“A picture says a thousand words!”
With the faculty lounge meeting tomorrow, I thought it would be helpful for some
much needed perspective on the state of the U.S. stock market … and as you can
clearly see from the chart above, over the last 10 years, EPS has grown
approximately 7 TIMES FASTER than sales per share, thanks to corporate
buybacks … and as I’ve stated before, with the “Baby Boomer” generation smack
dab in the middle of retirement, and private U.S. pensions vastly underfunded to
meet the payout needs of a retiring generation of tens of millions of people, the
FED has no choice but to feed the Ponzi scheme of stocks as we’ve come to
know them.
It’s either prop stocks up via the “Plunge Protection Team” [PPT] and spend
billions, OR face government bailouts in the TRILLIONS … and if you’re a director
on the board of one of these outfits that engages in corporate buybacks, what a
great scam you’re running on the investing public … since most directors get
“sweetheart deals” via stock options when they leave the board years later,
what a great way to boost EPS by lessening the float of stock, all the while the
company you’re “directing” doesn’t do Mr. Jack Squat in terms of innovation,
product development, and generally growing the company.
So, after jacking the stock higher cuz of an accounting gimmick through your
years as a “Director”, you retire from the board and take your stock options to
JPM or Vampire Squid [GS], and they loan you the money to exercise your
options, you get the stock, and then sell it at an inflated market price, pay back
the loan, and then walk away tens of millions richer for what exactly? … “right,
you raised your hand and voted for stock buybacks at a board meeting every
quarter, thus insuring an eventual raise for yourself via your “cheap” options
… other than that, you didn’t do shit but sit there and count your money … nice
work if you can get it”.
And of course, it has the full blessing of the faculty lounge Twits at the FED,
cuz it helps them out of their dilemma, which is a failed private pension system
in which millions count on along with social security … “you scratch my back,
I'll scratch yours” … welcome to “Crony Capitalism” in all its glory! And so the
Ponzi scheme will continue, until one day comes along and it won’t anymore
… and it will happen so fast, very few if any will be able to escape successfully
from a debacle that will make both the 1929 & 1987 crashes look like stubbing
your toe.
My guess is, sometime in 2024, when the U.S. Treasury Dept. says all future
borrowings of money by the U.S. government will go ONLY TOWARDS INTEREST
PAYMENTS ON THE NATIONAL DEBT [which by the way, grow ever larger by the
minute], then we’ll see SHTF … of course, the ONLY way out of this mess without
a complete revolution and blood in the streets, is if interest rates go negative
[NIRP], and the FED forces every American to PAY THEM for keeping money in
the bank … and who knows really what this effect has on stocks? … and so, the
Ponzi battering ram takes stocks higher until that fateful day in the future when it
ends.
Today’s DOW30 trading points out a big problem in markets today … with the
FED on deck tomorrow, what do you expect to happen today other than chop the
living shit out of day traders and scalpers? … stop hunt here, stop hunt there,
everywhere a stop hunt … spikes from hell up, spikes from hell down, with no
follow through to anywhere … markets do not operate on your trading schedule,
so giving ultimatums to markets or trading strategies is literally nuts … it is what
it is, and there are simply days or group of days when trading is bullshit, and it
happens in every market … today and tomorrow up until 2 PM EST are not going
to be optimal … nobody is going to commit large amounts of money to anything
until the Twits at the FED speak … did somebody not inform the banks? … and
so, with no large money flows either into or out of stocks, they have the upper
hand in making sure retail spec accounts puke futures every 5 minutes, whether
long or short … they got the money, you don’t … who’s Pavlov’s dog again?
Without some kind of “situational awareness”, no matter the market, and without
an algorithm or model to trade by … one by the way no matter how sophisticated
and expensive to create with mounds of math & computer science whiz kids, will
never approach 100% profitability on every trade … there is NO HOLY GRAIL
… how can you possibly take on the banks who look to make your money their
money? The absolute biggest mistake any trader can make, after a small loss or
even string of losses is to say, “well, screw this shit, everything is messed up”!
… well, no it isn’t … what’s messed up is you, cuz in randomness and probability
theory, shit happens … deal with it … stay disciplined and patient cuz it’s the only
way. But traders don’t do this, cuz then they go chase the next “Holy Grail” idea,
jettisoning the last one, and on and on they go into bankruptcy … if I had a dime
for every time I’ve seen this in my trading career, I’d have a million dollars.
The “Traders Course” [TC] gives you the algorithms, AND IF YOU FOLLOW IT,
which is a very big “IF” for most, you’ll make shiploads of money, especially in
the DOW30 for scalpers … it works, just follow the “Hoover Dam” thing. But
understand, there is no gain unless there is the possibility of loss … let the loss
come on exceptional circumstances, but don’t simply walk away from a trading
model cuz you didn’t make money from it last Wednesday … or, it didn’t give me
the signals I wanted today cuz it sucks and life sucks, etc., etc. … anybody but
me heard this before?
And while some of you reading this out there are thinkin’, “man did he just climb
into my head or what"?, I’m not pointing the finger at anybody, but simply pointing
out that NOTHING is 100% and the power of trading to change your life comes
from the ACCUMULATION of winning trades over time, not on some schedule
you mapped out in your head, which I guarantee, the market you trade is gonna
have everything to say about it on its terms not yours.
So today is a bucket of shit for the DOW30 … who doesn’t know this the day
before the Eccles building Twits set interest rate policy? … the daily candlestick
a “doji”, gee see my shocked face on that one … and tomorrow up ‘till 2 PM EST
will be a funeral … maybe some position squaring ahead of the decision, but
expecting the DOW30 to trade in any kind of normal sense is insane … and
remember what I’ve said about limitations of whatever your trading model is
… and for the TC algorithms, one limitation is low volume low range days where
there isn’t much happening up or down … the algorithms parameters will
collapse onto each other making signals useless cuz they can be set off on
literally nothing in terms of a price move … and what is today in terms of trading
for about 8 - 9 hours? … right, the “Flying Wedge of Death” [FWD], which I’ve
stated before is the biggest account killer in the known trading universe, inside
today’s approximate 70 index point range … long at the top and short near the
bottom looking for range extension that doesn’t come … and the “POP” back
the other way brutal and fast, leading to bigger losses than anticipated. So,
seeing this, why the hell do I sit on the sidelines? … if I have to answer that,
you haven’t been paying attention.
Markets are what they are … you wanna be the cowboy that shakes things up?
… Ok, take your millions and see what the banks do to you with unlimited QE
funny money … let me know how things go … fact is, you can only take what it
gives and not a penny more, and on some days it simply isn’t worth it … today is
one of those days.
So, no algorithm trades today … and as an aside, there weren’t even any signals
during the NYSE session today … NADA … depending on your interpretation,
there might be one, but even taking that one it didn’t yield much … I chose to
ignore it cuz my interpretation says it wasn’t a bottom.
One more thing for today … those ordering the TC will get email confirmation for
our chat support, which is each trading day during the week from 4PM EST - 7 PM
EST … I support what I publish, and my goal is to see ALL OF YOU be successful
traders, and viewing the market as your own personal ATM … until tomorrow mi
amigos … Onward & Upward!!
Have a great day everybody!
-vegas
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