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Night Stool Weakend Edition


richmtn

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No Whining

 

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We don't know and neither do they. Doc

 

 

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CRB Index

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The Big One. Almost everthing at a glance. THE Big Picture.

The Big One

 

Money Flow and Mr. Market. Follow the Money.

 

 

TOCOM Heavy Metal and Commodes

 

 

 

Globex Flash Quotes

 

 

 

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Sorry this got soooooooo wide. Maybe the new software I'm testing.

 

The charts have gotten interesting for bears. The Nasduck looks very weak.

Can this be some form of reality check? Nah.

Week ended very weak. We'll see.

 

 

CAUTION remember your time frames. This chart has 30 minute bars. Short-term.

Intermediate-term players should use this to confirm their longer term time frames.

I'm using it to try to get insight into Monday's open.

 

post-1-1039881200.png

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Rich here are two good ones :grin: Anyone got more details from Arch?

 

I base my surmise on a planetary pattern that has always coincided with crashes

and/or panics going back to 1857. I hasten to add that not every time this pattern

has formed have markets crashed, but every time markets have crashed this

pattern has been extant. So I view the pattern as a kind of economic hurricane warning.

 

http://www.stariq.com/Main/Articles/P0004090.HTM

 

Last week, most of the world stock indices continued the declines that started the

prior week. Many have now given back a considerable amount of those gains

accrued between October 10 and December 2. All the major indices we follow

closed near their weekly lows on Friday, December 13. Some, like the Japanese

Nikkei, are now perilously close to the lows of October 10. This is important,

because as stated way back in October, the Nikkei may be on the verge of

mini-panic as it flirts with its lowest level in 19 years.

 

 

http://www.stariq.com/MarketWeek.HTM

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A VERY good interview. Highly recommended. Any of you familiar with him I was quite impressed?

Sounded like a stoolie! :D

 

Jim Dines -the 40 year stock market veteran- has been on a "sell" signal since 11-27-02.

In addition, he doesn't think the bear market is over, due to the current state of "mass psychology."

 

AegeanCapital interview by IKE

 

 

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1. A trend in motion will continue until it actually ends (DITREND).

 

2. When the trend is flat, dull, or unclear assume that the previous

clear trend has remained until proven otherwise (DITRULL).

 

 

3. A trend in motion overrules all "facts", "arguments", and "reason" (DITREMO).

 

4. An Uptrend is bullish and a Downtrend is bearish; don't think, look (DILOOK).

 

5. When in doubt, stay out (DIDOUT).

 

6. Dines Rule of Lost Leadership: When bull or bear stock-market leaders finally falter, the market

usually reverses direction (DROLL).

 

7. Dines Rule of Gold Countertrend: The price of gold tends to move generally opposite to the

rest of the stock market and the US dollar (DINOPA).

 

8. Dines Nature of Paradox: Overefforting for the wrong thing produces results opposite

from what was sought. That's why you never got the person you wanted, and never got rid of the

person you didn't want (DINOPA).

 

9. Dines Rule of Gold Seasonality: Gold shares are seasonally strongest in the first few months

of each new year (DIRGS).

 

10. Dines Wolfpack Theory: When a few stocks of an economically related group move in a certain

direction, the rest of the group will tend to follow that direction as "Confirmation." So buy laggards in

newly-leading groups. World markets will increasingly move in unison (DIWPAT).

 

There are 37 more of these wonderful "Dinesisms" ...

 

 

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Chapter 7 On What is the Gambler's Secret Desire to Lose Based? Is it Sex? 71

 

Does Money Lost Go to What We Call "Money Heaven"? 72

 

What is the "Secret Desire to Lose"? 76

 

 

Chapter 12 How to Understand Your Place in Different Types of Crowds 186

Mass Market Psychology 186

 

If the World Were Always Logical, Men Would Ride Sidesaddle 186

 

The Relationship of Sex to Investing 188

Men Seek Sex and Discover Love; Women Seek Love and Discover Sex 192

What is a "Crowd," a "Mass," and a "Public"? 199

How Does a Crowd Form? 203

The Cycle of the Mass in Motion 207

Blood Might Be Thicker Than Water, But Love is Thicker than Tar 207

Collective Definitions: Rumor, Legend, Gossip and Myth 211

A Lie Will Go Twice Around the World While the Truth is Still Getting Its Shoes On 211

Rising Stocks Creating Their Own Justifications 226

Mass Contagion 227

Imitation and Suggestibility 227

Contagion 229

The Dines Greed/Fear Oscillator (DIGFOI) 242

Fads and Fashions 242

Crazes and Binges 248

Demoralization, Panic, and the Return to Sanity 255

Practical Examples of Booms & Busts 263

Extraordinary Popular Delusions and the Madness of Crowds 263

Can "Hot New Issues" Make You Rich? 272

Is Wall Street Another Las Vegas? 275

Do Mysterious Cycles Run Wall Street? 278

Practical Applications of Mass Psychology 281

Approaching the Market Correctly 281

Common Sense Can Supercede Any Kind of Analysis 281

Chiseling Eighths is Too Expensive 286

"Denial" is More Than Merely a River in Egypt 289

Buy-Low-Sell-High, or BLSH 298

There is No Hitching Post in The Universe 301

Should You Average Down? 303

Should You Trade or Invest? 304

The "Secret of Women" is that They Only Want What They Think They Can't Have 304

How to Be A "Tape Reader" 319

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I posted this on Nov. 30, 2002.

