Stock Market News and Thoughts

Topics: Stock Trading Strategies

We have had two nice back to back up days in the stock market. Last month on the day the market made its last peak I bought the SDS short etf as a hedge on my positions and said I thought the market was going to go through a little correction. The S&P 500 then pulled back down to its 50-day moving average and has bounced off of it twice.

After it went up yesterday I got several emails from people about the market action. They want to know if I am now bullish on the market and when I am going to get out of my short positions. One person for example asked:

"Hi Mike.
Is the correction/pullback in the market over? Today the S&P made a new high
for June and has broken out of its "falling flag" formation (usually a
bullish sign), I also note a succession of higher highs and higher lows on
the daily chart. 1650 is or was a key resistance level but that too has been
breached. Do you still hold to the notion that the market is going to make
another leg down and what evidence remains to support this?
Kind regards ****"

Yes I am not convinced that the move of the past two days represents the beginning of a new big rally in the market that will take it through its May highs and beyond. I know its tough to doubt the market after it has a big up day and everyone gets excited, but I have not seen the things that typically come at the end of a correction - I have not seen a day in which the selling to buying volume ratio is over 9:1, have not seen a big jump in the put/call ratio, and not seen a key reversal day in the VIX. Nor has the ratio of bulls to bears in the investors sentiment survey reached the level that it got to when key bottoms have been made in the past few years.

I could be wrong of course. There is no way I can give you absolute proof, because that is impossible when it comes to financial markets. If I am wrong though I do not care - I would just take off the hedge and keep holding my long positions. The reason I do not care is at this point I am more interested in the potential in overseas markets, and metals and mining stocks going forward than the S&P 500. So I do not care about buying it or "missing out" on it, because I think there is more money to be made elsewhere anyway.

My guess is that the market is bouncing into today's FOMC meeting and 2PM statement release. As long as I have been in the markets there has been a tendency for the stock market to bounce in the days leading into an FOMC meeting and then correct afterwards. What happens is that short-term traders get excited over hopes and rumors that the Fed will say or do something supportive to the markets. They buy the rumor and sell the news. So I want to see what happens to the market Thursday and Friday after the FOMC meeting before making any judgement to whether the up days of the past two days mean anything or not.

To put it to you this way there are short-term players that look for reasons to buy the market and trade it. FOMC meetings give them an excuse to buy and then sell. Then the media has nothing to talk about so they talk about what the Fed is going to do and all of the speculation when in the end nothing of any important at all is going to come out of the Fed today, because they are going to do nothing but continue to print money and buy bonds and finance the wild deficits. They have no choose.

Nonetheless we have seen dumb speculation that they will stop. Then as the market goes up the media says well they won't stop maybe. As a result you get CNBC headlines like this - Fed Likely to Keep Options Open on Bond Buying.

CNBC will never come out against these Fed policies, because it is owned by GE, which makes money off of government contracts and the deficits - which depend on more easy money printing operations from the Fed. So CNBC talking heads treat Bernanke as a hero since they in the end work for GE, which is dependent upon government contracts for its revenue. For the average American Ben Bernanke has given them economic misery. But for GE he has given them profits. Therefore CNBC portrays him as a hero and will spend all day today praising him.

That's why when people David Stockman who came out with a book a few months ago explaining how the Fed policies have created the economic mess we are in CNBC smeared him.

It's also why they smear the spy leaker on CNBC, NBC, and CNBC.

But today this is what Stockman has to say to Yahoo:

Stockman says the Fed’s asset purchases, known as quantitative easing (or QE), and near zero interest rates policy is wrong-headed.

“We experimented. We violated every rule of sound money, every tradition that ever existed of what a central bank does on the theory that there was going to a great depression if we didn’t.”

But the reality, says Stockman, was different—a severe recession was in the making because of “the housing and credit boom” fueled by the Fed’s policy of low interest rates under Chairman Alan Greenspan and then Ben Bernanke. “It wasn’t going to be a Great Depression,” says Stockman. And now, says Stockman, “ All this cheap money is doing nothing but creating a temporary illusion of recovery setting us up for the next fall.”

CNBC is a propaganda channel.

Here is what a newspaper outside the US has to say about QE and Bernanke:

Julian Callow from Barclays says they are buying $1.8 trillion worth of AAA or safe-haven bonds each year from an available pool of $2 trillion. Nothing like this has been seen before in modern times, if ever.

The Fed, the ECB, the Bank of England, the Bank of Japan, et al, own $10 trillion in bonds. China, the petro-powers, et al, own another $10 trillion. Between them they have locked up $20 trillion, equal to roughly 25pc of global GDP. They are the market. That is why Fed taper talk has become so neuralgic, and why we all watch Chinese regulators for every clue on policy.

We will find out tomorrow whether Ben Bernanke is ready to blink after the market ructions of the last three weeks, sobered by the cascading upsets across the Brics and mini-Brics; or whether he will stay the course with Fed tapering sooner rather than later.

Investors seem to think he will indeed blink, or at least blink enough to put off the day of reckoning for another three month investment cycle, which is what hedge funds care about, and that if he doesn’t blink it will be because the economy is picking up speed. They cling to the Bernanke Put, when the new reality may instead be the Bernanke Call.

CNBC will never report on the existence of this report titled Crunch Time: Fiscal Crises and the Role of Monetary Policy written by Fred Mishkin, who has been one of Ben Bernanke's best friends for decades and wrote an internal Fed report in the Fall of 2007 that provided the theoretical basis for the Fed's zero interest rates policies in reaction to the popping of the real estate bubble. This report was the most important Fed report written that year.

