All Eyes on the G-String Meeting

[cwd]

My work system is a Dell that I added a dual monitor video card to so it can output to three monitors. 2 17 inch LCDs and one 20 inch lcd in the middle. I often bring in my laptop as well which is a lot faster than the company system and I normally run QuoteTracker on my laptop if I have it with me. If I don't bring it in, I use QT on one of the 17 inch displays. I do my work on the 20 inch monitor and use the other 17 inch monitor for email and browsing. When I have the laptop, I use the left monitor for work as well. Two of the monitors are mine, one is the company's.

 

On Wednesdays and Fridays, I'm remote so I just have my laptop and trading is near impossible as there simply isn't enough space for QT, a browser and my work stuff.

At home, I have a 24 inch monitor for work, a 17 inch monitor for email/browser and my laptop for quotetracker. My home environment is the best as it has a blazing fast machine, good speakers and sound card. I can turn the music up at home but I can't at the office. I could use headphones but I normally get interrupted a lot during the day and I don't like to take them off all the time.

 

<{POST_SNAPBACK}>

 

I trade from my measly laptop w/ a 14" screen.

 

I don't need more monitors or better equipment.

 

I need more training on identifying PigShanks, PigSetups, and Animal Planet Pattern Recognition.

 

<{POST_SNAPBACK}>

 

 

Right on. It ain't the computer, it is the pattern recognition.

<{POST_SNAPBACK}>

 

Well, some of us do have real jobs during the day, night and wee hours of the morning. I have to entertain others in my office for meetings or reviews and

get called to other offices during the day. Sometimes I have to review code

with someone at my station so having a dedicated monitor with everything on

it is nice as I can glance over at it while working on a problem.

 

I'm probably a little older than most folks here and I did wear glasses for about

ten or eleven years but don't need to anymore after going to larger monitors

or monitors where the resolution isn't as high.

 

Not having to wear glasses or deal with the problems associated with contact

lenses or vision changing due to circumstances is worth the expense of a week

of interest income. 17 inch lcd monitors are only $189 and those are the good

ones. 20 inch monitors (good ones from Dell) are only $400. 24 inch monitors

run around $700. It's better for my vision, I'm more productive in my job and

I can always see the market.

 

Some consider this a negative?

<{POST_SNAPBACK}>

 

 

I agree. I have a 20 in Dell monitor and love it, but unfortunately one must still recognize the setup.

[LeeWhee]

From Swenlin.  wndy'll like it. 

 

Our next chart is of the Rydex Cash Flow Ratio*, which I featured in an article two weeks ago. Note that the Ratio remains Dover Sole (reflecting strong bearish sentiment), in spite of the fact that prices have continued higher. The condition of the Ratio is caused by a combination of aggressive buying of bear funds and timid acquisition of bull funds. This situation is extremely unusual, and I believe it must be relieved before we can expect a significant price decline. Relief will come when the bears give up and the bulls become more aggressive, ultimately causing the Ratio to move back up toward the top its trading range.

 

 

Bottom Line: The significant aspect of the market being overbought is that it is probably not a good time to be adding new long positions. Also, more caution is appropriate while the overbought condition is being worked off. Otherwise, I think the Rydex Cash Flow Ratio strongly suggests that prices will move higher, even after internals begin to correct downward. In other words, I think that people need to become more bullish before the rally will end.

 

Technical analysis is a windsock, not a crystal ball. Be prepared to adjust your tactics if conditions change.  Swenlin Spotlite

<{POST_SNAPBACK}>

 

The Rydex chart is a conundrum. But perhaps, like many indicators, it no longer works the way it once did. Hard to say.

 

I do note that the Rydex Cash Flow Ratio was getting progressively more bearish as the SPX climbed from Dec-May. That was very unusual in itself since the Ratio generally moves higher with the market.

 

But that didn't stop the market from falling apart in May/Jun.

 

Could be that folks aren't using Rydex funds in the same way they used to with the advent of so many etfs and option strategies. Or it could be that most folks are primarily using Rydex as a downside hedge so the bull funds aren't getting much play. This might make the ratio seem overly bearish.

 

Who knows.

