Morning Call [6:29am ET] Yesterday morning I referred to a jack-in-the-box. This morning, I’m sorry to say there is another children’s game that comes to mind. It’s the exciting toboggan ride down a steep hill. And, if you didn’t stuff your pockets with cash at the top, you are going to be hurting at this point.
I’ll get right to the point. Thirteen trading sessions ago, the financial services industry and the mainstream media combined to explain that the May 6 market crash was just a fat-fingered Joe or Jane and that capital markets and government regulators needed to intervene with more controls. Calling them flat-out liars, I showed them the middle finger.
Facts: the extreme lowest point of the S&P 500 index on May 6 was 1065.79; and this morning at 6:10am ET that index has fallen to 1039.25.
I sensed this tumult coming on yesterday morning and sold my short-term positions into cash, taking profits from the market. When I got around to writing about it last evening – to clear my conscience – the S&P was 1066.
This morning, whether you are long equities, energy, grains, coffee, sugar or currencies not called Yen or Yankee Dollars, you are a loser. You have taken your assets on a wild toboggan ride.
Here, sadly, is the evidence.
I guess the world is full of fat fingers! NOT.
Some of us, at least, will be smiling today.
CTA Trading Desk Post-Close Report
Selling intensified on global equity market. Traders are still disenchanted with big government’s response to the Greek debt crisis, and now are worried about military escalation between North and South Korea. With overseas markets down -2.5 to -4.5% US equities plummeted on the opening finally taking out the February low on the cash S&P while futures managed to hold $0.50 above their first-quarter low.
Declining markets’ only hope for a reversal requires printing a new low for the move before subsequently rallying and finishing higher on the session. The action in the S&P (+0.04%) followed that script perfectly, leaving open the possibility for a reversal higher.
At the morning lows pessimism was running rampant; investors were clamoring for put protection, Daily and Weekly RSI’s falling to deeply oversold levels with support levels rapidly falling. However, there was a glimmer of hope as Goldman Sachs (GS+4.29%) and Amazon (AMZN+2.42%) resiliently showed signs of relative strength even as the broad market cascaded lower. Also emboldening Bulls was the outperformance in the high tech sector; the Nasdaq (QQQQ+0.00%) did not take out either its May 6 or February 5 lows, today recapturing the 200-day moving average.
Traders looking to buy into weakness viewed these glamour stocks’ price actions as market “tells”, deploying cash once GS and AMZN triggered opening range breakouts (OBR). This set-up usually means the marketplace is absorbing emotional selling, and demand is soaking up excess supply. Aggressive traders can then purchase shares with well-defined stop loss limits (morning lows), enabling them to prudently speculate on an upside reversal.
The Bulls should be able to move the ball downfield given the price action today, the first target being the 200-day moving average at 1103. The next resistance is up above at 1130, roughly 50% of the decline off the April 26 highs. Remember, the sharpest rallies normally occur within the context of bear markets so a “one-day wonder” run up over 1100 will not be a green light to dive back in 100% long. Rather than going all in, a safer bet on higher prices might be shorting bonds (TLT-0.04%) as money managers unwind the flight-to-safety trade, dumping longer-term treasuries and adding long exposure.
In this very risky environment it makes sense to nail down profits, limiting overnight risk and coming in each morning with a clean slate. The old trader adage comes to mind; Bulls and Bears make money, pigs get slaughtered.
Have a great evening.
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Comments
For the first time in my life ...
... I made money trading in a declining market.
Primarily by moving in & out of SLW and PHYS, or GLL and QID.
I'm up early today, as every day looking for a setup for the day.
Just wanted to say thanks Bill, for opening my eyes.
the dollar - remember when?
Remember back in December when the dollar was at 74 and change, and everyone was predicting its imminent demise? Its now trading at 87.41 - a heartbeat away from it's 2009 high of 89. December was when the whole Greek crisis first broke onto the scene. Gold had just broken $1200 and fallen back. Gold is now $1190, even with the massive dollar move. Oil was slightly above 70. Its now at $68. SPX was at 1100, its now around 1050.
People are now predicting the demise of the Euro, the implosion of the eurozone. Instead of the carry trade, the big guns are focused on shorting the euro, ECB is buying junk sovereign bonds, and there is open talk of countries either "restructuring" or being kicked out of the zone altogether.
Yet there are many more shoes to drop, more chickens that have yet to come home to roost here in the US. How much higher can the buck really go? Will the eurozone really implode? Is the buck really that much healthier?
My question is, what will trigger the end of the dollar boom, and cause all that scared money haring off for yet another rabbit-hole to hide in?
* state bankruptcies
* housing double-dip
* commercial mortgage problems
* GDP double-dip - "no more recovery"
* europe bites the bullet and develops a restructuring plan for Greece
whoops! Hadn't heard this before...
"Europe may have to clean up its own mess after all. The US Senate has voted 94:0 to block use of taxpayers’ money for IMF rescues that make no economic sense or bail-outs for countries like Greece that far are beyond the point of no return.
“This amendment will help prevent American taxpayer dollars from underwriting dysfunctional governments abroad,” said Texas Senator John Cornyn, the chief sponsor. “American taxpayers have seen more bailouts than they can stomach, and the last thing they should have to worry about are their hard-earned tax dollars being used to rescue a foreign government. Greece is not by any stretch of the imagination too big to fail.”"
http://blogs.telegraph.co.uk/finance/ambroseevans-...
