We Must ACT not React

We profited immensely by the upturn with our open and new recommendation to the

-OEX100717C500 /
OEX JUL 17 2010 500.00 CALL took us from low buys of $10 to $11, with sales to 12.90 by 2.54 p.m We wiil continue to hold and recommend this option, seeing an upside potential to our next resistance lines, near 10,550.


This just makes me laugh. Yesterday this prestigious chartist informed us that "the market fell at the 200 day moving average, and that sector selling was rampant." In fact, if we read this chartists 'summary of the day' the day prior one could only assume that the market would lead down immediately.
Today, it's all new, and he says:

-- MARKET BOUNCE CONTINUES OFF FEBRUARY LOW
-- SHORT-TERM OUTLOOK IMPROVES FOR RISK ASSETS
-- SECTOR LEADERS INCLUDE AIRLINES AND CHIPS
-- MARKET MAY BE STARTING SUMMER RALLY

How simple to change scope, simply as the market changes scope.
Here's what really happened:

1. The market is vastly overbought. The buying yesterday was not break out buying, as volume was light.
2. We will hesitate and pause at 10,350 because it is strong resistance line.
3. Things are "better" for traders yesterday as tech responded well, Oil rose, inflation seemed "under control," and the indices rose 1%

There are huge pent up emotions in the market, of both FEAR and GREED.


Just think, Britain itself has been asked by the Euro Zone finance ministers to cut down on its debt. These are the same finance ministers that agreed to a 525.4 billion dollar bailout vehicle to help ailing members, with Germany voting on a huge austerity plan.

Housing starts could drop 3.5% in May on the end of tax credits. CPI could drop .2% tomorrow, says Barclay, a trigger which could influence the market.
Over the weekend former Advanced Mentoring trader MR asked the best question we could all ask:

if all these countries are trillions of dollars in debt - who do they owe the money to? Where did it all go?


The money is owed to themselves, and to other bondholders, meaning other countries, that have "bet" with them.

It is owed to who sponsored the debt, and few are astute enough to take it back to realize oil companies, banks, raw materials, are all part of the circle of "build more, offer more" interest rate, and build the house of cards.

Only one thing really stopped this house of cards, and it was not real estate. It was the gigantic bets made on Wall Street on CDO's and derivatives beyond comprehension that Geitner explained so well "more money was being 'sold or optioned' than in available supply in the world." We were truly printing money, but not the FEDS, but instead banks and Wall Street

"In America we combine liberty and democracy as if they are the same word. The reality is that we are often more interested in democracy than personal liberties. The Chinese are the opposite." This comes from James Fallows, editor of The Atlantic, which offers truly fine journalism.
Fallows also says that the Chinese feel hostage to the U.S. economy.

I took most interest in his interview to America's struggles with understanding Democracy. For example, it is democratic, but sicker than hell, to rewrite the Texas schoolbooks to "put Jesus in" and take "slaves out," and all the twists that were put through. It is democratic also to stereotype and profile Hispanics in Arizona.

However, whatever democracy this is reminds of the Tea Party Poopers handing out the Constitution at every meeting, as if we adhere to these basic tenants all will be "all right."

In both places civil and social liberties are forgotten, yet "democracy" is in place.

I for one value my civil liberties and my social rights, and I disrespect and hold negative opinions on those that force their opinion on me. Hmm, democracy?

Fallows ended his speech with "our relationship with China is mutually beneficial. It is NOT a zero sum game. But as in every long term relationship there will be times we disagree. By far the gravest problem for China and for the West is environmental collaboration."

In Floydian Terms, we have to ACT, NOT react.

And none of this has anything to do with "raising our taxes, or having a deficit".