Morning Call [7:25am ET] ‘Volcker Rule’ or same old rules? The Wall St. Journal is reporting today that the US Senate will not legislate any change in the fundamental conflict of interest basis of the nation’s banks. The people get stiffed again. Whatever comes down from Congress in the new financial reform legislation will be a joke. Actually, it will likely be whatever Goldman Sachs wants it to be.
http://online.wsj.com/article/SB1000142405274870350380457508382351121220...
Yesterday, Legg Mason (NYSE:LM) applied to the SEC for approval to launch their own suite of actively managed ETFs. Apparently there has been a flurry of activity at the SEC with applications also from T Rowe Price, Russell, Goldman Sachs, John Hancock and others. Believe me, this is a game changer for the mutual funds industry. Hopefully, my company will be a player, soon.
http://finance.yahoo.com/news/Legg-Mason-to-Try-Its-Hand-at-ms-352045929...
At the recent Cara Bahamas 2010 Conference, Ken McCord, president of Horizons AlphaPro, which until now has been the biggest manager of actively managed ETFs, made a presentation. A few of his slides follow. He also spoke of the advantages in buying and holding actively managed ETFs as opposed to mutual funds and closed-end funds.
The advantages to the investor, as I see it, include:
• Opportunity to invest small amounts in various strategies
• Lower admin costs result in more of the investor’s capital is put to work
• Real-time price based on dynamic NAV of the assets in the ETF
• Instant liquidity without administrative issues
• Tax administration efficiency
What we are talking about with an actively managed Exchange Traded Fund is the securitization of a mutual fund product or a hedge fund product. In other words, it’s not an ‘investment’; it’s a price in a capital market, like any other stock or bond. What you are buying is the service of a full-time investment manager, not a salesman, but somebody (a team) that works your money in the capital market with an objective, like yours, to protect and grow your capital. It should be that person’s only job, and there should be absolutely no strings attached. If that manager, then, is truly independent, and not working for the sell-side (which many of these advisors will be), then you can be assured you have a true partner.
The last point I made is sure to be a controversial one, but this is the basis of everything I have been talking about for years; it’s called conflict of interest. If I’m in Congress, I’d vote for the Volcker Rule. If I’m the SEC, I would not permit the sell-side to be the advisor of any ETF. Distributor/seller/administrator yes, but money manager never.
At some point in the evolution of our society, the leaders will come to understand that there is a credit market system and a debit (asset) market system, and they must be kept separate, with different players and different regulators. When it comes to handling other people’s money, there must be no conflict of interest, no different than the practice of law. How these banksters ever managed to take control and pervert the debit (asset) market system, directly resulting in the problems we have today, is beyond me. Actually, the answer is obvious: the bankers have long ago bought and paid for the votes of the people’s elected representatives, and now the Treasury must rely on the bankers’ banker, the Fed.
Solving these issues is not difficult, but the people elected to Congress have no guts. They are pimps. Plain and simple. How they can look themselves in the mirror, go to work each day, and think they are actually doing the people’s work is heartbreaking to the rest of us.
Sooner or later they’ll get it. They will split the buy-side from the sell-side, and the people at Bank of America and JP Morgan and the rest of Humungous Bank & Broker (HB&B) will have to decide whether they are an agent or a principal. Permitted to be everything has been an unmitigated disaster.
Disagree? How would you like to be holding the shares of JPM for the past 13 years or BAC for the past 15? Look at these charts and then consider the mega-billions in compensation and perks to their senior executives over this period. It’s sickening.
Federal Reserve Chairman Ben Bernanke gives semi-annual testimony on monetary policy and the state of the economy before the House Financial Services Committee this morning. Traders have been waiting to make decisions based on what he has to say. Obviously, the thinking is that the Fed now has to (call it what you will) tighten, and the price of gold has taken a stumble. After hitting 1131 on the weekend, spot gold just bounced off 1090 (4:30am ET), and is now about 1093.
But, before making decisions, we need to see how this market is going to react.
Have a great day.
CTA Trading Desk Post-Close Report
Aided by a weaker US Dollar (DXY -0.05%) that sold off sharply as Fed chairman Bernanke started speaking to House committee, telling them that ultra-low interests would go on, the equity markets rallied Wednesday, prices closing near session highs (S&P +0.97%). However, once again, volume was uninspiring.
Semiconductors (SMH +1.65%) provided early upside leadership, while Financials (XLF +1.67%) joined the party later on, and Homebuilders (XHB -0.13%) overcame a terrible housing report to give the Bulls some measure of hope that upside price momentum will soon re-assert itself.
The big movers in the DJIA today were Bank of America (BAC +2.5%) and JP Morgan (JPM +2.4%), both lifting sharply in unison for precisely one hour from 10:10am ET. Interestingly, Home Depot (HD +2.0%) made the exact same move although the stock did manage to move higher as the session progessed.
There is nothing really to add to comments made over the past few days; until the market makes a definitive move out of this narrow trading band (roughly 1080 to 1120), on volume, it doesn’t make sense to take large positions.
Prices have been moving higher for almost one year and we know March has often been a pivotal turning point. The latest economic releases (consumer confidence and housing starts) have been awful, throwing into doubt the durability of this stealth recovery.
One wonders how much longer “hope” can prompt consumers to spend money or invest in mutual funds.
With Congress approval ratings hitting another all-time low of 10%, not many Americans feel their elected officials are qualified to make the proper decisions to ensure the nation’s long-term economic well being?
