are trading down to €910 and you are breaking trend lines along the way. That's disconcerting, so that alone was sufficient for me to say, I've been involved in this for a long period of time. It has been working, it no longer is and in the business of trading how do you know something is not working, because you are losing money. The trade is beginning to fail and that simply is what happened. The trade began to fail after months and months of working inexorably and rather, for the lack of another term, blithely in my favour.

http://www.mineweb.com/mineweb/view/mineweb/en/page96990?oid=108395&sn=2010+Detail&pid=92730

Jennifer said...

I guess that means Karl Denninger's out. :-)

CV said...

@Jennifer

KD - TD - & CV...

Strictly off limits! :-)

Bruce in Tennessee said...

Jennifer,

I would keep it simple and break it down to two themes. Risk and safety. Risk would be equities, and I would show them the DOW since 1998. Safety would be cash. You need not tell them they should avoid equities here, but you would be remiss as a board member since more families need assistance, not to outline why equities are still at risk at this time.

If I were there, I'd explain about tax increases and the usual set of problems ahead, but most of all I'd let them choose between risk and safety. It is a school after all.

Frankly, I'd suggest beating the bushes for contributions. And school sponsored events...whatever it took.

CV said...

Put I'll put a coin in the "offering" box & light a candle for you...

Jennifer said...

Thank you CV and Bruce. Those are some good ideas. I've got my work cut out for me. Meanwhile, 1088 approaches.

mcHAPPY said...

Is everyone scared out of their shorts yet?

*pun intended*

*insert corny drum line*

CV said...

@McF/McHappy/Andy T

With the move in EUR-USD today, it looks what might be setting up is a WEDGE wave 4 consolidation...

Whether that is the case or not... My question is, what are the odds that a wave 5 extends UPWARDS out of that...

or does a wave 5 sometimes fail to complete any further price action higher?

Shortcrone said...

Jennifer, lately I've been talking to clients that are eager to invest more into equities because we're all better now... You have to ask if they believe there is more risk to missing some of the upside or more risk in losing substantially to the downside. Take everything that will be needed in the next 5 years and shelter it in cash. Use conservative measures for the 5-10 year money. Leave equities only for investments that will not be needed for 20 years.

Shortcrone said...

Oh-and calculate for them the difference between a 4%, 8% and a negative 40% in the next 4 months. That usually convinces them to wait.

mcHAPPY said...

CV,

Of the 3 you asked, I'm the least qualified. But currencies are known for a 5th wave blow off.

Also, with new highs of 1091-plus I'm seeing, here is something to keep in mind:

a little over 3 days down from 1099.46.

a little over 3 days up from 1061.11.

A nice a-b-c correction. We should start down hart any moment.... if not *gulp* for anyone holding shorts *like me*

However, we are now at 1093 and I really am biting my nails.

Jennifer said...

Short Crone -- thank you very much. All excellent ideas.

CV said...

$COMP running smack into its 55SMA here...

karen said...

June leading indicators fall; slower growth seen
10:00 AM ET 7/22/10 | WASHINGTON (MarketWatch) -- Slower economic growth is expected through the fall, with moderating improvement in the industrial core of the economy, and little indication that the slow improvement in the services sector will "pick up momentum," the Conference Board reported Thursday. The index of leading economic indicators declined 0.2% in June, following an upwardly revised increase of 0.5% in May. Economists polled by MarketWatch had expected the index to fall 0.3% in June. Five of the 10 indicators that make up the index rose in June, with the largest positive contribution from the interest rate spread. The largest negative contribution came from average weekly manufacturing hours. Manufacturers' new orders for nondefense capital goods were steady.

karen said...

U.S. existing-home sales fall 5.1%; Realtors say inventory could pressure prices

karen said...

BreakingNews

U.S. mortgage rates hit new record low for the fourth time in five weeks

I-Man said...

So if you were looking for higher prices yesterday, you're a MOMO?

Oh...

I thought being open to other outcomes was something that successful traders did.

I must be at the wrong blog.

karen said...

Gartman's last words from the link above: The dollar will continue to remain the world's predominant reservable asset. Gold is quietly becoming a reservable asset and honestly in 10 or 15 years it will be the US dollar, gold and Renminbi, which will be the major reservable assets. Take that as you wish.

CV said...

@McHappy

Thanks...

As for starting down any moment...

I'll agree that PRICE level its getting stretched... If they really want to get rid of shorts though, TIME will be the key factor...

Weak shorts cover out of BOREDOM & PRICE (not just price)...

AmenRa said...

Gold: up up and away (back at 1200)
TNX retreating from highs


It's early.

CV said...

@I-Man

That's a general description...

Look - we all know these price levels are insane...

So to be a buyer, you either have to be a MOMO, or a trader...

Most TRADERS nuts aren't enough to move the markets... MOMOs nuts are (or could)...

