Blog for November 30, 2009 [See ADDENDUM]

http://oahutrading.blogspot.com/2009/11/mutual-fun...

I have followed the incarceration of Martin Armstrong for some time now and believe his case indicates that the power of the federal government judiciary when it goes after any individual. I do not know all the factors in his case but clearly the sentence exceeds the crime.

What really bothers me is that he has been held for almost 10 years in jail and recently he has been sending financial forecasts, historical economic articles, and writings about his interaction with the federal judiciary, to those that publish them on the web.

I clearly believe this action of moving him to a maximum security prison is a reaction of his writings. It is an attempt to silence him and his opinions.

I urge everyone to act immediately to try and save Martin. I am not sure he will survive when he is moved.

Will the Dubai fiasco and news of the 8B loan by C accelerate the drop in the price of C?

Two modern thinkers whose work I often return to when I hear such stories. They are theoretical references only that I use in intellectual exercise although Arendt's work is directly influenced by her experiences in Nazi Germany.

"For Arendt, therefore, the polis stands for the space of appearance, for that space “where I appear to others as others appear to me, where men exist not merely like other living or inanimate things, but to make their appearance explicitly.” Such public space of appearance can be always recreated anew wherever individuals gather together politically, that is, “wherever men are together in the manner of speech and action” (HC, 198–9). However, since it is a creation of action, this space of appearance is highly fragile and exists only when actualized through the performance of deeds or the utterance of words. Its peculiarity, as Arendt says, is that “unlike the spaces which are the work of our hands, it does not survive the actuality of the movement which brought it into being, but disappears not only with the dispersal of men — as in the case of great catastrophes when the body politic of a people is destroyed — but with the disappearance or arrest of the activities themselves. Wherever people gather together, it is potentially there, but only potentially, not necessarily and not forever” (HC, 199)."

http://plato.stanford.edu/entries/arendt/#ActPowSp...

I was just pondering the notion that mass consumption and our fetish of objects has probably been more effective in dispersing the public space of appearances than any overt tyranny that held power in the 20th Century. It is unfortunate that abuses such as those directed at Armstrong result.

Foucault:

"A distinctive feature of modern power (disciplinary control) is its concern with what people have not done (nonobservence), with, that is, a person's failure to reach required standards. This concern illustrates the primary function of modern disciplinary systems: to correct deviant behavior. The goal is not revenge (as in the case of the tortures of premodern punishment) but reform, where, of course, reform means coming to live by society's standards or norms. Discipline through imposing precise norms (“normalization”) is quite different from the older system of judicial punishment, which merely judges each action as allowed by the law or not allowed by the law and does not say that those judged are “normal” or “abnormal”. This idea of normalization is pervasive in our society: e.g., national standards for educational programs, for medical practice, for industrial processes and products."

http://plato.stanford.edu/entries/foucault/#3.3

Well it would appear that in this instance the state has gone beyond mere reform and is using a law intended as limited coercion as a punitive means of revenge. It would be interesting to know who is pulling the strings but this, as sad as it is to say, appears to be tyrannical abuse by the judicial system.

What a slippery slide of tyrannical behaviour our respective government's are falling into. Look at Sunday's UK Independent headline:

http://www.independent.co.uk/news/uk/politics/iraq...

"The Chilcot inquiry into the Iraq war will consider a letter from Lord Goldsmith, then Mr Blair's top law officer, advising him that deposing Saddam would be in breach of international law, according to a report in The Mail on Sunday."

Next stop The Hague for Toni Blair? Yeah right...

That is a great question and piratically an actionable reality considering how poorly managed it(citigroup) is, sorry, C, but your days as the supermarket of the world may be put on ice with so many fish heads.

Don't you love the smell of putrid molecules as they try to squeeze through the same turn-style with reference to Weil and by that I mean the small ones and the large ones?

Bill,

The only thing I find these ratings changes good for, is playing sharp price moves on stocks in the very short term. I agree with you that the essence of the information is suspect and mostly pablum.

