Something I noticed about a week ago

So, yes yes, technical trading is voodoo and only works because people believe in it. And currency traders are smarter than that - but a lot of stock people have been moving into currencies.

About a week ago, I noticed what looked very much like a bear flag in the six-month chart of the dollar index. The dollar has broken decisively out of the channel of that flag today, downwards. Technicals theory, as I understand it, says that we'll get another drop about the same scale of the previous drop that formed this flag, from the entry point into the channel. To wit:


What's wrong with this chart?

So. See all the above. But also: what's wrong with this chart? Do I have this wrong from even a chart-theory perspective? (It is a little sloppy but I insisted upon parallel lines, which is a little more stringent than usual. I think.) Places I read have a lot of technical traders so I've picked up some of these notes, but I could have heard them wrong.

I learned something today

So I got the go-ahead from management at Country Village Farmer's Market to work that market, so I went ahead and ran up there for a shortish session of playing, to check out the market.

Well, I've learned something today. Specifically, that if you play a market with paid music later, people will assume you're part of the paid music, particularly if there's a sign up talking about the sponsoured music from 4-6pm, even if it's only noon. They'll stand around, listen to you play for a while, then look over at the sign, read it, and you can actually see the "ooooh" on their faces as they've learned something wrong. Then they don't give you any money.

As far as the performance goes, I was a bit off my best today, which doesn't surprise me, but I think I did okay despite that. Again, the vendors liked me; one of them gave me food (cherries) and one said I was a lot more enjoyable to listen to than the people they usually have in the sponsoured music slot. (Oh ho.) They also suggested I look at Edmonds and Snohomish markets - they say the turnouts there are a lot better and the get a lot of musician traffic. And the management - which was great, and let me use their tent even so I had guaranteed shade - says next time I can take down their signage and put up my own so that people know I'm not being paid.

So I'll give it another go next week, Friday, starting between noon and noon-thirty, and hopefully not having misleading signage up near me will help, and maybe having my own signage will help a little beyond that. Also, my next scheduled spot is looking rather unlikely - it's still tomorrow, Woodinville Farmer's Market, Noon, but only if I can somehow get some shade - the weather forecast is not promising. Otherwise I'll have to cancel.

Anyway, the flute setlist today was the same as last week, the mandolin setlist also the same except for adding the new untitled song I've been working on lately (which went over well) and not doing either "Captain Kidd" or "Pirate Bill and Squidly."

Quickie econonotes

Massive stock and bonds selloff today; there was a shriekingly temporary pip to positive late in the day on a rumour, that the Fed was going to open some sort of new lending facilities to Fannie Mae and Freddie Mac. It was irrelevant, as they can go to the discount window like everybody else, but no other bailouts are coming. In theory. Also, the dollar fell sharply, as per the previous bear flag commentary. This is a very bad combination of factors.

IndyMac FSB, a major California lender, is now in FDIC receivership. "At the time of closing, IndyMac Bank, F.S.B. had about $1 billion of potentially uninsured deposits held by approximately 10,000 depositors. The FDIC will begin contacting customers with uninsured deposits to arrange an appointment with an FDIC claims agent by Monday. Customers can contact the FDIC for an appointment using the toll-free number above. The FDIC will pay uninsured depositors an advance dividend equal to 50 percent of the uninsured amount." Estimates are that paying off insured accounts and handling the bank collapse will run between $4 and $8 billion, which is 7%-14% of FDIC funds. Ignoring inflation, this is the second largest bank failure ever; including it, it's the largest since the S&L collapse in the 1980s. A few more go up like this and we're talking real money.

We're also talking about Fannie Mae and Freddie Mac going under, and Dr. Roubini at RGE Monitor, who has an exceptionally good track record on this crisis, has a lot to say about that, and the inadvisability of a bailout.

No link, but technically, the market is due for a retrace rally soon, assuming nothing explodes, like, say, Iran. (c.f. All Systems Go for War, and Iran, Israel, and Missiles. $200+/barrel oil, anyone?) Meanwhile, see credit. See credit deflate. See M2 decline. See Phil Gramm make a fool out of himself, embarrassing the McCain campaign.

Meanwhile, over at the CFR, Brad Setzer talks about China as a creditor. Oil spiked up sharply again to near-record levels of last week; demand, regardless of this is expected to continue to rise, due to a large combination of factors including subsidies and the growing Chinese and Indian middle classes. And Dr. Roubini discusses other people now estimating credit losses from the financial crisis to be US$1.6 trillion (with a T).