Friday, June 29, 2012


I think at this point it is time to come forward with my inner monologue. I have had a thought in my head now for quite some time and here it is.

It has become time to ignore the short side of the markets indefinitely

I am sure most people reading are going to think I have lost my mind by making this statement. We know the economic situation is truly awful, nobody can argue that. However, what also cannot be argued is that every time we get a brief down move almost anywhere, it is immediately violently reversed with a seemingly bad story that should hasten the decline. Releasing a story about how more good money is being thrown away to feed socialism, is not a good situation. The story out of Europe about yet another bail out is horseshit. This will mean that the place it comes from will now be at risk as well. This is not good news that should send the markets flying upward. We are giving money to people who will never pay it back, it just poofed! All else being equal, that should pummel financial markets, yet it does not.

What happened yesterday in the US court system was shocking, a very bad omen for the whole world. The previously last standing place in the world that stood for freedom, no longer does. Essentially re-writing the bill for the democrats, the Supreme Court has now said that there is no limit to the taxing ability of the Congress. This is much worse them holding up the law on the basis of the challenge, the commerce clause. What we are seeing in New York with the 16 oz soda stuff, is now spreading everywhere. I have never witnessed a fundamental changing event in my life until the last few years, so from that perspective this is all very interesting. I do remember asking my dad what it was like when we dropped the bomb on Japan? How did he feel? It was such a history changing event, I was just so curious to try and re-enact it for myself so see how I would have felt. The reason was that things were so steady here, that I did not think such a life changing event would occur in my lifetime.

I was wrong.

The governments are taking over on a level I just never thought could ever be possible. How could they ever hope to control our every move? They have completely taken over the markets now. I plan to just use these brief periods of dips that occur for a month or two as places to position on the long side  and basically forget the short side from now on. This is just in my bigger picture views, I will still trade shorts on a short term basis but with a lease that is incredibly short. Sometimes you just have to admit when your opponent is getting over on you. They are getting over now, plain and simple.

They are establishing a new order and it does not involve us. We need to fight via voting, but short of civil unrest, which is going to follow as surely as the sun will rise tomorrow, they are going to keep pushing us down as far as they can.

We do know at some point this whole thing will implode, and I think it will be obvious when that happens. Until that time, I think it is entirely pointless to look for the big one on the down side, it ain't coming. They can buy futures like they did yesterday to reverse the decline in the last hour, then again do the same thing in the night session when the volume is lighter. There is nothing we can do to stop this right now, so go with it plain and simple.

This is not really a bad thing for traders, we now have a deck stacked in one direction in a way it has never been, this gives us a tremendous edge we need to exploit. How to buy these dips is up to individuals as to how you go about it. Sometimes they get deep like the recent one we have had, where it takes big stones to hold on that long.

Maybe a down type of post, but I am a realist, and I have to admit, they are getting over on us right now. The Scoreboard does not lie unlike someone else who does it frequently to all of us, as affirmed by the court.


Michael Tredr said...

this is exactly how I've been feeling these past two years - shorting the market was such a stab in the side of the head for me until I came to the same realization.

the thing that's ironic is that, people are so vehemently against any type of government control or "big brother" effect but then they turn around and post every little thing about their life on Facebook/Twitter. I mean, it's a choice in and of itself but it's also a subtle reflection of the kind of leaders they vote in.

CNN (of all places) published an op-ed a month ago from this guy whose subject was that people want Obama to be a King and not a President. I believe he's right - and I think this is where the fundamental shift you're talking about comes into full view.

I believe that in the fray of pacifism & multiculturalism, this great nation has lost its sense of civic responsibility and we are now beginning to see its effects in the capital markets - which, in its original form, is the dividend of the values that made us the nation we are.

Vikas said...

Chris, are you short today's rip in the ES_F? Pretty crazy. This is close to the levels you mentioned you were looking to sell.

PD Quig said...

I feel your pain, Chris. If November doesn't bring a cure, then America does not deserve to be saved. The first time around, it was plausible for 53.7% to say they did not know what kind of man Obama was. After 3.5 years there is no excuse.

If you're still on board with his program, then you are part of the problem and, yes, you must be destroyed. Notice that I did not say "defeated." I said--and mean--destroyed. The left must be wiped out. Politically exterminated. It is Nathan Hale time: either liberty or death. Or, as Reagan said in 1964...a time for choosing.

In the meantime I'm using automated systems to harvest this POS market and going to bed flat every night. Screw the Brian Sack's and 33 Liberty Street gang. They will go down in infamy.

Unknown said...

hi Chris,

I agree with you. It seems that "some powerful force" is keeping the market from falling. It sounds like a conspiracy theory but i do believe we are having it now.

Bonds had a large drop yesterday. However, at the moment, i still think the bond would just be best consolidating. It doesn't sound reasonable for the T-bond to slip downward quickly because that's not what US government wants either.

Anonymous said...

i do believe there is some powerful force intervened to keep the market from falling down further. It sounds like the conspiracy theory, doesn't it?

T-bond experienced a sharp drop yesterday due to stock market rally. However, i still think the T-bond to be consolidating rather than going to drop quickly as that would be against the US goverment interest.

Chris Johnston said...

No I am not short, and the way this move is looking it may turn my indicators back up. Even though we are in the sell zone on the weekly, I still have to have my short term things line up and they are looking bullish at the moment. Days like Friday tend to mess up short term indicators for a bit.

I think what is happening now is bigger than an election year. Quigs I completely agree. When you have a president who threatens the Supreme Court and they actually give in, you know we have some very serious problems right now. I suspect there were some conversations not so pleasant that happened somewhere in order to get the Chief to roll over.

It is the F You I won, and F you if you don't do what I say basically, regime.