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Trade Trends with Bollonger Bands and Twiggs Money Flow

Archive through October 22, 2010

Chart Forum » Hilarius' Hall Of Fame » Our Daily Bread » Archive through October 22, 2010

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rdumas
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Username: rdumas

Post Number: 4153
Registered: 11-2006

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Saturday, October 09, 2010 - 01:55 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ody,

What you say about us coming to similar conclusions is very true. I have a practice of starting to write my market wrap at around 9:30am and usually finish anywhere between 12:30pm and 2:00pm. During that time I generally never read any incoming mail.

It would appear that you posted your thoughts about the market during the period that I was engaged in writing my market wrap and as you say we appear to have been thinking along the same lines.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ehmu
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Post Number: 41
Registered: 08-2010

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Monday, October 11, 2010 - 03:47 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



I am finding the goings on in the markets quite discouraging, this may be an understatement.

Over many years I have done well using TA to trade equities on various stock exchanges, backstopping my confidence with healthy generic fundamentals for the markets.

At this point in time, I'm finding the sentiment regarding market involvement is at an extreme low, and this contagious mood also easily becomes discouraging.

I just came across the piece below, that I found very humorous, maybe almost as good as when Allen Alda was involved in the sitcom *MASH*.


Excerp
As the Star Wars guys always said just before the bottom dropped out: "I've got a bad feeling about this..."

Take one part schizophrenia and another part propaganda, mix well, and you get a nasty little cocktail called "October 2010." For a bit of absurdist, schizophrenia-tinted humor, consider these two stories in the Wall Street Journal of October 7, 2010:

Middle Class Slams Brakes on Spending

Retailers' Solid September Sales Raise Holiday Hopes



Whole article at:

http://seekingalpha.com/article/229170-october-2010-i-ve-got-a-bad-feeling-about -this?source=from_friend


I hope this post gives you a little comic relief. God knows we all need it right now.







_____ n a m a s t e

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rdumas
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Post Number: 4161
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Monday, October 11, 2010 - 06:35 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ehmu,

Not sure if this article will cheer you up.

Insider Selling To Buying: 2,341 To 1



By www.zerohedge.com

Sorry kids, we just report the news… as ugly as they may be. After last week saw an insider selling to buying ratio of 1,411 to 1, this week the ratio has nearly doubled, hitting a ridiculous 2,341 to 1. And while Wall Street’s liars and CNBC’s clowns will have you throw all your money into “leading” techs like Oracle and Google, insiders in these names sold a combined $200 million in stock in the last week alone (following Oracle insider sales of $223 million in the prior week). Insiders can. not. wait. to. get. out. fast. enough. This Fed-induced rally is nothing short of a godsend for each and every corporate executive. But yes, there may be value: there was insider buying in 2 (two) companies last week: General Dynamics and Best Buy, for a whopping total of $177,064. At the same time sales were a total of $414 million: so is anyone wondering why JPMorgan is reopening its gold vault… Anyone left holding the bag on this market when the FRBNY props are taken away, will be left with the same return as all those investors who entrusted their money with Madoff. Guaranteed.






I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Post Number: 391
Registered: 02-2010

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Monday, October 11, 2010 - 07:45 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Interesting pieces Ehmu & Rud'meister,

The US manipulation of stock markets, the gold price, and even economic data seems endless at the moment.

The US does not want to see the markets collapse for political purposes, are desperate to keep shorting the gold price to enable the sale of their Bonds, and do not want to inform the citizens of Disneyland the real hard reality of the economic woe.

Take the recently released employment figures:

Preliminary estimates for the yearly benchmark revisions reveal that the US government underestimated the overall number of job losses for the year and may erase another 366,000 off its books. Keep in mind that these are all “official” government numbers! The current payroll level is over a half a million overstated!

The U6 underemployment number is 17.1% and climbing. Nearly 1 out of 5 is either out of work or working part time being unable to secure full time employment. Easy to see in which category the 41 million US citizens on Food Stamps belong.

I read John William’s blog on http://www.shadowstats.com , and his summary is telling:

- Outright Contraction in September Payrolls Net of Temporary Census Workers
- Current Payroll Level Overstated by Roughly 550,000, Based on Announced Benchmark Revision / Broad Unemployment Rates Soar
- September Unemployment Rates: U.3 at 9.6%, U.6 at 17.1%, SGS at 22.5%
- M3 Annual Decline Narrows

...and against all this information the markets went up! It is not the Institutions, not Corporate Execs, my bet is that it is Uncle Ben.

At some point this thing will ignite, don't be standing by the exits when it does...


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ody
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Post Number: 5411
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Monday, October 11, 2010 - 08:17 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Bill: Americans

I see the matter largely as you do. Much of the responsibility for the management of the economy in the US lies with the Fed, and Bernanke is woeful - as many academics would be, for that matter - when it comes to wanting to please people, avoid unpleasant truths head on, and engage in spurious reasoning. To be fair, the "system" in the US has never been a particularly good one, but was made greatly worse by what was introduced by Reagan and Greenspan. And one has, in the current situation, to sheet home responsibility also to other authorities than Bernanke.

The coroporations are CREATED to make wealth, so if they behave badly, it is up to others to stop them, and in the US this has not happened for a long time.

