Yves on Starving The Bull

Yves will be on Bloomberg Radio at 1500 ET today. 

Why a Second Stimulus Means Lower Stocks

“Starving the beast” and starving the bull might have some similarities.  Republican credo believes that starving the “beast” of government from revenues will effect change in public spending. It will lower spending thus making the government smaller.

I am of the school that the economy is actually worse than imagined. That a second stimulus is strongly desired but can only be attained under stress conditions. A retest of the March’s low in stocks would probably be one of those requirements.  It is for that reason that I show the repos recent drop to attest that the invisible hand is being removed from the market.

I also show a different view of my count on the Dow.  It is filtered to remove some of the manipulation at works behind the curtains.  You arrived to it by a summation of many markets. In the bush administration, money was spent like it was going out of style. It now looks that this administration is on track for outdoing the Republicans. To balance this large tax increases are coming your way?

Deficits do matter and the bull knows this.

Yves Lamoureux, Investment Advisor, Blackmont Capital Inc.

The opinions contained in this report are those of the author and are not necessarily those of Blackmont Capital Inc.. Every effort has been made to ensure that the contents of this document have been compiled or derived from sources believed to be reliable and contains information and opinions which are accurate and complete. However, neither the author nor BCI makes any representation or warranty, expressed or implied, in respect thereof, or takes any responsibility for any errors or omissions which may be contained herein or accepts any liability whatsoever for any loss arising from any use of or reliance on this report or its contents. BCI is an independently owned subsidiary of CI Financial. CI Financial is a Canadian owned diversified wealth management firm, publicly traded on the TSX under the symbol CIX. Blackmont Capital Inc. is a member of CIPF and IIROC.

Comments

[Cyckes]

Latest Neely chart
http://www.traders-talk.com/mb2/index.php?act=attach&type=post&id=12114

[Upstart]

The rally appears to coincide with the bottoming of a trading cycle that runs 7-8 weeks. It would probably take at least this week or into early next to exhaust itself. Not sure what that may mean for the wave pattern.

[Brian]

"Republican credo believes that starving the “beast” of government from revenues will effect change in public spending."

...then...

"In the bush administration, money was spent like it was going out of style."

This just goes to show you both parties are of the same philosophy--Keynes economists. Republicans talk about cutting spending when they know they don't have the votes to make a difference.

The next bubble--which will be the last for a long while--will be the government.

[rich]

Yves do you really think the government would want the stockmarket to fall hard in a "crisis" to pass a stimulus package? I doubt it very much. Talk of "invisible hands" keeps us all paranoid, but serves no purpose to us as traders. You have been calling the top in this rally since a long time ago and I think there could well be another leg higher which will quieten you down once again. I am starting to see you as a reverse indicator. If this was Wave ii of 2 off the peak for your big move lower, do you think we would see a 90% upside day on such good breadth? I think if you ask yourself honestly the answer is no.

[Michael Lomker]

>a 90% upside day on such good breadth

And no volume.

[Sherman McCoy]

Looks like all those STUpdates I read from Hochberg in 2003. "Ignore the 50x200MA crossing positive, Dow 400 is a certainty", blah, blah, blah. I gave back so much money following that bozo. That said, I'm short with a tight stop. If we don't gap down tomorrow, as most 3rd of a 3rd waves do, you have to buy it.

[MHD]

Gap down doesn't seem likely with INTC earnings. Looks like most ewavers are going to have wrong counts. Neely's top call of 956 looks on thin ice. No volume on this huge advance, but good earnings could change that. How these companies are beating earning estimates by large amounts is really a mystery

[rich]

>a 90% upside day on such good breadth

And no volume.

Well wave i of 3 according to Yves certainly did not have much volume either except for the day it broke the neckline and rebounded to form a doji candle. Seem like wave 3 behaviour...hmmm, not to me!

[Wave Rust]

how do impulse/motive waves extend?

how?

first move off a high and the first counter move, then you get a decent count.

dow 4000? maybe in 3, 4, 5, 6, years, after a long slide, maybe never.

betting against the trillion dollar swag slingers, are you! - ask yourself, 'do you feel lucky, punk? well do ya?'

look at the market - trade what you see.

who cares whether its a bull or bear.

wave rust

[anon_aka_TERA BAAP]

Wave Three..is moving PREFECTLY according to PLAN..leaving TONS of dead BEARS behind..

tomorrow NEELY will have SEMICONDUCTER rally stuffed into rear end.. as he will be STOPPED again..

if i had DIME for each time NEELY is stopped..it would be even better than my BULK purchases of GOLDMAN SACHS in 60's range.

HAHAHAHHAHAHA

i do not understand why Bears are insisting to short this market..it is so easier to just RIDE the Bull..tomorrow SPX will be ABOVE both the 200 dma and 50 dma..while VIX making new LOWS..CPI will add onto INTC as catalyst for POWER move higher

TERA BAAP

[[email protected]]

you must be pretty heavy on the long side eh? keep hoping for that bull

[[email protected]]

btw, i agree that the S&P could rally tommorrow but it is approaching downside resistance according to Neely River Theory

[TERA BAAP Scan your broker statement and upload it.]

>my BULK purchases of GOLDMAN SACHS in 60's range

TERA BAAP
I do not think you can afford bulk purchases. Scan your broker statement and upload it.

When I see it I will believe it.

[TERA BAAP. You went long "big-Time" when S&P was 910. you are breakeven now.]

TERA BAAP. You went long "big-Time" when S&P was 910. you are breakeven now.

>HAHAHAH!! CLOWN, you must be KIDDING..

this DIP will be BOUGHT in first 30 minutes of trading

i am buying SSO and BGU big-TIME in pre-market

TERA BAAP

Posted by: anon_aka_TERA BAAP | Thursday, July 02, 2009 at 06:00 AM

[Sherman McCoy]

like I said earlier, you have to buy it. i did.