Bill Cara’s Blog for Sept 24, 2010 [See post-close report]

Greetings. Don't you just love the smell of POMO in the morning?

SCHW - Charles Schwab initiated with a Market Perform at JMP Securities.

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Hoping all goes smoothly with your move, Bill. You'll be missed.

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A little music for the weekend:

http://www.youtube.com/watch?v=TEVvOATOCGo

Some of you may have already seen the video of the lady and the president at the Obama Town Hall Meeting. If not, here is the link:

http://buzz.yahoo.com/buzzlog/94017?fp=1

Today at WSJ Opinion Page is an article built around it. "The Enraged vs. the Exhausted"

I find this paragraph to be a sign of Hope to counter the Audacity of this administration and, more importantly, the entire D.C. culture of the Elite vs the "Hicks".

http://tiny.cc/2m8sl

Highlights
Today's headline number for durables disappointed a bit but ex-transportation showed broad-based strength. New factory orders for durable goods in August dipped 1.3 percent, following a 0.7 percent rebound in July. The August decline was somewhat more negative than analysts' projection for a 1.0 percent decrease. July's figure was an upward revision from the prior estimate of a 0.4 percent increase.

The reversal in overall orders in August was led down by the transportation component. Excluding transportation, new durables orders gained 2.0 percent, following a 2.8 percent drop in July.

On the release, equity futures nudged up but essentially were little changed.

More detail coming. Please check back.

NKE - price target raised at Barclays to $90 from $85 on strong 1Q11 results. Maintain Overweight rating.

NKE - estimates, target increased at Goldman. NKE estimates were raised through 2013. Company is seeing accelerating order trends. Buy rating and new $87 price target.

Taking some profit.

IMO

David Tepper, head of hedge-fund firm Appaloosa Management LP appeared on Bubble Vision this morning. He sees the next few months as follows:

1) The economy turns around and stocks go up

or

2) The economy remains stalled and the FED comes to the rescue with QEII and stocks go up.

Thoughts?

I did lighten up on some, not all for sure, GBE and actually some RBY. I do believe the fundamentals are good, I just have a traders mentality of late and realize everything is up so the easiest thing is to do nothing for fear of missing something. I do not like the currency POMO as a driver which is suspect at times, but it is what it is.

Actually a position should not be too much on a weighted average, say 75% or more, at least in principle. We all have our own personal styles.

Edit:
I will buy back these (shares) when they let some air out, if they ever do, lol.

Just a little more stress for the shorts...

"Quite a few mutual funds have some silver exposure, mainly through silver-mining stocks. (Only a handful of mutual funds, none of them very big, hold significant amounts of the iShares Silver Trust ETF.) If we limit ourselves to funds with at least $100 million in assets, the following table shows the 10 with the highest percentage of their portfolio in silver stocks. The table also shows the size of each fund's asset base and its percentile ranking in its category over the past month and the past year (as of September 23)."

http://tinyurl.com/39u5fp7

I really don't have a byline for this one:

http://www.businessinsider.com/colbert-to-congress...

ALOHA!!

Looks as if the US Census bases poverty metrics on a 1955 model that does not take into account many costs to survive in America that did not exist then. In a recount that takes into consideration those on unemployment and food stamps it seems the total Americans living in poverty increases by another 14.1 million. With that 60 million Americans live in poverty, which brings the ratio from 1-in-7 to 1-in-5.

I had been wondering about US Census numbers as it seems any government data is based on flawed models from the past or some sort of conglomeration of hedonics that is impossible for the average human to unravel and understand. Whenever I view government data, including US Treasury data, I always say to myself, "What you are about to see is the best case scenario!" Seriously for many of us it is hard to balance our own checkbooks, just imagine a checkbook with $11TRIL in it and a gazillion entries! Governments are never bastions of honesty and accuracy and in fact that has been the ongoing criticism the GAO has against the US Treasury since forever.

This link shows the study the National Academy of Science(NAS) did on poverty in America where they refute the US Census 2009 study. Either way you slice it 1-in-7 is bad enough, but 1-in-5 takes us to a whole new ball game. Still if I had to be in poverty somewhere in the World I would prefer to be in America, especially in Hawaii. If you live in rural Hawaii you can easily supplement those food stamps year round with free fish and fruit of your choosing. Being poor in NYC in the middle of Winter has to be an extremely agonizing experience.

LINK: http://tinyurl.com/23dhx4n

Then in a separate study there is this ...

In their most recent survey, this number exploded to a mind-shattering 77 percent. Yes, 77 percent of Americans are now living paycheck to paycheck. This means in our nation of 310 million citizens, 239 million Americans are one setback away from economic ruin.

Debt attrition sets in ... Hummmmm ...

For how long. I don't really grasp how a weaker dollar is better. Is there a Foreign Exchange for Dummies link somewhere?

The debt crisis is still upon us. Panic selling still occurs albeit sporadically. Monetary policy is not working. Too much debt. The markets are in charge, not the FED. This will probably not end well.

http://tinyurl.com/26rl5u3
OK Dr. S, you may be onto something regarding CYB, presently +0.03 0.12% @ 25.34.

"WASHINGTON—Legislation that targets imports from China and other countries with currencies similarly perceived to be undervalued sailed through the U.S. House Ways and Means Committee Friday, preparing the way for a vote in the full House next week.

"I will bring this bill to the House Floor for a vote next week," House Majority Leader Steny Hoyer (D., Md.), said in a Friday statement.

"While a multilateral approach to addressing this issue is preferable, we cannot wait any longer to level the playing field for U.S. businesses and protect American manufacturing jobs," Mr. Hoyer said.

The Ways and Means panel passed the bill by voice vote earlier Friday. The bill authorizes punitive tariffs on goods from countries deemed to be manipulating their currency."
J

Talk about chasing...
Scenario 1: S&P 500 double-bounce off of around 1148ish and the market tanks next week.
Scenario 2: gb58 is wrong and also bankrupt by Wednesday.

Jim Jubak looks ahead into the coming weeks, expecting a pullback, and offering a strategy for dealing this possiblity:

http://tinyurl.com/2e7dms8

Johnny -

CYB is my alternative to money markets or 'cash' in my trading accounts. Tariffs on the Chinese will be FUBAR but, in the U.S. government's race to inflate, tanking the dollar and stickin' it to China is a fun way to pay down the mother of all debt obligations. The only alternative, of course, is to repudiate it and man the battle stations! Anyway, how volatile can a hedge against the most populated country's currency get?

Volcker to the Chicago Fed: "“Money market funds have encroached so much on the banking market. They are nothing, in my view, but a regulatory arbitrage. The purpose that they serve in handling payments and short term paper is a commercial banking function” but they don’t hold the capital or face the regulation of banks."

http://tinyurl.com/29wuj3v

He's not a fan, either. Time to break the buck and sit back as the panic unfolds?