But ultimately, and beyond all this, the trouble is unfortunately much deeper again, and is one of the nation as a whole. Americans have been so lucky, self-indulgent and pampered for so long, and been able to get away with so much, that they now have a deep-seated belief that they are BORN to be wealthy, and automatically entitled to wealth; also, that God and their might entitles them to obtaining it wherever and whenever they can. The Chinese, for example, OUGHT to know their place (the argument runs): to buy American bonds and support the dollar and American debt on the one hand, yet raise their own currency so that automatically they will find it harder to compete against the intrinsically superior USA, etc. American wealth is not, as Eugenio thinks, unlimited, and will not prove to be. American greed and arrogance, however, ARE unlimited, and I very much doubt that a change is in the wind: it will only occur if circumstances force it upon them. And then they will kick and scream, blame everyone else, and misbehave towards other nations, with their infinite self-righteousness and sense of superiority. A trouble is, of course, that at least as yet, there ARE many levers they can still pull to dominate others, and that they will no doubt do so.

But when it comes to the sort of INTERNAL transformation which this nation needs, I don't think they can see themselves for what they are, and don't want to, and a significant further deterioration is the most probable scenario.


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bridog
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Monday, October 11, 2010 - 10:19 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Just gotta skite, can't help meself!

I have been rabbiting on about the value tied up in KGL and BND spasmodically for months. Looks like it is finally being recognised:

BND - could have bought in July sub 60c, today buyer offering 99c.

KGL - 2 months ago less than 9c, today buyer offering 19c.

Just goes to show, sometimes old Bridog can get it right!

Cheeers


Old enough to know better . . .

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ehmu
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Monday, October 11, 2010 - 10:34 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi bill/rudy:



Oh yeah, wow did you ever cheer me up. I'll be fine now 'til 2011 with that kind of extreme inspiration.

Rudy, the insider sales was the bad news, the good news is that they are all taking that money and buying gold bullion. (they think that it's bullion, it's actually 24ct gold plated lead bars special collectors edition)

Now I understand why the retail investors are being herded to the US markets. So they can retire in comfort, while the rest of the world shorts the markets to lose their shirts (&OR blouses on the bright side). ha ha enough cheerfulness, let's get back to "shocktoberfest".

I'm in cash except for a small futures contract in "vasoline", if things get really bad this quarter I can always take delivery---otherwise I'll probably roll it over to the March contract.

The one dollar coin in Canada is called a loonie (and we stamp the image of a loon on one side)------how fitting is that. I have tonnes of cash, but soon it'll be worthless.



.........................


_____ n a m a s t e

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paddy
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Monday, October 11, 2010 - 10:45 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Ehmu : Just thought I would let you know
that Rudy & Bill are in strong contention
for the Grim Reaper Award . The decision
will be made by a bunch of loonies .

Perhaps there might be one or two more days
before Mother starts on the correction.

Paddy


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bridog
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Monday, October 11, 2010 - 11:03 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hey Paddy,

I've been wondering if every round here has been playing a game called "My prognosis is more dismal than your prognosis" and "No MY prognosis is blah blah. . ."

Even that "constitutional optimist" Eugenio has gotten into the act!

Hey I just had the biggest weekly paper gain since somewhere around 2006.

Eugenio, you'd be havin a good time wouldn't ya?

Cheers


Old enough to know better . . .

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rdumas
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Monday, October 11, 2010 - 11:18 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Ehmu,

I was only having a bit of a game with you. It's easy to dig up negative news if you really try (actually you don't really have to try).

I am pretty bullish actually for the next 4 months or so. Whilst Bill believes in a big drop coming up at this stage there is nothing technically that suggests that and hence I believe at this stage that any decline will be somewhat limited. Naturally enough things can change on a dime but so far the technicals whilst to some extent overbought are not bad at all at this moment.

Anyone watching Dolphin's selections in the tipping competition would have made another 6.72% on VMS this morning (his selection last week). That guy can really pick them. His selection for this week HGO is up over 6% from Friday's close. Who said that there was only bad news out there?


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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bridog
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Monday, October 11, 2010 - 11:35 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Look at some more figures for just today taken a few minutes ago:

EQN up 3.8%
PNA up 4.7%
FMG up 5.3%
BND up 6.5%
PEM up 7.7%
KGL up 18.7%

Its a rage out there!


Old enough to know better . . .

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cat_lady
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Monday, October 11, 2010 - 11:51 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



can I just say:

NAV, GXY OZL MCE

cat lady


Without my morning coffee I might as well be a dog

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bridog
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Monday, October 11, 2010 - 11:59 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Cat Lady,

Could we call you Cheshire Cat Lady?

Cheers


Old enough to know better . . .

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gdd3
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Monday, October 11, 2010 - 12:05 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks for the +ve 'plug', Rudy.

VMS has been a 'classic' 25%+ performer as a TAZ trade since first 'poking' its head above the 150EMA on July12th...no fewer than 5 perfect TAZ entry points, the last one is still active although this am I 'lightened' off at 64c as that was a M/M target point and both Williams%R's are at extremes.

And, yes, HGO is going well and I have high hopes of another great return here with this one(basis potential M/M of Bottoming pattern) BUT did you pick up the other one I mentioned(and 'entered' by my 'TAZOMETER' friend whiteowl) in NGF....a WHOPPING 17.39% so far!

How long this 'great run' will last...who knows? However, experience in the markets tells me that one has to ride the wave whilst the goings good!

Cheers
Dolphin


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gdd3
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Monday, October 11, 2010 - 12:23 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



AS a means of interest, if you guys don't 'visit' the "Trading Action Zone"(TAZ) thread under the Short-Term ASX TOPIC, here is my chart on VMS to illustrate what I was refering to in my last post.



