Imminent and severe market correction

[Edwood]

"must be about time we closed this thread"

LOL!

 

[Aussiejeff]

Aussiejeff,



As I have stated elsewhere, money is created out of thin air, there is no limit. The quantitative easing is just borrowing from yourself (if you are a central bank )

If things look like they are going too far south again, another $500b-$1t will just be created out of fresh air, like the last lot.

brty

Hark!!

Doth mine ears heareth the booming intonation of chairman Obama "MAN THE PRESSES!!! ALL HANDS ON DECK!!!" & the sudden ensuing chatter of a 1,000 shiny new US printing presses starting on another $US6Trillion run?

 

[brty]

So why all the record bond issuance?

To fool the masses.

I think all money is created out of thin air, where do you think it comes from??

brty

 

[MRC & Co]

To fool the masses.

I think all money is created out of thin air, where do you think it comes from??

brty

You think? I thought with the way you were talking you must have known.

 

[Macquack]

To fool the masses.

I think all money is created out of thin air, where do you think it comes from??

brty

I always thought it grew on trees.

One thing is for sure, the best way to rob a bank is to own one.

 

[brty]

MRC,

I'll ask again.....

where do you think it comes from??

Yes I think, can you prove otherwise??

Did you know that the largest holder of US govt debt, was the US govt departments in various guises, of over $5T.

brty

 

[MRC & Co]

I agree, to an extent. What bothers me is the crude information and condescending sarcasm (yes yourself and others), when really, your views are elementary at best.

If the US Government does need to raise capital, how will they go about doing this other than, 'they will print more off the pressers'? If they truly can drop it from helicopters, how do they put this into the budget as part of their fiscal position? If they raise money through bond issuance (even if they buy it themselves), what impact will this have on the bond markets and short-term money markets? How will you determine what is happening and put it into context to actually make it of any use? How will you profit off it?

How about some useful information here for all us who don't understand the system as well as you?

I guess I just get sick of sifting through opinions for little value. Your kind of statements are made by so many these days, it isn't even contrarian anymore.....what will that mean.......

BTW, I haven't seen the kind of action in Asian order flows as I did on Friday, since 2008, make of it what you will...........

 

[jonojpsg]

see Prechter has put a call out recommending 200% short position (on the Dow)

I know I'm a bit of a goose admitting this, but I jumped right on board when I read this I guess I've been waiting for some signal to short the Dow given that the fundamentals are so out of whack with the current Dow PE ratio of 29 being way too rich for my liking

Have seen technical (wave) analysis saying we're heading into wave 5 with a target of 7550 Mate, if that comes off, this trade will net me a cool $60k Question is, will I be disciplined enough to hold that long??

Any suggestions of how I should play it from here, now that I've entered? Short 2 Dow contracts from 10618, current profit $8000ish in four days.

Oh, and if a drop from 10600 to 7600 isn't severe then we should rename the thread - for mine, it still seems to fit with the general idea.

 

[GumbyLearner]

I always thought it grew on trees.

One thing is for sure, the best way to rob a bank is to own one.

or rob the people.

http://projects.propublica.org/unemployment/

The unemployment insurance system is in crisis. A record 20 million Americans collected unemployment benefits last year, and so far twenty-five states have run out of funds and been forced to borrow from federal government, raise taxes, or cut benefits. In many other states the situation is deteriorating fast. Using near real-time data on state revenues and the benefits they pay out, we estimate how long state trust funds will hold up. Click on a state to find the latest, plus historical data, and details on tax increases and benefit cuts.

Bankrupt and Borrowing: The state's unemployment fund is currently bankrupt and the state is borrowing from the federal government.
In Trouble: The state's unemployment fund will likely be depleted in six months or less.
In the Clear: The state's unemployment fund is solvent.

http://www.propublica.org/feature/how-we-did-the-math-on-our-unemployment-insurance-tracker-0119

 

[brty]

MRC,

and you accuse others of sarcasm....

How about some useful information here for all us who don't understand the system as well as you?

