Morning Call [8:03am ET] Today, mid-term election day in the US, its Dollar down and Euro up, so far. That translates to higher prices from equity, crude oil and precious metal futures, so far.
The question now is whether more Republicans in Congress will lead to gridlock, and if so, is that such a bad thing? Wouldn’t we rather government just do nothing, when in doubt?
I swear by Apollo the Physician and Asclepius and Hygieia and Panaceia and all the gods, and goddesses, making them my witnesses, that I will fulfill according to my ability and judgment this oath and this covenant:
To hold him who has taught me this art as equal to my parents and to live my life in partnership with him, and if he is in need of money to give him a share of mine, and to regard his offspring as equal to my brothers in male lineage and to teach them this art–if they desire to learn it–without fee and covenant; to give a share of precepts and oral instruction and all the other learning to my sons and to the sons of him who has instructed me and to pupils who have signed the covenant and have taken the oath according to medical law, but to no one else.
I will apply dietic measures for the benefit of the sick according to my ability and judgment; I will keep them from harm and injustice.
I will neither give a deadly drug to anybody if asked for it, nor will I make a suggestion to this effect. Similarly I will not give to a woman an abortive remedy. In purity and holiness I will guard my life and my art.
I will not use the knife, not even on sufferers from stone, but will withdraw in favor of such men as are engaged in this work.
Whatever houses I may visit, I will come for the benefit of the sick, remaining free of all intentional injustice, of all mischief and in particular of sexual relations with both female and male persons, be they free or slaves.
What I may see or hear in the course of treatment or even outside of the treatment in regard to the life of men, which on no account one must spread abroad, I will keep myself holding such things shameful to be spoken about.
If I fulfill this oath and do not violate it, may it be granted to me to enjoy life and art, being honored with fame among all men for all time to come; if I transgress it and swear falsely, may the opposite of all this be my lot.
If only the 112th Congress could be affirmed by Hippocratic Oath before undertaking their duties. They sure don’t listen to the US Constitution.
Here are the usual charts and tables on prices this morning:
You know, many people think that the stock market only lifts when the economy grows, but I pointed out that China’s GDP growth rate was exceeding 10% per year when the Shanghai Stock Exchange composite index was crashing about -73% from 6124 to 1664 from October 2007 to October 2008.
So now, don’t be surprised that the US stock market indexes will grow when the Fed starts to lift rates, which would constrain growth but also serve to tighten up and improve the prospects of the nation’s banks.
India today, for example, has raised its bank rate for the 6th time this year, and yet the Bombay Stock Exchange Sensex Index continues to soar as has the share prices of the country’s leading banks, ICICI (IBN) and HDFC (HDB).
http://www.marketwatch.com/story/india-raises-interest-rates-by-quarter-...
Too often, stories are manufactured by certain parties and disseminated widely via mass media with the intention of making investors make the wrong decisions. There is always an element of truth and believability to these stories or else the majority would not be duped. Con artists know this.
Today’s headline is about gridlock, so I asked the question: is it such a bad thing if Washington’s politicians do less?
So, at the end of the day, don’t be distracted by meaningless stories. As an investor/trader of capital markets, if you understand the corporate fundamentals and focus on the share prices, you will be that much harder to fool.
Have a good day.
Catch of the Day
Good morning. Vad here. [11:15am ET]
Today's Catch of the Day is a good example of trader's adaptability to always changing market conditions. Take a look at the first chart. Our standard setup was to short X under two conditions: iIFit broke 44.95 and IF it held under 45 before doing so. X however broke 45 first, spiked to 45.10 invalidating our setup - and THEN proceeded down, showing what could have been a perfect trade. Not having our setup triggered we simply missed profit opportunity.
15 minutes later FCX formed the same setup - 97.90 short trigger, 98 resistance. Remembering how X acted we assumed that this was today's behavior and adjusted our strategy. Instead of missing another one, we waited for that invalidating spike and re-calibrated our setup accordingly - we shorted 98 breakdown AFTER the spike, with the same 10 cents stop. Chart below speaks for itself.
CTA Trading Desk Post-Close Report
Good evening. Patrick here. [7:37pm ET]
Irony of all ironies: maybe things are so bad stock prices have nowhere to go but up.
Jenny Sixpack could practically see the steam coming out of her husband Joe’s ears as he lumbered through the door after a long day at work.
“What’s wrong honey, tough day at work?”
“Frickin’ boss – all he wants is for us to work longer hours and get even more done because management is cutting back jobs. He says no one gets a raise because the company can’t raise prices to increase profits. If we raise prices the middle class will buy stuff from our overseas competitors who undersell us and then make their money back when their government reimburses them.”
“That stuff has been going on for a long time, Joe. Is that all that’s bugging you?” Jenny asked.
“I wanted to take off to vote on my lunch break, but the boss said there was work to be done. Then he asked me who I was going to vote for, kinda suggesting if I was gonna vote for the guys he thought were best I could go vote on company time.”
Jenny began to understand his frustration. “Voting is supposed to be a private affair. Guess your boss was watching the voter intimidation that went unpunished in Philadelphia in 2008 when voters were openly threatened by men wearing paramilitary gear.”
