!st, Fast Footnote: Watchin’ the Wheels Go Round and Round: News and views you may just want to keep your eye on.

  • President Bill Clinton: Yes, The American Dream Is Under Assault
  • Greek Default Could Tip U.S. Into Recession
  • The Fed Can’t Help What’s Really Ailing the U.S. Economy
  • Airline Trade Group Sees Bigger Profits This Year
  • To Save Postal Jobs, End Saturday Mail
No matter how cool you are, with all the different indicators and bells and whistles you may use to trade, PRICE ACTION itself is truly the number one indicator.

And right now, price action is telling us that prices want to go higher, intermediate-term.

Of course, these circumstances can change over the course of a week.  But here’s the deal right now
Last Tuesday we saw Demand take control of the market. And when demand takes control of a market, it becomes a market that is looking for reasons to go up — even when there is bad news.
Because we saw demand take control of the intermediate-term trend, we want to see some bad news hit the tape.  I’ll explain…
I am long right now on hedge funds, ETF’s and some equity’s. That’s trader speak for “if prices go up, I will make more money.”
I love bad news nowadays!!!!! (I’ll explain later my short term plays and my in and out plays)..
We’ve seen investor sentiment readings reach extreme pessimism (a contrary indication).  In the face of that, we’ve seen the market making higher highs and higher lows (an intermediate-term up trend).
Then some news hit the tape yesterday that’s music to my eyes:

“Investors have pulled more money from U.S. equity funds since the end of April than in the five months after the collapse of Lehman Brothers Holdings Inc..

“About $75 billion was withdrawn from funds that focus on shares during the past four months, according to data compiled by Bloomberg.

“Outflows totaled $72.8 billion from October 2008 through February 2009, following Lehman’s bankruptcy, the data show.”

And now we see individual investors capitulating by selling stock even more than they did after the 2008 crash.  That means a lot of the selling that would otherwise prevent prices form advancing is out of the way.  If they jump back in and buy again, it pushes prices higher.
But every time we see bad news in the intermediate-term, it helps us in two ways:

1.  It gives us a down day in the market to enter into bullish positions.
2.  It clears some of the sellers out of the way who would have kept prices of our current long positions down!

I told my Friend on Friday, after the close, that Monday’s action would depend on whether Europe was in disaster mode over the weekend, or finding another solution to their problems.

Look at what happened Monday (yesterday).  The S&P 500 was down about 25 points (just over 2%) on a delay of Greece receiving part of its bailout money.  (Great buying opportunity.)

n the face of “bad news” you can see institutions using this as a chance to buy buy buy!

And today, even with the negative IMF news, markets are up.  

Again, the long-term trend is down.

*  Short-term 
= Hours, Days to weeks
*  Intermediate-term = Weeks to months
*  Long-term = Months to years

Although that may be a reason for a nice big intermediate-term rally, don’t forget that the trend comes to an end.  But ride that trend to the end, and then when supply takes control of the market again… JUMP UGLY on the bear side and make enormous amounts of money..Do your own Due Diligence and check back here to see what I am up to And lets make some money with these Institution’s…Blue