The Stock Market

[midas]

as per my last post 10400 is next dow exit. According to T.A

why wasnt the exit 10,230 ?

Because Technical Resistance is indeed at 10400 and your "dead cat" hasn't bounced far enough yet.

Hmmmm

I wonder what will ultimately matter most ........squigly lines or Spain's ever increasing debt getting downgraded ?

[loong]

as per my last post 10400 is next dow exit. According to T.A

?????

Your previous post was #1754 on 12th May

around 10% pullback is what market was looking for.

USA looks pretty darn good

Educate yourselves peoples !

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

Europe propped up and G.B sorted.

Will be some nice short term gains if you bought last several days

I don't see any relationship between the 2 posts. I fact you were calling nice short term gains just as the bullish retracement with the Dow was exhausted.

I do agree that 10,400 is likely to be a key resistance level, but not necessarily a time to exit. More a time for decision. Personally, I will be looking for a signal to short at this level, but it depends on market sentiment if/when this happens.

Likewise, 9,800 is likely to be a key support level.

There was market noise around the 50% retracement during the bull market and it is not unreasonable to anticipate noise around the same level before the market decides to continue with the bullish move back to 61.8% or confirm that the bears have taken control.

I have no open positions at the moment as I feel that we are currently in no mans land..

[Abrak]

uring the bull market and it is not unreasonable to anticipate noise around the same level before the market decides to continue with the bullish move back to 61.8% or confirm that the bears have taken control.

Are they we go again with - 61.8% - which to most people might seem a rather random number.

Actually it is a Fibonacci based on the 'golden mean' - 1.618xxxxxxx ad infinitum. Now this number revelence ranges from anything from say the Mona Lisa to how our brain waves are formed.

However, chartists never really explain why this number is significant - merely tell you that it is.

Here is an idiots guide to understanding the number.

http://doblox.com/blogs/post/400-fibonacci...issign~1.618%29

[Gambles]

Not sure that it's disingenuous so much as right and left hands deliberately not communicating

Obama brought back Volcker because the Goldman boys were keeping him in the dark

The more bank for your Buck speech was a classic example of them making a fool out of him (or letting him make one out of himself)

Volcker doesn't want inflation but is being served half-baked fait accompli for breakfast, lucnh and dinner

Bernanke and The Goldman boys can't ever admit that their only plan is to inflate away the debt - they'd never be allowed to get away with it

but it looks increasingly like their only policy option whether POTUS knows or not

So Gambles what is the end game?

I see it as inflation deflating debt. Now I admit that is the simplest solution but I cannot see any other.

To some extent even those who believe in deflation, like Midas, are talking about 'deflation' in real terms while they acknowledge monetary inflation.

And really especially as far as the US dollar is concerned, China and the US are currently involved in a screw me, screw you policy.

the only end game that would provide a lasting fix is an asset write down to realistic values

Mass bankruptcies, huge bank failures, extreme short term unemployment but at least a solid base from which to build

Anything else is a sticking plaster when surgery is needed

But the right thing will not happen because of

politicans

bankers

vested interests

The above 3 groups are from being mutually exclusive - you'd get huge areas of overlap if you drew these on a Venn diagram

The right thing will happen when priced in gold. Say another 25% drop in house prices in the western world coupled with another 25% increase in the price of gold. There is the 50% drop we need from here.

Sokal,

I'm not trying to discourage your posts because you make some great points and you reference many sources that I don't use so I learn a lot...but, in the spirit of trying to help you with your problem....my first huge crush back in the school days of the early '70s was when I was about 11 years old. I can still remember her name, Alison Pollard. She was perfection in 11 year old female form, funny, beautiful, kind - just wonderful. It never really happened between us though and although for many years after I'd occasionally wonder what became of her, I have moved on completely. Sometimes you just have to accept that things weren't meant to be and that you have to let go and move on......

[Gambles]

as per my last post 10400 is next dow exit. According to T.A

why wasnt the exit 10,230 ?

Because Technical Resistance is indeed at 10400 and your "dead cat" hasn't bounced far enough yet.

Hmmmm

I wonder what will ultimately matter most ........squigly lines or Spain's ever increasing debt getting downgraded ?