“No, that didn’t bug me too much. I can always vote after work – assuming I’m done before 7pm. No, what really ticked me off was going to the store and buying my 24-ounce Budweiser for the train ride home.”
“That should have taken the edge off, Dear,” Jenny said.
“Well it usually does the trick but today I didn’t have enough money to pay for my beer. I had the $2.03 to pay for the beer, but the self-checkout kept telling me the beer cost $2.35. A manager came over and told me the price was right. I had to borrow from the guy behind me in line. I figured those no-good politicians must have added on another tax.”
“Wow, a 15% tax is out of control, Joe. Was it a sin tax?” Jenny asked.
“Nope, not a sin tax. A plastic bottle tax, a sales tax, a consumption tax, a value added tax, an income tax, or a death tax. It was Budweiser raising the price overnight on my beer.”
Jenny had seen their grocery bills steadily rising over the past year, knowing all too well prices were on the rise. Her husband however rarely made it to the grocery store.
Joe continued, “I thought that bearded guy who was talking in front of Congress on TV the other day, using all those fancy words was saying there’s a danger prices that prices will be going down. He said everyone knows that prices going up were good for everybody, and he was going to do everything in his power to make sure it happened. I might be a simpleton but it ain’t no good for me when my pay is staying the same – assuming I still have a job – I’m working longer hours making no more money, and I gotta pay more for my beer.”
Since Jenny paid the bills and had studied economics in school she knew all the middle class people were having greater difficulty paying their bills. “Honey, the head of the national bank knows most of us are in deep doo-doo. The value of our house has declined by 33%, the stock market has gone nowhere for 10 years, and now the banks pay us nothing on our savings account. The bearded one is trying to keep interest rates low so we can go further into debt more affordably.”
“Interest rates are the lowest I can remember. Let’s go borrow some money, lock in a low rate – then we have some extra cash if we need it.”
Jenny knew they could never get a loan – her brother was a banker and told her at Johnny’s high school graduation the only way to qualify for a $10,000 dollar loan was to have $50,000 in the bank, have a good job, and have no debts or liabilities.
“Joe, only people who don’t need the money can get a loan. Everyone else is SOL. The rest of us have to scrimp and save what we can and try to make the best of it. We are all in the same boat – not getting a raise and afraid we will lose our jobs.”
Joe was getting worked up again. “How come that park district manager got a raise up to 400,000 a year for making sure the grass is mowed. He’s got lots of money to spend.”
“He’s in the minority Joe. Most of us are fighting an uphill battle. The cost of living is going up and our salaries are not. Johnny’s tuition is going up 8% next year, doctor bills seem to go up every year, gas is going up, electricity is going up, the cost to put food on the table is going up.”
Joe interrupted, “Not everything is going up – I was at Best Buy last week, and the 46” plasma high-def flat screen I was looking at is down 25% from last year.”
“Honey I know you would love to have your buddies over to drink beer and watch the Bears game on that great TV, but the fact is we already have a nice TV. We don’t need another one.”
“Jen, I ain’t no math whiz but if the price of everything I need to live is going up, and I can’t save any money because prices are going up and even if I could save money we get no interest on our savings – then if my take-home pay is staying the same we are going to go broke.”
Sadly, Joe was right but Jenny had one last ditch idea, “Joe I know it is risky but maybe we should take our savings and buy stocks.”
“But you just said stocks have gone nowhere for 10 years and they could actually go down. We might have to sell at a loss if I get laid off and we need the money.”
“Joe it may be our only hope. I know the buy-and-hold strategy in stocks hasn’t paid off recently. But if the basic necessities are going higher then we need to be in the stock market so if companies are raising prices and making money at least we own a piece of a more profitable business. Think of it this way – we could buy Budweiser stock and the extra .30 cents you and everyone else is paying for a beer would help Bud make more money and make their stock go higher, so we would make some money on the stock we owned.”
Joe smiled at the first bit of good news he had heard all day. “Okay honey, take all our savings and buy Bud, Marlboro, Coke, and Pontiac stock.”
Jenny figured it had been a long enough day, she didn’t feel up to talking about Phillip Morris being the owner of his beloved smokes, or the fact that Pontiac was a causality of Government Motors.
“Joe I’ll transfer the money from our savings into the stock market and we’ll play the QE game.”
Maybe stocks are due to fly.
Have a great evening.
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Comments
YES!
"The question now is whether more Republicans in Congress will lead to gridlock, and if so, is that such a bad thing? Wouldn’t we rather government just do nothing, when in doubt?"
Don't just do something, stand there.
Mailbox full
My bad. I failed to buy more storage. Told to delete messages to free up space so I deleted 12,103 messages of over 30,000. Still no access. Removed the trash and bought more space. Still nothing. I guess I'm in Google Prison for 24 hours.
QE2 risks currency wars - Ambrose
http://www.telegraph.co.uk/finance/currency/810346...
What interests me in this affair of US dollar 'manipulation' is the freedom with which this accusation is thrown around. The US dollar has traded in this range in 2007, 08, 09 & 10 and this is construed as manipulation?