The assumption is that the underlying value of the company doesn't change, so a weaker dollar needs more of them to buy the same company. Hence, to a limited extent, stocks protect you from inflation. But don't bet your patrimony on it!

jet- I'd be careful. There is now a solid floor under this market until next Thursday's close, IMO.

Dr. S -

Thanks for the Armstrong update. I can't figure out if he's a visionary genius or a crackpot, I don't think there's anything in between. Reminds me of Tesla - "can he really do all that??"

Dr. S,
Volker still "has it", just like Bill. There is so much good material in the Volker article, I can't single out any one point as head and shoulders above the rest. It's all great. Thanks for the link.

Even with the rather frightening ascent of CYB, I picked up a large chunk today @25.34. Sold my ADBE @26.84 ($0.56 share profit) with the intent to buy it back soon, a few pennies lower. At the moment, ADBE appears to be a good trading vehicle for those who prefer less volatility. I would not have wanted to be holding ADBE the day it went from 33 to 26.
J

The only sector index down for the day on the TSX was the global gold index ($SPTGD), down 1.15 %, on a day gold hits a record high.

I bought TZA as well. This equities "rally" seems artificial, low volume combined with strong gold and silver, all "juiced" as Cara mentioned, by government stimulus. TNA advanced today to just below tuesday's high. Floor or ceiling, looks more like a ceiling. All real indicators show a pullback for the beginning of next week.

His last newsletter was predicting that all the cycles were telling him gold would explode - specifically in the month of October. Now he's saying Sept high is likely the top and it will trend down between now and June. So it appears he's "updated" his previous forecast. The newsletter is a good read, but I attribute less clairvoyance to the guy now.

from Thursday night

Most are placing emphasis on the breakout 1130 as the critical level because it took all summer long to breach and now has failed to be support. In this view, considering the market already had a bearish reversal day and hovered around SPX1130 on Wednesday, it’s not that surprising the market re-visited the summer range, breached back to the upside and closed below it at the close.

The tale of 2 markets , firstly, is the way the market rebounded after ‘overshooting’ in the morning. It was a beautiful constructive move (showing resiliency of the tape) as an underlying bid overwhelmed what was an exaggerated and un-called downside open off Euro data and Initial claims. Smart money knows Europe’s data growth will now slowdown in the footsteps of the way China and US did (while now these stabilize). Recession fear mongering today surrounding Europe is just what we went through for a few months with double dip’ talk in the US as our ISM‘s were weaker than expected after peaking. Also, post FOMC the ‘focus’ has turned to inflation data and away from data such as today’s Initial claims and maybe even some of the manufacturing numbers coming up in early October.

The second tale surrounds the last 1 ½ hours and what looked like a spooked market. There was nothing on the wires worthy of the sell off, so likely it was just a technical driven sell off as shorts pressed and got a little more aggressive as a second coming of 1130 today was approaching. If this is the sole case, the market’s realization it was only technical should allow the market to make a move back above 1130. Shorts are biased to be short term now and longs will buy up dip oppy’s, so a quick rebound move is very possible.

www.djimstocks.com

Les, who says the Swiss aren't funny?

http://www.asylum.co.uk/2010/09/24/swiss-politicia...

bluesky -

Commodity Future Trading Commission (CFTC), an agency perhaps more powerful than the SEC, accused Armstrong of controlling global markets with his trading model which was later confiscated by a court appointed Goldman Sachs employee. Truth is stranger than fiction.

Cheers.

Johnny,
Obvious taxes are only the tip of the iceberg. Most property taxes (and insurance but that's a rant for another day) are paid from escrows. Most schmuk homeowners don't even know their year to year changes. All they know is that their monthly payment increased.

There is a really savy real estate lady that I am friends with who is building a business by protesting tax appraisals. She accesses the county's appraisal records and contacts the owners of properties that she knows are grossly overvalued for tax purposes. The short story is that in the last 2 years, she has successfully challenged over $12 million in over inflated values which resulted in savings for property owners of $600,000. She takes half and she says that she has only been challenged twice by the appraisal board.

I live a comfortable distance from Dallas (Thank God) but the local news media is running a story about the head of the Dallas School District 'retiring' to take over as the head of the Las Vegas school district. He made well over $300,000 per year here. In retirement, he receives about $250,000 from the pension fund. His new job in Vegas will pay him 'only' $280,000 or so. On a combined basis, this turkey is scamming the system for $430,000 or more per annum. The sorry fact is that this ignorant politico probably believes that.. Hor-atio.. is a mathamatical stastic to determine the percentage of Freshman Girls selling sex for Ipod money...

It reminds me of the military back in the 60's where an officer was bumped a grade just prior to retirement. Anyone who knows the retirement 'games' of teachers, police and fire in major metropolitan areas understands the 'wink wink' and I hope to get the same treatment, thank you!

But I neglect the hidden in plain sight taxes. Some are figured as 'surcharges and other fees' but a rose by any other name.

AT&T monthly service: $37.00

Surcharges and Other Fees
Federal Subscriber line charge.........$5.30
911 fee $ .50
Federal Universal Service Fee $ .72
Texas Universal Service $1.69
Municipal right of way fee $ .65

Total Surcharges $8.86

Taxes

Federal Excise tax $ .68
State and Local tax $3.58

Total taxes $4.26

So, total surcharges and admitted taxes equal $13.12 in addition to my $37 service plan. My State and the Feds just increased my phone bill by 35.45%.

This is just an honest breakdown of a modest phone bill. Where do you think other examples of hidden taxes reside?

Forget the 'Bush' tax rate declines. Taxing and spending resides with the congress only. The Senate cannot by law propose tax rates or spending proposals. Only your congress. Read your constitution. The 'Bush' rates on taxes could have only been as a result voted on by your congressional Reps.

A dead economist, Herr Freddie Hayek once opined that when the aggregate tax take from a country's citizens exceeds 40%, that they are surely on the road to serf status in spades. Income tax policy is a cruel joke when you consider the other avant-garde ways of revenue gathering and subtle renigging on the so-called social guarantees. My guestimate is that we are approaching 50% if one considers deficit spending to be the cruelest of taxes never to be admitted.

One only hopes that our first generation of Praetorian Guards will be wise and beneficent. Eh, free will, republic, democracy and social justice are at most just the latter day rallying slogans of a green culture now descending into the maws of a hungry civilization.

SPQR

Been trying to find that video George thanks. In seriousness though, imagine a parliamentary democracy where the executive is now majority women. Switzerland has done it.

http://www.swissinfo.ch/eng/specials/election_cabi...

http://www.spiegel.de/international/europe/0,1518,...

ALOHA!!

