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Guest Post: Another Similar 2008 Chart Pattern
Submitted by MacroStory.com
Another Similar 2008 Chart Pattern
(This post was written on October 12, charts are not updated for today's price action).
“He observed that human emotions collectively had major impacts on the movement of stock prices and markets in general, ultimately creating patterns that kept repeating.” - From a book on Jesse Livermore’s trading style
Without a doubt one common similarity between the current market and the fall of 2008 is heightened investor emotions. There are plenty of other similarities from bank nationalizations, a deteriorating global economy and government intervention.
There were wild swings and volatility that whipsawed traders out of positions and saw paper profits appear and disappear in very short order. Traders then as they are today were simply exhausted and decisions were more influenced by emotions than macro data, technical analysis or convictions.
I strongly believe in Jesse Livermore's theory about human emotion forming patterns and since humans never change patterns will often repeat. I've been trying to find a pattern that compares to the current market. A roadmap if you will of how this emotional roller coaster finally plays out.
I think I may have found it. Below are two charts. The first shows a rounded top pattern that appeared twice in the fall of 2008.
The next chart shows the current markets (SPY 60 day 4 hour chart) versus the fall 2008 (SPY daily chart). There are six points of reference, five are tops Point A, B, C, D and E and one bottom Point F. In both cases the behavior of all six points are identical.
What I found most intriguing was how Point F saw the biggest rally into Point E of the entire pattern. If you look at the pattern notice how the top remains symmetrical while the bottom loses its symmetry beyond the half way point and begins turning lower.
My reason for finding such interest in this comparison is as Jesse Livermore said human emotions never change and they are repeated in patterns. The emotions facing traders now are the same as in the Fall of 2008. Those emotions are reflected in price fluctuations. They lead to violent swings. They lead to whipsaw action as decisions are made in haste, under duress.
There is no guarantee how the 2011 roadmap will play out but I find the 2008 similarities very intriguing. There is no reason to believe investor psychology is any different today than it was just three years prior.
Extra credit for those still reading. Here are a few other eerily similar comparisons.
In 2008 Point E was 106.25 versus 107.43 in 2011.
In 2008 Point F was 119.95 versus 120.04 (so far) in 2011.
May 19, 2008 the market topped at 133.78 versus 135.80 on May 2, 2011
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Point E was 119.95 vs 120.04 in 2011, not Point F.
Point F was 106.25 vs 107.43 in 2011.
Regardless, amazing similarities.
If we don't break and hold 1,120 into the weekend we probably fall apart by Monday. Back below 1,080.
That's 1220.
That's 1220.
your 1220 will soon be your 4:20, keep it close and fresh you'll need it
Point E was 119.95 vs 120.04 in 2011, not Point F.
Point F was 106.25 vs 107.43 in 2011.
Regardless, amazing similarities.
If we don't break and hold 1,120 into the weekend we probably fall apart by Monday. Back below 1,080.
That's 1220
One of the main differences is the 2008 crash stayed below the 100 and 200 day moving averages. We just broke above these lines which can't be discounted. I'm 100% short (removed hedges late yesterday) and I'm pretty concerned about a melt up after S&P broke above 1200... Looks like I may need to add some hedges tomorrow... Any thoughts on this?
interesting coincidence
http://expose2.wordpress.com
Tyler or someone wtf happened to Platinum in the past 2 hrs...
Let's test out the $1565 cap.......it works!
im getting reallllly tired of people trying to compare this to 2008.....
I agree. You have more debt, more phony asset pricing, more over capacity and more derivative exposure now then you did in 08. Should be hardlining zero on snp about right now.
The only way that the markets will really fall hard(which they need to), will be in the absence of the corrupt central banks, politicians and regulators. Unfortunately, there is currently no shortage of those said.
I don't think they matter anymore. Ask Mubarak.
Totally OT - but since we talked here on ZH about Murdoch and Newscorp, and some of you might even still read Wall Street Journal, this might interest you. I know it comes from the Guardian, still interesting story.
'Wall Street Journal' Scam:
http://www.guardian.co.uk/media/2011/oct/12/wall-street-journal-andrew-l...
"Andrew Langhoff resigns as European publishing chief after exposure of secret channels of cash to help boost sales figures"
"The Guardian found evidence that the Journal had been channelling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate, misleading readers and advertisers about the Journal's true circulation."
"The affair will add weight to the fears of shareholders in Murdoch's parent company, NewsCorp, that the business has become a 'rogue corporation', operating outside normal rules."
