Bear Cave 2 (Bull Allowed)

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Monday, August 9, 2010
Nothing To Write About


As an aside its amusing how the crowd could not find an economic reason to get bullish so they are using QE 2.0 as an excuse. They always find an excuse to get bullish after the market is already up. They think they are "investing" but in reality they are following their primal instinct to be part of the herd. Have a good night.

http://capitalobserver.blogspot.com/
 
August 08, 2010
Moving Away from Conspicuous Consumption
The relentless consumerism of the good old days -- i.e., before the financial crisis hit -- seemed as natural as Apple pie. Now, though, it's becoming apparent that the spending habits of old were more a factor of cheap money economics and nonstop corporate propagandizing than an unavoidable human compulsion. Brought back to earth by a harsh new reality, many people are discovering, as the New York Times reports in "But Will It Make You Happy?" that there's more to life than borrowing and buying:

http://www.financialarmageddon.com/
 
Market Condition: Overbought




So much of this is theatrical.

At the root, it is about sending messages.

The Fed could also change the language coming out of their August 10 Open Market Committee Meeting to prove that they will fight deflation, keep interest rates near zero for an extended period, and even increase their inflation targets (the latter is unlikely at this time).
The jobs numbers this Friday could be determinative.

Still, Fed Chair Ben Bernanke didn't sound too interested in changing the central bank's policy in a speech yesterday.

He accurately described the crisis in state budgets, and then suggested the states should have increased rainy-day reserves (um, they had record reserves leading into the recession; it just happened to be an unfathomably large one).

Overall, Bernanke sounded upbeat yesterday.
It would be out of character for him to turn around and authorize a new monetary easing program.

--David Dayen, "Federal Reserve Finally Taking Double Dip, Deflation Seriously?", August 3, 2010.
 
An Important Note Of Caution

Tony recorded a quick message for you Tuesday (August 3rd, 2010), that he feels is very important for you to watch right now. It’s an important note of caution on today’s economy and 7 things to consider as you watch the stock ticker go up and down. Please view and share this timely update with anyone you care about.

How have you taken advantage of the economic season?

http://business.tonyrobbins.com/78/an-important-note-of-caution/
 
Tuesday, August 10, 2010
A Reason To Give In To Desire

When the market is rising participants want to find an "intellectual" reason to join the herd. Sentiment has stayed neutral to slightly positive as the horrendous data has not allowed participants to turn bullish to an extreme. QE 2 could give those fence sitters the intellectual excuse to follow their primal instinct of joining the herd. A rally that lasts into expiration with extreme sentiment would be an excellent short setup.

http://capitalobserver.blogspot.com/


Popular delusions began so early, spread so widely, and have lasted so long, that instead of two or three volumes, fifty would scarcely suffice to detail their history.
The present may be considered more of a miscellany of delusions than a history, a chapter only in the great and awful book of human folly which yet remains to be written, and which Porson once jestingly said he would write in five hundred volumes!

--Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds, 1841.




Market Condition: Overbought


"Patience is the companion of wisdom."
- Saint Augustine
 
It's the way I'm playing it.

Robo


Wednesday, August 11, 2010

Not Buying It


With the economy in such dire straits, I am only taking the lowest risk long setups. That would happen once the market is approaching maximum oversold. We are a long ways from that. That does not mean we won't get bounces or even that we wont rally to a higher high. It just means that I don't like the risk/reward setup so I won't be participating.


http://capitalobserver.blogspot.com/2010/08/not-buying-it.html
 
Wednesday, August 11, 2010
COILS IN S&P AND SILVER

We now have a volatility coil forming on the S&P and silver. Contrary to what one might think the initial move out of a coil, although it is often aggressive, usually ends up being a false move soon to be followed by a more powerful and durable move in the opposite direction.

http://www.smartmoneytracker.blogspot.com/
 
Wednesday, 11 August 2010
James Randi and the Seer-Sucker Illusion

Illusion is not Forecasting

Every day, across the world, people forecast the unforecastable and predict that markets will boom, or bust, or stagger sideways like a drunken sailor. Eventually one of their predictions comes true and gullible people everywhere equate this with foresight when, in fact, the forecaster has simply been slipping a note in their pocket each morning. In a world where everyone predicts everything occasionally someone’s going to be right.


http://www.psyfitec.com/2010/08/james-randi-and-seer-sucker-illusion.html
 
In Stunning Decision, EU Orders Germany To Start Onboarding "Bad Debt" To Sovereign Balance Sheet: RBS, Fannie, Freddie Next?
Submitted by Tyler Durden on 08/11/2010 11:57 -0500

In what could be the most important news of the day, German Die Zeit reports that, in a stunning move, the EU has ordered Germany to count the holdings of WestLB and Hypo Real Estate (the latter of which failed the stress farce from last month which nobody cares about or remembers anymore) as government debt!

http://www.zerohedge.com/article/st...-sovereign-balance-sheet-rbs-fannie-freddie-n
 
Market Condition: Neutral



One of the chief ways financial market participants make sense of events is by drawing parallels with the past.

The subprime crisis, when it first erupted, was widely perceived as the most dangerous financial crisis since the 1930s.

The implication was that it was critical to avoid the policy mistakes that transformed that earlier crisis into a macroeconomic disaster.

Specifically, it was important to avoid an excessively tight monetary policy.

Now, with inflation surging, the popular parallel is not the deflationary 1930s but the stagflationary 1970s.

Again the implication is that it is important for policymakers to avoid past mistakes.
This time, however, past mistakes means a monetary policy that allows inflation expectations to become unanchored.

In fact both analogies are misleading, precisely because market participants and policy makers are aware of this history.

Their awareness means that financial history never repeats itself in the same way.
Biochemists can replicate their experiments because molecules do not learn.

Central bankers lack this luxury.
--Barry Eichengreen, "Back to the 'Thirties with a Twist", August 30, 2008.
 
August 11, 2010
The S&P 500 closed the day down 2.82%, which is only fractionally above the intraday low.

The year-to-date performance is back in the red at -2.30%, following seven consecutive market days above the 2009 close. The index is 61.0% above the March 9 2009 closing low but 30.4% below the peak in October 2007.

http://dshort.com/
 
Snicker

Something occurred to me last night: remember how I used to point out how the Fed's prostituting itself kept having a shorter and shorter bullish effect on the market?

At first, the bullish effect last a few months.......then a month.......then a couple of weeks...then the effect could be measured in days......


http://slopeofhope.com/2010/08/snicker.html
 
I tried to watch CNBS “The Bull Crap Report” - I mean “The Kudlow Report”, but couldn't take Kudlow's comments..... His guest were pretty good, and most were fair - bull and bears, but Kudlow! Same old Pump Monkey....I'm looking to go long again also, but not because of anything I ever hear on CNBS and especially from Kudlow.
I think Tyler has it correct and he is a daily read for me. A site I don’t mind donating some Beer Money to.

Good Trading!

Robo


Contrary To CNBC's Persistent Lies, Volume Surges


Submitted by Tyler Durden on 08/11/2010 15:11 -0500

Bob PisaniReality


Another day, another desperate attempt by GE's propaganda branch to keep its viewers disconnected with reality. Case in point: Bob Pisani, who has now said about 100 times that "volume was very low, no bids were hit, etc, etc." The truth: yes to the latter, and a blatant lie on the former.


http://www.zerohedge.com/article/contrary-cnbcs-persistent-lies-volume-surges
 
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