Post by brosin on Sept 3, 2011 11:41:52 GMT -5
To me, it still appears that lending is signaling way more distress than I'd think currently - there has to be bad stuff still brewing in Europe or in one of the [or multiple] US banks something). So I stand by previous comments that we are in a bear market. That being said, I don't think it's going to be easy. In this environment if you can be out in front of understanding who's about to hit hard next (and that [*especially*] includes bearish positions too), you'll get way ahead. In this type of bear market where the swings are exaggerated, you can as you can see make a lot of money fast. But you can also lose money fast. I still that the general trend is down and that this current move from 1101 is simply the one that's shaking off everyone who sold at the bottom and tried to jump short at the bottom. They'll capitulate again here on this coming move to at least 1250/75 I think, and that'll be the time to get short biased.
Above chart is a current version of the deja vu chart. topping pattern was identical - market would grind up without abandon for a way too extended period both in 2006 into 2007 (housing bubble), and in 2010 into 2011 (Bernanke bubble). In 2007, it was the housing bubble popping that caused the recession whereas in this case it's kind of the opposite, but this is all completely identical from a sentiment perspective and (crazily enough) from a charting perspective. So even with opposite cause/effect relationships, response is the same. Or so it seems. This topping pattern that led to the 2008 financial crisis might not be the same in the end. It could end up failing and the whole global economy could recover (still possible and if so, stocks still cheap - but I'm not really willing to say that yet personally although definitely more encouraged than I was even 2 months ago.. skepticism is a good thing).
Anyways, stocks grind up without fail, and then something happens that surprises the market (causes a massive "surprise low" - first circle of each time period). In 2007 it was huge ratings agency downgrades to the Mortgage Industry. In 2011 it was the Japan tsunami/earthquake/nuclear meltdown.. frankly I don't know how the market even tricked everyone into pulling off the identical move in 2011 afterwards, but the market would turn those massive lows quickly around and eventually the market would make a new high in quick fashion. Almost as if too many were playing for down and market shook them off..? Market holds the "surprise low" (to trick?) but the key is that it makes a lower high as if the market realizes it's over and we slip to new lows that lead to tankage.
The summer 2007 and then here a few weeks ago were both basically crashes - again very damaging as big funds are liquidating. Now everyone is onto what was coming in what seems to be obvious recession. At that point when banks were being raced to the bottom was the time to buy because the market was going to bounce big (2nd circles of each time period). Look at that big green candle (first green arrow) week in 2007. No doubt got everyone back off guard as that was almost a 10% move in a week. Is happening here now too -- getting people back offguard -- although in slightly longer timeframe by the looks of it. That's why while I am still overall bearish, I think there's some good money to be made on this push higher before the next big down wave.
Above chart is a current version of the deja vu chart. topping pattern was identical - market would grind up without abandon for a way too extended period both in 2006 into 2007 (housing bubble), and in 2010 into 2011 (Bernanke bubble). In 2007, it was the housing bubble popping that caused the recession whereas in this case it's kind of the opposite, but this is all completely identical from a sentiment perspective and (crazily enough) from a charting perspective. So even with opposite cause/effect relationships, response is the same. Or so it seems. This topping pattern that led to the 2008 financial crisis might not be the same in the end. It could end up failing and the whole global economy could recover (still possible and if so, stocks still cheap - but I'm not really willing to say that yet personally although definitely more encouraged than I was even 2 months ago.. skepticism is a good thing).
Anyways, stocks grind up without fail, and then something happens that surprises the market (causes a massive "surprise low" - first circle of each time period). In 2007 it was huge ratings agency downgrades to the Mortgage Industry. In 2011 it was the Japan tsunami/earthquake/nuclear meltdown.. frankly I don't know how the market even tricked everyone into pulling off the identical move in 2011 afterwards, but the market would turn those massive lows quickly around and eventually the market would make a new high in quick fashion. Almost as if too many were playing for down and market shook them off..? Market holds the "surprise low" (to trick?) but the key is that it makes a lower high as if the market realizes it's over and we slip to new lows that lead to tankage.
The summer 2007 and then here a few weeks ago were both basically crashes - again very damaging as big funds are liquidating. Now everyone is onto what was coming in what seems to be obvious recession. At that point when banks were being raced to the bottom was the time to buy because the market was going to bounce big (2nd circles of each time period). Look at that big green candle (first green arrow) week in 2007. No doubt got everyone back off guard as that was almost a 10% move in a week. Is happening here now too -- getting people back offguard -- although in slightly longer timeframe by the looks of it. That's why while I am still overall bearish, I think there's some good money to be made on this push higher before the next big down wave.