CNBC won't tell you that this report he wrote in February argues that the Fed is going to reach a point of no return in 2014 in its QE money printing policies that will result in a financial disaster worse than the last one.

Read it for yourself.

CNBC will give you no warning about what this report says.

Bernanke will leave the Fed next year, before any of this starts. He will jump ship.

Now today if you look at the stock market this month we have had several big up and big down days and the market hasn't really gone anywhere at all. Instead of a giant rally ahead of us or even a giant drop I think more likely the US stock market is simply going to drift around and not do much of anything at all. On a leg down now I think the S&P 500 would likely bottom in the 1550 area if it closes below its 50-day moving average. Such a drop really would be no big deal in the big scheme of things.

People watch the market everyday and the news talks about it like some big things are happening, but I really think not much is happening at all.

At the same time mining stocks are sitting there consolidating and no one is paying attention. This is where the potential for big action is and everyone is asleep.

Topics: Stock Trading Strategies

I just did this podcast with Olivier Tischendorf of www.tischendorf.com/. Olivier is an independent trader based in Germany who has been trading the financial markets since 1999, using technical analysis and trading rules. In this interview we talked about his trading style and some of the sectors and stocks he is watching now.

One of Olivier's key ideas is to have rules so that you are in control of your positions instead of being at their mercy.

You can also download the mp3 audio file for this interview on your computer by clicking here WITH A RIGHT BUTTON CLICK and selecting SAVE FILE AS from the drop down menu.

If you have an itunes, ipod, or rss reader you can subscribe to the podcast by clicking here.

Topics: Stock Trading Strategies

Jim Rogers gives a Lecture at Baliol College, Oxford.

Topics: American Society and Culture

New story out today on CNET states:

The National Security Agency has acknowledged in a new classified briefing that it does not need court authorization to listen to domestic phone calls.

Rep. Jerrold Nadler, a New York Democrat, disclosed this week that during a secret briefing to members of Congress, he was told that the contents of a phone call could be accessed "simply based on an analyst deciding that."

If the NSA wants "to listen to the phone," an analyst's decision is sufficient, without any other legal authorization required, Nadler said he learned. "I was rather startled," said Nadler, an attorney and congressman who serves on the House Judiciary committee.

Not only does this disclosure shed more light on how the NSA's formidable eavesdropping apparatus works domestically, it also suggests the Justice Department has secretly interpreted federal surveillance law to permit thousands of low-ranking analysts to eavesdrop on phone calls.

Because the same legal standards that apply to phone calls also apply to e-mail messages, text messages, and instant messages, Nadler's disclosure indicates the NSA analysts could also access the contents of Internet communications without going before a court and seeking approval.

For full story go here.

Topics: American Society and Culture

The other day I made a blog post in which I expressed alarm over the NSA and outrage over revelations that the United States government is now collecting the phone, email, and banking information - really any data that it can - of every American citizen - and storing it so that it can retrieve it and use it in the future to investigate you, thereby rendering the fourth amendment to the Constitution meaningless.

I did not know how people would respond to this post, I know how I felt about it, but I also felt like I could be taking a chance in what I wrote. For one thing it could anger customers or potential customers. I have pretty much stopped watching TV news, but I did watch it for a few days, because I wanted to see how they reported on it, and most of what I saw on all of the networks was in praise of the NSA and critical of this leaker.

Some politicians in our country have called him a "traitor." Even the Speaker of the House said this.

Others of course have had the opposite view and the TV media has tried to frame the issue over whether this individual is a "traitor" or "hero" and has given very little discussion over the implications of the actual revelations themselves.

For the most part TV media has gone lock stock and barrel in support of these spy programs. In moments when they have debated the issue more they have framed at as choice of you being safe with the NSA programs or possibly being put in danger if they are done away with. In other words life or death. A lot of TV yelling all designed to scare us. That seems to be all the TV and too many politicians like to do.

Similar programs were revealed in the 1970's and created such outrage that Congress investigated them and shut them down.

But today if you are against a program like this you can feel all alone after you watch the TV news.

After I wrote my post I sent an email to 52,000 people(that is how many people are on all of my combined email lists) about it.

Out of all of the people who read it I got one email from someone who did not like what I said.

I got about a dozen others in support.

One against.

I think there are probably a lot more people who support what I wrote, but are probably scared to say so in this environment - or simply have mixed feelings about the issue, being scared of terror attacks and the spy programs at the same time so just aren't sure what they think.

The politicians that are the most shrill in support of the NSA programs and the NSA intelligence people claim that it is necessary to protect us from terror attacks.

Here is the problem though - anyone can bypass this stuff. All you have to do is go and use a website email service that is in another country that protects the privacy of its users. All you have to do is click to such a website and use it. There are search engines like this too.

So anyone that is doing bad things is just going to do that - and has been doing it.

That means as far as actually stopping terrorists goes this whole NSA thing is a waste of billions of dollars and actually provides us with a false sense of security.

The politicians who are wrapping themselves in the flag of the terror war to win votes and support - to act as war leaders by supporting the NSA - actually are making us less safe by causing the country to believe these programs are helping it and are wasting resources when they could be put to better use. Instead of spying on every single person possible on the whole planet who goes to a website based in the United States it makes more sense to keep a closer watch on people who actually are dangerous. Apparently the US government was warned by the Russian government about the Boston bombers as being potential dangers and did nothing to keep an eye on them or anything.

