Wednesday, March 10, 2010

ITS OFFICIAL ...NO BID MARKET!

Many retail traders have decried the obvious market manipulation that has transpired to restore air into the bubble. The ultimate moral hazard for those that play in "the game" is that a no bid market is achieved as a consequence of this interference. In other words the big boys participating..ie mutual funds and hedges...become frozen. They are in the position now to commit more money to a frothy moarket that has risen 70% from its low just a year ago.....or more prudently take some profit. Unless you own a fund that is locked into being long at full investment....then WHY WOULD YOU STAY LONG HERE.So logically it makes sense for this market to correct....but it doesn't. It continues its steady ascent to glory unabated by the typical forces in a "free market".

Are we in a "no bid" market? The short answer is NO. The longer answer is more complex. This entire exercise beginning back as far as late 2008 was constructed as an effort to reinvigorate CONfidence in our market system and aid in the effort to establish an increase in the velocity of money. Printing money alone was not going to work. The plan was developed over a period of several months.....including the carefully crafted market "bottom" in March of last year. We as retail schmucks are supposed to see this as an affirmation of a recovering global economy. Even though the "real news" is painting a very mixed picture. Of course the daily news is contrived to assist this effort and will continue to do so until the absolute collapse of this effort occurs.

My post last night was not to say we are going to a Dow of 13000. It is only another point of view on how this COULD play out. I do not know the answer and neither do any of you.....including Joe. I am sure he will agree. But one thing many of us believe and that is ultimately deflation overall, will have to clean out the system. Prior to this many events can transpire, and that is why we have our arguments on this blog. Our goal here is to debate this and provide ideas for you to make your investment decisions...

Right now I am looking at DTO. If they push it to 85 I will add. Real tuff stuff.gl

15 comments:

  1. Kli...all I know is I've never been so confused! Thanks to all of you that post..TexasBondie

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  2. I think I may have said that wrong..I'm not confused because of the many insightful posts I read here...Just thanking you guys for posting your thoughts...TXB

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  3. Nice turn around by DTO, what a gap!

    Joe

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  4. Caught it!! YEAH!! In at 60.59 out at 62.73

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  5. Anyone want to look at CNAM for a short? I cant short, but if I could... I'm just saayin..

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  6. C,

    Oil rolled over with DOW & S&P after it hit 83, quant programs at their best.

    Joe

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  7. So the drop in gold and silver was just a by product?

    -C

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  8. C,

    Yes, the programs droped the commodities including Gold and silver. I mentioned to Kli this morning to watch AUY and see if 10 holds and if not 9.70 is the next support, if 9.70 is broken GS can drop that puppy to 8.50/9

    Joe

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  9. This is intended to confuse....As Joe and I have stated the Algo will destroy maximum trade positions with a bias to maintain the market for the purpose of CONfidence. My mistakes have been trying to play sector shorts based upon the SnP index...watta a mistake..if you notice as several of you have pointed out it is much better to use idividual stock charts and volume indicators etc. for position trading...As TXB stated.....confusion is NECESSARY for the algo and makes it an efficient killing machine....just try to determine its next target...for instance oil is a death knell for recovery....if they do leave oil in the mid 80 range or higher the demand ultimately will get worse and of course the facade of an economic recovery is damaged

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  10. Also throw in a multipronged program including Media pump and dump stories with sentiment pressure and you have the perfect storm. If we had not had a total collapse of a "so-called" two way trade with opposing hedges etc..then this would not be so easy. As it stands you have to give up many of your past expectations and use a multitude of metrics that typically you would not rely upon....

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  11. crude now slip slippin away....watta game....hehe

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  12. watch GDX to hold 43 if it breaks then 40 next...

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  13. Along with all of our obvious troubles, has anyone heard about the coming fishing ban? Not fishing limits, but fishing ban!! Good luck feeding your families America!

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  14. It's a scavenger hunt for the gap trade, but you better be quick getting in and out before the algo activates, seems to be a combination of certain pricing action and volume for large indices, stocks and commodities.

    You might be better off loading up a core on the penny stocks like CVM on the next strong pullback to get your trading fix.

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