While these big picture thoughts don’t always influence intra-day trading patterns, it may explain why institutions are reluctant to aggressively add to long positions. As volume has diminished, so has volatility; but we believe that pattern will reverse itself within the next several weeks. Intra-day ranges are compressing, prices coiling, meaning that a powerful move, one way or the other, is inevitable.
The first sign of trouble for Bulls will be a break of S&P 1095, a price level which has held many times over the past few sessions. This area represents (i) about the midpoint of the 2010 trading range, (ii) the 20-day Exponential Moving Average, (iii) the 89-day Simple Moving Average, and (iv) an uptrend off the mid-month lows.
On the other hand, a move in the S&P above 1120 would alert traders to anticipate end of the month strength, and a probable test of recent 52-week high at 1150, on the one-year anniversary of the Bear market lows.
Have a great evening. The US Olympic hockey team beat Switzerland 2-0 this afternoon. Tonight, another quarter-final has the tournament co-favorites Canada and Russia matched up in what Canadian fans are thinking is potentially the greatest hockey game to ever be played. I'll be cheering.
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Comments
Cara 100 Ratings Changes
Good morning.
There are NO Cara 100 Ratings Changes to report at this time.
Plu cest change...
plu cest le meme chose...
"Solving these issues is not difficult, but the people elected to Congress have no guts. They are pimps. Plain and simple. How they can look themselves in the mirror, go to work each day, and think they are actually doing the people’s work is heartbreaking to the rest of us."
To profoundly mix metaphors: recalling the fable of the scorpion and the frog, isn't it too much to expect a tiger to change it's stripes?
The profession, by definition, is rife with hypocrisy. I am not nearly as optimistic as you. Frankly, neither was my favorite philosopher...
Truman
Have been reading Truman, the Biography of Harry S. Truman written by David McCollough and it plays so much to what has gone on today to back then at the height of the Depression. He hated the large moneyed interests particularly Wall St. and held a number of hearings at that time. " On Monday Dec. 20, 1937, Senator Truman delivered the second of his assaults on corporate greed and corruption. In the earlier speech in June he had recalled how Jesse James, in order to rob the Rock Island Railroad had had to get up early to risk his life to make off with $3000. Yet, by means of holding companies, modern day financiers had stolen $70,000,000. from the same railroad" He hated bigness in business and the unchecked power of Wall St. He was also warned by his friends in the senate that he was treading a dangerous path by taking them on, but displayed real moral courage in continuing his fight. He raged against the lawyers who were the best that Wall St. could buy in order to perpetuate the greed. Wish we had someone like him today!
Cara 100 Update
APA - Apache gets a Neutral-from-Buy downgrade at Government Sachs.
BRCM - Stifel Nicolaus Resumes Coverage with a Buy. PT = $38
teamonfuego's technical question and NLS
Hi again. teamonfuego, I like candlestick charts. Google finance does them very well. There's all kinds of indicators like the ones NYUgrad brought up yesterday and a few quick google searches will find them. Try "evening star", "morning star", "doji", "bullish engulfing", "bearish engulfing" or a few other items like those. Or you could just look this over (that's what I did):
http://stockcharts.com/school/doku.php?id=chart_sc...
In addition, I like stochastics and bollinger bands.
http://en.wikipedia.org/wiki/Stochastic_oscillator
http://en.wikipedia.org/wiki/Bollinger_bands
Now, pull up NLS on google finance (or just click this next link):
http://www.google.com/finance?q=NYSE:NLS
First, click the settings link and change that to candlesticks. Then, activate technical indicators by clicking the link at the bottom, marked technicals. Add bollinger bands, slow stochastic, KDJ and RSI (which is one that Bill uses prominently here).
Note that it's been on a bit of a tear for the last month or so. Generally the pattern is bullish; during the stochastic downslide from january 22 to feb 4 it still kept a good chunk of its gains and then when the stochastics turned around it went rocketing up. These are good signs and it means that your fundamental analysis likely spoke true.
HOWEVER, I don't like where it is as of yesterday. The price shot well past its bollinger bands and the stochastics look ready to turn around, both of which in my mind are bad signs.
As with most of us on this blog, take this with a grain of salt, DYODD, I am not a professional trader, just a hobbyist, etc. etc. etc. Also I make no claim of expertise; I just found some of these resources online and started reading them. I'm just learning too. The real expert here is Vadym (and Bill of course).
Re: Truman
Thanks Bruce , I have been intending to read that book , Harry S. Truman tread many dangerous paths. Thank You. Bob .
Cara 100 Update
PG - numbers raised at Government Sachs. Shares of PG now seen reaching $70. Estimates also increased, given higher expected profit in liquid laundry detergent. Neutral rating.
QCOM - target, estimates slashed at Credit Suisse. QCOM price target sunk to $40 from $45 on chipset margin pressure. 2010 and 2011 EPS estimates lowered to $2.17 and $2.30, respectively. Maintain Neutral rating.
Re: Truman
Bob
I started reading this book on Sunday, and can't put it down. What an amazing human being he was, warts and all!