And of course the worst part is that support of these spy programs means tearing the fourth amendment to the US Constitution to shreds. The politicians all in favor of this program are supporting it in order to win political points - in order to look tough in this "terror war." They are merely playing on people's fears and the media is stoking them. An anxious people are an easily controlled people - and one that tends to keep watching the TV to see what is going to happen next.

These revelations also are damaging to American internet companies that now have been smeared across the world. If you live overseas are you going to want to play on Facebook now? Use Google? This is now going to be a business opportunity for people overseas to take advantage of to the detriment of American companies, American workers, and the American economy. Someone will make a facebook type site now outside the United States somewhere free of NSA control. That will damage Facebook and the same thing will happen to Google and all of these other American internet companies. If I owned these stocks I would dump them.

So here is where this all ultimately goes - if new internet companies now emerge outside of the United States and become new dominant global players on the world wide web is the United States government going to block Americans from using them in order to keep its citizens in its Google/Facebook/NSA web? Is it going to restrict your access to websites outside of the United States like China does for the people that live under its Communist government?

If not then this whole NSA thing is going to end up being something that essentially will wreck American internet companies and waste tons of money. If they are going to end up one day restricting what websites you can go to to just those approved by the government then we are moving to a true totalitarian system.

Or we can demand that our Congress investigate these NSA programs and roll them back.

We have seen many troubling things occur in this country in the past dozen or so years. But we are now reaching a true tipping point. If we do not say no to this then who knows where all of this will go over the next few decades.

We are all now in a moral dilemma. It is time for us to break our silence.

The other day I made a public post sent to 52,000 people saying no. There are people off all walks of life on that list. I know of at least one billion dollar hedge fund manager on the list, people connected to politicians, writers, and of course lots of high-net worth investors all over the nation.

I really do not know what more I can do myself. This is a financial site and I'm not going to go on a campaign against these spy games from now on forever everyday. I wrote my thoughts and made a stand. I can't do anything more as an individual.

No one can do anything as an individual in this case actually. We can only stop it together.

So I ask you to go here and place your name on this petition to Congress demanding an investigation into the NSA spy program. This is a petition created by Internet browser Mozilla and dozens more technology companies and civic organizations. Just take a stand. Together we can make a difference.

CLICK HERE.

In the 1960's Martin Luther King was the first major public figure to come out and speak against the Vietnam War. He spent months trying to decide what to do - and to work up the courage to do it. Someone took portions of that speech and combined it with others and put together this powerful clip.

No matter what you might think of the Vietnam War, it is easy to imagine what he would say today about what is going on in this country... the words he speaks are relevant to the situation we are now in today ourselves:

To do nothing in the face of this attack on your own liberty is to slip into some sort of moral abyss.

To go to the petition CLICK HERE.

Topics: Stock Trading Strategies

Yesterday I made the comment that I thought if the stock market were to bounce again off of its 50-day moving average(it fell down to it again Tuesday) that the market would likely take weeks to put in a bottom, however if it fell through that support level the correction would likely speed up and come to an end next week.

Well the market went up as the DOW rallied over 200 points.

It looks to me that we are in the type of market action we saw last year in March and April and then again in September and October after the market made its prior two peaks. After those two peaks it spend almost two months making a top. It fell to a support point and then bounced up and down off of it only to finally fall through it and bring a panic bottom that marked the end of the correction. You can see how that final drop occurred last year in May and November.

So it looks to me like the same thing is happening again. If so the market will probably keep bouncing off of its 50-day moving average and then break it towards the end of this month or early next week and have another leg down for a few weeks and to mark the final drop of this correction.

Topics: Stock Trading Strategies

Yesterday the stock market dumped. This morning the Japanese stock market is down 6%. We are in a market correction. They happen. Last month people thought the stock market was going to go up forever. Now they are starting to get worried.

Rallies come and go and so do corrections. Corrections cause people to lose money. People are right to want to use them as buying opportunities, but they don't know how to do it.

What happens is that they buy too early. They see an up day in the stock market and they think it signals the turning point and buy - but they end up buying into a suckers move.

Just a few days ago the DOW was up over 200 points in a day and CNBC got excited. That move sparked bottom buyers in the market. It causes people who do not know what they are doing to buy too soon.

Then when the bounce ends and the markets turns down these type of buyers sell out.

So how do you use a correction as a buying opportunity?

You wait for signs that it is really over. Up days are not that sign.

What you want to see is more selling!

And more panic.

If the market bounces here I will not be convinced. In fact if the market bounces here it will mean that the correction will last longer and be deeper than it would be otherwise.

The faster the market drops from here the sooner the correction will end. Ironically people will take an up day here as a good sign for the market, when in reality we'll know it would actually be bad.

You can look for true panic in the market by watching the VIX, which tracks the volatility premium people are paying in the options market. When people get scared the VIX goes up as buy scramble to buy puts to hedge their positions instead of sell them. It tends to spike when a market correction and important bottom occurs.

The VIX started to move up yesterday as it closed above 18.50. That's good and takes us closer to the end of the correction.

The VIX though needs to go higher to be able to point to evidence that we are seeing the type of panic that signals a bottom.

The VIX will spike up once it gets above 20 and probably peak somewhere in the 23-28 range.

If the market falls quickly from here this will happen soon - probably next week. But if the market tries to bounce like it did the other day it will take longer for this to happen - a bounce would just trap more people who would end up selling later. A bounce here will make the correction go on for several more weeks. No bounce and big selling and it can end in days and not weeks.

So let's see what happens.

