Status Quo

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UPCOMING EVENTS

Status Quo The global economic elites have every intention of maintaining the status quo. From Central Banks to big banks, they universally fear change. And why shouldn't they? The game is so heavily skewed in their favor. The defeat of the Scottish succession is a prime example. There was a huge campaign that included everyone from Goldman Sachs to Alan Greenspan to David Cameron pulling out all the stops to sow fear about independence as much as possible. Global bankers vowed to punish Scotland, declaring they would move out of Scotland if independence were declared. From the Ludwig von Mises Institute: A Deutsche Bank report compared it to the decision to return to the gold standard in the 1920s, and said it might spark a rerun of the Great Depression, at least north of the border. When it comes to predictions of economic doom, it doesn't get much more hysterical than that. Except that it does. David Cameron nearly burst into tears begging the Scots not to vote for independence. The elite onslaught against secession employed at least two strategies. The first involved threats and "for your own good" lectures. Things will "not work out well" for Scotland in case of secession, intoned Robert Zoellick of the World Bank. John McCain implied that Scottish independence would be good for terrorists. The second strategy involved pleading and begging, which, of course, betrayed how truly fearful the West's ruling class is of secession. In addition to Cameron's histrionics based on nostalgia and maudlin appeals to not break "this family apart," Cameron attempted (apparently successfully) to bribe the Scottish voters with numerous promises of more money, more autonomy, and more power within the UK. The threats that focused on the future of the Scottish monetary system are particularly telling. The very last thing that governments in London, Brussels, or Washington, DC want to see is an established Western country secede from a monetary system and join another in an orderly fashion. Political secession is bad enough, and is a thorn in the side of the EU which clearly hopes to establish itself someday as a perpetual union with no escape option. A successful withdrawal from a major global currency, even if to join the EMU later, would imply that countries have monetary options other than being absorbed wholesale (and permanently) by the EMU. When the winds of economic change start blowing, there's an awfully big, powerful contingent always ready to turn off the fan. Read Past Issues of Larry's Newsletters at TradeWithLarry.com

The markets swung down on aggressive selling to start the trading week. The COMP and SPX led the way, while the DJI wasn't too far behind. With more and more selling taking place, we are seeing a bit of weakness up at these historic levels. I do however, see a rebound in play. I suspect we could bounce back today or tomorrow. Now there could be a continuation of yesterday spilling over today. Recent history tells us that the slide won't last that long. It could be fairly aggressive, and a small correction is absolutely in play. The down slide and rebound will be led by the momentum stocks. If you are playing the dips to buy, I would wait until the markets bottom out. If the haven't stopped selling, you don't want to be holding during the slide. Read More

TECHNICAL DATA ES 1992.75/1985.50 POC 1986.50 YM 17167/17095 NQ 4066.00/4041.00

I think that working out of a winning trade is a lot harder than a losing one.  With a losing trade, I can be very direct.  My stop price either in the option or the underlying is reached, cut bait and move on!  A winner is a bit more difficult.  Things are working in your favor, but you don't want to leave money on the table.  For us, a combination of factors figure into how and when we exit a signal.  First, is there fundamental news that came out.  For example in our WYNN signal, Wells Fargo had downgraded from over-perform to market perform.  That adds to our conviction to the downside.  Couple that with the strong technical picture we identified and we really felt comfortable with our downside play.  But, at some point we have to exit.  Using options is a bit more difficult when trying to use stops and trailing stops due to liquidity issues, plus some of our students have a "ticket charge" where they incur a flat fee each time they execute a trade in addition to their normal brokerage fees.   Read More

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