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Dear Readers looking retrospectively the Sell Pressures(anticipated) were high enough yesterday to think of selling and we did think selling day before(anticipated !). But again, you will never see us Regret the possible profits we tried, risked a little, could have gained a lot. Did not happen... On down the road. The Summation Line is still hinting that this sell did not come from a comfortable place so, it will not go too far, most likely, and that is just fine with us, cause that would confirm entire outlook "October 21 Again" and will create a rally after this nice little downdraft here, which will carry markets into 17-18 Sept, Bernanke show in Washington. That would be the time to think about a nice 5-13 day strong downdraft that could turn into crash. Not so fast though, let us first get there and see that everything is lined up for what we want. Notice , a very strong GOLD even as stocks declined, this confirms that the liquidity death is not upon us "yet" for the crash, cause GOLD is feeling plenty liquid... $US, regrettably the only currency we Americans have is feeling the fake liquidity starting to flow into the system and started the dreaded downturn predicted in Sept for so many months before. How should our fellow senior citizens should feel with our own government refusing to privatize the S.Security and destroying the Purchasing Power of the future $US promised to them in the form of pensions? I feel sick with politicians and Wall Street eating their lunch. God do not you have some powers to stop these bastards! Can't you stop this ugliest Wall Street Welfare For the Rich?
18 comments:
for those interested..
recent GOLD surge mainly due to buying over COMEX, which means hedge fund buying is in play.
So expect some more volatility in GOLD before the real move up?
Dear Dxb,
Thanks for your always timely and astute input.
Good Trading
Here is a fundamentally based gold stock trading system.
Are all of Hussmans 4 criteria in place? maybe not quite yet, but possibly good enough for government work.
___________________________________
Going for the Gold
Four simple indicators for monitoring the condition of the precious metals
markets
http://www.hussmanfunds.com/html/gold.htm
Excerpted from the October 1999 issue of Hussman Econometrics
" . . .
So if we're looking for a rally in gold, we're really looking for 1) World
inflation, particularly in the U.S., and 2) falling long term Treasury bond
yields. This combination is most frequently seen early in a recession.
. . . .
you generally want to buy gold stocks when they are lagging the price of the
metal. And given the fact that trends in the XAU itself are uninformative
about future returns, it also means that you are better off buying gold
stocks on dips than to buy upside "breakouts".
Not surprisingly, the combination of all of these is rare but extremely
powerful. In the rare instances when 1) The rate of inflation has been
higher than 6 months earlier, 2) Treasury bond yields have been lower than 6
months earlier, 3) the NAPM Purchasing Managers Index has been below 50, and
4) the Gold/XAU ratio has been above 4.0, the XAU has soared at an
astounding rate of 123.63% annualized. In contrast, when none of these have
been true, the XAU has plunged at -53.21% annualized. That's a gaping
difference.
. . . "
Dear Cobbense, VEry good info indeed. I do use the GOLD/XAU Ratio, but must admit that if I am bearish( even slightly ) about stocks market, I would rather buy GOLD than gold stocks. So, if Crash does not happen, I maybe more warmed up fo the Gold Stocks Idea, but until then I prefer Gold Itself.
Good Trading
futures have turned "green". Could this be the time to buy the dip?Could this be the start of the rally into the "sept18-oct.20" drop zone?
Good Muzings Dear Chronictown.
Here is what my "not so educated" guess is.
We play around here for a couple days, with a slight downward tone. Ha... and get into Buy signal on gages. That would bring us to 10 Sept or so. Then the buy will exhaust itself in 4-6 trading days, which would bring us to Sept 18-20. How about that?
Now this is only a guess...
Good Trading
Dear Boris, IMHO, the light trading from the holiday week/summer vacation once again muted the sell pressure swing. I missed it, mainly because the summation did not yet look like any sort of top. Oh well, rule #2, I love your rule #2. The time period between swings (a result of light volume ?) has been shortening since mid August. Even with the sell off yesterday, the buy pressure barely moved. That's another oddity that's been showing up in the charts lately. On to the next swing.
Good trading, Daveo
Dear Dave, You read these charts like I do.
That is good.
Great to have developed that sense about it.
You are so right, the low volumes are playing some games on gages, but they seem to manage somehow to find the true nature of this beast called market.
Good Trading
Dear Boris, you are so right, the jaws were open yesterday, not as wide as I would like. But they were open ! Thanks for all you, Daveo
Dear Dave/Readers,
I must respond about the #2 rule.
Yes, in some ways it is actully the most important rule and I tell you why.
We humans, have a strong tendency to remember the things that were good and or could have been good and "got away". So, when the trade that could have been sucess gets away we remember and become "anxious". That is when we become a "dead meat" for the market, cause we now push it, we want to make up. "how could we miss this 100% great chance" , " what a bozo we are". We can not find the words to describe our stupidity and that is when we lost it. We get into any trade, cause it still looks like a trade that "got away".
Do not fall for that. Listen to me. If nothing else do you learn from me. DO NOT FALL for the one "that got away". Forget it as quickly as you saw it.
If you remember this you will make me happey and yourself "RICH" and I mean this in phsycological sense. You will be rich and restful and your mind will be clear, even if you do not make a lot of money , you will retain health, without which, you will never ( guaranteed ) have the mental capacity to make money.
Now lot of shrinks writ books and become famous trainers.
Forget them.
Just remember the rule #2 it will save your life.
Good Trading
Thanks Boris.I play poker "semi pro". What your talking about happens all the time.Going "on tilt" is a bank roll killer. It is the same with the stock market. chasing will bust you out! It is a battle with your self. discipline is the key.trying to get better. Knowing thy self is half the battle!
Thanks Dear Chronictown.
GOod Trading
Boris and all,
traveling around to various sites I pick up observations. One that I found this morning bears watching. I's apparent at the moment that the $SPX is forming a wedge pattern..Using my spreadsheets, I can say that the converging lines of the wedge intersect on 9/14/07 at around 1512...now it may morph into something else, nothing is written in stone, including those targets, but this is a "heads up"..
Good trading
Mark
Thanks Dear Mark,
GOod observation and not far from what would/could make us happy.
GOod Trading
I have learned so much on this site. I have been on tilt a lot of times but what I have learned here is that I will never and I mean never go on tilt again. Thanks to Boris and everyone else that frequents this board. waldo.
I agree with Waldo. It is the one thing I learned and has saved me. In the past I would have done exactly how Boris describes it "chase" the market. Today, I feel calm.
Boris, I was wondering how if any does market sentiment play into your analysis? There seems to be quite a bit of comparisons to the 1987 crash out there but the one thing that is different today (or at opposite spectrum from 1987) is sentiment. Could this be the one thing that prevents a 1987 type crash and actually takes the market much higher? Again, many thanks for your time.
Paul
Dear Waldo,
It is not too much we have to learn. There is a lot, granted. But there are most funtamental things , rules. once mastered all else will slowly/surely fall in place. It is the framework that counts.
Yet not denaial here, there is a lot to learn indeed.
Good Trading
Dear Paul,
Sentiment is very important. In some ways it is reflected in the GAGES, but standalone there is so much good working going on . LIke put/call ratios and committments of traders and etc. I do look at them, but do not report as they are not really my proprietary work.
Now, it is hard to gage the sentiment versus 1987. Options were not that popular then...
But similarities can be found in poilitical ans civil life of then and now. Republicatns then and now. Big spenders(although denyied) Reagen and Bush. etc .
I do not say this is enough by any stretch of imagination. I will change my mind as soon as my Gages do.
But just something to bring as comparison.
GOod Trading
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