Technical Analysis of Stock Trends

Naked mud wrestling in Senate. Naked knife fighting in market.

Posted on Dec 13, 2008 by WHC Bassetti.

Of course we’re capitalists.  Of course we’re not deaf dumb and blind capitalists.  Of course we’re not pigs to the trough capitalists, like Phil Gramm — and the companies who evaded all common sense regulation and almost burned down the house.  But the sight of the U.S. Senate arguing about hourly rates of Detroit workers while the Titanic is taking on water inspired us with such disgust and fear and loathing that we wanted to take a scourge and clean out the law making temple.  

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Strictly systematic. Dow Stops. No babbling. No whining.

Posted on Dec 11, 2008 by WHC Bassetti.

We were reading our last letter and wondering if it made any sense to our readers.  We’re not sure it made any sense to us.  So in order to impose some sense on the situation we calculated the stops on the Dow.  These make sense, insofar as sense can be made of these markets.  Remember, it was Keynes who said the markets can remain irrational longer than you can remain solvent.  Funny thing, Keynes is back in fashion, even with neocons.

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Run for the hills. Bulls on the loose.

Posted on Dec 09, 2008 by WHC Bassetti.

Well, maybe.  The upwave that started November 21 just broke away and looks to carry much higher.  We think that shorts should begin hedging by matching their shorts with longs in indices and ETFs.  Depending on how strong you feel the upwave is you might even go fully hedged, or even some % long.  As is obvious we have been nibbling at bottom fish for a little while here and buying lottery tickets. In addition to the major indices Ford and GE (among many others) gave buy signals today.  Now note that a change of trend signal has not occurred.  And in fact we would not be surprised if this wave runs uphill here and exhausts itself when the market realizes that Barak does not walk on water and that the economy far from being watery is quicksand. So this note is for the speculators and adventuresome.  The patient might want to wait for the change of trend signal.    In all our experience we have never seen markets like these.  They virtually make a mockery of systems trading and methodological trading.  Contrarian methods and trading styles and luck rule the day here.  Here is what we expect:  an extended upwave, followed by more bad news which reestablishes the bear market.  There is every possibility that there will be a change of trend signal that will be false.  We are working overtime to psych out these events and readers should check frequently for whatever we invent next.

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The oily dollar — a greased pig in the making

Posted on Dec 06, 2008 by WHC Bassetti.

We remarked quite some time back that OIL was a sale.  While it is a speculative play the chart says that you can add to the position.  Never do this at home without a stop. 4 or 5%, or a chart signal.

Get ready for 50 cent gasoline.

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Dow betwixt and between–betwixt surreal and reality

Posted on Dec 06, 2008 by WHC Bassetti.

Watching the Dow blast up 250+ points on the day the government announces that the administration (We suppose they did it. Someone must be to blame.) pulverized over 500,000 more jobs leaves us between Lewis Carrol’s mirror and black hole.  We must be in a bull market atmosphere — or a b.s. atmosphere.  1 in 10 mortgages in trouble, a possible 2MM foreclosures — oh well, time to buy and get back to business.  We’re at a loss to imagine who we’re going to sell things to if everyone is out on the corner trying to sell us apples.  Ignore all this.  It’s called economic analysis.  Keep your eye on the chart and be willing to abandon your short positions when the trend changes.  Any probability of that?  Probably not.

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