Is California too big to fail? elsewhere:
Adam Posen, a member of the Bank's Monetary Policy Committee, said that although Britain and the US were unlikely to face repeated recessions, in many senses their plight was "scarier" than Japan's. The warning is of particular significance because Mr Posen - an American economist - was recruited to the MPC partly because he is a renowned Japan expert.
In speech at the London School of Economics, he said: "The UK worryingly combines a couple of financial parallels to Japan with far less room for fiscal action to compensate for them than Japan had."
Britain faces an uncomfortable trio of obstacles, none of which faced Japan in the 1980s or 1990s. Unlike Japan, Britain has to sell a large proportion of its debt to overseas investors, who are more likely to exit the market if they become scared of Britain's fiscal prospects.
http://www.telegraph.co.uk/finance/financetopics/f...
the fact that foreigners own so much debt suggests capital controls could be put in place so that Americans are obliged to support government borrowings, once the Chinese et al. pull the plug. Is it for this reason that vintage cars (amongst other collectibles) are selling for astronomical sums of money right now?
Interesting how the bad news gets sold as the market is going down. Starting to see a relationship to these events now.
Discipline trumps conviction...
... but this fine morning I wish I had broken my rules this one time. From yesterday's end of day:
[15:58] {Threei} tempted to take FAZ overnight
[15:58] {Threei} but heck... why do I need that
[15:58] {Threei} some idiot throws another trillion in, we open +500
Call it day trader's regret :)
Cara 100 Ratings Changes
Good morning. The index futures are so ugly....Ted Danson wouldn't date them.
GILD - Upgraded to Hold @ Morgan Joseph
NKE - Upgraded to Buy @ Argus
Other stocks of possible interest:
AAUKY - The stock gets a Buy-from-Neutral boost Goldman Sachs, which also adds it to its Conviction Buy list.
ABX - Upgraded to Buy @ Deutsche Bank
Re: Discipline trumps conviction...
30-1 odds on the twelve? Once in awhile instinct tells you to take a bet with a low player advantage- discipline keeps you out, and it stings.
Right now, I would almost take a flyer on three twelves in a row, which I've seen happen more than once. Can we gap down hard three days in a row? If you're going to make that bet, now's the time.
rule 48?
rule 48 invoked. http://tiny.cc/p9qxo
I have no idea what that means, though....
Rates / 10 year yield
Hi All – The 10 year U.S. Treasury bond price improved to lower the yield to 3.12% - down from 3.20% early Monday. This follows global stock markets trending lower on the heels of the European debt crisis and tensions on the Korean peninsula. With the German bond out of favor due to declines in the Euro the U.S. debt instruments, and by extension mortgage rates, are benefiting from the international refuge appeal of the U.S. dollar today to yield the lowest mortgage rates in twelve months. Happy Trading
"Kitco's Gold Index moving in a straight line" Gold/EUR hit 980
Gold/EUR closing in fast on that 1000 level.
Gold/SEK so near hit a new ATH (don't have a good chart for that).
Stratfor has a new piece that has me thinking hard.
I had thought as far as the EU possibly disintegrating, but not further to what might come afterward.
(addendum: anyone interested in Poland should read this.)
Germany After the EU and the Russian Scenario
http://www.stratfor.com/weekly/20100524_germany_af...
"The European Union is experiencing an existential crisis. "
"Therefore, if we simply focus on economics, and we assume that the European Union cannot survive as an integrated system (a logical but not yet proven outcome), and we further assume that Germany is both the leading power of Europe and incapable of operating outside of a coalition, then we would argue that a German coalition with Russia is the most logical outcome of an EU decline."
Careful out there,
days like this are bound to have technical troubles all over:
NYX: NYSE and AMEX reportedly experiencing some technical issues with delivery to the broker hand held machines
Cara 100 Update (Final)
ORCL - estimates were cut through 2011 at Citigroup. Company has currency exposure in Europe, Citigroup said. Buy rating and new $28 price target.
PTR - Upgraded to Hold @ Citi
VALE - estimates were boosted through 2011 at Goldman Sachs said. Company is benefiting from higher metals prices, Goldman said. On the other hand, the target was cut to $43, given rising economic uncertainty. Buy rating.
Re: Careful out there,
Vad,
Rule 48 means the exchange doesn't have to tell you what's happening. Only the traders on the floor know what's going on. Lovely.
Just like Germany may ban all short selling whatsoever.
More intervention to suit the interests of certain people!
Re: rule 48?
"With stock futures volatile before the opening, the New York Stock Exchange invoked Rule 48, which suspends a requirement for designated market makers to show premarket prices to help smooth the opening. It was the third time this month the rule had been used."
But you can't stop a natural hurricane with policies.
S&P 500 - 500 Day Simple Moving Average 1037ish
Well, we have narrowly escaped falling below the 500 Day Moving average at
about 1037 on S&P. Will be important to watch as a support/resistance level.
Re: S&P 500 - 500 Day Simple Moving Average 1037ish
The day is young. With memorial day weekend coming, it truly may be sell in May and go away.
