Bailout or bust... for the USA.
Congress, can't live with them and we can't sue them. How about putting a few of them in jail, is that possible given the mess they have put us in?
Let's think about what can happen if they pass the bill for the "rescue" package. The first thing that will happen is that they will come up with a softer name that will not scare the general public. After that, confidence and fear will push and pull the markets.
Let's look at the market in the belief that they pass the bill. What will happen the next trading day? What happens is going to be very important as to which direction the market heads. If the market opens lower after they pass the bill, watch out. It won't be a pretty day and panic will be sure to set in. If the market opens sharply higher and sells off later in the day, it's not going to instill confidence in the system.
What I'm looking at is how the market closes this Friday. Does it close higher for the week, or does it close lower for the week? Another key will be what are traders comfortable going home with this weekend. You may want to watch the dollar index and gold and see where they are closing for the week as they typically foreshadow things to come for the economy as a whole.
If Congress and the Senate continues to play politics and do not pass this bill for the markets, we are going to see a pullback and a retest of the lows. Again, I can not stress enough the importance of how the indexes close this weekend. I doubt I am the only one who thinks that these guys are incapable of cleaning up this issue given that they made the mess to start with.
Our "Trade Triangle" technology continues to remain in a negative position and we see nothing in the short term that's going to change the trend of the US economy and the stock indexes that we are following.
For your information the Dow closed at 11,143.13 last week. NASDAQ closed at 2183.34 and the S&P closed at 1213.01.
Again, I stress that I want to see how these markets close for the week and not only how they close the day after the announcement is made.
Our blog poll for traders has always been very accurate over time. Many traders, in this case 67%, are negative on the stock market for the balance of the year. I would not dismiss this poll as it has been extremely accurate in the past in predicting gold, crude oil, and other markets.
We are living in tumultuous times and these times demand strict discipline in the one's trading.
Round three begins Thursday morning.
Good luck to everyone,
Adam Hewison
President, INO.com
Co-creator, MarketClub.com
Well, the pullback and retest of new lows already happened on Thursday, the cash NDX fell through the low and the Dow and the S&P nearly did the same ... Now that that's out of the way, maybe the rescue vote can bring a real rally, though maybe just another one within the bear market. Only one way to find out.
Hey, I posted that last one with my real name by mistake. Can you edit it to just show "Carl"?
Steve, I've got to give you credit for guts. Part of me agrees with you. Let America feel the pain. A massive deflationary depression, with >20% of people out of work, retirement savings wiped out, home values gone, and poverty all around would go a long way to restoring lost social values. Those that submitted bogus credit applications, or approved them should go to jail. Sure, I feel sorry for the suckers in the Wall Street Banks that bought the bad mortgages, but they need to be more careful who they trust.
After a massive deflationary depression, with most banks wiped out, social values would be very different. No one would ever put money in banks again, or use credit cards again, or borrow money, much less fail to save for a rainy day. I'd expect that religion would have a revival. We'd have less divorces. Our kids would work harder at school, and no longer be last in the world in math. Poverty tends to refocus and re-motivate people.
Most people who oppose the bailout though don't realize what they are asking for, but at least you seem to.
I do agree with Adam - the market will tell us whether they think the recovery package is sufficient, and it won't be. I've been expecting the depression of 2008-2016 for ten years or more. All this package can do is slow the process down, and make it a little less painful, and perhaps avoid the deflationary ramifications that are boosting the dollar and killing gold/silver.
I do think the bill will pass, in some form, though. When push comes to shove, these Congressmen want mostly to be re-elected, and none want to go down in the annals of history along side Smoot and Hawley.
Whether the bailout passes or not is besides the point. Our big banks are in trouble and when they suffer, we all suffer. The bailout won't solve their problem. Everyone should start looking for ways to protect their money. This basically comes down to either taking your money out of the market and cutting discretionary spending or diversifying and investing (forex or foreign stocks) some overseas preferably in Asia, parts of Europe and South America. I personally use offshore bank accounts and they have helped me with diversification and asset protection. If you want to read more on why offshore investing is smarter, feel free to visit my website.
Best,
Frank Miller
http://www.theoffshorebankaccount.com
America is in need of a cleansing. Let Wall Street feel the pain. Let the banks go broke, and let the economy suffer.
Then perhaps the country will stop complaining on blog, and start taking some action. I agree with Adam; let's start arresting congressmen, SEC officials, FED officials, bank managers, and anyone else we can think of who have been ripping us off.
This "plan" failing would be the best thing for the country long term. A previous comment on this blog said it best:
The moment America is no longer allowed to fail is the moment America is no longer capable of success
Is there any way YOU can make the SEC undo the rule change from last year rpermanently so that we are back to normalcy:
No short sale unless on an uptick
Chart of 1929 not 1992. Sory.
Thank you.
Shameless politicians, approve not 700 billion but 850 billion. All the senators should end up in jail whit their friends from Wall Street, or NO ? maybe we deserve them, because we're not different. Always VOTING for same crooks, election after election. I know major Wall Street crash coming soon. Don't believe me? Please look at the charts from 1992 and 1977. Two great crashes. And look at the chart of 2008. The chart patterns is exactly the same. Unbelievable? Please be careful. Enough complaining, make money trade FOREX buy dollar and Japanese Yen, and laugh all the way to the bank? or better under the PILLOW.
Thank you've for a good post and good luck to all of us with senators like ours.
It's embarrassing to the U.S. people that the government is thinking about flooding the market with dollars when the dollar is just starting to show some backbone on world markets, so why kill it? Oil down, gold down, dollar up. This bill is about a handful of wall street institutions wanting cash. The credit crunch is from hoarding by credit institutions. The fed has a trillion dollars from August on it's books, so why don't they shell that out? If they p-ass this bill, the may hit 16,000, but who will be around to feed the beast after the first of the year? This bill won't fix anything, it will only make things worse.
The principle parallels to the Great Depression are frightening. All we need is for the government to start pulling money out of the system, such as a tax hike and it will be a long time before we see morning.
There are trillions of dollars on the sidelines and that is bullish