I can see the dollar being used for a carry trade - hot money leaking from the Fed bailout pushing up other currencies, particularly in emerging markets. But is pushing up the Swiss Franc, as an example, a situation of Central Bank manipulation or market forces seeking safety or increased risk?
Obviously printing $4T is manipulating one's currency in a real manner. We can debate whether the TARP 1 constitutes manipulation as every Central Bank participated in its own stimulus program. But all I see at the moment is the Fed jawboning which traders are anticipating and investors piling in on emerging markets. Old pegs to the US dollar (Hong Kong for example) ain't exactly useful when the US is down in the dumps.
Cara 100 Ratings Changes For Tuesday
Good morning.
No POMO Injection Scheduled For Today.
Cara 100 Earnings:
MA - (3.94 vs 3.54)
PFE - (.54 vs .51)
-------
BA - Boeing initiated with a Buy at EarlyBirdCapital. Target $90
RIMM - Research in Motion initiated with a Hold at ISI Group. Target $60
-----
"When I was a boy I was told that anybody could become President; I'm beginning to believe it." ~ Clarence Darrow
BH, Old joke: "Truman was
BH,
Old joke:
"Truman was elected and proved anyone could become President — then Eisenhower was elected and showed we didn't need a President."
I'm thinking we could hardly be worse off without one.
Australia and India raise rates to curb inflation
Bill , Australia also has raised interest rates , " The surprise move by Australia's central bank to take rates to 4.75pc - the first increase since May - pushed the Australian dollar above parity with the US dollar to $1.0013 as investors expect higher interest rates to attract more foreign money into the country " " India's central bank raised its repo rate — its short-term bank lending rate — to 6.25pc and the reverse repo rate — which the central bank pays on bank deposits — to 5.25pc. " http://tinyurl.com/2cy3ggj . Perhaps soon I can find some buy and hold stocks in these growing economy"s . Bob
RBY new release, will file 43-101 in Nov 2010
I don't think they'd be doing that if the numbers weren't good.
HLF might do like CTSH yesterday after
being down 5% on excellent earnings and rebounding hard.
RBY new release, will file 43-101 in Nov 2010
I think the sale of the company is all but done.
Just connecting the dots, but a tell in the PR was the use of Geox and the direct reference to the Bruce Channel Deposit as a prelude to the Gold Eagle acquisition by GG.
Again, if RBY isn't bought by GG before year end, I'll eat my hat.
There's at least 8M ozs on the ground in F2 and RBY should be taken out for somewhere around 2B ($8/share +).
We shall see very soon.
FD: Long DEC 2010 $5 calls and MAR 2011 $5 calls (a lot of 'em).
UNG (Ok Lets try.)
Ok Lets try.
I have been following UNG along with some other possible trades maybe attracted by the low price. Have noted that gas is very cheap compared to oil would assume market to correct divergence over time. Would it be a reasonable assumption from chart to say UNG has bottomed and has just defined resistance at October 11 high (5.82) and support around October 27 (5.5). The next expected resistance if 5.82 broken would be around the (5.9.
For reasons listed above I have made trade orders listed.
Filled Details:
2000 shares at $5.56 on Nov 02, 2010 10:28 AM ET
Sell 2000 Stop Market $5.41 $U.S. Nov 26 USD Nov. 02, 10:36 AM Open
PS: Bill, found your book to be very good at getting ones head into the right frame of mind, and being complimented by your blog I think there is 60/40 chance I will succeed this time.
Any thoughts?
Re: UNG (Ok Lets try.)
Since UNG loses 10-20% every month alone due to rollover, i.e, by doing nothing, I'd say it cannot bottom.
BTW, straddles however for November, December, and January require 12%, 15% and 18% moves 9http://shockedinvestor.blogspot.com/2010/11/profitting-from-ungs-moves-either-way.html). Can UNG move that much either way? It sure can.
UNG, VXX, and leveraged ETFs, best to stay away from. The amount lost in them is in the trillions by now (all likely going to HB&B).
Re: UNG (Ok Lets try.)
malcold - As Si02 implied, technicals in a leverged ETF are not reliable or useful. Also keep in mind that natural gas is in contango (upward sloping forward curve) so every time the fund rolls to the next contract it is buying a more expensive (seasonally adjusted) contract than the one it previously held. UNG performed great when natgas was backwardated (downward sloping forward curve) but contango has turned it into a widow maker.
Re: UNG (Ok Lets try.)
With that said, good luck with your trade. I would prefer to keep an eye on a producer stock like CHK to play an eventual turnaround in natgas. That way you aren't as susceptible to a potential cratering even in the short-term natgas futures. Just an idea. I think there are better risk-adjusted plays out there.
Re: any thoughts?
malcold and also BOB 47 re your last query:
As I am just now putting in a better portfolio decision management system myself that is based on a fundamental screen followed by a technically-based timing screen, which should not take me more than a week or so to implement for clients, I plan to give everybody enough general info to help them do the same, using their own criteria for data analysis, which will come up with different selections and entry/exit timing. That way, I get to keep my information private, but give you the same basic tools I use. You all have your own interests and biases, including asset mix, sectors and groups, risk:reward, time horizon, etc, so at the end of the day, your portfolios will undoubtedly look quite different than mine.