Re: Careful out there,
Yeah, and then they wonder why market drops 1000 points in 20 minutes? Intervene more, and observe even more unnatural events. Shrug.
Interventionists' belief that their will can trump the laws of nature will never cease to amaze me. Although I tend to think at least some of them know that they can only postpone inevitable while making it more drastic... and simply pursue political expediency of the moment. That's what goes for leadership these days I guess.
#63493
starting to build a large position in the quick fix.. cash is tight, and, imvho, people will go to the quick fix... the pill will cure the ill ( bad food habits, can't afford the weight loss programs ).. watching the massive short position
Who said Arab oil was threat to US national security?
"It has been said that the US Environmental Protection Agency is considering withdrawing all government contracts, drilling licenses and leases from BP. The oil giant has 22,000 oil and gas wells in the US worth $16 billion (€13 billion) -- almost 40 percent of BP's entire turnover. Such a move would be crushing. And it would be almost impossible to push through. BP is also one of the most important fuel suppliers of the US military. BP's defenders would merely have to point out that any move against the company would endanger US national security."
I like the title of the article:
Washington and BP -- 'Like a Junkie Controlling His Dealer'
....or the pimp that controls their washington prostitutes
"Politicians in Washington are getting nervous" - so they should. good luck these fall elections.
http://www.spiegel.de/international/world/0,1518,6...
Re: S&P 500 - 500 Day Simple Moving Average 1037ish
Although I agree that there are some real ugly possibilities, on the other hand, unlike the panic in 08/09, Mom and Pop do not seem to be filled up on stocks and ready panic out this time around. Most people I know were scared out and never got back in and have been sitting on cash but watching the $USD weaken and stocks fly away (until the last month). This seems like a godsend for those who missed the initial May09-Apr10 rally. So who is left to panic out?
Re: Careful out there,
Which is the better story: King Canute or The Emperor Has No Clothes? Unfortunately for those of us without access to the interventionists it doesn't really matter. I think one of the key fights today is whether gold sustains $1200. That's real. But so is the uncertainty facing the European Union. I for one believe that Greece, and others, will have to restructure their debt at some point. Until then we are just playing on borrowed time. I was speaking yesterday with a friend with over 30 years experience who runs a global macro hedge fund who (cynically?) wonders whether governments are purposefully manufacturing the situation we find ourselves in.
.... re 63493
ok baz22, i give up guessing........which stock is the quick fix????? i still own some KERX and getting away w/selling the 5 calls each month, ditto ANDS w/the 2 1/2, they called away my ARIA, ARNA and ARRY last fri.......HL is beginning to annoy........
Re: Careful out there,
"Interventionists' belief that their will can trump the laws of nature will never cease to amaze me."
In 1974, when I could not start my new VW until everyone was buckled up, I thought there was too much intervention. It wasn't that I didn't use seat belts, but it goes against the laws of natural selection where only the foolish went through windshields by choice.
I'm sure many now in Congress would have been weeded out if nature were left to decide ;-)
RIMM
What to say thanks to Mr. Cara for the daily/weekly lessons... from April 1, 2010 (I believe) regarding RIMM:
As for me, I like the fundamental corporate metrics of Research In Motion a lot in fact, but, at $74, I don’t like the current share price. I’d be interested in buying this stock down at its January low of $60 or, possibly at the 4Q2009 low of about $55, which may happen if the broad market took a big hit in the quarter starting today.
This morning RIMM trading ~$58.
Out of vxx at 34.60
I had picked up for 32.8x.
Looking to reload on that and a few others on test of resistance for broad markets.
RIG today
On a day when the market is off, and after getting clocked over the past week, RIG is actually up. Off 40 points from the high this year, RIG has a forward PE of 5.4, a trailing PE of 6, a profit margin of 26%, and - perhaps a teensy legal problem at the moment.
FD: I wrote some puts earlier this morning. July 50s have an Implied volatility of 71!
............
tobyt... good morning ( sort of ! ).. figured it would get dumped after alpha article(s)... however... I am buying on a sliding scale ( from yesterday )... possibly to the $ 2.25 range.. arna
AZO chart b/o
Channel top, nice potential breakout.
http://www.finviz.com/quote.ashx?t=azo
AZO chart b/o
Channel top, nice potential breakout.
http://www.finviz.com/quote.ashx?t=azo
House Prices Down
"WASHINGTON, DC – U.S. house prices fell in the first quarter of 2010 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted, purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages, was 1.9 percent lower on a seasonally adjusted basis in the first quarter 2010 than in the fourth quarter of 2009. The unadjusted national decline was 2.2 percent. Over the past year, seasonally adjusted prices fell 3.1 percent from the first quarter of 2009 to the first quarter of 2010." FHFC
Surprise surprise: the top housing increases were in the Washington DC-VA-MD-WV area, Up 11.7 percent over that period.
full document: http://tinyurl.com/33svoa5
Re: Out of vxx at 34.60
Back in at 32.2x.
Watching if prices break up out of this falling wedge.
http://bit.ly/dl0VRj
GDX v/s GDXJ
I recall Bill preferring GDXJ v/s GDX indicated by the fact that he bought some last Friday as per the Sunday Weekly post Wrap-up.
