Official Stock Market & Economy Thread

[reigndrop]

Originally Posted by Dey Know Yayo

gartmans been getting whipsawed the entire way down, i'd stay away from him imo

His recommendations might be off, but the things he has said are always on-point. That being said, read his newsletter, but don't follow hisrecommendations.

 

[dey know yayo]

dunkman- comex or onlygold.com are good plauces.
andycrazn- dont buy from etrade lol
theone- theres no weekly triangle... there's an obvious falling wedge that we are about to break down from... post a chart or something. we take out 850 ins&p in early january and sell off to at least november lows.

 

[dey know yayo]

Mondays are traditionally the big moving down days in stock markets, so I think I will start loading up in bearish positions on January 2nd, unless there issome huge volume selling starting alrady next week (which I doubt-- I expect next week to be low volume sideways action with an upward bias). Here are somestocks that I think wil break down pretty hard:

SPG
VNO
O
BXP
ARE
ALL
PRU
MET
SHLD
GS
MS
BAC
APOL
SNP
POT
MON
CF
E
APA
CHK
CLR
ENER
SOL
JASO
LDK
V
MA
AAPL
GOOG

here are some stocks that I think will soar:
SRS
SKF
FAZ
BGZ
SDS
QID

 

[theone2401]

I dont know how to post chart from stockcharts.com. If I was on my own computer I could just copy and paste..but I just pulled up a candlestick, 1 year, weeklySPX chart. Draw a straight line at 850 and you will see the pipe and the bottom of the triangle.

I could definetly be reading it wrong I have only traded this pattern on an individual stock once before ( It may be a case of me trying to validate my owntheory, I am human) But it is a pattern that I read about in Thomas Bulkowski's book and the probability of a upward breakout wasaround 70% or so. It is a triangle with a pipe coming out of the bottom 3 trend line touches on top and soon to be 3 on the bottom.

You got me second guessing myself now

But regardlessof what each of us see as far as the pattern is concerned 850 is the crucial point that is the bottom of my triangle and a break below that is my bearishsignal. Even if I get the shape wrong as long as we are looking at the same level for resistence I dont feel so bad

 

[dey know yayo]

this is no pipe bottom... clear resistance around 50dma... every resistance break is met with a sell off to right into base... the best breaking out stocks arebreaking back down now... xmas sales numbers gonna kill retail and commercial real estate in january.

 

[theone2401]

DKY. I traded this same pattern on STLD. It was on the daily chart you cannot miss it draw a horizontal line a $6.75. I am not married to my art work by anymeans but look at the results of my trade. I bought right before the gap up. It retraced exactly to last trend line touch.

If it was just luck...%#@% ill take it

in at 7.50 out at 11.80 when the RSI hit 70

 

[dey know yayo]

STLD X NUE etc etc all those steel stocks are gonna go right back down... went up on news of obamas ridiculous infrastructure spending but theyre going backdown just as quick. credit crisis.

 

[eplaya06]

Originally Posted by GoVols234

DKY, you are obviously very knowledgeable on the subject and was wondering if you could recommend any books or websites that would be helpful to reaching the current knowledge you have. I am in college now and am broke, but would like to get well versed on the market so that when I graduate and have money, I will be able to put it to good work. Thanks for the help.

 

[wawaweewa]

Well written article but I don't foresee an inflationary depression. Wealth and price destruction will reign supreme through much of 2009. Deflation willtake hold; a very strong hold at that. Savers in the US will finally be rewarded.

Interesting tidbit from an article :

Destruction of Household Wealth

Inquiring minds are diving into the Z.1 Flow of Funds Accounts of the United States for the Third Quarter 2008. It's a mammoth 124 page publication. The publication came out on December 11th but some probably have not seen it yet.

The following chart comes from page 113 of the PDF..

The chart shows a massive reduction in net worth of households over the last 4 quarters.

2007 Q4 -$1.46 Trillion
2008 Q1 -$2.42 Trillion
2008 Q2 -$0.39 Trillion
2008 Q3 -$2.81 Trillion

$7.08 Trillion in wealth has vaporized in the past year. Figure 2008 Q4 to be as bad as Q3. If so, roughly $10 Trillion in household wealth will be vaporized in little over a year. And looking ahead, there is no reason to believe the stock market, the housing market, or the economy will show signs of recovery anytime soon.
As a result,

[h3]Consumer Demand For Nearly Everything Plunges[/h3] Retail stores and exporters alike are in deep trouble as consumer demand for nearly everything is plunging. Let's take a look at some proof starting with Japan Exports Plunge Record 27% as Recession Deepens


Idle Cranes From Long Beach To Singapore
Idle shipping cranes at Frozen Ports From Long Beach to Singapore portend a bleak 2009-2010.