 

I do see that the chart jumped a bit higher in Jun/Jul but it has now flatlined. Somewhat similar in pattern---but not degree---to May-Aug05. The Ratio flatlined in Jun/Jul while the SPX moved a few % higher. Then a selloff came anyway.

 

Guess we'll find out if this chart is telling us anything anymore.

[jickiss]

jickiss is back!

 

and

 

 

well, since your jickiss is long GG on margin,

 

here is another jickiss chart,

 

it is entitled: "GG, a Gappy Manip, Would you short it?"

 

looks like some body was in a hurry to push this Beach Ball under the vast Waters near Water Street in Boyz hattin.

 

jickiss!

[beardrech]

Its late at night and so I must give myself permission to make remarks that just might be pertinent to the SM or completely OT.

 

As you know I've inclined to satirise the Attention deficit disordered speech mannerisms of our President, and was convinced,up until today, of my clinical accuracy--

 

But While witnessing his performance at todays press conference, I was absolutely knocked over by his rhetorical transformation--

 

Without any reasoing process of mine rationalising the above Im concluding that this man is vvery very very serious about bombarding the nuclear facilities in Iran--

 

There are many items I've noticed that would complement the above assertion but there's no need to go into them at this tme and place

 

A less pessimistic corollary to this pronunciamento is that Iran recognises his seriousness, and thusjust might capitualate and accept a deal--

 

The outcome,who knows the date--is either 12 cent a barrel of oil or $150 a barrel--

 

beardrech With Apologies

One other thing--perhaps the most significant statement by a Public figure, in the past two hundred years or more, was made today--and the under reporting of it was either counter-miraculous, or another sign of Stalinistic editing by R Murdoch and friends. I mean Benedict--we americans may be dumb but like Churchill said about democracy as a form of government compared to others, so do other kulchurs, when also compared with ours, come out looking much much more stupid than we naive Americans

 

I mean the absolutely dumb stupid mid-eastern response to the Pope--they could give a xxxt about a decent respect fot the opinion of mankind, and, because of that, they blew it ;Thank goodness

[cwd]

Message from Swami

 

Surplus oil will run off in 6 weeks; mid-october;then Gasoline will hit $2.20 for a week or two;then a relentess rise resumes, continuing on till next may at the least---Relentless rise is all I got: no specific figure --you be the judge

 

beardrech      Dont repeat this to a soul--Lets all look back and see how accurate this prophecy is--

<{POST_SNAPBACK}>

 

 

That sounds about right to me.

[beardrech]

jickiss is back!

 

and

 

 

well, since your jickiss is long GG on margin,

 

here is another jickiss chart,

 

it is entitled:? "GG, a Gappy Manip, Would you short it?"

 

looks like some body was in a hurry to push this Beach Ball under the vast Waters near Water Street in Boyz hattin.

 

jickiss!

<{POST_SNAPBACK}>

Jackiss

I believe it was you who said the crash tell would be when the Ten year T note would dip to 3,99 yield or less--I'm inclined to agree with you with the following proviso:that you factor in the current rate of inflation minus the rate of the T10 at the time...so that we dont make the mistake of reading the number (face Yield) of the, at the then current yield in Absolute and not relative terms--

 

The subtraction would be necessary before making a call--this is in likght of Marky Mark's post about the insatiable appetite for bonds of all sorts--as long as the Bond Mkt is the Boca Grande devouring every penny nickle and dime available all other investibles including gold will sit still--

 

but when that 399 hits alles ist verloren wir gehen herunter saying "What price glory now Kapitain Flagg???

beardrech

[LeeWhee]

jickiss is back!

 

and

 

 

well, since your jickiss is long GG on margin,

 

here is another jickiss chart,

 

it is entitled:  "GG, a Gappy Manip, Would you short it?"

 

looks like some body was in a hurry to push this Beach Ball under the vast Waters near Water Street in Boyz hattin.

 

jickiss!

<{POST_SNAPBACK}>

 

GG is sure one volatile feller. Since the May high, it's now down 46%. Ouch.

 

But it turns out this is nothing new for GG. It has had 40%+ selloffs every other year since the 1998 bottom:

 

1998: -40%

2000: -49%

2002: -48%

2004: -45%

2006: -46% so far

 

GG made a low this week at 22.46. It closed 2005 at 22.50. So even after falling 46% this year, it's still actually up on the year and only went negative by four cents. How 'bout dem apples?