That's all I'm saying...

McFearless said...

@Jennifer

my .02, since you asked:

1) sounding like a lunatic?

Your letter/talk needs data/information/facts. You can present a bad message but if it is backed up by facts for the thoughtful to consider and reflect upon then you will not sound like a lunatic.

2) pissing everyone off

You should be prepared before you do this that you are going to piss at least one person off and probably more than that. There is no way around this, so you may as well just prepare for it and accept it. Really though who cares, you are doing this because you want to help, if the school goes under and you never said anything, and therefore never got anyone upset, what good did that do?

3) alienating the whole board before my 3 year term has even begun?

Tell them you want to be a team player and as such you want to make sure the board is considering all points of view to do what is best for the students, the teachers, etc. If what you say is correct about the school's finances are true then it sounds like in general they are in pretty good shape, if all you are trying to make happen is for some of the risk to be reduced then just explain to them that while your idea of taking actions that go against the advice of most experts may sound like a "big risk" in actuality if you just play it safe, even if you end up being wrong, the school, the children, the teachers, should not be hurt.

Good luck.

Mannwich said...

Yowsa. Brutal schizo market to trade in. Certainly not one I want to partake in.

mcHAPPY said...

@I

I'm most definitely open to different outcomes which is why I'm waiting to see if 1099.46/10407.52 get broke first.

In terms of EW this is most definitely fitting the criteria of what I would expect in these circumstances i.e. possible third of a P3. We have deep lows followed by lower highs that come just within pointsor fractions of points of seeting a higher high on a minute level.

When you forget the emotion of money on the line, it really is fascinating to watch.

McFearless said...

CV,

9:59

go to ewi if you want that answer, it's free week, I believe you can even get free intra-day forecasts all week, currencies, commodities, markets:

http://www.elliottwave.com/

spoonman said...

Jennifer,
I had similar chats with my father, not as involved, but I would second what BinT said. When I talk to my dad he didn't really seem to get it until I framed it in terms of safety vs risk. What if the stock market fall 50% here? Also, Hussman would be a great reference.

McFearless said...

"After Bernanke’s comments yesterday pushed investors towards less risky assets"

Just so I have this straight, captain exogenous cause model, when Bernanke spoke yesterday to market participants to share with them a bunch of data points that are already known everywhere and to spout his worthless opinion on how we might not start acting like robots....yet, he moved the net of market participants into safe assets.

but then when this data release occured:

"Data for July’s manufacturing and service output in the Eurozone grew faster than was expected. The index rose to its three month high of 56.7 which beat analyst expectations of 55.5 and the previous month’s figure of 56.0"


it took that same net right back out of the lower risk assets and they jumped right back into the frying pan?

I'm sorry, this is ridiculous, truly.

But hey ZH, thanks for the efficient market rundown....not sure how that matches with your daily manipulation claims but it's "all good"

mcHAPPY said...

Ben 10:19

Agreed. The news today was awful and the markets have bounced.

I can almost 100% guarantee that those job numbers will be revised much higher next week.

Anyone notice some gaps below?

McFearless said...

did anyone read the article I posted from Minyanville the other day?

I'm tired of hearing about how the Fed's QE made the stock market go up (or even better, the claim that at least some of it did)

please explain to me how all the other stock markets, corporates, commodities, securitized debts etc etc in the world went up as well, because if it was QE, something is wrong with your math but lets not let these silly sort of things get in the way of such an extremely popular explanation for it all.

I had figured by linking this coming from someone else besides me it would have carried some more weight but apparently not, I'm linking it again anyway:

http://www.minyanville.com/businessmarkets/articles/Fed-Federal-Reserve-conspiracy-Bernanke-trim/1/7/2010/id/26253

karen said...

Today reminds me of those toy rockets that you blast off, watch soar, burn out, and fall slowly back to the ground..

McFearless said...

"Agreed. The news today was awful and the markets have bounced"

forget today, how about yesterday, where was the Apple bounce off all the good news...or right, my bad, Bernanke ruined that... as EWI stated last night, what better example of news and earnings not moving the market than yesterday? But here we are this morning and it's every headline.... again.

AmenRa said...

Ben

It's not so much as to whether QE ignited the rally but what did those who received QE do with it?

McFearless said...

@Jennifer,

One more thing, check out slide 34 on this thread here

http://www.ritholtz.com/blog/2010/07/agora-symposium-slideshow/

that might be the data to help you get started presenting to the board, that entire slideshow, with the exception of that typical bear market chart is ACES.

CV said...

@McF

Bot Wars...

Picking up pennies in July...

I-Man said...

http://www.youtube.com/watch?v=CM2Px3uB-xM

Lose Everything fi Know Jah.

mcHAPPY said...

A little move to 1096 would be complete a nice 5 waves up or it could be finished....

Mannwich said...