 

 

Here's a weekly chart of the NASDAQ Bubble. I've tried to represent some

very long term cycles with the Rate Of Change indicator.

The 500 ROC is an attempt at the 20 year cycle and so on down.

The 1000 ROC seems to have shorted out the sites software.

It looks to me like it produced a 6 month cycle.

The point is that by superimposing them, whatever they really are,

it should show how all cycles peaked at the top of the bubble. Duh.

Don't look for peaks and valleys in these cycles this chart isn't anywhere

near big enough to show a full cycle in any but the suspected 6 month cycle.

 

Check out the lower right corner of the chart. By my eye and by

examining in closeup the data points there seems to be an upward bias to the lines.

Me no like. :-\

 

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***************************************************************

 

This is the same chart as of Friday Dec. 13, 2002.

That upward bias has turned down. Much more friendly to bears.

post-2-1039883996_thumb.jpg

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I may play the NASTY or NOT but I like looking at the S&P 500 because it's not so nuts.

Much easier to see what's going on. Less noise.

That said the NASTY seems to be the weak sister.

 

880 or Bust

We need to get thru that 880 major congestion area on the way to 860 and maybe , maybe....

 

Sto is the 10-13 week cycle.

ROC is 4-5 week cycle.

Looking good. :grin: :wink2: :grin:

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One of the stoolies was wondering why Fannie was going up when the

market was going down.

Fannie is slighly out of phase with the overall market.

I successfully played Fannie during the rally. Yeah somtimes I get it right.

She was weak during the rally and her 10-13 week cycle turned over early

and headed south. Now however her 10-13, 6-7 and 4-5 week cycles are in

an up phase along with the moving averages.

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If you have not read this yet do so. This is a must read.

 

Storm Watch Update from Jim Puplava

November 16, 2002

 

CRA$HMAKER

by Jim Puplava

 

Remembering Black Monday

 

Monday, October 19, 1987 was a day no one would forget. A storm appeared out of nowhere that

would wreak havoc on the world?s financial markets. By the end of the day, it looked as if the financial

system was headed for the abyss. In the words of one observer on the Street,

 

"This one came out of the blue. I didn?t expect it to be so bad?we froze around 3p.m. and just started

watching the screens. Even the phones stopped ringing. We were watching history in the making."

...

It was with trepidation that I awaited the opening of the market the following day. Fortunately for

myself and my employees, an unnamed buyer showed up and started buying in the futures market in a

major way. The "Plunge Protection Team" had been born. The large intervention by this unnamed buyer

helped to turn the markets around. President Reagan addressed the nation and said all was well and

the nation believed him. The markets recovered. Behind the scenes, the new Fed Chairman, Alan

Greenspan, began a round of shuttle diplomacy among central bankers in a coordinated effort to rescue

the markets. It seemed to work. Asian markets reopened and U.S. stocks went on to rally, closing out

the year with about a 6 percent gain.

...

The stock market and the bond market began to decouple. The plunge in interest rates since 2001 and

the drop in the stock market is a good example of this decoupling. Other relationships, such as gold

leading commodity prices, became muted after 1994. Inflation was viewed differently. What is not

understood in western economies is that inflation moved from the real economy of ?things? to the

financial system (paper), especially here in the U.S. in the form of asset bubbles. Rising asset prices are

no longer considered inflationary. When stock prices go up more than 20 percent a year for five years or

when housing prices go up 20-30 percent, this is considered the good fortune from benevolent

government leadership. The ?new era,? ?new paradigm? shibboleth?s of the 90?s was simply the spin

that justified the inflationary asset bubble.

 

Much Much More

 

****************************

 

The Perfect Financial Storm??

 

Financial Storms Heading Towards The U.S. Economy

? Copyright 2000-2002 James J. Puplava

 

The Big Picture

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This seems like a good point to review the commodities discussion.

 

Now I think I see why MH has been all over this.

 

SharpChartv05.ServletDriver?chart=$crb,uu[l,a]waolnnay[d19970101,20021231][pb39!c19,-3][iud26!uv25!lh75,18!la12,26,9].gif

 

Chart courtesy of www.contraryinvestor.com

 

Very cool chart. :grin: :wink2: :grin:

Machinhead if you read this would you care to comment.

 

crband10yrust112202.png

 

The red line now on top is the CRB.

 

*********************************

 

Machinehead responds:

 

richmtn

 

Thanks for the excellent charts. Here is a PDF chart of the CRB index of 17 commodity futures, going

back to the 1970s:

 

http://www.mrci.com/pdf/cr.pdf

 

After the great Jan. 1980 record high of 337.60, the CRB made four subsequent lower highs, the last

one being a triple top in the 232-234 range during Oct. 2000 to Feb. 2001. Today's dramatic breakout in

gold over $330 brought the CRB right to the edge of the 234 resistance. A rise beyond 234 would break

the long stairstep downtrend and establish a higher high for the first time in 22 years.

