Super Bear
August 26, 2009
Larry Levin’s Nightly Newsletter & Trading Signals
Super Bear
I like reading James Howard Kunstler for many different reasons and on many things we agree. His latest super bear meme, however, is beyond me. Let’s hope he’s wrong. Enjoy.
The Fog of Numbers
“There’s something happenin’ here.
What it is ain’t exactly clear…”
- Buffalo Springfield
One of main reasons behind the vast confusion now reigning in the USA, our failure to construct a coherent consensus about what is happening to us (or what to do about it), is our foolish obsession with econometrics - viewing the world solely through the “lens” of mathematical models. We think that just because we can measure things in numbers, we can make sense of them.
For decades we measured the health of our economy (and therefore of our society) by the number of “housing starts” recorded month-to-month. For decades, this translated into the number of suburban tract houses being built in the asteroid belts of our towns and cities. When housing starts were up, the simple-minded declared that things were good; when down, bad. What this view failed to consider was that all these suburban houses added up to a living arrangement with no future. That’s what we were so busy actually doing. Which is why I refer to this monumentally unwise investment as the greatest misallocation of resources in the history of the world.
Even this interpretation - severe as it is - does not encompass the sheer damage done by the act itself, on-the-ground and to our social and cultural relations. Suburbia destroyed the magnificent American landscape as effectively as it destroyed the social development of children, the worth of public space, the quality of civic life, and each person’s ability to really care about the place they called home.
It’s especially ironic that given our preoccupation with numbers, we have arrived at the point where numbers just can’t be comprehended anymore. This week, outstanding world derivatives were declared to have reached the 1 quadrillion mark. Commentators lately - e.g. NPR’s “Planet Money” broadcast - have struggled to explain to listeners exactly what a trillion is in images such as the number of dollar bills stacked up to the planet Venus or the number of seconds that add up to three ice ages plus two warming’s. A quadrillion is just off the charts, out of this world, not really subject to reality-based interpretation. You might as well say “infinity.” We have flown up our own collective numeric bunghole.
The number problems we face are now hopeless. America will never be able to cover its current outstanding debt. We’re effectively finished at all three levels: household, corporate, and government. Who, for instance, can really comprehend what to do about the number problems infesting Fannie Mae and the mortgages associated with her? There’s really only one way out of this predicament: to get ready for a much lower standard of living and much different daily living arrangements. We can’t wrap our minds around this, so the exercise du jour is to play games with numbers to persuade ourselves that we don’t have to face reality. We’re entertaining ourselves with shell games, musical chairs, Chinese fire drills, Ponzi schemes, and Polish blanket tricks (where, to make your blanket longer, you cut twelve inches off the top and sew it onto the bottom).
Now that Newsweek Magazine has declared the “recession” officially over, it’s a sure thing that we are entering the zone of greatest danger. Some foul odor rides the late summer wind, as of a rough beast slouching toward the US Treasury. The stock markets have gathered in the critical mass of suckers needed to flush all remaining hope out of the system. The foreign holders of US promissory notes are sharpening their long knives in the humid darkness. The suburban householders are watching sharks swim in their driveways. The REIT executives are getting ready to gargle with Gillette blue blades. The Goldman Sachs bonus babies are trying to imagine the good life in Paraguay or the archipelago of Tristan da Cunha.
While extremely allergic to paranoid memes and conspiracy theories, I begin to wonder about the impressive volume of World Wide Web chatter about an upcoming bank holiday - meaning that the US government might find itself constrained to shut down the banking system for a period of time to deal with a rapidly developing emergency that might prompt the public to make a run on reserves. God knows, there are enough black swans crowding the skies these days to blot out the sun. I hesitate to suggest that readers who are able to should consider stealthily withdrawing a month’s worth of walking-around money from their accounts.
Trade well and follow the trend, not the so-called “experts.”
————————————————————————
Notes from the Pit…for 8-26-09
ATTEMPTED DIRECTION: BUYER or SELLER
1) Rotation Neither
2) Range Extension Seller
3) Public went home as a… Seller
4) Buying-Selling Tails Seller
5) Open in Bull or Bear Range Neither
ATTEMPTED DIRECTION: Higher = Lower =Yes Neutral=
Comments: The attempted direction was bearish overall but within a balanced profile.
ATTEMPTED PERFORMANCE:
1) Today’s NYSE Volume compared to prior day & 10-day average - expected.
Today (1.303 billion) Higher = Lower =XX Unchanged =
10-day Ave: (1.234 billion) Higher =XX Lower = Unchanged =
2) Value Area: Higher = OL/Higher=XX OL/Lower =
Lower = Inside= Outside =
3) VA Width: Wider = Narrower =XX Unchanged=
COMMENTS: The VA was OL/higher buy narrower with good NYSE volume. Advancers led decliners by 1.5-1. Attempted performance was bullish but weaker and again doesn’t confirm the bearish profile.
POTENTIAL RESULTS: Overall, Tuesday was a mixed bag with a balanced profile. We may see a breakout in either direction Wednesday that should be followed. The durable goods report will be released before the open and new home sales 30-min after the open. Moreover, a 5-YR Note auction will be released at 12pm CST.
Support = 1021.00, 1015.50, 1007.00
Resistance = what is resistance?
Institutional support = none
Institutional resistance = none
Please use the pivot calculator in the “shared folder” for all of today’s pivots
————————————————————————
Results from Virtual Trading Room
————————————————————————
Electronic (ES) mini-SP 500
1) VA sell @ 10:30am at 1032.50 = -1.50 (1 lot)
2) Algorithm positions (4)
3) “Reading the Tape” positions (15) …combined Secret’s, Algo, & “Reading the Tape” total…+14.25
———————————————————————–
Today’s Value Areas:
Use These Value Areas
for Trading on TUE
ES 1033.00 / 1026.50
YM 9,578 / 9,530
NQ 1648.25 / 1638.75
————————————————————————
Today’s Trading Tip:
Don’t you dare not protect your trades!!! Unless you like losing money!
————————————————————————
To read the Value Area Help Guide, please copy and paste this into your address bar:
http://www.secretsoftraders.com/ValueAreaHelpGuide.htm
To read about how I became a trader, please copy and paste this into your address bar:
http://www.secretsoftraders.com/who-is-larry-levin.shtml
To view my recent trading statements, please copy and paste this into your address bar:
http://www.secretsoftraders.com/secretRoomLogin.asp
To read about my intensive Training Programs, please copy and paste this into your address bar:
http://www.secretsoftraders.com/mentorship-programs.shtml
Secrets of Traders
The Chicago Board of Trading Building
141 W Jackson Blvd. Chicago, IL 60604
888-755-3846
312-235-2572
info@secretsoftraders.com
In an effort to comply with all applicable rules and regulations please be so kind and read the disclaimer below:
IMPORTANT NOTICE: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of future results.
DAYTRADING involves high risks and YOU can LOSE a lot of money. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those talked about in our site.
To unsubscribe or change subscriber options visit:
https://larrylevin.infusionsoft.com/opt?o=0&i=49215&e=bcdd4544&m=363995
Secrets of Traders, LLC
141 W Jackson Blvd
Chicago, IL 60604
United States
(312) 235-2572
Leave a Comment