As I have pointed out many times the truth is we do not need private banks to issue DEBT. Look at every US Treasury Statement and you see that the US Treasury "withdraws" and "deposits" funds from its Federal Reserve Account. Why does the most powerful Nation on Earth need a private bank account? Obama touched on this subject in his TV speech back in April 2009 when he called private banks MIDDLEMEN in relation to the student loan system. I think those banks sat him down and told him DONT GO THERE JACK ... or else you will end up like Lincoln and Kennedy. The phrase CENTRAL BANK isn't even in the US Constitution.

Why do we need private banks as MIDDLEMEN between us and our money? Central banks are Unconstitutional for a reason.

I believe this documentary gives the best overview of banks and money with a lot of historical perspective. This should open up some eyes and bring some more focused discussions other than the INFLATION/DEFLATION debate which I consider a diversion from the real TRUTH about private banks.

We all saw how the FOMC Meeting Minutes moved the markets this week. Imagine a World where the FOMC did not exist. I for one think it would be a much better World for WE THE PEOPLE. The politicians and bankers would vehemently disagree ...

Its the DEBT STUPID!

LINK: http://www.youtube.com/watch?v=D22TlYA8F2E

The only Presidential Candidate who offered America REAL CHANGE and REAL HOPE was RON PAUL. In his platform he wanted to ELIMINATE THE US FED. It should be every US voters focus in future elections. To vote for anything else is just a 100% pure delusional diversion. Unless we as Americans force this issue all the other issues like the environment, military, welfare and education will end up in the trash heap of political fraud and deceit.

Think outside the box. Break free from the monetary STOCKHOLM SYNDROME we now live in.

I can offer reason for the Fed's existence. To make good all the bad lending practices of commercial banks in the United States - the FDIC closure of which now exceed the total of 2009. This is of course a nonsensical piece of reporting because the recession finished in 2009.

http://finance.yahoo.com/news/Regulators-shut-bank...

loannetter,

Great one.

Another example of the internet effect. Even when only partly true alternative ideas and opinions eventually brought down the Soviet Union. In 1984 my son was in the USSR and young people were hungry for western news magazines (and Levis and Elvis records) because they knew there was another reality.

Bernanke, Obama, Beck, O'Reilly... the gubment or MSM can't top the free flow of info to an increasingly informed public.

When I was young people bought the newspaper or magazine with their preferred slant. Col. McCormick, Henry Luce or whoever could sway millions and what was eventually accepted as historical truth took decades to counteract it.

I have hope that people like this woman may eventually elect someone who actually put the citizens welfare up front. Disillusionment is Step One. It won't happen in a single election, but perhaps when enough of us realize how we are being played as suckers things will really change for the better.

Ross, I've noticed those taxes and the ones on my utility bill. Most everywhere I look there are these new little taxes and extra fees. When the Obama health Care plan went into effect Obama claimed "no new taxes". Then my wife, who is quite ill but works only because we can't buy health insurance for her and she is almost 64 but not yet 65 and eligible for medicare, had her health insurance payroll deduction rise +$100 a month. So, Obama's tax was an increase in the health insurance rate, as I see it - and us chump 'merican's have to buy it by gubmen't mandate or go to jail I suppose. Of course we have always paid for health insurance, even as the health insurance execs lowered coverage in cleverly worded "health insurance policies". Such is the lot of us "little people". The BP guy had it right, it's just not politically correct to speak the truth.
J

http://www.northernminer.com/videos/play/?plid=100...

drank the grape koolaid in the first 30 minutes. SPX up 23 points in first 30 min. Flat the last hour. Big boys didn't get excited about taking them home. Neither am I. May not be time to short but IMO not time to open new long positions other than extreme capitulation stocks and maybe not then depending on indicators. Problem I see with many setups is that there is not enough profit potential (3:1 or better) to justify going long OR short.

$naa50r indicates risk rising...again AND divergences showing in the hourly makes me believe reversals are quite possible.

http://ronsen.blogspot.com/2010/09/saturday-brunch...

Vad,

1. On city itself.

My wife's cousin had a good business going in Vegas supplying furnishing accessories to hotels (lamps, pictures, etc.) and it is down to zip.

2. On the seminar audience.

My suspicion is those in the younger age brackets had little to lose these past couple of years or are busy looking for full time work to pay off those college loans.

The 50s and 60s were the hardest hit. Also the older groups are more experienced investors and more likely to realize the "pros" came out looking really bad in recent years. Why pay for bad advice? DIY is in all over.

"One thing though hasn't changed... major problem hindering the performance is the same I see through all the years I run educational events: inability to take a stop loss, holding losing positions through the major declines."

I've noticed the same thing with people I know. many have NEVER considered such. One said to me, "If you don't have confidence in the company why buy the stock in the first place?"

My neighbor, who is always totally invested, told me just yesterday that everything he owns is down and if he sold he would take a loss. "I'm getting 5% on my money and if I sold I don't know where I could put it."

His buy and hold so far has included GM preferred and bonds, a local mortgage company bankruptcy, and Ford preferred. Before he bought AT&T I suggested he check their pension funding, but he bought it anyway because, "It's always been a good company and has a ton of cash and paying 6%." He should see the debt.

Go figure.

Whether you are in the inflationist or deflationist camp,
here's some food for thought that promotes the inflation theory.

Deflation: Reality or Urban myth?
by Puru Saxena

http://tinyurl.com/3xmnpk4

Here's a few highlights:

"deflation is an urban myth and the global economy will have to contend with very high inflation.

It is our conjecture that inflation is always a monetary phenomenon
and willing policymakers have the ability to create inflation.
Now, before we delve any further, we want to make it clear
that inflation is an increase in the supply of money and debt.
Conversely, deflation is a decrease in the supply of money and debt.
Furthermore, it is critical to understand that an increase in the general price level is a consequence of inflation and a decrease in the general price level is a consequence of deflation.
Most importantly, despite what you may hear elsewhere, you should keep in mind that a booming economy (operating at maximum capacity) is not a pre-requisite for inflation.

Throughout history, periods of massive money-creation have always been inflationary
and this time should be no different.

Given the inflationary environment we find ourselves in,
we do not like cash or fixed-income securities.

In our view, both cash and bonds will lose considerable real value over the following years
and the ongoing strength in the government bond-market may turn out to be an exceptional selling opportunity.
short bonds

Conversely, we maintain our view that precious metals, energy and the stock markets of the fast growing developing markets in Asia will provide stellar returns in this inflationary environment.

The Koolaid is actually OK as long you're first in line, drink your cup before they spike it, and leave the compound immediately after.

ALOHA!!

Yes Vad, Vegas is hard hit ... I keep getting that same feedback from numerous friends who live there. We used to have a good weekly account with the MIRAGE HOTEL but they closed that account in order to boost their bottom line. Maybe when they closed that account they could afford to keep one or two employees working, but no doubt flowers are the least of their worries now.

How many of the over 60s are trading with their Social Security checks? I mean who can live on just social security these days?

