Wednesday, October 26, 2011


FAZ daily
Dying on the vine, this is. The global market is
no better off than it was in July, yet FAZ is out
of fuel. Can't and won't fight the trend overnight.

FAZ daily
Again, 42 held as support, but for how much longer?

FAS daily
Financials have overall been losers this quarter,
yet buying pressure is strong in bankster stocks.

FAS daily
Price is teetering near a key point.
Today's late-day surge despite uncertainty in Europe
proves once again that "they" won't let Euro banks
or US banks fail. Again.

12:24 pm (Hawaii) Tomato, to-mah-toe. Potato, po-tah-toe. Up, down, down, up. I traded FAZ twice in the earlier hours for two very small losses. Yes, would've been better off asleep, but I was quite awake at 4 am so . . . . . Woke up near the close to see the indices much higher after dipping below break even. What explains this? I can't think of a sane, logical reason. It is what it is. The charts on FAS and FAZ prove it. No matter what your thesis, volume is on the buy side of the market, even though there are a remarkable number of strikeout stocks again today. Last week we had Goldman Sachs missing, but the stock rallied. Now we have AMZN, NFLX and a ton of huge losers this week. (Panera beat solidly. I should follow bread/restaurant stocks a little.)

Whatever the market does, I refuse to hold a thing overnight as long as it trades on Merkel/Sarkozy/China headlines. The only thing that comes close to making sense is that gold is moving up. A China intervention to save the Euro monetary system requires more fiat printing, bottom line, and that makes gold (and silver) more valuable. Still, is it the machines programmed by plunge protectors that keeps this putrid market afloat? Or is it simply retail traders? Hedge funds/HFTs comprise a vast majority of the market, so what else would explain it? The market is rigged, as always, and I aim to be a pilot fish, not a hero. A pilot fish with a little sack of metal and a constant aversion to extreme risk.

Today, we learn that the EU is nowhere near a common plan to solve this crisis. They won't even meet face to face. Not good. Bank stocks sell off. Then they rally big into the close. Makes no sense, but that's what happens in a casino where every deck is funny. 

How long until Bank of America is majority owned by the Bank of China? Not very, I say. Not very.

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