I'm more interested now in metals and mining stocks than anything else. All of the reporters are negative on gold. Look at this CNBC interview with Peter Schiff and witness the mindless talking head ask Schiff if he is ready to admit that gold is in a bear market and that he "is wrong" to believe in it.

Well gold started a bear market in 2011 and that bear market ended when gold crashed this April. It is now in a stage one consolidation phase which will likely end this month. That means we are at an important bullish turning point in gold just as EVERYONE is negative on it except a handful of people - people like me, Dave Skarica, Fleckenstein, Schiff... just a few. The media as a whole is doing nothing but declaring it dead.

Listen to this woman! And then the "traders" on CNBC say its bad and "going lower" to agree with her... I'm sure they think by having the right consensus views they'll get back on TV...these crazies are shorting gold after it has been in a bear market since 2011 and already crashed!

Topics: Gold and Gold Stocks

This is a must listen interview by Bill Fleckenstein at KingWorldNews. In it he explains why he is more bullish on gold and silver now than he has ever been bullish on anything ever. To listen go here.

With the revelations that the federal government is cracking down on civil liberties and rendering the fourth amendment to the Constitution essentially meaningless I thought I'd post this classic Twilight Zone episode on the site today.

Sometimes there are issues bigger than us - bigger than us trying to make money out of the financial markets and you have to take a stand.

First though this is a must watch interview with Daniel Ellsberg, the man who revealed the Pentagon Papers during the Vietnam War on why the revelations over the NSA are important.

The NSA revelations are chilling. Let me tell you why. The problem isn't that you or I are doing anything wrong. The problem really isn't what it poses for the average American today who does nothing but watch TV all day, but the danger it poses for the free flow of information in our society and potential for it growing into one day totally tyranny.

Let's face it the average person doesn't care about anything and seems to be willing to accept anything he is told on the TV. Most people have a love and hate relationship with the government, but in the end they actually worship it and are emotionally dependent on it even if they hate it - they believe it is protecting them financially through payments and physically through the wars and supposed targeted killings overseas. They live in a state of anxiety and fear - fear of the financial future and terrified of the rest of the world. The type of person who blindly accepts this NSA program is as emotionally dependent upon the government as a person who lives off of food stamps and is unable to make a living for themselves.

The problem is the impact these NSA revelations have on writers and reporters in this country.

Imagine for example that you decide to do an investigative reporting piece or write a book about a government crime or information that people don't know about, but threatens some politician or agency of the government. Well if you do that you will be tracked and spied on and who knows what.

The mainstream media on TV - FOX, MSNBC, CNN - is calling this leaker a "traitor." That is very chilling language. It is really over the top. Ok, this guy may have committed a crime by leaking this info, and I am not encouraging crime breaking, but I really do not see how what he has said that can possibly be a danger national security. The bad guys are not going to be using emails and phones to do their bad things. I also do not think announcing that someone is a "traitor" is acceptable language to be using. The sentence for treason in the United States is death.

I believe as citizens - and as simple human beings with human rights - we have a right to know that our government is recording everything we do. To argue that we do not have a right to know that the government is recording everything we do is totally crazy.

So for a media TV talking head to call someone a traitor is in effect to call for their murder. That is really outrageous language. It is one thing to say someone may have committed a crime, but to use words like that is really over the top.

In theory people vote by making an informed decision. Well secrecy makes that impossible and if people who are going to work to tell truth are going to become targets of persecution well you are going down a slippery slope. Did your Congressmen know this NSA program operated to the extent that it does? Call their office and find out. Apparently few did. So who is approving of this? Not the American people.

In the 1960's the FBI spied on civil rights and anti-war leaders. In order to wire tap civil rights leaders they had to get the permission of the justice department. They couldn't just tap anyone they wanted. Well now the NSA essentially is tapping and recording EVERYONE. They just record the info and look at it when they want to with the flimsiest of pretexts. Every email you write to someone and every phone call you make is being recorded. Every email, banking transaction, everything I do is being recorded by the government.

You too.

Now we have "secret courts." How can a "secret court" exist in a democracy? Except England why are people in European countries and other modern western nations safe without NSA spy programs? Why do they not need them, but we do? Or do we?

How does one practice citizenship in the United States of America in this day and age? Does being a citizen mean nothing, but watching TV, believing everything you are told on it, and then voting for one of two candidates chosen for you every few years? Is that all it means to be a citizen?

It is really up to you. If you do not like the direction the country has gone then call your Congressman and demand that Congress launch hearings into the NSA revelations. If you do nothing then more freedoms in our country will be eroded away and we'll devolve into the type of mindless mob society as depicted in this Twilight Zone episode. It's up to you. This is the most important political issue of our lives. It will determine what type of country we want to be - and become.

The Obsolete Man from Ryan Sebo on Vimeo.

Ron Paul - "truth is treason in an empire of lies”

Scott Horton Interviews Ron Paul

The Scott Horton Show

click here: audio.

June 10, 2013

Transcript (scroll down for audio)

Scott Horton: All right, y’all, welcome back to the show. I’m Scott Horton. It’s The Scott Horton Show, live here from 11 to 1 Texas time at scotthorton.org and noagendastream.com weekdays. And our next guest is Dr. Ron Paul. He’s the author of A Foreign Policy of Freedom and also some other accomplishments you might have heard of. He was a congressman for a while I think and he’s got an article today at antiwar.com that is called “Government Spying: Should We Be Shocked?” Welcome back to the show, Dr. Paul. How are you doing?

Ron Paul: Doing fine. Nice to be with you.

