INSANE PSICOLOGY FOR A BEAR MARKET

The US government will announce tomorrow 22/03/2009 the plan to try to get bad assets off the books of the banks. The Wall Street Journal and the New York Times reported it on Friday.

Actually the recession is deepening and politicians are aware of it. So they have established a schedule to avoid the stock market to go down more. Bernake knows that the only way to fight against deflation is to show to the people they are going to create inflation. We know that politicians cannot do nonsense, so they cannot give money, although they are doing that

As things are going worse, that means that normal people are not believing they can create inflation in the short term, so long term investing decision are expecting how things develop.

Politicians are going to show us how insane they are, because we know that creating a superinflation time is worst than a small period of deflaction. Past week the have used a lot of power an tomorrow you will see another attempt but I think we have had enough. The figures are so big none of us can realize what that mean; we only feel Main Street and follow Wall Street through the news. The result is that everybody is confused, nobody knows if the market will go up or down, (but the dollar will go up, I will tell you about this a few days later). If you think you are confused look to this and you will be more confused http://www.financialsense.com/Market/daily/tuesday.htm

What I know is that my sister has bought bank stocks and she caught the bounce after some days of suffering. So she is delighted and I am telling her "sell", every time I see her. She has put a buying order expecting for an additional 20% up. My friends have bought stocks and I am the only one that is loosing in this moment, (about 10% in SDS as I opened the shorting position I wrote).

Confidence is really high, I am a bit afraid of going against the crowd but they are very sure and when everybody is sure of something market will tend to show them they are not right. I have not executed my stops cause I was on vacation and I loosened them to avoid an unexpected closing.

Tomorrow is Monday, on Friday market has gone down and usually it should go up if we were bullish. Tomorrow it will go down. Remember buy with the rumours and sell before the news. I am still shorting and the only effect I expect from the uptick rule is a decrease in the volatility and that will happen in April the 9th, but we are still bearish. Look to the slow-stock, the AD line, the 150 average, the politicians fear and the low fear of the people.

The signal that will trigger the downward leg will be inflexion of the put/call ratio. If every things develops as the market shows now we will see the buying signal in 2 months.

Open wide your eyes, not always you know what I happening in the economy.

http://www.youtube.com/watch?v=_NMu1mFao3w&eurl=http%3A%2F%2Fwww%2Erankia%2Ecom%2Fblog%2Fdalamar%2F2009%2F03%2F18%2Dde%2Dseptiembre%2Dde%2D2008%2Dla%2Deconomia%2Ehtml&feature=player_embedded