Alceringa-interesting point-An E waver of note followed by the END and i noted that the run up was the most abnormal wave he had ever seen. Is that surprising with wave 3 down looming??? Irrational exuberance by every measure is higher now than at the top, sentiment higher than just before the 87 CRASH-for a wave 3 everyone has to be onboard and they are. What now pussycat? ooh oh ohoooo! Trade Safe!
Not to be outdone, the American Association of Individual Investors (AAII) survey released this week showed 71% bulls and just 9% bears. The bullish ratio of 89% is the second highest reading in the history of the survey going back to 1987. The highest bullish ratio reading ever recorded by this group was 92%. That occurred at the market top in August of 1987, which then led to the infamous "crash of '87". With sentiment running at extreme optimism, valuations back to bubble levels and Commercial Hedgers shifting dramatically to the short side, the picture is starting to look pretty risky for Larry Kudlow, Jim Cramer and the rest of the perma-bulls.
We saw a huge shift in the net positions of futures traders this past week following contract expiration last Friday. Commercial Hedgers are now heavily net short in both the S&P's and the Nasdaq, while Small Traders, the so-called "weak hands", are now heavily net long in both contracts. This is a radical one-week turn around and has decidedly negative implications for stocks over the intermediate term. Commercials typically "lead" the market by 1-3 weeks, so if they are right this time, we could see the market decline in earnest anytime soon.
If we do get a bounce on Monday, we don't expect much of a rally. The weekly trend has turned back down (lower highs and lower lows) and market internals are weakening.
If you are short already, no worries...this week's ST rally will be over quickly If you are looking to get short, no worries...this rally is a gift. If you are long, I'd be worried, very very worried.
Just watched Part II of "The Money Masters" linked by dmckin on Hyper's forum. Conclusion; Don't wish for a gold standard. International banks hold 90% of the world's gold. I assume this means they let it fly when they are good and ready .
Butter - can you post a link to moneymasters part 2 for me? I can't find it. Thanks
It's true, as you say, that "on the books" the CB's have 90% of the gold.
However, the more important statistic, as put forth by the excellent work by Frank Vennaroso, is "how much is actually in the vaults"?Turns out there is a pretty good chance that anywhere from 25% to 50% of the book amount has been leased to the open market, never to return.
It's dowry, baubbles, bracelets, pandas, and all sorts of things, but what it is NOT is bars within a CB vault.
Gold is the only investment I have which I am sure has a zero chance of turning into a big fat zero.
consider the gold carry trade - FED leases gold for 1% a year, lessee (maybe like JPM)sells gold that they have just leased (short sale) and invests proceeds in bonds at 3.5% to 4% and collects spread and then when FED drives bond prices higher (lowers yield), JPM also collects cap gains. everything works fine: the FED essentially lowered gold price, lessee makes big-time, low-risk dough, demand for bonds is energized, etc ... last i heard though, the swiss wanted a good chunk of their gold outta our vault - i wonder if its still there? higher gold prices, of course, will kill the lessee.
Iat least we're all safe for now. thank God we're in a bowling alley.
The unintended consequences caused by the cut of one-quarter point in Fed Funds last week, driving the yield on the 10 yr. Note to 3.542% (which must have caught the Fed totally by surprise) -- is almost one half point higher in a few weeks - will, at the margin, slowdown the purchasing of equities by the asset allocators.
When they return will they be called The California Raisins?
You, obviously, majored in philosophy...
Native Washingtonians can't STAND 'em. Call 'em CaliFORNi....OOOPS!!!
Butt (_)_) HRFF is an arriviste hisself. So he ain't throwin' no stones...
In Seattle u r what you DRIVE, it seems. Just like LALA land.
On Sat HRFF wandered across the street to git hisself a mint julep or two and sat down beside a black fella FURom Chicago and got to rappin' boud women here vs the Midwest/East. (BARE dated a Chicago gal FUR yearz and yearz, here, and this guy is hitched to one.)
The fella observed: "Seattle is California....only with the rain."
"The sphinx set riddles for people which they could not solve and the sphinx devoured them." Russian poet Ilia Ehrenberg reflecting years later upon the debacle of the Bolshevik Revolution and civil war
"In any case, experience shows people are unlikely to change their ways without a cataclysm of existential proportions" Meinhard Meigel, German economist and demography expert on his prophecy of a Wagnerian abyss of social and economic chaos
"We believe that here is no easy way out of this mess, and that the chance of a benign outcome, while hopefully possible, is quite low." Comstock Partners 3-17-2005
"Not without a shudder may the human hand reach into the mysterious urn of destiny." Junk email promoting the sale of Valium, Viagra, Soma and Cialis. Of course, we AMERICANS need not WORRY about such CLAPTRAP!!!
"The trouble about myths, or lies, is that those who foster them are stuck with them." Edward Crankshaw
"I don't buy the idea that a crash will come without warning. There are always warnings. All crashes have certain common technical preconditions." Doc (snorjt)
"YOU look IMPORTANT. Are you important, or just....WEIRD?" "Bob I am" at a political gathering, to HRFF, 9-29-04
"Are YOU C.I.A.???" "No, I'm not "CIA"." "Well, you sure LOOK LIKE you're C.I.A.!!!" Lead singer of the rock band KISS to HRFF at a luggage carousel at SeaTac airport circa 1996
"Unlike you, I use words people can understand." Doc
"America at the moment, with its faith-based currency, faith-based economy and faith-based government, might be a heaven for those who love faith, but it's a hell for those of us that respect evidence." The Daily (W?)Reckoning, circa 9-17-04
"What should be clear at this point is that even huge fiscal stimulus and unprecedented financial excess are incapable of fostering a sound and self-sustaining economic expansion. The paramount issue, today and going forward, is the deeply maladjusted U.S. economy and its increasing unresponsiveness to even enormous yet misdirected financial stimulus. Both the Financial Sphere and Economic Sphere are severely maladjusted." Doug Noland's Credit Bubble Bulletin, Aug 24 '04
"U.S. dollar purchasing power relies almost entirely on the difference between interest rates in Japan and the higher rates in the United States." Warren Pollock, Prudent Bear essay circa 9-04
"What about your replacements? the Children. What do we tell them when the whole thing caves in?" HyperTiger