Oil is showing a divergence on the daily charts - a rally up to 63-66 range is possible. If one doesn't start immediately, we might extend lower to as low as 54.50?

Tradesmen,

your comments late yesterday kept me on the hook the whole day. We always had good, lasting up-trends in the markets. This trend currently is not different, what differentiates as you observed rightly is the lack of volatility.

Also the volatility measures for options are trending down, so you could speak of a secular bear market in volatility. see the long term chart of the VIX/cboe.

http://finance.yahoo.com/q/bc?s=%5EVIX&t=my&l=on&z=m&q=l&c=

maybe this is a sign of increased program trading? I do not know? I would assume most program trades follow some kind of "trendfollowing". Would that tendency reduce volatility? I do not know.

But on the other hand, if you look up the long term VIX, the VIX was low as today before the great bull run to the 2000 highs....

The whole thing is quite interesting, cause IF we have this program trading doing more and more business, than i think FOR SURE, a human can find a way to profit of these programs. So we "just" need to find the "bug" in these programs :)

Another day of the "rising tide" ... my watchlist of 40+ ETFs is all green (well, XLU is down 8 cents), including oil, metals, international. The melt up continues.

So, I am investigating T'man's "bug report" (thanks for the chuckle with your post yesterday). Here's a Yahoo! chart of VIX/SPX back to 1990.

http://tinyurl.com/y9dotk

The VIX bottom over this period is low 9s on a spike down, average reading is low 20s. SPX climbed on rising VIX 96-98, otherwise VIX ranges or drops as SPX rises, as we are seeing now.

This chart tells me that low VIX does NOT necessarily correlate with high market or a market top. In fact, the bullish case is that VIX & SPX look like the beginning of '96. So I am reviewing my assumptions.

t4k

...and now XLU is only down .05

Maybe the party is just getting started?
(unless there is trouble underneath)

"NY Fed is doing a coupon pass for issues between Aug '08 and March '09"

Money Suppy has been the one element missing to create a new Bull Market in my opinion.
If they keep this up - this move could have legs well into '07.

Is Ben going to open the flood gates now?
Or is this liquidity mopping up some mess we have not been told about (yet)?

Anyone got any ideas?

go to Monday's Blog, dated: 9 Oct 06

Monday, October 09, 2006
Tracking the Large Trader

http://www.traderfeed.blogspot.com/

go to Monday's Blog, dated: 9 Oct 06

Monday, October 09, 2006
Tracking the Large Trader

http://www.traderfeed.blogspot.com/

That obvious manipulation MNCS warned about here, by me, and in the press last week opened up down 25%. No risk limited exit for the 'I have a tight stop" crowd. Be glad it didnt open down more.

Note they kept it levitated a few days after the bad press.

Masters of illusion.

Apologies. Maybe I should have posted the "Large Trades" link on the Daily Planet...

and so I shall.

OK, at this point, I've heard from enough US conservatives (not "neocons" or "social" conservatives) to confirm to me that the market *supports* a transition of Congress to the Dems. I had been thinking that the market would begin to tank if/when it became clear that Dems would win.

I guess there is enough frustration with the lack of fiscal discipline and oversight in the current Congress to support new leadership. Either that, or the fix is in to maintain the current leadership, and the market *really* likes that ;-)

~wow~

t4k

Tradesman, Jansing, Bill, etc

.Maybe it has a bug in it???
Concerning the lack of volitilty, consider the 'bug'
expressed at Jesse's site in the 'stock bubble pump?' link

http://www.geocities.com/arthurcutten/jesse.html

Well, the $usd found the 200 dma as resistance. Normally, I would see this as a possible $usd top due to short term technicals backing up the story of the fundamentally weak $usd and would be looking to purchase gold here (with a stop loss). But I think I am getting a little "goofy".

You see, a few weeks back I called for an "election put" on stocks and an "election cap" on gold (for those who don't get it, I was following the lead of the old "Greenspan put"). I bought stocks, have made money but refuse to sell. Now I don't want to buy gold. The crazy market has me looking for black helicopters and for Paulson to soon be elected into the Market Manipulator's Hall of Fame. I can't help but think that gold won't have any legs until after the election AND stocks won't fall with any degree of pain until after the election. Buying stocks because of an "election put"? I have gone batty.

For those of you who are still sane, watch the $usd, it's overbought, it didn't break through the 200 dma to the upside, then look at gold.

I think I need a beer.

procol,

great work!

MNCS closed down 30% today, Procol warned lately of stock-pumping going on in this one.

*clap*

Hmmm, what to do... what to do?

S&P 500 is at the top its channel.
It is now at a .78ish Fib. from its 2000 decline.

Normally my standard procedure would be to short a buying panic on a throwover of say 1384 or so - in a very overbought market. The market would pull back to test the Fib - and if it broke - would trap all these 'Johnny Come Lately's

But Big Ben is feeding money supply into the TOP of this rally - Now That's Different!
Alan Greenbacks used to feed it in large amounts at the bottom.

So Ben wants the party to continue.

And then there's all this:
Under-invested hedge funds...
A crowded "It always falls in Sep-Oct" trade that hasn't worked...
Defensively positioned MM's chasing the rally they missed...they missed the 3rd - don't want to miss out on the 4th...
Energy Dept - refusing to refill SPR, telling OPEC not to cut...
Stubborn negative sentiment...still
Record Put/Call ratios in the so called 'dumb investors'...
$10 billions still in Energy Funds
$100 billion+ moved to overseas Funds the last 2 years - some coming back...

---

I find myself underwieght US Stocks - instead having been focused on "shorting the trend down on commodity stocks".

I'm not one for chasing. So guess I'll just play the same daytrade/overnight trade game plan with US equities through options week and upto the next Fed meeting - there should be tons of intraday volatility either way.