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Which Way Wednesday - Let's Try Dylan's Way!
Which Way Wednesday - Let's Try Dylan's Way!
Courtesy of Phil of Phil's Stock World
Kudos to Dylan Ratigan for losing his temper and telling the TRUTH:
Ratigan is everything a reporter used to be in the days when integrity mattered. He told CNBC to shove it rather than toe the line and push their snake oil and his show is a breath of fresh air in an otherwise stale media landscape. I love the way he sits there listening to the same political BS as we all do from his panel for 3 minutes and 45 seconds and then literally explodes in RIGHTEOUS anger. I often feel the same way and sometimes explode the same way, but to see a host do it on TV (other than Jon Stewart) is just fantastic - it's what this country needs if we are ever going to save ourselves - complete change in the system.
As Dylan says: "I have been coming on TV for 3 years doing this and the fact of the matter is that there is a refusal on both the Republican and Democratic side of the aisle to acknowledge the mathematical problem, which is that the United States of America is being EXTRACTED - it's being extracted through banking, it's being extracted through trade, and it's being extracted through taxation and there's not a single politician that is willing to step forward and deal with this."
Yesterday was a ridiculous day in the markets, with the Dow rising 250 points, then falling 500 points and then rising 800 points into the close for a net gain of 429 points on the day. We had a lot of fun trading it but it's sad to see our markets trading like a 3rd World country. I have been warning for years that: "If our government pursues Asian-style Central Banking policies they will subject our markets to Asian-style market swings" (see "Stock Market Crash - Year One in Review - The Gathering Storm"). In July of 2009 I warned:
Our stock markets have already started trading like those crazy Asian markets. Why? Manipulation is why. Control of the media by government and business allows focused messages to go out to the people so investors can be stampeded in and out of the markets at the will of the people who control the message.
You need to look no further than yesterday's insanity to see how this madness plays out (chart by David Fry) as the Fed failed to deliver and explicit QE3 message at 2:15 and by 2:45 we were down 3.5%. But then, a miracle occurred and someone threw the BUY switch at around 2:45 and the crowds stampeded the other way in the best Bugs Bunny fashion.
Fortunately, at 2:46 I had put up a note to Members in Chat to take the money and run on our bearish play (the IWM Aug $63 puts, up 66%) and we flipped bullish at 2:50 with the DIA Aug $111 calls at $1.50 and those made a nice double into the close (we went back to cash to be safe). That's 166% on two trades in two hours - which is why I just don't understand why people are so unwilling to go to CASH!
Cash is good, cash if flexible and, if the Dollar rises, cash is even a good investment. This is a TERRIBLE market to be invested in. Whether you are bullish or bearish you can lose 10% of your portfolio overnight. Even if the market comes back the next day, math becomes your enemy as $100 losing 10% becomes $90 but $90 gaining 10% becomes just $99 so you end up leaving $1 on the table which is, as Dylan points out, an EXTRACTION of your wealth by Wall Street.
"THEY" don't care if you win or lose - as long as you play the game. That's why hucksters like Cramer will run you in and out of positions until you are wiped out and then the Cramers of the World will wait a few days for the next bunch of suckers and do it all over again. This is how the system is designed -- BE THE HOUSE, and not the gambler. There are still many many people who are gambling on these markets and, when the swings get this wild - the risks simply become unacceptable.
We almost got back to Friday's close on our expanded Big Chart and we have NO interest in taking bullish positions (other than working our way into very long-term positions we think are oversold) until we get back to our new "Must Hold" levels and those are still 10% away on the Russell and about 5% away on the rest. Anything less than that is just noise as we bounce off a major downward move in the market due to FUNDAMENTAL changes in the long-term outlook for GDP, Debt, Unemployment and Corporate Profits.
A lot of this stuff has always been with us, as I pointed out 10 days ago: "All of this is just a huge distraction from our GDP, which is now running at an average of 0.85% for the first half of the year. Keep in mind that our Government told us that GDP was 1.9% for Q1 3 months ago on Friday they said "Oops, did we say 1.9% – turns out it was actually 0.4%."
This is a BAD. My commentary in that Monday morning post (8/1), when the Dow was spiking up to 12,200 was:
So this morning, Cramer is back to BUYBUYBUY and, amazingly, acting as if he expected this all the time after he stampeded his sheeple out of stocks at the bottom last week! What am I saying this morning? As I just posted in Member Chat – SELLSELLSELL! Not all of it at once but let’s take half our bullish profits off the table and set reasonable stops on the other half and let’s add to Friday’s disaster hedges and we’ll even take some speculative short-term downside plays because "good" news is already priced into the morning pop but the Obama/Reid deal still has to get past the lunatics in the House and that’s a coin flip at best.