"The Journal's decision to secretly purchase its own papers began with an unusual scheme to boost circulation, known as the Future Leadership Institute. Starting in January 2008, the Journal linked up with European companies who sponsored seminars for university students who were likely to be future leaders. The Journal rewarded the sponsors by publishing their names in a special panel published in the paper. The sponsors paid for that publicity by buying copies of the Journal at a knock-down rate of no more than 5¢ each. Those papers were then distributed to university students. At the bottom line, the sponsors enjoyed a prestigious link to the Journal, and the Journal boosted its circulation figures.
The scheme was controversial. The sponsoring companies were not reading the papers they were paying for; they were never even seeing them; and they were buying at highly reduced rates. The students to whom they were distributed may or may not have read them; none of the students paid for the papers they were being offered. But the Audit Bureau of Circulation ruled that the scheme was legitimate and by 2010, it was responsible for 41% of the European edition's daily sales – 31,000 copies out of a total of 75,000."
Thanks for that. You've got to admit that when it comes to ways of cooking the books, this scheme was actually quite ingenious. Daily print newspapers are basically finished. This just adds further proof. Don't think it will be enough to bring down Rupert's quite diversified empire though, unfortunately.
... so ... we need a new sort of plunge-protection team ... hmm ... but how do we sell this to the proles? ...
im getting reallllly tired of people trying to compare this to 2008.....
hey! this isn't just anybody! this is MacroStory.com!!!
no wonder things are so fuked up!
i'm having 80-y.o. emotions & i'm only 65!
maybe i was jesse livermore before i was slewie...
...born in a bucket-shop in tennessee
greenest state in the land of the free
bet on the ticker-tape till he couldn't see
and turned into a bear when he was only three!
You can test if you were Jesse. Check for the bullet hole in your head, and the powder burns on your hand.....
"On November 28, 1940, Livermore shot and killed himself in the cloakroom of the Sherry Netherland Hotel in Manhattan. The police revealed that there was a suicide note of eight small handwritten pages in Livermore's personal notebook. It was reported in the November 30 issue of the New York Tribune"
Jesse Livermore is a pseudonym. Here's "Jesse's" blog:
http://jessescrossroadscafe.blogspot.com
<golf clap>
dont' forget more algos. ETF algos vs HFT algos vs money manager algos, resulting in extremely high correlation. The extremely high correlation in the market should be a warning to regulators about the dominance of algos in the system.. But nope, they only respond after 1 trillion is wiped from the market.
You may be right.
If it's true that computers dominate the market, then it's a good bet that their algos look to the past to predict the present. In which case, people should not be surprised if we follow the same pattern we did in 2008.
As to whether or not human nature comes into play, well... it may. But then, people have a habit of making data fit their beliefs and, personally, the data comparisons are a little too exacting for me to think this is human nature.
Definitely interesting stuff.
I think Cramer and CNBC have it wrong. It wasn't the Lehman moment it was the TBTF moment and we are repeating ourselves. The end of 2008 and early 2009 wasn't about Lehman it was about governments capitulating to bank bonuses. That's why it is the same this time!!!
I am of the opinion that 2008 was the tbtf crash and 2011 is the tbts, to big to save, round.
you mean more government! slam dunk rally then!
http://www.youtube.com/watch?v=dAHG4eb0Kcc&feature=player_detailpage
they only problem is dr. ben juggling with qe's, operation twist and 0% rates. I guess we will find out, how many he can juggle at the same time.
Each year that has passed, central banks and regulators have increased the lengths and desparation in which they are willing to go in order to keep markets from falling like 08.
amen to that....
Bitch, Bitch, bitch, bitch...quit yapping!
Yes; it's completely useless. All the data and wisdom in the world is divided into two classes. The 99% that you can't trade on; and is therefore worthless, and the 1% you can trade on. This is just an example of somebody with time on their hands and no clue at all.
>the world is divided into two classes. The 99% ... is therefore worthless
Are you by any chance a politician?
Are you by any chance a politician?
no he's still just trying for polyamorphous being
I disagree, look at a 5 year weekly chart of the Euro, might get one more week up to 1.40.
The fed was not ready with infinite QE during that time. They are now
The Fed is ready for a flash crash? Because that's what this market is setting itself up for.
how do you figure?
In 2008 people were investing for their future.
Today its all HFT trying to scalp a few cents and moving price with 5%+ daily swings.
The day of the long-term buy and hold are dead- at least until the markets are regulated.
So forever then?
That's been my interpretation of today's world too.
