The Market Bottomed Yet Again

The market bottomed yet again at 12,050. It did hold by end of day, but we should all be very aware of the current market conditions, and the FEAR in the market.

The 21 day cycle passed today, and the amount of whipsaw is disturbing. The next Dow bottom is at 11,880, and we'll list it in our Dow projections below as a potential stopping point. However, take careful note that if the market is not able to hold at 11,880 we will see institutional traders hitting their locked stopped losses at a moving average, and a very important bottom.

Because of this we will list a put for trade, despite the count cycle now over extended, and the 21 day cycle being broken.

Please take caution in any new put trades. If we're off in our call recommendation it will be our second stop loss in a week, meaning I've broken my pattern of constant successes, something I've been warning traders about for several weeks.

Take prudent risk.

The market flatlining that has occurred earlier this week, and the market is general, has been at a point of "hesitancy" that makes it difficult to profit on such tight ranges. No news is good, the world economy is truly in a shambles, and no one is in charge in this country. Sadly. McCain is ready to off shore drill, of course, as this solves our problem....short term.

Many responses to Floyd's rant on "beer on Sundays" yesterday, from the reasonable that agree we cannot legislate morality, to those that asked me if I believe the Bible to be the word of God. As a good person I know there are many interpretations of the word of God. The point I make in "beer on Sunday" is that it is our lack of understanding of what is really important that fuels our financial discontent.

The rants made are part of what I teach. To understand WHY the market moves we must understand human reason, and lack of.

For example, off shore drilling in the U.S. does not take the oil production from the "ugly Saudis getting rich on us (the nerve of them,hmm?...would we do the same thing?) but instead simply creates production in the U.S., without environmental reason, and DOES NOT ADDRESS the issue of how to move from a fossil fuel. There are still tax credits to buy Hummers.

Subprime mortgage comes to mind. We did not stop this behavior. No guidelines or reason was established.

It is our behavior that has moved the market from 14,100 to 12,000. News affects markets, of course, as a trigger, but events trigger even moreso. We are now a nation struggling between fear of more bad news, and fear of deflation and inflation.

Much of our behavior of the past 8 years of lack of economic controls and understanding of true economic conditions is now affecting us. Of greatest interest, the massive deficit we have incurred under Bush is now not even discussed, as the concern over filling our gas tanks, and price of food, has yet again taken us from the even bigger picture. How do we pay this debt off?

Who truly owns our bonds?