Cheers
Dolphin


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rdumas
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Monday, October 11, 2010 - 12:43 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Dolphin,

Unfortunately I didn't take up any NGF but did buy some HGO at $0.34 today thank you very much. You're a legend in my eyes.




I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ody
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Monday, October 11, 2010 - 12:54 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The driver in share markets currently

There can be no doubt that it is the prospect of "quantitative easing" which is pushing share markets up - particularly "materials", including gold, which are being bought in the belief that the US dollar will automatically fall further in value as more money is printed. Thus, it is then concluded that "real value" must be found in "real tangible assets". So long as this phenomenon is clearly understood, one can indeed make money on the market's hysteria - but experience shows that markets working on this assumption are very dangerous, so do keep a close eye on any change in sentiment, and be ready to sell.

There is no knowing how long this will go on for. Unlike Rudy, in this instance, I am inclined to think that a rally lasting for four months is unlikely, as there is far too much risk, which many will be aware of, for the market not to turn quite readily. More likely, I would think, will be a short but very enthusiastic "burst", and that is what I would take advantage of. The spectacular rises mentioned in posts here today are the right kind of stuff to latch onto, but obviously stocks are not going to rise at a rate of, say, 6% each day for long. Usually there is considerable money to be made out of this sort of thing, but not for many months on end UNLESS what for the most part remains persistent negative news turns around. That is unlikely to happen and the only "good" news propelling the market is QE. Expect the Reserve Bank, among other forces, to choke the market off. The higher the market here goes from here, the bigger the rise which the RBA will impose. So it's a matter of making hay while the sun shines, and that may actually not be for long, though we could well see some further spectacular rises yet.

It's very much a short-term traders' market, not one for even medium - leave alone - INVESTMENT. Timely selling will be crucial.


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billt
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Monday, October 11, 2010 - 02:04 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Guys & Girls

Well done on your trades, some fantastic gains.

Thank you Ody for your views, always on the button.

......did someone say there is no technical support for a substantial pullback?

......by the look of this US VIX chart I am just a little concerned that a pullback might be a lot more explosive than everyone here is expecting. That bullish falling wedge looks like it wants to go somewhere fast. There is a 'mini-me' bullish falling wedge on the US VIX 60 minute chart too! It may not play out - but there it is.

Even Goldman Sachs have increased their probability of a Double Dip by a factor of 2 since the start of the year...Roubini has mates! US GDP falling, US Unemployment getting worse..bla bla...

Happy to point out the other side of the equation at this juncture. I play both the 'ups' & the 'downs', but I'm content to be patient for the dip:





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ody
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Monday, October 11, 2010 - 03:08 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Don't worry, Bill - your time will come (and it may not be that far away)


Bill, - The reason why you are worried is that, ultimately, you are a fundamentalist, and all good sense at present indicates to fundamentally thinking people that share markets should fall rather than rise. Many people who go into the share market, however, are not in the least concerned about the fundamentals, but just want to "grab" any upside opportunity that comes along. There has been no change to indicate that fundamentally matters are any better than they were before today: on the contrary, the reason why the market here went up was simply that it had gone up in the US, and in the US it had done so because of the news about additional money being printed or about to be printed. Bullish speculators - and actually it is a logical kind of speculation - take the view: "Quantitative easing means more money, hence a decline in the value of money, hence the need for investing in "real" assets like commodities." It is as simple as that. Undoubtedly a good many people will overstay or expose money to stocks that will fall, but the basic reasoning, from a TRADING viewpoint, is hard to fault in the short term. And the internal or external prophecy becomes self-fulling. The individual investor/speculator, when faced with a situation like this, is not going to worry about fundamentals or even any other current piece of news that might make her or him pause: they seize an opportunity, and grab it, thus "making it happen". You don't even need a chart to show you that the market will go up if everyone knows that quantitative easing has not created a recovery, but HAS a record of pushing up share prices. It is a marvellous mechanism, as one would think even Bernanke understands by now, for creating the next asset bubble, and making people content by doing so.

The interesting thing to watch will be just how high the markets will be taken up, and how quickly. When once ONE ruling obsession drives people into the market, that can be very powerful, and then "the madness of crowds" factor also starts to operate. And resources in particular have a history of huge rises - as well as falls. I add that one-dimensional market "plays" are a typical feature of bear markets seizing what is often perceived to be an opportunity on the way up while noone has reason for believing that there is any soundness to support the rally: that is why a rally like this often has distinctly "manic" features. Equally characteristically, falls in a bear market also tend to be very strong, as again only ONE factor is really in play: fear replaces hope, and any fundamental consideration, either in relation to the rally or the downfall, is often very difficult to find.

So, with QE the dominant factor, we could well see quite a bit of a rise yet. It is very possible that prices will have to go quite a bit higher yet before angst returns, as it inevitably will do - inevitably, because there is no fundamental factor that can ultimately keep the market going, at present: fundamentally, there is no doubt that the market that is driving us, viz. Wall Street, is operating within a sick economy which is facing truly huge problems. The piece below is yet another one which show us just HOW bad that economy is:
-------------------------------------------------------

No home for new money

Robert Gottliebsen

Published 7:25 AM, 11 Oct 2010 Last update 10:13 AM, 11 Oct 2010


Many Business Spectator readers will find this commentary hard to believe. Yet it is true and will affect the world community.

