There Will be Blood
Last night our RTV Sell signal went bust and I hope you hedged yourself a little as suggested in my previous post. Not that the tape has been moving much ? there?s a difference between speed and velocity. Velocity is a vector, so it has direction. Speed is the magnitude of velocity, it does not have direction. For example, if my velocity is -5 mph, I am travelling backwards at a speed of 5 mph. Now if you look at the tape of the past few days then it seems we are speeding around all over the place but thus far we are not going anywhere fast. Hey, did I just blow your mind?
News and rumors are often a catalyst of intra-day gyrations and over time they can affect trading psychology to a great extent. Which invariably leads to trading mistakes as your emotions lead you to stray from your hard set system rules. If you take a step back and look at the chart above then it?s rather clear that despite psychotic market psychology the SPX managed to continue higher until it bounced off our first resistance line. Unfortunately the RTV Sell signal is bust ? which of course does not mean that we go higher or that we go lower ? it?s simply a setup with preferable odds that is now defunct.
Whether or not we continue higher depends on what happens right here and right now. Being short here near SPX 1356.48 is a great setup until we push into 1356.49. Yes ? one lousy tick can matter quite a bit. And that?s really all there?s to be said about this at the current stage ? this thing has to play itself out and short of a crystal ball there is no additional information that will bestow us with more clarity at the moment. What can be said has been said here ? at least in the realms of technical objectivity.
For some reason I had not looked at this chart for quite a while and when I came across it last night I was rather shocked about the magnitude of the divergence. We are plotting a ratio between all NYSE stocks above their 50-day SMA and all NYSE stocks above their 200-day SMA. This gives us a rough measure of the quality of any rally or sell off (yes, it works equally well on the downside but is more expressive on the upside as the downside moves too fast).
As you can see there?s quite a rich history in divergent signals and their invariable resolutions. Considering prior history what we are looking at here is not pretty and this chart henceforth shall be named ?There Will Be Blood?.
Sorry, had to turn dramatic there for a moment. Now, please remember that this is a long term chart. Meaning that we may easily push toward 1370 or even 1400+ before this ship finally reaches the black hole?s event horizon. But you should be aware of it and I will be sure to post updates on a regular basis.
Another pertinent chart worth noting is the NASDAQ total volume to NYSE PM total volume ratio. Oh boy ? not sure if those readings are going to stick until the close but I am very conflicted about taking on any long term positions. Nothing wrong with a few quick swing trades but I would not want to hold anything for more than a day or two.
Of course if we breach those resistance lines on that SPX chart we may just power higher as previously suggested by my SPX P&F chart ? recall we had a price objective of 1390 there. Which is exactly the type of situation that has everyone including the best traders I know scratching their heads right now ? we should be correcting but we (somehow) manage to power higher. Trend traders love this type of tape ? they know overbought conditions can prevail for quite some time. The rest of us may be better off holding back and just taking on positions when we see clear setups or important inflection points being breached.
This entry was posted on Wednesday, February 15th, 2012 at 3:28 pm and is filed under Market Outlook, point & figure. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
Do you guys know anything about farming? Would this be a cash crop farm that depends on the functioning of markets? Would it be a farm that can feed your family directly? How would you pay your farm hands? How do you know they won't rip you off? This all seems problematical to me. Maybe hunter/gatherer would be a better way to go if the shit really hits the fan.
In a civilized society money is power, in a society that has broken down power is money. The real winners will be entities (such as street gangs/drug gangs/prison gangs/large loyal families) that do not depend on society for their existence. They can enforce their rules with out appeal to any external power. They visit vengeance on those who fuck with their members.
I once talked to a Glen Beck fan who went on and on about how the government is completely lawless and if you don't want your gold confiscated you better buy collector coins. Why? Because according to the law the government can't confiscate those. Wait a second I thought -- out of one side of your mouth you claim the lawless government will confiscate your gold, out of the other you say it is against the law to confiscate collector coins. Anybody see how stupid this argument is?