Perhaps the market IS partially anticipating QE? I don't believe it's ever about any one thing, technicals included. There are no magic bullets. Now go ahead chartists, throw your rotten produce at me.

mcHAPPY said...

Or we could go higher - lol

CV said...

$COMP doing some thinking...

Last time it crossed ABOVE the 55SMA was on February 25th... At this same price level...

Only this time it has the added burden of...

MUST... NOT...LET...55/233 DEATH CROSS... HAPPEN

mcHAPPY said...

Ben,

The only thing 'extra' I'm getting on EWI free week is the energy markets. You?

CV said...

@Manny

"Perhaps the market IS partially anticipating QE?"

Then explain the 10yy at 2.9%

karen said...

Ben, one take away from your Kevin Depew article (hadn't seen it before, sorry) was the John Mack video which I am now watching.. Kevin said in the comments that it was a perspective changer for him.. I'm going to see if it changes mine.

"If anyone has a spare half hour I'd encourage you to watch this video of MS CEO John Mack describing his view of what happened during 2008, the pace of the meltdown and the decisions that were made. This video changed the way I view the events that happened."

http://www.youtube.com/watch?v=R9sQtmPAYO0

mcHAPPY said...

I'm not going to lie, I'm a little confused and nervous, HOWEVER, I think everyone can agree that up over 2% in an hour is hardly 'healthy' or 'organic'.

We know what happens to the football players, hockey players, professional wrestlers, and a few track athletes that over do it on performance enhancing drugs - most drop dead or go to sleep and never wake up.... eventually.

Mannwich said...

Great point, cv. Again, I'm not saying it's all about that or any one thing at any time, but it's not always simply about technicals either. Be wary of too much certitude in any direction. That's my new mantra. ;-)

I honestly have no clue. Just throwing stuff out there.

Bruce in Tennessee said...

McFearless said...
did anyone read the article I posted from Minyanville the other day?


OK, Ben, I've been keeping my mouth shut, but I think it's time I gave you some advice. I watched a movie some time back, and I took something from it. I bought a soccer ball, painted a face on it, and named it Wilson. I put this soccer ball by my computer. When someone does something really idiotic, or when congress passes another dumb idea, me and Wilson rake them over the coals.

....works every time...

CV said...

@mcHappy

It's going to hang here for awhile, if, for no other reason, that it looks like the leading diagonal from 1220 has been broken...

Soap on a rope...

McFearless said...

Manny,

nah, lets leave the charts out of it and just challenge the statement itself

the only conclusion that could be drawn from your 10:33 is that you believe markets are random.

is that right?

sometimes they anticipate, clearly sometimes they don't, sometimes it's earnings and moving averages, sometimes it isn't, in the end it's all just random...

McFearless said...

lol, Bruce, I'm not angry, it's just something I'm passionate about, I think people get burned all the time thinking that outside events are trend changers, just trying to put the ideas out there but if it's annoying that can certainly stop.

Mannwich said...

So you believe it's all about one thing? Prove it. Be wary of your certitude. That's all I'm saying. The world is a complicated place.

Mannwich said...

You seem angry to me.

Mannwich said...

And, keep in mind, I'm saying I know nada but I believe many of us know, I mean, KNOW, less than we think as well.

CV said...

@Manny

My strategy is simply to eliminate the ABSURDITIES...

Clearly, news flow has nothing to do with it (so that's an ABSURDITY)

Technicals? The market may seem "whippy", but there are a lot of different technical indicators (short/mid/& long term)...

So even with the day to day "schizo" behavior, the market is well within the longer time technical boundaries...

It's like weather forecasting...

I can't predict when a gust of wind is going to blow by, but I can tell you it's likely to be hotter in July than in january in the Northern hemisphere...

Mannwich said...

I hear you. I do think technicals are ONE tool in the tool bag but they, like most things, aren't the only tool.

Be wary of too much certitude. If there's one thing I've learned since my "youth", it's that.

Anonymous said...

McHappy,

wasn't the simplest clue yesterday right in front of our face...volume...

a three of three isn't going to kick off with a volume like that imo....

Mannwich said...

Agreed, ben. Volume seemed a bit tepid in yesterday's sell off.

CV said...

@Manny

OK... I'll take your advice and just sit here, never actually doing anything, and immerse myself in contemplating outcomes...

Call it my PREPARATION for getting a job at the United Nations...

Mannwich said...

Do what you want, CV. I don't care. I'm just giving you my perspective. Take it or leave it.

mcHAPPY said...

Interesting on volume, Ben.

Look back at the volume spike on July 16. Maybe we had a very close truncated 5th wave to start minor 3? The volume spike was much larger than July 14.

McFearless said...

My certitude?

sorry, I'm certain that people claiming the news is moving markets right now are totally wrong....if you can't be certain about that what markets are you following exactly and please explain to me exactly what news moves those markets.

not once today in any post I've done did I claim the "one thing" that moves markets, I'm arguing against news moving markets, so there is no need for me to prove anything, the market did it for me.

