July 11th, 2011
Hello
I mentioned past week that I was expecting a drop Thursday or Friday as the last chance to mount a correction. If the drop I said looks wimpy not gathering strenght we’ll go up big.
Well Friday the drop came.By the end of the day however it corrected more than one third of the drop.So today was a very telling day, having me on the fence, in the sense that could be powerfull enough to start a nice correction.
Meaning that the pressure to a downward move is gathering strenght so I’m more inclined to see action to the downside now with a caveat in the price action: the drop should be swift and continous from now on, not like what happened in May. The move down should be clean and fast.
If back and forth starts developing means that the drop ended. Is easier to follow a movement when is almost uninterrupted in one direction, as soon as stops acting that way I’ll get out.
And the last thing to keep in mind is that the move up that started in September I expected to last 10-14 months with no big drops. (July-Nov 2011)
Meaning that if this last chance to the downside that I mentioned past week starts getting strenght I would consider the up move since September finished and an entirely new cycle or pattern will start developing.
And of course an end to the Sep move means carte blanche for the market to drop a substantial amount. Of course the starting phase (since past Friday till this coming Thursday) should be very impulsive to the downside to consider in my view that a new cycle was born.Will see
Dan
Thks Dan. From a brief eyespotting, I for one don't want to see the 1261 line broken on the SP500.
ReplyDeleteWould definitely not bode well for people who hold stuff. Likely to make them "bagholders", I think, if this happens... :(
Thanks for weighing in, Dan! Interesting happenings, for sure. I'm thinking there are many more twists and turns (and rallies) along the way before things ultimately fall apart again next year.
ReplyDeleteHas anyone seen the bond vigilantes? I want to get their autographs.
ReplyDelete@emmy: They're bee-bopping around Europe trying to "bail" themselves out by taking public assets in exchange for the bad debt they doled out to uncreditworthy bankrupt nations. Last seen in Italy, moving onto Spain, Portugal after that. Where do they go after that?
ReplyDeleteSeems as if it's merely a preview of what's to come in the U.S. as everything gets privatized here as well. As Bruce Bartlett noted recently, it's back to the late 1800's, which was a glorious time for the wealthy. The rest of us? Not so much.
Meanwhile, here in Minny, we are well into week #2 of the government shutdown, which is actually, and ironically costing the state more money as a result. Heckuva a job political "leaders"!
ReplyDeleteEmmie - Hah! Good one. I've been wondering the same thing myself.
ReplyDeleteManny - better Minn than CA this year, our budget just squeaked by.
@Manny:"Where do they go after that"
ReplyDeleteChez bibi, j'en ai bien peur ....
At my place, I'm afraid ....
Very informal French, that is. :p
ReplyDelete@Wolfie: Neo-feudalism is upon us, I'm afraid.
ReplyDeleteIn other "news", a very profitable News Corp apparently not paying any taxes either, but receiving REFUNDS from Uncle Stupid in recent years. The beat(ings) go(es) on. But we KNOW the corporate tax rates are way too high in the U.S., right?
ReplyDeletehttp://www.zerohedge.com/article/over-past-4-years-news-corp-generated-104-billion-profits-and-received-48-billion-taxes-irs
This is a good article
ReplyDeletehttp://www.nakedcapitalism.com/2011/07/eurozone-leaders-fiddling-as-rome-starts-to-burn.html
I'd add our own "leaders" to this.
Does anyone care if I kill the flag counter thing? I never look at the thing and it's one of the blog plug-ins that slows the site down a bit. . .
ReplyDeletefrom the NC piece
ReplyDeleteIn my opinion Italy as well as UniCredit is in far, far worse shape than has so far been admitted. Italy has, I think, hidden debts in its Cities and regions, particularly those of the North. I think we will see ‘new’ debts surfacing, particularly if Berlusconi and or Tremonti goes.
I've often thought of this, that Berlosconi and his government have been lying and obfuscating for years on the true "health" of the Italian economy. Once he's out, I'll bet all kinds of Italian shenanigans will come to light.
Wolfie - do you think France is any difference? Are the banks there healthy?
@Thor,1:50PM: Sry, I'm not knowledgeable enough in that field. However, I guess all nations have so kind of "hidden" burdens. I feel in the end, "hidden" is just a different name for "not so official accounting rules".
