Tuesday, October 04, 2011

Futures are down pretty big, like that's a big surprise, DOW about 180 points, they set up a very cool descending triangle heading into the premarket open, and then dumped out of it. We are actually in the third day down in a row now, so we are into the 3-5 day DOWN "system", whereby you buy and then sell when we close higher than the previous two days, definitely not for the faint of heart during times like this. With the clean out of any stops that were hanging around that had them at the August lows, and the markets getting pretty over sold, I could "anticipate" we get a little short covering rally here, which is not a call to Bottom Fish any thing, just that a rally may provide a better short entry at higher levels. 
ANYWAY, John Hussman was RANTING in his weekly column yesterday, hahahahahahaha, http://www.hussmanfunds.com/wmc/wmc111003.htm, GET'EM JOHN!!!!!! It's actually his typical EXCELLENT column, mostly about the ECRI recession call, and how you'd have to be stupid to listen to the Wall Street SHRILLS rather than a NON-AGENDA Institution like the ECRI, etc etc etc.
Anyway, he lays out a very explicit explanation that comes to the conclusion of WHY ISN'T ANY ONE FROM THE BUSH ADMINISTRATION IN JAIL, ESPECIALLY HANKEY PANKEY PAULSON!! Well, you should probably throw the whole stinking 562 of the aholes behind bars, the entire bunch in DC, but he shows very clearly that the banks have MORE than enough capital to survive a "restructuring", that Paulson's EXTORTION of the 700 billion from the American tax payer was completely unnecessary, and that as long as Washington continues to use a "crisis" to privatize the gains and socialize the losses, we will NEVER get out of our on going malaise. Sigh, we could be SO MUCH further along right now, if there had only been a FEW honest people in DC, who did what was RIGHT, rather than enrich themselves. 
If the current market malaise really gets rolling, I have NO DOUBT, that, THEY, go right back to what they were doing before, and use it to EXTORT MORE ill gotten gains from us, until hopefully you wise up, AND THROW THE ENTIRE BUNCH OUT!!!

I'm watching some JUNK, JNK, I'm certainly NOT interested right now, I'm just keeping an eye on it for down the road. I mentioned this thing a lot a few years ago, it's a wonderful pairs play for CONSERVATIVE investors who like YIELD, you pair it up with TLT, JNK, and HYG for that matter, follow the regular equity markets around, almost nit for nat, and as such you can pair them, with your OWN ratio and R/R parameters, to get the 4% yield on the TLT, and the current 8.4% yield on JNK, which averages out to about 6.2%.
Now, JNK BOTTOMED with the markets in 09', on the same day in fact, and at that time it was yielding over 16%, what happens is that as we get into a recession, Junk bond investors finally start to wise up, and demand MUCH more yield for the added risks of default, it bottomed in 09' at about $26, so, in THEORY, if you took the current dividend rate, about $2.88, AND, JNK got back to $26, your yield would be ONLY about 11%, but what happens, is like I said above, the "investors" start to panic, and demand a greater yield to cover the added risks, so you have to wait on this thing.
It's just an idea of mine, just some thing to remind me to keep an eye on this thing. I'm only mentioning it because it seems to be picking up some steam to the down side, as it broke WAY below the August lows yesterday, ahead of the regular markets, currently this thing has ONLY lost about 13% since it's highs it made last November, as compared to the 20% on the SPY, so, HOPEFULLY, it will start playing some catch up.


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