2/21/06 #2 Oh, Don't Go Out Tonight?

...CONgress passed new, tougher bankruptcy laws late last year. If you think they were looking out for little guys when they did that, then you and I disagree.
...The Fed is going to discontinue publishing the M3 money figures, making it harder to see how much liquidity they are injecting into the markets.
...The Iranian oil bourse is scheduled to open next month, with its transactions denominated in euros, not dollars.
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...A mystery writer could make a good case that the three items mentioned above are linked. Some bulls, including some whose opinions I respect, see nothing but good times ahead. For instance, the Dow Theory group finally got their long awaited buy confirmation. But I think it is time to start watching our step out there as we walk among the bulls.
...I ran across a fascinating speech given by Congressman Ron Paul, R-TX. Mr. Paul delivered the speech 2/15/06 before the House of Representatives. Mr. Paul is an independent minded Congressman who over the years has had to fend off numerous attempts by both Democrats and Republicans to dethrone him, but he has been too popular among his constituents for that to happen to date. This speech is well worth the time it takes to read it. Mr. Paul is a gold standard advocate, and he traces the history of the demise of the gold standard and the rise of our present fiat monetary system. He also shows why he feels it will end. Many points of interest in the article, but what may be most important for the day we are living in are his comments on Iran and its proposed oil bourse. Whether you agree with his opinions or not, the article is interesting.
...For what its worth (fwiw), I don't agree with the gold standard folks. I believe those days are gone forever, and people who think that the world powers are going back onto an official gold standard are wrong. Imo, we are in the last age before the return of Christ - see my other blogs for more on that - and what will ultimately replace our current paper money system is an electronic exchange system, a system wired into an all-inclusive computer system that can only be accessed by using biometric data. Apocalyptic, I know, but that's what I think.
...The other most interesting article I saw today was on Michael Nystrom's Bull Not Bull website. It was an essay he penned regarding President's day, and where he thinks we are as a nation. Once again, whether you agree with all his opinions or not, very thought provoking and well worth the time.
...Quote (from the above mentioned article):
"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every state house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."
President Dwight D. Eisenhower
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...With the disclaimer that I don't always keep it up to date, I don't always post my actual buys/sells there, and my actual buy and sell points may be different than what is listed, my picks are mostly (but not all) listed on the ClearStation site, if you want to check them from time to time.
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"A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished." Proverbs 22:3.

2/21/06 Opinions: Everybody's Got One, Including Me

...This is a particularly interesting time in the markets, imo. The bulls and bears are both confident and convinced. In the past couple of weeks I have read articles from people whose opinions I respect. These people are looking at the same data sets and the same charts, and seeing entirely different futures for the markets.
...I don't use technical indicators nearly as much as I used to, and when I do I use them more as confirmations to support my decisions, not as key determinants in making those decisions. The longer I trade, it seems the simpler my systems become. I think the main reason for that is that program trading dominates the markets to such an extent nowadays. Computerized trading programs are often set up to reverse direction at key support and resistance lines on charts without regard to the fundamental prospects of the market or stock in question, imo. I also believe the markets are more openly manipulated than they have ever been by the PTB. And that big firms with fast computers and some of the brightest minds in the country on their payrolls, paint false pictures on charts sometimes through strategic buys and sells. They know what the amateur technical analysts are looking at, and how to buy and sell at just the right time to make the charts paint the technical patterns that the small fry traders are looking for.
...The intra-day market action has become stranger than ever, imo. I cannot tell you how many days I sit and watch a 10 minute chart on a stock go straight up for the first half of a trading session, then straight down the second half, or vice versa. There are probably a lot of reasons that can happen, though I don't know how those folks who want us to think that rational investment decisions are behind every move would explain it. To me, it is manipulation, pure and simple. For instance, there are thousands of hedge funds out there now, all populated with deep pocketed big guys who are used to winning in their businesses, not losing. And all with minimum buy-ins large enough that if you have to ask how much it is, you can't get in anyway. And with the decreased volatility in the markets, those funds scalp much the same as daytraders a lot of days, imo, trying to make a little here and there. I think on some days those firms throw money at a group of stocks or an index to run it one way, then pick a point to pull the rug out and take it the other direction for no other reason other than they can do whatever they want.
...So I keep it simple. The one thing that the big players have the most trouble doing is covering their tracks, if you close your ears so you can't hear their siren song, and you avoid the disinformation campaigns designed to relieve you of your hard earned money. If you just watch the price and volume figures of the markets and the stocks you are interested in, you can stay ahead of the game. When I see a stock going up at a decent angle, and the volumes on its up days are overall bigger than the volumes on its down days, that's what I'm looking for. In addition, I like to use candlestick charts. I look for shadows below the bottom of the body, showing that there was buying interest in the stock, that somebody stepped in and supported it. The key is to try and do what the big guys do. They are the ones who move the markets. You need to be on the same side of the trade they are.