I know that it was rhetorical Midas but I can't help backing you up on this one

In the long term, I'm short the value and meaning of the squiggles and very long the negative impact of carrying so much cruddy debt

[Gambles]

I posted this in financial crisis earlier but I think that it's relevant here too so apologies if you've seen it already:

FOXES AND HEDGEHOG UPDATE?

 Behavioural Finance: Information overload can lead to short-termism

By Frances Hudson | 11:51:58 | 27 May 2010 Courtesy of Citywire

The City has been castigated for short-termism, but why and what are the consequences?

In 1936, Keynes defined speculation as ‘the activity of forecasting the psychology of the market’ and theorised that ‘as the organisation of investment markets improves, the risk of the predominance of speculation increases’. If this is true, then behavioural finance should continue to gain prominence. The investment decisions that we make are bounded by our time horizons. This seems eminently sensible. If there is a known or even probable future liability, either in the form of a cash flow or lump-sum cash requirement, it should be taken into account. In the absence of known liabilities, the goal might be to achieve superior risk-adjusted returns over a period of time appropriate to the instruments and methodology being used. So far so good, but recent experience is contrary. Holding periods for US equity mutual funds contracted 80% from an average of 16 years in the 1950s and 1960s to just over three years in 2003 before settling at around four years pre-crisis. At the same time, turnover within portfolios increased from 17% to 110% per annum, implying a holding period for equities of just 11 months. Most analytical tools used by investors are not intended to work on such short time horizons, suggesting that many investors are, as Keynes forecast, engaged in second-guessing the psychology of the market rather than applying conventional fundamental analysis. One explanation for the compression of time horizons is increased information availability. Besides trade and risk disclosures and marking-to-market, investment managers and companies report and are assessed on a quarterly or even a monthly basis, even though the tools they use are effective over very different timeframes. It could be that greater frequency and volume of information provides a degree of comfort to investors, though it may be a false sense of security, engendering overconfidence and leading to over-trading. It seems obvious that increased trading results in increased costs, which detract from long-term performance. As a further caveat, even if it were successful, short-term performance does not necessarily translate into long-term gains. In the immediate aftermath of the global financial crisis, investors’ time horizons shortened dramatically as they sought the most liquid instruments – those they could be sure of exiting if the world did end up crashing around their ears. Herding towards the exits was an understandable (if less than rational) way to behave and provided a contrarian opportunity for those willing and able to take a longer view, reaping an illiquidity premium. Of course, being seen to be doing something – especially if it is the same course as others are following – is a low-risk short-term strategy in reputational terms. However, being distracted by the noise around markets rather than focusing on longer-term changes to the conduct of business could prove a costly course to follow.

However the long term in only equities can mean some 10-15 year periods of nil returns as depicted above? Please always note that Strategic Asset Allocation for long term growth also changes every decade or so.

Scott Campbell

28th May 2010

[Parvis]

I know that it was rhetorical Midas but I can't help backing you up on this one

In the long term, I'm short the value and meaning of the squiggles and very long the negative impact of carrying so much cruddy debt

Gambles

In the "wisdom" I MAY have gained by having lived for a long time - I must insist:

In the long term we are all dead - and - in the short term - I prefer driving a Porsche rather than an old Toyota (yes - Naam - I prefer Porsche to BMW - perhaps this is relating to my "research on cycles" - since Porsches were my "early manhood transportation").

From a totally objective viewpoint - according to any top professionals (in Economics, Psychology, Psychiatry, Mathematics, Physics, Engineering etc. etc.) I ever talked to - all "human endeavours" can be reduced/simplified to "squiggly lines" which encompass more "wisdom" than systematic verbal analysis and long verbage will ever do.

Edited May 29, 2010 by Parvis

[Abrak]

Sokal,

I'm not trying to discourage your posts because you make some great points and you reference many sources that I don't use so I learn a lot...but, in the spirit of trying to help you with your problem....my first huge crush back in the school days of the early '70s was when I was about 11 years old. I can still remember her name, Alison Pollard. She was perfection in 11 year old female form, funny, beautiful, kind - just wonderful. It never really happened between us though and although for many years after I'd occasionally wonder what became of her, I have moved on completely. Sometimes you just have to accept that things weren't meant to be and that you have to let go and move on......