One of the reasons I returned to Toronto was to avoid the continuous distractions that prevented me being able to focus enough to get this done effectively. But, I knew that I needed to do that, and also get more players from the CTAB team contributing to the blog, so that I could spend most of my time on client work.
Part of my unhappiness recently was not in being spread too thin, as many surmised, but in fact being pulled in too many directions by the people around me. I took the first step a couple days ago to sort that out, and now I'm taking the next one. In a couple weeks, I should be a happy camper, and the results should benefit the clients and also the community.
Re: UNG (Ok Lets try.)
agreed. I've noticed anecdotally with Vad the gradual reduction of these ultra ETF's from our trading. Not what they're cracked up to be - at least not intraday anyway. Shorting all of them appear to be the safest move. JMO.
Catch of the day
is posted. Today's one is not purely technical, but includes broader outlook on a trader's behavior. Adjusting to ever-changing market behavior is a highlight of this particular trade.
Re: UNG (Ok Lets try.)
Like other people pointed out UNG is very tricky to make money on the long side. I did get some UNG calls at the 5.3 level, but it's a very small position. Your stop is probably too close and likely you will get stopped before making any money. Position sizing is your friend.
how many are entering the sell the news trade
ie shorting today or tomorrow?
I opened some small positions and waiting to see what happens next. The only thing that concerns me now, dollar fell from triangle and may sell off more, bullish for stocks and PM. Interestingly, SLV is not going up anymore. Exhaustion?
RBY
Out of the bag ... insiders must have run out of the room after inking the sale.
Re: how many are entering the sell the news trade
SLV hasn't made a new 52 week high since yesterday and is still green on the day. And SLV is even up a few shiny nickels on the day. Not what I'd term exhaustion.
SLV:GLD ratio
http://stockcharts.com/h-sc/ui?s=SLV:GLD&p=D&b=5&g...
I think it's too early to enter any trades on the short side. Can't argue with paring some longs in overbought sectors but I still see a lot of value in individual pockets. I can see this market driving a stake through the shorts in the short-term regardless of the longer-term QE2/Election reaction. If we break the highs of the day on S&P and R2K it could be off to the races. Yesterdays action couple with todays gap up is looking to me like another succesful bear trap by this runaway market.
Sell the news
Been writing november close out of the money calls on my Pm's and Ag's just in case
Fitch - Credit Cards
Fitch: US Credit Card Defaults Declined In Oct To Level Not Seen Since Mid-2008
RBY- Let the fun begin!
As you may be aware, I control a large amount of Dec and Mar $2.50 calls. I continued to buy as the stock dropped down to the $3.45-3.50 area.
With today's news, my wealth will expand exponentially. It's called "keeping the faith, baby"!
Having expended hundreds of hours on researching Rubicon, interpretation of drill results, site analysis, etc. has been worth the time and effort. The NI 43-101 which is being focused on the "9X" area of the F2 core should ultimately show a resource of 8-12 million ounces of gold for the F2 which borders on the edge of Goldcorp's huge Red Lake mine.
My thinking is that if RBY gets bites from other mining companies, including the Chinese, Goldcorp will outbid them. I have seen estimates from $6-10 dollars. But who knows?
UNG (Closed trade)
Filled Details:
2000 shares at $5.59 on Nov 02, 2010 02:02 PM E
House wins again.
Thanks to all for there input and advice I have much to consider.
contango!
producer stock like CHK!
I have to go to work now (blue collar)capitalist at home socialist at work capable of plating both ends.
Re: Fitch - Credit Cards
TOF - any data on what's happening recently with consumer credit? Last data I have was for Q2 2010 from the Fed Z1, and it had contracted 2.5% y/o/y (and it had been contracting for the past 9 quarters - since 2008). Usually it grows at around 5-10% per year.
Declining defaults should help COF and AXP. COF looks sick, but AXP looks to be recovering. I think AXP is one of these "top 5%" stocks - kind of like TIF, or JWN. The well-off are having a good recovery, I think, so stocks that cater to them should be doing pretty well. All this money printing goes right into financial asset prices, and those have all gone up. (Top 5% - earning > 210k/year - owns 72% of all US financial assets, and accounts for 33% of all consumer spending). Who will money printing benefit? Just guess.
Declining defaults should also help credit growth numbers as well, since a bunch of the "de-leveraging" is actually just defaulting.
Re: RBY- Let the fun begin!
Questions for all that are invested in or follow RBY. What is the downside risk for the stock? From a technical point of view where do you place your stops short term (<3 months) and long term (one year)? Looking at the company what kind of bad news will determine people to take their loses/profits and leave? The company seems to get good attention on this blog but only with respect to potential profits so I thought maybe we should look at what could go wrong as well.
No position in RBY or RMX.TO
Roubini fears second housing crisis
“If house prices are going to fall another 5 to 10 per cent, another 8 million households are going to be in negative equity,” the New York University professor said today at a conference in Cape Town, according to Bloomberg news.
