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A place for friends to gather and view stock market charts, discuss technical analysis and market outlook. What is your Principal Asset? How can it be developed? Each and all should do their own due dilligence and homework before investing. And by no means should you use anything I say or show here as a sole basis to buy or sell securities as everything is for educational experience only.

Friday, February 15, 2008

The Market Flips & FLOPS

I could not decide which was the best representation of the market.

Thursday, February 14, 2008

Death from above.....

According to what I'm seeing the chart below pretty much depicts the majority of index charts. A downward bear channel where the top of the channel was tested and failed. If you look back the last time this channel top was tested and failed on 2/3 & 2/4 you will see what is shaping up to be some nasty downside movement coming. This is NO time to be long, ANYTHING, unless you are into inverse ETF's like the TWM just to see charts go up instead of down.

Bottom-line: We will test and probably blast through the 1/22/08 low within the very foreseeable future.

And for your entertainment pleasure I think this is a fitting video.

Wednesday, February 13, 2008

Tuesday, February 12, 2008

Very compelling stuff from Market Ticker

Here is the PDF link to the Fed report.... WOW!

Fibs @ work on the IWM

Here is a great example of using fibs for enrty and exit strategy. As you can see on this 3 month chart the fall from 80 to 64 found downward resistance on each fib line. So if we draw a line from that low to the near term high we get new retracement levels for the bounce. It is pretty clear IWM may struggle along the bottom side of the bottom fan to tough resistance @ $71 & $72 in order to get back to test the $72.80 level. I'll be sticking in a toe by scaling in with Puts at these levels and loading up after the retest of 72.80 for the next leg down. Stops to be set at $72.90.

For the brave with HUGE cojones buying Calls below $70.50. for the ride to $72.80 you could set a stop @ $70.10.

A lesson on taxes compliments of David R. Kamerschen, Ph.D. University of Georgia

This is worth reading. Take a minute to get an education on how the US TAX system really works.

Suppose that everyday, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. He said, "Since you are all such good customers, I'm going to reduce the daily cost of your beer by $20. Drinks for the ten of you now will only cost just $80." The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected. They would still drink for free. But what about the other six men, the paying customers? How could they divide the $20 windfall so that everyone would get his "fair share"? They realized that $20 divided by six is $3.33.But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay! And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $50 instead of $59 (15% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $9!" "Yeah, that's right,'exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got nine times more than I!" "That's true!!" shouted the seventh man. "Why should he get $9 back when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money among all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible.

David R. Kamerschen, Ph.D.

Professor of Economics, University of Georgia

The esteemed and knowledgeable Dr. Kamerschen left out one important point: the bartender, trying to be nice by cutting his price by $20, got stuck with a $40 tab then beat up all nine customers thus losing $100 in sales per day because of his nice "intervention".

Monday, February 11, 2008

Great video from Market Ticker

Fibbonacci use explaination

This is great video on Fibonacci use.

DD: Cautiously buying Calls below $44.75-$45

It looks like DD is trying to climb off the lows and break this bear channel. The concerning point is the lack of volume on the sideways movement over the last couple of weeks. Buying here at $44.75-45 seems like a good long entry with a stop at $44.50. If it does break the channel look for the top of the channel to then become support.