Boy..... you had the same crush on Allison Pollard (I believe it had two lls) that is weird and freaky. I didnt really get it on it either although I did get some tongue and she was quite a bit older at the time - to be honest - prone to being a bit of a slapper. Bear in mind that in the early 1970s I was surfing the 3 available channels, which were in black and white, looking for Barney.

[midas]

as per my last post 10400 is next dow exit. According to T.A

?????

Your previous post was #1754 on 12th May

around 10% pullback is what market was looking for.

USA looks pretty darn good

Educate yourselves peoples !

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

Europe propped up and G.B sorted.

Will be some nice short term gains if you bought last several days

I don't see any relationship between the 2 posts. I fact you were calling nice short term gains just as the bullish retracement with the Dow was exhausted.

I keep remembering his words of wisdom to me in Post #1480 on 11th April

" Hey midas I do remember saying see you at 11, 000 , why don't you just buy something and enjoy the ride? Nothing to suggest its not going to 11500 or to 13000 for that matter, can you show me why anyone would be selling now? (please no news paper clips) "

I think that was his problem !

[midas]

I know that it was rhetorical Midas but I can't help backing you up on this one

In the long term, I'm short the value and meaning of the squiggles and very long the negative impact of carrying so much cruddy debt

Yeah well I often wonder how unshakeable such confidence in squiggly lines will remain as this global debt disaster keeps unfolding?

.I mean there has to come a point when the walls are crumbling atound you that your little graph starts to means sod all ?

[AlexLah]

As long as the debt can be serviced Midas, at whatever cost.

I just read they suggested raising the environmental tax on oil by 400% in the US............

[lannarebirth]

I know that it was rhetorical Midas but I can't help backing you up on this one

In the long term, I'm short the value and meaning of the squiggles and very long the negative impact of carrying so much cruddy debt

Gambles

In the "wisdom" I MAY have gained by having lived for a long time - I must insist:

In the long term we are all dead - and - in the short term - I prefer driving a Porsche rather than an old Toyota (yes - Naam - I prefer Porsche to BMW - perhaps this is relating to my "research on cycles" - since Porsches were my "early manhood transportation").

From a totally objective viewpoint - according to any top professionals (in Economics, Psychology, Psychiatry, Mathematics, Physics, Engineering etc. etc.) I ever talked to - all "human endeavours" can be reduced/simplified to "squiggly lines" which encompass more "wisdom" than systematic verbal analysis and long verbage will ever do.

I disagree. Squiggly lines can either encompass or ignore, based on the parameters of the architect of the graph. Please know that most graphs are created to deceive rather than enlighten.

[Parvis]

I disagree. Squiggly lines can either encompass or ignore, based on the parameters of the architect of the graph. Please know that most graphs are created to deceive rather than enlighten.

lannarebirth

"Squiggly lines" do not deceive - if you use them correctly. This assumes of course you use the correct parameters - which may need to be updated as necessary. To choose the correct parameters is not an easy task. By choosing the parameters you are in essence using logic. To display these parameters in a graph - you are in essence using an objective (scientific) formula without opinions, personal agenda - or emotions.

If the intention of the "architect of the graph" is to deceive you - he can deceive you as easily as he can in written/spoken words.

Graphs just like words do not deceive - it is the people who produce these graphs or words - who can deceive.

Edited May 29, 2010 by Parvis

[lannarebirth]

I

"Squiggly lines" do not deceive - if you use them correctly. This assumes of course you use the correct parameters - which may need to be updated as necessary. To choose the correct parameters is not an easy task. By choosing the parameters you are in essence using logic. To display these parameters in a graph - you are in essence using an objective (scientific) formula without opinions, personal agenda - or emotions.

If the intention of the "architect of the graph" is to deceive you - he can deceive you as easily as he can in written/spoken words.

Graphs just like words do not deceive - it is the people who produce these graphs or words - who can deceive.

Sure. Lots of dishonest people about. Particularly in occupations that touch your money.

[Parvis]

I

"Squiggly lines" do not deceive - if you use them correctly. This assumes of course you use the correct parameters - which may need to be updated as necessary. To choose the correct parameters is not an easy task. By choosing the parameters you are in essence using logic. To display these parameters in a graph - you are in essence using an objective (scientific) formula without opinions, personal agenda - or emotions.