“We are going to have another nasty crisis. That’s going to happen unless we do something about it. Forget about subprime, look at prime.”
http://tinyurl.com/2dv6lfd
Article also contains comments by Bill Gross on QE2 causing possible 20% drop in USD. I think he carries enough influence in Washington that I think QE2 will disappoint markets.
Reality Check
Kaimu,
You are quite Sir, would love to know more about your line of thinking for tomorrows anticipated events, how are you positioned, are you liquidating, what do you suggest for somebody who want's to borrow your shoes and hat for a inkling of your enlightenment. As I admire your unwavering efficient clinical diagnosis of socio-economic pathology. Especially when the given reality is as mentioned in this clip.
http://bit.ly/97TQ2P
Gridlock = Good
Kudos to our resident sage (Bill C.) for appropriately framing the question "Gridlock- such a bad thing?"
As George Will so eloquently explained last weekend (on Christiana Amanpour show), the Founding Fathers definitely wanted and intended "gridlock". That's why they put in so many checks-and-balances. They wanted a structure to force continuous debate ("gridlock"). They did NOT want any one collective-entity to be able to impose their will without substantial debate and/or consideration.
RBY- Let the fun begin! ........ question for Nebish, Papa-D
Very low volume in the calls today dec $5 .05/.10 volume 101 OI 3922
or mar $5 .25 /.30 volume 68 OI 4336
Does this mean that those in the know, are not excited about the 43-101
Should the options action not indicate some heat at this point?
thx
Re: Fitch - Credit Cards
My impression of the declining card defaults is that the actions of card companies to reduce available credit to the current balance has been a wakeup call to consumers. In addition the new notices about interest rate and fee hikes has provoked many an act of clarity and I see people paying down their debt much more consciously. The unmasked greed of banks has been revealed as they attempt to turn the screw one more time before new consumer protections arrive in the form of Elizabeth Warren.
Profitting From UNG's Moves Either Way, Recovering or Crashing F
from "shocked investor" - straddle tool - dyodd
http://shockedinvestor.blogspot.com/
Matt Taibbi on the Tea Party
I enjoyed his work on the financial crisis and skewering of Goldman Sachs, and I think he offers some fair commentary in this article, whether one agrees with it or not. He comments that Ron Paul is too honest for the Republican party and therefore will always be left standing outside of the tent.
http://www.rollingstone.com/politics/news/17390/21...
RBY- Let the fun begin!
Geoex is doing the resource report. They also did a similar report for Gold Eagle Mines which then was acquired by Goldcorp. The Geologist George, well familiar with Red Lake geology and and Goldcorp properties as well as Rubicon properties will be preparing the reports.
Someone asked what was the downside risk. Apparently if they can't come up with enough gold, that would be a risk. However, I dismiss that thought because analysis of drill results have already confirmed substantial gold. So the key question is how much? Intelligent estimates range from 8-13 million ounces. There are also other areas of the Phoenix Project for Rubicon that haven't been accessed but are known to have a gold content, i.e. East Bay.
There is talk that once the report is issued, bids will occur and the stock price could jump considerably. I am not going to speculate here on a price although I had mentioned previously that a $6-10 range could be reasonable or a lowball.
Calls have very little premium built into them. For instance, I picked up some Dec. $2.50 this morning for $1.25. RBY price is currently $3.82. Go figure!!
reviewed COT charts today
and while this is not exactly an actionable info, it shows where smart money is concentrated.
Pretty much what I expected: long dollar/natgas/volatility and short bonds/hard commodities/soft commodities(except for hogs and cocoa)/PM/non-dollar currencies/risk trades.
The most striking short position is in NASDAQ. most bearish ever in 6 years, the second lowest were registered in dec 2004 and oct 2007.
But timing is everything of course.
Gridlock
as sad as it is I am going to have to vote for gridlock.
Uranium (S)
Hi All - This corner of the litter went out for a run today. Have held some of these thru the downturn and most have recovered quite well, but today's action is beyond the pale. Not sure if this is the proverbial flash in the pan and time to take the gains or bulk up more - particularly in CCJ which is a slow mover today. I suppose the sector could be in for a decent revival with the price of yellowcake moving higher and with product demand returning. Happy Trading
Re: Gridlock
Remember Newt Gingrich and the "Contract with America" in '94? They won in the midterms and tried to shut down Government. It was ineffectual and just caused problems, IMO.
http://en.wikipedia.org/wiki/Contract_with_america...
Re: Gridlock
Illini- good point. I love this site.
TGB
Canada has blocked Taseko Mine project
http://www.reuters.com/article/idUSTOD00620320101102
Any thoughts? Buy,sell?
TGB in freefall
Is there a bottom? Is anybody trading today? Everybody's voting I guess. Was anybody here in TGB?
Re: TGB in freefall
Don't have a position, but see Motley Fool article from yesterday in which it was identified as one of three companies with huge increase in shares sold short recently on ASE.
http://www.fool.com/investing/general/2010/11/01/d...
