http://www.zerohedge.com/article/21st-weekly-outflow-confirms-investors-refuse-be-suckered-market
21 WEEKS! Investors are apparently a little smarter then the Fed realized. This would tend to explain why the pros have seemingly put on the short position that 3C has been showing. At some point money down the drain is going to find a more useful spot. Like I said in my 2007 5-part video series on "Bubbles" -"It's like food poisoning and you'll do anything not to get throw-up because who likes that? But until that poison is out of your system, you aren't going to feel better". The same applies for this market. I've been expecting the second shoe to drop for awhile, I thought it would be worse then the first, now I'm sure it will be and we'll all probably have to figure out, and fast, how to trade a secular bear market. Investors know that we can't be at higher level then a year ago when the data was optimistic. We have sliding GDP headed straight for a double dip, you can't ignore that with a good housing report here and there. I've never seen market averages behave so erratically, penny stocks yes, averages, no.
If the government ever wants the institution of capital markets to return, to see insiders willing to invest in their own companies, there's going to have to be a purge. The pension funds screwed up, no hyping the market is going to give them the 8% a year they have figured in to make up for their underwater funds.
Investors are getting out while the getting is still good. So who's going to be holding that position when the damn breaks, it doesn't look like institutional money?
I do believe in karma, the law of the harvest, you get what you give, sometimes it just takes awhile before it's realized. What they have done with this market in any other circumstance would be outright criminal.
Maybe this time next year traders will be trading foreign exchanges where outright corruption isn't called "policy".
On that note, unless something changes, I'll stay largely short because it seems to me that the writing is on the wall and the fall could make 1929 look like a pullback. I don't think "Bubbles Bernanke" has enough fingers and toes to plug the leaks in the damn.
5 years ago
21 comments:
Brandt,
You're starting to sound like you think this upward move could go on a lot longer?
What happened to 3C showing distribution from the start of September? We agreed that there wasn't that much accumulation before the 'bounce', so surely the market down turn is near that 3C has been predicting for so long? Any day now i would have thought, or have you doubts now?
Brandt,
We may have not seen markets like this but that does not mean that markets have not acted like this in the past. I venture to say that our great grandparents would say they surely have seen markets that act just as we are seeing today. (Now think about this statement for 5 mins) :)
Quality Stocks,
Yeah, it's all coming flooding back now, i distinctly remember my grandparents telling me how the HFT bots used to run the markets up in a 45 degree angle daily... and how the FED used to take a stock market that was selling off like a waterfall and reverse it at the flick of a switch.
I'm assuming you're talking about the late 30's. Yeah, i've seen all the comparisons before.
I'd say any day now under normal circumstances-the last rally was 25 days, were short of that right now. I can't pretend to understand what this PMO is about, I do understand the outflows of retail and insiders, I do understand the negative divergences, don't understand something I've never see before. So as I'd always answer, I don't know. 3c lined up the day it broke-that's the best indication, that day was last Thursday. Tomorrows revision may be too much for the damn, or it may be the end of the qtr to prevent more redemptions and another crash of the financial institutions. which is tomorrow. I see too many things lining up that all scream down. 3c, breadth indicators, insider outflows, retail outflows, so in my opinion, my best guess, any day now. However, what the Fed is up to is anyone's guess. You've seen what the market can do to an index in 30 minutes on a parabolic move. Why they haven't taken out $115 is curious, apparently they easily could. So I'm going to watch and learn and hopefully take something away from this including $$. That H&S top isn't there by accident.
You keep asking the same question and I keep giving you the same answer, it doesn't look good. IMO it could be any day. The divergences are already worse then former tops and with all the fed is doing, there's still very little sign of accumulation except on vert short term charts which aren't as useful in predicting a swing down. I posted earlier the longer term charts that do show that, and they all looked the same-distribution.
It may seem like this market is going higher and higher but do you realize it's only up 1.52% in the last 13 days? The market can do that and a lot more in a single day.
Mr Pink,
If you have seen how markets can behave in the past with extreme volatility then it makes it easy to understand they can perform the same way today. This whole Fed intervention and HFT actually dictating a long term direction in the market is complete nonsense. I will only say it once. It is nonsense no matter how much you read about it on zero hedge, cnbc, alpha, market watch, Carl Fuita, smart hedge fund folk or anywhere else. The market is old as the hills and even when HFT’s are introduced it will still perform exactly how it has always performed and that is hurt the maxim amount of people possible.
