A Rebel Yell – The Stock Market, Government, And Other Thoughts
It has been said numerous times that RebelTraders is only a bear site, in that only bearish news is presented. Is that being objective, or is it merely an echo of reality?
Perhaps if you knew a bit more about me you might adopt a slightly different view of what is presented on my site and why it is I am so adamant about certain viewpoints. You may have a perception that I am a greedy, selfish, or even a stubborn individual who cares only about himself.
While I am bearish on the economy and the markets I am nothing of the above. Outside of the markets and this website I am told I am a very generous person. I give to others without asking anything in return. I volunteer a substantial amount of my time to help others through our fire department, being the coordinator for a local Community Emergency Response Team (CERT), and a member of our towns Office of Emergency Management team. Mrs. Rebel and I live in a very small community and we are both heavily involved in organizations that are all centered on helping those in need. And we never ask anything in return. What we do get in return is the satisfaction of knowing we made a difference in someone’s life in a time of trouble. But this is just how my Wife and I are, it is what we enjoy doing.
The birth of RebelTraders on May 16, 2007 was out of that very same mindset of helping others.  I am told by my family that I sometimes care too much and that I give of myself more than I should. Even this very website is free and provided to all without asking anything in return. When the site readership grew I had to move to my own dedicated server because it outgrew the free blogger service ‘blogger.com’ which is where RebelTraders was born. The costs to maintain and operate this site come out of my own pocket each and every day. While there is some advertising on the site it does not make any profit for me. It just goes towards the upkeep of the site and even then I still must put out my own money. Some have suggested I put up a ‘tip jar’ on the site, but I have even resisted doing that for it would make me feel I’m taking money for something I enjoy doing which is helping others.
Some say I have a chip on my shoulders, that I hold extreme anger against those who speak bullish on the markets. The only chip that I have on my shoulder is angst against those who attempt to take money from others for their own financial benefit. Be it through deceptive marketing, misguided information, or outright lies. I know it is a chip that will always be there for a world that has an open and honest Government and honest business practices will never become a reality in my lifetime. But that does not mean I just lay back and just take it. As long as I have my voice and fingers to type with I will speak my mind and say what I see to be the truth, no matter how many people don’t care for it. I’m not here to please everyone all the time. For if that was my only goal then RebelTraders would have never been born.
I have attended many trading seminars over my lifetime. Some were here in my own neck of the woods around Philadelphia and New York, and occasionally by travel. My reason for attending these seminars once in a while is to meet people. I have met some of the best technical analysts and traders in those travels. One aspect of your web host here is that I am a ‘people’ person. I enjoy listening to all view points and believe it or not I am rarely one to tell others they are completely wrong. Instead I will just present an alternative view. I can’t force anyone, nor should I even expect anyone to adopt my alternate view if I have one. It is always up to the individual to decide for themselves what view point is right for them, whether it be right or wrong. I can only offer a viewpoint that may provide some balance to their views.
In early 2007 I became extremely frustrated with the quality and/or skewed information that was being presented to investors and traders. The reason I was frustrated was that through my own observations, research, and analysis of the technical aspects of the markets led me to believe that a significant bear market was about to befall upon the world. This is why RebelTraders was born.
During those early days trades were discussed, macro and micro economic conditions were presented, and counter analysis was offered in the face of ever increasing bullish talk from CNBC and the Government. In the eyes of some readers, I was being unpatriotic to go against my own Government by disagreeing and even refuting their claims that all was well with the economy. As time went on the economy continued to show all of the warning signs of significant and long lasting change was coming. And in spite of all the complaints from readers who kept trying to persuade me to think otherwise I kept my view.
As I stated earlier I am keen to other viewpoints, but they must be based on rational thought and data. As an engineer I have spent a good part of my life always debugging and designing systems that were based on facts. An engineer bases his or her work on empirical evidence and that is how I always have approached the markets my entire trading career.
The stock markets are full of individuals and corporations who only have one interest in mind, and it is theirs. Even large investment firms who specialize in managing other people’s money may say they have your best interest at heart but the naked truth is that for the majority of them they don’t care about you. Every company always operates under a ‘what is in it for me’ business model. The primary reason investment banks and other investment specialists are in business is to make money, not to make ‘you’ money. Yes, there are some that base their profits on the growth of your portfolio but that is not where the real money is being made. The real money comes from simply having your account in their files to show a bigger account base which in turn allows them to do more and grow bigger. They can’t grow and make more money if the deposit base is thin.