I also wonder what these babyboomers will do with those big houses their kids grew up in when there is no market? They may not owe anything on the mortgage but they are now saddled with way more house than they need. Maybe their kids are moving back in ... Last year when I was in Orange County California we visited an elderly retired couple who had a two story home about 6000 sq ft where they had split the upstairs HVAC so they close it off. They rarely went upstairs any more too old to climb stairs and it was always hot up there. They complained even with that their electric bill was too high! Yet they did not want to sell in a down market. They were convinced real estate will be back to normal in a year or so, but then they have been saying that for two years now. Sorry but without jobs nobody can afford to pay debt. Real estate is based on debt.

How can someone day trade or do any short term trading and not use stops? Most of my shares were purchased through Private Placement(PP) so stops are out of the question. There you have to run on pure company fundamentals. Pretty much the same as buying pre-IPO but longer term as there is always a holding period involved. It used to be I could buy pre-IPO one day then sell the same day of the IPO. That scam made a lot of privileged insiders very rich as you had to be invited by your broker, which usually meant you were one of his or hers best high net worth clients. Even that had its limitations as IPO shares were limited in distribution whereby the best performing brokers in the company got the most shares. Naturally most of those pre-IPO shares went to the New York, Wall Street based offices first then trickled down from there.

Did you or your wife take to the Blackjack or Poker tables? Or was that too high risk? HA!! Everything is a gamble ... Of course who ever said there were any guarantees in life ...

ALOHA!!

Ultimately the story ends with mid-night prayer: Just let me out this time, I swear I will never ever do it again.

Vad ... Yes the midnight prayer ... no doubt Bernanke is saying the same prayer a lot now!

This may sound strange coming from a day trader but I have zero interest in gambling.

Not at all ... I don't gamble in Vegas either, but I've lived near an active volcano for over ten years and I trade juniors, so I'm all tapped out on adrenaline! HA!!

Were I to design one, it would hinge on psychological warfare, the blackest of covert ops.

What used to work hasn't been working- at least two professional traders I know are adamant on that point.

It wouldn't be that difficult to design a black box that utilizes popular technical analysis patterns to confuse and trap traders. For all we know, developers use blogs to their advantage- there's a wealth of data in cyberspace.

If we're trading against a box that is able to intelligently predict our behavior given (historically reliable) trading setups, the box has the upper hand- especially if it's supported by vast amounts of trading capital that can be gambled as if it's OPM.

Is it possible that trading algorithms have simply become more sophisticated- while most of us are relying on outdated tools or outdated strategies? Worse, outdated concepts? 'What used to work isn't working.'

Just putting it out there for discussion.

"In my mind humans create and technology of the algorithmic type can only react in scripted or some derivative fashion.."

gforce- Exactly. Why is it then that so often traders themselves react in scripted fashion? If they all agree on technical entry/exit points, the smart trade would be to fade those points- and black boxes would be a great way to do that. Furthermore, if time-honored trading strategies are not working well, shouldn't traders be willing to discard them (at least temporarily) and look outside the box for one that works?

As a corollary, let me add that one reason I believe Vad's system works so well is that it is in itself a black box- it's designed to detect and fade highly reliable patterns of human behavior.

Another corollary- human beings are known both for certain strengths (eg, the ability to create), as well as distinctive weaknesses- the greatest of which is emotional. It takes enormous willpower not to react instinctively/reflexively to certain situations.

I think it comes down to the Achilles heel of traders- emotions. When it comes to emotional control, a black box wins hands down. When was the last time a black box broke down thinking about a dying relative, or traded out of character thinking about last night's date?

Interesting, to become totally emotionally unattached from trading. Thats a concept that will be hard to bring to fruition...and perhaps needed at times. I assume that is what Bill Cara and others were referencing when they all said the markets character has changed.
I have noticed a general coldness to what used to be a humanly compassionate market role of raising money for an entrepreneurial purpose. Value discovery too.

Right, perceptual boxes are reinforcing until they are not. In a sense we are always trading against Goliath, even Bill Gates or one of the big boys like the Fed are not quite the market...Armstrong likes to call it "collective conscience or conscious" I think, at least one of his writings did.
I am going to catch some sports...good trading...the WIR should be interesting...take care.

edit:
It just occurred to me that the WIR will be absent this week.

I was in Atlantic City this week from Monday-Wednesday. I arrived in the morning and stopped in at Caesar's which is a very large casino there. On the main floor, every table was shut down, poker, craps, roulette, etc. On a side portion they only had 2 craps tables and 2 blackjack tables open, everything else closed. The slot machines, for the most part, were idle, no customers. A huge casino like Caesar's may not even survive! Incredible.
I get free rooms at Borgata offered to me every week even though I hadn't been there since April. I spend most of my time playing $2-$4 limit poker. They certainly don't make any money off me but yet continue to offer beautiful rooms and great buffet. I don't understand how these places stay in business. This past year Pennsylvania has allowed table games in the previous all slot casinos and that has damaged Atlantic City significantly. The daytrippers are staying in their own state.
The economy is certainly hurting everyone.

'Real strategies work. Always did. Always will, as long as human emotions haven't changed - because real strategies are based on reading and utilizing those emotions.'

Vad- I agree that human nature has not changed. I just think they've come up with more sophisticated ways of playing with traders' emotions- and one obvious way of getting played would be an opponent using the very tools we rely on for pattern recognition against us. Or maybe I'm just overthinking the entire issue.

It is (IMO) one reason instinct can often be more reliable than technical analyis when 'reading' the market.

John Mauldin has just released his weekly newsletter, and it is a very interesting one. It is called "Pushing on a String": http://tinyurl.com/2ffbzpb

He is suggesting that in the next few months we should look carefully at the economic data, and bad data will probably prompt Bernanke to enact QE2. I would add that we should look closely to how the market *responds* to economic data:

1. If we get poor economic reports (as John Hussman is expecting) and they are bought, then the market *wants* QE2, and hence it will keep going up until QE2 actually takes place and then a some more until it actually *verifies* that QE2 is not effective. At that point, all hell will break loose.
2. If we get so-so (but not bad) economic reports and they are sold, then the market will probably not have much upside (as the market is currently pricing in growth that is much better than so-so), and a big drop might happen to force Bernanke into QE2.

What does everyone else think?

Mr. Saxena, smart though he is, is fighting the last war - inflation. That's because of two words: shadow deflation.

1 in 7 home mortgages are no longer performing assets. Total mortgage debt went from 10.6T down to 10.1T from 2008 through today. We have deflated 5%, yet another 14% of home mortgages are NPA. That is another 1.4T in losses waiting in the wings. Then add CRE, and add some more of the 4T in underwater mortgages that will default once the current NPA turn into foreclosures, hit the market and home prices continue down.