Scott Horton: Very good to have you here, sir. So, the big news of course from the end of last week and now into this one is all of Glenn Greenwald’s revelations at The Guardian about National Security Agency spying, and one of the big things to come out of – well, the whistleblower has gone ahead and come forward after the first three big stories, and his name is Edward Snowden and it turns out he’s a Ron Paulian of some kind, donated to your campaign in 2012. What do you make of that?

Ron Paul: I haven’t thought a whole lot about it, but I guess his concern about privacy is the same as mine, that he resents it and sees that people who do things like that are defying the Constitution and are not representing our liberty, so I guess it shouldn’t shock anybody that he would be a libertarian-leaning type individual.

Scott Horton: And do you approve of this type of whistleblowing in general? What do you think of what’s going on here?

Ron Paul: Well, of course, you know, what we want is the truth. You know, everybody should say yes, we do want the truth, but a totalitarian and authoritarian, when they’re in charge, that’s the last thing they want. They want secrecy. In a free society you’re supposed to have a Constitution designed to have the government protect our privacy and our liberties, not the secrecy of government, but when the government gets too big and becomes more authoritarian, then that government wants to hide the truth. They do everything possible. And that is the reason that I’ve made the statement that truth is treason in an empire of lies. So here these individuals who come along and tell us the truth, of course they do break the law and they’re practicing civil disobedience and it’s very, very risky, but who becomes treasonous? The people who defy our Constitution, undermine our Constitution, throw it out and not protect our privacy? No, the person who’s accused of treason are the ones who are telling the truth. And right now, of course, we have a CIA agent that’s in prison because he told us the truth about torture, you know, about Guantanamo torture and revealed this. But to deny that information to the people is what I think is so dangerous. So I think the bigger question is not what should the penalty be for Snowden as much as what should the penalty be for people who take an oath to obey the Constitution and do the exact opposite?

Scott Horton: Right. It’s amazing, isn’t it, the way that they try to conflate whistleblowing with espionage. And they say, “Well, you know, if you say something classified to the New York Times and Zawahiri can read that hiding out in his mom’s basement in Pakistan somewhere, then you’re providing aid and comfort to the enemy.”

Ron Paul: Yeah. And that of course is just, you know, the demagoguery of it all, because they want to paint those of us who want to protect the Constitution and protect the Fourth Amendment, we are then said to be the bad guys. So they turn around and demagogue it and say, “Oh, he’s cavorting with the enemy, and he’s supplying information to the enemy.” But this is quite a bit different than what we saw in World War II when we had our government was filled with spies and they would take secret information about, you know, nuclear weapons and turn them over to avowed enemies like the Soviets and actually benefit materially from that. That is quite a bit different than somebody telling the truth about our own government when it gets out of control.

Scott Horton: Well, and just how out of control is this? I mean, I guess it’s shocking but not surprising is basically the message here.

Ron Paul: Well I think it keeps getting worse. I don’t know if you saw that little clip somebody found the other day on a speech I gave in 1984 –

Scott Horton: Yeah.

Ron Paul: – expressing concerns – hey, we better watch out, this thing could get out of control. In the same way, even in these past 10 years, I don’t think something dramatic has happened under Obama in the last year or two that all of a sudden these programs have gotten out of hand. Because they were started with the Republicans and they were started, you know, under Bush, and they continue – just because we don’t hear about them doesn’t mean that they weren’t existing. I think it’s steady. I think it’s steady growth, and the worse things get, the more they’ll do it. Whether our foreign policy deteriorates or our monetary policy deteriorates, the greater the power goes to those individuals who want to control things, and of course the more powerful a government, the more secrecy they want, because they’re afraid to be revealed.

So once they reveal what’s happening, they might be challenged, so they have to then play the patriot card and say, “Oh, well, you’re not patriotic. You’re un-American.” Remember how much they said about my foreign policy. You know, “He doesn’t care bout the troops. He’s un-American.” You know, and this is just to try to destroy that person who is giving us the information. And that of course is what they’re doing right now with Snowden is just to say that, you know, “He’s the bad guy.”

And some of the statements – you know what I get a real charge out of, in a way, I mean it’s so weird, is the Republicans want power and generally they’ll say and do anything for power. They want to put Obama on the ropes, and they finally get something– And I think it’s great that a large majority of American people say, “Hey, he’s gone too far. I mean, he doesn’t care about the Fourth Amendment. He’s snooping on all of us. He’s spying on all of us. This is over the limit.” And then we have the Republican leadership come and say, “Hey, you know, this is good. We endorse this.” You know, as if they were handed a great issue and they say, “Oh, no, we started this under George Bush and this stuff is good. We have to do this. We have to have national defense. And if you don’t do this that means you’re un-American and you’re not patriotic.”

Scott Horton: Yeah, I saw Bill Kristol saying, “Hey, we shouldn’t conflate the IRS scandal with the NSA scandal,” even though the NSA scandal is a million times worse, you know?

Ron Paul: Yeah. Yeah. He’s one of those Republican leaders that want to… People don’t refer to him as that, but he’s the one that’s been behind the Cheney and the Bush operation and all the foreign policy – but of course they have a lot of influence obviously in both parties, because foreign policy really hasn’t changed. This is why this is shocking to the progressives, and this is a wake-up call for progressives, and I think this is good.

But it’s sort of disgusting to see Republicans defending Obama when they finally get him on the ropes and catch him doing some of the things that are wrong and that could be used, you know, in a political way of trying to challenge him. But, no, it becomes totally neutralized. Which makes my point that foreign policy, you know, never changes. So when Obama gets into a little trouble, what happens? A lot of Republicans come to his rescue and say, “Hey, no that’s okay, we believe in this, we don’t want our foreign policy to be undermined because this is so necessary.”