If society breaks down there will be no rule of law. I would much rather be among friends, people I can trust, in that situation. So even if you buy your farmland fair and square I would not count on the law to enforce your claim, or to stop hungry people from stealing your crops, or some bad ass from ripping you off in one way or another. Who would avenge you if you were killed in South America?
Yes, we know how to cultivate land and to grow just enough to feed our family in case of a global food shortage. It's not that difficult - people had to do it for tens of thousands of years.
"It's not that difficult - people had to do it for tens of thousands of years." Yep, that's just what I thought just before I lost my viginity and I don't remember that going too smoothly! ;-)
Farming is not as easy as people think. Moth asked some good questions. I grew up on a farm which has been in my family for nearly 200 years and ran it for nearly 10 years, 2 decades ago. I'm making plans to move back there in the next two years to get back into farming full time.
If your goal of the farmland is just to provide enough for your family then I'd say most anyone can do it as long as you're willing to work hard and understand mother nature can be a cruel bitch, just ask a rancher in West Texas. That's why I stressed water and water rights being very important and suggested you look for land that receives adequate rain fall, so you do not need to rely on irrigation. I think the farmers in the Western Plains are going to run into trouble in the future because of aquifer depletion.
If your goal of farming is to produce income selling your excess production that's a whole different game and you better know what you're getting into or else you'll be lucky if you just spin your wheels financially- it's a very tough and competitive business.
Considering your goal of farmland is to produce just enough for your own family you've got a lot more options and thus you'll probably be able to get a better deal because you don't need a lot of acres.
One thing that will help you determine where to buy your land is what your family likes to eat. If you like pome and stone fruit (apples, pears, peaches, cherries, etc.) or maybe you like wine then you'll want to consider Southern Chile or Argentina as you need to be around 35 - 45 degree latitude to grew these fruits. If you like citrus, bananas and mangoes then Brazil or Northern Chile is an option or somewhere closer to the equator. The same thing goes for certain vegetables some need to be grown in temperate climates and others in tropical climates though some can be grown in both. Animals can basically be raised in any of those locations if you're just looking to consume them yourself.
The mob was big in my town back in the day. They prevented anyone from being arrested in the city for alcohol possession during prohibition.
USD/CAD looks interesting. It triggered a daily NLBL and is now fighting with resistance at about 1.0020. If that can be broken, it should be good for a run to at least 1.0120.
looks like spx futures is sitting on 1337 for some support atm - are we going to sell early in the morning and then bounce???? pain for the bulls yesterday, time for the bears too? :
I would favor a (-) gap at NYSE open then rally to burn some weak hands followed by a strong flush afterwards. But that's only an opinion.
Potential target at the neckline for AUDJPY if we lose support is 82.75 (/ES 1330). The old pop and drop, looks vaguely familiar (SPX). HeHeHeHe!
Creating Jobs..Mole, you are so right. Creating a sustainable future for my family has always been a priority for me too. People are very foolish and instead of creating value and looking for the best method of achieving "jobs", some folks think that bringing manufacturing back is a good thing..So sad to see people eat this stuff up. And let me be clear on the point here. To poke and prod industries into a certain direction just for the sake of keeping a population busy "working" is a very short sighted policy. I have a theory and that theory is eventually when a market becomes so efficient example "internet" that the product it provides "info" becomes essentially free no price. But lookie lookie government trying its best at protecting the "workers" at hollywood which is bs of course look at the bill it tries to make that point, pretty funny. Perfect business model crushed overnight. Efficiency needs to be let loose not hinder with. The most dramatic example is of course energy. Anyhow back to work.
I was just thinking the other day that investment/trading should almost be a more important priority for people than jobs in a capitalist society. A job is only 1/2 the equation. If there's one thing I wish my parents had taught me when I was younger, it would be how to trade/invest.
Seems like that little spike is due to Jan employment data out of Australia. Let's see if it sticks overnight. There's a 60-min NLBL at 84.16 that's still acting as resistance.
Yup. But, you know Aud/crosses are behaving like they would two years ago. Job numbers/Economic data out of AUD was more pronounced lately like those days. EDIT: It more than likely will not matter, and it will be completely irrelevant overnight. short position being put in at the .
