Morning Call [7:29am ET] With 21 minutes remaining in yesterday’s session I sold a 30% portfolio weighting in EDZ, which is a 3x emerging markets bearing position, so my exposure was 90% of the index. I sold at 38.83 a position that had cost 38.54 a few hours earlier. For a while as you know I was underwater, putting the trade on four minutes before positive economic data had been released. But I didn’t get overly concerned because the Euro had been plummeting against the Yen, which I believed would pull down equity prices to test S&P 1040 one more time at least, or until the Bank of Japan relieved the pressure of a historical near record setting high market price for the Yen.
You see; in my world, everything has to be in balance.
With 12 minutes to go to the market close yesterday, I decided to alert you to my concern that there would, in all likelihood, be a case of Interventionists putting juice into the market prior to the open this morning. I opined that it would be unwise to be short.
When I closed my trade, the S&P 500 was trading at 1045 and many traders had been leaning short, expecting the 1040 to be taken out on the close. The minute I sold my short, the S&P started to move higher, closing at 1049. This morning, as I write, the S&P future is about 1061. Headlines shout out: “World stocks up on China, Australia news” and “Stock futures surge on signs of overseas growth”. It hurts to laugh.
The media is such a charade. I’m surprised these clowns didn’t link today’s higher prices to the color or pattern of the tie President Obama wore during last evening’s nationally televised address – the one where he said the government would stop prosecuting wars and instead direct the taxpayer’s money to fixing the economy. It hurts to laugh.
EDZ will trade sometime today at 37 or less. Yesterday I sold for almost 39. As a world of clowns parades by, I keep my eyes on the prize.
Latest futures:
Latest EUR/JPY chart shows strength in the Euro this morning, meaning that the Bank of Japan has again tried to relieve the pressure on the Yen, which has resulted in a wave of fresh money hitting capital markets.
Have a good day.
CTA Trading Desk Post-Close Report
In a week containing a large amount of economic data, this morning’s numbers provided support for the stock market Bulls. The first number was the ADP employment data, which came in at -10k, which was much lower than the expected 13k. Common sense would tell you that if we have a bad jobs number, that the market should move lower – but common sense doesn’t work in the markets. The bad number gave market Bulls solace that a new round of Quantitative Easing is around the corner to support the stock market. After finding technical support for the S&P 500 at the 1040 level once again, buyers felt that they have a clearly defined stop price and shortly after the number was released, the Dow was up just over 1%, the S&P 500 was up 1.2% and the Nasdaq was up almost 1.5%.
The next round of data contained the ISM report that shows us how the manufacturing industry is faring. The market was expecting 52.9, but the released number was 56.3, which handily beat ALL forecasts, including the most optimistic. This positive economic data boosted stock market gains for the second time today. At the end of the day, the S&P 500 was up almost 2.95% with energy, materials and technology performing very well.
At this point, we don’t have enough data to call a stock market bottom, but experience has shown that when the market is oversold and sentiment is negative, the market can rebound on bad news because traders feel that “it can’t get any worse” and “all the bad news is already priced into the market”, so the market rallies and squeezes the shorts. In today’s environment we also have the very real possibility of government stimulus coming into the market in the form of Quantitative Easing, which can form a floor under the stock market.
Oil inventory data was also released today. Inventories were up from already historically high levels which would normally lead to lower oil prices, yet oil rallied on the news as traders focused more on today’s data on strong Australian economic growth and China’s manufacturing expansion. A strong global economy will increase the use of oil and drive inventories lower, so oil rallied. An oil rally is probably good for the broad market at this point because it shows that maybe the economy is not falling off a cliff and that traders are willing to buy risky assets. Oil priced at the $70 level is probably not going to present much headwind to economic growth and is not pointing towards inflation, which could slow a stock market rally. So, Bulls don’t have much to fear in this area until prices are much higher.
How long this rally can last is anyone’s guess, but values are to be found in stocks like: JNJ, INTC, CSCO, etc. for longer-term holders. Take CSCO for example, which is currently trading around $20. CSCO has historically traded around 17 times cash flow. Next year’s cash flow is expected to be roughly $1.90 for a target price of $32 – a 60% gain from here, a great gain if things work out how they are supposed to – but, they rarely do so let’s look at it from a more conservative view. Next year’s earnings are estimated from $1.52 to $1.96 per share, depending on which analyst you talk to. Cisco has traded in a historic P/E range of 17.7 on the low side and up to 42.4 on the high side. Let’s use the low earnings estimate of $1.52 and the low historic P/E multiple of 17.7 to calculate a very conservative target price of $26.90 – a 34% gain from here. Even with Cisco hitting the least optimistic earnings estimate AND sentiment remaining depressed (low P/E ratio) we still calculate a nice gain from today’s $20 area. Of course we are not recommending the purchase of CSCO here because you might get cut trying to catch a falling knife. What we are saying is that there are many other stocks that look similar to CSCO using that simpleton method of calculating a target price and when the market does bottom, it might be the next great opportunity to add high quality stocks to your portfolio.
Good luck!
– Geoff Goetz for Patrick Veech
Comments
Cara 100 Ratings Changes
Good morning.
AAPL - Apple coverage assumed with an Outperform at JMP Securities. Target $290
BBD - Banco Bradesco upgraded to Buy from Neutral at UBS.
POT - Potash downgraded to Hold from Buy at Stifel Nicolaus.
POT - Potash downgraded to Market Perform from Outperform at BMO Capital based on valuation. Target $165
RIMM - Research in Motion downgraded to Market Perform at JMP Securities. The analyst's checks indicate continued market share pressures from competing Android and iPhone solutions in the corporate market.
SCHW - Charles Schwab upgraded to Outperform from Market Perform at Raymond James.