Wall Street’s Bailout Hustle
http://leavittbrothers.com/blog/?p=2719
Wall Street’s Bailout Hustle
by admin on February 23, 2010
Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash
by Matt Taibbi, Rolling Stone
CON #1 THE SWOOP AND SQUAT
CON #2 THE DOLLAR STORE
CON #3 THE PIG IN THE POKE
CON #4 THE RUMANIAN BOX
CON #5 THE BIG MITT
CON #6 THE WIRE
CON #7 THE RELOAD
Con artists have a word for the inability of their victims to accept that they’ve been scammed. They call it the “True Believer Syndrome.” That’s sort of where we are, in a state of nagging disbelief about the real problem on Wall Street. It isn’t so much that we have inadequate rules or incompetent regulators, although both of these things are certainly true. The real problem is that it doesn’t matter what regulations are in place if the people running the economy are rip-off artists. The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn’t going to work, no matter what we do. Sure, mugging old ladies is against the law, but it’s also easy. To prevent it, we depend, for the most part, not on cops but on people making the conscious decision not to do it.
That’s why the biggest gift the bankers got in the bailout was not fiscal but psychological. “The most valuable part of the bailout,” says Rep. Sherman, “was the implicit guarantee that they’re Too Big to Fail.” Instead of liquidating and prosecuting the insolvent institutions that took us all down with them in a giant Ponzi scheme, we have showered them with money and guarantees and all sorts of other enabling gestures. And what should really freak everyone out is the fact that Wall Street immediately started skimming off its own rescue money. If the bailouts validated anew the crooked psychology of the bubble, the recent profit and bonus numbers show that the same psychology is back, thriving, and looking for new disasters to create. “It’s evidence,” says Rep. Kanjorski, “that they still don’t get it.”
More to the point, the fact that we haven’t done much of anything to change the rules and behavior of Wall Street shows that we still don’t get it. Instituting a bailout policy that stressed recapitalizing bad banks was like the addict coming back to the con man to get his lost money back. Ask yourself how well that ever works out. And then get ready for the reload.
CRM, TRAK
Closed my short of CRM at a small loss at $68.6 and decided to move my money into a long position in TRAK. BSI - thanks for pointing that one out. I didn't realize how cheap that one is. They have $200 Million in cash and no debt and are worth $560 Million. So they have about $5.50 a share in cash. Backing out cash its trading at about 15 times earnings and they're going to grow faster than 15% next year.
FD:
Long TRAK at $13.89.
As if they didn't have anything real to discuss
Wednesday, February 24, 2010 10:39:03 AM
SEC's Casey: Will vote 'no' in the upcoming proposed short sale rule vote
- Note: some recommended aspects of the proposals include restrictions on short sales of a stock once it falls 10% from previous day close; then short sellers could only perform short sales for stock price above the best bid
- Reminder:earlier SEC Chairman Mary Shapiro said the new rule "strikes the right balance"; SEC's Paredes has reportedly expressed concerns; feels benefits do not outweigh costs
Could Shakespeare write a play on this?
Bernanke: "Low interest rates for a long period of time"
Market: Yay! dollar down, markets up
Bernanke: "I need to jack up interest rates"
Market: Yay! we have bottomed and the economy is strong enough to withstand higher rates
Unemployment: Worst ever
Market: Yay! it cant get worse
Housing: Its bad out there
Markets: Yay! it can't get worse
Politics: Our gov't is broken
Markets: Yay! but we have our 1st minority president
Re: CRM, TRAK
Interesting idea. Gotta admit though the chart looks pretty ugly. Looks like it could bounce from here though- Oversold with fib and support nearby. It's a knifecatch so it naturally piques my interest...
KC
Re: CRM, TRAK
Placing a sell order at $15.60 on TRAK. In looking at the chart this is where the stock bounced up to before plunging again so this is probably going to be an area where people will cut their positions loose. Plus, in going back on the chart it looks like $16 is an area of prior resistance/support so I figured it would be best not to get too greedy.
They are asking Bernanke which banks might need help for Greece!
loss of words.
UXG - McEwen Capital PDAC Reception-Open Invitation
March 9 5PM-8PM at Four Seasons Centre for Performing Arts, 145 Queen Street West, Toronto
RSVP: Maritza Fuentes rsvp@McEwenCapital.com Tel.(Toll Free) 1-866-441-0690
Featuring Classical Music,Great Food and Drink, and World's Premier Escape Artist (like Harry Houdini)
Re: They are asking Bernanke which banks might need help for ...
Most of these people in the House are on a different planet than Dr. Ron Paul.
dollar retranching but PM flat today
Very disappointing. Got stopped out from GDX yesterday but SLV holds steady.
The only thing that gets me interested in this trade that PM sentiments plunged to very low levels again (comparable to the low on February 5, 2010), yet PM are laboring a higher low as of now.
PLM
Traded this one in the past. Presently in the middle of a swan dive- presumably due to comments related to environmental impact of their NorthMet project and permitting delays etc. I'm accumulating today on the premise that the sell-off is an over-reaction....
KC
Bill's early career and parallel's with mine
The forerunner of KPMG started with a merger of Main Lafrentz and Thomas McLintock with Klynveld to form Klynveld Main Goerdeler. They then merged with Peat Marwick Mitchell to form KPMG.
I started my early accounting days with Main Lafrentz out of New York City and audited lots of different company. I then moved on to American Metal Climax where I learned operational and financial auditing of various mines and metal processing facilities for copper, aluminum, lead and molybdenum. I subsequently started prospecting on a very small scale but not enough to make a living and then did too many things to mention. However, I did prospect in Mexico, Nevada, California, Colorado and Canada. Yes indeed, there is a lot of metal out there but if you can't raise the capital, forget about it! To find huge nuggets laying on the ground waiting for you to pick it up is a fantasy, and believe me, many prospectors fantasize!
SEC voted for short ban
http://bit.ly/dkngag
So is this goodbye to short cover rallies?
