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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (7597)	2/27/2007 4:56:42 PM
From: The Ox	Read Replies (1) \| Respond to of 33421

Hi John, With your macro view as a backdrop, are you short the US market now or are you waiting for some other events to transpire first? Just curious.... TIA TO

To: John Pitera who wrote (7597)	2/27/2007 8:30:29 PM
From: Jorj X Mckie	Read Replies (1) \| Respond to of 33421

John, I just love it when you talk doom and gloom and economic mayhem. Are you thinking that it is time that we had a come to jesus for the little credit bubble we have been experiencing? Lisa is gonna be so happy we locked in with a fixed rate mortgage two weeks ago.

To: John Pitera who wrote (7597)	2/28/2007 2:28:56 AM
From: nspolar	Read Replies (2) \| Respond to of 33421

John, over the last year plus my views changed considerably, from what they once were, and mostly with respect to timing. It is still too early to say my views are on a LT path that is appropriate for the times. The ST timing has been and remains difficult and treacherous. But I like what I see (w/r to my LT views) and if the general indices retrench by oh say 15 to 30 % by middle to end of May or maybe later, well we will have confirmation. That will be the 4 yr cycle low, but only the first low in a much longer down wave. I fully expected this, just could not say exactly when. I went full (200 %) short a bit early (1760 NDX), but think I will be aptly rewarded. I expect 2X short funds to perform better than 2X, provided the move down continues with emphasis. A reason I have posted Shilling (which I came across by accident), is that his views almost match mine. And yours seem a bit similar as well. Keep up your good fundamental work. My views have been shaped primarily by chart work and timing looks. - the Dow has been in an apparent EW [B] of major degree. - the SPX has been in an apparent EW [B] of major degree. - the NDX has been in an apparent EW [B] of major degree. Timing models on all of these suggested a possible top, beginning end of Oct '06, to about this time frame. It depended on where one put the EW bottoms, back at the last major lows. There were two choices. It is normal that the beginning move down of a [C] of major degree would be violent and strong, which is the wave that follows all the [B's]. And if the move down is going to be strong, which I believe this one will be, the initial move down should probably be strong. It is also possible imo that gold is now in a full blown C of [4] down, and Prechter's revenge has begun. The key here for those that do not know EW, is that if this is true, then the real precious metal bull has not yet begun, even though it has in the equities. I posted an EW of the HUI before last May, predicting a [1] top in the HUI, in early May. I still have it charted as such, and have this as the beginning move of a C of [A] of [2]. Another C imo, and it too should begin as it did with some emphasis. So if I am correct on the HUI and POG, the HUI is leading POG wave wise, by quite a bit, as it should. And, more than likely, the big bottom in gold is in, even though we have a possibility for a very serious down move here. Longer term timing would seem to indicate the major indice C waves down will be long, like 6 years or so. The price bottoms will likely come earlier than 6 years. Gold and pm stocks will bottom earlier than the general markets, and the next concerted move in pm's, basemetals, etc.; will be a monster. Just further out than most figure. In the meantime there is trading to do. Fundamentally, yes, if it happens this way this move will mark the end of the transition from deflation to inflation. The transition is a long process. And I too liken this a bit right here to 1972. World events are in some ways eerily similar, what with the war and all. If one looks at that timing, gold started its bull run in earnest, prior to the general market bottom, of that post '72 time frame. The next major period, however, following a major wave down, will be truly inflationary. We will see prices in pm's, basemetals and other commodities that will be out of this world. Those are my current broad timing views. I will post some EW charts, later on, if more confirmation develops. Today was but a decent start in that process, but I want to see how low we go here, and the next rebound. I appreciate your board.

To: John Pitera who wrote (7597)	2/28/2007 9:10:09 AM
From: John Pitera	Read Replies (1) \| Respond to of 33421

U.S. securities rules could still roil exchanges Tuesday, February 27, 2007 9:37:51 AM (GMT-06:00) Provided by: Reuters News By Jonathan Keehner NEW YORK, Feb 27 (Reuters) - Despite exhaustive preparation, sweeping changes to U.S. equity markets taking effect next month could further rock the nation's once quiet financial exchanges sector, already swept by a wave of consolidation. Designed to modernize markets through automated trading, Reg NMS -- for National Market System -- has precipitated moves like a new stock exchange launched by options mart International Securities Exchange <ISE.N>. It also spawned NYSE Group's <NYX.N> hybrid platform, which for now weds traditional floor-based brokers with new electronic capabilities, but many believe could be the death knell for open outcry trading. "While Reg NMS has already produced a historic shift by making the New York Stock Exchange convert to an automated market, there is the potential for unintended consequences that none of us are seeing," said Nasdaq Stock Market <NDAQ.O> Executive Vice President Chris Concannon. "Or that someone out there has seen but the market doesn't yet appreciate." In no less than 371 pages the regulations, instituted by the U.S. Securities and Exchange Commission, span four major areas and call for executing automated orders at the best available price, open access to quotations across market centers, consistent pricing increments and new rules for disseminating market data. With such a broad mandate, experts say that regardless of everything to anticipate Reg NMS, the rules could have unseen consequences as they fully take effect this year -- leading to new models or industries in the increasingly for-profit business of exchanges and equity trading. NOW YOU SEE IT The regulations could shake up equity markets through the Market Data Rule, analysts say, which allocates the distribution of revenue from fees paid by broker-dealers for market data. Under prior rules revenue was divided based on the number of shares executed -- incentivizing markets to break orders into smaller increments, for which they received more data revenue in a scheme the SEC called "trade shredding." Reg NMS tries to correct this by dividing revenue on both the number of completed trades as well as quotes posted at the best price. "The recalculation of the market rebates will definitely have some very interesting unintended consequences," said Adam Sussman of New York consultant Tabb Group. "Pre-NMS you got paid for trades but part of post-NMS is getting paid just for quoting." With stock price quotations offered by markets at ever-increasing speeds, it may be possible to enter and remove a quote before it could be accepted. Trading venues could generate revenue for orders with a limited chance of execution, said Sussman, causing a spike in quoting activity. "Venues could incorporate that in their business model," he added. "If they do the SEC will of course take a look but it will be an interesting wrinkle in the development of Reg NMS." KEEPING CONNECTED Unintended consequences may also come from connecting markets after Reg NMS, says Keefe, Bruyette & Woods analyst Richard Herr, adding that a decade ago few anticipated the rise of electronic communication networks (ECNs) following regulations called Order Handling Rules. Those rules, a response to charges of collusion among brokers, ushered in a new era of competition and combinations between exchanges and ECNs like Archipelago and Island. Reg NMS could take equity trading on a similarly unexpected turn as markets are forced to execute automated orders at the best available price, leading to a focus on efficiently sending orders between venues. This could ignite competition around providing links to exchanges and other markets, says KBW's Herr. Indeed, stock exchanges have signaled their intention to pull out of the current linkage system, governed by the nearly 30-year-old Intermarket Trading System (ITS), suggesting demand for new products that interconnect markets once Reg NMS is unrolled this year. With new trading venues announced regularly but a limited number of third-party linkage providers available, Reg NMS may spawn a spirited industry around connecting markets that must be aware of prices available nationwide. "The ability to route orders is a service that every exchange is going to have to provide to be NMS compliant," said NYSE Vice President Colin Clark. "Exchanges will be offering private routers and within that service there is room for enhancement."