Politicians respond

30 10 2008

It was a strange email day today.  I received separate messages from Rahm Emanuel (my congressman), Jan Schakowsky (my former congresswoman), and Dick Durbin, all regarding a freaked out email I sent to them complaining about Hank Paulson’s bailout plan.  Remember that?  

As things turned out, we actually got a little of what we wanted, which was an equity stake in the banks that we pumped money into.  While the banks are still in serious trouble, it is always nice to hear from your elected officials, even if it comes weeks after the fact. 

The messages also reminded me of a vow I made to another one of my former elected officials when I lived in Chapel Hill, NC.  I was going to graduate school during the darkest days of the Bush administration.  There were several times when I seriously feared that Rummy and Cheney were setting us up for an invasion of Iran.  There were also many times when I was disgusted by the full assault on science that was taking place by all of Bush’s appointments.  Whether it was administration people suppressing NOAA or NASA data that warned of global warming or some of Bush’s “education experts” trying to get “intelligent design” taught in schools, there were many times when I freaked out and wrote letters to my North Carolina senators, Richard Burr and Elizabeth Dole. 

Richard Burr sent me a thoughtful response to every single letter or email.  Elizabeth Dole did not respond to a single one!  Not one!  Richard Burr earned my respect and my vote and all it took was a simple email acknowledgement of my message.  Dole earned my eternal disgust.  I promised never to vote for her and even contributed to her opponents campaign.  I am so happy that she is on the verge of defeat. 

The moral of this story is simple.  Respond to your constituents.  It is an easy way to make the people you represent happy.  (I sent a message to Barack Obama too.  I have yet to hear from him but he seems a little busy right now so I’ll give him a pass this year.)





US Dollar Update

29 10 2008

Not too long ago I posted something about the end of the current rally in the US Dollar index. Well today it failed on its biggest down move in years. These simple ABC patterns amaze me!

It will now be interesting to see if the dollar will resume its downtrend. The first test will be confluence, which is shown on the next chart.

US Dollar Index Confluence

US Dollar Index Confluence





A couple of crazy Cubans

29 10 2008




Panic Buying

28 10 2008

We had some nice buying panic today that ended on a mini-climax top.  It always cracks me up to hear what people come up with when they try to explain large market moves.  People’s brains just can’t stand it when markets move up on bad news or down on good news.      

 

 

It looks like we broke a trendline, which means we will probably hit 985 on the S&P 500.  That isn’t that far off so wait for a pullback before you put any positions on.  I still expect us to move sideways within the current range. 





Electoral Vote Charts

27 10 2008

Can 10% swings in the market be boring?  It sure seems like it to me, especially since I can only post index charts because every other individual stock looks like total crap. 

Speaking of charts, have you seen these electoral vote charts on Princeton Election Consortium?  The similarity in the pattern of both of these charts is amazing.  Just shift the 2004 chart up a little bit and the peaks and valleys would overlap nicely with the current election.  The pattern in 2004 seems to suggest that people made up their mind after the second debate and never reconsidered. 

It looks like the same pattern is developing in this election. 

 





Am I still a bull?

27 10 2008

Bullish?  Me?  More than ever!

The volume is totally drying up.  There are fewer and fewer sellers out there.  Now it seems that money is being moved back to the US markets and we are becoming the only “safe” place to be.  Asia ends 12% down last night and we only close 3% down?  How crazy is that?





People are losing hope

26 10 2008

During the flight to Boston I was listening to Tom O’Brien’s Friday show and I noticed a pattern in some of the callers that seems to suggest that people are starting to give up hope (a very good sign if you’re a bull).  

Before I talk about the specific call, let me remind you of the pattern that seemed to emerge as O’Brien got bearish in late 2006.  Most of the people that listen to him trust his calls much more than they trust themselves.  As a result, the listeners quickly follow O’Brien’s lead and put on a ton of bearish positions.  The reality, unfortunately, is that the market never turns just because someone says that it will.  As you can see in the chart, the S&P 500 continued to make new highs, thus shaking the confidence of the average trader/investor who has a low tolerance for risk.  O’Brien, on the other hand has a much higher threshold for pain (as most successful traders do) and can stick to his convictions.        