How will you determine what is happening and put it into context to actually make it of any use? How will you profit off it?

Inflation. Destroying the value of cash savings. Destroying the value of the super funds of the baby boomers, is what will pay for the mess. Look at the Bank of England website for history dating back 300 years that shows when a large increase in money supply occurs, inflation occurs, usually with a lag time.

Are you of the "we are all doomed, there is too much debt" brigade?? There cannot be more debt than money.

I guess I just get sick of sifting through opinions for little value.

Good, then offer some facts that show my opinions to be incorrect.

bye

 

[yonnie]

I agree with MRC that you do have some people here who are quick to judge,
quick to rubbish others with their limited knowledge and have an opinion about everything under the sun. I dont think they`re here to learn about trading `cos its too hard, but just for "un"-social contact.

In my opinion a good trainee trader realises he/she doesn`t know much, is keen to learn, knows very quickly that there are more ways to skin a cat, is open to new ideas to improve his/her trading and is HUMBLE.

 

[Aussiest]

BTW, I haven't seen the kind of action in Asian order flows as I did on Friday, since 2008, make of it what you will...........

That sounds scarey. I'm gathering they were on the "sell" side? (I really must get an IB account).

 

[MRC & Co]

Sorry brty, I'm not targeting you personally or your posts in general, just comments about the financial crisis appear so vague in general and of little use.

Aussiest, there are both buyers and sellers in the order flow, the difference is, there is a LOT of paper (institutional money), so obviously a lot of speculation about this being the 'top' by the guys who really move the market. There is no doubt in my mind, that the guys who move the US market, are the same ones who move the Australian market. You could see someone holding down the SPI in the order flow for 4 days before the US came off, obvioulsy knew what was coming, a very good leading 'indicator' IMO!

 

[skc]

Aussiest, there are both buyers and sellers in the order flow, the difference is, there is a LOT of paper (institutional money), so obviously a lot of speculation about this being the 'top' by the guys who really move the market.

So the recent order flow is very different to what you may have seen in Jun 09 or Nov 09?

There is no doubt in my mind, that the guys who move the US market, are the same ones who move the Australian market. You could see someone holding down the SPI in the order flow for 4 days before the US came off, obvioulsy knew what was coming, a very good leading 'indicator' IMO!

I must say it seemed obvious in hindsight. But would you have shorted the SPX on that alone or did you have to hedge with a long in the SPI or something? Not sure if that would work out as SPI seems to have fallen quicker than SPX?

That sounds scarey. I'm gathering they were on the "sell" side? (I really must get an IB account).

Don't be too excited. This information is not from an IB account. It's from a seasoned trader who can read the market...

 

[MRC & Co]

SKC, yes, I haven't seen anything like this throughout the entire 2009. There were big volume days last year and some big moves, but it looked like just a big execution algo going off, not sheer emotion which is what it currently looks like and is what it looked like in 2008.

I didn't and wouldn't short based on that alone. I had quite a few factors of why I thought it was coming off and I actually went short S&P (ES) with quite a bit of leverage for a position trade the night it first came off, but got stopped out by 2 ticks before it went (after they squeezed it following the reports of Wells Fargo, Bank of America etc)! So I can now only catch it through scalping bits and pieces of it.

Seasoned? Not me........yet, maybe in a few more years. But a seasoned trader (the most seasoned I've ever met) did tell me it was going to come off Friday night in the US. I was actually going to PM Broadway after seeing he bought banks and tell him I would hedge it for the night........could have should have would have......

 

[Edwood]

I know I'm a bit of a goose admitting this, but I jumped right on board when I read this I guess I've been waiting for some signal to short the Dow given that the fundamentals are so out of whack with the current Dow PE ratio of 29 being way too rich for my liking

Have seen technical (wave) analysis saying we're heading into wave 5 with a target of 7550 Mate, if that comes off, this trade will net me a cool $60k Question is, will I be disciplined enough to hold that long??

Any suggestions of how I should play it from here, now that I've entered? Short 2 Dow contracts from 10618, current profit $8000ish in four days.