Bank of New York Mellon's Morning Briefing 9/1/10
Some good stuff on currencies, commodities and intervention.
http://bit.ly/av5AN5
Trading
Excellent call, yesterday. The Forex market is definitely the big dog now. I've following DBV for direction help.
RE: What Confirmation??
Re-psot from yesterday..
Grym..
You are absolutely right, I agree with you on this 100%. I was just continuing my opinion on the matter by sharing other's opinions too. My opinion on this was laid out loud and clear in my comments a couple days ago here in the blog from Aug 27 on Friday as below. However, no follow up by others or counter comments except one and that's fine, I will live :(, (kidding here). I am sure many here have different risk levels and time frames for when to enter or exit the market and have their own opinion as well and that's 100% fine. But I usually look at the big picture and the trend and trade accordingly.
I realized that listening to other's opinions could be very costly. Frankly I was cheated from my huge Gold shares positions by selling too quickly before this recent rise in Gold bugs just because majority here and elsewhere were saying gold has topped and was heading lower, I sold with a small gain because the rest of people and TA told me we are in way overbought area and better to exit now safely but miners stayed in overbought area and continued to go higher until this minute. I should have held strong and firm and just bought puts to protect my huge position but Grrrrrr, I didn’t. And you know what, I will never do that again. I will always buy puts to protect my gold position but will not sell my GOLD positions again that quickly at least for next few yrs to come.. That's how I feel now strongly about it. Mark my words.
GLTA
http://caracommunity.com/content/bill-cara%E2%80%9...
RE: What Confirmation??
analyst65,
Buying puts to hedge risk is a good move at times, but it is also costly. I decided to go to cash because the risk of staying in short-term over-bought positions was too great. The $USD could have lifted. The Dollar to Euro could have pushed the Euro to 1.20-1.21. Then gold would likely have sold back to intermediate-term trend lines. Your put would have been exercised or would you have sold it and applied the gain against the lower price of the gold position you said you were never going to sell? What would cause you to ever sell?
My point is that we all have different criteria in making decisions. I'm glad to see you are a gold perma-bull. The world needs more of them. Maybe if most people were, the govts of the world would wise up and stop over-spending.
As for me, I'm a trader, and my job is to manage risk, so I trade that way. I cannot afford to be a perma-bull on gold. Having said that, my clients received their monthly letter for August that is headlined: "Gold may glitter in an environment of rotating sovereign crises".
RE: What Confirmation??
Analyst65,
I'm willing to listen to any and all opinions and also have a problem filtering which are worth acting on.
I'm currently 90% in US government related bond investments and very edgy. Only my TLT is available to protective stops and I have been unable to find a convenient way to hedge long term — say 5 years out. (Most is in a tax deferred account with a required "manager".)
Therefore I have sold mutual funds early as a rule rather than hold too long.
I was working in a range on the 10-year of 3% (out) and 4% (in), but we've dropped into a lower range and I'm not as comfortable even though I can't see a strong chance for an official rate increase any time soon. Seems like economic suicide to me.
Vix down and Bond yields up : ) delayed at stockcharts
ya, un huh...what to make of this?
update: $usd down and $eur up, good for yen maybe as in giving credibility to Japan?
appears the ten year is up now
Re: Snap Shot of Various Indices
Hi Mr. Cara,
Regarding the jpeg containing indices of various asset classes that you share with us everyday. I find it quite nifty, if not outright useful, for monitoring the market. Was wondering whether this is proprietary to your desk or whether independents such as myself can subscribe to this service for a nominal fee?
Right now, I rely mostly on free Bloomberg indices tables, which are very useful, but not as informative as the one you use. It would be nice to have something like that.
Thanks and more power, Mr. Cara!
Jet
RE: What Confirmation??
Bill,
As I mentioned to Analyst65, I at times have exited too soon and gone to cash.
Since may main goal is the "return OF capital" as mentioned by that great economic adviser, Will Rogers ;-), I'd rather be too soon than too late.
The advice I got from the "bond guy" at my broker is in line with your comment on the cost of puts, I feel better about their input on the question.
As for bullion — I no longer even think of it as a part of my sales portion.
Thanks,
Grym
RE: What Confirmation??
Thanks Bill for your feed back, by the way I never said I was never going to sell my GOLD, I only said that I will not sell that quickly and instead protect my position with PUTS, say 4 to 6 months long term puts. I said I would have stayed in GOLD for few yrs to come and keep protecting my position from any down move in Gold while making the big $$$$$ in the miners shares prices rise. To be honest Bill, had I bought PUTS to insure my last Gold Shares position, my loss on the PUTS would have been a mere fraction of the huge gain I would have made in the actual shares price. Now I look back and regret selling that quickly and you find me now sitting and waiting for a drop so I could buy back which may not come for a long time now and I don't wish to chase the prices at these levels either so that's how bad I feel about selling that position now :( but I guess we live and learn.
Thanks anyway.
Short Squeeze Is On
...
RE: What Confirmation??
Grym,
just a thought here, as i realize that its by no means easy to implement, but perhaps it would be worth looking into establishing a relationship with a local, young farmer [or other supplier of items that you/your family need] who is honorable and understands the current monetary situation. in this way, you could provide your existing, current excess capital in return for a supply of future 'consumption'. after all, that is essentially the process that you are doing with bonds or any other wall street product, except that by working through their system you allow them to extract a portion of the wealth along the way for doing essentially nothing.
i have established relationships with local beef, chicken and lamb producers in my area and find the decision to be extremely rewarding on a variety of levels.
obviously, there is risk involved as your provider may for whatever reason not be able to make good on their end of the bargain, but, then again, to what extent do you put your faith in Uncle Sugar? risks indeed.
as always, best of luck to you.