During the peak years of the boom, mortgage money was increasing at 1 Trillion per year for three years running. From 2001-2008, the amount of money went from 5.3T to 10.5T. That's 100% inflation! My guess is, all that money will probably vanish - 5 trillion - to bring us back to trend and then beyond, as markets tend to do. And that's just in home mortgages, it doesn't count CRE, or corporate loans, or consumer credit.

Shadow deflation - the tangible result of all the "pretend" that riddles the banking system right now. His chart would look quite a bit different if pretend wasn't happening. Bankers know this, the Fed knows this, and now so do you.

One thing we agree about though - inflation or deflation is all about growth in money.

For me, the most likely path is as follows: the Fed will start to print again, the dollar will be hit hard, and our foreign creditors will signal their displeasure privately through back channels, and reinforce that publicly by dumping a chunk of their 20 year treasury holdings, moving the bond market. The Fed will be faced with a choice - challenge our creditors, and risk having to be the buyer of last resort of every treasury as it continues to print and our dollar moves much, much lower, or take the deflationary hit and force our zombie banks to recognize their losses and restructure, bringing all that deflation into the light of day. Printing is all about rescuing banks from deflation, Once you give up that goal, there's no need to print.

If printing is selected, the buck crashes, and PM is a handy parachute for some percentage of our personal wealth.

However, if the bank restructuring option is selected, the buck will rise, the stock market will fall, the treasury market will rise, the money markets will lock up and a bunch of them will break the buck, we'll have a nice bank holiday, and that will surprise everyone who is intent on fighting the previous "inflation" war. Isn't surprise what markets like to do best? In that scenario, physical cash will be very handy to have on hand. Anyone talking right now about a bubble in physical cash? PM probably crashes in that scenario, allowing forward thinking people to pick up a bunch of it for peanuts, perhaps for later use in a gold-backed currency?

Honestly, I have no idea what they will do - print, or restructure. But it seems wise to acknowledge both options are possible, and prepare accordingly. And its all brought to you by - shadow deflation!!

http://ronsen.blogspot.com/2010/09/sunday-morning-...

Chart smorgasbord.

1) Prebought?
2) VIX...no worries
3) QE2
4) Miscellaneous charts
5) Rosie's rationale
6) The Roque 6.

Enjoy the weekend.

Ross, Mokat,

I attended a presentation by Paul Kasriel at our community college about four years ago and when I questioned what I perceived as textbook views regarding our area economic condition (dissolving manufacturing jobs) he was confident they would be replaced with equal or better. We are now at 18% unemployment not to mention the unsellable housing problem.

Wages and home prices are in dismal shape around here and now nationally as well. People can't afford to pay and can't find buyers to sell to. Here it is not a question of "de-" or "in-" anymore.

I have a lot of respect for much of what he says and read his opinions on line, but like most economists they have the same training, experience and have been untouched in any personal way by current conditions.

http://tinyurl.com/2vvncge

DavidV- Well, of course the 'even smarter' move would have been 'all-in' the night before- but I would consider that more of an inside job, or 'fly-on-the-wall.' Note also that 2 hours later I was 'all-out.' My whopping take on the move amounted to +0.7% in the trading half, or just +0.35% for the entire portfolio (between eating breakfast and driving to work, I ended up with less than 15 minutes to decide on positions, and I ended up overweighting some of the [early] deadbeats, like BAC). But I'll take it.

"Vad- I agree that human nature has not changed. I just think they've come up with more sophisticated ways of playing with traders' emotions- and one obvious way of getting played would be an opponent using the very tools we rely on for pattern recognition against us."

Think of it this way: if human nature has not changed, against whom are "they" (smart money I assume) going to trade if they start trading against pattern recognition? Against minority who, just like "them," uses those same patterns? It makes no sense. Crowds create those patterns, and playing them is in fact exploiting crowds. Now, interesting case happens when crowds get informed about certain pattern and start trying to play it - then they ruin it themselves just as tape reading base premise suggests, and smart money fade it. Very recent example is widely discussed "head and shoulders" this summer - CNBC, WSJ, what have you proudly showed this "ominous sign used by sophisticated traders" (I quote some idiot from TV). Sure enough, market faded it. One of our seminar topics is life cycle of patterns - this is classic example.

"They" don't have to come up with anything extremely sophisticated, as long as "us" do that same thing.

Vad- Exactly. 'They' (those able and presumably also willing to influence market direction via access to large pools of capital and/or relationships with policymakers or media conglomerates) have become quite skilled at creating false signals/patterns- perhaps made even easier recenty due to low volume.

I am grateful to Kaimu for providing this link:

http://www.youtube.com/watch?v=D22TlYA8F2E

I have to say this broadens my understanding of the gold standard and the silver standard.

Watch this video unless you think you have all the answers.

Les, another reason why I think QE2 will not help the economy is that it will squeeze profit margins (which are all-time-high now and are vulnerable to a pull back already) lead to stagflation. Copper already broke out to a 2-year high, aluminum is on the way to surpassing its April 2010 peak and also breaking out to a 2-year high. As soon as oil joins the metals, the death sentence for the economy will be written down -- rising raw material prices in the environment where corporations have NO pricing power at all. Such stagflation kept the market flat for 10 years in the 70's.

I have read all your comments on this thread about the Blackest Box but I have my own theory which may come across as a naive thought/theory, call me crazy if you wish but whether I am up or down for the year, rich or poor, I would continue to believe in this theory and that such a process is always taking place behind closed doors.

I know many of you DISAGREE that market trades up and down based on some conspiracy theories designed by a few of highly influential groups who are living among us. But I tend to believe that such groups do exist and have a great effect on how things turn into in the economy and what direction the market takes on one day, one week, a month, a quarter, a year or years. Some of these groups include, but not limited to, some members in the world Gov't's high office, the heads of major influential banks, the rich elite with deep, deep pockets whose intentions in life are always to stay rich and powerful, have no emotions to other surroundings in the world and don't give a damn about the other middle class or poor people and careless for social justice in their own back yard or around the world.

The principle here simply works like this, scratch my back and I will scratch yours. For example, if the Feds/Gov'ts heads, heads of the banks and their rich clients/bankers are known to be in bed together, therefore it is not surprising that we would expect to see that Feds/Gov'ts and policymakers will create or pass policies/legislations that will only serve and benefit those influential or wealthy friends (The bankers and their rich elite clients), in return, those bankers/rich elite groups would easily return the favor by making their partners/supporters at the feds/Gov't (Policymakers) happy and drive the market in any shape or direction such groups would sure benefit from. Cheating and screwing in the process all small retail investors, students, average Don Joe investors, Ma and Pa savings, ...etc from their money. It has worked in the past and will continue to work in the future. My friends, there is a very good reason why ONLY 10% become rich from trading stocks and 90% loose or break even. Without such a system in place, you won't see such a formula consistently staying at that level. Even those naive investors who played the high flyers dot come market, many of them did actually become suddenly rich in a very short time but they forgot who was running the show and lived to see all their high flying profits from dotcom investments returning back to ZERO, ending in losing all their shirts and the house they took second mortgage on.

