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Friday, August 12, 2011

Market Thought... a very expensive vacation

Every time I know I will have limited access to info and trading I try to prepare as much as I can to anticipate a realistic market scenario.  I was fully expecting a market decline to the 360SMA (maybe even chilling there for a bit), but bounce from the 1200 level.  I was expecting further European BS to continue the market negativity, and cause the testing of major trend support.

Unfortunately for me, the Standard and Poor's (SP) decided to add to the financial crisis they greatly contributed to with their bullshit triple A ratings on mortgages by downgrading a legitimate triple A (even when their math was wrong).  This forced the hundreds of billions of dollars managed by 'idiots' or contractual obligations to force a knee jerk reaction and sell.

The SP again caused trillions of dollars worth of damages to the financial markets, and caused severe trend damages to the markets.

I know the difference between a bullshit trend destruction and a legitimate one, unfortunately there are many people in meaningful positions that can not. The sheer negativity this trend is promoting, I think, is causing some seriously wrong decision making by some of the banks. (A tail waging the dog.)

First, the market starts to get annihilated thanks to some douche bags with clout, then negativity consumes every one with rumors swirling faster than an high school girls locker room.  Today it was revealed that ECB overnight lending spiked on Wednesday to 4.058B Euro, from 2M Euro on TuesdayThis was likely from some Asian banks withdrawing credit lines probably because they got consumed by the overall negativity.

Hopefully the chain of events causes the EU to actually do something that works, and the super congress acts with teeth. In the mean time, Europe should keep chugging along and without a real credit issue within the credit markets.  With no credit issue, the equity markets will re-gain its longer-term tend and this negativity will get washed out.  There will obviously be resistance along the way with all the SMAs now acting as potential resistance.

Weekly and monthly structural trends are still intact, fortunately.

I was itching to be in front of a computer to trade this volatility.  I lost on missed opportunities and the positions I am currently holding, making this my most expensive vacation.  But being on vacation was nice.  I have a bunch of re-positioning to do tomorrow. (I do not plan on exiting the positions I have on, and still think within the next 6months IBM will be at 190, AAPL will be at 420, DIS will be north of 42, GOOG will be near 600, POT will be north of 61. I can keep going, but think my point is made.)

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