ReplyDeleteOr maybe more accurate:"official rules and state of facts which you don't hear about in the MSM" ..(and which I for one wouldn't understand, too much sophisticated)
ReplyDeleteAnd honestly, no, I don't feel the banks are healthy. Not if PIGS fall.:(
ReplyDeleteTHor - I am somewhat ambigous about the flag counter, I think it is cool and how many people have shown up here and where they have come from, but we have a good idea of who the regulars are.
ReplyDeleteI think anyone who stops by our blog will see they have an open invite to comment on how they see fit regardless of where they are from.
So either way on the Flag Counter works for me.
Mangy Mutt
WolfStreet - Even if the PIIGS do not go down, I do not believe the banks are healthy.
ReplyDeleteWhether today, tomorrow or whenever,something eventually has to give with the PIIGS and the longer it takes the uglier it will be.
But the banks are in no better shape then they were 2 years ago, they are not healthy enuff to survive without hand outs.
Oh well what can we do about it?
Mangy Mutt
QE3 coming? What a shock. Not. No wonder why Mr. Market spiked recently today. Unreal. The global circus act continues....
ReplyDeletehttp://www.zerohedge.com/article/fed-minutes-released-some-fomc-members-think-qe3-would-be-appropriate
GREAT article - interesting stuff on Brazil as well.
ReplyDeletehttp://www.atimes.com/atimes/Global_Economy/MG13Dj01.html
Now as often happens it is beginning to appear that the Bear may merely have been premature. Brazil in particular looks to be in deep trouble. Under president Luiz Inacio Lula da Silva the country had an interesting mixture of an excellent monetary policy and an inferior fiscal policy, with interest rates firmly positive in real terms while the government persistently overspent.
The fiscal problem was masked for a number of years by the relentless global increase in commodity prices, which improved Brazil's balance of payments and allowed its public debt position to improve significantly as export revenues surged. Inflation, which would normally have become a serious problem in such a situation, was tamped down by the very high interest rates and the consequent strength of the real.
Then in 2010, as is often the case with center-left governments who have got lucky with the economy, Lula overdid the spending, as he attempted to secure election for his protege Dilma Rousseff. Not only did the official budget deficit widen by about 2% of gross domestic product (GDP), but the development bank BNDES went on a lending spree and the state corporate sector went wild with losses.
another good quote from the article -
ReplyDeleteWith "true" public debt probably around 100% of GDP, the country seems likely to fulfill the criteria set out in Kenneth Rogoff and Carmen Reinhart's magisterial book This Time Is Different for a serious banking crisis that produces an intractable recession, probably involving below-par economic growth for a decade or more. China seems to be in very much the same position as Japan in 1989, apparently invulnerable but in reality heading for a very large crash indeed. It does not make it easier that, unlike Japan in 1989, China has not yet attained Western standards of living, except for a relatively thin slice at the top.
On Flags, Remove it if it helps the load time. Fire fox and chrome routinely just spin when trying to refresh for the latest comments. I figure it's one of the plug-ins.
ReplyDeleteGreat post Dan. I think there are lots of 1% days ahead of us still. 1% days in my book is he range traveled for the trading day.
Todd - yeah, I think some of those plug-ins affect browser loading. I can disable them one by one until we find the one that's causing the delay.
ReplyDeleteWhen it hangs, do you see anything on the bottle left hand corner of your screen that also hangs? Sometimes the browser will show you what it's hanging on. . .
For instance, my browser is currently still trying to load googleads.g.doubleclick.net
ReplyDeleteYes, that is the one.
ReplyDelete@Thor
ReplyDeleteMutt put it in a good way so if someone resides in a distant land (from our relative position in the globe) will be nice if they mentioned what kind of conditions they are facing at the moment in their respective countries.The flags, if they cause trouble, just remove it.
Dan
done!
ReplyDelete@Thor: didn't notice trouble with loading the blog. I'm connecting from Paris suburbs (Versailles).
ReplyDeleteHowever, I'm totally in favor of removing plugins to try and see if it/they are responsible for the problems other fellows may encounter.
re Lag and googleads.g.doubleclick.net
ReplyDeleteSeems the freestockcharts widget is to blame here, as can be seen in Google Chrome developer's console.
Plus it seems it does lots of requests anyway. That may cause overloads for some fellows obviously.