McFearless said...

yeah, I mean the volume wasn't super strong and then we did hold right around the 1070, you guys know I'm bearish, but I dont' want to get steamrolled either being too short at the wrong times

karen said...

We had a day like this on June 15th, I believe.. a rally without reason following a candle with bearish implications.. it sputtered out after a few days and the spx went from 1130 to 1010 the following two weeks.

mcHAPPY said...

Actually, Ben. That volume spike could have been the third wave within the move.

karen said...

alaidi - JoblessClaims shoot up 37K, Stocks +2.2% & Hungarian Forint is day's best performer out of 36 currencies. LOGIC ? #forex #forint $$

Mannwich said...

Maybe it depends though? Maybe the news DOES move the markets SOMETIMES and not other times? I can't prove anything but neither can you.

Screaming about how anyone's an idiot if they don't agree with you and your perspective is a trait you'll probably shed with age. For your sake, I hope that's the case.

McFearless said...

and Manny,
dude, I'm not trying to get into the "what moves the market debate" I've had enough with discussing Elliott waves with people on blogs, especially when they have not taken the exhaustive time and effort it takes to understand and apply it properly and to accept that even then there is no way you will apply it correctly every time.

I think if people want to use one tool then there is nothing wrong with that, I don't do it, but if it works for someone then what's wrong with it? People should use whatever works for them when it comes to markets, there is no holy grail.

making moves in markets takes conviction, a certain amount of certitude is a requirement. Does that mean I'm 100% sure about any of my trades....of course not.

Mannwich said...

You can have certitude about your trades, for sure. That's probably a requirement but certitude that you're perspective is always right and others are not only wrong but idiots for theirs, is a bit suspect. That's all I'm saying.

mcHAPPY said...

@Jennifer

In which time frame do you use the RSI?

McFearless said...

screaming?

i'm sitting here at my desk laughing, the more people that think they can play the markets on news the more money I know I can take out of the market....

I like the people here, I think I can offer thoughts to make them better traders, and I feel in most days I get a lot of great thoughts from people here that help me, if you want to read this as me screaming at people that don't agree with me so be it.

CV said...

@Manny

Nothing wrong with having a perspective...

People accomplish things in different ways (according to their character)...

CV has 'learned' the most by trying and failing, than anything else...

It may seem silly, but I want to KNOW how hot the flame feels (so I'll hold my hand over the flame until I can't stand it)...

That way, I can "quantify" the sensation of heat... My brain doesn't register someone standing in observation and saying to me "that's hot - don't touch it"

"That's HOT" is for the Paris Hilton's of the world...

18 said...

From an 18 perspective...

We're in a minor up within a major down. Only chart I have to show is this one...

SPX daily close

Until we close above 1134 then major trend is down.

On the daily hi-lo chart, it shows almost the same thing except the down trend would change up if 1116 is breached...

SPX daily hi-lo

Until either of these change, we're still printing lower highs and lower lows using 18's.

18

(CV, i know you don't fancy Renko charts, only way I could show this :))

Mannwich said...

It's all good. We can't all agree all the time. You guys would get bored over here if I didn't play a little devil's advocate gadfly from time to time, wouldn't you? Wouldn't you? Wait, don't answer that question. ;-)

Anyway, I certainly respect folks who have the knowledge I don't and I don't know jack about the markets or much of anything else, for that matter. I'm just playing my role.

karen said...

Ben @ 11:08.. that was the most upstanding reply I've ever read.. : )

CV said...

@McHappy

Frankly, if we're going to be up here visiting these heights again, I hope we do push over 1100...

That would start to cause some spectacular "bearish divergences" on the timeframes I want to see...

Also - my EXPANDING WEDGE/VIX144MA/EUR-USD theory is still in play... None of that has been violated (even with today's move)...

I could probably even stand a move up to 1116 or so and have it all still in play (TOPSTEP was mumbling about that number a little yesterday - as an outlier)...

McFearless said...

Karen,

sometimes I'm not a complete asshole....only most of the time ;)

karen said...

What an idiot i am! I've never played with that attributes feature.. hope you all can link this spx on three line break with 13 and 34 ema lines:

http://stockcharts.com/h-sc/ui

Jennifer said...

@McHappy -- I don't. I'm really not that sophisticated...I've been playing technical catchup for the last year to what I already knew about the fundamentals. I just happened to see that comment posted on another blog and thought it was interesting and timely. I'm glad it worked for CV.

McFearless said...

did I misunderstand the top step video yesterday, I sort of came away from it thinking that they were looking for a decent probability set up that we'd get right to where we are now but the selling would start all over again right in the 1098ish area

did other people get that from that video?

CV said...

@Manny

"You guys would get bored over here if I didn't play a little devil's advocate gadfly from time to time, wouldn't you?"