You're dancin Bill
It seems to me the level of your market insight has increased since you went to visit your new granddaughter. You must really being enjoying yourself around family. Sure you want to leave for the Bahamas???
That was Zero Hour, 9 am Central Time
...
Re: Snap Shot of Various Indices
genkumag,
The colored image is the futures quotes (also see performance and charts images) at FINVIZ.com. I think it's FREE. I use the Elite service which gives the intra-day charts that I often use here for explanations.
I recommend FINVIZ.com, StockCharts.com (Premium) and ADVFN.com (real-time US pricing). For very little cost, these services give you pretty much all you need. They also keep you too busy to be watching the clown shows on CNBC and Bloomberg TV.
Re: That was Zero Hour, 9 am Central Time
You nailed it man!
But seriously, thank you and Dave and TOF for hanging out with support as the last couple of days were trying, even though my stops were sound and held well during the support testing.
I added small (but leveraged) position in out of money Yen put on open, as I believe it's a good trade and I learned that my ideas are generally good (but timing poor) and I need to reenter if stopped out, even if several times.
Re: That was Zero Hour, 9 am Central Time
Nice.
Bulls
They have the ball and have completed a long pass. Next step would be to cross the 50 day line which is presently at 1081.22 on $SPX.
Re: That was Zero Hour, 9 am Central Time
The only big question remains how long it's going to last, as I'm uneasy about the http://www.consumerindexes.com/ prediction of double dip recession.
The only thing is I noticed that the consumer index has been actually rising in August and only the YOY results has the huge drop.
Trend reversal?
WASHINGTON (MarketWatch) -- Activity among the nation's manufacturing firms picked up for the first time in four months, according to a closely followed survey of executives released Wednesday.
The Institute for Supply Management index rose to 56.3% in August from 55.5% in July.
Re: That was Zero Hour, 9 am Central Time
How long it lasts in the ST doesn't really matter much to me, as I made the decision to enter a LT trade last Thursday. My only ST trades right now are limited to two separate positions in SPY October 106 calls, which are up an average of +54.6% from yesterday's entries.
Expensive Boarding Passes
jack- This is exactly the kind of beginning you want to see for a bull move- one that disallows easy boarding for sidelined passengers. So I would call it an 'auspicious' open.
Re: Trend reversal?
Mark,
My takeaway from the ISM Mfg Index this morning also included this "New orders slowed but just a bit, down four tenths to 53.1 for its lowest reading since the manufacturing recovery began in the second quarter of last year. Unfilled orders also slowed, down three points to 51.5 and its weakest reading since December. The slowing in order build is certain to limit future improvement in business activity.
Still today's report is solid and includes strength in both exports and imports and an increase in prices paid that reflects demand for inputs. Though the slowing in orders is a concern,"
J :)
Sold my QID pre market
and now nibbling back in TZA while its down 9%+.
?
Is anyone having a hard time posting charts here today? I have 3 jpg that will not attach.
GOLD
Opened up a short position on gold this morning. Last night I received these graphs from my friend who has developed this leading indicator [orange line]. These graphs are as of yesterday EOD. As you can see there is a negative divergence on all time frames which indicates distribution was going on even though the price was raising. If I get any updates today I will post.
GLD 1 Min: http://www.screencast.com/t/MWY2ODhmNDQt
GLD Hr: http://www.screencast.com/t/ZWE4ODkxNj
GLD Day: http://www.screencast.com/t/NTc2MDdh
Note his indicators called the oil rally well in advance that took place last week.
RE: What Confirmation??
Sammas,
Interesting approach and a new one as far as I know.
I guess I would then be worried about the weather as well ;-)
Seriously, I understand a few people have gone to bartering and I expect other innovative survival tactics.
If necessity is the Mother of Invention — ingenuity must be a close relative.
Thanks
Re: GOLD
I see a divergence in GLD daily charts between May and June that predicted a drop. But I don't see it now. I guess you are talking about ST trade?
Ten-year Note
Retreating from today's high, even after blowout ISM Manufacturing numbers and Fed's paltry $900 mln POMO.
Re: ?
Bev,
Last weekend the techies installed some new software and there were bugs. They solved the ones related to the repeated postings, but have not found the bug yet in the chart attachment program. I'm sure they will.
Re: Expensive Boarding Passes
Hmm 2nd I'd point out at several "expensive boarding passes" that were similarly priced during the past few months that led to a not-so-long rally that ended up petering out after reaching 1100 or 1120. May 10th, May 24th, June 9, July 2nd as examples.
The truth is, HB&B does NOT like to share their gains with the great unwashed, so a big part of the move is accomplished prior to market open in the futures markets. Isn't that lovely? Today is an exception - you were able to board the train for 50% of the move if you got on before 10am. Such generosity is unusual. But don't be upset, how else can these guys make money in a range-bound market? Poor fellows, they have to "earn" their bonuses somehow.
But clues do appear, however. TLT opening down 1.5 points was one such clue.
Perhaps as a result of all this I have very little conviction these days. I sold some WAG puts and some TLT calls before market close yesterday, but that was the extent of my sense of what would happen. Of course immediately after the close yesterday SPX futures promptly jumped up to the high for the day. This was quite different from Monday's close, so based on that and Bill's assessment of the Yen situation I bought some oil and natgas futures, since they hadn't yet moved the way SPX did. Oil did well, natgas not so much.
Re: GOLD
Bev,
I use the Williams%R that works simular to indicator in your posting. Bear E
SLV ZSL
Johnny,
My targets for the SLV ZSL trade are $19.20 and $28 respectivly
Watching daily MACD's. Bear e
Re: SLV ZSL
Bear E,
Those sound reasonable. Presently, I lack conviction on the slv/zsl trade, the rapid moves in today's mkt are outside my comfort zone and I am very cautious. I began following forex prices due to Bills last few posts and began keeping http://www.advfn.com/forex/rates running in an open window. I have got a lot to learn there. In just a few minutes I did good on EDZ early yesterday morning (Thanks to Bill!), then didn't trade the rest of the day. The move in EDC would have been great to ride after I disembarked the EDZ train, but I am not that nimble anymore.
