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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Justinfo who wrote (63989)	9/15/2014 5:51:49 PM
From: FCom777	3 Recommendations Recommended By Justinfo pogbull toccodolce Read Replies (1) \| Respond to of 218214

Not sure what you mean about the selling being 'too orderly'. Seems more stealthy to me. To me, last Thursday's price action told the story of where we are headed. Keep in mind that the theme of this move higher from a few weeks ago has been liquidity - i.e. Fed dollars injected into market via its Bankster proxies - as I have posted previously. A pertinent proxy of what is going on in this regard is the relationship between bond and equity prices. The "normal" relationship is for bonds to move higher while equities move lower as investors move from one equities to bonds and vice versa based on their perception of equity risk. If there were "Conservation of Dollars' this relationship would likely prevail - however - this is not the case since dollars are generated out of thin air. What you need to look at are the times when both bonds and equities move higher - or lower - together. Moves higher are an indication that liquidity is being injected into the system and moves lower that liquidity is being removed. Recall the last significant S&P down move occurred when both bonds and stocks sold off - this is when the big move lower occurred. Also, when the low formed in the low 1900's, you'll see that bond prices started strengthening before equities started to do so - and that once the move higher began - both bonds and equities rallied for the first two thirds of the move. That's been the theme of the intermarket relationship over the last few months - and themes like that do not change quickly. Now, getting back to last Thursday - you will recall that equities floated higher during the day and closed close to its daily - and all time highs - for that matter. If you look at bond prices during the latter part of the day - they sold off big while equities were floating higher. That was the signal to me to get short. Granted, I got short a little earlier in the day than I would have liked - looking back - and the last hour of trading Thurs had me sweating a bit ... However, I felt like it was a good trade regardless - even though I brought losses home - since my trade methodology was consistent with the relationship between bonds and equities that had been established. Needless to say, I was grateful for the gap down Friday and follow through that we have seen since then. The icing on the cake is that even though we have moved over 30 S&P points lower - bullish sentiment is still high. My sense - with reasonably high probability - is that the highs for this equity move higher are in and we will move lower till the longs get flushed out. We could well move to new highs after that - but we certainly haven't seen any exhaustion selling to the down side - yet. Believe me, you will know it when you see it .... Today bonds intraday moved lower while equities floated higher after last nights sell-off. Even though bonds were up for the day - the bond up price action occurred largely over night and bond pricing tailed off during the trading day today. Thought equities would sell off late today - much like I thought they would sell off late last Thursday - but they didn't. I'm hoping we see lower equity - and bond prices - in the morning. The stealthy - or orderly price action - as you put it - is an indication to me that distribution to the public is occurring. The longer it takes to develop - the lower the equity prices we are likely to see. Of course, if we wake up tomorrow and both bonds and equities are substantially higher - I'll likely be chasing my tail and covering short equity positions - and might even go long. That would be an indication that the Fed is injecting even more liquidity into the markets - which is certainly very possible- and some might say likely since there is a Fed meeting this week. I tend to doubt it since to me they have already broadcast their intentions. The stealthy fashion they are doing it kind of confirms it. Had equities sold off later in the day and closed near its lows - I might be inclined to look for a place to go long tomorrow. But it seems to me the Banksters are still distributing ... and plan to take prices lower - perhaps much lower. Scotland could be a trigger - as could a serious Russian response - to the Bankster/NATO's militaristic actions in both Eastern Europe and Iraq/Syria. These idiots in Washington are playing with fire and seem to be completely clueless about the risk they are taking. Why Americans are willing to risk their lives - granted unknowingly - by being apathetic to militaristic actions taken in their name is beyond me. That's my story and I'm sticking to it. I'm looking for both bonds and stocks to sell off over night which to me will be a signal that a big move lower is close at hand.