Wednesday, October 27, 2010

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.


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.


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, has added price tags to the right side of their free charts in the past year. Sweet.

Tuesday, October 26, 2010

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 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.

Friday, October 22, 2010

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.