Best of luck to you.
J
Re: GOLD
Bear E... interesting... I see the similarities.
Re: GOLD
jack black until I see a positive divergence on the longer time frame and confirmation on the shorter time frame I'll be on the opposite side [short side] of the gold boat.
Using his indicator I went not only went long oil but short the 30yr bond
[TMV]last week also.
Re: Expensive Boarding Passes
If you look at the 10 DMA of $TICK or especially $TICKQ you will see this is a significant low. This combined with the unusual strength of EEM argues for a longer term effect, as EEM is leading SPX. I'm waiting for FXE:FXY to reverse it's course for a complete LT bullish picture.
Seminar in Sin City
I mentioned it a few weeks earlier, got the details now for those who are interested or just going to be in the area to drop by and say hello. Feel free to e-mail me to try and arrange get-together.
http://conquerthemarkets.com/
Your faithful will be blabbing for about an hour at the end of day 1, about general structure of trading plan and components of trading system.
GDX bouncing from a long term support
No break out so far. If so, I will be looking for an exit strategy from my longs. No urgency as I don't see panic buying or TA divergencies on daily charts.
scalping my points
Sold QCOM, RIMM, and TBT, picked up over the last 3 days against the wind. Dumped CNQ and KGC for nice gains yesterday. Still holding MRVL and MOT in tech space plus some POT, SCP.TO, and MMP.UN.TO and HNU.TO. And PMV.VN for a LT hold.
Nice to get wins. According to Rosie's read on the Fed and the data, no reason to stay excited.
Back at it.
EDZ
I notice it's creeping back up, but I don't have great expectations for today.
J
Studying charts in milliseconds
http://www.nanex.net/FlashCrash/CCircleDay.html
http://tinyurl.com/35b8ehs
from yesterday - kaimu apologises to deflationists
"My apologies to the deflationists in the room, but we did not get to where we are today since 1913 with prices, debt and credit via deflationary monetary policy. You have to look at what came first over the past 96 years not just the past two years."
Well now Kaimu, I think you have not been reading my posts with the same attention to detail you pay to the treasury statement, or you would have noticed the line I put in there specifically for you. It was even in the first paragraph so it was hard to miss. I'll copy and paste it here so you don't miss it this time, and this time I'll put it in bold:
"For me, the whole inflation/deflation debate is really not a discussion of what happened in the past, or will happen in the distant future, but an assessment of what is happening right this moment. We're so used to inflation, it's programmed into our genes, simply because its been going on for a long, long time now. That''s why the 1913 buck is down to about four cents, as Kaimu likes to point out. If we look at trends, inflation IS the trend, and the problem."
Does this sound like I haven't looked at what's happened during the last 96 years? I am not only well aware, I'm in complete agreement with you about our past.
That said, I am currently focused on TODAY. That is because it does not matter if the ship you are on has been sailing placidly across a calm ocean for the past 96 years if today it's in the middle of a hurricane. In that instance, it seems somewhat absurd for you to ignore the current cat 3 conditions and instead point to the 96 year historical record of calm weather and opine to your fellow passengers there's no wind blowing outside, and that (contrary to the pesky evidence) history shows clearly that the sea is calm.
Deflation will "probably" eventually cause our system to vapor lock. There's a reason we have had inflation for the past 96 years. That's because inflation is required for the current monetary system to function properly. Under our current monetary regime, deflation leads to big problems, and that's why our central bankers fear it so much. And when deflation starts to happen, we had better pay attention, because it means that the system that RELIES on inflation to function properly will start to behave in strange and unpleasant ways in a deflationary environment. The impact of this is that our favorite central banker will likely engage in exciting interventions to try and avert impending disaster, all of which is quite predictable if you first notice that deflation is happening today.
Perhaps this is all a timeframe issue. I'm looking at Unpleasant Systemic Events that might happen in the near future. If I were Rip Van Winkle about to sleep for 20 years, your long term "inflationary" view would be helpful, but I have to live in the now, which includes the near term possibility for continued bankruptcies, foreclosures, further asset price drops, bank holidays, capital controls, retirement account asset seizure, and that sort of deflation-induced drama, and so I prefer to look at what is happening right now.
When I want to know if I should bring a raincoat with me when I leave my house, I don't look at 96 years of weather history, I look outside to see if its raining.
Re: That was Zero Hour, 9 am Central Time
Taking profits on the SPY Oct 106 calls (opened at an average of 2.80, closed at 4.50).
Re: Studying charts in milliseconds
Thanks JimG, at least some honest people are out there regarding the crap that passes as markets these days. Am referring to the "nerd" and others who care about something called the truth.
Edit:
To be clear, I am not bad mouthing HFT per say just the creators of confusion.
Crap defined:
http://dictionary.reference.com/browse/crap
Re: Studying charts in milliseconds
Finally, among all the paranoid nonsense about HFT, someone who get it can insert a word.
"Under the maker-taker model, market participants that offer to provide, or make, liquidity by posting an order to buy or sell a certain number of shares at a particular price receive a rebate," explained Michael Peltz in a June feature for Institutional Investor. "Those that execute against that order -- that is, take the liquidity -- have to pay a fee. Exchanges earn the difference between the rebate they pay and the fee they charge. The SEC limits taker fees to 0.30 cents a share; rebates tend to be lower for economic reasons, but for high frequency firms trading millions of shares a day, they can make for a pretty good living."
