iBankCoin
Joined Jan 27, 2008
7,297 Blog Posts

Charts Lie

Numbers don’t, well sometimes they do.

When looking at a chart of the Dow Jones, coupled with Charlie’s annoying voice, we were bound to bounce, and we did.

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However, do you really think it’s up from here? I mean how many times can you replay the same rumor. In my opinion, support will be broken around 12,000, and when that happens, you don’t want to be long. The race to zero continues.

Note: Consider this your 2nd chance to get flat or short.

Note II: If you’re looking for a stock to get long, check out GEOY

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17 comments

  1. wow

    Someday they actually will announce ABK news, it will be extremely gay and mean nothing. The banks are just trying to figure out what’s cheaper, taking the losses themselves or funding the losing battle of the monolines to prolong that triple-A rating.

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  2. m

    the lie was that it broke support and was headed lower. Chart readers know that there are often “fakes” below the trendline…
    A rate cut is coming.

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  3. m

    and it takwes about 6 months or more for rate cuts to kick in, when it does, we’re going much higher, all the cash on the sideline is going in, everyone’s getting squeezed, and THEN we’ll see financial armegeddon as everyone cashes out and goes short…. There’s too much fear already priced into the market.

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  4. JJ

    It does not look like the bottom will fall off anytime soon. Although today’s rebound in the last hour is a result of short covering, it nevertheless shows us the bears are not as strong as we have given them credit for. I think we will trade between 12000 and 13000 for a couple of weeks.

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  5. Employee8

    Anyone get a VIX reading at the low today?

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  6. i agree, today’s bounce means nothing, but you’re wrong about 10’ks, they do lie-charts do not(ever here of wcom?)-silly young jedi

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  7. Woodshedder

    So. What happens when the employment situation shows more negative job growth?

    Do any of you really believe this economy is going to show job creation?

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  8. Woodshedder

    Employee, VIX show at average levels. Not to much fear, not too much complacency. Should the VIX spike to previous highs, the market will find itself 5-10% below its current levels.

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  9. Q4

    Talk about desperation from the Fed.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a6L_q3gvHZDg&refer=home

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  10. m

    I think that Friday’s report is critical, and whichever way we head, I’m sticking with for maybe a month. However, I think a lot of fear is priced in already, and if the most money is on the sideline since 2001, it’s gotta go somewhere at somepoint. Of course technically that money COULD go on the short side too.
    It wouldn’t suprize me if the market moves strongly in either direction by next week.
    If the market doesn’t breakout by friday, I’ll agree with you and go short. If it does though, or even stays fairly neutral, I’m a buyer. I’ve just recently covered a few of my ultra short indecies so I can be ready to move in whatever direction the market dictates

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  11. Hong Kong Bull

    Agree Q4… desperation indeed!

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  12. blah

    I’ve thought that the market looks like a bear flag for awhile… Luckily I’m not one to participate in a move until I am convinced, so my stop sell did not load up on the short side as it broke through support enough to trigger it… shorts couldn’t tear through the buyers, and the sellers lacked conviction, Technical traders can lose big if they aren’t willing to let it run through the support or resistance, and clearly show conviction before buying. The market has been channeling and is bound to move strongly when it does. Chart trading has a lot more to do with market pyschology than people realize. Channeling stocks are a battle between bulls and bears, and traders buying low and selling high. Sometimes it’s people betting on a rate cut, and betting on no cut, and when the event happens it moves, either way bears and bulls are fighting and when either the bears or bulls show conviction, and use the profits from the channeling stock to load it up, many of the bears have to cover, or bulls have to sell.
    Charts are inexact definately, they can have things that are wrong happen to them, and certain aspects of charts are unclear(measured gap vs breakout gap vs exhaustion gap), but statistics show that certain patterns have certain market correlations. They might not ALWAYS be right, but the idea is to be right more often, and have more money in when you’re right, and really be right when you’re right, and less in when you’re wrong.

    Dan Zanger may have had some serious luck, and had an extremely bullish market and dotcom boom, but 30,000% in a year is no accident.
    Charts aren’t always right, and sometimes when they’re wrong, they can crash very hard if you’re not prepared to sell on a dime if the breakout fails, but charts work often enough to seriously take a hard look at.

    You could be completely right, but I think the market is going to have to run up a little to gain the momentum to really be able to sell hard, and I think Bernake has decided to do it his cut happy way, and has already shown that if the market goes lower for too long he declares an emergency cut on the spot, and simply doesn’t let the market run it’s natural course. He might be coiling the spring for a SERIOUS fall, at some point or another, but he doesn’t sound like he’s slowing down on the rate cuts, and with a guy like that, you can never be bearish for too long.

    If you’re going to sit short or long, I say short…
    the declines are always sharper than the gains, so if it starts to rally for awhile, it’s not going to kill you, and you’re not going to get trapped.
    But I prefer to have a good chunk of cash, some gold and silver, and be ready to load it up on the up or downside.

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  13. fuckers!

    The market is going lower! don’t you see the “bull flag” on QLD you chart fuckers! Don’t you know that the dollar is falling, and consumers are not only broke but in going deeper in debt!!!
    People need to pull out just to pay their damn bills let alone their foreclosed houses!!

    The government spent too much damn money for anyone to be able to do anything! buy the swiss franc, UDN, and short the fuck out of stocks if you want to live bitches!

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  14. lol

    [email protected] aka “chicken little” I think he’s been reading too much of Robert Kiyosaki http://finance.yahoo.com/expert/article/richricher/69637;_ylt=Ar70hv2u91I4NQAdBpQpvmK7YWsA

    lol, buy silver after it’s up 50%!

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  15. Q4

    SKF

    “Facing additional writedowns during the first quarter, some analysts are of the opinion that the major banks and brokers may need to do another round of capital raising. For some firms, the new capital will come with a whole set of additional problems related to the first round of capital they raised.

    For example, in January when Merrill Lynch (MER) raised $6.6 bln in funds from Korean Investment Corporation, Kuwait Investment Bank, and Mizuho Bank, the price that these funds would convert to stock was set at $52.40. However, one of the stipulations of the agreement was that if MER raised more than $1 bln of funds over the next year with a conversion price below $52.40, then the $6.6 bln in funds raised would also be subject to that new lower conversion price. With the stock now trading at $48.55, if MER is forced to raise additional funds at current levels, this would cause a 1% dilution of the current shareholder base on top of the new funds raised.”

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  16. coolcat

    Sounds great! Your blog is one of my most favorite now ;). You have hit the nail on the head, just like you always do.

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  17. Bob

    I am trying to keep from reading trash like this. Man, you are sick. How did this came to your mind?

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