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Strategies & Market Trends : Playing the QQQQ with Terry and friends. -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (4785)	5/19/2009 2:51:39 AM
From: Walkingshadow	Read Replies (1) \| Respond to of 4814

Well, I think the uptick rule and the whole thing about shorts was a tempest in a teapot and a diversionary tactic: those damn short sellers again! THEY are the ones to blame!!! Like hell they were. They were just capitalizing on an opportunity, and why shouldn't people in markets be allowed to invest in opportunities? Isn't that what markets are all about? Fact is, that had virtually nothing to do with the fundamental problems, and more likely stabilized the markets. Granted, the uptick rule does prevent shorts from "piling on." But how significant a problem is that, really? Maybe it occurs on a couple of days a year. And everybody remembers 1987 and 1929 of course. But the imagined problem----that shorts took the market down considerably faster than it might have otherwise fallen----is not the problem at all. The problem is that the bulls created the situation in the first place, and blew the markets out of proportion to the upside. Same thing in March 2000. The majority of the market is long. Short sellers are the minority, and I think unfairly maligned (except naked shorts, but I am not talking about that here). One could argue, and more effectively I think, that the real solution would have been to install a DOWNTICK rule that limits "piling on" in the bull direction. After all, isn't that a much worse problem? The fact that markets have a tendency to become OVERVALUED and go crazy to the upside? This is much more common, in my opinion, than instances where things get overdone to the downside. You don't see inverse bubbles that wreak havoc for a quarter century or more and cause tremendous increases in the national debt and plunder pensions and citizen's savings accounts all in the name of fraudulently enriching a cadre of already filthy-rich corporate leaders who will never be held accountable, who will never be penalized, and who instead will reap gigantic bonuses even as they decimate shareholder value. But you DO see that again and again with upside bubbles that cause tremendous economic damage for generations. And people complain about short sellers? And isn't the objective to keep enough of an adversarial relationship in a market so that the bulls become the check on the bears, and vice versa? Isn't that the ultimate of market checks and balances? So I say establish a DOWNTICK rule !!!! ....and, leave the uptick rule in place too. Terry

To: Don Green who wrote (4785)	5/19/2009 3:10:14 AM
From: Walkingshadow	Respond to of 4814

<<IMHO the only thing that hasn't changed is human emotions and how the affect the market. >> True enough Don. But these---especially fear and greed----are the major determinants of market behavior, when combined with the inherent herding instincts that humans exhibit in markets. These are the fundamental forces that drive every market, if you ask me, regardless of where the market is, what is being traded, the era that the market is trading in, whether they install uptick (or downtick) rules, or any external attempts to regulate the market (e.g., China's limits on how far a stock can move in a day----that sure did little or nothing to prevent an absurdly inflated upside bubble that the Chinese will be paying for over the next 30 years or so). Get a handle on these things, and you don't need any other information in any market, and you certainly don't need news or opining pundits or pump and dump analysts trying to set you up to be left holding the bag or obnoxious screaming idiot sweathogs like Cramer. Since these fundamental market forces are typically pretty irrational, then it follows that rational market predictions and modeling and "stories" and so forth are hopelessly misguided, if not outright oxymorons. Terry

To: Don Green who wrote (4785)	5/21/2009 11:59:22 PM
From: Walkingshadow	Respond to of 4814

Here's the current chart on QQQQ. My take on this chart is: 1. QQQQ broke the trendline 11 sessions ago, and thereafter things began to unravel steadily. 2. Support at the 200 sma was tested, held for a few sessions, broke, then the index rebounded thru that again. The 200 sma support held today. 3. Support at the 20 sma (midline of the BBs) similarly held, broke, held again, and broke today. 4. Relative strength is declining. 5. Stochastics showing new sell signal now. 6. BBs are contracted now and becoming unstable. This is the most contracted the BBs have been since last summer. The index must push against one of the rails to relieve this contraction. I think the index will push the lower BB open. That would be most consistent with the general technical weakening that has been steadily developing. There has been a crossover of the 10sma/21sma of the put/call from extremely low levels. That's consistent with continued downtrend here also.