In a sense, they take nickel-and-diming down an order of magnitude or two. The advantage is that their trades are low-risk: they rarely hold positions for very long and any individual stock, future, or currency can't really sink the boat. High-frequency traders have become a target for all kinds of people, but most of them appear to make their money being a little faster and little smarter than their competitors. And if they are playing by the rules, they improve the quality of markets by minuscule amounts trade after trade after trade. "
Re: Seminar in Sin City
I dunno Vad - I don't see you in a sexy suit and tie smiling for the camera...
Not sure I'm interested :)
Re: Seminar in Sin City
Worry not - that city will have plenty of that if that's your fancy... Me, I am not in 'suit and tie" or even "smile" category... Grin, yes, that'd be me.
Re: Studying charts in milliseconds
This bit of info found in the links provided is worth reading:
http://assetinternational.com/ai5000/channel/NEWSM...
...as I've understood from someone here, the more government intervenes, even in buy-sell quote imbalances, the greater the possibility for further instability.
"As Napoleon supposedly said, never ascribe to malice what can explained by incompetence—or in this case, incompetence, technical glitches, and bad time-stamping."
Nonetheless, it is worth noting the final conspiratorial word of caution.
Re: Studying charts in milliseconds
"..as I've understood from someone here, the more government intervenes, even in buy-sell quote imbalances, the greater the possibility for further instability."
Exactly. Enter the halts - what an idiotic way to regulate the flow by interrupting it out of desire to calm it down, in the process leaving the participants without opportunity to (re)position themselves.
RBCN
looks like a great buy here with 200 DMA as support. Demand for their products (sapphires used in chips in LED) is skyrocketing as a result of huge end demand for iPads, Flat Screen TVs, smartphones, etc. Their most recent conference calls was quite bullish and they are only trading at 14 times next year's earnings estimates, which continue to go up. The topper: big short interest and excellent balance sheet.
FD:
Long at $24.90.
Mexican "lifestyles of the rich and famous" - a la Barbie !
A Mexican friend told me the drug lord captured yesterday was nicknamed "la Barbie" because he's good looking, and "Ken is not so well known as Barbie"!
"Blog del Narco" offers still pics and a video tour (in Spanish) of the country house where La Barbie was taken by Mexican Federal Police. Not shabby, and more stylish than I'd have expected.
http://www.blogdelnarco.com/2010/08/interior-de-la...
What Bernanke doesn’t understand about deflation
"Bernanke’s recent Jackson Hole speech didn’t contain one reference to the key force driving the American economy right now: private sector deleveraging (here’s the previous year’s speech for comparison’s sake). The reason the US economy is not recovering from this crisis is because all sectors of American society took on too much debt during the false boom of the last two decades, and they are now busily getting themselves out of debt any way they can."
http://www.debtdeflation.com/blogs/
A gap 'n' stall day. Haven't seen one of those for a while. night all.
TNA/BHP/SPLS/TNA
selling MOC.
FD: long all the above
DJIA RSI scan
HPQ buy alert 3 days ago
MCD sell alert 2 days ago
everything else treading water.
FD: long HPQ
Re: from yesterday - kaimu apologises to deflationists
Dave,
I agree. Kaimu is without question correct in what has destroyed the "sound dollar" — if in fact there ever was one.
But the current situation is, in my opinion, particularly dangerous because it has been so long since it's been around that many people can't accept deflation as a real possibility.
The worst factor today is US wages. With the advent of globalization, robotics the US may never see a complete return to the life style to which we've become accustomed since the end of WW2.
Computerization has made possible huge jumps in productivity and the need for far fewer workers in so many categories. The reverse auction effect of labor has sent US manufacturing into the dumpster. The ISM data is a sick joke compared to fifty years ago.
Added to this is the vast overproduction of things — housing being a major one right now — and we can't help a period of deflation until the inventory is worked off. At the same time we will be seeing inflation in other categories.
I expect tangible things and commodities will eventually be a great investment opportunity.
lots of news tomorrow
[No set time] Chain Store Sales
6:00 AM ET Monster Employment Index
8:30 AM ET Jobless Claims
8:30 AM ET Productivity and Costs
10:00 AM ET Factory Orders
10:00 AM ET Pending Home Sales Index
10:30 AM ET EIA Natural Gas Report
1:00 PM ET 10-Yr TIPS Auction
4:30 PM ET Fed Balance Sheet
4:30 PM ET Money Supply
Today's news was generally bad, but the market was up 30 points. Could a 3 point unexpected improvement in the ISM numbers be that exciting? Doesn't feel likely to me. 15 points of the 30 point move today came at 1000 ET, but the positive trend was established long before market open.
It will be interesting to see how the market reacts to news tomorrow. Individual retailers will be especially exciting given retail sales numbers come out at random times during the day. Overall it should be good for some volatility, perhaps shaking out some weak hands or squeezing the shorts. (Will I be a weak hand that gets shaken out? Who can say! I suppose it depends on how much shaking happens!)
SPX is right at the 50 DMA. Looks like resistance is here, 1100, and around the 200 DMA at 1115-1130.
As bearish as I am, I can't help but notice the forming inverse head & shoulders pattern on SPX with the neckline at 1125. If it breaks up through that neckline, that gives, what, a target price of 1220? I don't really expect that to happen, but I figure I'd point it out anyway...
Re: lots of news tomorrow
Its really amazing watching this market. I am more bearish now than I was in 2007-2008. I just watched this idiot on CNBC telling people they need to embrace risk. Well people have not learned their lesson. This economy does not warrant taking risk in my opinion. After today I went from fully hedged to 15% net short. We shall see just how fanastic the data is....
America's got talent
Last night while flipping TV channels I almost flipped out watching this young singer. This is Susan Boyle times 10, maybe times 100.
http://www.youtube.com/watch?v=DRLib3_c6kg
I think she was 7 or 8 at that time.
