An accident of History

Thomas  Jefferson said in 1802:
'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks   (FEDERAL RESERVE ESTABLISHED Today in 1913) to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered...'

Was Jefferson's attitude toward bankers the result of his continual indebtedness or did he foresee this latest financial crisis.  Every bear market is accompanied by the collapse of some major financial institution.
DC

Thank you Santa

This is the Santa Clause rally and there are two (2) possible T's that are working. the Smaller T has expired and the larger T looks to last a little longer.

 The T in the above chart has expired and I am closing out my long position at the close.  In the above chart there is no indication of any other T that would influence this trade.

After closing out my long position I will look for a possible short, however, a new center post could develop very quickly so be on the lookout.  The current T may have started at the last high point on the oscillator back on December 9, 2009.  If this is the case then the T has further to go and the Santa Clause rally can break into new high territory.  If so, buy the breakout! I closed out my positions at the following prices at today's close:

Bought BGZ @17.03 + .80

Sold BGU @ 52.98  + 2.32

There is a new Center Post

There is a new center post formed in the above chart of the 10 minute DIA.  The left side of the T begins as the old T ended.

 

The double bottom in the above oscillators confirms the center post formation right at the support level.

 

The higher lo on the oscillator that occurs at a lower lo of the price further confirms the new center post of a T.  I executed the following trades:
Bought BGU @ 50.68
Sold Short BGZ @ 17.83

DIA 10 min 12-17-09 - A New T is Formed

The chart above is the DIA 10 minute from Thursday December 17, 2009 at 2:10 PM.  The chart indicates the formation of a new T and this led to my decision to close out my short positions on the close of the market.  I will take a new bullish position after the opening on T ripple Witching Friday 12/18/09.  The positions were closed out at the close on Thursday 12/17/09 at the following prices:

Bought BGU @ 50.17 + 0.72

Sold BGZ @ 17.96  + 0.09

Bought DDM @ 43.04  + 0.70

Sold DXD @ 30.10  + 0.41

I have not updated this blog recently due to illness.  I am now in catch-up mode. 

The chart of the DIA above shows a possibility of a longer timed T that is just beginning.  This could carry the bullish trend of the market well into January of next year.  I will publish the daily T charts for the Dow Jones industrial averages later in the day on Friday and report any prices if I take a position at the opening.

DIA 10 min 12-10-09 - A New T Was Formed and Then Expired

A new T formed after I had initiated a short position in the large cap ETF's.  I had a nice profit in my positions in BGU and BGZ and did not take the profit when I could.  I still have a profit, just not as much as I did yesterday.  If I were paying closer attention I should have noticed the new T forming and then taken my profits but life is not always that easy.  Since we have another expiring T I added to my market short position in the following positions:
Sold Short DDM @ 43.74
Bought DXD @ 29.69

Daily Close S&P 500 12-7-09 Trend Indicator Oscillator

Here is the same trend indicator oscillator applied to the daily prices of the S&P 500.  As you can see I am acting on a sell signal from the Daily chart as well as a sell signal from the 10 minute intra day chart.

Trend Indicator Oscillators

The above chart shows my trend indicator oscillators that are based on a surrogate net volume advance/decline number for every 10 minute interval of the DIA.  When the green line crosses above the red line, a bull trend begins and when the red line crosses above the green line a bearish trend begins.  Each oscillator is a derivative of my basic oscillator.  This trend indicator is more sensitive than the oscillator shown in the chart below.  The trend indicator oscillator shown below is the exact same calculation as the above chart oscillators with the 10 minute last price of the DIA substituted for a net up/down volume substitute.

The above trend indicator signals a new trend as the red line crosses the red line.  As the green line crosses above the red line a bull trend begins and visa-versa.

A Small Expired T indicates a Short Sale of the Market Averages

This is definately an expiring T which portends a weaker market this afternoon and tomorrow.

This function indicates a short term change in the direction of the market to down.  I executed the following orders:

Sold Short BGU @ 50.89

Bought BGZ @ 17.87

 You can enlarge any chart by double clicking on the chart.

DIA 10 min 12-4-09 Oscillator signal to cover

The above chart shows the oscillator just crossed above its moving average line indicating the end of the move.  I closed out my positions at the followinf prices.
Bought to cover BGU @ 50.11  plus .70
Sold BGZ @ 18.11   plus  .40

A Modest Proposal

Last Friday my good friend took me to a Scottish restaurant for dinner.  The idea of a Scottish restaurant may seem like an oxymoron to most readers yet it is not a far-fetched concept if you live in the town where Jack Nicholas built his home golf club “Muirfield Village Golf Club.”  All the streets circumventing the Golf Club are named after the streets in St. Andrews Scotland where the “Royal and Ancient Golf Club” is located.  Here it is perfectly logical to find the appellation Scottish associated with a restaurant in keeping with the theme of the community.  I ordered fish and chips for dinner with a glass of Killians.

My friend is a hale and hearty fellow well met and always the perfect host in social settings yet intensely laconic in business matters.  Our conversations are always eclectic and cover every subject imaginable.  As long as I have known my friend, he has neither expressed nor denoted any specific political philosophy that would indicate either a liberal or a conservative predisposition.  If I were to identify the underlying principal that governs his worldview, it is pure reason. 

Because my friend is a very successful businessman, he caught my attention when he said that he had a solution that would immediately reduce unemployment to virtually zero.  Since President Obama called for a “Job Summit” I am publishing this innovative solution to expose it to the Socratic method and peer review.  Your comments are encouraged.

THE SOLUTION:
If it is mandated that the hours worked by every American be reduced by approximately 10% or one hour per day without any reduction in weekly pay then all employers will have to hire 10% more people.  Since labor makes up about 20% of costs, there would be only a 2% increase in the cost of production and a one time 2% increase in the inflation rate.  We can compensate for imported goods by increasing customs duty by 2%, a small price to pay for entering our markets.  The extra leisure time would allow workers more time to spend their meager earnings thus stimulating many sectors of the economy.  With the extra time many workers would start a part time home based business thereby creating more wealth for this nation.

I submit this modest proposal for your comments.

Sold Short The Market at 2:10

Bought BGZ @ 17.71
Sold Short BGU @ 51.41

DIA 10 min 12-3-09 Expiring T's

The above chart of the 10 minute Diamonds illustrates the last three T's.  The symmetry of the T's demonstrates how the market average always goes higher after a certain cash build up period.  The amount of time that the market averages advance in price is approximately equal to the amount of time of the cash build up.  The oscillator function that is graphed below the DIA prices is derived from exponential moving averages pf price differences during the 10 minute periods.  The latest blue T on the left of the chart is due to expire at 3:50 PM this afternoon December 3, 2009.  I always begin the left side of the T at the high point of the oscillator that marks the beginning of the cash build up phase.  You will notice the invariable sell off after each T expires, however, the ideal is to identify the middle post of the T and go long the market.

 

This 10 minute chart of the Diamonds shows a higher frequency function of the previous function curve.  The blue T from the higher chart is drawn here along with a smaller T that is set to expire at 2:10 PM this afternoon.  Note that after each expiration of a T there is a drop in the market average.  Sometime between 2:10 and 3:50 I will short the market and report to this blog.