Big Yellow Taxi
http://tinyurl.com/5lmh8n
Late last night, I heard the screen door slam,
And a big yellow taxi took away my old man
Now don't it always seem to go
That you don't know what you've got till it's gone
They paved paradise and put up a parking lot
I rounded the corner of Wall and Broad, and caught a bunch of Bears getting into the same old cab, with the same driver, and ask for the umpteenth time, 'Take me to the cleaners.'
Re: TGB in freefall
So of course people had inside info that this was coming. Just more evidence that the game is rigged and little guys don't have much of a chance compared to the big boys. Where's Gordon Gekko when we need him?
The Worst Hand in Liar's Poker
TZA, TZA, VXX, VXX, UNG. And the Joker, HNU.to.
Re: RBY- Let the fun begin!
Thank you for your analysis, papadynamite. I'll probably pick up some RBY if the market sells off tomorrow or Wednesday.
Rand Paul wins Kentucky Senate
Mr. Paul becomes the first of the high-profile Tea Party candidates to emerge victorious from a nasty and contentious campaign.
Read More:
http://www.nytimes.com?emc=na
watching Newmont Very carefully
Fleck reports tonight that the Boddington project is not a legitimate concern, although there will some start-up pains... at this point, you can own Newmont, and, its proven and probable reserves of 92 million ozs. for $ 320 per oz., and add $ 500 per oz. extraction/production for a total of $ 820 per oz.... Their numbers today were good...
Deleveraging Delayed
I found this view of the deleveraging at CONTRARY INVESTOR quite interesting.
http://tiny.cc/splui
"...deleveraging is still barely out of the total cycle starting gates. At the household level we have not yet even seen organic deleveraging, but rather deleverageing through defaults. Jobs and income growth are the keys to the deleveraging process at the household level, but they are for all intents and purposes missing in action in the current cycle."
"The very means for households to delever independent of default are not visible." [lack of income growth]
"And so we need to expect 1) a stop-start real world domestic economic recovery, 2) Fed QE that does nothing to reinvigorate the real economy, but has the real potential to create yet more unproductive asset bubbles,"
seems to be a little selling going on..
http://www.finviz.com/insidertrading.ashx
Tough market/ Easy market
This has been a tough market to trade. On the other hand, it's been an 'easy' market to buy and hold. Buy-and-hold has probably outperformed most hedge funds since March '09.
Re: Tough market/ Easy market
Isn't it ironic that this happened just when buy-and-hold was pronounced dead?
The accuracy of this eternal law never ceases to amaze me.
Re: Tough market/ Easy market
This market has been quite easy to invest in / trade in if you're not skeptical and do the opposite of what the majority of people expect.
Re: Tough market/ Easy market
Looking back, it was inevitable that bears find themselves at the cleaners time and time again. Now that many of the bear blogs have conceded new highs are likely, there is at least the possibility of a top forming. Unfortunately, it's likely to be a painful topping process.
Re: TGB in freefall
Nice catch Dave M-
Appropriate that the article was titled "Do the Shorts Know Something You Don't?
Apparently in the case of TGB the answer is yes...
Anyone know an easy way to screen for unusual options activity or recent ridiculous changes in short interest like this? I know it's a bit sleazy, but maybe a few of us blind squirrels could grab a few stray nuts with this knowledge...
KC
Re: Tough market/ Easy market
tof- I would also chime in with 'the closet majority.' Surveys such as the AAII Sentiment Survey may well mislead- let's face it, most traders keep their cards hidden, and the best ones bluff their way to the bank. When it comes to discerning real sentiment, I would trust intuition over (easily manipulated) surveys.
Re: TGB in freefall
http://www.shortsqueeze.com/
Sleazy? Whole idea of trading is based on reading the footprints of Smart Money.
Re: TGB in freefall
Wow neat site- can't believe I hadn't stumbled across it - thanks Vad.
KC
Re: TGB in freefall
Sure thing. Just don't overestimate how timely the information is. Data is being collected and reported by exchanges every two weeks, so it's not up to day every day.
UPS
Hi All - A big deal today with clarity around a 9/3 fire/crash on a UPS plane out of Dubai. Perhaps someone might pay a bit of attention now and not parse reality. It's only a small % of the religion, but as evidenced a lethal one. Happy Trading
P.S. Always looking for the U3O8 insights - Jock are you out there?
CTA Trading Desk Post-Close Report
Patrick,
Enjoyed today's report. Funny, somewhat sad, but real.
Great quote -
Irony of all ironies: maybe things are so bad stock prices have nowhere to go but up.
Hmmm...
speaking of freefall
Has anyone read William Black's, "The Best Way to Rob a Bank is to Own One"?
http://tinyurl.com/blackonbanks
Black describes how banks perpetrate 'control fraud' using accounting and legal means of cover up to create the kind of fictional profits HB&B are now reporting. I've just read the preface. He is quoted in the Mises article by Doug French about Bank Failures in Slow Motion.
Thanks to whoever provided this link: http://mises.org/daily/4787
Re: The Worst Hand in Liar's Poker
and I'll raise you another VXX & UNG. Horrible/terrible they are.
