Opening Report – 16 November 2012

One of the risk factors right now is people themselves as opposed to Governments. The Governments got us into this mess by their short term desires to get re-elected by pleasing the people. The people have got used to the good times isolated from economic realities by the manoeuvres of their elected Governments. Now it is time to pay the piper and they don’t like it. Hardly surprising, but the expression of this may derail any hope we have of a soft landing. Quite a mess really. Meanwhile we have these falls which look pretty impulsive and we have options expiry today with the fast action usually coming in after expiry [Read the full report]

Opening Report – 15 November 2012

Everywhere we look people are playing the market game which I refer to as trying to pin the event tail on the market donkey – meaning they are trying to rationalise market action using funnymentals (sic). The problem is the market is not governed by these but is instead a product of mass human psychology and, more importantly, market positions. For example if everyone who wants stocks is stuffed to the gills with them then the market will go down because all the potential is to sell. It is a conundrum but every time someone buys the market the price may increase but the market is weaker as that is one less purchase that can happen again and one more stock holding that can be sold. It may seem counter intuitive but it is entirely logical. Of course news items affect the market and so it seems to be all about events but these are not the controlling influences as is often demonstrated when markets fall on “good” news and rally on “bad.” Often we see major peaks come out of a clear blue sky or on such days as New Year’s Eve (think FTSE 1999 and Nikkei Dow 1989 – neither of these peaks has ever been equalled!) when the feel-good factor is at a maximise leaving the funnymentalists scratching their heads in some confusion but there is always an event tail lying around somewhere they can pin on the donkey. Of course they do this blindfold which is an apt description of their blinkered view of markets. The game can be fun but it is for the reasons above I prefer to be a technoid! [Read the full report]

Opening Report – 8 November 2012

The Dow collapsed yesterday and has shot through the lower parameter of the rising wedge/ending diagonal. In terms of the wave count this may be wave 5 of the first leg down and what I thought was 5 may in fact be part of an irregular 4. However we have no confirmation that the latest decline is over at this point. Last week I was theorising on the similarities of the hurricane in 1987 and the recent storms in the US and the similarities, market wise are now just starting, or may be just starting. I also outlined two scenarios with regard to the triangular action and both may come true. Meaning we have simply sold right through the lower parameter and we may now re-test that parameter (which is currently around  13050) [Read the full report]