Finally Profit Taking? ~ 11/4/2009

$COMPX 2055.52 -1.80 -0.09% 2,199,386
$INDU 9802.14 30.23 0.31% 1,352,197
$INX 1046.50 1.09 0.10%

HOD SPX 1061 backtest of a break of trend support.

Weekly price actions are turning negative suggesting profit taking after 8 months rally based on debt spending. We have not seen any market correction even after 50%+ market advance since the March low. Last week is a CIT pivot. Even though some of major market price and breadth indicators are misleading to show oversold, we didn't have a price correction.

After the market advance based on debt spending, carry trade, momentum trade, etc, we may finally see a meaningful correction.

The followings are two different scenario wave formations. As shown on the SPX 60min chart, we may see a completing wave (v). As shown on the SPY 15min chart, we may see a start of wave {III} correction. I noted that tentative wave 1 target is SPX 950 - 1000 +/-.

For a less bearish Long Term scenario is that we are in Wave C correction.



What the markets are hoping for Americans to spend until going bankrupt; however, many are already "shopped until drop dead". In addition, the current globalists' agenda is not helping the United States as we are continuing to see "Trade Deficit" in addition to cost-cutting as we just heard "Microsoft" is cutting additional 800 jobs. We are in a long term down K cycle which Greenspan in late 1990s has massaged the cycle to avoid the downturn creating bubbles; therefore, Americans are worse off now than we had gone through the long term down cycle at that time. Of course, that means that the greedy globalists made fortune as we are hearing about the huge Goldman bonuses.

We now have internet and cyber communities through which some are learning realities of politics, economics, and financial conditions. Therefore, bears were right -- but were slaughtered... e.g. Bernanke greedshoot since March. Maybe we finally see a correction or a serious pull back so that many will realize and sober up. For example, we are seeing some of excellent Japanese products because out of pain, they rose above mediocre performances, e.g. GM losing to Toyota. I don't like Microsoft Mouse, another example, compared to Sony Mouse because the performances are clearly distinguishable. Sony mouse can do precision drawing while Microsoft mouth is bulky and terrible with precision drawing. Many Asians and females have small hands, and big mouth is really pain in hand after using for hours. Americans and students need to go through new learning process.

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  • US Senate Votes to Extend Jobless, Housing Aid

    The U.S. Senate vote unanimously to extend aid for jobless workers and broaden tax breaks for homebuyers and businesses in a bid to breathe life into the struggling U.S. economy. Pace of Layoffs, Planned Job Cuts Both Show Decline

  • Cisco Earnings Top Street Forecasts; Shares Climb
  • Former Citi President's Fund Up 84% This Year
  • Cramer: 6 Lies The Bears Are Telling You
  • Qualcomm Outlook Misses Street, Samsung Deal Helps
  • Fed to Maintain Low Rates Even as Economy Recovers
  • Why the Dollar's Decline Doesn't Worry US Officials—Yet
  • Nervous About US Stocks? Check Out Emerging Markets
  • 3 Companies That Could Be Ripe For The Picking
  • Kudlow: Stocks and Voters Show GOP the Way
  • Former Merrill CEO Thain to Emerge From Seclusion

Globalists vs the FED

Globalism, aka NWO, is inevitable as our world is getting smaller with advancing technology as many are connected through internet cyber community and commerce. It is just a matter of how any can control the greed power oppressing the world. There are speculations of an effort to mitigate the greedy power, a good example, as shown below in the article of "Bonus based on global formula" which is distorted practice. When the world financial markets are based on deceptive collusion and unfair leverage, there is no need for bonus payment as it is doubly unfair for the rest.

While effective and successful product, manufacturing, and management advancements are worthy of praise and monetary compensation, too many financial and management wars are based on unfair, short-term based results, quick-kill -- therefore, there should be a committee to assess a worthy reward based on case by case analysis --- GLOBAL COMMITTEE for BONUS ASSESSMENT.

http://trend-signals.blogspot.com/2009/10/what-fed-has-done-to-united-states.html

Fed rejects global plan for bonus payments

The US Federal Reserve has rejected a recommendation that bonuses for finance executives should be paid according to a single global formula.

The Financial Stability Board, the global standards-setting body, suggested last month that 40 to 60 per cent of the bonuses paid to senior executives and others whose actions have a material impact on the risk profile of their companies should be deferred and paid "over a period of years".