Unsold Autos Pile Up on Lots
In the midst of the world's biggest auto slump in decades, Toyota May Cut U.S. Payroll as Unsold Autos Pile Up on Lots.

Retailers Face Darwinian Fight as Losses Mount
A huge battle for shrinking consumer discretionary spending is underway. Yet, round after round of profit eating discounts have still not gotten consumers interested in spending. Retailers Now Face A Darwinian Fight For Survival as losses mount.

Weakening in Demand For Temporary Help
The temporary help market is grim. Staffing giant Manpower Sees Rapid Weakening in Demand






Even if foreign debt is called in the chance of high inflation is minimal. The only way I see high inflation coming about is we have a V style recovery. Then,yes, the Feds fight against deflation will result in some serious inflation mostly because of the rush of hard currency into the economy in order to satisfyhigh growth recovery. However, we are more likely, almost certain, to experience an L style economic state for years to come. Therefore, over, say 5-7, yearsthe Fed can mitigate the effects of all the liquidity that it has pumped into the system (although most of it is being horded by banks to offset future lossesand not making it to the consumer) because currency will slowly start to trickle back into the economy.


There is no doubt that with most of their action the Fed has created a situation where our economic malaise will last far longer than it needs to be.
The Fed knows it's fighting a losing battle but they're trying to prolong the decline over years instead of a quick crash over a few months. While thismay advantageous politically in the short term it will prove disastrous in the long term.

I understand why they're doing it. If a quick crash was allowed, both the Fed and the current political structure will lose power (have a high probabilityof losing power) as a result of the civil unrest. They want to maintain the status quo when all is said and done.

On a different note, I'd be weary of holding any of the ultra shorts if one is not an active day trader. Every few days news slowly trickles out that thebanks are selling off their bad derivatives positions and taking on the good side of many derivative positions. I have a feeling that these ultrashorts arebeing loaded with the losing side positions and the average Joe, not the banks, will take the loss in the next major downturn in the market.
The ultrashorts are great for day to day trading (I have a personal rule of keeping a position in them for no more than 2 days, no matter the percievedoutlook) but being tied up in them for weeks or months is dangerous.

I think the Dow going to 3k is a very real possibility (worst case sccenario) but as of now I'm more comfrotable with the 6k-6800 range.
If we ever are on the road to 3k then the Dow will be the least of our worries. There will be widespread unrest in the US at that point. Unlike the 1920'sand 30's too many Americans depend on the state to survive nowadays. The tactic (state dependence; welfare, handouts, etc.) that allowed the Feds morecontrol over the population by forcing many Americans to become dependent on the State will be their downfall unless they continue to provide these samehandouts.

 

[andre3001]

I just want to say the info in this thread is priceless to someone like myself.

Mods, can we pin? Intelligent conversation on this board is at minimum and we have people speaking some real truth in here LOL.

Anyway, as previously asked, OP, any suggestion on a book that one can read to gain some knowledge about following charts/trends/ etc? I have a finance degreefrom a top 50 business school and they NEVER taught us anything about what you're speaking about. Appreciate the help. I'm going to follow some ofthose stocks you mentioned over the next few weeks and see how they do.

 

[theone2401]

Originally Posted by Dey Know Yayo

STLD X NUE etc etc all those steel stocks are gonna go right back down... went up on news of obamas ridiculous infrastructure spending but theyre going back down just as quick. credit crisis.

they were also ridiculously over sold like the market...we will see I wont be shocked if im wrong but if not shorts will get creamed. US steel did not have thesame pattern.... and wawa Mish is the man all Nters should read

 

[nicefro]

up!

 

[secretzofwar]

^^Agreed. I'd like to know some books as well. We haven't learned any of this in my finance classes.

However, if you need Lynch or Buffet type advice, I'm pretty well versed.

 

[wawaweewa]

Originally Posted by secretzofwar

^^Agreed. I'd like to know some books as well. We haven't learned any of this in my finance classes.

However, if you need Lynch or Buffet type advice, I'm pretty well versed.

There's much about Buffet that schools don't teach.
Buffett doesn't teach it either.

 

[reigndrop]

Originally Posted by secretzofwar

^^Agreed. I'd like to know some books as well. We haven't learned any of this in my finance classes.

However, if you need Lynch or Buffet type advice, I'm pretty well versed.