How ironic, when the only upside vol comes from short covering and JPM SPY purchases. a rule that may end up shooting the initial intent.
Nationwide Strike Paralyzes Greece
http://bit.ly/ctwZHP
We need some of their moxy here. Imagine every single unemployed American marching to the White house and not leaving until corrupt pieces of our system are closed and prosecuted? I can dream.
Re: SEC voted for short ban
I haven't seen full text yet; those parts that were published as most important make it largely non-event. Just for show - there, we did something.
TRAK
heavy volume again in this name. it looks like a true capitulation bottom to me.
Re: SEC voted for short ban
Am I understanding this. You cannot short after 10% drop in a day, But the next day you can short that stock if it has not dropped 10%. Also. If i am in a short position and it luckily goes down 10% in a day will I have to liquidate at that time?
Bob
Re: SEC voted for short ban
Let me repost:
"some recommended aspects of the proposals include restrictions on short sales of a stock once it falls 10% from previous day close; then short sellers could only perform short sales for stock price above the best bid."
No prohibition to short, just enacting uptick rule. Meaningless and useless. Not even speaking about whole focus on short selling - way to ignore real issues. If they want to do anything about short selling, how about taking care of the only problem in that area: enforce prohibition of naked shorting. Period, there is nothing more in there. Go do real work.
Frikin Soviet Union all over again. Nobody cares about result, everyone is about showing that they do something.
Re: SEC voted for short ban
thx for the interpretation :)
Re: TRAK
didn't have full position so adding with a limit order at 13.94.
Do your own homework.
Re: SEC voted for short ban
So there is a uptick rule only after a 10% loss? WTH. Why even waste the paper on that complete nonsense. In all fairness shouldn't there by a downtick rule when a stock rises by more than 10%.
Fireworks/orders
If there are any, I'd guess they'll start around 3 PM. I'm positioning myself for either direction but SPX 10 day ATR is 14.68. First half hour SPX was up 7.4 so it moved in 30 minutes what might take 1/2 day. Plus a gap up opening.
SZK Triple RSI buy signal yesterday. Buy stop 40.27/40.27 limit. Nickel above yesterday's 3PM. I'll buy if the big boys buy.
TRAK buy limit 13.94. Kangaroo tail, capitulation buy. Doesn't look like it'll happen.
SPXU. Long some. Trailing a 1/3 10 day ATR buy stop.
URR. Ave volume is 4K so it's very thin. Don't like FXE. Buy limit 29.94, small position.
Do your own homework.
GL
Update: added some SPXU at 36.26
Bernanke on Capital Hill Today
Bernanke, said in answering a question today, "WE WILL NOT BE MONETIZING THE DEBT".
Is he saying he hasn't monetized any debt in the last two years and will not in the future?
There was no immediate challenge to his statement from the House panel. (I did not see full coverage of the hearing)
He also mentioned the developing demographic change coming to our society, with less workers and more needing state services, is detrimental to the medium and long term recovery of the economy without either a weakening of the currency or significant cut in government spending. The economy must strengthen at double digit rates to achieve a balance by 2020.
List of 51 companies I plan to meet at PDAC 2010 Mar 7-10
Booth #
2722 Alamos Gold Inc.
2447 Alexco Resource Corp.
3141 Allied Nevada Gold Corp.
2435 Altius Minerals Corporation
2305 Aquila Resources Inc.
3145 Athabasca Potash Inc.
3137 Aurizon Mines Ltd.
2153 Brett Resources Inc.
2800 Castillian Resources Corp.
2319 Castle Resources Inc.
2944 Centerra Gold Inc.
2823 Cline Mining Corporation
2850 Colossus Minerals Inc.
2448 Continental Precious Minerals Inc.
2201 Crocodile Gold Corp.
2603 Detour Gold Corporation
2338 Eastmain Resources Inc.
3048 Equinox Minerals Limited
2340 Farallon Mining Ltd.
2618 Fronteer Development Group Inc.
2635 Geodex Minerals Ltd.
2223 Geologix Explorations Inc.
2311 Goldcorp Inc.
2812 Harmony Gold Mining Co. Ltd.
3316 Impact Silver Corp.
2632 Kingsgate Consolidated Limited
2913 Kinross Gold Corporation
2602 Largo Resources Ltd.
2331 Liberty Mines Inc.
3312 Luna Gold Corp.
3014 Magma Metals Limited
2301 Minefinders Corporation Ltd.
2337 Minera Andes Inc.
2842 Mines Management, Inc.
2408 Miranda Gold Corp.
2315 New Gold Inc.
2912 Newmont Mining Corporation
2943 Northern Star Mining Corp.
3112 Osisko Mining Corporation
2902 Randgold Resources Ltd.
2908 Rubicon Minerals Corporation
2313 Silver Wheaton Corp.
3049 Silvercorp Metals Inc.
2509 Teck Resources Limited
2939 Troy Resources NL
2851 US Gold Corporation
2307 Vale
2546 Velocity Minerals
2640 Virginia Mines Inc.
2145 Western Areas NL
2125 Yamana Gold Inc.
Each of these companies has information I need for decision-making. Spending 20 minutes each requires a minimum of 17 hours.
But the one thing I know about PDAC is that if you don't manage your time (plan, organize, control), the convention -- the world's largest in mining --will overwhelm you. There will be about 700 to 800 exhibits, and some of the promotional groups manage a dozen companies. Everybody has a story to tell. It is, after all, marketing. The only mining going on is for $$$$.
