Investors....come in please!

Drew99GT · Sep 11, 2012

http://seekingalpha.com/article/856051-ecb-and-likely-the-fed-party-on-but-keep-an-eye-out

The institutional panic buying phase is starting; a healthy pullback to the lower trend channel of this rally will spark one final big move up I think. It's usually the panic buying phase that represents another top, and this coming top will be the top of wave 5 of the cyclical bull market that started in 2009.

Turk · Sep 11, 2012

Look at the waves of the S&P from Jan 1998 to present. (It won't paste in the link).

If we break out, get in. If we top out and start down, watch out below (imho).

Drew99GT · Sep 12, 2012

http://www.businessinsider.com/bundesverfassungsgericht-decision-on-the-esm-2012-9

Now on to the Fed.

JHZR2 · Sep 12, 2012

Yeah but I have to think that there will be a slight correction here before a lot of money (potentially) flows in. So much is still doom and gloom, at least if you listen to AM talk radio

friendly_jacek · Sep 12, 2012

If the fed news will be equal to or slightly less than the baked in expectations, there will be sell on news event.

I'm long term bullish, but short term bearish. Could be wrong, but I'm mostly in cash with some minor short positions and waiting.

It's hard to do seeing dollar plummeting every day, but it's possibly bottoming short term.

Drew99GT · Sep 12, 2012

The dollar plummeting is a good thing for risk assets. It's hard to fathom, and it almost doesn't even make logical sense, but it's all about the current relationship with Europe. The dollar, like treasuries, acts almost purely as a safe haven.

The TLT/SPY ratio is coming at a support area; if it bounces, we may get a small sell off in equities, but if it finally breaks down, it will be capitulation for bears that risk on is where the market is going. It's almost uncanny that the support area ends up right at where the Fed meeting is.

cjcride · Sep 12, 2012

Originally Posted By: Drew99GT
I'm buying Europe on the next pull back. European stock markets have been hammered and they all made trend reversals on Thursday. If they hold support at that reversal point, I'm in. EWP, EWI. Germany votes Wed on the ECB bailout.
+1 safe bet, Buy, Hold and Reap the Gain.

GROUCHO MARX · Sep 12, 2012

Dollar loses ground and my money goes into my gas tank.

friendly_jacek · Sep 13, 2012

This is why I think QE3 will not be announced today: the oil/gasoline/food prices are quite high and speculation is strong at this moment. It they started something very aggressive now (they are printing non-stop regardless with the 0% rate), there would be blow up in oil/gasoline/food prices and we know how it ended in 2008 and 2011.

I don't think they are so stupid to not know the implications of QE.

On the other hand, they could be that stupid and be blinded by the benign "core" CPI numbers that are one huge lie.

Drew99GT · Sep 13, 2012

QE3 is here. Unlimited QE, in terms of MBSs.

Metals immediately skyrocketed, long term treasuries tanked, and equities took off on the decision. Huge move out of defense and into risk.

Tempest · Sep 13, 2012

Quote:
I don't think they are so stupid to not know the implications of QE.

On the other hand, they could be that stupid and be blinded by the benign "core" CPI numbers that are one huge lie.

Yes, they are that stupid. All they care about is a high stock market and saving their own jobs. They use core rather than CPI (which is too low anyway) to make themselves look better.

$40 billion in new money every month "for as long as it takes". Lets see what happens to inflation now.

The stock market will love it.

friendly_jacek · Sep 13, 2012

I should have listened to you guys rather than trying to be "contrarian" at this juncture. This cost me some serious coin today.

To paraphrase a saying, [censored] the inflation, full speed ahead. This will not end well. But, the can was kicked many months ahead and Bernanke will save his job for now on.

Drew99GT · Sep 13, 2012

I've learned one very important thing in my short career as a trader: if the fundamentals suck, employment sucks, things look horrible in the economy: don't bet against the Fed.

http://marketmontage.com/2012/09/07/return-of-the-david-tepper-market/

Even if Bernanke came out and said they weren't announcing QE at the moment, he would have said they're going to do it in the future.

This might makes things even worse for the economy because the employment situation is worsening and all this QE will do is drive up food and energy prices.

Turk · Sep 13, 2012

Short-term: Good.

Longer Term: Not good.

From my newsletter: "Take profits (or sell covered calls) on stocks that have run up substantially the past 3-6 months. Consider implementing a protective put strategy to help mitigate future downside risk in your portfolio."

Good luck trying to figure it out, out there.

Tempest · Sep 13, 2012

Quote:
This might makes things even worse for the economy because the employment situation is worsening and all this QE will do is drive up food and energy prices.

Just like the late 70's all over again, but probably worse. We will get high inflation with a follow up of high (double digit) interest rates to pull the money out of the economy.

Look how volatile the CPI has been in the past:
http://upload.wikimedia.org/wikipedia/commons/3/34/US_Consumer_Price_Index_Graph.svg

It flattens out after 1980 when they started to cook the books, but inflation has a historical trend to happen very quickly. The classic tipping point.

Drew99GT · Sep 13, 2012

Originally Posted By: Tempest

Just like the late 70's all over again, but probably worse. We will get high inflation with a follow up of high (double digit) interest rates to pull the money out of the economy.

You may be right, but: despite what talking heads on AM radio say, QE doesn't add net new financial assets to the financial system. It is an asset swap. Remember, we're long gone from the gold standard and the way things work now isn't like the past. Could it all change in an instant and the whole financial system goes down the toilet? Maybe, but I'll wait until then. In fact, these QE programs don't even add reserves to the system. It's completely different then what the Fed did in the 70s. These are assets swaps. Nothing more, nothing less.

http://pragcap.com/understanding-quantitative-easing

http://pragcap.com/mechanics-qe-transaction

http://seekingalpha.com/article/256913-on-the-myth-of-exploding-u-s-money-supply

http://pragcap.com/opinion-3-reasons-the-fed-should-not-announce-qe3-this-week

Turk · Sep 14, 2012

Welp, I'm not going to fight the Fed.

With these rates staying low for years to come, it's time to pour lots more money into mREIT's. I already got AGNC & ARR, both poised for this environment, but most of the new money will go into AGNC today.

The quality bond funds should also do well... PONDX, THOPC, FNMIX & SPHIX.

Diving right in; the water should be fine.

Pablo · Sep 14, 2012

Originally Posted By: Drew99GT
I've learned one very important thing in my short career as a trader: if the fundamentals suck, employment sucks, things look horrible in the economy: don't bet against the CROWD.

Fixed.

demarpaint · Sep 14, 2012

Originally Posted By: tpitcher
Short-term: Good.

Longer Term: Not good.

From my newsletter: "Take profits (or sell covered calls) on stocks that have run up substantially the past 3-6 months. Consider implementing a protective put strategy to help mitigate future downside risk in your portfolio."

Good luck trying to figure it out, out there.

Sounds like a plan to me, when this baby falls its going to be big.

Turk · Sep 14, 2012

Originally Posted By: tpitcher
Welp, I'm not going to fight the Fed.

With these rates staying low for years to come, it's time to pour lots more money into mREIT's. I already got AGNC & ARR, both poised for this environment, but most of the new money will go into AGNC today.

The quality bond funds should also do well... PONDX, THOPX, FNMIX & SPHIX.

Diving right in; the water should be fine.

Fixed it.

Investors....come in please!

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