Thursday, May 6, 2010

'The Matrix' Sell-off

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Those not familiar with the science-fiction film starring Keanu Reeves. Earth is dominated by sentient machines. Humans are grown in pods and are connected by cybernetic implants to an artificial reality called the Matrix, which keeps their minds under control while the machines use the bioelectricity and thermal energy of their bodies as an energy source. The story resolves where a compromise and understanding that machine cannot completely rule without humans.
One cannot help but draw a correlation of how what was once trading done by men on the corner of Wall Street has evolved into  highly technological nanosecond trading, where 10's of thousands of trades are computed in a blink of an eye.

What happens when machines take over, with Mark Fisher, MBF Clearing Corp.

Itz made numerous posts on Twitter today and just prior to the meltdown posted --'Capitulation!'--, But was it really. Selling on Friday will follow through with out a doubt as Asia chimes in. The possible pivot and catalysts maybe the Jobs Report @ 8:30am. Today was a 'Preview' of how low markets can trade off of overbought conditions. Itz entered Walter Energy @ $75 ticker WLT, as highlighted this week to start accumulating. Ford was put on the Itz 'On the Radar" list entered @ $11. Again these are great long term buys. SCO spiked to a high of $14.23, although suggest stop of $12.30 was hit yesterday, it did trade as projected on the charts.
Itz Stock Chartz has for a few weeks now been repeatedly telling readers to protect against a correction, with either options, ProShares ETFs like SCO, DUG or SDS or just taking some money off the table. Things move fast, volatility as seen in the $VIX, $VXN & $OVX or the divergence in rising gold versus copper & silver warned that something was going to give ...soon. Was it a computer glitch, human error or whatever excuse the problem comes down to the FEAR of a Eurpoean Contagion that could spread into a global problem. That the credit markets and the cost of capital is going up (dejavu 2009). The 1000 point move in the Dow Jones if anything reinstated the fear and lack of confidence into the retail investor just as they were getting hopeful about stocks. That said we could see more selling either way on the Jobs Report, good or bad. Stay hedged, have your shopping list ready and tighten those seat belts!

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