There were a few companies I have met in the past and wanted info from, but I don't see them on the exhibitors list.
This is a tremendous show, which I highly recommend.
http://www.pdac.ca/pdac/conv/index.html
If you do plan to go, send me an e-mail [billcara at caratrading.com] and I'll send you my local [Toronto only] cell number, or drop your card and cell # with my name at the Media Centre on the 700 level, bottom of the escalator. Over the years I have met up with lots of blog followers and participants.
Re: Fireworks/orders
BSI - I followed you on the bearish move with SDS. Bought a bit at $35.2. I also sold my TRAK at $14.36.
Re: Truman
Bob, Bruce,
I read the McCullough book a few years ago and also Truman's two volume memoir. While I woulds have disagreed with some of his views, I was struck by his personal integrity.
I doubt that Truman ever did anything personally dishonorable mainly because there are many examples of him doing politically unpopular things. He conducted a personal investigation into war production waste and when the B-26 was dubbed the "Widow Maker" due to fatal crashes threatened the manufacturer after he told Truman, "We know the problem, but are meeting specifications." The problem was corrected.
Also, when he and his business partner in a clothing store went bankrupt, it was Harry Truman who paid back every penny they both owed — even though they were legally in the clear.
The big banker boys will do likewise, I'm sure. Riiiiight :-(
Re: They are asking Bernanke which banks might need help for ...
"Most of these people in the House are on a different planet than Dr. Ron Paul."
Oh, how I wish this were literally true! I'd kick in for their tickets :-)
I cannot bear to watch these kinds of tragic comedies of TV.
Re: Fireworks/orders
too soon on TRAK. RSI breaking above 10. Two nice looking kangaroo tail reversals yesterday and today. March max pain 15, 50 DEMA is 17.32.
In a paired trade, SDS:SPXU RSI 7 day is 60. SPXU is a better buy IMO.
GL
Re: List of 51 companies I plan to meet at PDAC 2010 Mar 7-10
Have fun Bill. Don't overdo it. Health 1st. :)
safe travels!
Re: Fireworks/orders
Where are you getting real time RSI? And are you using a RSI 7?
CAR
Looks like it's getting close to a capitulation bottom as well.
Re: Fireworks/orders
You're right...way to early on TRAK...
Sold my SDS at $34.98...waiting for a better entry point.
Re: Fireworks/orders
I use stockcharts.com. Have to change the settings to what I want but it's free. It shows that it's real time but even if it were on a 15-20 min delay, it's plenty good.
Re: CAR
RSI 7 day shows 26. March max pain is 12.5,
April 10.
No position. GL.
TRAK
misses by 2 cents. Down 69 cents after hours.
FD: long TRAK
Update: now down 1 cent. Afterhours is no man's land.
trickle down unemployment...
being felt hardest by the Wal Mart workers and burger flippers. If Wal Mart can't employ them, what do they do?
4% unemployment for workers earning $100'000+. No wonder Washington and its lackeys can't see the US for what it is. Talk about a disconnect. Without a reconstruction of its industrial base, America is kaput.
http://curiouscapitalist.blogs.time.com/2010/02/10...
TRAK and my Stop Loss mechanics
I bought 1000 shares at 14.03 after seeing a potential rise.
I set my 1st stop at 13.80. After the 1st rise to 14.42, I moved my stop up to 14.20. When I came back to my desk I noticed my stop had been hit. After checking the 1 min chart I noticed the price had actually not dropped down that low. So I called my broker to ask why my stop had been hit. They agreed the price had not gone that low but they told me that the Nasdaq execution worked differently. I guess at 1:46PM the bid price hit 14.20 thus executig my stop. So is this normal because the spreads between the Ask and Bid prices is quite signicant at times? I guess that is why the general consensus here is that mental stops are the best. You only have yourself to blame if the trade goes south.
Edit: Also just to mention the fill price was 14.25 (5 cents above my stop)
Re: Bernanke on Capital Hill Today
Hmm. "We will not be monetizing the debt."
Does he mean he won't be monetizing any further, once the current debt monetization program is complete? Or is he claiming that he never has monetized any debt, and that the remaining debt monetization program now underway never happened?
What a load of crapola.
You can tell he's lying because his lips are moving. How many regional Fed Presidents have stated that the Fed will buy more MBS if rates start going too high? And how are they going to get the money to buy these prospective MBS? Selling apples on the street? No. They will print the money. And when you print money and buy things - well, its counterfeiting when you and I do it, but it's monetization when they do it.
Its irritating to hear that sort of thing, and even more irritating that none of our elected representatives thought to question him on this matter.
Re: TRAK and my Stop Loss mechanics
NO,
there are quite a few good reasons why stops better kept mental but your case puts a new one. The problem is: there was no single print below 14.21 when your stop got triggered - and with most brokers it's a print at the pre-set price that triggers your stop. Now, some allow a choice: print, bid or offer... not sure whether your broker does. I'd suggest to look into it, find out which event triggers a stop and make according corrections. If it's bid and you don't have a say in it - this logistics is tough for wide spread stocks, your broker is not a good fit to play them. If it's a print - adjust stop accordingly, in this particular case it would be better to keep it UNDER .20, not AT it. The reason is: 13:05 spike and consequent break established .20 as new support, thus stop should be located just under it so that loss of support would stop you out.
Doing the Dead Cat Bounce, nice article..
by Robert Kiyosaki
Friday, February 12, 2010
Dow 5,000 in 2010?
