Discussion in 'Trading' started by makloda, Jan 27, 2007.
Yeah yeah... entries??? exits???
You lose all the time, thats why we don't ever see you call them
Indexes. Up again. Say what?
the signals being sent from all the different multivaried markets around the globe is that global liquidity is at extreme highs.
this increases prices of all asset classes, stocks, bonds, commodities, in the end its stealth inflation.
so looking at the indexes and thinking its 'too high' will rob you of a golden opportunity.
most of price volatility is just jawboning. People trying hit each others stops. But in the end it all comes down to who has the most money and their agenda.
thats why bonds keep going up even with signs that the economy is not really that slow. Dont be surprised if the bond market rallies tommorrow on strong nfp numbers.
A short term top will be hit tommorrow. Next week will be stop runs on longs. With some downside range testing taking place.
massive global liquidity is the hardest thing to fight for anyone shorting popular asset classes.
I imagine (not a prediction, not a call, just doing some thinking) a market gapping up on nonfarm payrrolls tomorrow and then fading the gap. (nothing weird just a 5 points from highs)
Let's see what its going to happen but i think the situation reminds me a few months ago when the market made the highs just 10/15 min after the data came out and then we have a correction from "highs".
Liquidity is driving every market index in every country to new highs. Eventually this will dry up and when it does it should be no surprise to anyone.
How much more credit/debt will they pump into the system to keep these markets in the greatest bull run........ in HISTORY????
Demand for Debt Service
What happens when commodity prices zoom? Interest rates zoom.
Should interest rates pick up from here, it will not take much (as I have been saying) to put the so-called âsmokingâ economy into recession. Higher interest rates have a way of bringing debt holders to their knees. Over the years, itâs same old, same old. People who take on more debt have the need to service that debt, and when asset prices stop rising and bankers start calling loans, the jig is up.
Credit derivatives, of course, make everybody in the financing business seem secure. Wait until this cycle starts to unwind. Weâll see how many lenders stay in business. Governments that are presently allowing lending rules to change, with respect to permitting longer periods of non-performing loans, can only be carried so far. At some point the banks will cut bait, and full debt service will be demanded.
Pension debt is another issue today. The longer social payment plans go under-funded, the closer we get to a financial Armageddon. Yesterday, when the Fed Head, the President and the Treasury Secretary and their legion of shills were out pumping up financial asset prices, I didnât hear a single serious comment on the pension problemâ¦ Or the healthcare funding problemâ¦ Or the rising commodity price problemâ¦
But, with a single pump of the Treasury bond market, I heard lots of hype about falling bond yields. Ha ha ha.
This morningâs ISM Manufacturing Index gives rise to more questions about the Q406 +3.5% GDP growth number. So too did the housing data and the auto sales data.
The truth is that the credit balloon can only be blown up so far before it pops. I expect that popping sound sometime in the next two to six months. Meanwhile, I hope you focus on the Relative Strength Index numbers (i.e., those over 70 on the Monthly-Weekly-Daily) - particularly those companies that carry a lot of debt or bonds as asset holdings) - and that you can find the resolve to sell into strength, or at least switch into stocks of high quality companies that have M-W-D RSI values below 30. The latter will likely be the first to move higher in the next Bull market.
Stock Market % Gain in 2006
Venezuela Stock Market Index 159.06
Ho Chi Minh Index 146.26
Jakarta Composite Index 52.40
Indice Bolsa General 44.54
BSE SENSEX 30 Index 44.53
Mexico Bolsa Index 42.96
PSEi - Philippine SE IDX 41.37
WSE WIG Index 36.94
FTSE/JSE Africa All Shr. 35.74
Chile Stock Market General 34.42
Hang Seng Index 33.59
PSI General Index 32.43
Luxembourg LuxX Index 31.96
IBEX 35 Index 30.77
Straits Times Index 26.02
FTSE 250 Index 25.69
Kuala Lumpur Comp. Index 22.78
NZX 50 FF Gross Index 20.18
S&P/ASX 300 Index 19.03
Taiwan TAIEX Index 18.69
OMX Stockholm 30 Index 18.57
ASE General Index 18.41
IGBC General Index 17.82
Budapest Stock Exch. Index 16.67
OMX Helsinki Index 16.11
Milan MIB30 Index 16.03
NYSE Composite Index 15.50
Amex Composite Index 14.56
S&P/TSX Composite Index 12.82
OMX Copenhagen 20 Index 10.72
this cycle is bigger then the late 90's cycle. It doesnt end till the indexes print exponential curves.
its a massive pyramid scheme, where prices just feed on themselves.
its still pretty early in its lifespan. It has atleast 5 years more. Even if you catch a part of it, and understand the trends inherent in different markets, many will walk away with boat loads of wealth.
it will end in a great depression type collapse. But trying to pick a top will spell doom. If anyone has old tapes of march 2000 price action in the indexes study them.
withdrawal of liquidity is the only thing that can kill it. Its a lot of false wealth creation. The wealth is just on paper. But that paper is being used as collateral for real world consequences.
main themes are that:
1) paper will lose value
2) hard assets will gain value
there will be some downward attempts in oil, but those attempts will be fleeting. Gold will be the ultimate winner.
Everyone knows the wealth is being created on paper, however how long could this last, you say at least 5 more years. We are entering our 4th year in this bull run, I know anything could happen, but its hard to believe they will be able to continue to pump up the money supply for such a span of time.
As for GOLD, its making its way back up, someone must be ready for something.
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