I know, I know, many would tell me come on, this can't happen, there are no such conspiracies alive and no such insider trading take place among those same groups I have talked about (wink wink, nudge nudge), sure there are strategies in place and if you are a smart trader you would benefit from them just like the other top bankers and their highly influential rich groups do. My response to that is, I am sorry my friend I was not, and will never be, invited to those meetings behind closed doors that are held by those same groups who influence and direct the trends in market, economy or draw the maps on ground and shape our lives ( same kind of meetings that decided the fate of leman brothers for example). I am sorry, I am not on the instant message contact list of top traders among different banks/investments and brokerage firms to give me the heads up or the lead before the rest of herds/steeples as when to get out of the market and when to start accumulating again (which by the way, could change on the fly), I don't have such an edge or advantage. The majority of us, most of the time, would come too late to buy after these guys toped and started to unload their positions to us or sell after waiting too long sitting on losses when these guys are now coming back to buy same shares on the cheap on a huge discount.

All I have are those same TA charts, indicators, divergences, trends, newswire, ..etc that are used by the majority at present of people now which I try to decipher and get my hints from to make hopefully a wise decision on how to trade. But hell, how would I be able to make such a decision, if they have these fast black boxes that are fed with programs to trade against the psychology of the majority of investors to scalp and sleeve them, steal their hard earned money, and ruin their dreams to retire someday comfortably.

Anyway, this is how I and many people I spoke too feel so I am not alone here. If we are naive to think that way, prove to me and others in solid examples if you wish that I am and others are wrong to have such a belief and maybe, only maybe, I may consider lighting up on that theory but I doubt that I would :)).

Happy Trading every one.

Ohh yeah, one more thing, please take a look at all 5 parts of this movie in the links below and enjoy uncovering the hidden truth which support a lot of what I mentioned above.

http://www.youtube.com/watch?v=_dmPchuXIXQ

http://www.youtube.com/watch?v=lBZne09Gf5A&feature...

http://www.youtube.com/watch?v=SjUrib_Gh0Y&feature...

http://www.youtube.com/watch?v=rXZ4xYP53DY&feature...

http://www.youtube.com/watch?v=rwz85gWjFbk&feature...

Here's another article on the inflation/deflation debate from Zero Hedge.

http://tinyurl.com/3a7n6oo

The ramifications of the FED behavior on NOV 3 are apparently huge. The author makes the case that QEII will be the beginning of hyperinflation. Bond will rise further in price as interest rates will fall to near zero, stocks will inflate along with commodities and gold could accelerate to a 5 digit price with the dollar falling to unthinkable levels. After the destruction, all assets except gold (and perhaps select commodities and stocks with production lines in vital products) would then fall, as they are priced in fiat dollars.

Consequently, if the FED fails to deliver QEII, a deflationary destruction will occur from a massive credit contraction.
Looks like either option will bring the house down.

Question:
Any Cara members thinking about increasing their gold holdings at current prices and reducing their cash holdings?
How much gold/gold stocks should one hold in their portfolio 20-30-50% ? 2 parts gold- one part cash?
If QEII happens in a big way and the dollar plunges, cash holders will get crushed. The next blow to CONFIDENCE
may start the "anything except cash" cascade.

Opinions welcomed.

Vad, I for one, missed you here!

We are certainly watching Sterling like a hawk around here. Their mortgage division, Golf Savings Bank has been gobbling up new condo projects and certain categories that carry higher than average risk.

Mortgage Banker Stats outlook: (Excerpted from mbaa.org)

We predict that mortgage originations will decrease to $1.4 trillion in 2010 from an estimated $2.1 trillion in 2009. Purchase activity continues to be weak, although it was given a brief boost in the spring by the tax credit program, while refinance activity is being propped up by mortgage rates that remain close to historical lows, although there is less refinancing going on now than in previous periods of comparably low mortgage rates. Purchase originations will fall to $539 billion from $740 billion in 2009 and refinance originations will decrease to about $910 billion in 2010 from $1.4 trillion in 2009. This month's originations estimates for 2010 forward were revised downwards to reflect the weaker July data for home sales and housing starts.(end)

Which is why I posed the question: How can Homebuilders possibly go up-- Unless they are dumping inventory at a loss to bump the balance sheet?

65- To paraphrase an universal observation- there are probably several hundred million more people around the world who share your suspicions.

The thread is about human nature, and we need look neither long nor far for examples of power conspiracies close to home (in fact, for abused spouses and children, it's a daily occurrence inside their own homes). To pick one example at random, let's look at the community of Bell, California.

http://tinyurl.com/2d888pz

When I first read the above story back in July, my immediate reactions were: (a) it's true, and (b) had the city managers been able to check their greed at let's say 1-2m apiece, they would have gotten away with it. The problem with most criminals (which is what these politicians are) is lack of self-control.

Your 'theory' is not confined to the capital markets- it applies to all human interactions. What you suspect to go down behind closed doors happens all the time- the only question is how successful these 'influential groups' of people are in driving market prices.

2nd_ave, I agree! This theory doesn't just apply to market moves and how it's controlled by these groups only but it also applies to a whole lot of other areas in our life and at many different levels. The love for power and control by these groups over centuries have been beyond imagination. Although I know that few here would still argue and say there is no such thing but that fine. Every one is entitled to his/her own opinion/belief.

We are a small fish 2nd in this market compared to a sea of sharks around us who control the market moves and decide the fate of small investors. We will be lucky if we could barely survive the market controlled swings and still get out alive without getting our skin sleeved.

Interesting Analysis indeed !!

http://www.youtube.com/watch?v=UdntH7Ya5xQ&feature...

Zero Hedge paints quite a picture, but I think they're starting from their desired conclusion (hyperinflation is coming, cash is trash, gold is good) and working backwards (now lets see how we can prove hyperinflation will come from QE 2).

First, I'm happy to see they agree with my thesis that deflation is what will happen absent any intervention. In fact, deflation has already happened, it just hasn't been admitted to.

Now, as to the mechanics of a QE 2. QE 2 will not happen in the space of a week, it will be spread over 52 weeks. Secondly, in QE 1 the Fed bought mostly MBS, not treasuries, and I think they'd stick with a mix like that. They may even get more creative. Ah creativity from the Fed, how exciting is that?

How low will rates go? ZH makes a dramatic prediction of 0% rates and "no offer" markets, but that's predicated on the Fed buying the bulk of the available treasuries out there, and I feel the Fed will spread the wealth out a bit more than that. The last QE didn't cut rates in half, and I don't think this one will either. That part of their story is just speculation - reminds me of some of the first atomic bomb scientists who speculated that an atomic bomb if exploded might destroy the earth. Other analysts suggest long rates wouldn't come down by much, and in fact QE 2 might well bring supply from other central banks around the world who may want to exchange long bonds for shorter term bills. Long rates might actually rise in that instance.