QS-I thought about that in 2007. And I do believe that we are going to have to learn very quickly to trade a secular bear market and I think a lot of Wall Street black-box systems will fail horribly. I don't see this turning out well at all. 1/10 Americans with no job, nearly 1/5 underemployed, GDP sliding down a hill-or maybe worse and a Fed that seems to make decisions that always come back to haunt us in spades. I didn't need the 5 minutes, but I get your drift.
Brandt,
I appreciate the reply. Here's hoping for a good October, as September has been hellish.
More bearish news:
http://www.zerohedge.com/article/mark-pittman-wins-fed-disclose-emergency-lending-details-december-1
Bearish news for the Euro, or good news for the Euro?
http://uk.news.yahoo.com/22/20100929/tot-uk-alliedirishbanks-4b7b872.html
QS-I hear you, I didn't need the 5 mins. That's why I think, well beyond a reversal of this leg up and see opportunities for those who figure out the secular bear first.
The market is old as the hills and even when HFT’s are introduced it will still perform exactly how it has always performed and that is hurt the maxim amount of people possible.
-----------Just make sure you are not one of them ------------- ;)
Quality Stock,
Well, as Brandt has said there are lots and lots of things that have been lining up that look like we are due a big down move...
... shorts are at a high, and there are very few retail investors are in the market, despite a 10% up move in a month...
... so, the problem is, isn't it all too obvious to slam the market down now? As everyone seems to be on the short side. So, as you say: "that is hurt the maxim amount of people possible"... well, wouldn't that be to kill shorts some more? After all, who is long? Only the FED?
But if the market does kill some shorts more and goes even higher, then i would say 3C has definitely called this wrong, as well as calling gold and $$ dollar wrong.
So, which one is it going to be?
Brandt do you see anything calling for a bounce in the am? Always seems like they love to gap over rez and the news in am would be perfect time to do this!
You keep asking the same questions. And the answers are the same; hindsight is the only thing that will tell you with 100% accuracy. Until then you must read the clues and believe them or not. It is up to you to choose. But for Pete sakes quite asking when the exact moment will be. No one knows that is why you should always be very careful when risking capital and have a plan in place. You obviously do not have a plan for each circumstance that might arise. You need to change that next time you commit capital.
the only divergence I saw was at 3:44 and 3C has just confirmed that move in pacing it. The 5 min charts are pretty solidly in negative divergences. So there's no divergence saying bounce in the a.m., just the possibility of the trend continuing in the a.m. as for 3C, but it does appear there will be some important downside based on the 5 min charts that have gotten worse since 12:30 today. The timing is about right for some action tomorrow. And the longer term charts are negative too, this may lead to another moment when they all line up like we saw last thursday
Quality Stocks?
What? No, i don't think you've read my posts carefully enough.
I'm always asking for the most probable outcome based on Brandt's experience with 3C and experience in general, not 100% predictions. 3C is suppose to show us what the 'insiders/smart money' is doing and that, together with other indications, should give us the most probable outcome.
"You obviously do not have a plan for each circumstance that might arise" - Well, my plan is the same as WolfOnWallStreet, that's why i'm here, surprise, surprise. I am net short on the markets, but have been short term hedged long into this bounce... but obviously i'm not 100% hedged, otherwise there would be no point! What else can i do!!??
After all, this comes down to one thing and one thing only... 3C being correct.
Have i waited a month for 3C's predicted downturn to occur = Yes.
Can i wait another week and the market higher for 3Cs predicted downturn to occur = Probably.
Can i wait another two week and the market higher for 3Cs predicted downturn to occur = Maybe.
Can i wait another month and the market another a lot higher than it is now = Probably not...
...But by then i would definitely be sure that 3C has called this wrong and/or is no good as an indicator. As i've mentioned before, an indicator is no good, unless it predicts events happen in a reasonable time-frame (i.e, if i tell you it's going to rain, but i'm not going to say when, it could be 100 days before it rains, but would you say i called it right when i finally rains? No).