Most of the stuff in here is technical analysis, which few colleges teach so I'm not surprised. Like I said earlier, if you want a start inthe things some of these guys are doing, READ THE NEWS A LOT! and to get started on technical analysis, read Technical Analysis of the Financial Markets byJohn Murphy. The book is pricey but it'll pay off in the end, otherwise just google and wikipedia these things.

 

[dublbagn]

Originally Posted by wawaweewa

I think the Dow going to 3k is a very real possibility (worst case sccenario) but as of now I'm more comfrotable with the 6k-6800 range.
If we ever are on the road to 3k then the Dow will be the least of our worries. There will be widespread unrest in the US at that point. Unlike the 1920's and 30's too many Americans depend on the state to survive nowadays. The tactic (state dependence; welfare, handouts, etc.) that allowed the Feds more control over the population by forcing many Americans to become dependent on the State will be their downfall unless they continue to provide these same handouts.

most truthful thing I have seen on this board in a while......some one hit me with the rock clapping gif asap....

 

[dey know yayo]

everything i've learned, i've learned online through google and wikipedia. "how to make money in stocks" by william o'neil is where a lotof the chart pattern info i've learned stems from, so pick that up.

wawaweewa-- deflation has started. but it's temporary. china and japan were net seller of us treasuries the past three months. they will not take any moreof our debt. bernanke has already said he will increase monetary supply enough to prevent any deflation. his power is literally limitless, he will keepprinting money as much as he needs. deflation more than a few months is literally impossible based on obama's and bernanke's policies. but it'shighly highly inflationary. do you realize our external debt? our trillion dollar + deficit next year? where's the money for that? we're going to printit. how is that no ridiculously inflationary? huuuuge excess money supply.consumer demand is down right now, but we've just started. bernanke cut rates to0 just weeks ago. wait till he starts quantitative easing and seingoriage. wait till china, japan, uae, saudi arabia start selling their treasuries to the fed(which has already said it will buy) and starts buying gold with its us dollars (which china and iran have already started). inflation will reign supreme. howwil deflation take hold when we have a fiat currency system and bernanke is willing to use that to create as much excess liquidity is needed to pay off allnominal debt and wealth destruction? inflation wil definitley reign supreme. 2009 will be the year gold takes off.

 

[nicefro]

Originally Posted by wawaweewa

Originally Posted by secretzofwar

^^Agreed. I'd like to know some books as well. We haven't learned any of this in my finance classes.

However, if you need Lynch or Buffet type advice, I'm pretty well versed.

There's much about Buffet that schools don't teach.
Buffett doesn't teach it either.

Elaborate

 

[dey know yayo]

the entire wealth of 1995-2008 was artificial, and spurred by low interest rates and debt issuance-- the state provided these people will welath they never hadmerits for earning, and obama and bernanke have said the will make sure these people get this wealth back IN NOMINAL TERMS. This is huge excess liquiditiywhich will cause terrible inflation. Even without bernanke or obama we would have terrible inflation as foreign creditor nations become net sellers of us debtand start calling their loans in. They were buying us debt becasue they 1. had faith in the system and 2. wanted to keep america's currency overvalued sothey could run great huge trade surpluses. now that americans are not artificially welathy (all bubbles collapse) they can't export their way out of it andthey have to domesticize growth, bringing purchasing power back to their own citizens. china will de-peg its currency and the indian rupee will surge in value,killing their export based economies,but a necessity. this will kill the u.s. dollar. FDR defaulted on the dollar. remember that.

 

[wawaweewa]

Originally Posted by nicefro

Originally Posted by wawaweewa

Originally Posted by secretzofwar

^^Agreed. I'd like to know some books as well. We haven't learned any of this in my finance classes.

However, if you need Lynch or Buffet type advice, I'm pretty well versed.

There's much about Buffet that schools don't teach.
Buffett doesn't teach it either.

Elaborate

Buffet is a master psychologist. A marketing genius.
He also likes to manipulate markets when he's losing. Although Buffet prob. doesn't see it as manipulating markets. (reinsurance scam, silver marketmanipulation, AIG).
Buffet doesn't always practice what he preaches.

That's not taking away from Buffett's talent though.

 

[andycrazn]

Originally Posted by Dey Know Yayo

everything i've learned, i've learned online through google and wikipedia. "how to make money in stocks" by william o'neil is where a lot of the chart pattern info i've learned stems from, so pick that up.

can i learn this stuff in college? im confused as hell on the chart pattern lingo you guys talk about. but i can see when something peaks andbottoms but i cant tell if a stock is going to spike the next minute. is that what you guys do?

