SLW

I entered into a small SLW position on Wednesday as part of my move to build a commodities position. Obama + massive spending projects + bailouts = (long term) buy commodities and short the dollar.

Here's a chart of SLW:



A decent breakout might be in the works as we're starting to bump up against a trend-line from way back in March. My only concern is that this recent run-up has happened during a holiday week, and thus the volume indicators are not following through in support of a rally. You can also see that we've established a double bottom already, and so there should be good support at current price, minus a dollar. Why SLW? No reason really, but it seems like gold might have started to take off without me, so for a larger % gain, I should go with the equity that still has yet to breakout. ABX, GG, AUY, they are all on my watch lists for gold.

A look at the SPY shows that we're about to make a decisive move up or down, once again:



As noted in previous posts, a break above the 84-85 should easily get us to that 61.8% retracement level. We will likely see a test of that price on Monday, and that should dictate the rest of the week, as we will have the big boys back in play with regular volume. Note that we are getting quite a-ways above the 5 DMA, so we may start to see some consolidation early next week between the 90.63 level and its 5 DMA before making a move. We've still got room on stochs before we get into overbought territory, so I'm still waiting to pounce on the next short opportunity.

If we're going higher though, there's a lot of stocks out there that have a lot of room to run- a lot of the techs: GOOG, AAPL, BIDU. Also, the beaten down solars: LDK and STP of note, have more room to run, unlike others like JASO and ENER.

Anyways, I tried to force my last short position and totally payed for it. So,
patience, patience, patience....

Battleground

I've had a horrible past two days due to my short positions that I entered last Friday. A good lesson learned I suppose, that is, don't enter trades when you haven't had time to do your research. A quick glance at the chart I put up this weekend would have given me enough hesitation to put off buying those puts Friday afternoon. As I expected, a test of the 38.2% rt level was in play, and we hit that 84-85 resistance level first thing on Monday. It ended up being a battleground of bears vs bulls as we ended up fighting that line up until the last hour and half on Monday. Since Monday closed right at 85, I was hoping for the buying to subside and have a closing candle below for Tuesday. As you'll see below, we've got a closing candle above the 38.2 rt level for Tuesday:



It seems like we might be stuck trending between 84-85 and 90 for now, but I've taken the liberty to draw out 4 possible scenarios (of the dozens there are) that I can foresee happening. Obviously they won't depict the minute-by-minute whipsaw action we've seen, nor even the daily- but I think we can use these to slowly pick off one by one which ones have been invalidated over the next week or so.

As I mentioned in my previous post, I'm continuing to monitor our markets post-election with that of Taiwan's election/inauguration. In my last post, I thought that the post-election market reaction in Taiwan was likely out of play for now, but now with the 3 up days the bulls have put up, the 100% retracement to the election high that was seen in Taiwan, may also be in play for U.S. That would look something like case 3 in the chart above.

Case 1 is the other Taiwan-related movement that I will be watching for. Case 1 is what happened in Taiwan markets after the inauguration of their new president. That is, they sold off for the first 13-14 days after the inauguration, followed by a 2 day rally, followed by fresh lows, breaking the previous support.

Case 2 and 4 are just other things to be watchful for. The chart certainly favors the long side as there's basically 3 up predictions, and 1 down prediction. We should be able to eliminate Case 1 fairly soon, as any pro-longed rally or lingering in this area will invalidate my case for the U.S. markets following Taiwan's markets, post-inauguration.

I will look for an opportunity to exit my puts, as I feel a great uncertainty and indecision in the markets right now. I'd rather be in cash than try and ride this wave up and hope that it does not become extended.

So, a caution on my usual, "3 things to do in this bear market," may be to hold off on #2, which is to go short. The risk/reward here does not justify shorting [more] at these levels. If anything, ease into your positions and add to the position when the move is confirmed. Here's an interesting chart that someone else posted online:



Not much to say other than all those bear markets in the past hit a temporary bottom after a 50% decline, two of which pictured here, ended up being the end of the bear market. Yes, this time might be different, but just something to keep in the back of our minds.