In the US it is mid-term election time, so American politicians want to be seen to be helping voters. However, this time around what they are really doing is making it highly unlikely that the looming stimulus package will work and the disappointing US employment and consumer spending figures will continue for longer.

There are more than 2 million US housing loans that are 90 days behind in repayments and another 2 million in foreclosure – that's at least 4 million loans in trouble. About a quarter of US housing loans are in negative equity.

This is the biggest problem facing the US. Printing money and handing it to banks will smash the American dollar, but the US economic recovery will not gather a full head of steam until the US foreclosure problem is overcome and banks and lending institutions begin lending on housing.

According to the Wall Street Journal at least 100,000 of the 2 million foreclosures have been thrown into chaos because the wrong court officials have signed the foreclosure documents, effectively freezing the process and enabling the residents to continue to live in the homes, payment free.

Some 23 states are affected and politicians in those states are now demanding that all foreclosures be stopped. The 'stop the foreclosure' movement is widening and being taken up in the Congress. How far it will go no one knows, but it is very dangerous.

The bottom line of this mess is that the housing loan system, including the part backed by government-owned guarantors, will just have to sit on the paper as the loans fall further and further into delinquency.

Remember that the issue is not that there was a mistake and that the borrowers have really kept their payments going – they have stopped paying.

In addition, Americans can walk out of the their homes, leaving the lenders with only the house sale proceeds to recover their loan. I can't forecast what will happen and it is possible that the problem will be solved by the right court officials signing the documents. But some politicians want unfortunate court officials, who are drowning in applications, to be prosecuted for signing when they should not have signed.

What this is telling banks around the country is that it is now doubly unsafe to lend on housing. The 4 million loans that are behind or in foreclosure have made US banks cautious and this has driven down house prices and made the situation worse.

The banks already have plenty of money to lend for housing and giving them more will not help unless they feel confident. The latest foreclosure fiasco has delayed the US recovery and ensured that the printing-press money will end up funding share, commodity and other asset speculation. At the same time it pushes down the US dollar which could start trade wars. The political and economic policy process in the US is not working well.

[Rather a euphemism, this last sentence, I would have thought. - Ody]


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ody
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Monday, October 11, 2010 - 03:36 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Typically aggressive market

The aggression of the market today does not appear from the general market rise, which is quite limited. As I write the XAO is up by 0.4% and the XJO by 0.3%.

While this difference is not large, it shows that action is stronger in comparatively smaller stocks outside the main body of 200. That is also confirmed by the fact that the Small Ords is up by 1% (so, much more than the market as a whole).

Furthermore, the losing sectors are the typically defensive ones of financials, health, consumer staples, and property trusts. The chief winner - always likely to be a measure of hope - is actually IT, up a big 1.7%. But the truly big PLAYER, as a sector, is metals and mining, up 1.4%.

Furthermore, although my interest rate securities have not fallen out of the sky, so to speak, they have today been performing more weakly than for quite some time, suggesting that even they are to an extent being sold so as to release money for what is clearly expected to be a resources-led rally, resources being supported as "real money" compared with the USD. It is the USD which provides the trigger for everything at the moment, even to the extent of pushing UP our own currency, which is identified with resources and especially gold, and also known to be supported by high interest rates, which are likely to rise.

However, the market knows that it does not need to worry about those rising interest rates yet: the RB has just kept them on hold, so until early November "we shall make money in the share market" - that is the reasoning. And we do it with resources stocks: particularly the rather smaller ones which everyone knows are a speculator's dream. IT is obviously also in play, but that is a minor sector: this is a speculative resources rally, seeking to make profits fast, so that stocks will in all probability be driven up fast also, and conceivably quite firmly.

For a more medium or longer-term investor, the hope must be - and I think it is a reasonable one - that a rally like this, in its very speculative nature, will also burn itself out quite strongly when once the next change in sentiment comes. The more the bulls take over, currently, the more likelihood there will be of significant falls down the track, which should then create some opportunities which present better value than we are seeing just now. The problem will however also still remain whether those "cheap" shares will be those of companies that REALLY have strong prospects. Usually, at some point, such a situation does arise. The last time was early 2003.

From then the market went up in great fashion until late 2007. We all know that 2008 was a disaster. But 2009 created a very tradeable rally which even for someone like myself (hardly a high-risk player) offered a good opportunity to make reasonably safe money. The current rally MAY turn out to be - perhaps in a brisk way - more incandescent. But, since not many people currently would believe, as they did then, that they are taking part in a recovery process, today's "play" is also far more dangerous, potentially.


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billt
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Monday, October 11, 2010 - 04:01 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Ody,

The depth of the problems in the US are staggering....'not working well', indeed! A great piece by Gottliebsen - scary stuff...

Some commentators have stated that QE2 has already been priced into the market. Since April economic indicators have not improved, and it is only a question of how big the QE package will be, rather than whether there will be a package or not. The market could easily turn on a dime at any moment...

When the market decides the game is up, it will be a massive sell-off. The VIX suggests something large is on the very near horizon.

The next couple of weeks will set the tone for the next few months - it will make viewing compulsory!

Thank you again for your post,

Bill


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billt
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Tuesday, October 12, 2010 - 07:36 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



High Frequency Trading - see where Mr Fat Fingers Lives!

http://www.cbsnews.com/8301-504803_162-20019067-10391709.html

The US 60 Minutes special on HFT's aired last night.

In the last four years that HFT computers have gone from 30% of total volume, to an incredible 70+% of the volume, and with the FED manipulating the bond/equity/gold markets lately, how can we have an even chance under these circumstances?

