Thursday, August 28, 2008

MASTER of the GAME

Subtlety IS the Market’s STRONG Suite. So many only ride upon and read the surface of this Market, as Ocean. It is strong, it is deep, and influenced by factors we never see.

What we see is the effect of this influences. Storm surges, tsunami’s, Neap Tides, new group being deposited, old islands disappearing.

Trends would be like ocean currents like the Gulf Stream, the Labrador Current, the Japan Current, and where they conflict and collide, it would be like Cape Horn, violent, dangerous and confusing.

If your sailing in such a storm, or vicious collision of tides or trends, there is little to do but insure your ships safety and move on. Observing tides and trends at a distance and getting the “Big Picture” is safe, but reveals the biggest ongoing trends. Where is the subtlety?

If you ever get tired of hearing “The Trend is Your FRIEND”, I have a paraphrase or two, the first of which is “The Trend is Your FRIEND, until the END.” Paraphrase #2 is
“The END of a Trend is Your FRIEND”.

To illustrate these points, I refer to some Momentum Shift Studies I completed this weekend. I usually generate two lists. One gaining Momentum, One losing Momentum.

LOSING MOMENTUM were

AGRICULTURE ; AUTO PARTS ; FOOD , Dairy & Meat ; MACHINERY, Farm & Construction ; MINING, Gold, Silver, Copper; OIL ; and PAPER.

GAINING MOMENTUM were

BLDG MAT’Ls, Wood; BUSINESS INFORMATION ; ENERGY, Alternative ; INSURANCE ; MACHINE TOOLS ; OFFICE AUTOMATION ; RETAIL, Apparel & Shoes ; TEXTILES.

Now that is a confusing mix, but subtlety is there. Machinery of a nature is falling but yet MACHINERY for RE-Tooling is gaining. Can you see the INflation / DEflation battle is right there. GOLD MINING is tanking, and INSURANCE is ascending.

Those are some of the stories. Certainly this market reminds me of Sidney Sheldon’s book title “MASTER of the GAME”. I loved the movie, and will have to read the book again some time.

The Market IS MASTER OF THIS GAME !! But we get peeks and hints IF we know how and where to look. WE are always wrong when TRENDS BEGIN and TRENDS END. Finding the turning points is probably the most fun. Remember the concept of “neutral buoyancy” ? Early on in Astronaut development NASA sends their guys up in a C-130 Hercules Cargo Aircraft and puts into some porpoise roller coaster moves in order to create ZERO GRAVITY. If you could visualize how the planes path, up and down, you see just where the TRENDS begin and end……..Kinda reminds me of the old Lava Lamps with the different coloured fluids would rise and fall, seemingly on their own.

This concept of MOMENTUM SHIFTS is important in stock sectors since it is alledged that HALF a stocks move will be related to its sector, hot or cold. It is another way we can stack the odds in our favor.


Good Luck to All

DG

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Containment of DOLLAR Rally



As I was picking thru my box of tools, I found one I liked, and then I tweaked it to give me a couple hints.

The First Hint I got was where the dashed blue line indicates a bottom level for the Dollar Rally to attain, and the Second Hint was the other graphic with another dashed blue line, which, IMO, will be the LIKELY ABSOLUTE TOP CONTAINMENT for this current dollar rally.

I dont think I have the chuzpah to call the price level where the DOLLAR RALLY will stop but I do have a good handle on a Date Window where a trend reversal will occur for the DOLLAR or The Anti-DOLLAR [ Gold ]. In the possible event they move both in synch with each other, I am thinking my Window on the turn date will be valid for the Ant-Dollar, more so, than the DOLLAR, but that will take a bit more time to figure out.
The Anti-DOLLAR [ GOLD ] might reverse BEFORE the DOLLAR RALLy hits the wall, and the two could once again move in synch for a while.

As to the unlikely nature of this situation, we have the DOLLAR breaking out of a DOUBLE TOP and into a BULLISH CATAPULT, so it forces me to objectively think out how this could end or continue. This is what I have come up with........

GOOD LUCK TO ALL.

DG

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