Neely Emergency Bulletin

Glen Neely issued a fascinating bulletin tonight to advise his subscribers on how to deal with the unprecedented government intervention in markets.  These interventions may be distorting wave structure and causing the S&P to do unnatural acts.  Hence he recommends staying on the sidelines until wave behavior returns to normal.  The strange behavior is in the futures markets tonight, and so he suggests to watch closely.  On strength, expect a short rally; if they weaken, expect the slide to recommence. 

Comments

[David]

Neely only looks at market action through one eye so will often miss the nuances provided by other types of analysis. I posted before about the Dow being back at the top trendline of the channel that describes the 1931-2000 bull market on a log scale. Did the Fed know this also or are there other forces at work that we do not fully understand? Anyway, the channel line called for a strong response as occured at the 2002/3 lows and that is what we got.

[kevin Coyne]

By restrictions on short selling it seems one is only allowed to bet on cerian stock going upwards betting on Glodmans stock going downwards is banned, A bad Bank to be created to take on the debt of the greedy and the failed.

A true Historic week the implications of which has not dawned on the public as yet.We were in a total meltdown which should have been allowed to take place.

Welcome to the end of US Capitalism in America the land of the Free.
It will now be intervention all the way down, We can eventually expect a semi nationalized Banking sector.
This is the beginning of the end of US financial hegemony. The USA Govt financial apparatchiks in Goldman Sachs and their ilk will never be allowed to fail despite fraudulent and failed models of business. The government will use brute force and sheer power to keep these elite on top and justify it as serving national interest. Just like in the Soviet Union there was corrupt communist elite that kept its stranglehold on that country.

The USA will have a corrupt financial elite kept there by a coterie of vested interests.

Capital accumulation for honest entrepreneur Joe Blogs and his ilk will be difficult and expensive. The government via its interventions has destroyed the free sprit of America and its fundlementel principals of success whre everyone is treated equally and where one is rewarded for success and punished for failure.

It is the freedom of American people that has created our wealth over two hundred years. This week that freedom was destroyed. This will lead in the next twenty five years into us becoming a second rate economic power.

After the correction of the great depression there was a huge boom into the sixties.

This tim supporting failure and not allowing the clearing of dead carrion of a defunct financial system the US Govt has ensured the system will stay poisoned – Do not expect good times to come for decades -

[DLU2]

WELCOME TO THE LAND OF COMMUNIST AMERICA

[min]

were you guys short?

[Plain_Ewaver]

Futile as it is to count waves with this massive intervention, here are my two counts.

bullish: September until yesterday's bottom was wave 5 of the (A) that started in Oct 2007. It assumes intervention is intended to make this (B) rally proceed till the election.

bearish: The action since July 15 was a flat, so far of the running variety. It assumes intervention is intended for today's options expiration.

[Plain_Ewaver]

Hey, I should rename myself "Interventional Ewaver"

[elskid]

kevin Coyne is right. Long or short aside, we are essentially trading the likes of blood money. The days of true investment in products and ideas is over and with that will come the downfall of our ideals. Witness the utter immorality of our government. We will be no better than a drug dealer with a fist full of dollars and no conscious or morals. I, as an individual, will remain moral (but nervous), but as a nation we are facing incoming infamous 'roosting chickens'.

[Fork_Master_Serg]

> It assumes intervention is intended for today's options expiration.

Maybe Lehman positions liquidation?

[THE SURGE HAS BEGUN!]

THE SURGE HAS BEGUN!! THE SURGE HAS BEGUN!! THE SURGE HAS BEGUN!!

[Yves]

The Resolution Trust Corp predicted in September of 2007.

http://yelnick.typepad.com/yelnick/2007/09/yves-on-gold-th/comments/page/2/

I will be on Bloomberg TV next week

Yves

[Jack]

When are you on Bloomberg exactly? Thanks Yves.

[Brian Monte]

I agree with Kevin Coyne's post
I shorted the market and was robbed! The government has mugged me.
Watch out folks! It was me today and tomorrow maybe you.
And that’s because I am the small guy and not Goldman Sachs with their dodgy borrowings and investments.
Shorting is a risky business and I study the market and research companies that have a flawed business model, or those that have irregularities or incompetent management. Thousands of others who short the market do the same.
Shorters show the public the dodgy stock and are amongst the first to point to those that might fail. We are an early warning system to the investing public therefore we fulfill a market need.
Without shorters shareholders will just sit on shares and allow bad management to continue with chicanery, reckless risk taking, greed and flawed business products for much longer.
Now we are being punished for pointing out weaknesses in companies like AIG Morgan Stanley and Goldman Sachs and HBOS in Britain.
Notice it is only after the shorters have exposed a company then the rateing agencies move in downgrading the stock. – when shorters expose them for what they are.
Shorters help the shareholders to see through the smoke and mirrors and get to the true state of the worth of the company.
Shorters will never be able to drive down a stock of Berkshire or a Microsoft or Walmat.
In a democracy and free economy the market decides what is best. The market decides value.
By regulating shorters the government is trying to fix market prices.