The interesting thing is listening to typical callers going from being short the market, to being scared as hell as the market moved against them.  At the peak of the market, almost every call started by asking him if he was still a bear, which would be followed by them trying to convince Tom as to why the market was going to go up forever.  Finally, people would start calling him and asking what it would take for him to turn bullish again. 

Well on Friday, it seems that we are starting to see the mirror image of this effect.  O’Brien got bullish and people were happy to jump on board with him as soon as he changed his market outlook.  Now since the market hasn’t gone straight up, people are starting to lose confidence and are beginning to argue with his bullishness.  Listen to the following call. 

Tom O’Brien Show 10/24/08

I love the quote, “Bob, I was a bear at 1400, I don’t get bearish at 875″. 

My point here is that we are still flushing out the weak hands.  O’Brien is still a bull and so am I.  Don’t get carried away with large bets and you’ll be able to handle these huge swings.  There will be plenty of time for long term investors to get in.   

 





I’m out on the road

26 10 2008

I’m in Boston for a wedding and I just noticed that my previous post has generated a little bit of excitement.  I was pissed off and I vented. 

This site is for the technical analysis of the markets.  If that interests you then please come back.  Don’t expect any more posts about the disturbed McCain volunteer.





We are still holding up

24 10 2008

Despite the fear this morning, the market finish was pretty damn bullish.  I think we will go to the top of the range, but the longer we continue sideways, the more bullish I think it is.





Disappointed by Politico’s Ben Smith

24 10 2008

I know I’ve said it before, but I love politics and I especially love presidential election years.  I always try to keep my posts focused on the markets but the last 24 hours have been so strange and disappointing to me that I feel that I have to share a story with you all. 

The story begins with on my many favorite political websites, Politico.com.  I have been a dedicated reader of this site since before the primaries.  The site seems to anger both sides of the political spectrum, which usually means that they are doing a good job of reporting both sides of the story.  I especially like the two blogs written by Ben Smith, who covers the Democrats, and Jonathan Martin, who writes about the Republicans.  It was through these two guys, Ben especially, that I first learned about many of the biggest stories of this last year  (Bitter people clinging to their guns, Hillary under sniper fire, Palin’s secret flight to Akron, OH and of course the “Goddamn America Video”.)  While some of these stories have been good for my candidate and other have not, I have never questioned Ben Smith’s motivation for reporting a particular incident.  That changed last night and I think that as you read, you will see that my initial warning to Smith opened up a can of worms that made me totally lose respect for his professionalism. 

As you might know, last night Matt Drudge was sensationalising a story about a girl who was allegedly attacked because she was a McCain supporter.  Ben Smith picked up the post and put it on his blog.  The post started out with, “Here is some campaign-related violence, via Drudge.“  I was disgusted by the thought of such an attack and quickly read the story.  It didn’t take long to realize that the story relied totally and completely on the word of one person, the “victim”.  She claimed that she was robbed by a black man and because her car had a McCain sticker, the man came back after her, beat her and “carved” a B onto her cheek.  It was clear that Drudge had every reason to sensationalize the story, given that his candidate was getting his clock cleaned, but the reality was that something just didn’t smell right.  I felt that by putting the story up on his blog, Smith was legitimizing it before it could be investigated.  I worried that we could see lynch-mob style reprisals against innocent people.  I therefore sent an email to Ben at 6 pm on Oct 23rd. 

It said:

Ben,

I enjoy your blog, but does this really deserve reporting? Don’t you think you need a little more evidence for this crime being campaign related? How does this girl know he did this because he looked at a bumper sticker? Come on. This is racially charged stuff that needs to be investigated a little more thoroughly.
It is really disappointing to see you parrot Drudge.

Paul

Surprisingly, I got a pretty quick response from Smith, which said:

There’s a police report. She could be lying, but it’s passed into public record. Reverse the campaigns — an obama volunteer in texas, say.