And, if purchasing is spread over 52 weeks, in any given week purchasing is only 28B, which can totally be swamped by sellers if there is a rush for the exits. Nobody rushed out last time, so it might not happen this time either. But - last QE operation, the US still had a reputation of strength and this was seen as a one-time affair. By 2011, will perceptions still be the same from the world, or has America's reputation suffered in the interim and as a result will the outcome be different? We did spend an absurd amount of money to get a very lukewarm rebound. Think that hurts our credibility a little?

I think only one thing is certain with QE 2, and that is, the US dollar will get hurt, and that commodity prices and equites of US companies that do export and/or have international income will likely rise as a result.

The big uncertainty for me is when the tipping point arises for our creditors - when will they start to view this as one more of an endless series of money printing exercises, and finally give up on holding dollars.

If QE 2 is that tipping point, that scenario envisions the Fed starting a QE 2 operation, being faced with an avalanche of treasury selling and a precipitous drop in the dollar, and then changing their mind. At that point, they decide that a drastically lower dollar is not a good thing for an oil importer, and so they decide they'd rather deal with the banking insolvency issues head on.

That scenario envisions a big head-fake, a massive whipsaw where we see gold, commodity and equity prices rise into a QE 2 announcement, followed by big losses in long bonds, a big drop in the buck - and then backpedaling by the Fed ceasing QE 2, followed by an equally big dollar rebound, and a big drop in the price of gold and commodities, and an equity market crash.

Will Ben get authorization from his board for QE 2? WIll they pull the trigger on it? Will our creditors take another QE lying down? Will they signal in advance their displeasure via a backchannel, stopping the Fed from even starting a QE 2? To me, QE 2 is by no means certain, and even if started, it may never be completed, and it may even result in higher long rates, not lower.

However if there is no QE 2, then deflation will be the eventual outcome. It's what is baked into the cake.

ALOHA!!

My thesis is that the USD will crumble no matter which monetary event occurs. Not so much from actual money/debt supply and velocity levels but from government debt attrition and the loss of confidence in the the US Treasury's ability to service its ever growing spending and the accompanying debt that is required to supplement the collapse in net tax revenues. Also the loss in purchasing power of a USD which is due to not stealth deflation but near 100 years of what I call "embedded inflation". The preferred currency destruction tool of choice! I think the psychology of currency destruction is already here, yet cannot be measured accurately using either inflation or deflation methods as it is more a measure of Human Action. Action has long preceded the rise in the gold price to historical nominal highs. Like I keep saying ... wake me when average US home prices get down to 1970 prices.

ALOHA!!

Mises quote ...

In all countries where inflation has been rapid, it has been observed that the decrease in the value of the money has occurred faster than the increase in its quantity.Ludwig Von Mises, The Theory Of Money And Credit 1934.

I believe the same works for "deflation" ...

The wavelike movement effecting the economic system, the recurrence of periods of boom which are followed by periods of depression is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. Depression is the aftermath of credit expansion.Ludwig Von Mises, Human Action, 1937

The psychology of the masses is a more important factor, but since it cannot be measured with a mathematically sterile formula it is always left out of the equations of money/debt supply debates. The fact is that most Americans no longer believe in the AMERICAN DREAM, which is debt based, and they no longer believe in the policies of the elected leaders of both parties. You cannot have sustained rampant unemployment(20%) and poverty(1-in-5) with 43 million(1-in-7) people on food stamps and still say there is growing confidence in government and the money system. No, confidence is shrinking in every sector including small business. Most people in America understand their government and its money has failed them but they are at a quandary as to how to fix it as this has never been a real substantive issue in the past. I just came back from a fellow farmer's house and he and his son and I watched the NY Jets vs Miami Dolphins football game. I won my bet! We all watched the first part of 60 MINUTES afterward, which focused on the US Military in Afghanistan. I pointed out that the Russian USSR Military was there in the 1980s and they were much more brutal and they called it their Vietnam in the end. Everyone agreed and even the military commander being interviewed stated that as soon as the US Military leaves Afghanistan it will return to its former 5000 year tribal infighting. Besides most of the fighters were coming from Pakistan according to the commander. Apparently "opium" buys a much better weapons system than the indebted USD or so says the military commander. I doubt anyone in the World believes the US Military "polices" anything any more. Maybe "babysits" is the more accurate terminology. Sure we could nuke them all but what is the point in that? Who truly benefits? What is the ultimate objective when you occupy a country by force? As we fight the front lines in Afghanistan our own People suffer the consequences of multiple failed policies, and not just Foreign Policy either. The problem is POLICY costs DEBT and we cannot afford POLICY AS USUAL any more. Taxes no longer pay for much of anything any more. YOUR TAX DOLLARS AT WORK needs to be changed to YOUR US DEBT AT WORK! It is debt that runs America and there are a very privileged few select politicians and bankers that benefit from DEBT. Most Americans do not prosper with DEBT. Unless you consider a debauched currency as prosperous ...

http://www.telegraph.co.uk/finance/comment/ambrose...

Les- Your data is off. I only see +0.5 for the SPX, +10 for the DJIA.

Otherwise, it would be the gap-up from hell.

http://www.incrediblecharts.com/tradingdiary/tradi...

link found at bottom of Twiggs' blog:

http://blogs.wsj.com/economics/2010/09/23/volcker-...

Ross,

What you describe is doubtless true from your personal perspective. I can also point to inflationary examples and suppose most can.

When my own business was drastically effected negatively by globalization and the technology revolution I had friends who where in sync with Thomas Friedman ("The Lexus and the Olive Tree", "The World is Flat"). In fact one friend bought me The Olive Tree book and insisted it would convince me that this was great for the future of all.

The same mentality came from DC. and now we have massive unemployment, increasing poverty levels and people eating at food pantries.

Deflation in jobs and housing is a national problem which may eventually hit your livelihood or it may not.

It is reality to an increasing number of us each day — lower housing values, fewer job benefits, unfunded pensions, lower wages, less purchasing power.

Taxes are going to be the biggest problem for many as all levels of government rush to "find" money to provide services. For the home owner it is immediate, but for the renter it will take time to push through the pipeline. It may simply be stopped short for them due to a big increase in available rental (unsellable) property.

One son sold his condo at my urging before the market halted sales in his community, but my other son lives where the market has almost completely dried up due to our high unemployment here.

Ross,

The first thing I saw in Yahoo Financial today was about increasing M&A.

Aside from the benefits a trader may glean from such this is another item which will add to the deflation side of the discussion.

In nearly every such case the result is a condensing of departments and net job loss. More unemployed means more people willing to take a job somewhere else in cometition with more people.

Equaling:
• Lower pay for more people.
• Increasing the fear factor to others.
• Creating more reluctance to spend.
• Causing businesses to increase sales by lowering prices.