Here is her 2nd last performance on the talent show:
http://www.youtube.com/watch?v=Nabo1iTcA5w&feature...
4 million hits on youtube after her latest.
http://www.youtube.com/watch?v=TVGrcy8wQHk
Re: What Bernanke doesn’t understand about deflation
The academic economics don't understand that credit is money and credit destruction is basically deflation.
Bernanke probably understands that but it is a no no to acknowledge anyhow.
Re: NatGas
What's with the natgas? Anyone with insight? The sentiments are very low. I tried to nibble but got stopped a week ago. Is now the time? Or is this a bear flag formation?
Re: America's got talent
Wow! Watched it several times- still can hardly believe that sound was coming from a 10 year old girl. Stunning...
Re: NatGas
Jack -
I lost last week on an HK play but nat gas should start a seasonal uptrend in Sept.
Re: America's got talent
I paused on her performance last night as well. My wife could hear, but not see the young girl. She thought it was an adult until she walked thru at the show's end and asked what her act was. What a surprise!
Re: NatGas
It used to trend up routinely in the fall/winter months. Many utility companies with storage assets had a 'winter hedge' via buying gas for injection during the summer season at lower prices. The seasonal pricing hasn't really been a factor the last couple of years.
As the market in general, and maybe more so for commodities, forecasting prices is 'dang near impossible'. Lots of folks think we now have 100 year supply of natty. I'm sure we'll ramp up use and that number will fall away.
CNG is being pushed right now. In Dallas, at DFW airport, cabs run on cng get to go to the head of the line, aggravating the gasoline powered drivers.
Hurricanes are shifting east this season. We might not see any in the gulf. I would prefer they stay at sea.
Re: America's got talent
She is from my neck of the woods and "2nd_ave's" old stomping ground. People here in the Steel City [Pittsburgh, PA] are very proud of her!
Rainy River
I don't seem to have as many trading ideas (at least good ones) as some of the regular posters here, but this looks really promising and may be of interest to those trading the juniors. Good and pretty consistent drill results, excellent volume/accumulation, and just broke out of a decent base. See attached chart.
FD: have a small 1500 sh position (now wishing it was much bigger) at avg cost of 5.78. May add a bit more on a pullback.
Not trading advice (or a pump), just an idea to consider.
KC
Re: Snap Shot of Various Indices
Wow! Amazing! Thanks for the share! I don't think I would have found this site even if I googled for it! Again, thanks!
Interesting commentary today from the Consumer Metric Institute
Contrary to the timeline suggested by the NBER, our data strongly suggests that the consumer portion of this recession did not start out to be about housing or damaged consumer balance sheets. But it is now. It has clearly evolved, and the average consumer's version of a recession diary might look something like this:
► December, 2007: Spending slightly more than last year, sub-prime mess is somebody else's problem
► May, 2008: Gas prices way up, banking crisis in the news -- maybe we need to be little cautious
► August, 2008: Democratic National Convention says things really are getting different this time, maybe more caution is warranted
► November, 2008: Good, the election's over, and gas prices are down -- things are getting normal again
► March, 2009: The 401K may be hurting, but at least we have the house to retire on
► June, 2009: Unemployment numbers don't look good, but those usually start back down
► August, 2009: A lot of vacant houses in the neighborhood, let's rethink retirement funding
► January, 2010: Unemployment is getting worse, let's pay down our credit cards
► May, 2010: There may be a recovery going on somewhere else, but it certainly ain't here
► August, 2010: Politics are getting ugly again, things aren't about to improve anytime soon
There probably hasn't been two separate recessions in three years, simply one that has evolved in significant ways. But if this really is a "double dip" recession, then our data indicates that the "Great Recession" of 2008 was merely the precursor, and not the main event. It is this current dip that we should be really concerned about; the current contraction in consumer demand is about structural changes in consumer behavior, whereas the "first dip" was about short term loss of consumer confidence.
*****
Having said that, I am bullish on the stock market for the next 3-6 months, until the tax cuts get repealed. After that, all bets are off.
Re: America's got talent
Bev- The Steel City is indeed a very unique place. It was always a pleasure to drive east from Ohio, leaving behind the flatlands of the Midwest for the steep slopes and rivers of Pittsburgh. Very distinct ethnic neighborhoods.
Walking down the brick roads of Wilkinsburg reminds me of Van Morrison's 'Healing Game:'
Down those ancient streets
Down those ancient roads
Where nobody knows
Where nobody goes
I'm back on the corner again
Where I've always been
Never been away
From the healing game
AN $80BIL DAY
ALOHA!!
I only apologized to deflationists because my topic is not about deflation. It seems everything that goes down these days is about deflation. Where was all this talk when the NASDAQ crashed? Was Katrina deflation?
While the economists of the World debate the symptoms of an economic collapse I am still reporting the causes of a monetary one still playing out every day before our eyes. Check your Z1 Dave and see who is the heavy in the debt and borrowing tables. Its always about government debt and borrowings, Fed, State and local. Nevermind that ... lets just skip right to the EMPIRE OF DEBT as the US Dollar may as well be called the latest EMPIRE MONEY.
It was a $80BIL day for the US Treasury on the last day in August. They added $80BIL to the US PUBLIC DEBT, well, actually $79.81BIL, but close enough! Certainly not the highest one day US PUBLIC DEBT increase that I have seen, but up there in the TOP 20 countdown! Now we are at $13.4TRIL USD and counting. All on a day when net revenues for the day were $3.6BIL USD. Only $34.7BIL in Notes were redeemed which accounts for the one day $80BIL increase to the US PUBLIC DEBT line item.