Speaking of not reading, did you forget me telling all subscribers about a week before, while the market was selling off that it was under accumulation and the bounce was going to be "scary" and even post charts and ask you to put your self in the emotional moment of those charts so you would know what to expect. I think 3C already worked quite well and you were here when it happened.
Hi Brandt,
Yes, of course i remember and that was apparently a good 3C call. But, for my own sanity, i need a little more confirmation of 3C's abilities ;-). For instance, yes, 3C did call for a bounce, but so did all the 'traditional' indicators at the time:
http://stockcharts.com/h-sc/ui?s=spy
At the time of the 'bounce' RSI(14 day) was 'oversold'. And the DMA 200 and DMA 50 crossed. If you look at times that the market has bounced and fallen over the summer, these 'traditional' market indicators have been correct also...
... so, that's why i just need a little more confirmation (as i am a born sceptic at heart ;-) ) as to 3C's unique abilities. So the big equity downturn (1930's style) occurring, as well as gold plummeting and the $$ dollar soaring, i.e. the main things that 3C has been predicting, would ease my mind! ;-)
I read your post....especially the last part -
Anyway Brandt is correct that he did call for a bounce well in advance of the bounce because of accumulation by 3c when the news was full of articles of why we will collapse. Check. He also said it would be very scary. Check. If you are following the plan then your trading emotions would already be in tune with the bounce and accepting it. No check.
3c has already shown its ability to work for the bounce. It is now showing distribution so give it time, whether that be a week or month or more it will probably all come home to roost in the end. Patience is needed and you must train yourself to stay unemotional as possible.
It may seem like this market is going higher and higher but do you realize it's only up 1.52% in the last 13 days?
This is a great point…..and over those 13 days you have let your emotions move on such extremes it has clouded the vision in my opinion. Your focus is on the wrong things. News, HFT, Fed, the theme of the day. All nonsense in longer term trading direction.
1929- http://www.flickr.com/photos/54219262@N05/5037049073/
1987- http://www.flickr.com/photos/54219262@N05/5037049127/
2000- http://www.flickr.com/photos/54219262@N05/5037666968/
2007- http://www.flickr.com/photos/54219262@N05/5037667034/
2009- http://www.flickr.com/photos/54219262@N05/5037049277/
dollar- http://www.flickr.com/photos/54219262@N05/5037667138/
top in oil- http://www.flickr.com/photos/54219262@N05/5037667174/
'09-'10- http://www.flickr.com/photos/54219262@N05/5037682716/
really can't say about the dollar yet, 3C shows what smart money is doing, the eruption of a currency war was not in the making when they started accumulating so they have every right to change their minds.
Quality Stocks,
Actually, Brandt (and i'm sure he will confirm this himself) didn't say it would be scary. He said it 'could' be a scary bounce, but we we'll have to see how it plays out... it turns out it was probably the scariest bounce there could have been, largest up move for September on record.
Yes, the market may only have gone up 1.52% in the last 13 days, but that's on top of a 7-8% up move already in a short amount of time, so it's a bit of a moot point really. The point is, it hasn't gone down as 3C has predicted, gold has gone through the roof, silver also gone through the roof and the dollar $$ has plummeting... all are the opposite of what 3C has called for.
"it will probably all come home to roost in the end" - Well, there's no probably about it really, if 3C is any good as an indicator, then it WILL come to roost in the end (and in a reasonable time frame too ;-) ).
Anyway, we are labouring points here, tomorrow will be a good test for 3C, it's a big announcement day (GDP and all that, as well as quarter end). Someone asked if 3C saw any accumulation today/recently by the smart money (who will already know the news that will be announced tomorrow) and Brandt said no. Brandt has even said there are negative divergences on numerous timeframes if anything. So, let's see if 3C is correct, and we should have a good down day tomorrow in the face of big news if things turn out as predicted, right?
More horrible news to add to the list:
Anglo Irish failure would 'bring down' Ireland: minister
http://uk.news.yahoo.com/18/20100929/tpl-anglo-irish-failure-would-bring-down-9eb7866.html
Consumer mood weaker than expected in September
http://uk.news.yahoo.com/22/20100929/tuk-uk-britain-consumer-fa6b408.html
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