I didn’t accuse the “victim” of lying. I just suggested that we need to know more before we started a race war (hyperbole). So I responded with the following email at about 7 pm central time on Oct 23rd.

Ben,

Of course there is a police report, there was a crime. The only thing campaign related is that the victim was a McCain volunteer. Does it become news because the criminal is black, or does it become news because a “B” was scratched into her face? Why would the “B” be for Obama? How can the victim know it was because the perpetrator saw a McCain sticker?

My problem is that there are just too many unknowns. The news says that the crime was within view of the atm cameras, so why didn’t you wait for that to be released?

What if there are reprisals and it turns out to be something other than advertised? Innocent people have been killed for less.

I apologize for the emotional email, but this is scary stuff.

Paul

Now here comes the incredible part. Smith responds with the following one line email.

Does it even say anywhere he’s black?

Can you believe that shit? So now this clown is trying to turn the tables and call me racist for assuming he was black? Guess what Ben, the original story that you posted stated clearly that the “victim” claimed that she was attacked by a “6-4 dark-skinned black man”. Give me a break!

Perhaps Ben Smith needs to start reading the stories he posts instead of just riding Matt Drudge’s ever shortening coattails.  

Of course we now know that this nut-job “victim” just made the whole thing up.  I hope the credibility of Ben Smith takes a hit after this 24 hour fiasco.  That way the next time he pulls something like this, no one will take it seriously.

Side note:  Jonathan Martin also reported this BS as fact.  I did not email him.

 

UPDATE:  I thought I was disgusted before.  Now I can barely hold down my dinner as I read these “professionals” try to rationalize their pathetic behavior.  Ben Smith says that although he is a journalist, he doesn’t have to live up to the same standards because he was just blogging the story.  What a joke! 

I wrote a letter to Politico’s editor-in-chief, John Harris.  I suggest you do the same.

Let’s not forget Ben’s ass kissing article writen with Jonathan Martin.

Here is the screen capture of the email.  I blacked out my email. 





QLD Trade

23 10 2008

News flash…this market sucks!

Check out what happened to my QLD trade.  It took out my stop and promptly reversed.  Why does this always seem to happen?





“The Maestro” Plays Congress

23 10 2008

I just can’t put into words the feelings I have as I read these headlines about Greenspan.  It is both laughable and infuriating to witness this old bastard try to salvage his reputation.

Greenspan Concedes He `Found a Flaw’ in His Free-Market Ideology

Tough to believe Greenspan’s disbelief
Nothing you say will change your place in history, Alan.  The die is cast.





QLD Trade

22 10 2008

I also picked up some QLD near the close today.  I like how it held the TDST line on the hourly chart.  I’m gunning for 36.

Good luck and stay small.





US Dollar index

22 10 2008

The dollar has been on an impressive run.  It just completed the 1:1 Fib expansion.  Will it go for the 1:1.618?





Plenty of time to get in

20 10 2008

Are we in the early stages of a powerful rally? I think so, but that doesn’t mean we won’t be back down to the lows again. Just look at the last major market bottom. It had three thrusts down that took many months to play out.  Just looking at the chart of the S&P 500 during 02 and 03, you can see how the market oscillated back and forth, searching for new leaders and building strength for the next bull market.

We had one test of the absolute lows and a third and final test of the highs of the low bar.

I expect that we are getting set to rocket higher in much the same way as the market did after the first low in 2002, but don’t expect another bull market right away.

The following chart shows how I’m gaming this market.

The first target is a 0.618 Fib retracement.  If the volume dies, like it did in 02, I’ll be looking for another test of the lows.  When we get to that point, we can either blast through the bottom, which will be very bad and very frightening, or we can have another bullish reversal setting us up for another move higher.  No matter what happens, don’t go chasing any crazy market moves because you will have time to get in at very good levels (they won’t be easy to buy, unfortunately).  We have so much technical damage out there that it will be months before any new leaders emerge.  The market needs time to heal its wounds.