Friday, August 12, 2011

ARMAGEDDON!


Not too bad is it so far? Highways are buzzing. People are still shopping. They aren't buying much but they're out and buying some. Seems fairly normal to the casual observer. However when one looks at the recent market convulsions a different picture emerges. Up until Monday a case could have been made that we were still engaged in perpetuating a market up trend that relied upon the Fed induced liquidity to pump more stardust into the CONfidence model that I have constantly harped on and I believe is/was central to the Political/Central Bankers plan to reinvigorate the economy. Rather than address the unwinding the debt leverage they have just added more debt. Rather than address the structural economic/employment issues they have depended upon monetization to ramp the stock market and the commecial/IB banks. Pure INSANITY.... Apparently I'm not alone in my CONfidence model....read Marti's most recent essay.

http://www.10sigma.com/files/Foundation%20Stones%2008-11-2011.pdf

What is next on the horizon? To answer this question one must look at this week. This week was significant. It completely broke the CONfidence model. Does that mean I am advocating an all short full court press here. NO WAY....a wounded lion can inflict a lot of damage. Just look at the last four days of candles.......NUTS!...NUTS I tell you...NUTS! What kind of healthy market pulls that off. The answer is a very unhealthy market manipulated and full of moral hazard. This creates fear. Fear begets fear and investors right now are scared stiff. The redemptions in the hedge fund world are horrendus and the money is going into the asset that was just downgraded by Standard and Poor's....US debt. How ironic... This is a classic meltdown with the chickens coming home to roost from all the moral hazards created by decades of leverage and most recently the obvious finacial takeover of the world governments. They always owned the politicians but now its not even hidden. When any consequential decision on our economic future is made it is even PUBLICLY deferred to the Central Bankers for the decision.

So what's next? Look for an all out effort this weekend to show a unified European answer to stem the Eurozone. At least to kick the can until Ben can make his grand announcement in Jackson Hole. The pomp and circumstance hopefully will give us the opportunity to come off of a great panicky low.....1050?? maybe... stay tuned ..this game has some blood ahead IMO.

Watch that $XEU descending triangle for the 140 base level break......or not. Right now anything is possible so don't bet the farm. If you are scared just stay in cash. Miners remain in a nice monster move off the last low in an accelerated channel and I like a core. hmmmmmmmmm surely not....

Anyway you can all rest assured....by the end of the year we'll know if I was right.gl

27 comments:

  1. http://www.zerohedge.com/news/liquidity-options-running-out-european-banks-liquidity-crisis-scene-set

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  2. there ya go.....its ova rova......CONfidence

    http://www.bloomberg.com/news/2011-08-12/u-s-consumer-sentiment-falls-more-than-expected-to-54-9-in-michigan-index.html

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  3. sm is small..not a symbol sorry

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  4. just added small RWM inverse of russel only 1to 1......as the Joe says......go with the flow

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  5. Chuck,

    Trading CENX, excellent stock, they announced $60M stock buy back yesterday and Glencoe bought lot of shares at 9.25, excellent aluminum company. It bounced nicely from $9.

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  6. Have not sold my DCTH which bought at 3.50 yesterday and for intra-day trader I even realized as I posted yesterday that DCTH was way oversold, it needs to get to 3.90 and break it to see 4.25, we shall see, I will take some profit today and let the rest ride since I play heavy.

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  7. Chuck,

    Just turn off all the B.S., media crap and even what kli says every day, focus only on cheap battered stocks and make $$$$$$$$, the rest is noise.

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  8. joe,

    Cenx had a lot of support around 9 going back 2 yrs...excellent trade...up nicely today...

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  9. Also, stock funds post biggest withdrawals ever: http://finance.yahoo.com/news/Stock-Funds-to-Post-Biggest-tsmf-4275342066.html?x=0&sec=topStories&pos=9&asset=&ccode= "The implications are serious for the mutual fund industry" and I would add, for the markets!

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  10. Joe,
    Advice I shall heed, you said it many times and like I said before it takes some to get through my thick skull but all the noise and fear kept me from making $$$$ this week. A mistake I will not make again!

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  11. Chuck,

    Affirmative, that's what i focus on, the rest is B.S., I already know what's going on politically, and economically from macro and micro perspective and do not need any one to tell me anything, completely focused on task at hand, money talks and B.S. walks.

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  12. Tom,

    It always comes down to HAVEs and HAVE NOTs, the rest is noise, focus on what you can achieve and have some control over not the other B.S. stuff.

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  13. Joe,

    thats why I like OSIR and POZN right now...beaten down near lows of last 3 years and making money..

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  14. dcth...nice day..nice week...took some profit...still holding for core build...

    european sales start could mean good movement in next 6 mos....

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  15. Chuck,

    There you go, that's the way to do it. I have free shares now on DCTH, took big chunk out between 4.18 and 4.20.

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  16. ABAT reports on the 12th, in case anyone else is still following that.

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  17. bond market is a little wobbly right now...

    jefferson cty, Al. will go bk tonight

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  18. SKF was a good trade as well today, saw the tape turn at 73.

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  19. Market looks like a flat wash today.......just some very nice trades for the hyenas.....for the swing trades I liked the miners action today....silver remains consolidating.

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  20. street rumor....downgrades on France and Belgium debt coming......if it happens metals rally and Euro sells off hard and breaks its triangle base.....no time line but its on the street.

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  21. Kli,

    see here
    http://macromon.wordpress.com/2011/08/12/credit-anstalt-2-0/

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  22. It will be the largest muni bk...no one from JPM went to jail, shocking!!! (I kid). The people who took the bribes went to jail, but not the folks who gave the bribes.

    http://www.bloomberg.com/news/2011-08-12/jpmorgan-proves-bond-deal-death-in-jefferson-county-no-bar-to-new-business.html

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  23. Today I watched a stock and saw something I didn't understand. I was watching COCO lv2. all afternoon it had large bids, sometimes on arca, sometimes island. These bids were in the 40k range at 2.90 and 2.93. The few times the 2.93 got hit, it was quickly replenished. At first glance, I would have thought that someone was wanting in big-time at a support level. The problem was that almost all the action was at the bid in small lots, and these bids remained. I began to wonder if someone was trying to keep a floor for a short entry rather than actually buy the stock. Any clue guys?

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  24. Correct Ken....that is an old game that should give you warning on it

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