Next time someone uses ‘volume’ as an indicator be careful!

HFT provides liquidity but it also has the potential of producing Mr Fat Fingers and his 6 May Flash Crash of $4.1b .


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ehmu
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Tuesday, October 12, 2010 - 10:09 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The Bane of Technical Market Analysis

http://investmentwatchblog.com/the-bane-of-technical-market-analysis/


_____ n a m a s t e

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rdumas
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Tuesday, October 12, 2010 - 10:23 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Hal,

I don't know whether I would entirely agree with what that article suggests. It would depend on the particular algorithms were used to drive the buying and selling decisions. For example if the algorithms used the same pattern recognition mechanisms (ie, H&S, Cup and Handle, levels of support and resistance, trend channels, etc) that normal traders used (but do it faster) then it could in fact make the patterns self fulfilling prophesies and hence increase the likelihood of the patterns coming to fruition.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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paddy
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Tuesday, October 12, 2010 - 10:41 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Rudy / Hal : Besides pattern recognition I am sure they
work in very convoluted paths of EW patterns and
Fibonacci ratios down several levels .

The challenge is to try and work out and take action
to avoid what the motherboard is planning to "reward " the investors that lack a computer on the floor of the exchanges.

Paddy


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rdumas
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Tuesday, October 12, 2010 - 10:46 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Paddy,

I fully agree with you there. You have frequently shown the other 3M's that the US market gets to within 2 decimal points of hundreds of different Fibonacci levels throughout the course of the market cycle over a number of months......It ain't no accident.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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billt
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Tuesday, October 12, 2010 - 11:01 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Most of this HFA Trading happens over micro seconds, these algorithms are looking at price movements in fractions of seconds, not days or months.

Dropping a rough 30% to 70% line across the last 4 years of the SPX volume, and assuming the excessive circled peaks were the HFA doing 'Fat Finger' type trading, it is interesting to try to get a handle on what was the 'real' level of trading happening over the past four years, and in particular the last 12 to 24 months. Has the 'real' volume decreased alarmingly? Has the volume since April completely evaporated?

Will what we do as 'traders/investors' become 'prehistoric' in the years ahead - will it simply revert to Big Brother and who has the best computer and algorithm! Has it already happened - but no one has told us...:-)




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paint
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Tuesday, October 12, 2010 - 02:00 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



G'day,

BHP short playing out on the technical front: price action retreating back through the UBB, with confirmation from Chalkin MF, %R, and Slow Stoch all nicely rolling over. AUD also rolling over - watch for the breach of the 10 day MA which has provided support for the last month or so.

As you would have read China is tightening credit and placing a restriction on 2nd home investment. US futures indicating a nice fall. QE2 is now more than likely priced in and the spotlight should come back on US earnings and outlook and a potentially a lesser QE number. Potential currency wars should add some spice.

UBS FX team see the 10 year AU / US spread tightening approx 50bps.

Old shorts in play: NWS, JHX, WBC and CTX. New short in play (yesterday) QBE, BHP, and BXB. Closed SDL long today.






(Message edited by colin_twiggs on October 22, 2010)


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paint
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Tuesday, October 12, 2010 - 05:11 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



The battle is on!!

XJO still sitting comfortably in it uptrend channel, but the latest price action indicates a real battle between accumulation and distribution around the 200 SMA (which is still down sloping)


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ehmu
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Wednesday, October 13, 2010 - 04:40 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Interesting discussion link below.

Can you ignore Negative Divergences?


http://www.stocktiming.com/Tuesday-DailyMarketUpdate.htm


_____ n a m a s t e

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bridog
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Saturday, October 16, 2010 - 12:54 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hello there,

I usually leave it to others to comment on the US and Europe, but came across a web site called the diary of a mad hedge fund trader, its worth a visit. The guy is a US Charlie Atkins.

Here's an article that provided me an insite on unemployment and the future of jobs in the US:

1) Why the Nonfarm Payroll Figures are Meaningless. Let me warn you that reading this analysis about the September nonfarm payroll is a complete waste of your precious time. But since it’s a holiday, and you don’t feel like mowing the lawn, raking the leaves, or washing the car, please read on.

First, the dismal numbers. The Department of Labor reported a net loss of 95,000 jobs, leaving the unemployment rate at a lofty 9.6%. Private sector job gains were run over by the steamroller of 159,000 government job cuts, mostly at the state and local level. There was no change in average hourly earnings. There were gains in health care, business services, and leisure and hospitality, while there were cuts in construction, as always, and manufacturing. Some 14.8 million Americans remain unemployed, 6.1 million for six months or longer.

Now, for the reason I never bother to follow these numbers any more. If you add in discouraged workers, the underemployed, and those working part time who would rather be working full time, the true number of unemployed is closer to 30 million, or about one in five Americans. Never mind the statistics that the government pumps out monthly are meaningless. They have been for decades.

The real problem is that the economy is obliterating jobs far faster than anyone realizes. My guess is that over the past decade as many as 25 million jobs were exported to China and other low waged emerging markets by globally adept, bottom line oriented corporations. Tens of millions more have been vaporized by the relentless march of technology. How many elevator operators, radio repairmen, gas station attendants, or telephone operators have you met lately? Add to that a structural over employment by states and municipalities that will take a decade or two to unwind. The net is that none of these jobs are ever coming back.

