... It's funny, I live the economy every day... and to wake up on sunday with the "Weekend warrior" economic debate on This week, and Meet the press.
there was a debate on "This week with George Steph.". Krugman was on, trying to talk sense into people.. Not that He has the answers, but it just seem obvious that anyone without their head up their ass knows that "You can't force the banks to lend."... I mean..
Ok, they are giving the banks money at 5%... and they want them to make mortgages at 5%... I mean.. where is the margin(ya I know in the leverage ratio.) but .. Ok... who do they loan to.... GE?
The interesting part is that.. there is a clear consensus out there that "Congress needs to Force the banks to loan". This has me spooked... I just think people think that this is the answer to the problem... More credit.
Mackey said Months ago... that the market needs to get so cheep that you know you are getting a bargain.
T-Lo put it this week Clearly in her rules for survival, that one follows the dumb money, but as the first lemming dissapears, it's good to stop following them. My thoughts are that seems like the trade on the next bounce is Materials and banks, tech.. Semi's. I'm not sure if this means buy gold or gold miners.... Gold just kills me, how counter intuitive it is... It even tends to be counter counter intutive.
Some thoughts on the market... One interesting thing is that there don't seem to be any bears.
Let's talk about market action... I've said in the past that the choppy action is sign of a turn.. What sometimes isn't said is that we "Sometimes have a choppy action before we leg down... After that Leg... Then we have a V bottom... and yet... sometimes it's a little different.
I also saw some Time series analysis which said we need 3 down bars to make a bottom... or 5
Sunday, January 25, 2009
Some morning reflections
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9 comments:
Saw Krugman and he was a man among children. Donaldson says that tax rebates are the only way go... like he's in disbelief that the market and the economy aren't coming back tomorrow and infrastructure will "take too long, maybe 12-18 months." Like what we need is for everyone to keep buying more plastic shit for their houses right NOW.
Krugman soberly informed Donaldson that the economy is not coming back soon-- this is a serious problem. We don't need more plastic shit from China, we need roads and bridges and telecom networks.
Fiorini said we should MAKE the banks lend money. Sure, then in 2 yrs we can come after them again and ask why the hell they lent money to soon-to-be unemployed workers in the teeth of a recession. Which b-school did Fiorini graduate from?
Gold is counter- counter- counter- intuitive. It's schizoid because there are so many irrational people trading it, hoarding it, burying it and such. That's why I don't trade it actively... I just hold it and trade around it very slowly maybe e very few months add or subtract from the core... Like T.Lo does in her strategic portfolio.
I'm not sure what the chop-chop means, leg up or leg down. Maybe a leg up that sucks people in, then a bigger leg down (that's my thesis.) Long staples and health, short GE and treasuries.
Damn... your are starting to think like me.
I think it's good to try and recognize how other folk are feeling.
there was a cartoon in the funnies about how democrats were trying to stimulate the stone age, in the face of the copper age. Somebody (the artist) has been listening to Joe Kiernan.
I have either some charts or maybe just an economic rant building up on me today...
I umn... It's raining here, and cold so I can't get a run in... Cooped up inside, and it's getting to me.
I figured you'd be sitting in front of ESPN-2 all day watching the Aussie Open with a half-chub.
LOL, Problem is all these matches were played last night, but they are about to start the next round in an hour or two.
What is awful is I fell asleep watching it last night, and would wake up every 2 hours or so and watch 15 minutes and go back to sleep.
That alize cornet is a cutie(but was beaten last night. dokich is a fair one....
Have I ever mentioned how I have this crazy thing for Navratilova?
Through all the grand slams I fall asleep watching tennis, and she is in my dreams a lot.
A couple random items:
1. Brian has some stock picks, might be worth looking at... that's how I got GERN last week. I wonder what you think. PSYS looks like a good short.
http://alphatrends.blogspot.com/2009/01/stock-trading-ideas-video-12509.html
2. Do you ever look at twitter? I followed a couple traders realtime last week and found it helpful... mainly because I'm still having trouble recognizing patterns. This one guy "upsidetrader" has some good insights.
Twitter: http://twitter.com/upsidetrader
website: http://upsidetrader.blogspot.com/
I wonder your thoughts.
One other thing about financials: they have less of an impact on the averages now that their stock prices and mkt caps have fallen so far.
http://www.aweber.com/b/10p8J
shhh I have no idea what twitter even is... I assume it's like instant messaging for a blog.
Any of them that I've looked at, have been... useless.
I sometimes wonder if the time I used to look at charts in the 5 tick per bar helped me.
Once the day progresses, I tend to move to 3 or 5 minute bars, but for the first say half hour I still look at 50 or 10 tick per bar charts.
It's interesting to conceptualize the Minute charts Vs the Tick charts.. It may be why I don't like horizontal resistance or pivots, because I still see the market as "Flow"...could be because I looked at tick charts for over a year.
What I'm getting at is that when you see the charts in such minute detail... You realize that the smaller timeframes make up the larger time frames. you also realize what makes a "Doji" as a chart pattern.
But when you see a pattern 20 times during the day on the 5 tick...I would think it would help you recognize them.
But like everything... You just have to keep looking. When I'm confused I just start drawing lines.... Also... Look at a bunch of time frames... That helps too. Look at the 5 minute the 3 the 1, Look at the 30's....
I'm not a fan of the 1 hour... The trading day can't be broken evenly into 1 hour timeframes... it leaves the chart short half of one Candle. or bar....
I sort of stick with Teresa, where I just want to know the MoMo Stocks. and play them accordingly.
You know Play RIG CVX TSO VLO for oil. COH KSS TGT for retail... BLA BLA BLA.....
Interesting thing.. Dennis was on this on friday about financials and impact on the market.
Something about only falling 300 or 600 pts if they went to Zero..
But also realize that is 300-600 pts to the upside... Just for 'C' to go from 3 to 6. and BAC to move from... 4-8.. Which seems possible.
Yes, for the market to go up 300 points, there has to be some major movement in financials, so the chances of a 300 up-day are getting remote. I guess IBM or XOM or MCD could make up the difference, but the odds get slimmer with the financials in the toilet. T.Lo has a chart somewhere with the percent gains needed to make up for various losses, such as if you lose 50% of the value of your stock, then it has to rise 100% in order to get back to zero. So for JPM to get back to it's 2006 valuation and thus help the DOW get back to 14K, it would have to quadruple. Unlikely.
What's "Doji"?
Easy there, I think you missed the point.
a 50% run in bac and C is probable in the next 2 months. Add that 300 pt run to whatever other movement we get out of other stocks... and we can get another good bear market 20% run.
doji are types of candles. there is a whole candle reading "ology"
http://www.incrediblecharts.com/technical/candlesticks.php
One thing T-Lo tries to point out.. is that we sort of want to prep for anything...
Kind of "if we make it over 84 spy then we will probably run to 88"
If not, we should have a straight shot down to into the 70's.
Instead of making a bet one way or the other, the thing to do is wait for the move, then act.
It's called Scalping, Where you are just looking for "larger moves" and if they happen you jump in and jump out.
If you can recognize the potential for those moves, just playing them is very profitable, and in fact more profitable than trading full market swings.
One tough thing for the morning on the bearish side, is that Mcdonalds reports in the morning I think... There is another report too...
Another "Headwind" on the bearish side. will be that we tend to trade up into the end of the month. and we are getting close
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