EVEN If we do get a deal today – what does it fix? We’re still in debt, our GDP is far worse than expected, unemployment is still out of control and NOW – we are CUTTING Government spending. That is just BAT-SHIT CRAZY! Austerity is not growth. Again, look at the chart above – our $15Tn GDP is actually $13.3Tn, that’s 10% less than the benchmark both the Dumbocrats and the Republican’ts are using to base their income projections for the next decade. A $15Tn economy that is growing is the number they are using to project jobs and exports etc. and it’s already off by 10% and SHRINKING! This is lunacy folks – DO NOT GET SUCKED IN!
The next day, on TV, I said we could have a 20% correction off the top and yesterday I said we should bounce 4% off that 20% bottom (sorry, not on TV). Today we have to hold that 4% line (15% off the top for luck, our -5% lines) or we're back to being bearish. I am not a flip-flopper - we are simply playing a very well-defined channel, so try not to be surprised when I change my position at our inflection points and especially at the top and bottom of the channel (see yesterday's post for channel charts) - THAT'S WHERE WE'RE SUPPOSED TO FLIP!
The chart above done by Pentaxon, one of our PSW Members and it illustrates how low the S&P has fallen when priced in a global currency basket. This is INSANE! We are back near our March 2009 panic lows in constant currency. We had a very good time buying then and we will have a very good time buying again but that's still another 10% or so down from here so, for now, we watch and wait - CASHY AND CAUTIOUS - because up or down - there will always be something to trade tomorrow if we keep ourselves flexible.
Even as I write this, the Dollar is being pumped up almost a full point pre-market (9am) and that is knocking our futures down 3% but that's only back to where they were before that idiotic spike into the close (where we sold into the excitement). The goal of this WELL-PLANNED BS is to scare the retailers who caught a ride yesterday and keep them out of the down 2% open (and get the bears to place bets to be squeezed later) so Lloyd and the boys can flip the switch on the Bots and BUYBUYBUY. Once they are loaded up (probably the EU close but maybe sooner) they trash the Dollar and send the markets flying back up. Maybe they have some bullish announcements lined up in the form of upgrades or QE3 rumors but, whatever it is, it won't come until after they print a scary open to keep Mom and Pop too terrified to pull the trigger as the market pulls away from them. I know this sounds cynical but if I don't tell you it's going to happen before it happens, you won't believe how corrupt the system is when Dylan and I tell you, right?
PLEASE be careful out there.
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And that's saying a lot here on ZH.
The US has run a net trade deficit (goods and services combined) EVERY SINGLE MONTH since January of 1992:
http://www.bea.gov/international/#trade
This is one way that wealth is being extracted from the US... unless you have a PhD and are a Free Trader and you think getting cheap iPods more than compensates Mr. and Mrs. Joe Sixpack for having their jobs shipped overseas...
Great. So a country that is running a net trade deficit (paid through debt) is a country from which wealth is being extracted.
The victimology urge is so high in the US this is the kind of extremely cheap propaganda that one can expect.
Wait, WTF do you mean they pulled him?
Fired?
Yanked his crank?
What?
Dylan, you have no natural resource base, economic base, nor job base for the level of population you have.
You can talk about all the "real solutions" you want, but there is one immutable fact: You cannot enforce those solutions on a population in which 20-40% of them will probably have to be dead in a very short term (talking a couple of years, maybe 5) to implement them.
It's over. It's -- all -- over. To state otherwise would imply that you can not only come up with a solution, but implement it and retain social order in the changeover.
You can't solve the $70,000,000,000,000 you're talking about without realizing that money is what has allowed this country to have the population base it has had.
It's like Karl Denninger stating that cash flow is king because cash is the only thing which can be spent. That's baloney, because if we did, we'd never be able to have a health care system to keep many of the poor alive -- and that's credit/bankruptcy at best and charity in most other cases! We'd never have the Just-In-Time delivery system we have (and forget talking about Blackberries, iPods, and whatever: try the real fruits and vegetables and meats, etc.).
I'm giving it somewhere around 6-9 months, and that's ONLY because of the National Religion and the National Office Pool (the NFL and the March Madness tournaments). The circuses will keep it going as long as there is still enough food, but the fact is that the latter will run out for a lot of people fairly soon.
Yes, but for at least the past year he's also been talking about the energy and health care industries as well as the MIC. This rant was clearly impromptu . . . besides his unrestrained honesty, I was surprised that he left those issues out of his rant this day. But he nailed the hell out of the problems with the "process."
That was a great rant. And, today they pulled him. What a bunch of turds.