In the not too distant past people invested for the future.
In today's world, the entire game is trying to not get killed.
There's a big difference between those too mind sets and where they lead a society and culture at the end of the day, the month, the year, etc...
"The fed was not ready with infinite QE during that time. They are now"
They need a very good reason to start another round of QE and the final dip on the graph looks like it might fit the bill, but it has to make an entrance first.
"There is no reason to believe investor psychology is any different today than it was just three years prior."
the last three years hasnt changed anything? maybe, but 2008 was shock and destruction as a bubble was bursting. I think psychology is different now. Does that mean the market won't tank? no, but 2008 it is not.
Because of 2008 people will exit quicker and more decisively. The crash will happen quicker and be much more severe.
There may be some truth to that...but I think people know the risks(or alot of them) at this point. The risk in 08 was unquantifiable, just endless counterparty risk on everything. Look at all the funds that got caught blindsided by Lehman as their prime broker. Those guys had to write those holdings off and get in line. Just unimaginable stuff. Everybody and their mother knows that a Euro breakup could cause a catastrophe. Hence, everyone just trading on the latest EFSF news. The black swan event is now a grey swan at this point. Everyone knows what's possible.
Whether that causes them to throw in the towel sooner remains to be seen but so far it hasn't. Remember in August when the world almost ended?
The black swan is $200T in counter party derivatives... When one bank goes bankrupt and hedges become worthless look out... Even a small investor would panic if a few options could not be paid because the person on the other side claimed bankruptcy and could not pay... Talk about a domino effect as the removal of hedges (zero hedge!!!) would cause a massive stampede out of unhedges equities....
good point. without the same types of traders and emotional tendencies in the markets as there were in 2008, then we won't see a repeat of 2008.
what's dangerous is to try and fit a picture of the past onto the present, because you want to re-confirm a position bias.
no one knows what's going to happen next.
Though peoples' psychology may be more or less the same, they do tend to learn from their mistakes.
One telling data set of the graphs were the volume levels of then and now. Retail investors have lost a lot of interest in letting the TBTF's play with their retirement funds.
However, the low volumes (would seem to) make it much easier to manipulate the markets, especially if the big boys are playing with expensive computers and cheap dollars laundered thru the fed.
P.S. Thanks ZH
Spooky... more than eerie.
I'm tired of the comparisons, too, but if the shoe fits..
but this time it's different!
full moon passing bitches... another similarity with oct. 08 is a full moon passed over off of a 14% ramp job top, just like today Oct. 12th full moon passing over a 12% ramp job bounce. Next comes a 25% decline into spring 2012. Strap in bitches!
This has more value than anything else on the page. The significant effects of the lunar cycle in the silver market were pointed out to me by my mentor in 1981; they've probably been responsible for a couple of hundred thousand in profits since then. The stock market is in a rally in a bear market; the full moon corresponds to the maximum optimism. I sold my S&P contracts today for a one hundred point gain. I will only do the cream on this; I'm not hanging in there. Hanging on to BAC bought at $5.70 wilh a zero loss stop order; mostly for laughs. Might get a nice earnings report on the 18th.; the market has been very supportive of the completely hammered price on this "dead and useless bank". If not, it doesn't cost me anything.
Why would you sell your S&P contracts, instead of upping your stop(s) on them?
Just so he could brag about it.
Look at me, everyone - I bought the low and sold the high.
>The significant effects of the lunar cycle in the silver market
Full moon = Peak werewolf attacks = Urgent demand for silver bullets
Keep an eye on wolfsbane futures, too.
Nice call on the BAC that day.
Scatterbrains - surely you meant to say, "strap-on."
...Because the collapse is going to be quite painful.
A backtest of the SPX weekly 50ma would fractal nicely with the 2007 top. http://bit.ly/nXIUl4
How do we possibly get there? http://bit.ly/qK6I7H
Makes sense, bounce at 1k with a washout at 800.
human emotion, lol
skynet doesn't feel pity, or remorse, or fear.
...And the T100's even have bad breath.
Side note, Shelfreliance is backordered over 1 month...
Find the local LDS pantry, call them and find when the open canning day is. You can load up on basics staples for cheap. You'll be able to pay for everything a FAZ daytrade.
Not sure how may will understand "LDS", but yes, it is damn good resource for loading up on the cheap!
2008, the FED had bullets and support.
2011, the FED has no bullets left and little support.
2008, average citizenry dumb as a box of rocks.
2011, average citizenry dumb as a box of rocks and a lot poorer than 2008.