The Fed did not embrace the FSB's ideain its consultation paper, which was issued yesterday at the same time as the Obama administration's "pay tsar" announced a separate crackdown on compensation at seven bailed-out companies.

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Leaders of 16 Asian nations meet in Thailand to Form a New Union

Leaders of 16 Asian countries gave high priority Sunday to finding a new economic growth model to free half the world's population from merely serving as producers for the West, the Thai prime minister said.

Prime Minister Abhisit Vejjajiva said the leaders gave such a search "the utmost importance" at the annual East Asian Summit, which concluded Sunday. He told a press conference that Asian nations would have to strengthen their domestic markets and further liberalize regional trade. ....

The East Asia Summit followed Saturday meetings of leaders from the 10-member Association of Southeast Asian Nations with heads of government from China, Japan and South Korea. Sunday's expanded talks brought in Australia, New Zealand and India.

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Globalism is inevitable as I decided to stop wasting my time and aggravation to resist it, nevertheless we need to put an effort to gain fairness.

We see a lot of fight based on Political party preference which is detrimental as it is further disadvantaging most of us around the world. We need to understand realities of global economic, political, and financial currents including understanding the hidden facts underneath written history.

Each of us makes choices and lives the consequences of that choices. Even though I am a conservative, I respect "choice" which each one of us makes.

I have put a lot of effort, time, and my life since 2004 to help America because I love my country; but, the enormous force heading toward "Globalism" is inevitable - just a matter of time.

We have 3 kinds of people around the world:

1) Those who know the facts of reality,
2) Those who are ignorant,
3) Those who intentionally create "division", and
4) other.

While most of us do not know all of published, unpublished, and/or hidden facts; those who are intentionally creating division and disruptions would certainly be living consequences such actions. But I believe that most of us are trying to understand the realities of future trend and power impacting our lives.

Anyway, I rest my case.

October 24 International Day of Climate Action - 350.org

Wars

War Profiteering

http://trend-signals.blogspot.com/2009/10/what-fed-has-done-to-united-states.html

• While the US government squanders $400 per gallon of gasoline in order to kill women and children in Afghanistan, many millions of Americans have lost their jobs and their homes and are experiencing the kind of misery that is the daily life of poor Third World peoples. Americans are living in their cars and in public parks. America’s cities, towns, and states are suffering from the costs of economic dislocations and the reduction in tax revenues from the economy’s decline. Yet, Obama has sent more troops to Afghanistan, a country half way around the world that is not a threat to America.
  
  It costs $750,000 per year for each soldier we have in Afghanistan. The soldiers, who are at risk of life and limb, are paid a pittance, but all of the privatized services to the military are rolling in excess profits. One of the great frauds perpetuated on the American people was the privatization of services that the US military traditionally performed for itself. "Our" elected leaders could not resist any opportunity to create at taxpayers’ expense private wealth that could be recycled to politicians in campaign contributions.

Unfilled gaps

** Unfilled gaps - a full of holely market price manipulation - a trace of wild pigs rampage.


Of course, LEI would be up after trillion debt spending. The 2009 economy is built on debt-spending and still waiting for survived Americans to spend until going bankrupt.

• Leading Economic Index Hits Two-Year High
• Subsidy or Scam? Many Abuse Housing Tax Credit: Report

  Thousands of individuals claiming the first-time homebuyer's $8,000 tax credit may have been attempting to scam the system, including purported 4-year-olds and illegal immigrants. Credit Could Be Expanded Housing at Bottom: Bove

• Leading Economic Index Hits Two-Year High
• 30 Year Fixed Mortgage Rate Rises Slightly to 5 Percent
• Are New Home Appraisal Rules Gone Before They Start?
• Weekly Job Claims Rise; 4-Week Average Falls
• Jobs Will Continue to Lag: White House's Romer
• Financial Woes Plagued Galleon Informant
• Blog: Balloon Boy, The Halloween Costume
• Windows 7 May Help Kickstart Delayed Corporate Spend
• Pets Leave Larger Carbon Footprint Than SUVs: Authors

• Is Obama Justified In Cutting Executive Pay?