Also, something I thought of for this week... perhaps the markets are being inflated for Black Friday, so that consumers will feel giddy and have less on their minds than their portfolio that is in the drain. Then, when the first numbers come out about how the consumers have disappointed, perhaps we follow through [Black Friday] with a Black Monday?

This will likely be my last post until the weekend, but may update if something reveals itself to me. Happy Thanksgiving everyone, be thankful that we are still in the game. Everyone can do well in a bull market, but the real test is how you do in a bear market. The fact that we have preserved capital is enough for me to be thankful. Looking forward to eating some duck. :)

Weekend Update

Here's what I'm looking at for this week:



I put in retracement levels from the highs of November 4th, down to the lows on Friday. There is strong overhead resistance in the 84-85 area (click on the chart for my comments). I think if there is any legitimacy to Friday's last half hour rally (just in time for OpEx), then 84-85 has to be overtaken on sizable volume. Above that, at 90 we run into more resistance and any rally past that would get me in on the long side for a multi-week rally. But before we get too far of ourselves, let's stick to that 84-85 range.

As we have a shortened week this week, and with Thanksgiving usually being an up-week on light volume, I think a test of the 84-85 resistance level is definitely in play for this coming week. But, the fact that we've seen light volume in the past will make any rally attempt at that resistance, suspect. If we test it this week and aren't able to take it with force, then we should be in for another round of selling into the 60s on the SPY. Remember, there is basically no support level underneath the 01-02 bottoms of ~77; there is a long way to fall if we can't hold this area.

I bought puts (SPY & IWM) on the rally late Friday, and will look to add more puts if we hit that 84-85 range.

I'm continuing to watch and compare the "aftermath" of what happened in Taiwan's stock market after Ma Ying-Jeou was elected president, and that of Obama's election. In Taiwan, on the 13th trading day after the elections, their general index (TWII / TAIEX / Taiwan Weighted Index) rallied off previous support and ended up fully retracing back to where the markets were before the post-election drop. Now, this past Friday was the 13th trading day after the U.S. elections, also with a significant up day. If the U.S. markets are to follow what the Taiwan markets did, the U.S. markets should rally back to 99-100 on the SPY, the high on November 5th. But, that is very unlikely as of this point. Something that may turn out to be a better fit is taking the days prior and after the Taiwan inauguration of Ma Ying-Jeou, and that of U.S.'s elections.

Although they are for different events, looking at the charts around these two events have a much higher correlation between the two. Using the Taiwan inauguration, that would give the U.S. markets a rally up to the 38.2% retracement level (see above) [the TAIEX actually pierced through it intra-day, but fell the next day], before falling back down. This would fall in line with what would be a reasonable situation this week. But, for it to be valid, the rally up to the 38.2% retracement would have to occur soon, as in Monday or Tuesday; Wednesday would put the rally much too late when compared with the rally in Taiwan.

Anyways, probably not that much to look into there. I definitely wouldn't base any plays off of purely that. Obviously I may be creating things that aren't really there, but I just think there's a lot of similarities between Taiwan and the U.S. right now in terms of the presidential electoins/politics (and maybe markets). If something does pan out, I'll put up a chart comparing the two, but for now- just something I'll watch for, for fun.

Geithner Rally?

You know what to do (Who is this Geithner guy anyways) :

1) Exit longs and:

a) stay in cash
b) go short
c) fetal position sucking thumb

There's one trend right now, and that's down. All rallies should be treated as nothing more than a blip on the way down until proven otherwise.

Witnessing History

At the same time that I am sort of "proud" to be witnessing history, it's not quite the same kind of "proud" most people would think of. We've reached new lows on the general indices, not seen since the 97-98 run. Here's a chart showing the relative bear markets and how long it took for them to bottom, courtesy of NYTimes. And keep in mind that the chart presented there is from Oct. 11, and we're down much farther than that now.

You'll see that we've fallen harder and faster than any of the previous bear markets, and there really is not a sure bottom in sight. My prediction to see new lows this year was true, but I believe there are still more lows to come before the year is over. Furthermore, more lows next year after Obama is inaugurated.