Good one Funky
how does the fed have no bullets left? thats exactly what they do best: conjuring liquidity out of thin air and forcing the inflation on the world. This is a crime against humanity, in the worst way if you ask me.
Right, they are only limited by the number of available electrons. Push a button and poof, a trillion or two available for QE3.
If it happens, I'm sure the only resistance will be a stern letter from Boehner et al. Most Joe Six-Packs have no idea what the Federal Reserve is or what it does.
Opening infinite lines of credit to prevent zombie banks from failing works wonders for an economy. Take Japan, for example...
So........ go long December thin air futures?
Better hope not if you're a hopium consumer; 66 won't hold 38-42 would come into play with a break on volume aka panic.
Bullish!
On a side note, I was at a TBTF luncheon today and shocker, they were semi-bullish! I think they included a gold chart to prove that "see some things are increasing in value". No mention of it due to currency debasement but presented it pretty much as a fear trade. Projections were all positive. See, everything is fine.
the last 3 months has been the same pattern.. up down up down 1200 - 1100 channel ---- what will break us up or down? - http://hedge.ly/og1k3F
answer: the Big Dogs setting pace a/h and pre-mkt, that's what. Algo's then magnify whatever is decided. see my post on "Mkt Slump" thread 18:32
So you think they are setting the stage for a market ramp? Not sure what to make of what you said "omen of big downers". What's a big downer?
downer is when the "market" goes DOWN
Gotta hand it to High Command, they kept up a nice 3 year bonus run with lies, misdirection, disinformation and fraud. Phase 2 gets trickier.....the commoners who can read and add are on full alert.
There are NO investors.
There is computers that buy or sell when they are programed to do so.
There is central banks and soveign funds.
There are mutual fund and hedge fund fools, that want to keep their jobs.
Selling is bad for employment....period
This time is different. :)
crash bitchez
Tylers, " Must you" , rub IT IN?
"It rubs the lotion on it's skin...."
It IS 2008 in Europe....so prepare and beware.
In many ways....
can we just start crashing already...
I am hoping the Europeans go mental coming winter, they kinda deserve it, I mean they (all of them) have been totally conned by Merkel and Sarcockzy. So look for major disruptions/protests/strikes/turmoil right across the EZ.
Should crash their markets.
...into oblivion.
I honestly don't know any individual investors any more. I tried last year to set up a "Beardstown Ladies" type investment club but couldn't find enough people among my friends to start. I am the only person I know who even looks at day-to-day market information, let alone reads the volumes of good/bad research. Gone are the days of Peter Lynch. And in a way, good riddance. But it was shocking to me how few people who earn a decent living or have retired on what they think are solid investments even care about what goes on. I asked one friend who is a VP at FLR and is over 50 what he thinks about the future of his 401k and he says he never looks. So who is doing all this trading? Today's volume was worse than anemic. It was moribund. Based on my own empirical assessment of things, I'd say that 99% of America is likely to wake up one morning totally and completely broke. Thankfully, they are not "post office crazies" but then again, I keep remembering "Lord of the Flies." Are we not all about one heartbeat away from insanity?
Exactly my friend. Every day for years upon years now I try to discuss this with folks at the gym, coworkers, etc and they refuse it. The whole business model of the mut fund/401k is predicated on "the long run." Everything they read, is from the sell side. They only know of buying. No selling. Look at CNBC. The morning market open is the worst if there is such a thing. They never encourage selling. Only buying. This reinforces what they have been told by the pro's down in HR.
Think about it. There are few periods throughout history where this level of group think is so entrenched that they can go to sleep and feel as if they have done all they can. It's maddening for me. Trying to wake anyone up to this is futile. I had to remind a guy today that I informed him in 07 when Bear hiccupped in Feb that he needed to RUN. I have no credibility with this person because of the contrived run up since then. He has spent no time trying to understand the macro environment to contrast what led to that and where we are today.
I'm done with them. I would love to see a collapse and see them just scream with the years of frustration that I have had to bear
Obviously, we are the last sane people in our social set. I have mentioned to folks that there is the possiblilty of using bear ETF bets rather than options and I might as well have been speaking another language. I am personally so spooked that I won't go to sleep owning anything. This has made for slim pickin's, as they say, but at least I sleep well. Too bad that 90% of most moves are made overnight on dark markets that you and I cannot access. Yes, the market is definitely rigged but even a soon-to-be-dead deer can see oncoming headlights.
I learned a tough lesson this week regarding closing FAZ prior to closing bell...OUCH.
