Monday, August 17, 2009

Taking Stock: Pull-back

Today may have been the pull-back that everyone has been waiting for, and not just the one from last week. The selloff was primarily done within the first 15 minutes of the day, with some buying the rest of the day, right at the first retracement level.

Tuesday, August 11, 2009

Taking Stock:

Just a handful of mild things going on today. Everyone is waiting for the FOMC to finish their meeting and present the results, which will be tomorrow. I seriously doubt that they will raise interest rates, but that is virtually a given. What would happen to if everyones mortgage rates were to increase in the short-term? Second, the dollar index has been rising the past few sessions, but is down just a touch today. It is likely to drop tomorrow, and even the long-term trend is still down. How is it that the dollar value could rise, considering the percentage that the government has increased the money supply by in the past few months in order to avert the financial crisis? Also, the S&P-500 will likely pull back to the 20DMA (the neat-o little red line) before advancing again, much like it did in the previous rally.

The rally is likely to continue, for two reasons:
1.) The dollar will more than likely continue to drop
2.) The Fed is highly unlikely to raise interest rates

Anothet thing worth noting is that there have been some IPOs filed. IPOs will usually not go through in a bad\bear market.

Monday, August 10, 2009

Taking Stock: Oil Prices

Warning: The content of this video may be disturbing to some viewers.

What he is saying is that the

There is another video on the same topic, but I have yet to find it again.

Thursday, August 6, 2009

Taking Stock: Perspective

The CVI is still getting even a little stronger today, and the pullback that quite a few people have been waiting for is finally coming to fruition. That's what happens when stocks rally as much as they have in a short period of time. I'm thinking the same as what Dan Fitzpatrick was saying about there being quite a few people on the sidelines in cash, waiting for the pullback in order to get in the market at a lower level\price. In a sense, there is a sort of built-in belief that the market will start a new bull market, which normally starts up to within six months of the end of the recession. The quantitative and projected forecast for the end of the recession is around the beginning of next year, so we are within that range of the discounting mechanism of the market to take effect. I have also been taking into account the factor of government intervention (they really know how screw a market, eh?) because of the massive amounts of money that they have conjured up and has been finding its' way into the market (through Treasuries?).

From having been watching Dr. Nouriel Roubini in the videos that have been posted in various places (I had some audio of him also), he has been saying for some time that the U.S. will experience a period of stagnant growth, and possibly what he calls "Stag-deflation", starting next year. Welcome to the wonderful world of everyone writing down their monetary sins. That hardly supports a strong rally in earnings and domestic economic growth in the near future.

I wanted to share this video to show what I was referring to yesterday about what Dr. Leeb was saying. Some of the things that he mentions plays on the angle that I was thinking in regards to "irrational exhuberance", in the fact that he says that there are both rational and irrational markets and that the current one is very irrational. In other words, I concur and have the same sentiments that he has. Only the market itself will tell what will happen. It is funny that he mentions something about the possibility of the potential crash being something like what happened in 1929 and on Black Friday. I was thinking about Black Friday last night, simply because commodity prices before that crash were sky-high and that this time is somewhat similar. In Leeb's newsletter, he mentioned something about the possibility of the FOMC raising interest rates, which I think could definitely trigger the crash that he is calling for. Like today, the Dollar is having a little rally (probobly only to the 20DMA), which is also likely to happen if the FOMC raised interest rates. The slight contrarian view to that is the fact that the U.S. is deep in hock this time.

Wednesday, August 5, 2009

Taking Stock: Looks Good

The CVI looks great, and some of my old positions are in a new uptrend. Just from the looks of the CVI (possibly somewhat of a limited perspective), this rally might be just as strong as the last one. That bodes well for me and my long-term future plans. I took a few steps forward in the rally that started at the beginning of March, and would like nothing more than to do the same in this rally. The Dollar Index (DXY0) finally broke support, and is falling. When the Dollar falls, the price of oil and other commodities usually rises. From looking at the Light Sweet Crude Oil Index (XOIL), the price of oil is likely to continue going higher (just likely, not guaranteed).

I also read a bullish report ("Marder on the Markets") written by Kevin Marder, an associate of Gil Morales.

Something that Dr. Stephen Leeb has been calling for recently is another market crash before the end of this year. Of course, I can't say that he will be right, and I won't say that he is wrong, but I will definitely keep that thought in mind and keep an eye out for it. Apparently the forecast is due to a quantitative model, orchestrated and done by himself and some mathematicians from Yale.

I had a thought recently about the possibility of some of what is called "irrational exhuberance" in the market, which usually occurs at or very near the peak of a market top. This is a crisis inclusive of the financial system and credit market, and is said to be the worst recession in roughly seventy years. I was thinking about the possibility in conjunction with what Dr. Leeb was mentioning in his market update, in relation to the price of oil rising so quickly and his comments about the forthcoming of a market crash later this year. It makes sense to me, with that in mind. Although, the market is still at least far below what the all-time market highs were. I can't help but think of all of those trillions of dollars that the goverment has conjured together. How much have they spent so far, and how much of it has been going into Treasuries? The sort of "rule of thumb" is that money comes out of the bond market and into equities\stocks, and visa-versa.