Trading the Trend

Chris Outwater writes:

I did not know your site was brand new! Congratulations. I am certain you will be successful as you seem to care about people and teaching them valuable survival skills. I grew up in LA and moved up here to SB after I sold my first company.

On paper today---I was in and out of FAS with a 9% gain---this is before I spoke with you on the "call-in" about time frames. We are still in the uptrend so tomorrow on a pull back (if there is one), I might get in again (paper) and hold until we approach 950, which might take days, weeks, mos? Couldn't one play the trend as the market oscillates along? Say, it drops to the bottom of the channel, but does not break down below---you go long an ETF and hold for the ride back up to test 950?

Feeling that the uptrend is intact, I bought FAS this morning at $10.20 (small amount of real money)---timing was not perfect, but if the trend stays intact, I should be okay.

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Permalink Reply by Steven Vincent on May 26, 2009 at 5:29pm

I think that quote is a highly accurate depiction of the real works situation. But I think they are going to monetize all the way. Long term their plan is to borrow and then pay off the debt with inflated dollars. Ultimately they do plan on destroying the currency since they bankers do want a world currency and world financial system. To get it they have to trash the existing monetary regime...without losing power in the process. They are literally banking that inflation will mask the reality of the situation for a while longer as it always has...my guess is 18-36 months before the real crisis blows up. What we just had was a warm up.

Chris Outwater said:

Yes, I understand the business model. And it should work as the site grows.
I read your commentary last night and without predicting the market, you did damn well at staying a cautious bull even with a lot of negative talk all weekend about US Treasury downgrades. The market this morning showed us that it is not ready to absorb that potential negative outcome at this time. We must go with the prevailing trend.

This is an interesting quote from Market-Ticker.org: "This week we will be treated to the US Government attempting to sell $100 billion in new Treasuries to finance its profligate spending habits.

Bernanke, for his part, is on the cusp of losing control of the long end of the bond curve. If it gets away from him he will have only two choices: pull liquidity and allow the curve to spike higher, repeating almost exactly what happened in the 1930s, or ramp up his "monetization campaign" to meet the issuance, risking an immediate tender of the entire outstanding float, resulting in an even worse outcome - a choice between collapse of the government or an Argentina-style currency implosion followed by that same collapse.

My bet is that is if push comes to shove Bernanke will back off and swallow The Depression that inevitably must follow, because the alternative is that he may literally swing from a lamppost - if not at the hands of angry citizens once the government and rule of law have fallen then from Congress, who, if he goes "all in" ramping up the monetization and loses, will find themselves unable to fund the government's operations." end of quote from Market-Ticker.org.

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Permalink Reply by Chris Outwater on May 30, 2009 at 10:25pm

I could not call in on Friday. However, I just listened to your talk from yesterday. It was excellent! Lots of keen insight into trading with the trend. I am going to listen again tonight. Thanks!

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Permalink Reply by Steven Vincent on May 30, 2009 at 11:58pm

YouTube channel coming soon!

Chris Outwater said:

I could not call in on Friday. However, I just listened to your talk from yesterday. It was excellent! Lots of keen insight into trading with the trend. I am going to listen again tonight. Thanks!