Re: Tough market/ Easy market
2nd - I actually was very close to opening up TZA after hours. I think a short term top could very well be near given what I sense to be the broad based capitulation by bears and adulation by bulls. Valuations still aren't even close to high enough to seriously consider shorting though. I'm now 80% long, 20% cash, and 100% sure I will not be shorting. However, there have been some underlying problems in Ireland / Portugal that aren't getting the headlines that they probably will get soon so I think it makes sense to step back on the risk just a little bit...not a ton but enough to respect the contrarian power of bullish sentiment.
Re: RBY- Let the fun begin!
Ok, you say 8 to 12 mm oz. Sprott estimate is 1.5 to 3.0 mm oz, I read.
Can you substantiate or document your numbers in any way?
How about your "Chinese" buyout rumor? Same question...
I'll admit I haven't read to see if CC has rules on pumping or bashing, but your post bothers me.
I do think RBY is an excellent opportunity out in the next few years for the same basic reasons, and own a lot of actual shares, but don't think it honest to post wild expectations here as though they were fact.
FD: RBY is my ONLY stock holding.
We're in a Strange Cycle
Not sure what will happen this week, but in general, the circular pattern I see is monetary stimulus - raising commodity prices, followed by slower economic growth, followed by more stimulus, rising prices again, over and over. Stimulus has been helping both bonds and equities, but inflation is hurting Jenny Sixpack and her husband. How will this play out over the next year? Probably more of the same. How about after that? Maybe like 2008 - de ja vu all over again - stocks crash, commodities crash, but, you guessed it, gold spikes. So, for the current(one year), stay with stocks and gold, especially gold stocks? This is my take on 'buy & hold' for now. Best of luck.
Re: Fitch - Credit Cards
In looking at the most recent Fed data, I definitely get the idea consumers are dramatically reducing the amount of credit card debt they have outstanding, either through defaults, limit reduction by credit card companies, or by paying down their debt. I'd be quite curious to find out which one of those is responsible for the shrinkage. Here's the report:
http://www.federalreserve.gov/releases/g19/current...
Revolving credit growth, annualized:
09-Q2 -9.1
09-Q3 -9.4
09-Q4 -12.4
10-Q1 -8.5
10-Q2 -7.2
10-Jun -7.5
10-Jul -7.2
10-Aug -7.2
Well it looks like voters are tired of "hope"
I sincerely hope Ron Paul gets more floor time as a result.
Re: TGB in freefall
Nasdaq also offers free short interest data, including equities listed on other American exchanges:
http://www.nasdaq.com/quotes/short-interest.aspx
Great value investing resource
I haven't seen this one referenced before so thought I'd share:
http://www.grahamanddoddsville.net/?page_id=689
This is a link to the newsletter archive of "Graham and Doddsville
A Newsletter from the Students of Columbia Business School"
These newsletter are full of interviews with great fund managers with long term track records talking about their investment strategies.
Why waste a second of your time with CNBC when you can read excellent stuff like this! Great links to other resources as well. Enjoy.
Preparing for psychological combat
Yesterday I recommended a book that I picked up, which was referred to me by a friend, "Trading in the Zone" ISBN# 0735201447
I am not sure if it was simply the right time for me or the right book. But it is making me really look in the mirror and evaluate. No doubt the few months i took off will help me tremendously longer term.
The two analogies i am conjuring up for trading are surfing and basketball free throws.
A) When surfers get thrown by the waves, they dont (and can't) blame the ocean. They usually have to realize they caught a bad wave or their technique was wrong. Where as in trading, most traders externalize the loss and blame a multitude of things and then associate disappointment which breeds doubt, hesitation, and over trading.
B) Free throws are prob the most boring activity in sports. repetitive, slows the game down, awarded only 1 point per basket, etc. I am liking this analogy in building my own trading plan because it minimizes delta. As a trader you know where the free throw line is, how far and high the basket is, no defenders etc. Most importantly you know the outcome if you miss! the only obstacle to the "free" point is your technique and form. also smooths out the highs and lows where the trader doesn't become euphoric on good days and self-deprecating on bad days.
Think about this. Michael Jordan of the Chicago Bulls had a career free throw percentage of 82% of 8,772 free throw attempts = 7,193 points. And this is out of 32,292 career points! so 22% of Michael Jordan's points came from him standing on a free throw line with no defender, and repetition. minus some important free throws, i am sure he didn't beat himself up after missing a few. Imagine if he had to deal with deep regret and shame after each missed free throw in front of 30,000 fans? It would paralyze anyone.
I remember Vad spoke at CTAB #1 about creating an alternate personality of oneself to be the trader. almost like a machine/robot. Well I am finally in the garage building.
Here are some excerpts I read tonight that I took note of:
"When you put on a trade, it is in anticipation of making money. Every
other trader in the world who puts on a trade does so for the same
reason. When you look at your relationship with the market from this
perspective, you could say that your purpose is to extract money from
the markets, but, by the same token, the market’s sole purpose is to
extract money or opportunity from you."
"The best traders stay in the flow because they don’t try to get
anything from the market; they simply make themselves available so
they can take advantage of whatever the market is offering at any
given moment. There’s a huge difference between the two perspectives."
"To be consistent, you have to learn to think about trading in such a
way that you’re no longer susceptible to conscious or subconscious
mental processes that cause you to obscure, block, or pick and choose
information on the basis of what will make you happy, give you what
you want, or avoid pain."