• US Prepares to Lower the Ax On Executive Pay at 7 Firms

The Treasury is expected Thursday to order seven companies that have not repaid last year's federal bailout money to halve their top executives' average compensation. Poll: Is Government Justified? Cramer: No Sympathy for Executives

• Biden Calls For Strong Partnership Between U.S. And Europe
  

  (RTTNews) - Vice President Joe Biden spoke Thursday after meeting with Romanian President Traian Basescu, calling for a strong partnership between the U.S. and Europe.
• Lawsuit: Madoff's workplace was rife with cocaine, sex
  http://www.cnn.com/2009/CRIME/10/22/madoff.lawsuit/index.html
  * Lawsuit seeks punitive damages, compensation on behalf of former investors
  * Starting in '70s, Madoff sent employees to buy drugs for company use, suit alleges
  * Lawsuit: Madoff used money stolen from investors to pay for escorts and masseuses
  * Madoff now eating prison pizza cooked by a convicted child molester, lawsuit says
  
  

Slumber Markets with low VIX

After the selling into close, markets do now show any concern as premarkets are showing slumber flat -- must be expecting another shoot-up based on "Long and Strong Delusion" debt spending economy. Markets are showing continued low volatility after bouncing off from VIX 20 and finishing the day with a strong hammer, it is dead again showing no-follow through.

• The Labor Department says new jobless claims rose to a seasonally adjusted 531,000 last week, from an upwardly revised 520,000 the previous week.
• • Mixed Bag: Weekly Job Claims Rise; 4-Week Average Falls

    The number of newly laid-off workers filing claims for jobless benefits rose more than expected last week, after falling in five of the past six weeks. Pay Cuts at Bailed-Out Firms Job Growth Slow: Summers

  • McDonald's Posts Strong Profit, Predicts Solid Sales
  • Travelers Profit Beats Market Views; Shares Up
  • AT&T Results Top Estimates with iPhone Help
  • US Should Cut Deficit or Risk AAA Rating: Moody's
    • Double-Dip Recession Unlikely: ECB's Weber
  • Merck Posts Big Profit Jump, Slight Rise in Sales
  • Xerox Reports Earnings Drop But Raises Outlook
  • China's Growth Quickens But Policy Stays on Hold
  • Windows 7 May Help Kickstart Delayed Corporate Spend
  • Interview: Steve Ballmer on Windows 7, Company's Outlook
  • Chavez Urges 3-Minute Showers to Conserve Water
• Goldman Sachs Is Too Big to Tell It Straight: Jonathan Weil
• US 'plans bail-out firm pay cut'
  

  US firms that benefited from government bail-out cash will be told to slash salaries for highest paid executives.

Market Correction

$COMPX 2150.73 -12.74 -0.59% 2,556,394
$INDU 9949.36 -92.14 -0.92% 1,398,943
$INX 1081.40 -9.66 -0.89%

SPX traded to 1101.36 HOD and retrieved closing near the low of the day. Even though Markets look as if "TOP formation" with inverted reversal formation with high volume selling at major pivotal resistances, it is better to be cautious as the theme of the 2009 rally is mainly based on "Short squeeze" without any meaningful correction.

• The W3 corrective wave theory is enticing and is due after long 6-7 month rally; however, based on the previous price pattern, the risk/reward for being in the market is 50/50 as the recent rally has been sharp. aka Bernanke greenshoot.
• Market breadth during the 2009 rally has been narrow compared to 2003 market rally. And market breadth and price action has shown negative divergences for months.
  
• Bearish fundamental factors didn't stop markets continuing to advance, so, blindly following the EW downside forecast can be deadly. Bears need to be cautious as the selling which we have seen could well be another trap.
• "W3" after A-B-C correction sounds reasonable after the incredible 6-7 months rally, nevertheless.
• USD broke 76 support, and now it is trading near at 75 support. The counter part Gold traded to 1072 +/- resistance and trading at 1058 at the moment.
• AAPL is upgraded to 300 which is a bad news for bears, however, if markets start to correct, it will likely fill the gap-up.
• VIX traded to 20, then, closed at 22.22. Would this really be a start of a meaningful correction?
• Markets are near CIT pivots, and if we are indeed in W3, this ride will be "Fast & Furious".
  

Bernanke, SPX, Sectors & profit

Markets are trading near at major S/R pivots, and many are now again turning into bearish, e.g. EW W3 downside forecast. As noted, I don't see a confirmation which we will see a correction of this maddened market even after 50%-300% driven up markets. As shown on the SPX daily chart -- % rally, a shallow retrace of 4%-9% followed by another short-squeeze push-up, it is premature to scream a pull back as Bernanke can continue to manipulate markets to upside.

