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"

Friday, January 1, 2010


I should work harder on this blog. I could actually get readers. The biggest problem is; then I'd have readers.

The discussion Tony and I have been having has to do with the swing. Both of us are in agreement that there is a Swing here. Of course, if you can't see that in the market action over the past few days. You are Blind.

The discussion is, if it's an Intermediate high.

My biggest problem is, that this has been the most Wildly called top/swing ever. Tony asked who has been talking about it. Ritholtz is hinting at it, Cobra wasn't fooled, Some of the EWT counters are on it, there are 4 other random Blogs I've seen, on it. Kotick did a whole CNBC segment on it.

If it were 2 or 3 of them, I could say they are Outliers. Sure a few of them are saying it based on Thursday market action. I'd also mention that it's also exactly what happened last year. Emotional Memory, Recency bias... Etc...

But I also could say, that the same thing could have been said last year. Also, we can make the argument that in the land of Impossible pricing models, Blind following the blind, is a legitimate Strategy

My conclusion is this; these signs warrant Caution, that is all I can say. Be on your Toes.


Tony said...

Well, the Thu pm end-of-year sell off may be the only swing down we get here.

And sure, we could get yet another swing high next week with the start of a Jan effect.

But the swings are getting smaller and smaller, which is following T.Lo's rising wedge scenario--- on lower and lower volume.

There will be a volume "spike" once the adults come back next week, and the interesting thing will be to see if "they" sell this beast.

As I sit here, I feel like the market is a big Shroedinger's cat-- the market is either going to sell of or spike higher with volume.

The big boys are all at their cocktail parties this weekend and they already know what they are going to do at 930am Monday. Buy or sell orders are all written and waiting only to be entered.

The diabolical thing would be for a spike higher Monday and even Tues am, which brings in more retail money. Then a melt-down Wed thru Fri... leaving everyone scratching their heads next weekend.

Eric said...

I think the Really diablical thing would be for the traders to come in and sell if for "Some time".. a few sessions... a week or two.

Then for it to spike on everybody.

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