I am Mad as Hell, and I am not going to take it any more!
http://www.youtube.com/watch?v=QMBZDwf9dok
Network (1976)
Nice to see someone call out all politicians as scum and entirely complicit in the problem. however, this guy criticizes our government being in bed with big business and then offers another keynesian fix to the problem in his 2% bank lending shceme, sponsored and implemeted by who? The real problem is the FED and the manipulation of and disctation of the rates that drive our banking markets. We need capitalism which in its real form would not have anything remotley close to the existence of a centralized, all powerful private bank that is participating in a ponzi scheme with our treasury with the taxpayer absorbing the losses. If we had anything close to capitalism for the last 90 years, we might not be in this mess. I do commend him for blaming scumbag politicians. Now he just needs to be honest about the dangers that the unions and their thugs pose to free markets and our society as the economy gets worse.
Yes, Dylan is NOT smiling. And he is 100% correct; the MSM debates small, insignificant, contrived points while the elephant in the room stands mute.
If you're like me and think we're on the very of collapse, do something about it: http://www.collapsenet.com/262.html
BEST RANT WITH POWER AND TRUTH. IF MSM HAD MORE LIKE DYLAN, I'D TURN ON THE TV. THANKS DYLAN
Umm... I vote for burn it to the ground.
But then, my vote has never been important and that is what is going to happen anyway.
Look at London. How does anyone think there's going to be an Olympics there (or much of anywhere else outside of maybe returning to Beijing!) next year, especially when you view the First World's economic situation over the next 12 months?
Dylan be da man. Saw that just as it happened. I think the folks at the table were about to bolt.
Half-man: he talks about bankster-parasites and corporate free trade extractors, then tells us that Wisc. public employee thugs are "the people fighting back". Nope. Just more pigs at the trough.
anti union?
Wall Street gets Trillions..
Social Security gets robbed for $2.5 Trillion..
But the Unions in the middle of fucking no where! are the problem?
hey on a side issue.. how much do the Koch Borthers pay? I was thinking about some part time work.. what do you think I can get? like how much do you get paid? more or less? Thanks in Advance! just throwing my hat into the ring!
Great Video!
Everyone on TV is still smiling so things must be going as planned.
Down 512 and the nutjobs on cnBS are all smiling like the cat that ate the canary?????
What gives, I thought they were supposed to be freaked out whenever it was going the wrong way (according to them).
Glad I'm just a bystander, I would be completely lost trying to make money in these markets.
it is a straw man argument to argue "austerity is not growth." of course it isn't growth. but growth isn't possible without a lack of government intervention, and you can't have that kind of environment without cutting spending. big time. big. fucking. time.
I actually disagree, because government intervention is effectively required to keep any value in these companies, where if their balance sheets were evaluated, every last damned one of them (with the possible exception of Amazon and Apple) would go Tango Upsilon (tits up) in an awful hurry.
Like that 20% drop in B of A on Monday?
Growth isn't possible. That's all you need to know. We're at peak growth in system that requires exponential growth to work (you know, the PONZI system). Growth isn't possible, growth isn't going to happen, and the system will implode. You already know that, right. gold, guns, getaway plan. get ready for the long emergency...
agreed super, the only growth in a ponzi scheme is for the one at the top and eventually he/she gets boned too.
Hmmmm. The PPT must have taken the day off; might close -500, or did they shoot their whole wad yesterday; catastrophe orgasms are so in vogue now.
With respect, I find it is a Fine market to be invested in, provided that your are short, or holding puts.
I always keep a Large cash balance on hand, so being squeezed out is not an issue.
The overriding trend is down, down harder and farther than most can get their imagination's around. I care not for the daily wiggles pushed by the Powers That Be, as their aggregate efforts will be futile, in the long run. I have lived plenty long enough to see Central Banks get run over by market action. Happens in Forex all the time. Ask the Swiss…
One of the reasons I wouldn't invest in this market is the whipsaw effect of what you saw Monday.
And there's always a belief that QE3 could be forced to retain what the rulers believe to be order.
Shorts are as dangerous as longs at this point, else one could short the phone book without much loss of generality here, because this sucker is going down (barring massive PPT intervention (see yesterday).
We need, to get the DOW 30 in line with the rest of the world, to hack at least another 300-500 off this market as of today.
agreed darkstar. QE1 = fail, QE light = fail, QE2 = fail. when QE3 is announced TPTB will have truly defined "insanity".
uh, this failed three times now, let's see if it works on try #4..... pulleeze!
baseball has it right - three strikes and you're out!
Dylans rant was awesome.....
Not really...the Tea Party has been syaing the same thing...albeit more clearly...for 2 years now. Feck Dylan...he is only 1/2 right...and speaking to 2 dumb bitchez whom will never get it anyway.
Now do you understand ??
Pity none of them have ever heard of the Tea Party, people who tried to stand against the system. Sadly, it seems a few of them were bougt off DC style as well.
+1000