Regards,
BH

I awoke this morning to capture an insatiable thought...How can a man get perhaps more than he or she bargained for? Then my mind preceded to wrap unintentionally around this persistent thought about Cramer of all people.

I searched and searched to to discover what is left of my mind, considering all the hatred and divisiveness I have let through the door, What I found and increasing realize that perfect understanding of my dilemma, while appearing to be externally encoded was in reality a ghost in the machine-and engram-a codex-anyway, I also realize/realized the importance of understanding what Cramer and others sad clowns really added to the goodness in this world:

What do Cramer and Darwin, sorry D. but if the shoe fits, They both say a thousand words approximately and say it with a picture; as a consequence, smeared makeup and bird crap a fuming, they both are like so much sounding brass but without the reach around! Yes, they both teach and practice their craft well. But, I feel the need, no desire, to act-I mean ask-what have you done for me lately? With a slick smile, poetic as can be, I throw my hands in the air...hey, why can't we all just get along anyway, lets keep the white man down a little longer. What we really need in someone like Obama to come onto the stage and break the back of the nearest makeup artist who trys to slap another coat on!

Released on 11/30/2009 9:45:00 AM For November, 2009
Prior Consensus Consensus Range Actual
Business Barometer Index - Level 54.2 53.0 50.8 to 55.5 56.1

Highlights
Gains in new orders and a slowing in deliveries hightlight November's Chicago purchasers' report, offsetting further losses in employment and further draws in inventories. Chicgao's headline index rose nearly 2 points to 56.1 to indicate a month-to-month increase in the pace of overalll business activity in the area. New orders rose 1.4 points to a very strong 62.8, a plus-60 level that, because of its strength, will be hard to match in the coming months. Supplier deliveries rose 6.7 points to 57.4 to indicate a significant slowing in deliveries and congestion in the supply chain. Production, at 56.1, rose in the month but at a slower pace than October's very strong 63.9. Employment, at 41.9, indicates substantial month-to-month contraction but at a less severe pace than October's 38.3 level. Prices paid showed a mild month-to-month increase at 52.6, a result that raises no concern.

The report is a mild plus for the economic outlook especially the gain in new orders which points to strength in production and hopefully employment in the months ahead. Markets showed no reaction to the results. The ISM, which samples purchasers on a national scale, will post its reports this week with Tuesday set for the manufacturing report and Thursday for non-manufacturing. Note the Chicago report, which has no connection with the ISM, includes both manufacturers and non-manufacturers in its sample.

Market Consensus Before Announcement
The Chicago PMI jumped more than 8 points in October to 54.2. For the month, production surged nearly 17 points. We may see further improvement in November as the new orders index jumped more than 15 points.

Bill, do you think the bloodbath or not will cause many suicides this time??? I am mostly kidding, and I do give myself permission to do this, about the bath part-stop-you know what they say about blood it has been known to cry out for justice...Mandela said it first probably, after of course the original reference to be sure.

I have to be one of luckiest people alive...I get to see, taste, and feel Jordon...Tiger...Lemieux...and many, too many to name, others. Of course I can include you but a spirited enigma wrapped gently in an open coded working reality is hard to comprehend, let alone define; besides this comprehension changes everything, even as I write these very words. Funny how it all comes together, isn't it?

Just bought me some UUP, un huh-un huh, hey when I feel this comfortable about things, I feel it in my gut...its warm and lasting unless I think about it too much, unless of course it was not my decision to begin with.

Second half of the scenario is not materializing - instead we got a breakdown. Not sure if we get continuation of selling or just stall here.

Edit: thought I'd add some, to explain why I have no read here. The thing is, there is no pace change - market slid down as slow and steady as it climbed up prior, no significant volume change... this kind of movement is likely to be random rather than determined to get somewhere. I tend to sit out this kind of situations, or get stock-specific in case something moves on its own with no relation to the market overall. So, looking for this kind of moves in "independent" stocks - SEED for instance, MPEL maybe...

