Wass Happenin?

I'm already stopped-out of ANH, and just got in NTRZ.

KKD is looking good, and the indices already did a headfake this morning.

Here's to an even lower-volume Christmas rally!!!

Crash Course

I recently discovered Chris Martensen's Crash Course lecture series. Here's an excellent explanation on how the Fed creates money:

Actual News Event Mistaken for Onion Video

I was watching the following video at work when my neighbor asked me if this was another Onion News Video. I don't know if that's more scary than the news itself! This news clip reminds me of the beginning of some of those movies where they would show the news footage back "before it all happened", if you know what I mean.

I couldn't get the video to embed, so CLICK HERE FOR VIDEO. It's the one about the mysterious missile launch off California last night.

Commodities were rocking this morning, looks kinda like they hit the tipping point. In honor of the oncoming Christmas spirit, I submit the following:

Kicking and Screaming

Can you spot the differences between the two images below?

I have never seen so many long-tail doji days all together like that, with decreasing volume to boot! This Market is hellbent on indecision, and is going to have to be dragged into making a decision, up or down.

I'd say they just "pulled a Congress", referring to the guys who just refused to pass a Budget before adjourning for Election Season, because they didn't want it to influence voters. Just like the conspiracy theorists (who are probably right) say that the Fed has been pumping the Indices in advance of Elections to boost the incumbants' chances. Looks like it's a fat chance now, and the excuse for this relentless melt-up is now due to frontrunning of QE II: The Wrath of Tim (Geitner).

I'm STILL short, and at a loss. Right now, I feel like quite the dumbass as I look at my P&L. But, since we're still flatlining in Index prices, I don't see any reason to pull out just yet. I've got a feeling that I'll get that climactic release by the end of this week, and I'll know if I'm smarter or dumber-er.

Is this all on the UUP and UUP?

So, I was looking at the blog and how often I have NOT been posting the past year. It's been very stressful with the combination of market ups and downs, President Obama and Congress officially cancelling my job, the Constellation Program, and the passing of my dear grandmother.

I come across a year-old chart of UUP that I posted, and almost thought that I was looking at today's chart! We're back to the same price levels, and the past year's data looked strikingly similar. I pulled up the current chart, marked up both for comparison, and posted below.

THEN:

I see a VERY DIFFERENT setup in today's action. Last year, there was a well-defined trendline that was eventually broken with supporting info from the indicators. There's a lot of up-pointing arrows on this first chart, showing positive divergence.

NOW:

Today's chart shows a year of much more wild behavior. While a similar trendline is respected, the other indicators aren't really giving any signals, all except volume. Volume is supporting hope for a bottoming out and reversal. We still need to penetrate (huh huh) that trendline, though. It's like a squished version of the first chart, more caffeinated and energetic. Another good sign is that price has gone above the 20-day MA. Let's see if it can cross the 50-MA.

Remember that this is an ETF that follows the Dollar Index. The whole world is in play here, and this is a simplified version of where the US is related to everyone else.

Another thing I noticed, Stockcharts.com has added price tags to the right side of their free charts in the past year. Sweet.

QE2 in Q4

The past two months of monster stock price rises are being attributed to inflation of stocks due to the falling dollar. The Fed has been pumping money by the billions daily into the world economy through POMO, and you can compare the inverse relationship between the Dollar Index to the S&P 500.

Traders are talking about just staying out of the market, and blaming all the noise on high frequency trading algorithms. And now I've heard two different guys in radio interviews claim that the rising prices aren't due to current POMO pumping, but due to anticipation of the upcoming Fed's Quantitative Easing, Part II; also known as QE2, or QE Lite.

I've been looking for turnaround signs to cause the market to dip back again, probably right after the elections on November 2. Marc Faber suggests that the signal won't be elections results, but the Fed announcement.

I am currently short, and I'm sweating for jumping in too soon! But the thing I'm starting to notice is that the Russel 2K is staying flat, while the Dow and S&P are fluctuating more wildly. There is a dissonance forming between the indices, and I think it's the cracks starting to form.

An Answer to the Previous Post

I found this video on etf-central.com recently. It shows that China is actually not THE big holder of our debt, but one of three. The "Other" category is supposed to be the rest of the world outside of the U.S.

Holders of Treasury Securities, 2004-2010 from Computational Legal Studies on Vimeo.

Staring Down Destiny

I thought I'd come back from the shadows to post this link to a very concerning video. It explains how I've been feeling for the past year or so, and how I have been approaching my investing. I am currently bearish, but cautious of the rising trend in the Indices due to POMO hand-pumping.

Nicolas Darvas

How I Made $2,000,000 in the Stock Market by Nicolas Darvas is my latest read. I just came across this line at the end of Chapter 3, and wanted to repeat it here:

"What, I asked myself, was the value of examining company reports, studying the industry outlook, the ratings, the price earnings ratios? The stock that saved me from disaster was one about which I knew nothing. I picked it for one reason only -- it seemed to be rising."

Greecy French Fries

My godmother recently passed away, leaving me with her interest in several assets. If given the chance to liquidate some of these assets at actual, par value, then I may finally get a chance to start that full-time investment company (a.k.a. hedgefund) that I've been planning. If that ever happens, I'm going to make my traders dress up like superheroes and work in a spacious office surrounded by computer equipment that I'll buy surplus from the 1960's. I think it'll look a little something like this:

Out of the xBox

Guess what I got for Christmas? Here's a hint:



Now that I've got first Prestige, level 70, and Fall camo for the Intervention, I figured I'd look at the charts again to try and make heads or tail of what's going on. Ok, ok, I've been watching the whole time. So, here's where I am right now:

I recently bought the dips on AVF, DMND, and ETW. I tried to get KKD on a second dip to 2.51, but it never happened and it took off while I watched in the cloud of dust. I'm still watching it, looking for a dip-buy opportunity.

I've already sold DMND for a quick profit, and I'm still watching it for a second entry opportunity. It looks like a rising wedge that's ready to break.

There's a limit order to dabble in some CNOA at $.90, which has been hovering at $.901 for 2 hours now.

The traders I listen to are trending in the positive direction for the markets right now. I don't know how they see it, but I'm trusting their judgement (with stops, of course) while I try to figure out what they're seeing. Meanwhile, I'll be studying the basics again to engrave Chart Patterns 101 in my mind.

Hat tip to Traderstewie for the training session:
Link Here

Cheers.

If anyone happens to read this, my XBOX Live tag is R4ND0M THR33.