My old UC Berkeley economic professor and friend, Robert Reich, told me a fascinating story the other day. After enticing a major European company with huge tax incentives, infrastructure gifts, zoning holidays, and who knows what else, a Midwestern state landed a new manufacturing plant. Since Bob was Clinton’s Labor Secretary, the governor invited him to the ribbon cutting ceremony. But before the festivities began, Bob ran inside for a quick tour. There were only 13 workers, all technicians, who manned the computers that operated the machinery. This facility replaced an earlier one that had once employed thousands. Bob threw up his hands and walked away.

What all this means is that the unemployment rate in the US is never going to recover to the heady 4%-5% rate of our youths. At best, we can grind down to maybe 7%-8% in coming years as the economy slowly recovers. Then, when the next recession hits, official unemployment will spike up to 15%, and the unofficial one to 25%-30%. This is why you’ll never hear a recommendation to buy retail or consumer spending stocks pass my lips. I watched Germany suffer through long term structural unemployment for a decade, and it is not a pretty picture, and that was with a huge social safety net in place which we lack.

Let me mention an inconvenient truth here. There is nothing either political party can do about this, despite the blustery promises made by all sides. You can offer all of the tax incentives and job training programs you want. It’s not going to make a bit of difference. The $250 billion in infrastructure in Obama’s stimulus package last year will at best employ a few tens of thousands and add a mere 0.5%-1.0% to GDP growth, hardly a dent in a $14 trillion economy. Even construction companies are becoming efficient in their labor management. You might as well be pissing in the ocean.

Bob gave me another insight into our jobs future. He recently compared at a list of job categories when he was Labor Secretary to the current one, and noticed that about a quarter of today’s jobs did not exist 20 years ago. Eventually, labor and jobs will come into balance through the acceleration of new technologies that create entire new industries, slowing population growth, and imported inflation depriving emerging markets from their cost advantage. That is how our jobless headache is going to end, but it is a decades long process, and certainly not worth losing sleep over the first Friday of every month. By then, I’ll be collecting social security, if it hasn’t gone broke. That’s why reading this article was a total waste of time.

Diary of a Mad Hedge Fund Trader


Old enough to know better . . .

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bridog
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Sunday, October 17, 2010 - 04:52 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Re: Recent posts of insiders selling out of DOW components.

That leaves the question, what did they do with their money? Hide it under the mattress? Put it into US bonds with the currency losing more than the interest rate? Surely not!

Maybe they bought gold or invested in commodities? Maybe they they sent it East? According to Charlie Aitken, quoting EPFR Global (whoever that is) US investors have withdrawn $36b from "western" stock market funds and invested $45b into emerging market funds.

Whatever the case, this maybe bearish for Wall Street, but will be positive for the area funds were transferred to. A zero sum game, really.

Just my thoughts


Old enough to know better . . .

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ehmu
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Monday, October 18, 2010 - 03:06 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Where is the smart money going ??

I am seeing many articles in the journals regarding acquisition of agricultural land recently. Specifically that large hedge funds have been accumulating land for about a year now---so what happens if the grab threatens the food supply of a nation -- this is a deep question ??

Here is one such article, a little old: (but I have seen a couple that focus specifically on Australian farm land)

http://www.independent.co.uk/news/business/analysis-and-features/land-grab-the-r ace-for-the-worlds-farmland-1677852.html




_____ n a m a s t e

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peterloh
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Monday, October 18, 2010 - 11:41 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



RED OCTOBER

I said in an earlier post that the stock market is full of surprises and October may even turn out to be a good month. I am the least surprise that October is the month that overcome the resistance level of 4700 of the XAO and stays above it.So far this month, we are still travelling in a channel NE bound, with a higher high and a higher low.
I am more confident now that there is no euphoria, that the market is moving up. On the whole people are pessimistic which is a typical set up in a bull market "as the bull climbs a wall of worries". I would have been less confident if everyone jumps in and are less cautious. If that is the situation, the market is still under value.
By the 28th of this month, the employers will have to pay in the SGC and the salary sacrifice of employees and some of this money will end up in Australian Equities. In a balance fund, we expect about 30% of the contribution to go into Australian equities. So prepare for a pleasant ride to the end of the year and it would be a good Christmas, if the equities market brings in the goodies.




-------------------------------------------------
Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.

The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.

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bridog
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Wednesday, October 20, 2010 - 10:27 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Maybe we starting the more or less expected October correction?


Old enough to know better . . .

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peterloh
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Wednesday, October 20, 2010 - 09:57 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Obviously, there is some one who disagree with my view, well this person can come out from the closet and put his or her opinion. As for me, I put my money where my mouth is, that is in the market.You need guts to do that gutless.Lets hear your views.


-------------------------------------------------
Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.

The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.

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bridog
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Thursday, October 21, 2010 - 03:06 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Peter, I wondered what the hell you were talking about, and then I noticed the one star above. You're right, its pretty pathetic to do that anonymously.

I'm sure it would not be from any regular contributors or use to be regular contributors.

By the way, where are they? C'mon Ody, Rudy, MM, Billt, Jaded and others . . your conversations are missed!


Old enough to know better . . .

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billt
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Thursday, October 21, 2010 - 07:41 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



hi Guys

I have been posting over on EWW, so still active!...

Sorry to see you were a bit miffed on the 'star' rating Peter, but that's one more than I have ever got!! - treat it as a compliment, as it might have been meant that way by a non-poster? (it wasn't me!) I read all your posts Peter - I learn a lot, as do many, so kept them coming.