I've been there but know now this is a day traders dream market and holding overnight is foolish. Don't get greedy for those juicy opening gaps. With 3X leverage you can still make plenty intraday.
pauhana,
You should not be shocked at the complacency and cluelessness of the herd of suckers that the brokerage business has conned into believing that they are "investors". The markets have always been casinos and the number of true investors has always been minute.
The shock is that it has taken so little time to effect such a change. Just a few years ago, I was one of 12 people of relatively substantial means (doctors, lawyers, Indian chiefs) who met monthly to talk about such things. That was 1998. We disbanded that year. Since then, though I still see the same people regularly, they truly have no interest in even talking about the market. They are all still my friends. We even vacation together but I think they look at me as that person with the "deformity." Like the crazy uncle that lives under the stairs. I know my social cues and don't talk about "such things" any more but I wonder how they will survive. What is coming is more than they can imagine. They are totally unprepared. I am beginning to be worried that they may look to me for more than guidance. My family is prepared, as much as anyone can be. All I can think of is the fable of the ant and the grasshopper. What will happen to the mass of Americans who haven't even considered a "credit event." (Don't you love the euphemisms of todays' culture?)
What changed was that in 1998 any fool could convince himself that he was an "investor" because we were in a roaring bull market and your dog could pick winners by pissing on the stock page.
Your eleven friends probably went on to the real estate bubble or succumbed to the post 2001 brokers hyped lies of the magic and safety of diversified portfolios. Your friends are probably sheep like most people and they will be sheared and worse. Keep being an ant and know that the grasshoppers made their choices.
Don't like euphemisms. Know that most are carefully crafted frauds of sociopaths designed to mislead or hide an ugly reality.
Other differences are 16 million fewer U.S. jobs, slower growth in BRIC countries, an absence of election year hope, and more retirement account underfundings (pensions and social security).
Call it a "C" leg, a "5" wave, or Livermore's innate human emotional reaction, the final move down always breaks levels that most believed would not be revisited.
Love-Hate relationship.
"Like making love with a gun held to your head," said trader, "Yes, we know the markets are all manipulated and screwed up but we still have an obligation to be in there and try to make a buck for our clients."
Certainly no good news out there on the horizon. No QE3, EU in a tailspin, HFTs, bank failures, sovereign debts, and possible China hard landing. All bad news. No good news. Nothing but land mines. Charts are merely confirmatory. Abandon all hope yea who enter.
I am not quite certain I understand the obsession with 2008. Is that our new basis of success? Watch other assets in the fed thurs release the next 2 weeks.
2008 didn't have a full blown trade war about to start
...also hoping the pending trade war takes out PIMCO's crappy bet. China could dump and pump UST's at random.
Just overbought rallies stuck in trading ranges and the Dow starts selling close of last session. It's topped out. In saying that, hard to short because of the narrow ranges. They start to narrow more, compare it against liquidity/volume and moving averages and HFT bid/offers on close prices...look for the break out. Bring up your Aug2011 charts and see the same pattern, narrow ranges tight bid/offer then the guts fell out of the market. It's a redux, but this time we slide into lower ranges.
These markets are going down rather than up. Anyone see Shanghai markets last session? Very bearish, China starts pumping up stocks, hedge funds will start to short other regions (connected to China)...say Japan/Aust/Canada/Brazil etc
This analysis is comparing the wrong time period. The current price pattern is mirroring Jan '08 - March '08 on the weekly chart interval. We will most likely drift a bit higher and then get sold into with one more retracement not before taking out the last swing low and then it's down into the depths we go...
i agree with the technical similarities of early 2008 rather than late 2008, although the current selloff seems a bit more vertical. Especially if you consider the context of Euro markets (e.g. DAX, MIB, CAC40).
As for fundamentals (in case they even matter to markets anymore) 'double-dip' is now a household term & widely anticipated, whereas early 2008 was still full of mining bulls that discounted the 'sub-prime crisis' symptoms.
There's a small chance that participants have picked up some wisdom in the past few years? Maybe they're delivering pizzas nowadays..
while youre at it macrostory, tell me the winning powerball number tonight....(((YAWN))))
The SPX is dropping out of the short term trend channel, which could be bearish for the short term. The DX may show some strength while the EURUSD weakens. Also the TNX could be nearing the end of its correction to return to the downside. http://bit.ly/odP1QX
I'm just pissed that retail gas went up $.30 since 2pm today. Gas is now more expensive than three weeks ago. A week ago I got one tank at $2.99 a gallon. I iwsh I would have brought a few gas cans with me.
