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B4 The Bell, Moonday, August 16


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:D Welcome to another week of trading, humor, insights, served with political barbs and what-not at B4 the Bell! :D B4 has as its central theme short-term trading, lead by the astute technician Brain4. But it is also about what ever members think affects that - in a cordial atmosphere of a 24/7 international family lounge.

 

It appears that the downward trends in place the last seven weeks may continue, but be alert to changes in trend sometime later this week.

 

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Here is a great summary on the state of the US$, from Machinehead, which he posted on Friday in MTM:

 

Robert Blumen's article "Debt and Delusion" will repay a careful reading. He outlines the logic of Peter Warburton's book of the same name, subtitled Central Bank Follies That Threaten Economic Disaster.

 

Debt and Delusion

 

The central thesis: during the past twenty years, there has been enormous inflation. However, it has been confined to asset inflation (stocks, bonds, and real estate). The distorted CPI and PPI measures (particularly with food and energy stripped out) pick up nothing but "price stability."

 

Warburton points out that before the Federal Reserve was created in 1913, the average shape of the yield curve was flat. On average, there was no premium for lending long instead of short.

 

The persistence of a steep yield curve for years at a time is indicative of the fire hose of carry trade liquidity that the central bank is artificially injecting into asset prices.

 

Now that foreigners have been sucked into financing America's $600 billion current account deficit, what we have is a worldwide government-sponsored Ponzi scheme, supporting monstrously overvalued, artificially-priced asset markets.

 

This can only end in tears. Only a massive floating supply of monopoly bubble money could have driven up oil prices by $20 a barrel in six months. This is more a function of dollars losing purchasing power, than of oil suddenly getting scarce.

 

The dollar remains the key to the asset bubble ... the fuel that nourishes and expands it. Uncle Buck cracked drastically from 89 to below 88 on the $56 billion trade deficit. Under 87 would be a multi-month low.

 

Ultimately, the U.S. Ponzi scheme ends like every previous Third World crack-up: with a currency crisis, a debt default, and a drastic rise in domestic prices. The "shop till you drop" set doesn't suddenly get thrifty. Instead, they are simply priced out of the market.

 

That's the way the cookie crumbles ...

Welcome also new forum members, your Rules of Engagement:

 

During trading hours, 9:30 AM to 4:00 PM eastern US time, please try to keep off-topic stories to a short size - or just provide a link to your discussion on LOB, Political Stool, whatever... Also please avoid negative comments about fellow posters. Make up your own mind about the credibility of various media sources linked here and do your own due diligence on individual stocks and trading techniques. If you don?t like someone?s views, skip to the next post! Tanks! ;)

 

Good trading! ;)

 

Hope those forum members in Florida make a speedy recovery.

 

Lake Wells, Florida:

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From a Saudi business school professor in Jeddah:

 

The most likely trigger for a reversal in foreign investment is the falling purchasing power of the dollar, especially in the market for oil.

 

These facts, combined with the skyrocketing, over 20 percent annual growth in "Super Money," mean investors must be on the lookout for rising commodity prices and higher interest rates.

 

Where US Interest Rates and Inflation Are Heading

 

Tres mauvais. The big, dumb vendors weren't supposed to catch on so quickly to our polished sleight-of-hand.

 

What are we gonna do, Al? Huh? Huh? :huh:

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Naz futs

GF, just about everything looks like that. I'm trying not to overthink it but, I have to ask "can it really be that easy"?

If these things don't work out (patterns and retracement levels) Why look at charts at all. Things are not that easy. This takes quite a bit of discipline.

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Naz futs

GF, just about everything looks like that. I'm trying not to overthink it but, I have to ask "can it really be that easy"?

If you've been open to the idea of a bounce for the past few weeks, well... there have been bullish divergences like this for over a week- making it very difficult to play. It could certainly grind a lot lower, especially because of the rollovers on the longer timeframes, but many bounce-players have been creamed in the past week.

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Stars In Alignment

 

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8:32am 08/16/04

 

U.S. Empire State index plunges to 12.6 in August By Greg Robb

WASHINGTON (CBS.MW) -- Manufacturing activity in the New York area slowed dramatically in August, the New York Federal Reserve Bank said Monday. The bank's Empire State Manufacturing index plunged to 12.6 in August from 35.6 in July. This index is at its lowest level since May 2003. But the index is still above zero, which indicate expansion. Aside from a slight dip in March, the Empire State index has been above 30 since last October. Economists were expecting the index to slip only to about 31.8 in August. The new orders index fell to 14.9 from 28.6 in July, while shipments fell to 11.9 from 34.0.

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Naz futs

GF, just about everything looks like that. I'm trying not to overthink it but, I have to ask "can it really be that easy"?

If these things don't work out (patterns and retracement levels) Why look at charts at all. Things are not that easy. This takes quite a bit of discipline.

Chart Patterns are not 100% reliable. Triangles don't always break in the direction of the trend. Bear and bull flags don't always do what they're suppose to. When I see everyone looking at the same 'very clear' patterns and saying "oh it's time for a bounce", It makes me step back for a minute and wonder if I'm missing something. Of course the probabilities say bounce, especially with both SPX and NDX sitting right on their 02 channel lines and the Dover Sole conditions. But I'll be on the lookout for failures. JMHO

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Also, its dzackly 13 weeks from the last low.

 

I continue to adhere to my same old same old boring forecast, which hasn't changed because the market has been staying between the lines.

 

Take a subscribatory and download your Anals now!

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