[University Bookshop]

We Independent booksellers have been doing pretty badly - what with Amazon and internet retailing many bookshops have had to close. Many cannot meet overheads. This year the small University bookshop I own faces bankruptcy. I saw Bush promise a $500bn bail-out package to buy up distressed financial assets of financial companies and banks.
Mr Bush Please help the small independent bookshop we too employ staff and need money to survive…

[TIM]

ASSUMING THE BAILOUT WILL COST 1 TRILLION - AN ASSUMPTION MADE BY BARCLAYS BANK THIS MORNING -
- THEN EVERY MAN WOMAN AND CHILD IN THE USA WILL PAY THIRTY THREE THOUSAND DOLLARS EACH TO THE FED - AND A FAMILY WITH TWO KIDS (LIKE MINE) WILL PAY ONE HUNDRED AND THIRTY TWO THOUSAND DOLLARS TO RESCUE THE FINANCIERS...THEREFOR NO MONEY LEFT FOR THE BAILOUT OF THE BOOKSHOP OR THE CRECHE IN THE LAST POST --
HAS THE GOVERNMENT GONE MAD - IS THERE ANYONE SANE OUT THERE....KNOCK KNOCK...HELP GET ME OUT OF THE USA!
Be AFRAID ....BE VERY VERY AFRAID...THINGS ARE NOT NORMAL, HEAD FOR THE HILLS....WELCOME FEUDALISM ...WE ARE BEING FORCED INTO SERFDOM AND SLAVERY BY THE FINANCIAL LORDS

[yves]

Jack , I will be on Bloomberg TV Thursday at 17:00 .I was scheduled to do it today at 17:00 but had another conflicting TV appearance at the same time.This is better because I will do it in studio next week rather than by satelite.These are quite exciting times ahead .Cheers

Yves

[kallidromos]

The rally will be short-lived and meandering in a choppy and unpredictable fashion in a trade range will begin. Tops in the middle 11000's and back to the low of the beginning of this week.

Let's not forget Prechter's writings on short selling in "Conquer the Crash". Go back and read what the consequences of this course of action will be.

I lived in the US for 10 years and I consider it a second homeland.
I can't believe the decisions that are made not only in finance and the economy but also and primarily in the field of international policy.
I find the comments of fellow participants disturbing and disheartening but the most disturbing is the comment by University Bookshop. No money for a Univeristy book store !!
The hope of the founding fathers and your immediate ancestors, dear friends, Kevin and Brian, was to create a state where individual rights and liberties would be guaranteed but the fundamental needs of the people would also be met, in health, education, defence and elsewhere.
But Ben Franklin and George Washington, were replaced by a lethal mixture of amoral game theorists and a breed of ruthless carpet-baggers that have transformed the country and its institutions into an economic political and moral quagmire.

The best that can be achieved under the circumstances, is a new political movement that will challenge these forces, based precisely on the argument that it was the people's money that cleaned up their avaricious mess and it can no longer be business as usual, with the old boys untouched and at the helm of the country. The people who footed the bill and didn't share in the ludicrous prosperity while the going was good get to have control, send new faces to the forefront of politics and strike a new deal.

A mixed economy in the US is a clear necessity, in my view.

Health coverage for everybody is priority and Medicine can't price itself out of the reach of the people.
You can't have schools where students carry guns and you can't have TV undermining parental authority and you can't have desperate parents who dont't have the time to spend with their children because their work doesn't allow it.

Look back to your values and use them to build a better future for the US and the rest of the world. You have to move first though, before the hidden and silent forces around the globe come to your help, and there are plenty.

Kallidromos

[Eventhorizon]

I would be curious to know how much money the managers of these various institutions have extracted over the last few years, how much they have doled out to shareholders as dividends and share buy-backs leaving the companies in their current over-leveraged / under-capitalized state.

Didn;t this used to be called asset stripping?

Perhaps these funds could be disgorged and contributed to the bailout - how much did Hank make, Mozillo, Raines, etc, etc?

Yah. Like that's ever going to happen!

[santana]

A must watch video folks that exactly reflects the mood here on the Feds schiziod actions.

http://www.youtube.com/user/donharrold

This is how many thousands of Americans feel, in regard to the current situation. We support you Brian Monte - I have always been a lurker here but I am so upset i had to post this.

[min]

I feel total compassion for those that got burned today. They were indeed robbed and this market is and has been rigged for some time now.

I can only say this is not the first time it has happened. About a year ago (forget when exactly) in 2007, on the eve of an options expiration, the fed did something with a very similar knee jerk outcome —many got robbed then as well.

In 2004, when Prechter was mustering the confidence to think his wave three had started (right around this time of the year as well), a very strong rally came out of nowhere to invalidate his wave count.

We all can think of many other such incidents, no?

Point is, Fed intervention is and has been part of the landscape for quite some time now and any analysis failing to address this is woefully missing —this is probably Prechter's biggest blunder and why I gladly parted ways with him in 2004.

There was a lot of money made on the other side of this move and future similar injustices can be profited from the next time around if an unbiased outlook is adopted. It’s not easy but it can be done and it's something to look forward to.

One last thing, even though I was fortunate to capture 90% of this move I am NOT bullish! Getting married to either side and labeling yourself either/or is a death trap that everyone should avoid like the plague for now. Staying an unbiased and vigilant market technician is a much better way to go for the time being. If Prechter had some semblance of this I would not put him down so much. In the end you gotta go with what works.

[The Voice of Reality]

Some of you guys are crybabies. The Fed and regulators have changed the rules time and time again - ESPECIALLY when there is a crises. EXPECT IT TO HAPPEN and react accordingly. If it results in a loss, it is merely the cost of playing the game. Move on and get ready for your next trade!