If the intention of the "architect of the graph" is to deceive you - he can deceive you as easily as he can in written/spoken words.

Graphs just like words do not deceive - it is the people who produce these graphs or words - who can deceive.

Sure. Lots of dishonest people about. Particularly in occupations that touch your money.

Yes - now I agree - because the "architects of the graphs" and the individuals proclaiming to be "experts at your service" have a personal agenda.

But your graph sample has an illogical ignorant inference.

Edited May 29, 2010 by Parvis

[lannarebirth]

I

"Squiggly lines" do not deceive - if you use them correctly. This assumes of course you use the correct parameters - which may need to be updated as necessary. To choose the correct parameters is not an easy task. By choosing the parameters you are in essence using logic. To display these parameters in a graph - you are in essence using an objective (scientific) formula without opinions, personal agenda - or emotions.

If the intention of the "architect of the graph" is to deceive you - he can deceive you as easily as he can in written/spoken words.

Graphs just like words do not deceive - it is the people who produce these graphs or words - who can deceive.

Sure. Lots of dishonest people about. Particularly in occupations that touch your money.

Yes - now I agree - because the "architects of the graphs" and the individuals proclaiming to be "experts at your service" have a personal agenda.

But your graph sample has an illogical ignorant inference.

Yes, I know. A fraudulent graph in leiu of yours.

[sokal]

as per my last post 10400 is next dow exit. According to T.A

?????

Your previous post was #1754 on 12th May

around 10% pullback is what market was looking for.

USA looks pretty darn good

Educate yourselves peoples !

http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

Europe propped up and G.B sorted.

Will be some nice short term gains if you bought last several days

I don't see any relationship between the 2 posts. I fact you were calling nice short term gains just as the bullish retracement with the Dow was exhausted.

I keep remembering his words of wisdom to me in Post #1480 on 11th April

" Hey midas I do remember saying see you at 11, 000 , why don't you just buy something and enjoy the ride? Nothing to suggest its not going to 11500 or to 13000 for that matter, can you show me why anyone would be selling now? (please no news paper clips) "

I think that was his problem !

I got out of the DOW at this time. Not including dividends, I just broke even. I didn't expect it to get this high but it did. I had to make the sell at an internet cafe on Kohsan road. I don't know what the security is like at those internet cafe's but I had to make my move.

Apr 29, 2010 Sell E I DU PONT DE NEMOURS & CO DD - $40.36 USD

[Naam]

uring the bull market and it is not unreasonable to anticipate noise around the same level before the market decides to continue with the bullish move back to 61.8% or confirm that the bears have taken control.

Are they we go again with - 61.8% - which to most people might seem a rather random number.

Actually it is a Fibonacci based on the 'golden mean' - 1.618xxxxxxx ad infinitum. Now this number revelence ranges from anything from say the Mona Lisa to how our brain waves are formed.

However, chartists never really explain why this number is significant - merely tell you that it is. Here is an idiots guide to understanding the number.

http://doblox.com/blogs/post/400-fibonacci...issign~1.618%29

even my dogs (male and female) pee in my garden in a pattern strictly observing the golden ratio. honi soit qui mal y pense!

[Gambles]

From a totally objective viewpoint - according to any top professionals (in Economics, Psychology, Psychiatry, Mathematics, Physics, Engineering etc. etc.) I ever talked to - all "human endeavours" can be reduced/simplified to "squiggly lines" which encompass more "wisdom" than systematic verbal analysis and long verbage will ever do.

and that's where we differ, P. I'm much more sceptical about theorists, chartists and modelists and I'm more into what's real and tangible and human.

We're just different. As long as you're happy in your universe. I'm happy in mine.

[Gambles]

Sokal,

I'm not trying to discourage your posts because you make some great points and you reference many sources that I don't use so I learn a lot...but, in the spirit of trying to help you with your problem....my first huge crush back in the school days of the early '70s was when I was about 11 years old. I can still remember her name, Alison Pollard. She was perfection in 11 year old female form, funny, beautiful, kind - just wonderful. It never really happened between us though and although for many years after I'd occasionally wonder what became of her, I have moved on completely. Sometimes you just have to accept that things weren't meant to be and that you have to let go and move on......