THINGS YOU MAY HAVE MISSED FROM THE USA...

'US GDP Falling, Unemployment rising'....(if you say this often enough it makes it less painful - it actually seems positive - like 'oh, thank goodness everything is ok')

‘The economy grew sluggishly in recent weeks, with employers reluctant to hire or invest, the Federal Reserve said on Wednesday in a report that underscored a lack of inflation pressures. The U.S. central bank's Beige Book provided the latest evidence the economy is stuck a recovery too weak to generate new jobs....’

Mortgage Backed ‘Crap’

‘Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds’.

If this is the start of the process to recapture over usd$2 trillion of this worthless crap, then short the banks! (I have!) Many of the state courts are ruling that many banks do not have the correct 'title' to sell their asset - they bundled these securities into so many bundles and sold them on so many times, the paperwork was not all that it was meant to be. Imagine if the banks balance sheets are not supported by the already over inflated valuations of these assets. Imagine if the asset is $0. A third of houses for sale are from foreclosures. One in six households have negative equity in their homes.

..and back in ‘Fantasyland’

Building Permits continue to fall from 571k to 539k and MBA Mortgage Applications falling alarmingly from +14.6% to -10.5% this week.

What's all this telling you?

Will this rally continue...?

Uncle Ben wants it to - he has those printing presses ready to go to warp speed. 'A trillion here, a trillion there' - it doesn't really matter anymore....they can't pay it back, so who cares...

tick, tick, tick.....


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rdumas
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Thursday, October 21, 2010 - 07:42 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Peter,

Don't worry about the weakling that gave you the 1 star rating. On our threads those sort of people attract the contempt that they deserve from readers so they simply don't rate. Your views are always both welcome and valued.

Hi Bridog,

I tend to keep my posts on things fundamental for the Daily Bread thread and technical on the EWW thread which is why you haven't seen much of me here. I think that the same possibly applies to Bill so it's not that we have gone quiet, it's that we are posting in the house next door.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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peterloh
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Thursday, October 21, 2010 - 09:08 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Well guys, thank you for your support. It is not so much the one star rating, I feel that there is someone that has a chip over his shoulder. If so, please come out to the open and lets resolve it.
I do watch Bloomberg, CNBC and a host of others besides subscribing to a long list of journals. I no longer have the time to go into details but aware what is going on in the US, Europe and other states and am aware of the bearish sentiment around.We got to be careful, as the market does not always go in tune with the economic news.
As we know in charting, sentiment counts. Although I have presented a view which could be contrarian, you will find what I said is not completely baseless. I have been consistent in what I said, that if September turned out to be a different sort of month, don't be surprise that October will follow through and for good measure this will carry through to the end of the year at least. I notice that Rudy favours and that this rally may even extend to February. Coming from Rudy, it is a good confirmation as he is cautious in his approach.The other aspect is that the previous 2 years had been negative returns and it is unusual to have 3 in a row for the XAO.This scenario is very likely. If you mainly invest in the mid cap and small cap resources since last year, you will be thinking that you haven't been out of the Bull market.

Cheers,

Peter


-------------------------------------------------
Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis. It is not made in my professional capacity and should not be taken as advice.In my professional capacity I am only allowed to give advice on certain managed funds authorised by my license dealer.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. Please consult your stock broker or financial adviser in regard to your personal situation.

The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect.It should not be relied upon as a recommendation or forecast by the writer.

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billt
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Thursday, October 21, 2010 - 12:58 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Regarding my earlier post regarding US Financials. Note that the down trend continues for the Big Banks - a 10% correction in the last week.

The US market has rallied without the Financials leading the way...can a rally be sustained without them? Surely you can only count on Mr Apple to do so much...




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rdumas
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Thursday, October 21, 2010 - 02:55 pm:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Bill,

At present our XXJ isn't doing particularly well either. It will be interesting to see what happens when the price action gets near the ascending blue trend line. That will determine what happens over the last few weeks before Christmas.




Today the price action is below the 20, 50 and 150 day SMA's however that could obviously change if we get a bounce off the blue trend line.


I've given you my view based on what I know now. In another 5 minutes that view might change because of additional information. It's the best I can do - Rudy

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ody
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Friday, October 22, 2010 - 05:02 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Back to posting again ...

Haven't had the opportunity to for about ten days.

Share Peter Loh's irritation with the star system - just cannot understand why it should be kept.

As for markets, my view is that Europe is partly in economic recovery mode - Germany particularly - and thus reacting positively to the idea of buying shares.

In the US the situation remains very bad, but it is apparently expected that Bernanke will not print as much money as had been hoped by the bulls who eagerly bid up Wall Street in anticipation. Hence more money is going into the US dollar, and less into gold and Wall Street, which is also seriously worried about low employment figures, and lack of growth generally.

China by raising interest rates is indicating that it wishes to reduce economic activity. This, along with US developments, is inevitably affecting our share market negatively, and we are likely to continue to follow US and Chinese events rather than European ones.


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jaded
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Friday, October 22, 2010 - 07:07 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



paint-
can you put charts up One under the Other and NOT Side by Side?
S by S enlarges the thread.One needs to scroll right to left to read posts which,considering this thread gets a lot of lines in it,is 'bothersome'.

Hope you understand this?some computers apparently 'size' automatically.Anyhow mine doesn't and I put it down to oversize charts being posted from other than IC or,in paint's case IC charts Side by Side.

happy reading


" Hear what you Say...
But see what you Do!"