In my last column I predicted a “dead cat bounce” in the stock market and a possible Dow plunge to 5,000 this year. Obviously, many readers mocked my prediction.
But understanding the dead cat bounce is vital, especially in today's market.
Simply put, a dead cat bounce looks like Diagram 1 below:
The market crashes, rebounds, and runs out of steam, then crashes again…unfortunately, and possibly, to a lower low.
When professional investors observe a dead cat forming, many will begin to sell. If their selling leads to a panic, the stock market goes even lower.
Putting today’s numbers to the dead cat diagram gives this topic more meaning.
In 2002, the Dow hit a low of 7,286.
In 2007, the Dow hit a high of 14,164
In 2009 the Dow fell and stopped at 6,547.
Dow 6,547 is where the market stopped falling and the dead cat bounce began. At 6,547 the market was oversold and buyers came rushing back in, looking for bargains. The Dow headed back up, and a bear market rally began.
On February 5, 2010 the Dow closed at 10,012.
On February 12, 2010 the Dow closed at 10,099.
http://finance.yahoo.com/banking-budgeting/article...
GME kangaroo tail reversal
Had one on Feb 9. Selling off at 2X the 10 day ATR after hours. March/April max pain opts expiration 20. About 2 bucks upside and 60 cents downside risk so 3:1 upside:downside.
Long @ 18.10
Do your own homework.
GL
Re: Doing the Dead Cat Bounce, nice article..
He's been negative for several years.
Re: trickle down unemployment...
Les,
Yes, isn't it curious — most people who are in government, whether our mayor ($130,000) in a city of 150,000, or those in state and federal government, fall into the range which is least affected?
This is why I would like to see an amendment linking legislators pay and benefits to their constituents.
We can begin with their health care.
Re: TRAK and my Stop Loss mechanics
The 10 day ATR for TRAK is 71 cents.
Definition of ATR
http://www.investopedia.com/terms/a/atr.asp
Unless one is daytrading or scalping, I can't see why a sell stop would be set any tighter than the entry price or the HOD minus the 10 day ATR and that combined with position size would help contain risk. In addition, a good entry in the bottom 1/3 of the daily range would help as well.
Re: Doing the Dead Cat Bounce, nice article..
LOL, 6,547 to 10,099 is 54% rise. I never heard such move defined as a "dead cat bounce." That's one hell of a lively dead cat.
Anyway, we all know the point of all these "predictions", don't we? Throw them out there, brag forever if they come true, never mention them if they don't - sooner or later you'll get one right, will tout it endlessly and will become known as "one who predicted"... and the crowd of admirers will dismiss skeptics, and for the most noisy ones you can always explain all your misses by manipulation. Old as the world itself. Works, too.
post close report is up
I thought the televised hearings with Toyota today were bizarre. Why didn't we see the same level of concern and disgust when the bankers gave their testimony?
Re: GME kangaroo tail reversal
BSI - I've been watching this one as well, but I don't see the Kangaroo Tail Reversal you're referring to.
Re: post close report is up
Since "we" own GM now isn't in "our" best interests to slander TM? LOL
Re: Doing the Dead Cat Bounce, nice article..
Vad I'm with you on that. Someone with some intellectual honesty would say "Gee I blew that call - it happens, that's why you use stops."
Re: GME kangaroo tail reversal
Feb 9. Gap down opening at 18.98. Hit 18.27, closed at 18.82. Volume was about 3X daily average. Use a candlestick chart to see it clearly.
GL
Re: GME kangaroo tail reversal
I'm not sure if that's a kangaroo tail though. From what I've read those don't exist on gap downs...
Anyway, I did end up buying the stock after hours at $18.15. I put a sell stop order at 18.65 for tomorrow including extra hours.
Willing to wait for the $ 53.00 level
on MOS... not shorting, but waiting... Thinking newer, online sources of potash ( China ) will draw the prices toward $ 320 - $ 340.00/ ton.. Actually, $ 270/ton is not out of reason... Farmers are very resourceful, and are not very motivated to continue full scale production at current price levels...
Re: post close report is up
"Why didn't we see the same level of concern and disgust when the bankers gave their testimony?"
Those in positions of high power (not to be confused with the truly powerful) are often found exercising said power only when able to get away with it. Ask any 20-year-old waitress or valet.
Mental stops. Are they stops at all?
I think one should be real careful when they use "mental stops". It is so easy to talk yourself out of taking them when the time comes and you have to watch the tape constantly.For every one good reason for using mental stops I can think of 5 bad reasons for using them. Be careful. I always take mechanical stops.
Bob
PDAC
Bill,
I have registered and plan to go on Sunday March 07. If anyone from Ottawa Canada plans to go let me know.
123.
Re: GME kangaroo tail reversal
Gamestop has good fundamentals and valuation points, per Finviz. Except for quick ratio. The chart,of course,indicates a beaten down stock.
Re: GME kangaroo tail reversal
Well, the fear is that it will go the way of Blockbuster which is why valuation is so low. I'd say that is fully baked in and then some so it's a good risk-reward play in my mind.
Re: Mental stops. Are they stops at all?
They are - IF a trader is disciplined. If you don't have strong enough self-control and are not confident you will follow your trading plan, or if you can't be near your computer and watch your stock - by all means use actual stops, it's better than nothing. If you, however, are at the stage where you take a stop with no second thought as soon as it's hit, and if you can be there to watch your stock trading - all "good reasons" I mentioned are really good.
Re: post close report is up
Hi Bill,
I suspect there is some domestic maker favoritism at play here. They identified a problem, apologized, hired more workers to fix cars 7 days a week, etc.