 

[dey know yayo]

andycrazn- google "chart patterns".
wawaweewa- youre exactly right about buffett and his methodologies. although now i think it's different. i think he realizes now that there's no valueleft in american equities so he is trying to essentially earn a "jp morgan" legacy by liquifying important companies with his money, knowing it willlose him big dough. best example is his huge investment in goldman sachs preferred shares a few months ago.

 

[wawaweewa]

Originally Posted by Dey Know Yayo

everything i've learned, i've learned online through google and wikipedia. "how to make money in stocks" by william o'neil is where a lot of the chart pattern info i've learned stems from, so pick that up.

wawaweewa-- deflation has started. but it's temporary. china and japan were net seller of us treasuries the past three months. they will not take any more of our debt. bernanke has already said he will increase monetary supply enough to prevent any deflation. his power is literally limitless, he will keep printing money as much as he needs. deflation more than a few months is literally impossible based on obama's and bernanke's policies. but it's highly highly inflationary. do you realize our external debt? our trillion dollar + deficit next year? where's the money for that? we're going to print it. how is that no ridiculously inflationary? huuuuge excess money supply.consumer demand is down right now, but we've just started. bernanke cut rates to 0 just weeks ago. wait till he starts quantitative easing and seingoriage. wait till china, japan, uae, saudi arabia start selling their treasuries to the fed (which has already said it will buy) and starts buying gold with its us dollars (which china and iran have already started). inflation will reign supreme. how wil deflation take hold when we have a fiat currency system and bernanke is willing to use that to create as much excess liquidity is needed to pay off all nominal debt and wealth destruction? inflation wil definitley reign supreme. 2009 will be the year gold takes off.

The Fed does have limitless power in that regard seeing as how the Treasury is basically a Fed Reserve subsidiary now. The FED does want all thatpower to itself as evidenced by their announcement that they might issue their own debt.

The country has lost in excess of $7 trillion of wealth within the past year and the Fed and Treasury have injected $8.4 trillion. However, very little of thatmoney is reaching the consumer. Even if all of that money did reach the consumer it'd wouldn't even cover the capital (albeit fake capital) destroyed(this includes Q4 200.

Mainly, the banks are hoarding most of that money to offset near term and future losses.
The derivatives problem is still huge and the enxt set of corporate failures will trigger more sCDO payouts. The real problem lies in the syntheticderivatives.

Bank Reserves:

http://research.stlouisfed.org/fred2/series/RESBALNShttp://research.stlouisfed.org/fred2/series/RESBALNS


The USD may collapse if the Federal Reserve becomes insolvent or unstable due to them buying up POS paper for almost face value that may cost 20 to 1 or thatmay be worth zero.Eventually there may be serious inflation but it'll come if the FED becomes close to or literally insolvent.

This isn't talked about much in the media so you know there's soemthign to it.

AIG Sells $16 Billion in CDOs

By MIKE BARRIS

American International Group Inc. said a financing entity has purchased an additional $16 billion in collateralized debt obligations insured by the insurance giant through credit-default swap contracts.

So far, $62.1 billion of such CDOs have been purchased, canceling the CDS contracts and relieving some pressure on AIG's liquidity.

The move comes as AIG has been trying to pay back as much as $60 billion in loans it received as part of its September government rescue.

The entity, Maiden Lane III, was created by the Federal Reserve Bank of New York last month to mitigate AIG's liquidity issues in connection with its CDS contracts. The Fed said then that it would lend as much as $30 billion to the facility and AIG would lend $5 billion.

The entity will collect cash flows from the CDOs and pay a distribution to AIG for its equity interest once principal and interest owed to the Fed have been paid in full. After payment of the Fed's senior loan and AIG's equity interest, all remaining amounts received by the entity will be paid 67% to the Fed and 33% to AIG.

Washington initially rescued AIG in mid-September, when the insurer faced possible bankruptcy, by lending it as much as $85 billion at high interest rates. Since then, the government has twice agreed to change the deal. Initially, it increased the possible loan to nearly $123 billion. Then, in mid-November, it agreed to a new package valued at about $150 billion -- of which as much as $60 billion is a loan -- that slashed AIG's interest rate on the loan.

AIG is planning to sell much of its life-insurance businesses around the world, as well as its aircraft-leasing unit, in hopes of raising tens of billions of dollars.