The market price actions acting on TA caused many traders burnt because many TA didn't work well, e.g. retest of the March low, negative divergences, normal fib retracement, etc. Until TA and price pattern shows some confidence that markets will correct, it is a significant risk to assume the W3 bearish scenario as markets were pushing up based on short-squeeze for months. Considering the following factors, Bernanke can do anything with markets. Therefore, Keep in Mind of MOASS in this lunatic market.

How Bernanke and bankers took trillions out of Americans and Treasury.
* propaganda using mass media - e.g. his appearance on the 60 Min
* accounting method change using congress, FASB, and AICPA
* bail out and TARP
* selling Treasury debt
* baiting and fueling short-squeeze
* using hundreds of the Fed/big bank traders driving up or down markets -- probably, but likely -- based on market trade data analysis and traders showing their hands on newsletter, financial board sentiment, and trade execution information.
http://trend-signals.blogspot.com/2009/10/wire-tappp-in-fraud-case-deal-that-lost.html



What else is new for the fraudulent FED and its owners as the fraudulent operation was going on for decades... ~

• “The guy’s a giant, he’s a genius, he is a great human being,” said Austan D. Goolsbee, counselor to Mr. Obama since their Chicago days. “Whenever he has advice, the administration is very interested.”

AP Former U.S. Federal Reserve Chairman Paul Volcker

• Well, not lately. The aging Mr. Volcker (he is 82) has some advice, deeply felt. He has been offering it in speeches and Congressional testimony, and repeating it to those around the president, most of them young enough to be his children.

Bernanke lunacy of financial market manipulation after the Greenspan madness of tech and housing bubble/burst manipulation -- using mass media propaganda to sway sheepsters.



# Housing Market Has Bottomed, Banking Analyst Bove Says
"I really believe that the industry has bottomed, that we're not going to see further crashes in home prices or in home sales," banking analyst Dick Bove told CNBC.
* Mortgage Applications Drop
* Markets Harder to Please: Strategists
# Galleon Preparing to Unwind its Hedge Fund Holdings
* Wells Fargo Beats as Profit Up; Shares Fall as Bad Loans Jump http://www.cnbc.com/
Wells Fargo said shareholder profit rose 60 percent in the third quarter as mortgage banking revenue surged.
o Plan Your Earnings Season
o Earnings Surprises: Meet, Beat or Miss
* Morgan Stanley Profit Falls, but Tops Forecasts
* Boeing Posts Loss on Charges From 747, 787 Tests
* Housing Market Has Bottomed: Dick Bove
* Lilly Profit Tops Street View; Raises Year Outlook
* Watchdog Official Criticizes Handling of TARP
o Core TARP Programs Ending: Geithner
* Mortgage Applications Drop Again as Rates Climb
* No Tightening in Next Several Months: Fed's Yellen
* Bank of England Calls for Splitting Banks' Business
o Slideshow: The World's Safest Banks
* GE, Comcast Keep Options Open Amid NBC Deal Talk
* Madoff Investors Sue KPMG and Major Banks
* Buffett: 'Enormous' Economic Progress Over Last Year

Trillions exit yet?

Markets were pushing up for months in light volume trading, and even after 50%-300% rallies based on Hope Theme, I don't see visible profit taking even though internal was showing it. Trillions will look for exit to lock in huge gains since the March low.



Buffett naive or deceptive? While the title for the Buffett interview sounds reasonable, the main factor operating and managing financial market is mainly "deception" and "unfair practices" which noted on previous commentaries. Financial market system at the top is unfair and collusive operation -- therefore, the capitalism is broken as the statistics of wealth disparity proves the points. Furthermore, if indeed the wars were manipulated to profit from, i.e. war profiteering, the greed is indeed evil and is seeded in eternal death. Therefore, his premise of WS is not evil is either naive or deceptive.

>> Warren Buffett doesn't look at Wall Street as "evil," but he does believe both "carrot" and "stick" incentives are needed to make sure people "behave well" while they are trying to get rich.

http://www.cnbc.com/id/33412615

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>> As soon as Obama became president, he showed us that the State Secrets Privilege was going to continue to be a tool of choice. It’s an arcane executive privilege to cover up wrongdoing—in many cases, criminal activities. And the Obama administration has not only defended using the State Secrets Privilege, it has been trying to take it even further than the previous terrible administration by maintaining that the U.S. government has sovereign immunity. This is Obama’s change: his administration seems to think it doesn’t even have to invoke state secrets as our leaders are emperors who possess this sovereign immunity. This is not the kind of language that anybody in a democracy would use.