It all takes longer than we realize.

I smoked unfiltered Camels for over thirty years, quiting at age 51 when I got asthma. I could claim cigarettes don't cause lung cancer. But...

I have a collection of old ads showing movies stars like John Wayne lighting up and doctors claiming it is "Good for you T-zone." However, how many are stupid enough to believe this anymore?

Sure people are still smoking, but they are mostly young enough to think they have a long time before they will need to worry. Duh!

My brokerage just tripped a stop price on a stock of mine at 20.1275 when my stop was set for 19.50. The low of the stock for the day was 20.10 When I called to protest the sale at 62 cents above my stop price, they said it was tripped by a bid price of 19.50. Since when is a stop price triggered by a bid rather than actual price. I need help to argue with them. What are the rules on stops re. bid versus actual price?

BID with new highs in mind.

That is such bull----. Let us know how the broker decides to handle it.

I have never had a stop trigger before by anything other than an actual price reaching the stop price. Since the actual price of the stock never got below 20.10 and the stop was 19.50, I can't see any justification for selling the stock. Am I missing something?

No. I would call and ask to speak with one of their traders. If a conversation with him/her doesn't result in a reversal of the transaction, I would ask for someone higher up- at the very least, ask for a written/email explanation of what happened, which can then be analyzed (and hopefully contested).

indyrjc is right - there are different ways to set a stop trigger. Read the instruction carefully and check how yours was set. If it was set up with bid price as a trigger, you have no case. If it was actual print, you certainly do.

The new “D” word is dividends: 185 S&P 500 companies have raised them so
far this year while only three have cut them — compare that to this time last year
when those numbers were 110 and 72 respectively (see page B14 of the WSJ).
And, as the weekend FT notes (page 15), much of the rally off the July lows has
been in dividend-yielding sectors such as telecom services (up 20% from the
late-May low), utilities (up 13% since the end of June) and consumer staples.
All that said, there are just too many unusual things going on right now:

– We are in the midst of a huge equity market rally not being fuelled by the
financials, which have lagged by a full percentage point this month and are still
down 14.4% from this year’s highs.

– Equities and gold are typically inversely correlated since the latter is a hedge
against fear and uncertainty, and here we have gold breaking out to new highs.

– A 0.4% yield on the 2-year note and 2.6% on the 10-year Treasury do not seem
like levels that are consistent with the sort of growth that is being priced in by
the stock market. (Yes, yields ticked up on Friday as bonds cheapened ahead
of next week’s $100 billon note auctions.)

– The euro is rallying against the U.S. dollar to five-month highs despite the fact
that fiscal concerns are boiling over again among the Club Med countries —
Irish CDS spreads hit record levels last week and yield spreads over Germany
also surged to record wide levels, ditto for Portugal, despite apparently
successful bond auctions.

– Despite below expected readings on the NAHB index and new home sales, the
S&P Home Building index finished the week with a 3.1% surge.

Vad- What would stop traders from setting low-ball bids in the hopes of triggering a bid price stop?

So at one point today the 'best' bid was 19.50?

Then if I had time on my hands, I would probably set a number of low-ball bids on thinly traded stocks in hopes of running a bid stop...

They'll screw you and not care. I'd buy puts.

43.50 is the lowest PGN print I see on all data sources I have...

Vad,

Bubble Vision is reporting that there was no problem at the NYSE, only the NASDAQ. Perhaps this is why you're not seeing it?

http://finance.yahoo.com/q?s=PGN

My quotes are aggregate of all US exchanges

cover-up?

bigcharts shows the low at 22:

http://bigcharts.marketwatch.com/quickchart/quickc...

Tradestation shows NO disruption, nor does Schwab Streetsmartpro.

I guess you can just pay whatever you wish for PGN. Really inspires confidence in those who run and provide data on the market, doesn't it?

ebelog-

I not only have a second
But I'll stick out my neck 'nd
Say we hit 1200 by month end.

That's JMO based on today's action. (I wouldn't advise trading on my opinions- my batting average is <0.500 on market direction. It's prudent money management via stops + letting winners run that will make you money. The other pertinent factor would be time frame- as you know, my opinions on market direction can change in no time at all.) As for APWR, I've never had a position, so I'll have to refer you to the person who made that post.

fwiw, I'm sitting in 100% cash with no desire to trade today. I've had a decent run since August, and when that happens, it usually pays off if I take a trading holiday...

I am holding WATG, got into ADBE again today at 26.70 avg, looks like tech is leading the way today. No financial participation but will take what I can get

steadily yet quietly getting worse. Plenty of graphs. Worth a read after hours.

http://fistfulofeuros.net/afoe/and-then-there-were...

Business Insider article where David Rosenberg delivers rebuttal to David Tepper's Uber-Bullishness

http://www.businessinsider.com/david-rosenberg-del...

You are exactly right and that is probably what happened. My brokerage reversed the stock sale and reinstated the shares. They explained that thinly traded stocks can develop wide bid-ask spreads, especially at market opening. The stock in question was TTEK, a small cap stock that had a bid-ask spread of 19.50-20.50 or $1.00 spread at the 9:30 open point. This tripped my 19.50 stop because of the huge spread even though the actual price was never below 20.10. On that basis, the black box boys could (and probably do) play those wide bid-ask spreads to generate lots of quick profitable trades in up or even markets, especially. Of course, the stops being activated by bid prices rather than actual prices was buried in the fine print in an obscure reference rather than the "help" explanation for the term "stop price". I'll give my brokerage credit for reversing the trade, but no credit for being obscure about the stop price policy. No where with my brokerage is one given a choice about how to set the stop price(by bid, actual, or ask price). I understand that this is common practice for most brokerages. The main message seems to be that one better set a "stop limit" option for thinly-traded small caps.

You are exactly right and that is probably what happened. My brokerage reversed the stock sale and reinstated the shares. They explained that thinly traded stocks can develop wide bid-ask spreads, especially at market opening. The stock in question was TTEK, a small cap stock that had a bid-ask spread of 19.50-20.50 or $1.00 spread at the 9:30 open point. This tripped my 19.50 stop because of the huge spread even though the actual price was never below 20.10. On that basis, the black box boys could (and probably do) play those wide bid-ask spreads to generate lots of quick profitable trades in up or even markets, especially. Of course, the stops being activated by bid prices rather than actual prices was buried in the fine print in an obscure reference rather than the "help" explanation for the term "stop price". I'll give my brokerage credit for reversing the trade, but no credit for being obscure about the stop price policy. No where with my brokerage is one given a choice about how to set the stop price(by bid, actual, or ask price). I understand that this is common practice for most brokerages. The main message seems to be that one better set a "stop limit" option for thinly-traded small caps. PS-Load time is still very slow...

Could we be getting inflation; Gold is down and oil stocks are behaving better.

Kudos to your broker for reinstating your shares.