Write to Mike Barris at [email protected]

News December 17, 2008, 10:12PM EST
[h1]The Fed's Risky Backdoor Bailouts[/h1] [h2]As part of its effort to prop up the markets, the Fed is giving billions to banks-and putting taxpayers at risk[/h2]
By David Henry and Matthew Goldstein

The U.S. Treasury Dept. has been blasted for handing out huge sums of money to banks without clear taxpayer safeguards or ground rules for the recipients. Yet the Federal Reserve is pouring trillions into banks with little transparency. The moves have helped to shore up the wobbly financial system in the short term. But some of the deals could end up hurting taxpayers, weakening the central bank, and weighing on the economy in the future.

In one of its latest transactions, the Fed in November channeled $20 billion-more than the size of the proposed auto bailout-to a group of U.S. and European banks, including Société (SCGLY), Deutsche Bank (DB), and Goldman Sachs (GS), according to people familiar with the deals. The only evidence that the vast sum had changed hands was an entry on the Fed's most recent balance sheet called "Maiden Lane III" and a series of cryptic regulatory documents.

By making loans to financial institutions that can't get credit elsewhere, the Fed is the only part of the government that has the power to pump capital quickly into the financial system to stave off crisis. Historically such moves have been rare, and they've been made behind a curtain of secrecy on the thinking that public disclosure could spark a market panic. "We keep these transactions private because the Fed, as a lender of last resort, seeks to provide liquidity and not stigmatize those who seek it," says Calvin Mitchell, a spokesman for the New York branch of the Fed, which set up the Maiden Lane III transaction.

The banks likely welcomed the fresh capital from Maiden Lane III. But in recent months the Fed has pushed the boundaries of its authority by taking larger and more opaque risks on its books. The central bank currently has $2.2 trillion in outstanding loans, up from $900 billion in September. It's also using new and untested weapons. Until this year the Fed mainly loaned to banks. Now it's buying securities, some tied to poisonous mortgages. If those bets don't pay off, the Fed will eat the loss.


http://www.businessweek.com/print/magazine/content/08_52/b4114000208822.htmhttp://www.businessweek.c.../08_52/b4114000208822.htm

 

[wawaweewa]

Originally Posted by Dey Know Yayo

andycrazn- google "chart patterns".
wawaweewa- youre exactly right about buffett and his methodologies. although now i think it's different. i think he realizes now that there's no value left in american equities so he is trying to essentially earn a "jp morgan" legacy by liquifying important companies with his money, knowing it will lose him big dough. best example is his huge investment in goldman sachs preferred shares a few months ago.

That may be the case.
Although I also suspect that with Buffet being heavily involved with AIG and insurance in general, he is on the bad side of many swaps.

He may be liquifying companies that if gone bankrupt would lose him a lot of money. In essence it's costing him lots now to keep these companies afloat butit'd cost him even more if they went bust.

Although with GS I think that Buffett knows that they're now the top dog on Wall St. hand in hand with JP Morgan Chase
GS knew this %%%* was coming way back in late 2005, early 2006. They're the ones who began speculating in oil futures in 2006 as they pulld their moneyfrom many other markets (feeling that they'd go bust). GS made a pretty penny on oil specualtion. Enough to come out on top, so far, after BS and LBfiascos.

 

[dey know yayo]

Liquidity trap scenario will not pan out because of 1. HUGE EXTERNAL DEBT and 2. helicopter ben.

Our dollar is now backed by bad mortgage debt. Inflation happens when there is more money supply than is backed by economic goods. We already have thatscenario, but it worked for al ong time because other nations wanted to keep taking american debt and propping up the Dollar to help their own exports. exportsare absolutely toast now, americans don't have the money to buy them anymore. so that in itself will cause rampant inflation.

but aside from that, bernanke will not let a liquidity trap pan out. we have fiat currency, which gives the Fed literally limitless power. he has said himselfhe will use that to spur growth, no matter the costs.The Fed is already insolvent and has been for years... it will use seignoriange and quanititative easingto prevent bankruptcy (it already says it will).

don't forget the FDIC, social secutiy, and all these other programs. the FDIC doesnt have nearlyyyyyy enough money to cover its insurance demands, it willneed a "bailout." Social security will be what all these baby boomers will retire off of as their savings, mutual funds, and pensions funds go downto 0, and social security is UNFUNDED. and let's not forget all the other deficit spending obama has committed to his agenda already. how will we pay forthat? the fed will print money. it has already said it will. that money is going STRAIGHT into the ecnonomy, not trapped behind bank's incentives. that isexcessliquidity directly injected into the consumer's hands.