$EEM I was at a cocktail party (translation: kegger) last night with many savvy and somewhat savvy business people. The talk was of places to invest during an economy that was out of their league and lifetime. Sanguine yet nervous. Grateful yet wanting. Instead of the usual back-stabbing, gossip and boring human minutia that typically litters parties of this ilk, these 30-40 people swapped investment ideas like life lines.

I, of course, said nothing and didn’t tip my hand that I was a trader. It dawned on me through the din of their nervous glances that I hadn’t looked at the emerging market ETFs in a spell. Motivated to work I left without sampling a single plastic cup of Hamms beer. My loss, but one I could make up for at the nearest 7-Eleven.

Looking at EEM above, we see the same chart patterns played out in every US stock: the 2008 market crash followed by the 2009 sucker rally, followed by a bit of consolidation or minor pullback.

Wash, rinse, repeat.

I’d be a buyer of EEM if it managed to close above 35. I’d begin with a seed position and build into strength after each Point & Figure buy signal (provided EEM continued to move up). Always buy strength and sell weakness. The chart breaks with a close below 30. But that break doesn’t mean the chart is broken…it’s just weakness. Sell it. Leave knife catching to mouth breathing people with extra cash and sweaty gamblers. Think of it this way:

Take your kayak a and walk it to the nearest Class IV river. No matter where you launch your kayak, there’s always some show off meat-sack trying to swim against the current. Iron man training. Wait for him to wedge his foot in a rock and drown, then launch your kayak with the current and note his mistake as a way to gauge undertow.

It’s the same in the stock market. Watch for the guy with knife cuts on his hands and run the other way.

Wash, rinse, repeat.

$SLX $X $CLF  MarketWatch.com had a brief story about the  Steel industry cautiously seeing signs of a rebound. I decided to chart out the Steel ETF (SLX) to look for a possible position trade.

► Steel industry points cautiously to rebound (MarketWatch.com)

Dwindling inventories, new orders bring life back to idled mills — The U.S. steel industry, hard-pressed by a recession that wreaked havoc in its main markets and forced thousands of layoffs, can now point to several indicators supporting the contention that it’s through the worst of the downturn.

Here’s a look at the Steel ETF using a 3-box reversal Point & Figure chart.

The left side of the chart shows the massive sell off we had in 2008. The end of ‘08 and the beginning of ‘09 shows a nice bottoming pattern with what looks like the type of double bottom you’d see if you were using time based charts (Candlesticks, Bar Charts, etc.).  Price is the result of volume, so fuck looking at volume.

Let’s drill into the 2009 trading action with a 2-box reversal daily Point & Figure chart.

After an awkward start, SLX trended with the rest of the market in during The Great March Sucker Rally that is just now fading (blue line). The long term down trend broke (red line) and we’re in what seems to be a perfect pullback. The obvious trade is above 50, but if you’re daring you might take a Double Top/Triple Top Point & Figure signal sooner (44-45 ish).

If you’re one of the growing number of traders that hate ETFs, you can drill into some of the larger steel names such as US Steel (X) and find a similar chart pattern.

I’ve got this on my Bullish watch list as a possible buy at new highs with maybe a small “seeder” position if it breaks out from the most recent pullback. If March, April, May was indeed a sucker rally, then we might be able to buy this on the cheap as America spirals into chaos.

Quite an amazing collaborative music video by the Japanese band Sour. The music reminds me of the late 80’s stuff Del Amitri put out.

Directed by Masashi Kawamura, Hal Kirkland, Magico Nakamura and Masayoshi Nakamura, this a music video for Japanese band Sour and their song “Hibi no Neiro’ (Tone of Everyday). The cast is actually a selection of their fans from countries across the globe…most incredibly… each person was filmed just with a webcam. — TheNextWeb.com

Good song, great concept, superb execution.

$WFC – Another bank that I’m keeping my eye on is Wells Fargo (WFC). Nice wedge descending top to a potential Quad Bottom breakdown (short). A tag of 23 would trigger the trade. However, notice the long blue trend-line on the far right. That looks strong. With the perception of the markets being “fixed” shorting the Financials would be tough.

I wouldn’t trade against that. Low probability trade if price barely breaks that line.

Disclaimer.

The 34.00 level on $JPM is a rather clear Supply & Demand pivot. The sloping top from the recent push higher would seem to indicate the bears are somewhat in control, but the banks are death to shorts. So many invisible hands and the slightest bit of spun news from the Gov. can send them ripping …

I won’t short this, but I will observe any melt down from a grassy knoll or passivly short through an evil ETF.

This is the Financial Services Subcommittee on Oversight and Investigations hearing of May 5, 2009.

Rep. Alan Grayson asks the Federal Reserve Inspector General about the trillions of dollars lent or spent by the Federal Reserve and where it went, and the trillions of off balance sheet obligations. Inspector General Elizabeth Coleman responds that the IG does not know and is not tracking where this money is.

Yikes…