This one is new to me.

Remember the flash crash talk of a few weeks back? A great line seen today:

“The so-called flash crash was no anomaly, no fat finger mistake; it was a warning that after more than a year, the bulls had lost control of the market and the bears were taking over.”

True. And so far the price data supports the notion.

Source: Comment from a poster at Ritholtz.com.

Feedback in:

“Hi Michael, I recently came across your writings about turtle trading and was quite impressed by it. I have already called for the book and am quite excited about it. I would like to share with you an indicator that I’ve developed which gives timings for super cycles in the US 2 Yr Treasury, SP 500 and Gold. I would appreciate if you could have a look at it. In the last 12 years we have only 6 times that the indicator has come to the watermark 800 level, from where we anticipate a trend. The indicator signal time is markets as red boxes and the larger boxes are for the complete moves. The time line on the indicator chart are replicated on the price chart, the results are phenomenal. We’ve been able to catch the most important trends in the US 2 Yr Treasury market and ride it. Not mentioning the predictive value of this indicator on the treasury prices, interest rates, the economy and its effects on the stock markets. We are once again at a critical level in terms of the US 2 Yr Treasury. Your reading this email and your specific views would be highly appreciated.”

I have no expertise in ‘predictive’ technical indicators.

Buy or sell gold if it is trending and do so only with a loss-limiting stop in place. Don’t buy gold because Glen Beck or George Soros promotes it (see NY Times). Excerpt:

Tongue only half in cheek, Glenn Beck advised his audience to consider “Gold, God and Guns,” while laying out three possible scenarios for the economy: recession, depression or collapse. One major advertiser on Mr. Beck’s show is Goldline, a huge California marketer of gold coins and bars that is also a sponsor of programs hosted by other prominent conservative commentators like Laura Ingraham and Mike Huckabee. Mr. Beck has said he “was a client of Goldline long before they were a client of mine,” adding: “I personally don’t buy gold as an investment. I buy it for protection.” Of course, the right hardly has a monopoly on gold. Mr. Soros, a prominent donor to liberal causes and candidates, holds more than $600 million in bullion and gold mining shares.

Call Goldline and ask about how their ‘gold exit strategy’ works. I have done it. Their response is pure comedy.

From Richard Russell:

A young man who worked for the great J.P. Morgan approached Mr. Morgan. Said the young man, “Mr. Morgan, may I have your advice. I own a portfolio of stocks and it’s not doing well, I can’t think, I can’t eat, I can’t sleep. I worry day and night. What do you think I should do?” Morgan with his fierce demeanor eyed the young man and growled, “SELL TO THE SLEEPING POINT.” That may be the best advice ever given regarding investing. The truth — I’ve often used it.

I posted this on Facebook today:

“I find that I learn more about the markets driving through the California desert staring at mountains …than watching CNBC.”

Just kinda hit me driving today.

…A chart for the day courtesy of Richard Russell:

From the ‘calculated risk’ blog:

“You want the truth? You can’t handle the truth. Son, we live in a country with an investment gap. And that gap needs to be filled by men with money. Who’s gonna do it? You? You, Middle Class Consumer? Goldman Sachs has a greater responsibility than you can possibly fathom. You weep for Lehman and you curse derivatives. You have that luxury. You have the luxury of not knowing what we know: that Lehman’s death, while tragic, probably saved the financial system. And that Goldman’s existence, while grotesque and incomprehensible to you, saves pension funds. You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want us to fill that investment gap. You need us to fill that gap. “We use words like credit default swaps, collateralized debt obligation, and securitization? We use these words as the backbone of a life spent investing in something. You use ‘em as a punchline. We have neither the time nor the inclination to explain ourselves to a commoner who rises and sleeps under the blanket of the very credit we provide, and then questions the manner in which we provide it! We’d rather you just said thank you and paid your taxes on time. Otherwise, we suggest you get an account and start trading. Either way, we don’t give a damn what you think you’re entitled to!”

A question posted recently here on my blog:

“What value do individual traders provide society with? I can understand that fund managers earn fees by helping clients earn profits. But what about individual traders who trade their own account? I think Anthony Robbins said that what you earn is directly related to the value you provide, so to earn more you should provide more value. What value do traders provide? A couple of things I can only think of: capital and liquidity. But how do returns relate to the value a trader provide?”

If you take traders and speculators out of the market what are you left with? Of course that ignores the point that everyone (including this poster) is a trader to begin with — whether they understand that point or not.