I see that GDXJ is a more volatile version of GDX and they move together. Can anyone elaborate the reasons as to which is better for current environment (besides that it moves faster)?
http://stockcharts.com/h-sc/ui?s=GDX:GDXJ&p=D&yr=0...
Bill, are you still holding the small portion you bought on Friday or was this also part of what you sold and got out of as per today's post.
anyone see
$ 25.50 as support at msft ?
Re: anyone see
http://bit.ly/ceYRbX
I wouldnt touch msft at any price above $15 (Maybe $20). It is at the top of this long term range.
Good Lord, NY
I'm even burying the canned food now !!...
Re: Good Lord, NY
Whats the new saying? "Men lie, women lie, numbers don't"
TNA/TZA
interesting disparity between this pair when you compare their current retrace from February 5 – April 26 pivot high/low.
.......
duplicate deleted
ABC News Goes Underwater For Special Report On Gulf Oil Spill
http://huff.to/ddyq75
"ABC News outfitted a diving team with special hazmat suits and sent them to the Gulf to see the damage the oil leak and subsequent cleanup are causing underwater. They found that the leaking oil is combining with the cleanup chemicals to form a toxic soup."
HEY MR Irrelevant! Go on national tv and tell American's to boycott BP gas stations. Take over the plugging and cleanup! This is no longer BP's oil! it is the property of U.S.A!
Re: Good Lord, NY
story of " numbers " ..: Ceo of former Fortune 500 Co ( before, ummm, investigations ) interviewing 3 candidates for CFO position... Asks first candidate, who is a social worker, " what is 2 +2 " ? Social worker answers, " it depends on the emotional attachment, and of course, the financial stability "... asks the second, a NASA engineer " what is 2 + 2 ", who answers, " if taken in the inverse, and combined with existing variables, we could conclude, etc., etc ".. asks the third, an accountant, " what is 2 + 2 ", who answers " What do you want it to be ? ".
Re: Good Lord, NY
ok on wall st. Numbers lie too.
:)
While Bulls and Bears stare each other down.
A light contemporary rewrite of favorite nursery rhymes
http://nihoncassandra.blogspot.com/
THIS LITTLE PIGGY
This little PIIGy was slammed by the market;
This little PIIGy sat tight at home;
This little PIIGy made some budget cuts;
And this little PIIGy made none;
But this little PIIGy cried, "ouch, ouch, ouch!
All the way to the IMF's home.
THE SEC DOESN'T PEEP
The SEC doesn't keep, the safety of peeps
in sight, in order to defend them;
They left their charges alone, so they could hone,
multitudinous ways to fleece 'em.
The SEC didn't peep, since they were asleep,
only dreaming of frauds committed;
But when they awoke, they found it not a joke,
For the customers were still being pilfered.
Then up they took, their little crook,
Determined for to find them;
They found them indeed, but it made their heart bleed,
For Goldman had deleted all their e-mails behind them.
Re: GDX v/s GDXJ
mSquare,
This is precisely why I won't comment on my trading like that again.
I said at the time I may be in that trade for hours, and I was. I followed up yesterday to say that I sold my Friday gold bullish positions (65% portfolio weighting) for a single day gain averaging +1.75%.
I bought GDXJ 10%@25.38 and 10%@25.75 and sold that holding, -20%@26.16 for a realized gain of +2.33%.
My thinking at the time of sale was that if the broad market plunges, there will be margin calls, which will pull down the goldminer stocks too, and there has been a very large move higher in these stocks in recent months. The pull-back could be very large.
In the Junior Gold portfolio, I plan to trade mostly gold and silver contracts -- long and short -- until I feel the market has stabilized. That might take a couple months.
During the market's panic to buy these juniors, I bought a 10% weighting in UXG at $3.35 and sold a couple days later -- -8%@$3.97 and -1%@$4.06 -- leaving 1% at what is now a very low cost base. My objective is to build significant positions in a small "select" group of stocks, and selling a large chunk when I think they get over-priced, trying to reduce the cost base for each of the core group that I retain.
No further comment.
FOMC INTERVENTION
ALOHA!!
Contrast what is said in the FOMC meeting transcripts to what is said to the public. I doubt any "official" FOMC Statement ever includes currency interventions.
Here is one such from March 16, 2004(page 6 of 107) ... In a meeting with Greenspan, Geithner and Bernanke present.