""You have to pretend you're 100 percent sure. You have to take action; you can't hesitate or hedge your bets. Anything less will condemn your efforts to failure."
Umm, I just can back to my computer, if you guys have noticed I have really slowed down my trading. But at around 2 today was too funny my eur/usd orders triggered, hit stop loss then triggered sell order again then took profit (forced the take profit I didnt wait for the take profit to be reached)...I think I remember now why I have not touch the EUR/USD but a handful of times past year(literally less than 5 trades in that pair.). Both are very ugly dames with snobbish attitudes. But she was a fun ride downtown past few days.
Just got the next daily hist on the EURUSD and it is my belief that 1.30 will be taken out tonight. Therefore, more fun is in store:)
Everything we need to know about where this market is headed... It can no longer be argued that we are not in the dreaded Hulk Hogan formation.
ES 10-pts below VWAP. Pretty unusual. I would expect a rise into close similar to yesterday. If not, this may be the start of something big.
Great post Mole. Since I have a preference for swing trading, I would love to short right now; however, the lack of follow through to the downside in the last week is not giving me any confidence that a multiday whack is coming anytime soon. Almost every technical indicator on the daily timeframe is screaming for a whack, yet all we get is sideways chop. So maybe after a few more days of chop, we will get the "one last" pop to hopefully setup a better shorting opportunity. Now watch the drop begin today after we all give up looking for it. :-)
According to Doug Casey, who lives in Argentina and owns farmland there, he doesn't think its cheap there anymore or anywhere for that matter. I know that's the case here in the U.S. farmland is expensive, but it could easily become more expensive.
Here's an interview with Doug Casey where he talks about Argentina and farmland and he's most bullish on cattle. Starts about at the 3/4 mark of interview:
You're welcome and FYI - regarding farmland an extremely important issue is water and water rights. Just because a river may flow through your property doesn't necessarily mean it's yours to consume. If I was looking to purchase farmland I'd focus on areas that get adequate rain fall so you are not completely reliant on irrigation.
Actually it IS the farm land. The women in Chile are not that hot. Brazil and Argentina - well, the Argentineans are hot but crazy, and the Brazilians, well - I can't argue with you there ;-)
Argentina is unstable and Brazil ain't that secure either. Uruguay is very attractive though. I prefer small states in general as governments there tend to be more in touch with the people and are also less authoritarian. I bought some farm land last year in the Caribbean , not much, but enough to be safe and independent in case the SHTF. The principal advantage is no winter season so everything grows all year long. Belize is a small country that has plenty of advantages. Apart from being a tax haven, it offers plenty of flat and empty farm land for still cheap money. Plus the nature is really amazing there, especially the barrier reef.On the negative side, you won't find many top models there.
mole, i was thinking of it too, not seriously yet. but just spent a few times' thought of what the options left are. i rode the horse across the atlantic once, and am older now... but things have started to look funny in canada too. maybe because of the years that went by it is not easy to find a clear reason to leave... but thinking backwards somehow, there is no reason left that i would come here now, again.
The decision of where "the" place to live in depends on a number of factors. A government that views its citizens as chickens to be plucked certainly doesn't sit high on the list of friendly places to settle. However, there are gradations of plucking and the plucking does have a quid pro quo including providing reasonably good infrastructure, some assurance that the rule of law has meaning and reasonable enforcement thereof. On the latter two points, S. America is making progress (not all at the same speed), but I would put Canada a light year or two ahead. As far as tax fairness goes, if you are an investor living from dividends of a lifetime of prudent saving, Alberta has just about the friendliest tax system going (combination federal and provincial). Just saying - broaden the net! Now back to trading...
Downward move on the /ES seems to have exhausted itself for now. I'd love to see a retest of that high and another RTV setup tomorrow.
Somebody just pulled a (if not `the`) plug. AAPL rallied up about $2 in a few minutes, now has dropped $3. I`m following that chart instead of SPX right now as it seems to be the engine and Mole`s breadth reminders in the above post seem to bear that out.