Your $250,000 portfolio with Acme Investment Advisers Incorporated (made up name) is worth more to them as an account, irrespective of how much money you make or lose under their guidance. Case in point, how many people do you know received a phone call from their investment advisor in late 2007 or even 2008 and were told to sell everything? How many were told that the markets are facing big problems ahead and it might be safer to get out? See what I mean. The only thing that matters to an investment firm is the fact that you have money in their ‘system’ and so why would they want to tell their clients to sell and get out when your account is part of their life blood.
When the financial crisis began to grow even larger some investment firms went as far as to tell their clients to ‘ride it out’, or that these problems were common and you should not worry. Even in my own family we were exposed to that very tactic. In a post I published back on December 2, 2007 I discussed how an investment service attempted to tell  its clients that they should essentially turn off the television and go take a walk. It was not about how much money any client stood to lose, it was about the company losing the account, that’s all that mattered. Your personal gains or losses means squat to them.
The following is the actual letter a family member received in December 2007, again this was in 2007 and was already one month after I called a new bear market (more commentary follows the embed article below).
Rather shocking isn’t it. Telling clients to, in not so many words, just go stick your head in the dirt and ignore everything.
We all know the stock market is speculative and involves risk. But when it comes to the stock market it is also the breeding ground for the largest corruption, lies, scams, false statements, and outright deception. The larger the company is so too is the potential for even larger scandals, lies, and even illegal activity all in the name of making even more money. Just look at the major banks that have become so large that they can’t be killed. Instead their pilferage of the innocent grows to the pilferage of everyone in the form of the largest tax payer bailouts in history.
An individual investor is seldom told the truth of what is going on. They receive nice and glossy year end reports from companies they are invested with. They show beautiful photographs of people hard at work, speak of corporate ethics being at the top of their priority list, and speak about how great the future will be. Remember Enron? How about WorldCom? Take the many other thousands of companies that throughout history have been reduced to rubble, or left impotent by their own lies and fraudulent activity. The only entity that is worse than the stock market with respect to lies and deceptive statements is the Government itself.
So just how does a person who wants to invest money in the markets find any real information. Many turn to the financial news shows and get guidance from the likes of Jim Cramer, the team at the Fast Money desk, or listen to any number of large financial institution spokespersons speak about how this stock or that stock is a great investment. The financial media is just as guilty of always presenting a bullish sentiment regardless of the facts in front of them. Unfortunately no one in the big financial media outlets ever gets held to account for their actions. I read an article just today about Jim Cramer and how many death threats he has had against him. Gee, could it be that his ever bullish mantra has cost people to lose money and they are mad at him? He is on TV so he must be smart and must know what he is doing, right? Unfortunately so many innocent people watch him and think that very thing. If Cramer says it then it must be true is what these innocent people think. So sad a world it is that a screaming manic on television who has even admitted in the past to breaking Securities and Exchange Commission (SEC) rules is being taken seriously.
My mission here at RebelTraders is to do my best at presenting a view of the markets based on technical analysis, macro and micro economic events, and real world observations. My statements sometimes rub people the wrong way, they may disagree completely. Some may even think I have no capability at all for seeing anything good when it comes to the markets and economy. On the contrary, I am not that at all. I so desperately want to report good things going on, I desire the day I can say to everyone that I see green pastures ahead, and to report that the economic problems are all behind us. But wanting to report good things is different than reporting the truth. One thing I will never be is persuaded to do is report what I know to be incorrect. The word ‘Rebel’ may mean to go against a popular view but it does not indicate that I am a permabear, or even stuck in my ways. In the case of RebelTraders it simply means speaking what I see through my own research, which may often go against the mainstream media. In this regard I am a rebel.
My view of where we stand now remains the same. We are in the midst of a secular bear market (not cyclical), the rally from March will fade, and a return to a downward path in the markets will resume yet again. I await the signs of organic growth to return which to date has not. It remains my view that any market advance should be an opportunity to sell (or go short if you are an astute trader).
I foresee home prices declining much further still, credit contraction in the consumer sector will continue well into the year ahead, if not much longer. Foreclosure activity will continue to increase, personal and corporate bankruptcies will rise much faster in the coming year, and the growth witnessed to date in the form of corporate earnings will deteriorate once again after the artificially created growth fades away.
There is still much danger facing our markets and the economy as a whole. Agree or disagree that is my view and I will continue to report what I see, not what I’m told to say.