 

What was missing today was breadth. Yes, the concept of breadth applies in commods too. Today's

strength came from precious metals and energy. Other sectors - softs, industrials, grains, etc. - were

flat to down. A convincing breakout would mean not just a move through 234, but across-the-board

strength in commodities, materials, commodity-related bourses such as Canada, Australia and many

Asian markets, and commodity-related currencies (same countries).

 

What we're looking for is flashover -- when a roomful of superheated gases ignites from one end to the

other in a big whoosh. The inflation flashover will be a point of psychological recognition -- a belated,

seemingly overnight realization that deflation is not the problem. Rather, spiraling prices, costs and

taxes are eating us alive, and it's quickly getting worse. Doc alludes to this in the Anals tonight.

 

When inflation flashover occurs (probably together with a crumbling dollar), bond yields will rocket

higher. At that point, no amount of tightening - 5%, 10%, even 15% T-bill yields -- will brake the slide of

the dollar.

 

For deflation to prevail, the rise in PMs and energy must turn out to be a flash in the pan. The dollar

must strengthen, and the Fed must fall asleep at the switch, nodding, drooling and mumbling. Moreover,

the GSEs must turn tail and run from the housing market. It's not impossible -- it happened in the

1930s -- but it's hard to believe the interventionist authorities are going to let it happen again. For so

many reasons, inflation better suits their interests.

 

********************************************

 

Jorma replies:

 

Nice assessment MH. We have been blinded somewhat by the absurd CPI regime constructed over the

years to downplay inflation. That is the evil government I suppose, but urged on by it's most important

clients.

 

As always the dollar is the author of this story. So it was in the 70's and so will it be in the future.

Inflation caused by market forces as described in Econ 101 is a mirage, a straw man. It is possible in

commodities from time to time but in the world of manufactured goods it essentially never happens.

 

Oil is a big dog in the CRB and as we know this baby could do a moonshot almost anytime. This is the

one thing that would cause the recognition you speak of almost instantaneously. Currently there is

much hope that the ME situation will resove itself in our favor (speaking simply in brutal oil supply terms)

and eliminate this uncertainty. This is THE official administration story. If you were a bigwig who got

breifings from the WH that is what you would hear. Could happen I suppose. It almost has to happen,

or else. The lack of discussion about at least the possibility of an oil shock is possibly the number one

example of wishful thinking.

 

Always complicating this discussion is the fact that financial assets are usually never considered to be

inflating or deflating. A fatal error. We stoolies know, paper is going down, one way or another. I even

think in terms of falling bond prices (rising rates) as deflationary. So yes I am in the school that says we

can have both inflation and deflation.

 

**********************************

 

MH:

 

"I even think in terms of falling bond prices (rising rates) as deflationary." - Jorma

 

Mainstream economists have totally missed this issue, but stoolie Jorma has not.

 

In the 1870s to 1890s when very little monetary gold was added to the Treasury, the gold-backed

dollar got more valuable and deflation ensued. Farmers and ranchers were crushed. After the South

African gold discovery, monetary gold holdings increased and a mild inflation started in the early 1900s.

 

Now we have a bond-backed dollar. Both bond prices and bond supply (Fed holdings of Treasury

obligations on its balance sheet) are pertinent.

 

During the 1970s, bond prices declined drastically as rates rose. You can't directly exchange your FRNs

for T-notes at the Fed, but you can do it via Treasury auctions. What is the result? Does the shrinking

value of its paper backing make each dollar less valauble, thus stoking inflation? Or does the shrinking

aggregate quantity of currency make each dollar more valuable (deflation)? Or since FRNs and

Treasuries are both paper assets, do they devalue at the same rate?

 

Bear in mind that the Fed's holdings of Treasuries were sharply increased in the 1970s, so two factors

(value and supply) were changing at once. And it probably will happen again from here on.

Macroeconomics is not a true science because to date it has been impossible to conduct real-life

experiments where only one variable is changed whilst the others are held constant. Economists try to

extract significance from one-off events and multivariate correlations. But it doesn't work all that well.

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This happened to Rich several years ago. The only good news is

that it's portable and you can get control.

In a worst case senario that would be a good thing.

 

nytlogoleft_article.gif

 

It May Be Time to Plumb Your Pension's Depths

By MARY WILLIAMS WALSH

 

AT least 23 million Americans work for companies that offer

traditional pension plans ? the kind that provide a fixed monthly income

based on length of service. For many of them, the pension regulations

proposed last week by the Bush administration pose a threat to their

future retirement. The new rules would make it easier for cost-conscious

companies to switch to another type of pension plan that would shrink

their pension liabilities, reducing some employees' benefits.

 

"The switch to a cash-balance plan is tantamount to a pension pay cut for

older workers unless they get adequate transition protection," said J. Mark Iwry,

former benefits tax counsel at the Treasury Department during the Clinton administration.

 

Article...

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