Maybe DC, GS and GM can orchestrate a TM "crash", and take them over at $1.50 per share.
yesterday, i saw a clip of the panel ask the Toyota, executive, "Do you feel Toyota is being treated unfairly because we have a stake in GM?" What did they expect the answer to be? Ofcourse, the rep said "no we feel the govt is treating Toyota fairly in this matter."
Today, the FBI raided three Toyota suppliers. http://bit.ly/cK1W9S
China's military warns U.S to "speak and act cautiously"
BEIJING (Reuters) - China's military warned the United States on Thursday to "speak and act cautiously" to avoid reigniting tensions between the two powers, denying the People's Liberation Army played a part in Internet hacking.
http://bit.ly/aNSUi6
How did bankers pervert the credit market system?
Bill wrote: "How these banksters ever managed to take control and pervert the debit (asset) market system, directly resulting in the problems we have today, is beyond me."
I believe the answer is easy to find at the much maligned Austrians:
Government always needs money, reaches the limits of (safe) taxation so it must borrow. From whom? From the large banks... who in exchange get the legal right to practice fractional reserve banking which is no more than a fancy name for printing fake money. And the Central Bank is there to protect the falsifiers from the fury of the free market which otherwise would "run out" i.e. bankrupt the fake mony printers. The money would go to those bankers who do not engage in fractional reserve banking. No such animal though with a Central Bank. All banks print fake money, some more modestly, some shamelessly.
Nothing more complicated than that.... and nothing more sad. It started in 1694 in England and it keeps going. What's the "end game"? When? I wish I knew. The Austrians do not tell us.
Unfortunately all this does not tell me how to invest. So I will keep listening to Bill...
Akio Toyoda fights back tears addressing his employees.
Toyota Motor Corp President Akio Toyoda fights back tears addressing his employees.
http://bit.ly/cHy0Bh
Toyota name was chosen, partially, because it takes eight
brush strokes to spell its Japanese name... ' Eight ' is considered a good luck number in Japan... just a tid-bit heard on radio today.
bless us father for we have sinned
gold has given us a blessing,
it was clear the past few sessions what was happening,
the miners are the eyes into the soul of gold.
they were cratering well before gold fell, and gold's price action was indicative of a fluffy top with all the highs coming pre market or only for a fleeting moment before the crunch down during the trading day.
the shares especially the small to mid caps were faltering, and now gold is drifting down overnight.
nothing is written in stone, but what im seeing is the set up for a large fall in the markets which will drag the gold price down. i cant speak to the magnitude as thats a mug's game, only that things look down, but who knows for how long.
i do not believe the Miners as a group are coming back any time soon. i hate to say this but there will be the home runs but as a group, they will continue to be at prices lower than they were years ago with gold at higher prices. its been several years and the trend has not broken.
the PDAC will host men in pressed suits showing their wares. ill be there, shopping, crossing off any company from my list that employs busty show girls to give out hats and pens (im looking at you Valgold), or who's people are more bluster than beef.
word to the wise PDAC folks:
dont put some asshat in a shiny suit and slick hair cut running your booth talking on his phone the whole time. do put an earnest person who looks to make a sincere connection and inform you about his company. why this sort of strategy isnt followed by more miners is beyond me. with the underperformance of many miners over the years, there should be less bravado and back-slapping and more sweat to show us how they are going to make it happen.
i can see the financial district from my condo window, but a few blocks away... sweet dreams, dont look down.
bona note,
Bollinger Bands
Board; What parameters do you use with B+B and why? Period and standard deviation.
Re: Bollinger Bands
20/2 for daily; 13/1.7 for intraday
Interesting Stuff that Show how market is manipulated.
http://www.hedgeaccording.ly/2010/02/is-spy-gettin...
http://www.zerohedge.com/article/ever-wonder-who-c...
http://www.youtube.com/watch?v=cQyFxBG6dhY
Just re-posting these things for those who may not have seen them yet..
anyone been to or live in spain here? wondering if its as bad...
as the news states.
"The Euro's Next Battleground: Spain"
http://bit.ly/9I3idx
Re: Interesting Stuff that Show how market is manipulated.
WE better check our sources... Quick look at the first link offered this pearl:
"it allows the algo to exploit the SOES"
SOES?? Whoever write that article must be stuck in 2000. SOES does not exist anymore. It was replaced by SuperSOES, which in turn was replaced by Supermontage. In addition, even when it existed it was for NASDAQ only.
People really should start writing about things they have a clue. Not aimed at you, analyst65, hope it's clear.
Pivot Points
Vad,
If your still up I am wondering if pivot points are of any use and do you see any value in them. Of coarse anyone else can chime in.
Bob
Re: bless us father for we have sinned
Dr cosa,
Can't honestly say I enjoy your comments (being long miners for a long time), but they help stay in touch with reality. I hope after your visit to PDAC that you'll give us a summary of the presenters - those with sober facts c.f. those with busty ladies. Also, given your somewhat bearish view, I'd love to know how you see the next few years shaping up. Then you can finish up with a couple of "Hail Mary"s.
With EUR/USD breakdown, would AUD/USD serve just as well?
http://chart.ly/gd89vk
AUD/USD. Check out the break of the 100 day and the "kiss goodbye" retest.
With the EUR/USD being so heavily mired by the crisis, i am hypothesizing of also watching the AUD/USD very closely, looking for correlation to indices and commodities. thoughts?
thx in advance.
