What stage of the markets are we in.

Discussion in 'Trading' started by josephL, Jun 9, 2009.

  1. Nope. It’s not the mother of all bear market rallies. The market is doing the same thing it has for the last 100 years and the 35 I have been trading it. If you look at a monthly, weekly or daily chart of the Dow, the prices hang near the longer term moving averages as far back as you can see in bad conditions. For example we are now at the 200 day moving average for the Dow. But to move away from this average up or down we need a catalyst to get price moving one way or the other. Or it could be a summer in the index doldrums.
    #11     Jun 9, 2009
  2. So what's your position, then? Bear market rally or push to new highs?
    #12     Jun 9, 2009
  3. I have never predicted in ET but here’s my first market analysis. I trade cycles. In the near term my weekly and daily cycles for the indexes are at their peak (they can still move slightly higher) but are due for some down side action. The Money Flow indicators (Chaiken in particular) are also confirming funds are flowing out of the indexes. Value Line Geometric ($VGY)which I use as a proxy for the average trader is giving a number of divergences in indicators that may indicate downside action. Other indicators like the advance-decline and McClellan Oscillator, McClellan Summation and TRIN are in neutral.

    I do think it is a suckers rally even though the markets are testing the long term averages in this bear market. This rally just looks bigger because the volatility level is off the charts. I do see some downside but because summers here so I expect it to be a traders market unless the next set of earnings is out of line in July.
    #13     Jun 9, 2009
  4. piezoe


    [underlining and italics added.]

    Actually the US can create as much money as it wants, at least for awhile. The Treasury dept. prints up bonds then sells these to the Federal Reserve (or others). The Federal reserve can create money to buy the Treasury's bonds with the stroke of a pen. Now the Treasury has money that it spends. It can spend some of that money to pay interest on bonds already issued, and if there is some left over, it can spend it to buy advanced weapons that the Pentagon doesn't want. (The Pentagon is wrong of course, because these weapons will be pretty kool to use once we start World War III. Just ask a U.S. Senator.)

    This process of selling bonds to generate money out of thin air is called monetizing, and that's how the government plans to pay on the debt it has created by borrowing. The net result of borrowing and monetizing is inflation, which affects the economy much the same as direct taxation does, but it is politically much easier to pull off. Expect lots of inflation in coming years, and expect to do more vacationing in Haiti and Malawi and less in Paris and Madrid. Also expect the Secretary of the Treasury to travel around giving speeches and tell everyone he favors a "strong dollar."

    The Government, just as they create money out of thin air, will tell you that inflation has disappeared by calculating it away. Then they will not have to pay you as much interest on the TIPS you bought, and not have to increase spending on Social Security and Medicare as they would otherwise have to. But when you go to the store you will notice that inflation did not disappear and that the government has lied to you. :D
    #14     Jun 9, 2009
  5. josephL


    The only thing that we know for sure is that oil is going up and may its 100 dollar mark in the middle of the summers heat...this inturn will drive the CPI up with the tax on Tabbacco. We are basicly just in a cycle of relapse till inflation hits a higher peek...I want the market to crash so I can get some cheap equities :)
    #15     Jun 10, 2009