Maybe I'm so giddy and "proud" because I wasn't caught on the wrong side in this bear market. And, that got me thinking. Is it bad for me to be happy to see stocks tanking? Sure, I'm profiting from this, but at what cost? I know for certain that a majority of your parents 401ks and IRAs are probably down 50%+ since the start of this year, and that certainly doesn't help out your family. So in a way, I'm glad that I'm doing well, but sad for everyone else. Yet, at the same time, I feel like there's a sense of, "well if you didn't see it coming, you deserve it." And in a way, I really do feel that way.

But, as I type this, I realize that no one deserves to be financially wiped out. No one wants to see blood on the streets. But, the reality is that there will be blood. It surprises me that people still laugh when they hear that we're headed into a recession, or a depression. They don't seem to grasp the gravity at what is at hand. We're about to take the markets another 10-20% lower, and completely wipe out a generation of "buy and hold" investors. I've heard from many people, that those that were wiped out by the Tech Bubble crash of the 2000-2002 bear market, have never returned to the markets because of how scared they are now. And here's the problem, losing a generation of investors results in a market where there is just not enough buyers to step in. Ever heard of the "Lost Decade" for Japan? Well, if not, here's a quick refresher and an editorial on if the U.S. might have it's own "Lost Decade."

The warning signs are all there, if you don't prepare yourselves, well truly I can say you deserve it. People have been laughing in a way when I say I'm thinking about getting a gun- but I'm serious. When people start losing massive amounts of money, no jobs to be obtained, and a trip to the grocery starts becoming as expensive as a PS3, there will be civil unrest. And when you get that, you get problems. No, that does not mean I'm going to become a vigilante maverick, but you never know in an environment like that when you may need that kind of protection.

One last thing on my mind... to my own generation:

We've lived in a time where all we've ever known was a sense of entitlement to everything. We've lived in a generation where, for the most part, we've believed in the government and that they do what's best for us. We've lived in a generation where, there is always safety and comfort in the homes of our parents. We've lived in a generation where we only hear about the pains and sufferings during the depressions of the past- and yet probably still don't truly understand.

The harsh reality is that we are entitled to nothing. We deserve nothing, and yet we feel like we deserve it all. We've heard about the depression and recession, but believe they'll never come because we are happy and content with our iPods and HDTVs. How can they ever disappear, right? We believe in our government and let them do their thing, and yet they do things that are in the best interests of themselves, and the people that put them on a payroll. We believe in democracy just because we can vote, but democracy is currently dead in our country. Democracy is something that comes from active, independent-thinking people who actively pursue the "Democracy" that we on the other hand, fake ourselves into believing we have. Democracy is the people.

In the words of Lincoln,

"Democracy is the government of the people, by the people, for the people."

Like a true conservative, in a depression, I'm going to stick to my guns and religion. I truly hope there will be better days ahead, but the facts that face us do not depict that hope.

A Crazy Week

We saw new lows for this year on Thursday as we tested the previous 83 support, and as we started to breakthrough that, a rush of selling (stops likely) started and created an avalanche on huge volume. But, about 10-15 minutes later, that huge volume started to turn into huge buying, which pretty much snowballed (upwards) with shorts trying to cover (myself included). Here's a two day chart of the SPY showing Thursday and Friday:



I drew up the retracement lines from the intra-day bottom of Thursday to the intra-high, which was the close pretty much. The 5 DMA and 2DMA are also shown in blue, purple, respectively. We're currently under that 38.2% retracement level, but it struggled at that line on Friday, rallying from that, but selling off into the close. The 2 day moving average is right about with the 38.2% retracement, so we may get some support there on Monday. But, the worst case may be to go down to the 61.8% retracement level at around 85.77, which showed good support prior to breaking below it Thursday mid-day.

I'm still looking for a general up-trend through this week into Options Expirations, but I wouldn't be surprised to have another sweep low to scare out some more longs before bringing things back in equilibrium for max pain- which is ridiculously high on the SPY at 97. But, the theory is that prices will gravitate towards that price for OpEx, not necessarily end there. So, with the profit-taking on Friday, the likelihood of a continuation seems higher than heading back down, as of this point. The downside in my opinion is to 85, while the upside could reasonably be into the low to mid 90s. That said, this past Thursday may have very well been the last rally attempt before the big fall....