OK, to be fair to Mr Chuck, i will list what i agree with him:
1. Your views about US politics and the economy are sound and fundamentally right. I have no bones to pick.
2. Your generosity is unquestionable here.
3. Your dedication to provide unbiased opinions are highly commendable.
BUT…
[It remains my view that any market advance should be an opportunity to sell (or go short if you are an astute trader).]—-
This statement is gonna do many of your audience extreme damage as Jim Crammer has in the event the market does not go down as you have predicted.
No one knows where the market is heading months/years ahead. Successful trading is all about placing on high probability trades using demand/supply and trendlines to guide us. If the odds are in our favour, we take the trade but stop loss is always a predetermined.
I am not here to criticise, but to remind all we should practice responsible sharing of opinions especially there are so many traders among your audience who are firm believer of what you say, just like there are many who follow Jim Crammer’s advice and lost big time.
I have no qualms you are not Jim Crammer, neither do you have the “evil” intention as him. I just want to say we should not let our altruism get too far ahead of the trading game.
Have we not heard of the saying,
“the market can remain irrational longer than you can remain solvent…?”
If every firm believer were to start shorting as you advocate, and the market were to do a “2003-2007″ rally, are you not gonna shoot yourself on the foot?
The market by right, with no government intervention, should be seeing much lower level by now. The same could be said for the crash in 2002. But we should not underestimate what the global collusion of central bankers are capable of doing.
Trading is about mass psychology. If everyone believes the market is going up, it is dangerous to stand in front of the charging crowd. I am not saying the mood is extremely bulish now. What i am trying to say is we must adopt a level headed approach to trading.
Fundamentals are very different from technicals. Fundamentally, Goldman, UBS, Citi Bank and many others should be bankrupt by now. In fact, they are still bankrupt to those we understand proper business valuation but in the eye of the public, they do not understand all these details.
Mr Chuck, you are a good man. But you have to take care of your followers and not hurt them.
You have a fantastic site and i wish you well. All the best. God Bless you!
Chuck,
Your analysis is greatly appreciated. It is a bear market and we are in dangerously volatile market. Some analysts are predicting bankruptcy for the United States, due to our high debt, while others see a recovery just around the corner.
I want to remind donchin that any site viewed offers their belief about the market and it is up to each individual to make their own choices.
Chuck
I warned you of this many months ago. You are destroying people a la a reverse Jim Cramer!
You’ve been calling short positions this whole run since March. I asked you in April at what point would you reverse your short call? 10,000 Dow? 12,000 Dow?
You didn’t anseer because of your ego! Now, you’ve led your tribe down sh*t creek. I wasked you nicely to consider this possibility. Instead, you “knew better”/
So, now, you need to reaphat you sowed. YOu made crap calls. Now eat it!
And btw, yeah, you probably are a “nice guy” , but a poor trader and market timer! 8 months of charts since March and no matter what has happedn, you keep saying the same thing: Sell and/or short! Amazing!
Peace.
An incredibility open and straight forward post Chuck. You must have big dangling ones to have the guts to tell it like it is. Bravo Bravo !
Chuck
I for one appreciate all the good work you do on this site. Do not let the naysayers get under your skin as I read in an article recently “Aint nothing fuels a rally like free money”. I for one believe the current levels in the markets are at a fantasy levels acting as a storehouse of sorts for the amount of dollars created by the feds insane liquidity actions over the last year question is when it will it crash and how far will it go.
All of the tipping points are in place the fall would have came a bit earlier but has been delayed by the extremely strategic announcement of the Buffet purchase of BNSF.
The consumer as it has been known for the last ten years is gone, the banks wont lend,unemployment is the worse since the great depression, more homes are being foreclosed upon than are being sold, the government keeps running the printing presses and coming up with ingenious scams to spend money we dont have, they will not correct the falling dollar, which has fallen as far as it can without the governments of exporting nations acting to de value their own currencies to maintain their export trade, plus you have all the “investment firms” shipping dollars into foreign equity markets as fast as the boat will go.
I ask anyone who claims to know the markets to tell me any reason they should not plummet?? Whats the great news guys? What if anything is different now than it was 6 months ago?
Good job Chuck, you have been a part of the morning routine since I found your site
Carry on
)
The market will do what it is supposed to do. It does not plunge just because there are bad news. The past few months are a good example of what happened. Despite an onslought of bad news, the market went up instead? How do you explain that? Fundamental is always lagging behind what the market is doing. No one can really explain why the market is going up despite all the bad news. That’s why as a trader, you do not want to know the news, you just want to trade what the chart tells you. If the chart tells you to go long, you just go long. Simple. You don”t question the market.
