Weekend Thoughts … Crash ahead???
- A very weak economy … not only in the U.S. …
- 2 more downgraded bond insurers, pressuring the financials …
- An rocketing Oil price as Israel sees a strike against Iran and Libya sees a June price spike …
- An hawkish ECB, which makes sure interest rates will rise globally …
- A weak US Dollar as the Fed can not hike rates as the ECB …
- A technically weak equity market, which calls for NEW LOWS …
Anybody can feel a possible CRASH???
This would be just the “to-be-paid-bill” for market manipulation and not letting the markets go their way 
Tags: crash, manipulation, outlook
Juni 6th, 2008 at 23:16
Noch nich Olli
Wait till the olympics are over
not sure what the chinese have in store
but the dragon can still breathe
and its asleep now
wait till it awakens…
Juni 7th, 2008 at 08:23
I would love to face a Bull market …
But … All the signs are flashing RED …
About China … IMHO … this market is close to a BUY …
Juni 7th, 2008 at 17:02
You recently had a post where you analyzed what you called an inverted W (I think) and predicted oil prices would decline. Please, don’t take this as a criticism. My dad did some commodities trading when I was young and looked for similar things, tried to teach me some of them (of which I’ve forgotten nearly all of them). My question is: with the rapid rise in price the last two days, is there a new trend setting up and if so what and what would that trend suggest?
Thanks!
Juni 7th, 2008 at 18:13
You are 100% correct … and criticism is good …
Oil prices made a sharp reversal and blasted to new highs …
Did I lose money on that? No. Because I always use stops and this time the news on the imminent strike on Iran made me run for the exit.
I earn money, using technical analysis … but one has to accept, that there are fundamental events, which nullify all your analysis … this is what stops are made for
Today, I never would go long oil … but I can wait until the picture gets clearer … to short it again …
As momentum is one of my good friends, I play the short side in the equities at the moment … especially in the European ones as they broke down in relative terms to the american markets …
Thanks to Mr. Trichet
Juni 7th, 2008 at 19:00
I personally don’t trade commodities. Actually, all the more I’m in the market is a small solo 401k and a ESA for my kid (being mid 20’s and all). I watched my dad sink hours and hours into studying market fundamentals to be successful at trading commodities. Personally, I find that I make more money by doing more consulting :).
All that said, I did notice a few days this week where oil prices would fall ‘overnight’ when asia and europe were the predominate forces, and then regain at least some of those losses during American trading hours. Made me wonder how the American thought processes were different from the European and Asian ones.
A few days hardly makes a trend, and I’ve a very short history in paying close attention to any of this. (Actually, it was the hosing market bubble popping that got me interested. From my computer work I found that you can often learn most about something as you watch it break.)
Juni 7th, 2008 at 19:28
So you are a good consulter
Whatever you do … you need to do it 100% … then you can reach far.
Unfortunately, many people become victims of the markets as they lose money … for some even it becomes an addiction as betting, roulette, poker … the good thing is … if you LEARN trading … if you are disciplined … if you have a sufficient bankroll … YOU WILL WIN
Your Dad could save you a lot of time by telling you, what is NOT working … I at least plan to teach my kids trading … at the moment they are too young (10+7)
Juni 7th, 2008 at 19:57
My Dad and I are close, I talk to him all the time. He told me that he got out of commodities 5-6 years ago. My father is a life long farmer, did commodities trading on the side, some of it as a hedge some of it to try and make a little extra money for the family when times were really tough (so…a hedge I guess).
Most of the commodities trading he did was in his own business sector: corn, beans, cattle, stuff he worked with on a daily basis and he felt he had a good handle of the fundamentals. Still, when dealing with a commodities market, you can’t just look at your field, you have to be aware of what the entire planet is doing these days. Hence why he sunk a lot of time into research.
Still, he told me that 5-6 years ago he stopped commodities trading. He says that’s when the big hedge funds started getting into the commodities markets and he feels feels that the markets became decoupled from their fundamentals. After that he says it has become less and less true if there’s actually sufficient production to meet demand (fundamentals), but rather a game of chicken that you’re playing against some massive hedge fund manager that had way way more money then he had.
This is another reason why I was querying you about your inverted-W analysis. Like I said, growing up my dad looked for things like that. Still, I wonder if my Dad is right and the markets have become ‘decoupled from their fundamentals’ if such analysis tools also quit working? But, I don’t remember any of them and I’ve too much work to do to go research them and relearn them again.
I can also remember in the mid-early 90’s when my dad was heavy in commodities trading all of his brokers thinking he was crazy (despite making money year after year). They kept telling him ‘there’s no way to loose money faster then in the commodities market.’ I wonder if the recent run-up and eventual pop of the commodities market won’t bring back some of that thought…’those who don’t study history are doomed to repeat it’ and all.
So…do we try (with legislation) to force the ’speculators’ out of the market…. I’m not sure if that’s really such a great idea at the moment. I don’t understand how all this works well enough, I understand that speculators do serve a role and if we just force them out…who know what else we might break. I’ll leave that kind of analysis up to people who understand the system (perhaps you) better then myself.
Making retirement funds out, that I can sorta get behind. This thing *IS* gonna pop. And (especially the calif public workers retirement fund) is pretty heavily into commodities. I don’t want to be baling retirement funds out with my tax dollars because manager’s with ‘irrational exuberance’ we’re off doing stupid things again.
Personally I’m studying it not to figure out how to make money off of it, but rather figure out how long I’m going to have to weather the current bubble and get some insight into what the post bubble climate may look like.
Juni 8th, 2008 at 01:17
As JP Morgan says
they/ we all got it wrong as the dow is down 400 points
now is the time to buy stocks
so they wont need to file for bankruptcy
lets buy, so we can support them
lets go
come on….
lets buy an overbought market and lose some money
lets do it for JPM
come on people, lets do this
yikes..
thats an absurd headline on bloomberg friday
i cant believe it…
they are crazy and desperate
and american?
who “buys” that kind of stories?
its a fairytale..
amazing
Juni 8th, 2008 at 11:03
@ Seth … you understand more than 90% of alll fund managers
Today’s problem is, that as too much money is around, fundamentals lost value … the markets move always farther and quicker until the last long is killed or the last short got squeezed … this is why the technical picture is important …
The fundamental picture is only important VERY LONG TERM … every bubble gets deflated some day …
Tulips … South Sea … Gold and Silver in the 80s … railway stocks … tech stocks … telecommunication stocks … now the housing sector … financial stocks … commodities …
Some trends you can follow … some not …
After many years of Gold not moving at all … I could ride the comeback … and sold out already … the Tech bubble was difficult … as you had to buy crazy valuations to hope for even crazier people to bail you out …
So … if I see a trend, I hop on … if it loses steam, I’m out even quicker.
The rest of the time I daytrade … because … daytrading is skills and discipline … what ever they do … inflating or deflating a bubble
Juni 8th, 2008 at 11:06
@NOR … what ever they tell/lie … I will stick to my method …
Knowing, where the market should go … then …
if the markets goes into that direction … I attack …
if they defy logic … I;m out quickly … waiting for reentry …
No more … no less …