Re: Pivot Points
bobbyo,
I don't use them but many do, and find them useful. Same of course can be said about practically any technical study/indicator.
There are no good or bad indicators, really - there are those that help you visualize action, see it in some way you can interpret in instructive way allowing you to derive your response. None of them have predictive value, and all of them have instructive value - IF you incorporate them in your trading system in a meaningful way.
toyota hearings - misleading
If you were from Mars, the Toyota hearings would give you the impression that Toyota management were lazy and incompetent, and the lawmakers were energetic and competent.
They never cite the number of deaths alleged from Toyota's flaws. I think it's about 30 over a decade. This out of 35,000 average highway deaths per year.
Toyota's special 3 deaths per year is probably fewer Americans than die annually from bee-stings, or slipping on ice.
Not to minimize consequences of each individual accident, just to put it into perspective as a societal problem.
As Bill suggests, the banksters have caused rather more social disruption!
It seemed today that Mr. Toyoda couldn't kow-tow enough or bow low enough to satisfy those noble public servants! Did they want him to fall on his sword?
Re: Pivot Points
Thanks for the input. All I really want is a predictive indicator that tells me to buy here and sell there and is valid 70% of the time in all markets. That's all I want. Is that to much to ask? :).
Bob
PS. Thanks for the BB settings.
"Bonus Blowback Bypasses Brokers" WSJ
Retention Pay, Signing Awards Get Thrown at Top Talent; a $10 Million Payout at Smith Barney.
http://bit.ly/aXF4jS
*click on the 1st result for full wsj article.
Candlestick 101
Someone asked about free learning resource? Before i forget:
http://bit.ly/9Xn97Y
I am no expert in them. Learning as I go.
http://chart.ly/kd5b2m (reversal top black candle)
Time for bed.
Re: Pivot Points
Bobbyo, see another trader's extreme contrarian play (I think I can call it that) from yesterday - HSII. Trade is opened at 09:35 and closed at 10:56 (see realitytrader trading log)- See attached screenshot.
I have added pivot points to a freestockchart chart and BB's to my brokers intraday charts as there are neat tricks to be learnt in both of them. Before making the decision to enter a trade I like to be aware of potential pivot support and resistance, so I look to freestockcharts.
Vad has pointed out a reversal pattern to watch for in intraday charts with BB's and as you can see from the attached, this stock reversed off the deviation (i think that's what it is) of the pivot point. This is not the first time I've seen such a trade behave in response to pivot support and I'm kicking myself for not trading it.
Wasn't aware that parameters for intraday BB's differed. Will change them accordingly. Thanks to both of you for clarification.
Re: Pivot Points
Les,
That was a gutsy trade. i would call it a "fade the spike" trade. After the initial reversal the stock continued down that is what i consider gutsy. Stop must of been below 16 with a bigger spread (entry-stop) then what is normal over there at reality trader. In addition that is a really thinly traded stock. For myself, I would not touch that trade and just leave it to the experts.
Bob
Re: Pivot Points
Well noted bobbyo, that is indeed a "dino" trade.
This is another trick I have learned from Dino, which he calls "quarter theory". HSII reversed at .25, but failed to follow through and fell to the next level of support at .00. Useful trick for monitoring stocks for reversal potential. .00, .75, .50 & .25. Had I followed it for 10 minutes, I would have entered on the pivot support and reversal at 26 (so pivot support plus quarterly reversal potential). Say long at 26.10 with support at 26. Would have been no looking back on that one. I do follow Dino's calls for trades that fit that criteria.
Re: Mental stops. Are they stops at all?
1987 I had "hard" stops on everything.
While driving on a 500 mile trip I heard the market was falling and my Boeing was stopped out. (This was before cell phones and all I got were brief radio reports.)
My first thought was, "I'll call in and remove the others." The Interstate got pretty busy and by the time I got to a pay phone there was a long line and the people were unable to get though to their brokers — to sell.
I made a "hard note" which I see often in my investment notebook which says simply, "NEVER REMOVE A STOP ON IMPULSE!"
(I still write everything down since computers have also been known to be "too busy".)
I was out, bought back in (too soon) and made a good profit on the year.
Re: anyone been to or live in spain here? wondering if its ...
NYUgrad, I attended an executive retreat in Spain where I was to speak English with Spaniards...great job! The folks I met were from all sectors, notably banking, auto, technology and finance industries. A few years ago-- but the theme was evident they are under pressure as a culture to 'Americanize' their operations. Especially with their new corp holding companies now based in England or the States. Which means giving up long lunches with family and working longer hours/commuting distances, the whole catastrophe. Wonderful attitude and hard working/honest folks. Their worship of pork was the only 'downfall' for me. Trying to get anything without a bit of pig on the side was tricky. Suggest you get the Lonely Planet Guide to Spain.
Total Market to Gold Ratio
Total Market to Gold Ratio, in a tight triangle. 5 Hits on the triangle, is a good predictor of a big breakout move. Usually in the reverse direction the 5 was moving, in this case, down and out.
The Poll showed that most people would take gold over USD in a 5 year closed end bet. I agree.
Just reading "Gold the Once and Future Money". Good stuff. By Wiley and Addison. It's about more than just gold, 400 some pages about currency through history and a no-BS perspective about important events like Bretton Woods, and the Asian crisis in which economic hit men forced small governments to bankrupt their smaller and regional banks, allowing them to be bought on the cheap by the bigger and more connected players. Hmmmm.....I guess you can pull that off in larger than "3rd world countries" too.