Manny - giving you a savage beatdown on your hair-brained ideas has come to be the highlight of my day :-)

CV said...

@McF (11:19)

You're right... But under their breath, as outliers, I heard them mention 1107 & 1116... Unless I was imagining it...

CV said...

@Jennifer

It worked for a day... I never took it to the window tho (so now it's a CORE HOLDING)... lol

karen said...

Ben, I thot their number was 1096..

CV said...

6 spoo points that only a guy like I-Man could relish...

mcHAPPY said...

@CV

I think to give the masses hope you need to be pushing the limits to the upside on moves of say 240 minute - i.e. hourly is too short and daily is too long.

Keep in mind I am speaking from a limited knowledge EW perspective.

Mannwich said...

@CV: Thank you, may I have another, sir? LOL.

You can rest assured that Manny will never post under the anon handle though. I can take the heat.

McFearless said...

Manny,

Let me just ask you to consider something, if you don't end up looking for yourself then that's up to you:

On these days that you say news might be moving the market, I can promise you that I can find news that is negative on the same day, every single time. So rather than getting into these minute little detail points of which news is moving things why don't you do your own looking into "big events" that serve as fantastic case studies for what I'm talking about when I say the news cannot change a trend:

Kennedy Assassination could be one

The 2006 Tsunami could be another

and of course, the best example I can think of:

September 11, 2001.

Simply print out charts of the stock markets impacted by the above events, take the dates off the chart, take the prices off the chart, stick an arrow on the chart on the date those events occured and just look at the charts the next couple of months.

And so that's my last comment on this.

Good luck man.

McFearless said...

Karen,

it could have been, I spent so much time on that post last night that all the numbers are a bit jumbled in my mind this morning.

CV said...

@Manny

Re: ANONS...

"Stick & Stones"

Mannwich said...

I hear you, ben. I'm not saying news DOES move the markets. I'm just throwing out the however slight possibility that they might give it a push one way or another SOMETIMES, but not most of the time.

CV said...

@Manny

"Sticks & Stones"... That said, CV is an AVID afficianado of "name calling" (to wit: TWSWB, but it's done for journalistic enhancement...

If you can't get people to hate you, it's hard to get them to really like you either...

karen said...

I can settle everything: Nothing matters to the market except the currencies. Period. The market is no longer a pool of stocks but a refection of the currency market. When you figure out what moves them, let me know.

McFearless said...

@karen,

jeff kennedy at EWI is showing a big move down in august and september as hs projection in crude this morning, he says he's bullish in the bigger picture based on the way it peaked out in 08 but he's got a near term wave count with a move down to the mid 60's into September

karen said...

Ben, I'd replay it but I'm sure they will review it again today.. can hardly wait!

karen said...

BTW, I've been so fixated on the screen this morning I never made my coffee.. that is saying something.

CV said...

UPS up 6.5%

CV said...

But the chart, to me, looks like it's in a late rush to do some simple backtesting...

McFearless said...

Manny,

ah, don't you love the blogs, I'm not denying what you say at 11:31, so we agree! lol, news surely gives us jolts here and there, look at the kennedy assassination and you'll see what I mean, day it happened, huge drop, but it closed back above where it opened the day of the event the very next trading day. the event happened mid trend, so unless your name is I-man and you are killing it on those 1 min charts, news is not your buddy when it comes to making trades off it.

I understand why people like Nic might swing trade based on some news, but I think her and the I are the only people here trading that often that short term...so I probably should have clarified better.

i trade the big waves because I fully admit I'm not much good at all at trading them really short term, but that's a work in progress.

Mannwich said...

Good thought, karen. That seems to be the case at least for a good portion of the time since this whole mess started.

@cv: Good theory. Sometimes you gotta rattle the cages, I guess. I used to do it a lot more than I do now. I guess I've mellowed with age. Some battles are just not worth the time or effort anymore. I'd rather admit I know zilch and go have a beer and enjoy the summer.

CV said...

and I VERY MUCH DOUBT that gap will be ignored...

McFearless said...

man, give it some time of course after these euro stress tests comes out but I'm looking for some european indexes to be short of....it sounds like the stress test results are gonna be a big joke (shocking!), so we could get some baloney rally to sell....I'm keeping an eye there, might be a better set up than the US markets in the very near term.

Mannwich said...

Fair enough, ben. I guess we agree after all? All that bickering (my bad) for nothing! Oh well, gotta fill the time somehow, I guess? ;-)

McFearless said...

eh dude, it's not bickering to me...I love talking about markets this way and challenging the old/current academic model of how markets "work", I have to admit news can jolt markets, I think with careful study, you'd have to admit it doesn't change trends but on a scale that hardly matters to most people involved with markets

no worries here man

CV said...

@Manny

It's my BUSINESS to rattle cages (30 years teaching live group fitness)...

