Green Mail

We see dramatic discounts to net asset values (NAV) in so many of the closed end funds....equity, debt and commodities.....this tells us the public is out of the market and selling too. Who is left holding the bag are traders...many leaving the space because of new rules and regulation...diminished volatility and collapsing volume. When the majority of this years equity moves are an expansion of p/e ratios.....one has to ask...what can maintain that trend, accelerate it ...or worse...reverse it? Like Apple's peak...then decline...just when the news was most positive....there was an exhaustion of buyers.

China is now the largest user of gold...and the biggest buyer of crude oil...yes.. gold is going up again and oil remains much higher than anyone forecast for 2013...and everyone thinks both are going lower from here....short and long term.

The greatest trader/ tape reader Jesse Livermore said, "All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance and hope. That is why the numerical formations and patterns recur on a constant basis."

Pattern overlays suggest a period ahead like 2004....bonds are over sold and due for a bounce.....stocks over bought and due for a correction....and worse the folks hoping for an GDP acceleration in the second half of the year we think will be disappointed....if so...then p/e ratios can not advance.

Jesse Livermore further said, "The game of speculation is the most uniformly fascination game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or get-rich-quick adventurer. They will die poor."

We are humoured by the big hedge funds of today horse trading billion dollar short term positions of stocks and gathering all the medias attention....that is all they want anyhow. Years ago this was called Green Mail. Careful trading along side these folks....they are only interested in their positions not yours.

Danny Boy seen here with all the proper tools for the dog days of summer.