Scott Horton: Right. Well, yeah, during the campaign Obama and Romney both bragged about how they were learning foreign policy by reading Robert Kagan’s new book, Bill Kristol’s co-author of benevolent global hegemony and all the rest of that stuff. Obama proudly claimed it. So there you go.

Ron Paul: Yeah.

Scott Horton: And now, so Snowden in his interview with Glenn Greenwald said that his biggest fear is that nothing will change of this, and yet immediately your son Rand, Senator Rand Paul, came out and said, “Oh, yeah? Well I’m introducing the Fourth Amendment Restoration Act, and I’m suing too, and – ” he wants it to be a class action lawsuit. He wants, what, 10,000 people to join up to help him sue the government over this.

Ron Paul: And I wish him well. I’m not sure, you know, who’s right on this, whether Snowden will be right or Rand will achieve what he wants to achieve. Because, you know it is so difficult, and you know, for instance, before we went into Iraq, most of the Americans, 80% of the Americans were, “No, we don’t need to do this. We don’t need to do this.” And yet after the war propagandists are out there and the media pounds away, all of a sudden they can change attitudes. So, you know, the people right now are riled up and that’s great, but are they going to be there, are they going to change the congressmen and their senators because they, you know, haven’t supported their position? No, this may settle down and not much will happen. But I’m hoping it does, it does change policy. That’s the thing that really counts is will the policies be changed?

And even, you know, court fights and all, most of the time they don’t achieve, you know, a court victory to change things, but they’re great in calling attention to the problems out there.

And I remember one time I was outraged by Reagan and the Senate passing a tax bill that wasn’t written in the House at all, it was written in the Senate. And we went into court and the court says, “Oh, no, you have no standing. You have no rights. Just because, you know, just because the Senate overrode the House, you have no standing. You can’t complain about this.” So the case was just thrown out of court.

Scott Horton: That’s funny.

Ron Paul: So what kind of judge is going to really give us a fair hearing? That’s the big question. But –

Scott Horton: Especially something like that where that’s just black and white words in the Constitution itself that bills like that must originate in the House. Of course you have standing.

Ron Paul: Yeah. That’s the problem. So. But I think it’s public, it’s a PR fight. You’ve got to get a consensus, and this is what I think is shifting now, you know, in the last five to six, seven years. There’s been a shift in attitude toward monetary policy and the Federal Reserve and now on privacy. I think this is great. The American people are tireder of the wars now. Matter of fact, I think one of the reasons the Republicans did badly in ’08 was they were tired of the wars. But now they’re getting tired of Obama and his war against American citizens and their civil liberties, and people say, “Oh, this is devastating.” No, they need to know the truth, and that’s the most important thing. People will not act if they don’t hear the truth. But it gets very tricky if you tell the truth and you end up being accused of being a traitor. And that’s what’s going to happen, of course, to the many whistleblowers as they take great risks in doing this.

Scott Horton: All right, now. Over at the Ron Paul Institute for Peace and Prosperity, they’ve been doing a lot of really great work criticizing American policy toward Syria, and I wonder what you make of the fight going on inside the halls of power over what to do there when people like Henry Kissinger and Zbigniew Brzezinski and some of the most powerful, kind of, I guess they’d call them graybeards of American establishment foreign policy or whatever, they’re saying “Stay out, it could be worse, let’s not make it worse,” and that kind of thing, and yet there’s constant pressure always to intervene too, and, “Innocent people are dying and somebody’s got to do something, and we’re somebody and we can do something.” And I just wonder, what do you make of it all? What side is John McCain on? What side is America on? Where do we go from here?

Ron Paul: All I know is if we lose this argument and we expand and go in there and start bombing and get troops involved, and we let McCain and Graham win this argument, that doesn’t say much about us, you know, who are arguing the opposite. We must not be doing a very good job of presenting our case. And our tools are more available now than they used to be. It used to be if you didn’t get on the top three TV stations, you didn’t have a voice, but today we do have a voice. How many people watched Snowden on his video? Millions and millions of people. So if we lose this, you know, it would be sad to think that McCain and Graham win it and their policies are so ridiculous to go in there and help the Al Qaeda. This argument, you know, about humanitarian concerns, well, that’s an argument only, that isn’t the reason they want to do it, because the record shows that every time we go in there, you know, we send off missiles for humanitarian reasons to kill the bad guys and yet thousands and thousands of innocent civilians get killed, and that incites more Al Qaeda. It makes no sense, and yet they keep doing the same thing over and over again.

Scott Horton: Yep. All right, now, can you tell us real quick before I let you go, can you give us a word about the Ron Paul Institute? I know the URL is ronpaulinstitute.org.

Ron Paul: Well, we’re real happy with that, and it’s just early stories. It’s been a couple months and it’s going to expand and grow. And I guess the one thing I can tell you that I am pleased with, I thought that it wouldn’t be quite as easy to get people excited about it and people actually send some money in to help us out as it would be to talk about economics and recessions and the Federal Reserve and the United Nations and things like that, but we’ve had a pretty good response and we’ve barely started. So we’re hoping that we can have a real impact, and I think Daniel McAdams, who did my foreign policy, you know, in the congressional office for years, and he’s heading this up, and I have a lot of respect for his ability, so I’m really looking forward to us having an impact, and so hopefully some good will come of it.

