A GOOD SIGN
I am sure there are a few readers of the blog here that have subscribed to LW's new trading service. He has had a very rough start. I would wager this might be the worst stretch of trading he has ever had. He has a position in the above market which I won't reveal exactly since that would be a violation of confidentiality. This trade is not doing well at the moment and appears headed for a loss. He has had a string of them and I am quite sure many people are bailing out on him right and left, which is too bad. I am also quite sure knowing him and also knowing his track record and skill level, that he will right the ship at some point. These people that are bailing out are the same people that sold their stocks in March of 09 and never bought back in.
I admit that I have gotten concerned due to some unusual activity that I have observed in markets where these trades have been done. I think it is mostly because most of the subs are 1 lotters who are not following the rules correctly, thus causing erratic volume surges. One very encouraging sign occurred just the other day. My friend I talk about from time to time, just bailed out on the service. He is a very good indicator to fade generally in trading. He is the epitome of someone who has success in other places but is seduced by trading. What he fails to realize is that knee jerk emotional reactions are what will kill you trading. These same gut impulses can serve you well in other types of ventures. He is so emotional trading that he will never succeed. I think it is time to double down since he just bailed. It is highly likely the service will get on a roll now. For those who might be down on LW I can tell you he is a man of the utmost integrity and I am sure he feels terrible about the performance thus far. I would ask people to give him a chance, I have seen him trade live enough times with real money and make large amounts consistently over and over.
I had the trend line that is on the above chart in here the other day and you can see we went right up to it and crashed back down. This market is at the seasonal low period so if it is able to get above that down trend line and change trends, this could be off to the races. It has not done so yet, if that line holds we could just keep going down.
Here is a market that is set up for a potential sell, the YEN.
The one thing that really jumps out at me here is the huge bullish sentiment reading that is in place, the blue line where I have the arrow. This is happening during a rally in a down trend which should make this a good selling opportunity. It appears to me the Dollar is about ready to rally so most currencies then will decline, if that takes place.
It appears to me that energies and stocks are a buy right at the moment on this dip, which should set up a potential end of the month top.
Since one market is basically a proxy for another now, the Crude setup might as well be the ES setup, risk on risk off as they are saying. Let's just go with it until it changes which it will at some point, but we have had this going on now for a couple of years or more, so it is not a flash in the pan. I think as long as the FED is manipulating prices this phenomenon is going to be in effect. I think that means until the economy gets better, which is not going to be any time soon. If Barry gets another quattro I would expect the economy to be bad for at least 4 more years or more. He may have done enough damage for it to be bad even if he is gone, he is that talented. I wish someone on FOX would interview a rich guy and ask him how many people he will hire each year per 100k Barry wants to take from him? To think that raising taxes as much as he wants to is not going to effect employment, is so ludicrous that nobody could be dumb enough to really believe that is a good idea.
If you are one of those people rooting against the rich people you are a moron. Has there ever been a great country that featured all poor people? Some people will always do better than others, trying to penalize those that are doing better is so preposterous I just can't believe anyone is dumb enough to think that is the solution. I have things that I do, and if that DB raises my taxes I will stop doing them and people that need help from people like me won't get it. Maybe it will have to be tough love to show these people. Maybe we should just step aside, let them makes us France. The DOW will go to 1500, then we can start all over again. Rich people hire poor people, poor people don't hire rich people. I have traded terribly for the last month or so, who is going to bail me out? I would not ever accept anything like that.
The wealth effect the stock market rally has brought has been helpful to the psyche of the american public, so that has been a good thing.
The next chart shows one big problem I see for stocks moving ahead.
This huge bullishness in small investors is a big problem that should lead to more of a decline than what we have seen so far. However, for the moment I think we are in buy the dip mode on a weekly basis until this really breaks. Once we bounce then it will be time to take another look at things.
There is no Bond trade for Monday, I warned you this system only trades 3 to 5 times a month.
Good Luck next week