I learned something very early on...

You don't become good at what you do by getting people to like you (although that's what most group fitness instructors think they need to do)...

While my goal isn't to PISS THEM OFF either... You have to show them your scars... That makes you HUMAN...

Humans, in the end, will relate to humans... They don't relate to robots, and they don't relate to false idols (over time)...

That's why, eventually, every American ICON is eventually torn down and discarded...

- It's happening as we speak to Tiger Woods
- Britney & Lilo were easy targets
- Obama is next

The funny thing about Obama & Tiger are that they're still trying to fight against that... When they give up that fight (and become HUMANS) people might get back to liking them again...

It would also probably help if Obama stopped doing stupid things, or if Tiger would win a golf tournament again...

McFearless said...

alright, so we all saw that arch crawford link yesterday right?

ok, so right now the super bearish count is that we are in iii of C, today is the third wave up of this c wave, yesterday was the wave ii down, and once this C wave is done. Look. Out. Below.

How fitting on this count that crawford's Cardinal T cross and massive insanity date is 7/26 because that would be a nice time for this C wave to take to complete waves iv and v...

buckle up squad, we could all be riding splash mountain next week.

(still like the ABC X though, whatever that is worth)

mcHAPPY said...

I can see a trap door here but right next to it is a spring.

1098 or 1000

Take your pick.

FWIW - The gap at the open on July 16 is now closed.

Mannwich said...

I know, ben. I was just kidding. In the very least, I give you guys a good foil to smack down. Maybe spices up the joint? A little?

Mannwich said...

Agreed, cv.

CV said...

@mcHAPPY

I'll take 1,000 (if it so pleases the market gods)...

Is CV going to have to do a redux on the RELEASE THE KRACKEN thread (now that it's coming out on Blue Ray)?

McFearless said...

and speaking of volume, today hasn't exactly been impressive....nor have any of the countrend moves from the April high with regard to volume for that matter

McFearless said...

Manny,

probably wouldn't be much fun if we all sat around agreeing all day. disagreement makes a market.

CV said...

@MCF

I agree... No wait... I disagree... No wait... I'm confused... lol

CV said...

What the hell are all you people doing at this blog?

Get the hell out of here and reclaim some sanity in your lives! :-)

AmenRa said...

NYSE TICKS did not make a new high today even with all of the excitement.

CV said...

@I-Man

But I-Man... you can stick around... I want to know what you had for breakfast this morning...

I'd ask karen, but I already know she's chewing on the plastic from her keyboard...

Anonymous said...

TICKS bitchez!

mcHAPPY said...

CV,

I like 1000 as well but don't forget I am Mr. Contrarian Indicator.

If we are going down, we should see some fast moving action lower sooner rather than later. That gap at the open is certainly not hurting that train of thought.

CV said...

GAPS bitchez!

CV said...

What we all want to know is...

is it "mcHAPPY hour" yet?

CV said...

COUPONS bitchez! (get 'em while they're hot)

---

July 27 - $38 Billion 2 Year Bonds
July 28 - $37 Billion 5 Year Bonds
Jul 29 - $27 Billion 7 Year Bonds

CV said...

@McF

...and when was that "Cardinal thingy dingy" you were talking about?

karen said...

today is one of the strangest turnarounds i've ever witnessed.. look at the jjc candle today..

karen said...

A Major Inflection Point is Upon Us

I have not commented on the financial markets in a detailed way for quite some time now. This is not because I do not have strong opinions on them, rather it is because I see the current ongoing crisis as just as much a political and social crisis as an economic one and so I am compelled to address those concerns as I think it is in that arena that the greatest dangers exist.

http://www.zerohedge.com/article/guest-post-major-inflection-point-upon-us

karen said...

I think I need some HH today.. a little sanity, please. Will see if I can find anything..

THE MARKET said...

I'm just trying to stay irrational longer than you can stay solvent...

karen said...

If someone would just explain that move in $copper to me today.. pure madness or fundamentals ?

Anonymous said...

You've been irrational for a long time it seems...

1980-2000 - 71.6% YoY

18

Jennifer said...

@ the market -- Congrats, its working.

karen said...

http://blog.afraidtotrade.com/will-it-hold-or-break-major-resistance-revealed-on-the-three-indexes/

karen said...

18, that was spectacular!!

Mannwich said...

Wow, 18. Just wow. No credit-fueled bubble there though.

karen said...

"The debate over one of the most controversial accounting standards in recent memory is coming to a somewhat anticlimactic end. The rule once known as FAS 157, which tells companies how to measure the fair value of assets and liabilities, has been rewritten and rechristened Topic 820. Now in final draft form, Topic 820 is open to comment until September 7."

http://www.cfo.com/article.cfm/14511711/?f=rsspage

THE MARKET said...

@18

I get by with a little help from my friends...

- Ronnie
- Greenie

& Let's not forget that guy who invented the internet...