Scott Horton: Yeah, well I sure have got it bookmarked, and Dan McAdams is great on pretty much everything that I can think of anyway, and he’s been way out ahead on this so-called revolution in Syria for, you know, two and half years now as well, so that definitely speaks well of the whole project. Okay, well, listen, I’ll let you go, but I want to thank you very much again for your time, Ron. It’s great to talk to you again.

Ron Paul: Okay, Scott. Bye bye.

Scott Horton: All right, everybody, that is the great Dr. Ron Paul, American hero, author of The Revolution: A Manifesto and his great collection of speeches going back to the late ‘70s, early ‘80s called A Foreign Policy of Freedom. You’ve got to read it. It’s so good. And then of course End the Fed, which is a great case against central banking, and on and on and on, you know. He’s the heroic Dr. Ron Paul at the Ron Paul Institute now, ronpaulinstitute.org, the Institute for Peace and Prosperity. What a great name for an institute, if you’re going to have an institute named after you, right?

audio.

Topics: Stock Trading Strategies

This morning the stock market is poised to gap down on the opening and put an end to the two day bounce in the stock market. It appears another leg down in the correction that began in mid-May is about to begin.

Everyone who bought into the bounce is going to get trapped. Anyone who bought into it did so without a real strategy and just because the TV told them too. Someone who buys on a whim like that often sells out just as quick too. Bounces in downtrend corrections bring premature buyers into the market who end up selling as the correction continues, thereby adding more selling pressure to the stock market.

Corrections do bring buying opportunities, but you have to let them play out and be patient to take advantage of them correctly. But that is so hard for people to do, because they see an up day and get scared of missing out.

Topics: Gold and Gold Stocks

I just did this podcast with Dave Skarica of addictedtoprofits.net.

In this podcast Dave and I talked about George Soros and his activities in the gold market. The media put out a story in April about how Soros was selling gold by selling off his GLD position.

In reality he was leveraging himself in gold by moving his money into something more powerful than GLD.

For more details on Soros and gold go here.

You can also download the mp3 audio file for this interview on your computer by clicking here WITH A RIGHT BUTTON CLICK and selecting SAVE FILE AS from the drop down menu.

If you have an itunes, ipod, or rss reader you can subscribe to the podcast by clicking here.

Topics: The War State

Today the NSA whistleblower who was the originator of stories across the world press detailing how the US government records all the phone and internet activities of its citizens revealed himself.

Already some are calling him a hero and others are labeling him a traitor.

Well I am personally not doing anything wrong and if the US government feels it must record everything I do and put it in a secret file then here - go here and you will find "secrets" in these files if you look hard enough. I call them "secrets" because they have never been revealed in the press or anywhere else. All declassified. If the government leans on too many people than people inside the government leak and some work to legally declassify things to push back, shocking things:

DOD FOIA Library.

The real Obama, a man of nothing:

The man you see on TV:

Actually Obama's statement that his spies don't listen in on American phone calls is a lie. Either that or he doesn't know what he is talking about.

According to The Atlantic:

"In 2008, NSA workers told ABC News that they routinely eavesdropped on phone sex between troops serving overseas and their loved ones in America. They listened in on both satellite phone calls and calls from the phone banks in Iraq's Green Zone where soldiers call home. Former Navy Arab linguist, David Murfee Faulk described how a coworker would say, "Hey, check this out… there's good phone sex or there's some pillow talk, pull up this call, it's really funny, go check it out." Faulk explained they would gossip about the best calls during breaks. "It would be some colonel making pillow talk and we would say, 'Wow, this was crazy.'"

Most phone calls of course are not being listened too. They are simply recorded to be played later if it is determined to be necessary.

When I publish my book in September you will see a few things in it never revealed in a published book before, much less on the television tube that comes from information in these declassified files and will be completely documented so you can verify it yourself.

I do not advocate breaking the law and this fella may have done that by leaking, but I do advocate protecting the US constitution. My grandfather fought in World War II and my Dad was a Colonel in the Army who at the end of career served inside the Pentagon as an adviser to the Vice-Chief of Staff of the US Army. These are not the type of things people in the armed forces served for. If people stood up and made a few phone calls programs like this would be shut down.

The big problem isn't what this means on an individual level, but for writers, journalists, and reporters. Obama last week declared a war on leakers. Ok, well if you write for the Washington Post you are going to work off leaks. The White House leaks to get stories out. So are they just going to go after the leakers they don't like using this technology and do nothing about the ones they do?

This has a chilling effect on the first amendment and reporting and moves us in the direction of living in an East Germany style security state. Does this mean that if I write another book and go interview retired military leaders I'm going to have to wonder if all my phone calls are being listened to?

Topics: Stock Trading Strategies

There is a fascinating article today in Businessweek about how high frequency trading robots are shutting down and along with them volume in the stock market is shrinking.

The article states that:

"For the first time since its inception, high-frequency trading, the bogey machine of the markets, is in retreat. According to estimates from Rosenblatt Securities, as much as two-thirds of all stock trades in the U.S. from 2008 to 2011 were executed by high-frequency firms; today it’s about half. In 2009, high-frequency traders moved about 3.25 billion shares a day. In 2012, it was 1.6 billion a day. Speed traders aren’t just trading fewer shares, they’re making less money on each trade. Average profits have fallen from about a tenth of a penny per share to a twentieth of a penny."

Look at a chart of the S&P 500 and you can see how the volume is shrinking.

What happened is that Wall Street and big institutional players were making money off program trading. So many people got into the game that fewer and fewer of the overall program traders were able to make money.