Sir Zelman Cowen c 1970.

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paint
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Friday, October 22, 2010 - 07:42 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Jaded - I'll try to do this, the program seems to default to side-by-side.

Seems as though there is some mumbling about the need / size of QE2 - maybe it is becoming apparent that the cheap funds are being used for more speculative purposes and being sent off-shore, rather than being injected into the real economy??


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jaded
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Post Number: 371
Registered: 03-2010

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Friday, October 22, 2010 - 08:05 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



rather than default side by side paint,
one has to press the enter button
after putting up first chart instead
of going straight to Upload again.
ie new line.

Couldn't work out your last sentence re QE2
personally I don't think much of offshore/emerging markets
they're a 'rort' by Institutions like AMP
to get ya money even though they [amp etc]
perform so badly in the Aust Based Funds.

I know it's considered High Faluting/a sign of Sophistication to 'dabble' OS Markets but,well,
I like to know as much as possible about the "Culture"
country and company and don't care that the market
in woop woop is really HOT.
i certainly wouldn't trust say AMP taking my money into Eastern Bloc countries awash with Billion$$ of d'Illicit Gains.

Like a hitman squad could come out and eliminate shareholders in a TakeOver Play!!!
Bet Shane Oliver never thought of that!!


" Hear what you Say...
But see what you Do!"

Sir Zelman Cowen c 1970.

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paint
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Username: paint

Post Number: 68
Registered: 08-2010

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Friday, October 22, 2010 - 09:31 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Jaded,

This article outlines some of the current thoughts of Fed decision makers http://imarketnews.com/node/21191

It would seem that there is a huge expectation that the FED will go on a massive buying spree in bond market, as the market has reacted with glee and driven short-end yields to record(?) lows.... which in turn has driven a global debt rally. It now seems as though money is moving out of the short-end further down the curve for 2 major reasons: is the current yield sustainable & is the FED going to buy as much as anticipated. Overnight the treasuries fell and the 30 yr bond rose. I also believe PIMCO has reduced Treasury exposure for the 3rd straight month and has switched into MBS (interesting.... I guess this is a sign that they are reasonably confident in US growth), they are also moving cash into EM debt.

So, I guess, as the market attempts to second guess what comes out of the FOMC meeting in early Nov Treasuries will become more volatile, and there is a real possibility that a 'sell-the-fact' correction could occur at this short end, especially if the FED under-delivers (based on parts of the US economy stabilising and growing)..... which would in essence increase borrowing costs for businesses and households - as such I believe the language will be reasonably open-ended to allow ongoing purchases to manage this part of the curve. These are the 3 questions that are discussed at the meeting: First Question: 1. How is the Economy Likely to Evolve in the Near and Medium Term? 2. First Question: How is the Economy Likely to Evolve in the Near and Medium Term? 3. How Should We Communicate our Actions?


The real issue however, in my mind, is whether a incredibly low yield will feed through to business expansion and household activity, or whether it is just a sweetener for asset bubbles...... seems odd that all asset classes are running at the same time....

There is no doubt this has been a dominate component in driving equity markets as investors search for a better yield.... and this has now become the common sales theme... the yield differential. US earnings have been reasonably solid on the whole but the outlook hasn't been that great.

In my mind the big issues over the next couple of weeks will be: 1. QE2 outcome and its impact on USD, 2. G20 meeting being a catalyst for protectionism / currency wars and the impact on the USD, 3. commodities are current VERY sensitive to USD movements............. I guess its all about the USD at the moment!

I'm happy to go against the current trend and get short BHP - technically looks like it has found some good resistance around $41.5 and has some headwinds (Potash, delays). Most brokers have increased their price targets on this recently due to strong commodity prices - but the buying has failed to push the stock higher.

Thanks for the tip on posting charts.



Cheers


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paint
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Username: paint

Post Number: 69
Registered: 08-2010

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Friday, October 22, 2010 - 10:28 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



More on BHP - make or break. BHP is currently forming an ascending triangle - which is bullish by definition. However looking at equivolume the down days have had heavier volume than the up days. If this ascending triangle is to play out it must break through the supply line ($41.7) very soon. If it fails I'm loading into the shorts, if is succeeds (ie break of $41.70 on solid volume) I'll close my short and go longbhp

Note: TMF has not confirmed the recent rally and MACD looks like it wants to exit the nose bleed section


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ody
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Username: ody

Post Number: 5416
Registered: 10-2006

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Friday, October 22, 2010 - 11:18 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thread posts difficult to read

I have to agree with jaded that it is a real nuisance to have to move one's image line after line if one is to read posts here just now. Can you explain, jaded, how this situation can be rectified? We have had it once or twice in the past, and I seem to recall that ultimately only the administrators were able to fix up the problem.







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ody
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Username: ody

Post Number: 5417
Registered: 10-2006

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Friday, October 22, 2010 - 11:23 am:Edit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



paint: BHP

I share your reservations about BHP, paint. Particularly once the joint venture with RIO collapsed, the news about and from BHP has exposed several weaknesses in the case of BHP, rather than RIO. It would not surprise me to see some significant switching out of the former into the latter. I certainly would not buy BHP just now, and it is possible that one could successfully short it, though it is certain still to have many fans, which would inhibit shorts too aggressively placed. Even so, some matters are definitely not going BHP's way, and it is increasingly clear that the phosphate deal is unlikely to succeed - it is in any case somewhat of a distraction from matters that BHP ought to get under control among its existing operations.

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