Macro Update.

Some of my thoughts:

" The Invisible hand, suddely gets very Visible " ( extension of the Tarp ): Desperate times calls for desperate measures. Capitalism is a system depended on growth to function, and is a sytem where the strongest survive (Darwin ). Now when the goverments all over the world, further decide to extend the bailout program, protecting the "weak", it threatens the evolution of capitalism and creates disturbance in the force. The stimulus plans made by different countries these days will only make the reseccion time longer and deeper. We have to let "nature" run its course, and the weak go down with it!

Typically we often experience that in a Bull Marked, traders sell their positions before the weekend, so they can have a good nights sleep, and don’t worry about their longs. This “fear” creates a short term sell off. In a Bear Marked the same traders cover their shorts of the same reason. Almost every broker, trader and investor have the same “Devils eye“ on the futures screen during the day, and taking their bets of the same reasons. I believe it is important to find out what is the contrarian side of the marked, all tough it hurts some times. When your stomach says BUY, you should actually SELL, and vice versa.

Short term USD strength continues, despite of the low interest rates.... This makes the price elasticity for goods and commodities stretched, and short term demand will go down. It creates further inflacion in a market place showing signs of receccion.... This will over the longer term create deflationary spirals. The Domino Effect.

Inflationary Holocaust Jim Rogers: Watch the video! (click)

From the book by James Grant: “Market Miscalculates”:
"Economics, mistaking itself for physics, is wont to turn up its nose at history, but the past has much to teach"; "as dress on Wall Street has become more casual, so have the monetary arrangements... the gold standard and swallowtail coats have given way to Greenspan and open-neck shirts"

Lately the focus has turned from corporate fundamentals to macro outlooks, resulting in a change of newsflow, to the negative ( USD, Dubai, Inflation, New "Tarp" programs, etc. ), and lower levels in the indexes. I`ts still cheap to hedge against your long positions ( put/call ratio ).

Hyperinflation Nation ( click )

Dow Jones: Awaiting high volatility!

Dow Jones: At the moment trading in to a coil formation, with a negative divergence in the RSI. RSI trades in top of range. Awaiting volatility to pick up short term. BDD 10440 appears as the short term resistence level, DDLow 9580 as the support level. If DJI breaks out of the coil formation on the upside, and with that, the resistence level BDD 10440, next resistence level is DDHigh 10580 ( + 1,8% ). On the downside DDLow 9580 ( - 7,70% ). With the risk reward of ( +1,8% / -7,7% ), and with the negative divergence in the RSI, I would either allocate in to cash, or go short.
Terminology: My Dynamic Theory