Oh, and if a drop from 10600 to 7600 isn't severe then we should rename the thread - for mine, it still seems to fit with the general idea.

yeah well if its any consolation there were no doubt many of Prechters subscribers who joined you

but you want to be careful jumping in without checking the validity of any post for yourself - especially ones on free bb's!

for what its worth there are EW counts around suggesting this is the top of wave B, and wave C is about to kick off - which will be fast & messy and catch most unaware because complacency is high with the general belief seeming to be that we're out of the woods. In the 30's more lost money on the second leg down than the first, because everyone thought the damage had been done and loaded up on the bounce. Market bounced similarly to now (up 60%-odd) before finishing the fall down 89% high-to-low. Recent stats out of the UK show retail sharetrading volumes are higher than 2000 (albeit trader profile is more sophisticated than in 2000).

The key thing is you're on the right side of the trade - enjoy

 

[skc]

Seasoned? Not me........yet, maybe in a few more years. But a seasoned trader (the most seasoned I've ever met) did tell me it was going to come off Friday night in the US. I was actually going to PM Broadway after seeing he bought banks and tell him I would hedge it for the night........could have should have would have......

Please PM me the re same next time

 

[Aussiejeff]

Heads up chaps & chapettes....

*Possible* stock market Mega-Tsunami looming - IF Obama goes along with this "wacky" idea.

Jan. 29 (Bloomberg) -- Taxing equity trades may reduce U.S. stock market volume by 90 percent, Interactive Brokers Group Inc. Chief Executive Officer Thomas Peterffy said.

A transaction tax was first discussed in February and revived in December, when Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio said it is the “most painless way” to fund the government’s deficit and curb speculation. French President Nicolas Sarkozy said Jan. 27 that a European debate on the subject is unavoidable.

“The mother of all creators of havoc on Wall Street is this looming transaction tax,” said Peterffy, who is also president of the brokerage and automated market-making company, in an interview yesterday. Interactive Brokers is based in Greenwich, Connecticut. “Trading volumes would plunge by about 90 percent, markets would become illiquid and tens of thousands of people would lose their jobs.”

Sending a fee to the government for every transaction would hurt asset managers, brokerages and so-called high-frequency traders, a group that accounts for 61 percent of volume, according to New York-based research firm Tabb Group LLC. Interactive Brokers handles about one-seventh of U.S. options that change hands.

An average of 10 billion shares has traded each day on U.S. exchanges since the beginning of 2009, according to data compiled by Bloomberg.

$5.93 Trillion

The debate follows the biggest U.S. stock market rally since the Great Depression. The Standard & Poor’s 500 Index jumped 70 percent between March 9 and Jan. 19, restoring $5.93 trillion to American equity markets. It has fallen 5.7 percent in the past two weeks as President Barack Obama proposed limiting the size of financial institutions and their proprietary trading.

The proposals from Harkin and DeFazio, both Democrats, would impose a fee on transactions of stocks and derivatives, aiming to raise money for economic stimulus plans. The U.S. government’s budget deficit in the fiscal year that ended Sept. 30 was a record $1.42 trillion.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aUFMGaqiHYaA&pos=15

Nah. They wouldn't would they????

 

[satanoperca]

Hi AussieJeff,

They are broke and getting desperate as the ship slowly takes on water.

So yes it is possible that they will introduce a 0.25% tax on transactions. Will stop those algorithmic traders in their tracks if they do and recently effect the US markets.

All this uncertainty is surely weighing on the US market.

Cheers and thanks for the link.

 

[lasty]

Naturally a broker would say that it's bad having a transaction tax.
Volumes of course would decrease however there is an enquiry into algo trading which although appears to add liquidity they do infact destroy it.
Algo's have become so intelligent they can identify buyers and sellers behavioural patterns.
Brokers couldn't care less as they work on volume however for the retail player it's an unfair advantage.
Volume equals price stability but that's no good for traders.
Traders need movement and the more movement we have the less capital is needed for profit gains.