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Tuesday, August 09, 2011


URBAN MYTHS



I was watching the FOX business channel while I was working out and although I hate to constantly pick on people for things like this I just can't help myself. The reason I point things like this out is that I don't like to see these "experts" steer people wrong. The comment was made that we need to watch the Asian markets because they give consistent advance notice of what will happen with our markets the next day. It seemed like every 10 minutes she went to give us updates on those markets. This was so strange, I watch this channel often and don't ever recall seeing this happen before. I thought to myself, ok self don't be such a know it all, take a look at this and see if those words of advice held water.

Above is the artist formerly known as the Bernake 30, he disassociated himself with his namesake at the end of June and you can see what has happened since. I have the Shanghai Index in purple on top of it. You can see there were a couple of instances where the Chinese market led the way and a couple where what it was telling us was dead wrong. Duh!!! I knew this was the case, but sometimes you just never know. I also recall in the old days a former CNBC host telling us always that the price of oil drove the stock market. Of course I knew that was crazy, and history proved my case there. I was writing my newsletter at the time and covered in great detail that relationship and it showed less than a 50% correlation.

Always seek out the truth, just don't do it via television, you will get the wrong story every single time. The fact of the matter is in general so goes the US so goes the world. We are the leaders and in spite of President Pinheads attempts to bring us down, we are still on top. After he leaves be it after one term or two, we will be much worse off than we were before him, of that there is no doubt. However, I still believe we will still be the leader. It may not seem like it now, and I think we have a bit more pain ahead of us in the next couple of months at least, but things will get better here.

You may remember my commenting on a certain service that called out a buy signal in China and I showed a chart on it. Well that was some buy signal wasn't it?





You now have a 14% loss on your hands, they wonder why I just sent them an email telling them to stop sending me this crap. What these guys all miss is the major point. They all predict the demise of the US and the rise of everyone else. This will never happen. When we fall on hard times, everyone else goes down. I don't care what color cardigan sweater some Ivy League puke is wearing at the cocktail party, if he starts running down this road, move to the part of the room with the hot chicks and get clear of him. Do not bother to debate him, these guys never learn. Just hang in there long enough to get the gist of his take, so you can look for trades in the opposite direction the next week.

As I have said over and over, do your own research and ignore all this noise. The markets right now appear to me to now be in this brief rally mode I predicted a day early, but I am fairly sure we have more downside coming. I think timing the next short on a bounce may be a bit tricky. If everything goes according to plan, we will bounce for a week or so, then setup a rollover trade. However if we follow recent paths from patterns like this we could have a very sharp bounce that ends with a small range day, then bam back down again. We never know and that is what makes things interesting.





Here is one of the past price patterns that the software found as a match to our current situation. This type of thing would not surprise me one bit, and if it does play out this way, it will not be easy to trade. The easy money was made for the time being I am afraid, but we never know. What we do know is that situations like we just had rarely happen and won't likely quickly repeat, even if we go much lower. It will not likely free fall like what we just saw. However, keep in mind now the trend is most decidedly down now. Sell rallies.


I am still watching for entries in Cocoa, Coffee on the long side and Hogs on the short side. I fear I may have missed the Hogs as they could just free fall here. However, the pattern so far has not been an obvious trade so I guess I will just miss this one. For tomorrow again it is day trading as the focus, I made good money today in Crude doing so.









4 comments:

Alain said...

Looked to cocoa today. As expected, we have a down move that should be limited. Trendline break >2950 'd be attract me to buy some units. Prices could add 10 - 15% from there...

ledzepSteve said...

http://iamafuturestrader.blogspot.com/2011/06/big-picture-i-have-been-reading-alot-of.html

Your big picture looks pretty damn accurate!

Trading systems said...

Such a impressive writing.
Wow i am new to this field but still you are really a good writer.
Keep posting more.

Anonymous said...

I believe what they may have meant on the news show is that trading elsewhere in the world gives clues as to how US markets will react in the short term. I.e. if the Asian markets open to huge declines, then things may well look ugly for US stocks when domestic markets open.