This is much different than 2008 because we are starting the new collapse in a far weaker state. None of my neighbors are doing well. Up until last year all the homes for sale around me sold. A house hasn't sold around me since last fall. There are now 7 homes for sale on my block and nobody has had a bite.
This Time is No Different. When is the last time ANY central government let the market put an accurate price on the American Dream?
Looks like '08, feels like '08, smells like '08 - just more debt, more algos, more cooked books, more fearful sheeples, and a desperate empire committed to self destruction.
This sucker is going down "fast and furious".
5 days until Black Monday II
This is the worst analysis I've ever seen. The two years are NOTHING alike. Oh well, people are going to get blown out and that's fine with me.
Zweig breadth thrust signal fired today, first since March '09, and August '84. That's a pretty powerful argument that this rally has legs.
I don't see the 2008 fractal working out with that kind of breath and this much bearish sentiment. I've seen the comparisons with 1929 as well, that hasn't worked out either.
Zweig breadth thrust signal fired today, first since March '09, and August '84. That's a pretty powerful argument that this rally has legs.
I don't see the 2008 fractal working out with that kind of breath and this much bearish sentiment. I've seen the comparisons with 1929 as well, that hasn't worked out either.
Isn't zweig an overbought/oversold signal? How could it have possibly fired today unless it was signaling overbought?
A "Breadth Thrust" occurs when, during a 10-day period, the Breadth Thrust indicator rises from below 40% to above 61.5%. A "Thrust" indicates that the stock market has rapidly changed from an oversold condition to one of strength, but has not yet become overbought. According to Dr. Zweig, there have only been fourteen Breadth Thrusts since 1945. The average gain following these fourteen Thrusts was 24.6% in an average time-frame of eleven months. Dr. Zweig also points out that most bull markets begin with a Breadth Thrust.
A "Pelvic Thrust" occurs when the PWGFM indicators show that the vast majority of individuals are out of the market.
Consequent move is for the PPT to boost up the market on vapors, suck in Ma and Pa, short the shit out of the book they're talking, then blow out the system.
Last pickle barrel is happening now....
Equity trading is broken....when the crowded trade IS the liquidty we be fucked. Irony is the
crowded trade, ie. short term liquidty HFT's shops are in number a fraction of "day traders"
...Stevie @ Grunthal ..FNY....Meadowbrook..JMulheren&co...and more to the point not as
many bullets.
I once was a bear of maximum proportion, the illusion of decline firmly entrenched in my mind and soul. Fundamentals untenable, economy on a global scale rolling over, big (french, german, united states, uk , italy and yes china) banks on the ropes but its all a fantasy of ours here. I've been here a while now and believed that financial justice would be served but NO it will not. We are the bag holders, the serfs, the deniers, the educated, the confused, the understanding, the Tylers. If we do not take matters into our own hands and co-opt the security, cops, janitors and the common person to set or allow us to set the charges then we are all just pissing into the wind. Make war not love, MAKE war not love, MAKE WAR not love, MAKE WAR NOT love, MAKE WAR NOT LOVE. MAKE WAR!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I know my enemy, do you!
What dude?
Isn't making war an american dream?
New post
http://thethoughtfultrader.blogspot.com/
I deeply considered SPY puts here but I couldn't do it. The trade from Europe is short site about whether or no the EU is in danger of immediately falling apart. Stocks and the Euro rallied after the nationalization of Dexia, mostly because Dexia set the precedent that the EU will stand by the system. I think the same thing will happen with Greece. When Greece goes bankrupt and the EFSF bails out all of the banks in a European TARP move, the Euro should again rally because it will be saved for the day. A rising Euro should drive the dollar down and the falling dollar will put a floor under the stock market. The Fed is also in desperate need of more QE, which will further drive down the dollar and prop up the markets. Maybe going short would work for the next two or three weeks, but I think it's more of a story about a falling dollar from here, not falling stocks.
The Fed is actually doing QE3 right now, they're just lying about it. M2 is increasing. And pretty much by definition of ZIRP and Operation Twist, QE3 has to be occurring because the short end is being sold to buy the long end and at the same time there's a promise to keep the short end at 0%, so the Fed must also be buying the short end.
some of the most infamous crashes happened in october
you got it, early Oct we meltup...so it's a no brainer that end Oct is going to be brutal sans that BS coming out of Europe.
But this time it's different.
Why have an article about emotions when the whole scam is run by machines?