Sunday Morning Coffee: Permabullish? Not...

Click charts to ENLARGE.

From a trading standpoint, even absent the 'uptick' rule, it's easier to be bullish, particularly when the socialization of markets (Fed intervention in BAC buying CFC(?), Working Group on Financial Markets (Plunge Protection Team), 'fair and balanced' media, election year dynamic, and seasonality are against bears.

Socialization of markets (see above) works against heavy bets against markets. I don't like it. I'm an advocate for free markets, a strong currency, and transparency. But the economic powers that be clearly don't share my sentiments, as they favor volatility dampening and manipulation (as Todd Harrison would say, the only difference between intervention and manipulation is communication). Jeff Saut told me that he has been in a room in Washington with hundreds of computer screens of financial markets under constant surveillance. Do 'we' do that for our own amusement, or are other forces at work? Does anyone think Raymond James pays him a seven figure salary because they're stupid?

Add in sentiment, proprietary indicators, and the risk of an 'emergency' rate cut (the Cowardly Lion approach to doing business, or should I say the cowardly Tiger Cub?) and where is the pain trade here?

First, talk is cheap and money talks. Show some charts of positions that are POSITION TRADES , either long-term or intermediate. Hussman...since the summer...slightly up, fully hedged, nothing great there.
--------------------------------------------------------------------------------------------------------------------------------------Pfizer (PFE)...defensive play, with good dividend, "proprietary" versus commodity business.
---------------------------------------------------------------------------------------------------------------------------------------Aberdeen Asia-Pacific (FAX)...a closed end fund with a 7% dividend and is underpriced relative to net asset value. To an extent, an anti-dollar play. I've had this one for awhile.
---------------------------------------------------------------------------------------------------------------------------------------FXY (Japanese Yen)...I don't want the leverage associated with futures. But I've been long the yen since about 87 and a little. This is looking a little tired for now...and the COT charts are looking worse...this looks like a 'sell the news' chart, as soon as the Fed cuts...yen might spike, traders sell, yada yada yada.
------------------------------------------------------------------------------------------------------------------------------------UST...recently announced solid performance, growth and dividend hike, and had a 50 percent Fibonacci retracement. Defensive play. Long below 55. Risk-free? Hardly and it's not a buy and forget.
-----------------------------------------------------------------------------------------------------------------------------------Bear Stearns (BSC)...long via directional spreads (butterfly options)...a small confluence of Fibonacci data points show a target of 92-94. Frankly, I'll be very surprised if it gets to 90 in the near future...so I've got 80-90-100 spreads...I am a small fish with risk management built in here.
___________________________________________________________________________DSCO (Discovery) I will not buy low priced stocks...write it a 100 times. But these are like call options on the bio-tech, bio-wreck, bio-spec ship. Underwater on this one.
_____________________________________________________________________Genelabs (GNLB) long about 1.30 on a DeMarkish play. Nothing spectacular. Just a fishing expedition.
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But enough about me and why I've done what I've done. Let's look at the charts.

The VIX (volatility index)...poised to make a lower high, or not? I don't know, but I'm expecting a small contraction toward 22...

Here are some VOL BANDs calculations...if something goes up 1.5 to 2 bands a day or goes to extended pivot points, and stalls out, then I consider taking short positions (intraday) with risk control via position size and a defined stop. The 'surprise' rate cut, government spending package (everyone inside the Beltway is tripping over themselves to get re-elected), and who knows what else WON'T FIX HOUSING or CREDIT, but might fix the bears' wagons...longer-term, I'd rather be short...but not going there, yet.
______________________________________________________________________Here's a chart of the SP500 (one year daily) with the Average True Range at the top. Notice how the ATR tends to trough at price highs (reflecting volatility) and peak at lows? Just another word of contrarian caution.
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I surely don't have tomorrow's newspaper and everybody who's ever been here notes my distaste for haughty, market-incompetent central bankers, and smarmy politicians. I continue to work to understand markets better and work (preparation, study, and writing) at improving to try to have a chance to compete at the "Loser's Game".

I'm going to be right sometimes and wrong plenty, but I try to stimulate readers to consider alternative ways to think about the market...and I appreciate your thoughts. Highest regards to all. Respect has little downside in life.

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.