"The market doesn’t perceive the information it makes available; you
do. If there’s a struggle, it is you who are struggling against your
own internal resistance, conflicts, and fears"
Re: Well it looks like voters are tired of "hope"
Half of Ron Paul's ideas are brilliant. The other half are idiotic. I therefore conclude that he is simply a halfwit.
While I agree with his critic of the FED or of any FED for that matter, he seems to me to be a religious sycophant of the ideas of Ayn Rand, AKA, Alisa Rosenbaum, a disallusioned Russian expat whose hero was no doubt Leon Davidovich Bronstein, AKA, Trotsky. What a bunch of sore losers whose mantra became 'we better get the hell out of Dodge and emigrate or we all die.' And thus they did.
I know nothing of Ron's son who he hobbled with the name 'Rand' but I know that the 'priesthood' is or rather should not be heritable.
The irony of Greenspan chipping in for a floral arrangement in the shape of a dollar for Ayn Rand's funeral, which he attended and Ron Paul naming his son Rand must be keeping the Gods of the ridiculous rolling on the upstairs linoleum with insane laughter............Which creates........Thunder!
Well done, Ameriker. You all has voted good today. We gonna go from tax and spend to borrow and spend and back again. Now we all looks foreward to da true Demuplican gummint that can fix all our boobos wit dem cartoon bandi-aides.
Vote for Nixon-Agnew, they have a secret plan for ending the war! Maybe you don't 'get it' yet. Maybe you never will.
George Wallace, a really stupid and out of touch guy once said that there wasn't a dimes worth of difference between a Republican and Democrat. Today I would say that there is not a dollars worth of diffeence. Not to say that there is more difference but that it now takes a dollar to buy what a dime was worth 43 years ago...For all the 'shiney metal' fanatics, what is a silver dime worth today?
I steer clear of poly ticks except the biting ones on my dog's ass.
This country has become the picture of Dorian Gray. We all want to see it in the hopes and dreams as shown in the picture in the drawing room downstairs while the hideous malignant warts fracture and puss on the picture hidden away in the musty attic of our fears.
Re: Well it looks like voters are tired of "hope"
Dimes are $1.78 today, if bought in bulk.
http://www.apmex.com/Category/17/90_Silver_Generic...
As if by magic, 2 or 2 1/2 of them is enough to buy a gallon of gas, just like it was in the early 1960's. I remember the signs saying 19.9 and 23.9 for Sunoco 190 when I was a kid.
The thing that actually changed was that the dollar has been made worthless over time.
"A frog brought to a boil slowly never notices he's being cooked..."
Exxon Mobil bets big on natural gas
http://oilandglory.foreignpolicy.com/posts/2010/11...
a much better bet on the price of natgas than UNG IMO.
futures 4:30am - Hang Seng breaks out to new high
S&P -1.40 / -0.12%
Level 1,191.30
Fair Value 1,190.33
Difference 0.97
Nasdaq -1.50 / -0.07%
Level 2,148.75
Fair Value 2,149.54
Difference -0.79
Dow -7.00 / -0.06%
Level 11,145.00
The ASX looks ready to break. Korea returns to resistance at high. I'm looking forward to seeing if and how market and currencies react to FOMC today.
Re: Well it looks like voters are tired of "hope"
An answer for the States:
http://mises.org/daily/4811
Catch if the days
You'd have to eye X FCX types all day long and miss rest of market plays/activities to catch .30/40 small cent moves with .10 cent stops and you need a boatload of cash for it to be worthy of the time put into watching it this closely. 10c moves occur almost every minute of the day with these stocks. These move way to fast intraday (machines) to catch these scalps for the majority of investors/traders here probably and more likely most will be stopped out. It's good for educational purposes, but daily set ups would be better before they may happen than after the fact trades as it would be good to watch if the play actually play out the next day or two and learn that way.
futures 6:30am - Europe green
S&P +1.00 / +0.08%
Level 1,193.70
Fair Value 1,190.33
Difference 3.37
Nasdaq +1.75 / +0.08%
Level 2,152.00
Fair Value 2,149.54
Difference 2.46
Dow +10.00 / +0.09%
Level 11,162.00
$ looking like it wants to break to new lows. Could be double bounce. Wait n see is the catch phrase. French Banks and Euro autos getting a bid this morning.
http://www.bloomberg.com/news/2010-11-03/treasurie...
http://www.bloomberg.com/news/2010-11-03/samsung-s...
$UST2Y new lows
Re: Tough market/ Easy market
Isn't it strange it coincides with the November election at a time when most incumbents look shaky? ;-(
Change
"Got any change mister?" wasn't what U.S. voters were expecting in 2008. ;)
J
Re: Exxon Mobil bets big on natural gas
Les,
That is a fine article and makes sense to me. UNG has been rising since 10/25, which is likely a short term bounce. But, eventually natural gas will be in demand as the global population continues to grow and income, and living standards rise.
J
Re: Well it looks like voters are tired of "hope"
Ross,
That was a good rant - I enjoyed that