 

Was 22.46 THE bottom or A bottom? Could very well be.

 

However, the true breakout level was 21.60. That was the top of the consolidation/congestion pattern from Sept-Dec05 b/w roughly 19.02-21.60. So conceivably it could go back to test the breakout at 21.60 or perhaps the midpoint of the congestion zone at around 20.45. There's even a small chart gap at 19.70 should it choose to go down there. That would represent a total decline of between 48%-53%, right in line with prior selloffs in 1998, 2000, 2002, 2004.

 

Of course, if May was the BIG TOP, then GG could fall much further, especially given that it's been a 25-bagger over the past 8 years. But at minimum, this congestion zone should spring a rally out of crazy ol' GG.

 

If GG were to actually fall thru the congestion zone below 19.03, that would be troubling. But it would likely get caught around 17.39-17.45. That was the Oct05 low as well as the Dec03 high. But that would represent a 58% decline, somewhat larger than any previous dump during GG's 8-year bull run.

 

A decline below 17.39-17.45 would be an ill omen indeed since the next obvious support is not until 11-12. But that is not today's business.

 

Given all this, I'd say GG is worth buying with gay abandon at 20.45-21.60. Or buy now with risk down to those levels. Any break of 20.45-21.60 that isn't recaptured rather quickly should be viewed with a modicum of suspicion.

 

One other oddity: the 50% retrace of the entire bull run from 1998 low ($1.60) to the 2006 high ($41.57) is $21.59. That's the exact same level of the Dec05 breakout that has not been re-tested since. Kinda spooky dooky.

[Captain's Log]

I know we mock the sheeple but this article hit home the ugly reality of how it will roll out. Johnson: Dreams ruined, he walks mortgage plank

 

"You know, I was living the American dream," Anthony Stewart says. "I had savings, stocks, was living in a nice home in a very nice community, and I always paid my bills.

 

"Now, I'm wiped out."

 

Bottom line of the article is that he refi'd to pay a $17,000 medical bill into an toxic mortgage. Messed up planning where his mortgage is $5k per month from $3k. It is about to go up to $7k and now is being forclosed upon. Even though you can criticise the lack of financial probity, you cannot but feel sorry for his kids.

 

Maybe his kids will grow up the better for it - less materialistic - and will become part of a future 'stuff money into the matress' generation. Perhaps the seeds of change in America ?

 

Either way this is going to be a period to remember.

[KamikazeFED]

The market environment is what the market environment is. And it is very much a creation of, as well as contributor to, the general financial backdrop - one that remains highly speculative and inflationary.

 

If the Bernanke Fed is relieved by ? or perhaps even celebratory of ? the decline in energy and commodity prices in conjunction with gains in stock and bond prices, I suggest to them that they should instead be extremely concerned with the unprecedented degree of speculation now pemeating U.S. and global securities markets.

 

Doug Noland

 

A Tightening Farce

The trouble in the U.S. case is that there never was any monetary tightening. There were many small rate hikes, and the Greenspan Fed had probably hoped that the higher costs of borrowing would exert some restraint on credit demand. But it has not happened. It was a vain hope.

 

The fact is that the credit expansion has sharply accelerated during these two years of rate hikes instead of decelerating. During 2004, when the Fed started its rate hike cycle, total credit, financial and nonfinancial, expanded by $2,800.8 billion. In the first quarter of 2006, it expanded at an annual rate of $4,392.8 billion.

 

Over the two years of so-called monetary tightening, the flow of new credit has effectively accelerated by 56%.

 

http://www.financialsense.com/editorials/d...2006/0915b.html

 

You'd have to be insane if you think markets will collapse at this junction. The Fed has just stopped it's farcical tightening. All risks remain to the upside.

 

Bernanke can throw away the keys to his helicopter.

 

It'll be funny to see him chase the runaway freight train. What a clown!

[DrStool]

I know we mock the sheeple but this article hit home the ugly reality of how it will roll out. Johnson: Dreams ruined, he walks mortgage plank

 

"You know, I was living the American dream," Anthony Stewart says. "I had savings, stocks, was living in a nice home in a very nice community, and I always paid my bills.

