Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.

J. P. Morgan

"Sell down to your sleeping point"

Wednesday, October 14, 2009

what makes me nervous

is that, so far there is no 5 wave pattern in this upswing...

on the dollar we are printing my 1.49 target


Tony said...

Well, the SPY has blown through overhead resistance if the 108.67 pre-market holds. New high.

The question I have is whether the INTC number is considered "organic" growth or merely the result of cost-cutting, and it will be interesting how this is interpreted.

If it's organic, then the dollar should recover with the market; If not, then I think that this shows the pump is primed other words, either way the inverse relationship between dollar and stocks should be broken. I think the dollar is bottomed and that represents the lowest price risk.... should benefit under any circumstance: economic recovery or risk aversion.

Tony said...

Oh, and I like your idea of looking at gold mining stocks for shorts. I'll look at some names today when i have time.... still digging out.

Eric said...

didn't you have a 1080 target for the spx?

the intc is some consumer. cost cutting but commercial they say is still weak.

but they are orgazuming about it.

Tony, you and I both know that most the economic "Growth" in the past 10 years is all weak dollar... Pretend/inflation growth.

so earnings will shall we say... "have to be earned".

I hope corporate america is up for it.... either that or they have to hope for a continuation of the weak dollar.

Tony said...

I can't help but think there is a real chance this is a double top in the SPY, but we are at BIG resistance and a breakout would void that thesis. I know you hate horiz resistance lines, but tell me that nobody is looking at this level right here. If it gets rejected, then it's game on for aversion.

Dollar: yes the stock price movement has all been weak dollar, that's beent he whole point of the "stimulus package" and "monetizing debt" and "quantitative easing", etc.

If I had a lot of debt, then geesh, yes I would want to devalue the currency in which that debt is denominated. But, it Geithner and Romer and Bernanke are all correct, the pump will be primed eventually and will start pumping profits.

If they are correct, then the INTC number may signify we are out of the woods...

If they are wrong, then we will get more risk aversion (Point E).

Either way, the dollar goes up.

Tony said...

One other thing to look at: LQD

This may be the 'tell' and it doesn't look good.

Eric said...

when have corporate forecasts been reliable.

it's possible all the people who's second computer broke last fall and winter put off buying new ones till this summer.

Corporate america will buy new computers when they have revenue to buy them.

You never understand what I think about Horizontal Resistance. I just think the greatest fools buy or sell breakouts there. Second to the people who get sucked into the trendline resistance buy sells.

the thing you know is that the market will go from where it is to either a horizontal or trendline resistance.... then it's a crap shoot, or a sentiment game.

the shorts will panic like mad this morning... worth some kind of intra day pull back...

Beyond that it's a crap shoot.... maybe a wave 5 in this upswing at the close... maybe we struggle higher and have a "10K breakout trap" on friday/monday... get it in all the papers...

but so many people are waiting for 10k to sell it.....

tough game.

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