How did all this happen on a Tuesday? Well, recall last Tuesday the US Treasury printed up more marketable debt issues, which they usually reserve for every Thursday. Now we will see if Tuesday debt issues become permanent along with Thursday debt issues. Looks as if this week is shaping up to be another $200BIL+ week in debt issues, like last week was. Maybe we'll see a HALF TARP this week! Those are rare, but monthly FULL TARPS aren't ... Are we working our way up to a monthly DOUBLE TARP? Well, maybe not this FY 2010 but maybe in FY 2011!
The total marketable debt issues for Tuesday, Aug 31st, were $104.5BIL in Notes and $7.2BIL in Bonds accounting for some $113BIL added to the US Treasury's Account over at the US FED. DEBT = REVENUES here at the EMPIRE.
Yes two things loom large on the horizon aside from the usual weekly data and that is the November Elections and the Jan 1st 2011 tax changes. Two game changing events. I don't know about the rest of you but I am getting tired of seeing politicians and bankers ruling America. Huffy and Jeneanne and the rest may buy into the hillbilly redneck Tea Party myth but the reality is people are tired of the status quo in America. We're just looking, searching high and wide, for the EXIT ... not for us, but for the politicians and bankers and the celebrities who idolize the "Audacity of Fraud"!
Way back in the 1930s this is what Ludwig Von Mises said about that subject in his book Theory and History.
Those politicians, professors and union bosses who curse big business are fighting for a lower standard of living.
Then Mark twain hit the nail on the head with this one ...
I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's. Look at the tyranny of party -- at what is called party allegiance, party loyalty -- a snare invented by designing men for selfish purposes -- and which turns voters into chattles, slaves, rabbits, and all the while their masters, and they themselves are shouting rubbish about liberty, independence, freedom of opinion, freedom of speech, honestly unconscious of the fantastic contradiction; and forgetting or ignoring that their fathers and the churches shouted the same blasphemies a generation earlier when they were closing their doors against the hunted slave, beating his handful of humane defenders with Bible texts and billies, and pocketing the insults and licking the shoes of his Southern master. - "The Character of Man," Mark Twain's Autobiography
If these two economic and literary giants were writing about the same political fraud and monetary pestilence we now face today nearly 100 years ago then what has truly changed? Technology has certainly changed tremendously over the past 100 years, but apparently voter intelligence is still impaired at the level of "monkeys", as Mark Twain puts it. The TWO PARTY TWO STEP ...
When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them ...
Who here can recite the rest?
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
LINK: http://tinyurl.com/5u8z7u
There it is ... There's the "road map" to end the political and monetary tyranny we now live under. Yet many would say "But, there is no tyranny!", and so they have lost all perspective and live a quiet life of desperation "reacting" to their Masters. Joseph Campbell said those words about people who falsely believe that if they do not rock the societal boat they are safe. He said that in reality the "INSECURE PATH IS THE SECURE PATH ..." Its all about perceptions ...
As I have pointed out many times, we Americans live half our waking hours working for various governments, the Federal one, the State one and the Local one just paying a multitude of taxes that never seem to end or even slow down. Our Founding Fathers fought a Revolution over such Tyranny, yet we "super tech modern Americans" elect to spend our lives "reacting" to our Masters. The KING is back ...
Vad
Miss your posting of charts on Realitytrader Live Trading Chat Room /
review trading room log. Bear E
THE AFRICA PDAC
ALOHA!!
While many here study the triple this ETFs and the various stock picks there is what I consider a "sea change" that has been, in my opinion, under reported for years. It seems the Aussies on the ASX are catching on to this "sea change" probably due to their close ties to China and India.
This is what I call the AFRICAN PDAC! It is being held right now in Perth, West Australia, my ex-home town, and it is being attended by a multitude of heavy hitters from all over Australia and China with key players coming in from Africa.
THE AFRICA DOWNUNDER CONFERENCE 2010
I have investments in Africa, mainly West Africa. I have been investing in Africa for many years now starting with a small company called AFLEASE GOLD, which morphed into URANIUM ONE and GOLD ONE. Aflease Gold(AFLUY) gave me a 3500% return before I sold out. I might also add here that those returns were made on the back of a company that had some 900MIL shares fully diluted, prior to a reverse split. As many Aussie investors know there are two ways to view junior fundamentals. One is to look at the debt and the other is to look at the dilution. It becomes a matter of choice between bank debt with forward sales or no debt and no forward sales but dilution. The best choice is no debt and no dilution, but in this fickle World of unstable finances that is not the reality for most funding starved juniors, much less majors. All that aside, I am and have been very interested in what goes on in Africa, not just from the short term aspect but from the long term trend. There is a vast wealth in Africa with its people and its resources. If politicians could manage the two for the long term benefit of the people in the form of jobs and economic stability then I believe Africa will continue to evolve into a major economic force in the World rather than a political quagmire whose crowning achievement is nothing more than genocide du jour.
On to the Conference ... Presenting there on Sept 2nd is the CEO of PMI GOLD(PMV:TSXV), Doug MacQuarrie, who has changed the fortunes of the company over the past year. Also I see the Gold One CEO Neal Froneman. Also in attendance will be many other mining CEOs and African ministers who all have close ties to mostly ASX listed companies. I have some friends from GOLDNERDS who will attend as well. I look forward to their report. I think Chris Start will be there, not 100% positive. Some of my other contacts with Straits Resources will be there along with their horse Adamus(ADA:ASX), who will be presenting there as well.
Here it is ...
AFRICA DOWNUNDER CONFERENCE 2010
The positive, changing face of the African continent is continuing to attract the lion’s share of global exploration dollars as prospectors zoom in on its untold mineral riches. Countries which were previously considered no-go areas have attracted a new wave of international investors, explorers and miners wanting to have another look. Striking examples of these are Angola, the Democratic Republic of Congo and Mozambique.