So what are they doing now?

According to Businessweek.

"As profits have shrunk, more HFT firms are resorting to something called momentum trading. Using methods similar to what Swanson helped pioneer 25 years ago, momentum traders sense the way the market is going and bet big. It can be lucrative, and it comes with enormous risks. Other HFTs are using sophisticated programs to analyze news wires and headlines to get their returns. A few are even scanning Twitter feeds, as evidenced by the sudden selloff that followed the Associated Press’s hacked Twitter account reporting explosions at the White House on April 23. In many ways, it was the best they could do."

This Swanson is not me, someone else...

Yesterday the S&P 500 dropped over 20 points and the DOW fell over 200 too. The S&P 500 is now right on its 50-day moving average.

There is a good chance the stock market will try to bounce here, but I personally do not feel confident that such a bounce would represent an end to this correction.

The reason I don't think yesterday marks an end to the correction is that it did not cause the amount of selling to buying on the NYSE to reach 9-1. I also would like to see the VIX spike above 20 and reverse to mark a bottom.

In my view the market is likely to bounce a bit here and then break below it's 50-day moving average and have one final drop.

Topics: Stock Trading Strategies

The market is likely to head higher in the near term, but new highs can't be trusted, said Marc Faber of the Gloom, Boom & Doom Report.

Topics: US Economy

Notorious bear "Dr. Doom" Roubini, who got a big name back in 2007 and 2008 calling for an economic collapse is now bullish. He got on CNBC yesterday's and talked negative about the economy, but proclaimed that the market will remain bullish for the next few years.

EVERYONE talking on CNBC is bullish on the stock market. CNBC gets "bears" to be bullish and support the market, which in turns helps out the brokerage firms that advertise on their channel and make money when people trade stocks and open up new accounts to join the bull market with them.

He is also bearish on gold, where he is completely wrong - but it is a view that matches the consensus of Wall Street and almost all CNBC guests.

I'm not bearish on the market, but I take what I hear on the CNBC echo chamber with a grain of salt too.

Topics: Stock Trading Strategies

I just did this podcast with Dave Skarica of addictedtoprofits.net.

In this podcast Dave and I talked about bear cracks in the stock market and the Ben Bernanke indicator.

You can also download the mp3 audio file for this interview on your computer by clicking here WITH A RIGHT BUTTON CLICK and selecting SAVE FILE AS from the drop down menu.

If you have an itunes, ipod, or rss reader you can subscribe to the podcast by clicking here.

Topics: Open Portfolio

I had a 11k deposit clear today in my open portfolio. I was lucky to be able to get some money in hand earned from some of my other businesses that I partly own to make this deposit, because I believe June is going to be a great month to buy stocks. I post on this site my real trades - what I am really doing - as opposed to just yelling out stock picks. I want to talk about what I am really doing and thinking.

On May 22 I did a little selling and hedging in my account, because I thought a correction was coming.... Corrections eventually bring buying opportunities so that is what I am preparing for. More on this later.

This is what I posted May 22:

The stock market has been going straight up now for days after going up for months. At some point it is going to have a correction and it could happen at any moment. Today the DOW went up 100 points and is now almost even - it looks like a potential reversal day. This morning the Investors Intelligence survey showed that 55% of the people are bullish on the stock market - a level not seen in years.

I don't think a crash is coming or a bear market, but a correction can begin at any moment in the US stock market.

When you hold positions and the market rallies week after week it becomes time to take some money off the table and/or put on a hedge. I'm doing that today. I just sold three of my positions and went long the ultra-short SDS ETF, which is designed to trade against the S&P 500 and go up when it goes down, as a hedge on my other positions.

This way if the market does correct I won't lose much and will be in a position to keep most of my profits and then get rid of this hedge and happily buy.

By buying SDS I am actually on about 20% margin in my account, however it is a short position(ultra short so about 214k) against my long positions(excluding SDS 273k) so I'm really about 20% long in my account.

I think the S&P 500 is likely to fall down to its 50-day moving average, around the 1600 area. That would be about a 1,000 point drop in the DOW and likely take 4-8 weeks to play out.

I'm not sure what markets outside of the US will do as most of Europe has not gone up as much as the US has the past few weeks. They look like they could pullback about as half as much as the US stock market. Gold and silver probably just float around and build a base like it did last year from June-August. US Nasdaq tech stocks actually look most vulnerable to me...

Trades
Sold ISNPY 500 @ 11.12
Sold NILSY 270 @ 15.24
Sold PT 2K @ 4.54
Bought 3K SDS @ 38.15

For the most recent spread sheet file with portfolio positions click here.

For the most recent spread sheet file listing all portfolio trades click here.

Topics: Stock Market Barometer

I just read an article by David Skarica that outlines the bear case for the stock market. A lot of interesting things to think about in it. To read it
click here.

Topics: American Society and Culture

I just did this podcast with Charles Hugh Smith of www.oftwowinds.com.

In this podcast I talked with author Charles Hugh Smith about the soaring coasts of college and university education and how centralization has contributed to creating the high costs.

A college degree from the school I went to now costs five times as much as it did when I graduated back around 1997.

Charles is working on a book about the concept of the "newly free university" as an eventual answer to inefficient education. Check out this post he did on it.

You can also download the mp3 audio file for this interview on your computer by clicking here WITH A RIGHT BUTTON CLICK and selecting SAVE FILE AS from the drop down menu.

If you have an itunes, ipod, or rss reader you can subscribe to the podcast by clicking here.