Boy..... you had the same crush on Allison Pollard (I believe it had two lls) that is weird and freaky. I didnt really get it on it either although I did get some tongue and she was quite a bit older at the time - to be honest - prone to being a bit of a slapper. Bear in mind that in the early 1970s I was surfing the 3 available channels, which were in black and white, looking for Barney.

A, you got tongue??

So many old wounds re-opened!!

Maybe I haven't gotten over it after all.....

[Gambles]

I know that it was rhetorical Midas but I can't help backing you up on this one

In the long term, I'm short the value and meaning of the squiggles and very long the negative impact of carrying so much cruddy debt

Yeah well I often wonder how unshakeable such confidence in squiggly lines will remain as this global debt disaster keeps unfolding?

.I mean there has to come a point when the walls are crumbling atound you that your little graph starts to means sod all ?

The real squigglers wouldn't even notice that the walls were crumbling......

[Gambles]

I know that it was rhetorical Midas but I can't help backing you up on this one

In the long term, I'm short the value and meaning of the squiggles and very long the negative impact of carrying so much cruddy debt

Gambles

In the "wisdom" I MAY have gained by having lived for a long time - I must insist:

In the long term we are all dead - and - in the short term - I prefer driving a Porsche rather than an old Toyota (yes - Naam - I prefer Porsche to BMW - perhaps this is relating to my "research on cycles" - since Porsches were my "early manhood transportation").

From a totally objective viewpoint - according to any top professionals (in Economics, Psychology, Psychiatry, Mathematics, Physics, Engineering etc. etc.) I ever talked to - all "human endeavours" can be reduced/simplified to "squiggly lines" which encompass more "wisdom" than systematic verbal analysis and long verbage will ever do.

I disagree. Squiggly lines can either encompass or ignore, based on the parameters of the architect of the graph. Please know that most graphs are created to deceive rather than enlighten.

Doh!

I wish that I'd said that, Oscar, I wish that I'd said that!

Edited May 30, 2010 by Gambles

[Gambles]

I

"Squiggly lines" do not deceive - if you use them correctly. This assumes of course you use the correct parameters - which may need to be updated as necessary. To choose the correct parameters is not an easy task. By choosing the parameters you are in essence using logic. To display these parameters in a graph - you are in essence using an objective (scientific) formula without opinions, personal agenda - or emotions.

If the intention of the "architect of the graph" is to deceive you - he can deceive you as easily as he can in written/spoken words.

Graphs just like words do not deceive - it is the people who produce these graphs or words - who can deceive.

Sure. Lots of dishonest people about. Particularly in occupations that touch your money.

L, it's hard to argue with that. From Wall Street to Bangkok, I wish that it weren't true but the evidence is sadly and depressingly true.

[Abrak]

From a totally objective viewpoint - according to any top professionals (in Economics, Psychology, Psychiatry, Mathematics, Physics, Engineering etc. etc.) I ever talked to - all "human endeavours" can be reduced/simplified to "squiggly lines" which encompass more "wisdom" than systematic verbal analysis and long verbage will ever do.

and that's where we differ, P. I'm much more sceptical about theorists, chartists and modelists and I'm more into what's real and tangible and human.

We're just different. As long as you're happy in your universe. I'm happy in mine.

Gambles, while I am on your side in the fundamental camp, the likes of most chartists would actually argue that what they are in touch with is far more 'real, tangible and human' than your universe based on logic and analysis.

Ultimately chartists focus on our underlying psychology and assume that to an extent underlying knowledge is fully discounted (i.e. shall we say an essential 'rational expectations' approach to valuation - price random walk etc.)

If you were to say take the existence of 'phi' and then consider how theoretically it is of so much mathematical importance, you would realize that it is the 'fundamentalists' rather than the 'chartists' who perhaps do not understand things. Or shall we say ignore such matters to their detriment. I will always be a fundamentalist because I understand logic and theory. But, to the extent, that chartists understand underlying psychology, I respect that. In fact, the understanding of human psychology will only work in the short term. In the long run all stocks prices are based on their underlying fundamentals.

Or look it another way. The chartists basically take advantage of underlying 'mass psychology' to trade. That is fine so long as 'fundamentalists' actually take advantage of that psychological flaw and understand that prices will eventually move towards a fundamental equilibrium.

