Wednesday, August 10, 2011

New Long Position Update


I suppose the internet expression OMG is the best description for the last 2 days trading activity. So much for the efficient market theory. Volatility and confusion should be expected since we've got Tim 'It'll never happen' Geitner and Uncle Ben at the helm steering the economy and market through the shoals and shark infested Republicans waters of Washington DC. Obviously, the BULLS love the Feds announcement .. at least for today.

I think the FEDs term comittment to ZIRP for two years is as much politics as economics. They know that this next presidential election will, no doubt, be the ugliest political carnival over the last 100 years. By affixing a term, beyond the election, they've opted out of the fray in advance to prevent accusations that policy changes are politically rigged during an election.

Over in EuroLand Italy is toast, as Mr. Trichet has delivered the terms of surrender for a bailout. The austerity measures are as harsh as those for Greece and should appease the Germans who are now the only ones paying off everybodys credit card. France is the next hotspot as CDS spreads are widening and there are rumors of serious problems with their big banks. If France is forced to surrender then they should stop calling it Eurodollars and call it like it is ... German Marks. Without the strength of the German economy none of these phony bailouts would be possible. If the German economy falters then the S#%$ will really hit the fan over there!

New Swing Long Position was initiated and one of the clues was the VIX Count. Details available to anyone if interested, the only requirement is a comment on this Blog.

The broad market shot significantly higher today. The Russell 2000 outperformed other indexes by climbing up 6.83% while the S&P 500 gained only 4.71%. The S&P 500 saw its strongest advance since 03/23/2009 when the S&P 500 gained 7.16%. The DJI had its strongest advance since 03/23/2009. The last strongest up-move was seen on the NASDAQ 100 on 05/10/2010. The bigger daily gain was seen on the Russell 2000 on 03/23/2009 when it rallied by 8.35%. The strongest up-move was seen on the NYSE Comp. on 03/23/2009.

The S&P 500's daily volume was 6,690 million shares today, which was higher by 125% than the average daily volume sustained over the past 3 months.

In previous short-term outlook, I had suggested: "Positive money flow on this chart would suggest the possibility of positive trading tomorrow after the market open. " -

The Federal Reserve, in an unprecedented move, said on Tuesday it will keep interest rates near zero for at least two more years and is considering further action, bolstering battered stock markets.

The United States faces one-in-four odds of slipping back into recession, and a weaker economic outlook is raising the likelihood the Federal Reserve will soon do more to boost growth, a Reuters poll shows.

The chances of another U.S. recession are rising and Europe's recovery is also at risk, according to the latest Reuters poll, taken during the worst stock market selloff since the nadir of the financial crisis.

U.S. non-farm productivity fell in the second quarter as economic activity slackened, while a moderation in the pace of wage growth suggested inflation pressures will remain contained.

The stock market's recent slump is reviving bad memories for California's government and raising concerns about revenue estimates for its budget, a perennial concern in the U.S. municipal debt market.

The struggling U.S. economy is beginning to take its toll on shipping companies which should be seeing a big boost from their peak season but instead find retailers delaying decisions about how much to import.

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