Over the seven years that Australia’s Paydirt has been hosting the Africa DownUnder Conference, there has been a surge in the growth rates of nearly all African countries, largely driven by the unparalleled demand for commodities from China. This ancient land mass of Africa is without question the world’s greatest treasure trove – and has yet to be comprehensively explored using modern techniques.
While much of the continent has, in the past, attracted the major companies, a new era of joint ventures with juniors and grub-staking is taking place from Ghana in the north-west, to Kenya in the east and down south in the all-powerful triad of South Africa, Botswana and Namibia.
The action across the continent is taking place hard and fast there could not be a better time to explore the options and hear the stories from the people who are unlocking the wealth of the formerly “Dark Continent”. The lights have come on in Africa, and you cannot afford to miss Africa DownUnder, Sheraton Perth Hotel, on September 1-3 2010.
Apart from presenting companies, the event will be attended by several African Mines Ministers, business leaders and executives from the mining services industries. Last year, the conference attracted more than 900 delegates, just under 100 exhibitors and a full programme of top-notch speakers. This year it will be far bigger, consolidating our reputation as the best melting-pot for business conducted between the two continents.
Who attends Africa DownUnder?
- Mining Executives
- Financiers/bankers/brokers/analysts
- Government Officials and representatives
- Investors
- International and local media
- Mining service industry
- Suppliers
- Mining Consultants
Programme link ...
LINK: http://www.africadownunderconference.com/programme...
Re: Vad
They'll be back soon, sorry. It's just that market is so patternless last couple weeks, I am not finding much to post. As a consolation, maybe: look at perfect JBE setup on ARUN today, 19 break at 10:43 am.
Also, entertainment sake, these consecutive news headlines:
[13:43] OVTI Ticking higher on mention of front-facing camera in new Apple iPod Touch product (21.72, +1.27, 6.21%)
[13:43] AAPL Launches iTunes 10, featuring new Ping social network component (250.53, +7.43, 3.06%)
[13:43] SYNA Hearing weakness attributed to Apple removing clickwheel from iPod product line (25.54, -0.83, -3.15%)
inspired us for couple of our own:
[13:44] {Threei} TOAST weakens on news AAPL is not committing to the new line of toasters with social network capabilities
[13:49] {Threei>} COFF benefits from AAPL announcement about iCof, coffee-brewing attachment to iPhone that collects coffee-brewing advice from iRecipes and plays iTunes while owner works on iPad sitting in iLoo
Gotta have some fun while market does nothing for hours...
Re: America's got talent
great stuff. Let's hope her parents can protect her from the "give it to me now" media hungry society that will chew her up and spit her out in short order if given the chance.
My daughter is ten and is astounded to see another her age with such a gift. No need to look beyond ourselves to find the 'miraculous'.
Re: Seminar in Sin City
Sorry Vad, but you could not pay me to go to Vegas...even for a glimpse of you in the bright lights of the Luxor Hotel & Casino. I've been to the real Luxor. Egypt. Not the least bit glam.
Even the Swedes and Danish are getting in on the hate act
http://www.spiegel.de/international/europe/0,1518,...
I'm thinking (hoping?) that the economy turns around for a brief period and saves politicians a$$es across the continent this time, but what happens when investors demand yield on government debt, which will happen in the not too distant future if JNJ et al. become conservative investor targets paying 4+%.
This attitude is already ugly and not helped by political refusal to speak openly about future needs and priorities, mostly politicians need to spend within their means. Poor old granny racing for her money in that vid doesn't know - or probably want to know - that her state's approach to welfare is bankrupt.
futures 2am - Asia green
S&P -3.90 / -0.36%
Level 1,077.80
Fair Value 1,079.36
Difference -1.56
Nasdaq -5.00 / -0.27%
Level 1,815.00
Fair Value 1,819.89
Difference -4.89
Dow -27.00 / -0.26%
Level 10,245.00
Surprised to see that in Shanghai, traders were permitted to board the train at the opening. Only in the US does the train leave without its passengers? :)
Re: What Bernanke doesn’t understand about deflation
Deleveraging from debt for your average American citizen who is financially in over their heads comes painfully. Even when they are walking away from debt via bankruptcy protection and escape liabilities in the hundreds of thousands. The resentment and humiliation lingers. Denial is our cultural disease. Ignorance, anger and greed at work = the root poisons.
Waking up is hard to do....
Re: What Bernanke doesn’t understand about deflation
hmmm I had an inkling some 5 years ago that something was wrong with our finances, but hanging out here since 2007 has accelerated the process of deleveraging. Bill and others have already helped me to be ahead of the curve.
I would like to be leveraged (in land) as the global economy is at rock bottom of the deleveraging cycle some years from now. To be ahead of the curve is to - as Mauldin likes to say - think outside the box. Liberty is to have the right to access this information. Unfortunately human nature can be counted upon to ignore that information or to NOT think in a manner that deviates from the herd.
futures 5am - Asia solid Green, Europe not yet convinced
S&P -2.10 / -0.19%
Level 1,079.60
Fair Value 1,079.36
Difference 0.24
Nasdaq -2.75 / -0.15%
Level 1,817.25
Fair Value 1,819.89
Difference -2.64
Dow -25.00 / -0.24%
Level 10,247.00
Let's see if its a shakeout of weak hands at the opening. Euro autos are up, French banks a mixed bag.... baby:
http://www.youtube.com/watch?v=3WCvULMRUq8
Re: Snap Shot of Various Indices
Looking at the FINVIZ colour map linked by Bill. Looking to observe it EOD as part of the learning process and link ETF's to the various commodities. Found a new ETF which may or may not have been mentioned here before - CORN:
http://finance.yahoo.com/q?s=corn
http://seekingalpha.com/article/223399-look-for-st...
In the above article note the comments on Potash - guess that's why BHP is going hostile to gain the resource.