[loong]

Or look it another way. The chartists basically take advantage of underlying 'mass psychology' to trade. That is fine so long as 'fundamentalists' actually take advantage of that psychological flaw and understand that prices will eventually move towards a fundamental equilibrium.

Although I agree with you to an extent.

Somebody once said (was it Bill Williams?) That the markets can remain irrational longer than you can remain solvent. Although fundamentals will eventually have their impact on the markets, they have been and always will be more influenced by sentiment.

When fundamentals and a trend agree, it's time to climb aboard that trend.

As far as I am concerned, fundamentals support a bear market and when sentiment does turn totally bearish, I will climb aboard that train.

[loong]

Allison Pollard?

Now you know - she is gay

http://en.netlog.com/pce1707

[Abrak]

Allison Pollard?

Now you know - she is gay

http://en.netlog.com/pce1707

Actually I think she is 'bi-passive' but presumably that wasnt an option on the website.

[Parvis]

Or look it another way. The chartists basically take advantage of underlying 'mass psychology' to trade. That is fine so long as 'fundamentalists' actually take advantage of that psychological flaw and understand that prices will eventually move towards a fundamental equilibrium.

Although I agree with you to an extent.

Somebody once said (was it Bill Williams?) That the markets can remain irrational longer than you can remain solvent. Although fundamentals will eventually have their impact on the markets, they have been and always will be more influenced by sentiment.

When fundamentals and a trend agree, it's time to climb aboard that trend.

As far as I am concerned, fundamentals support a bear market and when sentiment does turn totally bearish, I will climb aboard that train.

I tend to agree with you. I believe what most self-described "Fundamentalists" don't appear to realize is that Charts are nothing but a graphical representation of fundamentals normally used by highly educated/trained professionals. "Sentiment" changes ever so slightly before "Fundamentals" - which you can only notice in Graphs - not magazine articles.

Edited May 30, 2010 by Parvis

[Abrak]

I tend to agree with you. I believe what most self-described "Fundamentalists" don't appear to realize is that Charts are nothing but a graphical representation of fundamentals normally used by highly educated/trained professionals. "Sentiment" changes ever so slightly before "Fundamentals" - which you can only notice in Graphs - not magazine articles.

Ooooh we are getting a bit difficult here.....

To any 'rational' investment professional a chart of a company's share price will not reflect underlying fundamentals. To assume it does needs massively heroic assumptions 'such as an assumption of perfect information' combined with an ignorance of the fact that share price graphs do not reflect the 'resulting random walk' that you would see from that assumption. Actually they know underlying fundamentals change far less than underlying sentiment.

How does a stock that was trading at Bt8 a year ago reflect the fact that it just reported Bt5.5 EPS in the first quarter of this year? From a fundamental standpoint?

You simply cannot equate share price graphs with 'a graphical representation of fundamentals' simply because fundamentals do not have the underlying volatility that is represented in those share price graphs.

[midas]

Or look it another way. The chartists basically take advantage of underlying 'mass psychology' to trade. That is fine so long as 'fundamentalists' actually take advantage of that psychological flaw and understand that prices will eventually move towards a fundamental equilibrium.

Although I agree with you to an extent.

Somebody once said (was it Bill Williams?) That the markets can remain irrational longer than you can remain solvent. Although fundamentals will eventually have their impact on the markets, they have been and always will be more influenced by sentiment.

When fundamentals and a trend agree, it's time to climb aboard that trend.

As far as I am concerned, fundamentals support a bear market and when sentiment does turn totally bearish, I will climb aboard that train.

I tend to agree with you. I believe what most self-described "Fundamentalists" don't appear to realize is that Charts are nothing but a graphical representation of fundamentals normally used by highly educated/trained professionals. "Sentiment" changes ever so slightly before "Fundamentals" - which you can only notice in Graphs - not magazine articles.

Maybe charts were useful when there was a real stock market but from all the " magazine articles "

I am reading there are very few professional traders other than the owners of the few super HFT computers

that have any faith in this market at all. Just look at the incredibly low volume last week when there was a bounce up.

So when you say you graphs can reflect changes in sentiment , whose sentiment exactly ?

The computers sentiment ?