The above chart has the daily over the past two months, with the retracement levels marked from the high on 9/21. Currently it looks like we might just fall back to the previous lows and perhaps this time, just completely fall through. So, I'm really lost right now as the previous post on Elliot Waves was not valid. I failed to realize that one of the waves created a higher low, where a valid wave should not have done so.

In any case, I've realized over the past couple weeks that I've made pretty much all the right moves, but because of my previous long positions from earlier this year that I've just held onto, even though I've made large percentage gains on trading the SPY, the others have continue to hold back my total account value.

I really need conviction this week to simply let go of long positions that are just strapping up cash that could be used in better ways. I've come a long ways in being able to sell losing positions, but I feel I have one more step to go before I fully becoming emotionally detached from my positions- and that's something all investors and traders should have the ability to do.

My positions: I exited all SPY put positions last Thursday, even the ones that I wanted to hold for the huge drop that will give us new lows this year. Then, Friday I entered SPY Nov. 85 calls positions on Friday, as well as AAPL Nov 90 calls in anticipation of a mini-rally this week. But, I realize that my position is way to large, considering we are in a bear market. I hope to exit half on any decent rally, or even for a small loss early next week. At the same time, start to re-build a large put position on the SPY. If we're looking at the next support on the SPY at 76-77, a strike price in the low to mid 80s on the SPY would prob give a nice risk/reward ratio as the delta on those would increase from around .25 into the .70+ range as the SPY heads towards 77. I may also consider doing something with the Russell 2000 as a potential index to buy puts on, as it has generally been the larger % performer on up days, and larger % down on down days.

A crazy week it has been, but we may be in for an even crazier week over the next two weeks.

Just A Quick Update

Lots of news going on in Taiwan about Chen Shui-bian's "detainment." Not going to delve into this further, but just to say that it sure is great timing for Ma Ying-Jeou, whose approval rating has dropped just as quickly as the TAIEX, and the overall markets in general. Note, once again, I do not approve of what CSB did, and I fully agree that he should be punished for whatever wrongs he did, although it seems like in Taiwan, you are guilty, until provent innocent. At least, if you are DPP that is. And for everyone who still thinks the general DPP party still supports CSB, you're wrong. The only people left that I can reasonably support supporting CSB still are those who are relatives/family of his, personal friends, and maybe DPP supporters who have had family tortured/persecuted by the KMT authoritarian rule in the past. Regardless, the new DPP chairwoman has clearly stated a new path for the DPP, one which does not go through CSB.

An interesting note while I make use of this segway into stocks: So far, the Ma Ying-jeou and Barack Obama similarities continue in the stock markets. The day before elections, both Taiwan and U.S. had temporary highs, and since, have fallen sharply- I will be keeping an eye on this one.

I've been busy lately, but managed to do well these past couple days because I jumped the gun early on those Jan 85 Puts on the SPY. Yesterday I doubled my position in SPY puts with Nov 95 Puts, and today went in to some FXP (UltraShort China/Xinhua ETF) calls today. I will look for the gap down tomorrow to sell a substantial portion of my shorts. This volatile market is unforgiving, and as such, I will be glad to take profits. Note, I still do expect to see a substantial snap-back rally, especially with Options Expiration next Friday; which gives me all the more reason to protect my profits on those puts. I will have a larger general update on the markets this Friday probably. Until then, be safe, protect your profits and manage your risk!

11/13/08 Update: Went from basically 5% cash, to around 70% cash, exiting all SPY puts, all FXP calls, and exiting SDS position. Looking for that mini-rally over the next couple days...

Obama's Effect on the Markets

Today's market was relatively calm, a "mere" 2% gain across the broad indices, especially considering that Obama was speaking today (which I didn't know until it already happened). A look at today's price movement showed that for the most part the market was waiting on Obama's speech, as the market just trending sideways in a symmetrical triangle and then broke to the downside after/during Obama's speech. The indices recovered late in the day from likely short-sellers locking in profits for the previous two day rout of the indices.

I had some entertaining comments on my Facebook in regards to my status update of:

"Richard is thanking Barack for exceeding my expectation. A quick 10% downturn in just 2 days."

