no one position dominates markets



Neither fear nor greed can dominate markets very long. Reason is the markets will not tolerate it. If anyone or anything corners the market they rewrite the rules to get trading going again. Markets must function, there can be no one or anything win to stop the game. The consummate trader, Jesse Livermore's fatal flaw was wanting to corner coffee. He did and they wrote him out. The Hunts did silver and they did the same to the Hunts. What drives markets up? Governments printing money. Why do prices fluctuate? No one can agree what anything is worth. What drives prices down? Up prices. Bluffing is large part of the markets not much different than Texas Holdem. For instance, talking heads only tell you what they are buying after they buy it, automatically making them sellers, no longer buyers.

Markets, international markets, are stronger than governments, stronger than the Fed. How many times a governments made moves to control their currency and succeeded... for two weeks maybe. Meanwhile, counter to this, the illusion is that a new trend started never stops. If something even happens once, it only seems it happens more often or is likely to happen again, That's the way we remember things.

politics weights heavy on prices

Imagine where we would all be if it were not the heavy, costly prescence of politics on prices. But we have to take things as they are, all of which makes speculation pick up the slack. It does not look as if there will be a compromise. Whatever anybody can do about it to protect their risk capital seems impossible to say. Gold is in the tank and heading lower. So the only course appears to be just sitting tight with growth positions. However, with Panera rolling over one has to keep a close eye on the other high multiple stocks.

Dow drop Monday 1,000 points?

Lot of scare scenarios out there this weekend. Politics stifling the economy again. The purveyors of this fear are likely those that feed themselves on fear to begin with. For those of us who are all in, this is what risk is all about. I reduced my positions down to 82% from 99% last week but that is going to do nothing for my active list in the morning. When your doctor tells you only a small percentage will catch pancreatic cancer from a drug, and you are one of the small percentage that works out to 100% in my book.

One old trader in my young days used to tell me every dollar was like a son to him. I thought to myself, well in that case it may depend on how many sons you have. Here is one rule I mediate on in many of these disaster situations we have today. The time the big boys buy is when there is blood in the streets. So lower prices attract buyers, thank you to all us speculator men. If you want to be a buyer in a fire sale you have to think ahead and have a cash flow to keep your expenses going until the seeds come up. Sam Hill

picturing the funny mentals

Charts tell the truth and they are cool. The funnymetals tell their own greedy story....  ..en travail

gold dipping season

You cannot discover new
oceans unless you have
the courage to leave the shore.

Think all the usual suspects around here still are sitting tight waiting for the low volume of August to pass under the bridge. My sense is that many of them are upwards of three quarters in stocks. So like the market in general they are not talking up any particular view. Their posture is anyway, that they are not too worried. However, stories are cropping up in the press about the canal putting a crimp in the "recovery." Oh well, whistling past the canal is what speculators are getting paid for. Sam Hill General Editor

turning on a dime

Changing your mind on a dime is one of the best rules one can follow.  After taking small profits in BAC, watching it go higher and higher can sour the spirit without you noticing it. So why did I not jump right bac in?

IBD managed mutual fund index topping

In Sunsetter Sam Hill's view the IBD managed top mutual fund index has run out of target room and more likely to decline than rise at this point. This he says is true no matter what eventually happens. Anything new in the mix can change anything else in the target range. Still, longer term everything rises because all money has to get out of dollars eventually and this forces up the price of stocks. Dollar declining in value since FDR as his political economic philosophy found inflating the dollar meant inflating the markets fleeing the dollar.