I Beg To Differ!

Two quotes I came across recently and which I would like to respond to as they represent the inherent misconceptions that lead many traders to lose their shirt trading the this wood chipper of a market. I will not quote the source as I don’t engage in criticizing fellow analysts – besides I keep hearing the very same statements all over the blogosphere, thus this message goes out to everyone, in particular those with bearish dispositions for the last quarter of 2010:

Exhibit A:

The market is over-believed.

Yes, that is absolutely true. Monday’s Daily Sentiment Index logged in at 93% thus exceeding the April 14 high of 92% as well as the October 2007 all-time high of 85%.

Exhibit B:

The present situation appears unsustainable and the market needs to alleviate its extremes.

Oh really?

So what??

Let me show you something.

Charts and commentary below for anyone donning a secret decoder ring. The rest of you guys will have to wait until tomorrow – sorry. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

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Back To Basics

Here is one sign that is sometimes early – but rarely wrong:

Well, I have a better one – simple but effective ;-)

Nice cross-over on my weekly stochastic – the heat is on for the longs. This chart has only failed me once on a long term basis – which was obviously in summer/fall 2009 when nothing could stop a relentless POMO induced melt up.

Let’s see what happens this time. But the odds are slowly starting to shift now. I want to see the Dollar punch higher here as well – in order to bring down equities we need to see several factors combine and produce a downside pull that even Bernanke’s printing machines cannot cope with.

Again, I don’t have high hopes for anything significantly bearish ahead of the election. But wouldn’t it be fun to see a meaningful slide just going into the final weeks? Yes, maybe a dash of Schadenfreude here – sorry, it’s genetic ;-)

Cheers,

Mole

I See Green Candles!

Although X-Mas is two months away I’m seeing some interesting candles today – on the DXY that is.

No, not those – but almost as festive. Let’s have a look, shall we?

Charts and commentary below for anyone donning a secret decoder ring. The rest of you guys will have to wait until tomorrow – sorry. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

Please login or register for Zero Data Feed (non-recurring) or ES Gold (non-recurring) or Zero Pimp-A-Thon or geronimo/ES (recurring) or evil.rat/ES to view this content.





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