DINO KOS: The yen story, as usual, is a bit more complicated. For once the recent data for Japan have been decidedly more bullish. Fourth-quarter GDP growth, for example, was reported to be at a 7 percent rate. Adding in the Japanese current account surplus and the inflows into Japanese equities from foreign investors, it’s not surprising to see the yen facing upward pressures. The panel at the top of page 4 shows (in the red line) the depreciation of the dollar–yen exchange rate through mid-March. The blue bars graph the daily interventions by the Japanese monetary authorities. As the dollar moved down, Japan intervened steadily and sometimes in massive size to smooth the fall of the dollar. Market participants noted a change once the dollar began to rise. It appeared that the Ministry of Finance (MOF) was actively seeking to push the dollar higher—in contrast to its previous action of smoothing out the decline as the dollar was falling. The largest and most controversial intervention occurred on March 5, the day of the employment report. The middle panel graphs for that day the intraday evolution of exchange rates indexed from midnight eastern time for the yen, the euro, the Australian dollar, the Canadian dollar, and the pound sterling. At 8:30 a.m., the weaker-than-expected employment report was released. Yields and the dollar both fell sharply. The exception was the dollar–yen exchange rate, which disengaged from other currency rates and actually rose. The MOF bought $11 billion dollars in the hours after the data release and, in effect, pushed the rate in the opposite direction than that suggested by that new piece of fundamental information. Market participants were confused by the price action, which threw some of the cross rates out of alignment and adversely affected liquidity. We’ve heard anecdotal reports that speculators have reduced their activity in the dollar–yen currency pair—reports corroborated by data from the major interdealer brokers indicating that activity in dollar–yen has been flat or going down in recent quarters. The dollar–yen rate fell again late yesterday and this morning following Japanese newswire reports that the Japanese authorities would cease large-scale intervention after the end of the fiscal year. This morning the dollar was down about 1 yen, at 109.35. During the intermeeting period Japan bought—including overnight purchases—$76 billion, bringing to $138 billion its purchases in the first two and a half months of the year. For comparison’s sake, during a very busy 2003, Japan bought $180 billion over the entire twelve-month span.
LINK: http://www.federalreserve.gov/monetarypolicy/files...
Wow ... look at all that intervention ... Seriously, how can a law abiding citizen plan for retirement 20 years from now when this system of "floating currencies" is so unpredictable and so easily manipulated? At some point intervention fails and where will that leave those who were prudent and worked hard and saved all their lives? All intervention does is reward those at the top ... the TARP recipients(aka: US FED member banks)and their numerous accomplices. The root of all our economic ills is the malinvestment fostered by a fiat currency and those who control the monetary and political system to their advantage.
Here is the "official version" for March 16, 2004, which condenses 107 pages down to three very short paragraphs of vague and meaningless reassurances of stability. Now that's what I call "transparency"!
Release Date: March 16, 2004
For immediate release
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.
The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the intermeeting period indicates that output is continuing to expand at a solid pace. Although job losses have slowed, new hiring has lagged. Increases in core consumer prices are muted and expected to remain low.
The Committee perceives the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation. With inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation.
Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.
Hummmm ... "The probability of an unwelcome fall in inflation has diminished ..." An unwelcome fall in inflation! What monetary policy?
I have to ask ... Where is DINO KOS today? In every FOMC Meeting he is the key strategist as all the rest sit there going "uh-huh" and asking questions, usually meaningless ones that KOS has to correct politely.
Where are you DINO KOS?
Re: GDX v/s GDXJ
I am sorry to hear that, although understand your position. I enjoy your comments and opinions as a learning tool.
Re: GDX v/s GDXJ
Bill,
Thanks for your explanation and my apologies for ruffling your feathers in thinking I was following your buy call and buying myself. I guess I could have worded my question differently and better.
I was looking to buy GDX (or GDXJ) on my own choice - wanting to own some gold-miners right now. What my post and question was about trying to understand one v/s the other besides the obvious more risk/reward in the smaller GDXJ.
Sure, what you wrote on buying it definitely added to my conviction to buy it and my question if you still held it was probably not a question I should have asked here...
Re: FOMC INTERVENTION
kaimu,
You probably recall that I wrote about Dino Kos several years ago, calling him the world's most powerful man that nobody knew.
You are absolutely right; the owners of capital use the capital markets as a price discovery tool, and these Interventionists have completely different objectives. To them, our market is just a policy tool!
If the Interventionists were fair to all the market participants, not just leaking insider decisions to HB&B, then they would make statements like, for example, they think that interest rates are too low and they plan in 3 to 6 months to raise the fed funds rate and discount rate, etc, and give the market plenty of time to adjust. But, no, they are permitted by law to do what to us would be illegal insider trading, and we often get screwed.
I say this is totally unacceptable.
Re: GDX v/s GDXJ
Scott,
I don't think it is right for anybody in the business to talk his/her book, which is my point. I don't like it when CNBC and Bloomberg parade their friends Buffett, Soros, Gross and on and on to do that sort of thing, so I shouldn't be doing it myself.
One of the problems I have in writing the Junior Gold Brief is that many of these are illiquid stocks, and I just don't want to interfere with the marketplace or be seen possibly doing that. So, regarding this Brief, I have a list of 25 to 30 stock trading candidates, but will write up only 5, changing maybe 1 or 2 every quarter for the next Brief.
Re: ABC News Goes Underwater For Special Report On Gulf Oil ...
"Take over the plugging and cleanup!"
Kidding? Why would they want to do that - to own the problem no one knows how to solve? Today's definition of leadership is pointing fingers, assigning blame and directing anger. Actual problem solving is so 19th century
Re: Out of vxx at 34.60
"Back in at 32.2x.
Watching if prices break up out of this falling wedge."
How are you getting that price at that time? Are you shopping in some dark pools?
Bob
North American Palladium
Just perusing my watchlists and took a closer look at this one. Trade under PAL and PDL.TO. They completed a $100 million CAD financing on 4/28/10 at $5 CAD a share (and warrants at $6.50). Now trading at $3.37 CAD/share only 3 weeks later for a cool 32.5% loss for participants in the financing (not to mention the CAD has taken it on the chin over the last 3 weeks as well). Sure, PGMs have taken a bit of a hit with the broader market but still, crazy. How do these financings get done? Geez. What's the deal? (in my best Seinfeld impression)
Bill had pointed out to
me, quite a ways back, that HB&B traders see his order flows... It would be extremely difficult for Bill to post his trades and not see some sort of reaction from the crooks.......