 

"Now, I'm wiped out."

 

Bottom line of the article is that he refi'd to pay a $17,000 medical bill into an toxic mortgage. Messed up planning where his mortgage is $5k per month from $3k. It is about to go up to $7k and now is being forclosed upon. Even though you can criticise the lack of financial probity, you cannot but feel sorry for his kids.

 

Maybe his kids will grow up the better for it - less materialistic - and will become part of a future 'stuff money into the matress' generation. Perhaps the seeds of change in America ?

 

Either way this is going to be a period to remember.

 

I have no sympathy for this guy. There was no excuse, NONE, not to have medical insurance. Instead he had stocks and fancy cars and a house he couldn't afford, yadda yadda, and then he looked for an easy way out of the mess he created. Well, I guess now They're just going to have to rent an apartment and live within their means.

 

The poor me victim thing just doesn't play here. People who deliberately choose to live beyond their means, and to not take care of the most basic of necessities, especially when they have kids, deserve no sympathy.

 

As ye sow, so shall ye reap.

[DrStool]

WSE Pro subscribers know I have been harping on the fact, week in and week out for over two years, that the Fed has never tightened. They have done absolutely nothing to restrict the growth of money or credit.

 

Ironically, now, the Fed must either tighten liquidity for the first time--that is not the same thing as raising rates-- or they must be willing to allow the Fed funds rate to drop, along with all other short term rates that have been dropping like a rock for the past 6 weeks. For them to even keep the Fed Funds rate at 5.25%, it's likely to require at least some degree of monetary tightening.

 

Tuesday is going to be very interesting.

 

Subscribe to the WSE Pro- Money, Liquidity and Real Estate service package and get the real story on what the Fed, Treasury, Foreign Central Banks and GSEs are doing every day to impact the markets.

 

Try the Professional Edition risk free for thirty days. Unbundled subscription service packages starting from as low as $39 for the daily Precious Metals service package! Click here for more information.

[beardrech]

I know we mock the sheeple but this article hit home the ugly reality of how it will roll out. Johnson: Dreams ruined, he walks mortgage plank

 

"You know, I was living the American dream," Anthony Stewart says. "I had savings, stocks, was living in a nice home in a very nice community, and I always paid my bills.

 

"Now, I'm wiped out."

 

Bottom line of the article is that he refi'd to pay a $17,000 medical bill into an toxic mortgage. Messed up planning where his mortgage is $5k per month from $3k. It is about to go up to $7k and now is being forclosed upon. Even though you can criticise the lack of financial probity, you cannot but feel sorry for his kids.

 

Maybe his kids will grow up the better for it - less materialistic - and will become part of a future 'stuff money into the matress' generation. Perhaps the seeds of change in America ?

 

Either way this is going to be a period to remember.

<{POST_SNAPBACK}>

Kaptan

Lets coin a new homily with grit--Failure follows success and Succsess follows failure:Unhappily they always skip a generation

 

Beardrech

[Tzu]

From Swenlin.? wndy'll like it.? 

 

Our next chart is of the Rydex Cash Flow Ratio*, which I featured in an article two weeks ago. Note that the Ratio remains Dover Sole (reflecting strong bearish sentiment), in spite of the fact that prices have continued higher. The condition of the Ratio is caused by a combination of aggressive buying of bear funds and timid acquisition of bull funds. This situation is extremely unusual, and I believe it must be relieved before we can expect a significant price decline. Relief will come when the bears give up and the bulls become more aggressive, ultimately causing the Ratio to move back up toward the top its trading range.

 

 

Bottom Line: The significant aspect of the market being overbought is that it is probably not a good time to be adding new long positions. Also, more caution is appropriate while the overbought condition is being worked off. Otherwise, I think the Rydex Cash Flow Ratio strongly suggests that prices will move higher, even after internals begin to correct downward. In other words, I think that people need to become more bullish before the rally will end.

 

Technical analysis is a windsock, not a crystal ball. Be prepared to adjust your tactics if conditions change.? Swenlin Spotlite

<{POST_SNAPBACK}>

 

The Rydex chart is a conundrum. But perhaps, like many indicators, it no longer works the way it once did. Hard to say.