I know I was asking for trouble from the Obama fans who had to come to his rescue and defend him. Eventually, things started escalating and I decided to stay out of it. But, I wanted to clear things up here. The reality is that what I said is completely fair. I made the call last week on shorting any election rally, especially if Obama is elected, and riding the wave down into Friday. Recall:

So, to my predictions. I'm thinking we trend sideways Monday and Tuesday with a lot of volatility. With Obama winning Tuesday night, I would have said we'd see a big fall the next day, but I'm thinking we're going to get a head-fake upwards. So, Wednesday we get a bull trap and it fades possibly even by the same day, then head down for the rest of the week. It's inevitable to have the markets go down when you are bringing in a president threatening to raise capital gains taxes to anywhere from 25% to almost double what it is now. Again, I believe we will see new lows on the indices before the year is over. The target many people and I have is that 7500 DJIA, 800 SPX support.

Although we never got that head-fake upwards as it was just a complete rush of selling from the opening bell, it should have been apparent from my tone above that regardless of if there was that head-fake upwards, the play was clearly down.

So back to those comments trying to defend Obama. Look, we're here to make money. I don't care if I was right or wrong, in the end, all that matters is that I made money. Furthermore, the call to short an "Obama-rally" was valid on a purely technical play. Technicals indicated that we were entering into an overbought situation Tuesday night. Add to that the resulting election of Obama, and we have a catalyst to have a technical correction. Yes, I am more bearish on the markets with Obama as president than if McCain was president, but the play here was short-term, not long-term. I've mentioned and commented in other places about what the play was for the elections. My belief was simple; if McCain won, markets down; if Obama won, markets down x2. I would have just as easily "thanked" McCain for a similar downturn if he had been elected even though I voted for McCain, and I would have likely seen comments like, "See! McCain sucks! He's going to bring down our markets!" Whoever was going to win (although Obama was a lock), I was going to capitalize on that. And, Obama was merely the catalyst for this play.

So, as far as where I see this market headed now, take a look at this chart below where I have marked the Fibonacci retracement levels as well as the Elliot Waves (click for larger image):



5 waves down, 3 correction waves up, before resuming the larger overall trend- in this case, the down trend in a bear market. If you can't read the Fibonacci levels, they are:

38.2%: 100.54
50%: 105.79
61.8%: 111.03

As you can see, the second wave hit resistance at about the 50% retracement level at $105 and change. The 38.2% also acted as resistance for the 1st Correction Wave at $100. This one I plotted is predicting the 3rd Correction Wave up, likely hitting resitance at either the 38.2% retracement, and if it breaks that, at the 50% retracement. But, if I move each wave, one wave back, so that the first wave actually ends on 9/18, we could easily head towards the lows of this year as the Correction Wave 1 becomes Correction Wave 3, finishing off a cycle, and resuming the overall downtrend.

But based on the holding of the 90 level which could have acted as a psychological support, it looks like we're in the 3rd Correction Wave, and will likely trend up for the next days, possibly up to a week. A run back at 100 is likely if the 3rd Correction Wave forms, with 105 being a strong resistance, and the 107-108 acting as a huge resistance. The 107-108 area is where the markets gapped down earlier this month, as well as it being approximately where the 38.2% retracement level is (looking on a 1 year time frame). If we get to 105, I will likely go all-in short and with that, hope to wrap up this year and take the last month or so off, ignoring the markets and enjoying the Christmas season. :)

As far as what I've done: I've held onto my UltraShort QQQ position (QID) that I bought for the election fall-out, even after the 10% drop. But, I did cover it with a call to protect some of my profits Thursday near the close. Along with the UltraShort QQQ play, I also bought puts on the SPY on Monday and Tuesday and cashed out for a very nice profit on Thursday. I have started building a position in SPY JAN 85 puts as part of my plan to "wrap up this year."

Lastly, always keep in the back of your mind when you want to go long, that this is bear market:



From the chart, we can see that the trend is clearly down, with the 200 and 50 DMA still trending down. Any long plays should be short-term, and should be used to exit existing long positions. In a bear market, bears get fat, pigs get slaughtered.