Re: North American Palladium
Pal is one of my favorite play toys. They sat through the depression of PALL by closing their operations and going on holiday. They have a habit of raising fresh capital when the stock is running and thwack, it's the end of the move. No debt and plenty of cash makes them feel better I guess. They actually have a shot at earning money with PALL over $400. Great trading sardine if you don't mind a double digit beta!
Got stopped out.
the 200 day is proving difficult to hurdle for vxx
Playing a bounce
Taking ST positions in the 'buy-and-hold' account > 50/50 FIDSX/FSENX.
I think we got our Black Tuesday, and it was bought. Looking for a bounce, followed by renewed selling.
Trades FWIW
Following minyanville's buzz:
Took off FXP early this morning for quick profit.
Initiated CIEN at $15, MSFT at $25.7. (sold at $30.5 a couple of months ago); V at $73;
Dbled down on GOOG at $470.8 and CSCO at $22.8.
Should I stay or should I go now? No idea. Traction here? Seems to depend a lot on Europe, and they appear to the American perspective to be taking themselves down.
No politicians anywhere want to the right thing by their constituents. Worse, their actions equate to fraud and racketeering, if anyone had the spine to apply laws.
http://www.minyanville.com/businessmarkets/article...
Re: Playing a bounce
I'm with you 2nd. Stopped out of a weak attempt to buy SDS @33.20... stopped out at 35.99 (1066 s&P). Bought 25% portfolio in VTI at the close for 55. Still watching for close below 1066 to redeploy bearish bets. Looks like a hammer on $spx chart today.
Pullback or trend reversal entry
We had about 30 min of educational discussion of our so-called "drop-recross routine" which deals with the method of finding entries on a pullback or sharp drop, While parameters and examples were understandably tuned for day trading, the approach itself is universal across time frames.
http://tradinglog.realitytrader.com/2010/05/may-25...
Scroll down to 13:00
Re: Playing a bounce
Black Tuesday? Not a chance. The market was ripe for a rebound, and by selling the futures in europe, HB&B created a massive gap-down open which paniced the public into selling into it - at the low - and/or buying puts with the VIX at 40. HB&B did the accumulating, and once the selling pressure ended, accumulation continued. The Euro rebound didn't hurt either.
I think this rebound may have a little while to run. I'm going to wait and see what they do, but my current inclination is, believe the hammer candle today, stay long, and wait for the VIX to slowly leak away. Next stop for me: 200 DMA at 1103.
FD: net long equities, short VXX, short puts.
Re: Playing a bounce
Pz- It certainly felt like indiscriminate selling in the first two hours. My take at this point:
(a) Seoul 'recovered' from its nadir last night as well, which likewise indicated (temporary) exhaustion on the part of sellers.
(b) If I wait for 'confirmation' of a bounce, it may too late. After all, my time horizon for this trade may be as short as a matter of days.
(c) Any rally in the indexes is likely to leave undecided overnight boarders stranded.
(d) Should the indexes continue down, well- there were far worse entry points than the one I chose, and I'll disembark with no regrets.
Re: North American Palladium
What is amazing is that when the financing was initally announced on 4/20 PAL sought to raise $75m CAD. On 4/21 this was upped to $87m CAD. On 4/26 the over-allotment was exercised bringing the total to $100m CAD. And the deal was finalized 4/28. Then palladium takes a big hit and the stock is blown to smithereens - that same $100m of shares become about $65m shares (excluding value of warrants at $6.50 CAD).
I'm cautiously bullish on PAL here and went long a bit @ $3.15 (US). At least one thing is for sure - it isn't the worst time to be a buyer - could have bought these last month. Maybe management should just set aside a few million from the offering and buy back a few of those 20m shares they just sold at a nice discount ;-)
Re: Playing a bounce
My time frame is potentially short as well. I will be watching for - below 1066 close for guidance on this "long term" trade as well. :)
I went long ULE and GS today early as they went back towards positive ahead of the market. I closed those positions for profit and tryed for a bounce back down with SDS at the psychological 1066 level. In hindsight I should have took those good trades as indicators and skipped the SDS and went long earlier. Never-the-less I got on board the long side at the close. If the bears couldnt keep it below 1066 today????
Aussie's noodle over Europe's predicament
You can laugh or you can cry ...
http://www.abc.net.au/news/video/2010/05/20/290530...
(hat tip to Barry Ritholtz)
VIX at 40
BR has a chart posted of the VIX over the past 15 years or so. While we may be used to seeing a high VIX over the past few years, history shows that VIX readings of 40 often do not last long.
http://www.ritholtz.com/blog/2010/05/long-term-vix/
consumer metrics - "personal finance" index
The folks at Consumer Metrics track all sorts of funky information. This particular index purports to track consumer interest in default and foreclosure counseling transactions, and as those transactions rise, the index drops. Today they reported:
"Over the last week this Sub-Index reached the lowest level ever recorded, easily surpassing the previous low levels set in late summer 2008 and again in January 2009."
http://www.consumerindexes.com/
Scroll down to "commentary"
Since these guys track transactions in real time, they are a leading indicator. Presumably there is some lag between purchasing debt services and actual default, and then another lag between the default and the actual reporting of said default by the banking institutions (assuming for the moment the defaults are reported honestly, of course). The personal finance index started to drive off the cliff on April 17th. Perhaps credit card companies start to report impact in their May or June reports?