 

I do note that the Rydex Cash Flow Ratio was getting progressively more bearish as the SPX climbed from Dec-May. That was very unusual in itself since the Ratio generally moves higher with the market.

 

But that didn't stop the market from falling apart in May/Jun.

 

Could be that folks aren't using Rydex funds in the same way they used to with the advent of so many etfs and option strategies. Or it could be that most folks are primarily using Rydex as a downside hedge so the bull funds aren't getting much play. This might make the ratio seem overly bearish.

 

Who knows.

 

I do see that the chart jumped a bit higher in Jun/Jul but it has now flatlined. Somewhat similar in pattern---but not degree---to May-Aug05. The Ratio flatlined in Jun/Jul while the SPX moved a few % higher. Then a selloff came anyway.

 

Guess we'll find out if this chart is telling us anything anymore.

<{POST_SNAPBACK}>

 

 

We have some some large numbers in the put/call ratio equate to some tops lately. With the put/call ratio at .57. the lowest in months as reported by wyndy, maybe that is a better signal.......unless of course it just dives to .3 or something...

[Tzu]

jickiss is back!

 

and

 

 

well, since your jickiss is long GG on margin,

 

here is another jickiss chart,

 

it is entitled:? "GG, a Gappy Manip, Would you short it?"

 

looks like some body was in a hurry to push this Beach Ball under the vast Waters near Water Street in Boyz hattin.

 

jickiss!

<{POST_SNAPBACK}>

 

GG is sure one volatile feller. Since the May high, it's now down 46%. Ouch.

 

But it turns out this is nothing new for GG. It has had 40%+ selloffs every other year since the 1998 bottom:

 

1998: -40%

2000: -49%

2002: -48%

2004: -45%

2006: -46% so far

 

GG made a low this week at 22.46. It closed 2005 at 22.50. So even after falling 46% this year, it's still actually up on the year and only went negative by four cents. How 'bout dem apples?

 

Was 22.46 THE bottom or A bottom? Could very well be.

 

However, the true breakout level was 21.60. That was the top of the consolidation/congestion pattern from Sept-Dec05 b/w roughly 19.02-21.60. So conceivably it could go back to test the breakout at 21.60 or perhaps the midpoint of the congestion zone at around 20.45. There's even a small chart gap at 19.70 should it choose to go down there. That would represent a total decline of between 48%-53%, right in line with prior selloffs in 1998, 2000, 2002, 2004.

 

Of course, if May was the BIG TOP, then GG could fall much further, especially given that it's been a 25-bagger over the past 8 years. But at minimum, this congestion zone should spring a rally out of crazy ol' GG.

 

If GG were to actually fall thru the congestion zone below 19.03, that would be troubling. But it would likely get caught around 17.39-17.45. That was the Oct05 low as well as the Dec03 high. But that would represent a 58% decline, somewhat larger than any previous dump during GG's 8-year bull run.

 

A decline below 17.39-17.45 would be an ill omen indeed since the next obvious support is not until 11-12. But that is not today's business.

 

Given all this, I'd say GG is worth buying with gay abandon at 20.45-21.60. Or buy now with risk down to those levels. Any break of 20.45-21.60 that isn't recaptured rather quickly should be viewed with a modicum of suspicion.

 

One other oddity: the 50% retrace of the entire bull run from 1998 low ($1.60) to the 2006 high ($41.57) is $21.59. That's the exact same level of the Dec05 breakout that has not been re-tested since. Kinda spooky dooky.

<{POST_SNAPBACK}>

 

Are the juniors the fly in the ointment? Some are still up HUGE over the last year. I am not sure about effects on the etfs,hui etc. and allocations but seems something to look out for.

examples

TRE 4.55 52 week low 2.21

EGO 4.18 2.55

GLG 37.55 18.99

 

The unexpected selloff catching many off gaurd had more to do with greed than anything else imo. How else can something up 200% in a year and absolute rage of people when mentioning they would go to the 200dma be explained?

Newtons Law effect seems to be in progress with this game.

[Tzu]

Any guesses on what happens if rates are cut? Seems the missing puzzle piece resolving where the market goes from here may be decided next week?