Nowadays... there's B-B-B Bennie & "the press"

McFearless said...

@18,

now here's something fun in fractal world, overlap that chart with one from 1921-1929...

yeah,....robust fractal much, we call this an extended fifth wave, further, the relationship shows that comapred to the 21-29 period that we rose 3.2 times the percentage gain in 3.1 times the time, all the while, the economy got worse...

is it random that the two charts are so correlated, I think not.

anyone that thinks this started under GW is not widening the lense.

George Costanza said...

@18 (12:38)

Could I get some bread to go with that?

SOUP NAZI said...

No soup for you!

http://www.youtube.com/watch?v=WZ3AOmZ2fps

karen said...

alaidi

RT @mohannadaama: #mkt down big yesterday, up big today, I'd be a seller today b4 Euro StressTest results tomrrow $$

McFearless said...

Karen,

did you watch the John Mack video? Care to comment?

McFearless said...

and karen, I won't say much about it because you already know what I'm going to say, I just want to restate what I did yesterday about Beard Boy's comments.

yesterday it seems to me that vast majority heard him and concluded that he will act with QE2 and as a result of his action the market will rise.

my reaction was only to listen to what he said and comment that he just admitted that all he can do is react....and that by the time he reacts, he'll already be late.

karen said...

Ben, only 29 seconds so far.. will start it up again..

McFearless said...

and I could still feel the fear in his voice from 9-10 minute mark, the fear is still there.

karen said...

Ben, it's gonna be tough for me to get thru it.. 1t 2:38 i'm i'm already "screaming" collusion.. cartel.. bullsh*t.. LOL

screaming = thinking

Bruce in Tennessee said...

http://www.nasdaq.com/asp/EconodayFrame.asp

Ahem...please note what the NAR says about next month's supply result...ready?

Highlights

"Existing home sales fell in June but not as much as expected, down 5.1 percent to a 5.37 million annual rate. Prices are a big positive in the report, up 5.2 percent for the median price to $183,700. Yet supply is a big negative, up to 8.9 months from 8.3 months. Heavy supply will hold back price improvement. The National Association of Realtors, which compiles the report, sees inventories rising to 10 months in the next report. The association stresses that the housing market will turn on the unemployment rate. New home sales will be posted on Monday."

...Weren't the biggest problems unemployment and too many houses?

McFearless said...

and the comments on the article, hadn't read them before, hilarious, especially the last, or is it the first one...claiming the fed "manipulates" interest rates.

have people ever looked, I mean actually looked, at a chart.

the fed follows the bond market, thats how they determine what to do with rates....chart it, I don't need to prove this either, the charts can't lie or spin an opinion.

karen said...

okay.. it's getting more interesting on the CDS stuff..

McFearless said...

and I think in the video perhaps John mack reveals he's not the hearless shark everyone wants him so badly to be, he was just scared like everyone else, and I think his concern about the 45,000 people that work at Morgan was real.

McFearless said...

heartless, that is....kanye west style

McFearless said...

best part is at 20:24

karen said...

market melt up? where in the * is the $ coming from..

Holly Golightly said...

"Thursday! It can't be! It's too gruesome!"

Paul Varjak: "What's so gruesome about Thursday?"

Holly G: Nothing, except I can never remember when it's coming up.

karen said...

look at the MS chart..

Bruce in Tennessee said...

Nic,

Is that you on the biplane?

I couldn't be me, I don't see any urine stain..........

karen said...

Bruce it is her!!

CV said...

Where's TOPSTEP?

CV said...

@karen (1:20)

Not from here...

Mutual Fund Outflows... AGAIN

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/ICI%207.22.jpg

CV said...

That JJC candle is a trip

McFearless said...

CV,

Cardinal T, above, I dont' really know all that much about it, planetary alignment, arch says it's the worst thing in 10,000 years, vey epic!

I don't know man, on one hand I give it the crooked eye...we'll find out within a week if it's on the same list as Y2K.

Mannwich said...

Here we go again. Good thing we bailed out GM.

GM Buys Subprime Lender for $3.5MM. LOL.

http://www.nytimes.com/2010/07/23/business/23autos.html?hp

karen said...

Ben.. i've got shivers! i just got thru the part where he hangs up the phone!!

McFearless said...

Karen,

yeah, toward the end it's nuts isn't it? I think I'm pretty good and figuring out when people lie, I've had people trying to lie to me face to face doing this job for over 8 years now, I really think he was entirely honest about how things went down, those guys were all scared out of their minds, how are we going to give them credit for "control" they were so freaked out by the herd, freaked out enough for a CEO to tell the treasury sec.

get f-ed.

Mannwich said...

Excuse me - $3.5 Billion.

karen said...

That was AMAZING! Agree with you 100%, Ben. And those words certainly couldn't have come out of John Thain's mouth..

