Thursday, March 01, 2007

500 POINT WARNIG SHOT, MASSES ABOUT TO BE BURNED AGAIN

To my many loyal readers, to the lurkers, or those like an insect accidently landed here in my web, stay awhile while I weave a web of intrigue, espionage, danger, and warning.

The 500 point jugernaught decline 2 days ago IMHO is a wanring shot, not a one day wonder or blip on the chart, some mistake or a reaction to rumor. If you try to figure out fundamentally why anything happens, you will parse away the meaning, and lose your way.

We may never know exactly why anything happens, what we can do is look at a move in context of where we are, how far we have come, and what it means technically.

It may that when you add the news from China, and the tightening going on in Japan, that what the 500 PT drop is warning is that the WORLD LIQUIDITY GAME IS COMING TO AN END. And that is ALL that is carrying this game forward for so long.

WE have now accumulated historic levels of debt, and imbalances, and the scales are tipped toward Deflation, there seems to be plenty of everything.......from China that is.

How do we pay for these things? With credit, from foreign purchases of our debt, of which China holds near $1 Triillion. Their currency is 40% or more undervalued, and they have NO intention of making any rude changes.

We have had WILD and damaging real estate specualtion here, it is rippling through our economy, a 4.5% 10 yr bond, which is lower in yield than the 2 yr and the 90 day, has been warning of trouble.

Durable goods orders plummeting, construction spending, home sales off the charts, but today our Manufaturing index inched up and all is well!?? LOL reason for stock turnaround given.

The Dow hit previous reaction lows andbounced, no doubt program buying came to recue.

Very good argument can be laid we have seen the highs for this market.

If it isnt cars and housing, tell me what will drive the economy?

Under current conditions, I am stepping aside and feel profits are profits, and sitting idle and letting them slip away would not be prudent.

I think the tenor of market has been changed, shocked into recognition or it should be that a direction stock prices can and do go in once in awhile is down.

Duratek

1 comment:

Anonymous said...

Absolutely! Lots to read about. Warrens statements toward civil unrest do to the "onerous tribute payed" were interesting. 1320 on the S&P might be attainable in the next weeks. Did you know that you can trade options on the VIX, on the cbot?