As always, take what I say with a grain of salt. I cannot be held responsible for any losses, as well as potential profits you incur from what you read. What you do with your money, is your problem, or hopefully, your delight.

How Long Can Obama Hold Out?

Officials from China once again reiterate that the new president must oppose Taiwan Independence in order for the U.S. and China to have "good relations." This is fresh off the heels of a similar occurrence a few weeks ago for what then was the two presidential candidates, Obama and McCain. See my post about that here.

As we've seen from President Bush's first year in office, Bush was quick to talk the big talk against China, but failed to walk that big talk as the weeks turned into months turned into years in office. How long will Obama be able to hold out against this China force that is trying to control things on capital hill. This will be one of Obama's true tests that I will look forward to seeing how he handles it- whether he caves into China like president Bush did (so much for change), or will he stand firm and give the people of Taiwan hope.

This brings up a point that I have always wished to ask the presidential candidates. That is, how can they support the 'One China' policy, while at the same time act as the leaders and promoters of the 'free world.' The One China policy is all about how there is only one China, and Taiwan is a part of China. Again, China once again imposing it's will onto others. And the ironic thing is that the candidates (both McCain and Obama) have come out saying they support the free and democratic Taiwan, yet adhere to the 'One China' policy, which specifically states that Taiwan is not a free and democratic country, rather, a part of China, a censored, communist, country.

No words to describe what is happening...

http://news.bbc.co.uk/1/hi/world/asia-pacific/7712318.stm

Seriously, are the "Taiwan" police actually Communists from China in disguise?

What irritates me more so than them trying to hide every ROC flag is that, why then, do they not tell those who wave PRC flags to take them down as well? In one picture, can't find it now, but I saw police manhandling a Taiwanese person waving a ROC flag, while in the background is a huge PRC flag, one of those 4' x 6' flags.

President Barack oMa Ying-Jeou

For those who haven't been paying attention to the media, Obama is your president-elect. Something that I called a couple weeks ago. And for those who don't know, Ma, Ying-Jeou is the current president in Taiwan, recently elected this past March.

I've mentioned this surprising similarity between Obama and Ma in the past, but now I'll take the time to lay it all out.


"Not Normal" Backgrounds:

Ma is not an ethnic Taiwanese. His parents are from Hong Kong, and he was also born in Hong Kong, although moved to Taiwan at an early age. During Taiwan's presidential campaigning, much noise was made about Ma's personal history, that being of Hong Kong. Furthermore, allegations of Ma's dual-citizenship came up about his possible green card in the U.S.

Obama is not "ethnic" American. And by that I mean he is not our usual presidential candidate, white, middle-aged, male. He's the first of the U.S., the first president-elect, black, young, male. Much about where Obama was born was also raised in the couple months (raising in question his actual nationality). That is, whether Obama was actually born a U.S. citizen, something that is required to be a president.

Personal Facts:

Ma is by all means, a young and charismatic president. Ma graduated from Harvard Law School. Ma rose to power rather quickly, becoming the Taipei Mayor and a becoming a star of the young KMT generation.

Obama is also, by all means, a young and charismatic president. Obama also graduated from Harvard Law School. Obama also rose to power rather quickly, with just one term as a U.S. senator. Obama became the star of the Democratic party at the last Democratic National Convention.


Economic Campagining:

Ma ran his campaign on the idea of economic prosperty, economic change. He outlined his 633 plan of 6% GDP growth per year, 3% unemployment rate by 2012, and 3% per capita income by 2012. This was in response to the "horrible" economic problems that were facing Taiwan under the previous DPP administration (albeit KMT controlled legislative).

Obama ran his campaign on change, hope, and a stronger economy. No doubt the economy was one of the biggest factor of this presidential election. I would say change and economy would make up more than 2/3rds of the reason for which they based their vote on. Again, this was in response to the horrible economic problems that the United States are currently facing under the Republican administration (albeit for the last 2 years, Democratically controlled).


Election Results:

Ma was favored to win largely throughout the campaign, especially in the last few weeks leading up to the election. won by a "landslide." Approximately a 60/40 win.