Re: Aussie's noodle over Europe's predicament
"The US economy is by far better off then the Euro economy because the US economy is owned by the Chinese!"
Now head to walmart for some shopping..........
Re: Playing a bounce
Black Thursday perhaps? The 27th is a full moon, notably a revolutionary time of transparency due to Uranus entering Aries and squaring Pluto. So sayeth Madeline. http://www.askmadeline.com. She has mentioned "cracks in the foundation" and advises being careful with the energy of anger or frustration. Embrace change with a smile!
Re: North American Palladium
BillySundance,
Re North American Palladium, I urge you to look elsewhere.
We are often surprised at the winners among the precious metals juniors, but if you are looking for a potential Kentucky Derby winner, you shouldn't be looking at the mule pull on Tater Day down near Possum Trot. :-)
UBS raises gold target for 2011-12
from Fleck today... meaningful.. maybe people will begin to realize gold isn't going to crash, but even more, that quality miners will began to get noticed.. I am still tracking TLR ( been in & out ) and a few other ' juniors '.. it was noted last week that the Soros Fund has invested in 9 junior miners in its latest disclosure for the qtr.
$12.99
ALOHA!!
As of May 24th the US Treasury Total Outstanding US Public Debt sits at $12.99TRIL USD. Not long before total US PUBLIC DEBT equals total US GDP.
The American Jobs and Closing Tax Loopholes Act of 2010(HR 4213) encompasses a lot of individual and business taxation. Boosting lending at the SBA is this governments idea of creating new jobs. I have to ask ... do I still have to put up my home equity to get a SBA loan? If I have no assets as collateral can I even qualify for an SBA loan? How much "assets" did these SubPrime people have to put up? That's what I thought ...
Here is a 29 page document that covers just about everything you and I do in our daily lives if you work for a living. I have added up the estimated costs the government will have to spend and it comes to $154.6BIL USD.
I find it odd that in order to "create jobs" and to "close tax loopholes" that the net price tag will be $154.6BIL USD. Where will those funds come from? More debt is the answer ... Is it wise to create jobs by enslaving future generations with more debt?
The reality is that this "Act" will cost more than the tax revenues it will generate by closing loopholes. It only took me 15 minutes to do the math. What's Congress's excuse? Once again tax revenue is "irrelevant"! All this "Act" does is create temporary demand but no long term productivity will be achieved. When does the "austerity" on the part of government come into play? That is never considered to the serious degree it should. A large centralized Federal government with its debt and payroll is anti-Constitutional and unpatriotic.
Here is the link to HR 4213 ...
LINK: http://waysandmeans.house.gov/media/pdf/111/Americ...
Scroll through and view the myriad of new regulations and changes ...
Re: North American Palladium
My God Bill I don't know doodly squat about palladium, north american or otherwise, but I have to say, that was funny... :)
Re: consumer metrics - "personal finance" index
ALOHA!!
So if we took out government and state subsidies in the form of welfare and food stamps and unemployment and medicare and social security where would this index be? I know some families who can only make their mortgage payment so long as they have unemployment checks coming in and food stamps for food.
tobyt
if one is looking for a darkhorse, cris may fit the bill... data is blinded till June presentation at asco... Dna could be baking a winner..
paper gold "fear gauge"
Three indicators for "fear of paper" in the market:
GLD: 0.5% discount to NAV
PHYS: 23% premium to NAV
CEF: 9% premium to NAV
GTU: 11% premium to NAV
(PHYS is Eric Sprott's new gold trust that lets you take delivery of one of their "good delivery" bars if you can cobble together enough shares to pay for it)
A 23% premium seems pretty astonishing. If you chart PHYS vs GTU, you can see a 16% move in PHYS vs GTU since its inception on March 1, and a 20% move vs. GLD.
http://stockcharts.com/h-sc/ui?s=PHYS:GTU&p=D&b=5&...
Why on God's Green Earth would anyone pay 23% above spot for PHYS, if they can just take their money to a store and buy the stuff and drop it into a safe deposit box? You can still get 1 oz pamp-suisse bars for less than 3% over spot, and kilo bars for 1.5% over spot.
Here's a trade. Go buy physical gold, then short PHYS. They have to converge at some point, right?
Re: North American Palladium
Bill,
I take with malice and great umbrage your assessment of my sardines. My sardines are quite trustworthy as the cans have yet to be opened! This company actually drills holes in the ground and has an affidavy from respected bean counter persons who have certified that with PALLADIUM at $1,000/oz the company has a better than even chance of selling more stock.
There is an Oklahoma bankster (circa early 90's) that has a big stake in this company. I guess holders are waiting for 'the other white metal' to be given strategic national security status and stockpiled with borrowed money!!!
Thanks. You are on top of the 'game.'