If you are a real trader, you should know that you should not be using an analyst’s perspective to trade cos the market does not function that way.
Dear Chuck:
Your tech analysis is first rate and your broad economic overview correct. Many of your visitors do not have enough experience in the markets and therefore do not realize that the speculative frenzy occurring in todays markets can vanish overnight. The probability of that occurring is increasing each passing day. No one can predict the future but when valutions get extreme either way up or down corrections will occur. There is only one reason why the markets keep going up – your tax dollars that were freely lent out to the Banks (Hedge funds) are feuling this rally but that is soon coming to an end. There is a lot of distribution going on as the brokerage house analyst and news media tell you how cheap stocks are and urge you to buy, they are selling into strength!
the u. s. govt is playing games in the markets???
i for one like to hear your opinions
i think in these days people are numb there punch drunk from the ups &downs of the market
i think you should be proud at what you are doing not many people are giving of themselves and not just taking.
Donchin, Can you share some of the indicators you find reliable in your tradings or blogs,sites that you visit often so we would know better what you are talking about? Thank you.
ab, take a look at Sam Seiden’s articles. Google his name. You will learn how to be a real trader. Be patient. You cannot be good overnite. Trading is an art and some science. you can always check with me : XXX.XXXX@XXXXX.XXX
I do not provide any service if thats what you are looking for. I can advice you however.
RT Note: Donchin, I did look up Mr. Seiden. He sells trading seminars and his published works are limited and basic. I won’t allow the publishing of an email that offers advice from within this site unless I know it is a reputable individual or other source. I don’t know who you are, except that you are in Singapore. Soliciting in comments is not allowed. No matter what your intentions are.
RT, I am not asking anyone to buy anything from me or Sam. I do not know him either. I just find that his freely circulated articles every week made so much more sense than so many so called “professional traders”. I can readily identified with what he is doing. Reason i refer other traders to him is because he is a Real Trader who “walks the talk” in my humble opinion. There are many out there, much less well known but are just as good. How can traders get better just by listening to one side of the story? You are a rebel trader, while I am the crusader of right trading techniques….You are not able to stand up to your conviction by closing the doors on others to differing opinions. Stop preaching a losing game because if that’s how you have been trading the market for the last 9 months by shorting into every rally and not covering your positions, you would not have been here. The reason you are still here preaching the “shorting game” and yet alive, shows that you do not practise what you preach. You are a FAKE REBEL TRADERS! At best, you are a STUPID TRADER!
RT Note: Don Chin, Is is obvious that you have no clue how I trade or even how long I hold a position. As my regular readers know I trade 3 portfolios, each with a different time frame. I only close doors on individuals who offer no constructive views to make a point valid. Unfortunately you simply say we are wrong and offer nothing of your own T/A, just a reference to someone who sells training courses. Best of luck to you.
Dearest Chuck, Thank you so much for your unselfish & humanitarian acts, especially for this site. I am happy for you that you are able to give so much of yourself, and for me that I can benefit from your generosity. It has always been obvious to me that you and your wife are very caring people, giving a great deal of yourselves to your fellow travelers. My thoughts are these: Do you ever get tired of defending yourself and your positions? I would suggest that you and your positions are universally understood already, and that you would feel much less anxiety and much more empowered, if you would only accept and own who you are, what you stand for, and what you do, rather than spend countless wasted hours rehashing and defending against an enemy that does not need to exist. Just ignore those who criticise (sp?)you – screw ‘em! Don’t let them get in your way. You are on the right path, not they. Take the sword, Link – you have earned it!
To all of the supposed “traders”.
A, B, C. of trading.
When the 5 day EMA and the 10 day EMA are above the 20 day EMA.
GO LONG.
Weekly is giving ABC kindergarten, basic, 101, trading signals and has been since 7/10/09. Bullish trend (measured in multiple weeks ahead).
Monthly: 5 day EMA is about to cross the 10 day EMA = Bullish trend (Measured in multiple months).
Monthly: 5-10 day EMA is BELOW the 20 day EMA. = longer term (measured in years to come) = BEARISH
This has to be the worst “teaching” I have ever seen.
AMATEURS!
Anonymous.
You do know that EMA are periods, if you are viewing a daily chart then your 5 ema is 5 days. If you are looking at a weekly chart then a 5 EMA is 5 weeks, and on a monthly chart a 5 EMA is 5 months.
You refereed to 5 day EMA on all time scales. Periods of moving averages is taught in T/A 101..
Chuck,
Of course this is your platform to have your say. Sometimes we have to accept that reality bites and people see what they want to see.