Obama was also largely favored to win throughout the whole campaign. Although polls didn't show it, the young "hype" votes solidified Obama's presidenty (sorry, a brief commentary by me). Obama by all means will also likely win by a "landslide," by historical standards of previous U.S. presidential elections.


How They Won:

Ma won on hopes of change from the previous administration. Moreover, won on economic promises that will turn Taiwan into one that will have the same prosperous growth that China had been experiencing. Ma received a lot of cross-party votes from "light-Greens," because of their disappointment with A-bian. These light-Greens voted for Ma, not so much because they wanted him, but in a way, to "punish" the DPP for their failings (whatever failings they were believed to have been responsible for).

Obama also won on hopes of change from the previous administration. His campaign remarkably trademarked the words, "hope" and "change," as part of his campaign rhetoric. Obama also won in part due to the current economic mess in the U.S., with this mess (inproperly?) being totally blamed on the current Bush administration and Republicans. Obama also received a lot of cross-party votes from Republicans of all kinds. This is also much in part to the Republicans disappointment in President Bush.


The Hope:

Ma was sworn into office with very high expectations, obviously because of his landslide election, but also because of his high promises by him and his administration (20,000 TAIEX comment?). Ma, you could say, had a mandate by the people of Taiwan to implement his changes he campaigned about.

Obama has won the 44th presidency on also, very high expectations, also because of his landslide election. Obama has a mandate from a large majority of the people to also implement his changes and policies he campaigned about.

(By mandate, I mean a mandate. If a president wins on a 51/49 margin, there is not really a mandate)


The Drop:

The day before Taiwan's election, Ma Ying-Jeou had the stocks at its highest point in the recent months. The day after, a huge drop, followed by more selling in the successive days, weeks, months after. Taiwan's index continues to slide as we speak. Down from a high of around 9400 to half of that, at 4700.

The day before the U.S. elections, the Obama hope and change had the stocks at a monthly high of about 100 on the S&P500. The day after the election, stocks dropped 5%, with another 5% the day after, totalling 10% in just two days. Where the stocks go from here is still in question, but [commentary here] I have no doubt that we will have new 52wk lows this year. This will follow in line with what has happened in Taiwan since Ma won the elections there.


Where The Country Goes From Here:

Ma Ying, Jeou has taken Taiwan down a path, backwards, towards the era of martial law, of one-party authoritarian rule. His party and he have reverted back to "communist" ways in censoring media, censoring freedom of speech, censoring and detaining opposition political figures. All this has been done with with no "blocks" in the legislative yuan due to the full control of the LY by the KMT.

Obama is no doubt a very liberal Democrat. The only reason you would think that Obama's policies are not socialist is if you think calling someone a "socialist" is an insult, so you don't want your president you voted for to be insulted. Obama's tax, health care, regulatory policies he hopes to implement are very socialist. It's all about equalling the playing field and redistributing the wealth. Although there is no actual censoring of idealogies, like Ma, Obama will be taking their country to the left wing. Finally, Obama will also (likely) have the full support of congress, with Democratic majorities in the Senate and House, to pass whatever bills he has in his book.


With all that said...

The, "Where the country goes from here" part, I hope, will be different for Obama than the history Ma is making in Taiwan. By all means, Obama is our next president, so he deserves all the respect, that is, until he loses it (hopefully he never will, unlike with Ma). But I have no doubt in my mind, 4 years from now, we'll have bigger government, paying more taxes, higher gas prices, and not doing any better than we are now.

Two plays I am almost 100% sure of:
Long oil, and long commodities. You cannot spend what Obama wants to spend, along with what has been spent already on the bailouts, and not have inflation.

Edit: Link to an editorial in the TaipeiTimes that also caught onto the Ma-Obama similarities. Also, an interesting note was that one of my friends on Facebook noted how Obama was "Ma Ying-Jeou #2," and following right after was about 5 other young Taiwanese who basically all said, "My mom said the exact same thing!" What makes it even more bizzarre is the fact that last night, while talking to my mom about the elections, without any sort of leading on, she made the comment about how she thought the Obama and Ma elections were eerily similar also. Is there some sort of supernatural/divine Taiwanese mother telepathy going on? :)