McFearless said...

well, I know bears probably aren't loving today, but are bulls? Can't see why they would be.

McFearless said...

Money supply at 4:30 today

Ronald McDonald said...

I'm lovin' it.

McFearless said...

I love the buns on a McD cheeseburger

so smooth

karen said...

Ben, I think this was your point as well:

alaidi - RT @DougKass: Kass: My 'Fast Money' Recap: By time Bernanke recognizes a problem, markets already discounted it. http://bit.ly/bsbdSi $$

karen said...

hey! that's what they say about mine! LOL

McFearless said...

indeed that was my point! I don't agree with the spin that Kass forces on it as he offers another prediction of the past, but even a bull and bear can agree that by the time the Fed arrives on the scene...the hour is late!

karen said...

think "hubby" and I will close out our usagx (precious metals fund) position in a few minutes.. sit this out..

McFearless said...

I also think that comparing to "average forward p/e" oh ....wow, danger, danger

From Chapter 5 of The Numbers Game (great book)

....Averages take the whole mess of human experience, some up, some down, some here, some there, some almost off the graph, and grind the data into a single number. They flatten hills and raise hollows to tell you the height of the land - as if it were flat.

....Trick two is that averages pass for typical when they be odd. They stand for what's ordinary, but can be warped by what's exceptional. They look like everyman but can easily be no one. They sound like they're in the middle, but maybe be nowhere near.

...."White, on average," is what we would see by mixing the light from a rainbow, then sharing it equally. But it is a wretched summary of the view. It bleeds from the original all that matters - the magical assortment of colors. When you see an average, think: "white rainbow", and imagine the vibrancy it conceals.


so there you have, now go trade on average forward p/e's

McFearless said...

also, I'm keeping track, he says "soft patch" in his article, lol.

it's the new catch phrase, at least for a couple months and then PIMCO is probably due to come out with another one.

perhaps, and lets hope, it's something that relates to Bill Gross getting a damn haircut.

karen said...

great comment and quote ben! i think i need that book! thank you!

Bruce in Tennessee said...

Actually, CV, what you get today is what we had here last week...I think people have just forgotten how to communicate...(which one of these is you, and which one is Bernanke?...I'll give you a hint when you see the video...) Don't mess with Bernanke.

http://www.youtube.com/watch?v=1fuDDqU6n4o

McFearless said...

Karen, it's a great book, I usually read some part from it almost every day, has taught me a lot:

http://www.amazon.com/Numbers-Game-Commonsense-Understanding-Politics/dp/1592404235

and if anyone is confused as to why i say Kass predicts the past, all he is doing is saying "this is what p/e's have been, so this is what they will be" that only tells me about the past, not the future, there isn't even any point arguing the comment, it isn't a forecast, just what happened before.

McFearless said...

Mario Gabelli on GM and the Fed:

“They need to get back in the game,” Gabelli, who helps oversee $28 billion as chairman and chief executive officer at Gamco Investors Inc. in Rye, New York, said during an interview on Bloomberg Television’s “In the Loop.” “They want to go public. They want to repay the government.”

“He didn’t panic,” Gabelli said, referring to Bernanke’s testimony to the Senate Banking Committee yesterday. “He’s basically the commander you want at the throttles.”

McFearless said...

DR's take:

Those were the words Ben Bernanke used to describe the macro outlook. He refrained from discussing double-dip risks, but in contrast to the market's desire for more policy juice, he actually spent more time talking about the how, "at some point, the Committee will need to begin to remove monetary policy accommodation to prevent the buildup of inflationary pressures".
Amazing – the Fed is still pre-occupied with inflation at this juncture

Mannwich said...

Naked Capitalism also has a post on the GM purchase of the subprime lender:

http://www.nakedcapitalism.com/2010/07/bankrupt-gm-uses-3-5-billion-of-taxpayers-money-to-buy-subprime-auto-lender-americredit-and-signal-a-return-to-the-good-old-days-for-wall-street.html

karen said...

still no topstep..

Mannwich said...

Big banks punishing those with good credit. So glad we bailed these folks out.

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/21/AR2010072106378.html?hpid=topnews

CV said...

Any TOPSTEP?

McFearless said...

there is a VIX Pit update:

http://www.youtube.com/user/optionmonstertv#p/a/u/1/mJQJTdUQIKU

karen said...

CV, not yet.. i follow on twitter and nada yet today.

McFearless said...

Intra-day nymex crude, these are free, so I'll just post a few here and there:

The pop above 79.38 implies that the wave (ii) retracement is still in force. I've adjusted the count as discussed and I suspect that it's the appropriate view complex-wide. At a minimum the advance should carry above September's comparable level at 80.82 (wave w). Nearby support is at 78.63 and then it's clustered between 78.17 and 77.41. At this point, today's 76.16 low should (ideally) stay intact until wave (ii) runs its course.

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