Re: North American Palladium
PAL certainly sold a lot more stock, but I suspect the key is the warrants. I'm guessing that some of the buyers of the financing are shorting the stock against the warrants, thereby driving down the price of the common. As I recall, they're also moving into gold mining (or more precisely, exploring) which may add some more buzz in the future. I interpret the stock as possibly near the bottom of an upchannel from March 09 needing to break a steep 9 day down trend with stochastics showing it becoming oversold. Currently no position. Respect Bill's take on the fundamentals, so only a trade as long as it works.
Re: paper gold "fear gauge"
Dave, I like Eric Sprott, but would never invest in anything that he offers. especially PHYS, Eric is making big bucks by selling physical to the Canadian Mint,and then reselling to the public, plus storage at the mint for his fund. "He does put his money where his mouth is, nothing wrong with that. My local dealer buys maples from him as he cannot buy from the Canadian Mint directly.
Just buy the real metal, 60.00 over spot one ounce coins, plus currency exchange, equals 7% on minted coins, storage, put them under the dog house, free storage, as long as you feed fido.
I guess clicking a data entry into a brokerage account, is much easier than driving across town, and writing a check to your local bullion dealer.
Ps I am cheap. 9% on CEF which is down right now, is to much for me, I sold off CEF last year,and went to holding physical, bailed out of Bullion Management two years ago .These firms will kill you with their expense ratios.
I would rather pay the Pooch to guard my goods.
BRING IN THE CHIMP!
ALOHA!!
According to this collection of polls on the US CONGRESS job rating it seems more and more Americans would be receptive to my proposal to replace the US Congress with a chimp and a "Dartboard of Decisions". I mean with a 14% approval rating what's left?
We would give the chimp a banana and some darts(foam ones for safety)with a magnetic dartboard with half the dartboard YES and the other half NO. Any darts thrown off the dartboard count as NO. THE GREAT DECIDER!!!
In the polls you can scroll down to 2005 and see the US CONGRESS had an approval rating around 40% back then, but over the next five years the approval rating has been eroded down to 14% now as the lowest. All that two party monopoly voting over the past five years and the best we can do is 14% approve. Not such a great report card for either party. Somehow though the American voter, who suffers severe STOCKHOLM SYNDROME, will surely replace the DEMS with the REPS, yet again showing that Americans are in love with political insanity. We spend more time scrutinizing a TV purchase or buying a car than we do a voting ballot. Until that dynamic changes you get what you vote for!
LINK: http://www.pollingreport.com/CongJob.htm
Re: $12.99
You often mention the SBA and when I first heard of the Treasury "forgiving" Chrysler's $1.6 billion loan, I thought of how that kind of money available to small businesses could save the companies who employ at least half the people.
This week I heard a report of what Illinois owes — a far lower number than is possible. I guess they simply forgot the $61B pension debt, or, perhaps it has been "forgiven".
Our state legislature finally passed a budget which will get us through the end of the fiscal year. When the sound bite is bandied about few will know our fiscal year ends June 30th!
Most people around here are probably too busy trying to get by day to day to pay attention.
My barber is now traveling 5 hours each way to work alternating weeks due to 50% drop in his business and $35,000 credit card debt. He is 59, had open heart surgery, and his current premiums plus meds have eaten away all his savings.
Our representative, Don Manzullo, is Chairman of the House Small Business Committee. When I wrote him saying his leadership has managed to make nearly all businesses far smaller — I got a "Thank You" letter.
SLR UPDATE
ALOHA!!
More upside on this one ...
The latest drill results hit 11m @ 59g/t Au around the 250m depth with a few more much shallower high grades around the MAGIC open pit. The drilling continues as the company has designated some $18MIL to expand their JORC compliant resources by July 2010.
This has been a phenomenal money maker for me ever since buying in at $0.17AUD over a year ago. I like their prospects going forward and it seems the POG in AUD will make for higher profits for Q2/2010. On the 26th the SLR share price closed at a record high of $1.39AUD, as only the intraday was higher at $1.44AUD per share earlier this month.
Here is a research report done by HARTLEYS on SLR at the end of Q1/2010, dated April 12th, which showed then a base case valuation of $1.50 per share and an upside case valuation of $2.03.
LINK: http://tinyurl.com/2dhnnvr
This report rated SLR a "speculative buy", but what isn't "speculative" these days?
Speculative Buy
Share price appreciation anticipated but it is higher risk than a “Buy”. For the share price to rise it may be contingent on the outcome of an uncertain or distant event.
Hummmm, "uncertain or distant event" ... Now with the SUPER TAX on the 2012 horizon its all "speculative"! But then again in this FIAT WORLD what isn't?
Hartleys will also sponsor the IPO later this year for PMI GOLD(TSXV:PMV) on the ASX. I have a large holding in this company, which has gold properties based in Ghana, West Africa. Also Macquarie Bank Group owns 34 million shares of PMV. There seems to be a love affair going with the Aussies and Ghana gold mining as there are a number of ASX listed companies in Ghana with large shareholding support. The new SUPER TAX would seem to make buying a Canadian based gold miner, listed on the ASX, with strong Aussie shareholder support whose main properties are on two of the most prolific gold belts in Africa a distinct advantage over Aussie based gold miners.
Thank you JIMMY RUDD!