Non-public...I disagree, we now know since this is a sanctioned public domain or so I assume; insane in the Topsy turvy membrane...that is what a squid would say while attempting mouth to corpuscle transfer.

Oh, Bill, the so pathetic mosaic you weave; my its richly colorful...except you didn't do it!, but my how very clever that you see through it!

Touche' and I don't mean pas de touch'.

Thanks for your insights and thoughts Vadym, they are appreciated.

Once again the right move today was buy the dips in gold. Gold +6 to 1182.

When the leaves turn brown and the sky gray
isn't it about time that we make some hay
alternating current brings quite the shock
but light and matter direct around the clock
back to trading you see for trading is what trading does
we don't need an excuse to trade just the right

sorry for being so verbose today, but I felt the need to share.

Blogs are reporting that due to the public pressure, the prison system has relented and will not transfer him to the prison where he was beaten to within an inch of his life. Success!

If you don't know who Martin Armstrong is go to the top of this page.

Cheers.

I am glad that I wasn't greedy and sold 2/5 of my original HNU.TO position on Friday at $10.64. Over the weekend, I placed a buy limit order at $9.80 for the same number of shares, so as to reload my original position completely should NG drop. Well, my buy limit order was filled today at $9.70, and I have just placed a sell limit order at $10.70 for these shares.

When HNU.TO briefly rose above $11 on Friday, a thought had crossed my mind that my original position was too small and I won't make A LOT of money if NG just keeps powering up. But now I see that my original position was just the right size, as it will allow me to add to it at $9, $8.50, $8, $7.50, $7 and not worry that my total HNU.TO position is growing too large and is threatening to destabilize my account. If the January NG futures keep oscillating between $4.50 and $5.50, then my "scaling in, scaling out" HNU.TO strategy will be a true "money pump." :)

I just sold at $0.78 the shares of AZM.V I bought in November 2008 for $0.34. Looks like a good trade, right? :) Well, for educational purposes, I'll fill in the missing details.

I am still trying to trade myself out of an underwater position in AZM.V, which I opened in 2007 at US$4.30 for 2000 shares. I traded around that position a little and then bought 2000 more shares on the way down, giving me 4000 shares at the cost basis of $3.15. Then, in November 2008, I bought 4000 shares of AZM.V at $0.34, and then sold 2000 at $0.61 in January 2009 and 2000 more today at $0.78. As a result, I now have 4000 shares at the cost basis of $2.70. I probably won't buy any more of AZM.V, as I have now wisened up and realized that it is truly better, for the long haul, to play with solid stocks, so even if we get a great market sell-off, I'll most likely be scaling into something solid, like GLD. :)

Hi David,
You've been doing the buy on dips, sell on a low bounce and repeat thing for a while with SRS. Other than position sizing, how else are you controlling risk? Also, how have the trades been working out for you - seemed to me like the shorts have been a bad place to be...
Thanks!

I have just noticed that a buy limit order I placed for SKF over the weekend was hit today at $24.50 for 100 shares, partially reloading the 200 shares I sold on Friday at $25.85.

Even if the Dubai issue is completely resolved now, it still does not change the fact that XLF was underperforming S&P since October, made a lower low in late October and most likely made a lower high in mid-November, implying that it is in a downtrend.

Hi Jock - Sounds like a major may take Greystar & Ventana (VEN) / the guy (as you will note) has some cojones or is a fool, but if they make it right politically (see Centamin deal) in country - the deposit(s) will sure work. Let's see if Russia takes a real interest - might be good sport for capitalism vs. socialism here. One possible lead here could be be C. Jeannes -he has the former. What are you thinking about this? Happy Trading

David, I agree with Vad. If you continually tell us what did not work, I for one am only mildly interested and mostly in the counter trend sense.

That said, I did go short with SDS early this afternoon only to find myself stopped out 30 minutes before the close. Would have been same loss at the close. That type of trade is not my normal time frame which is the intermediate term, which I see as bullish. Until the trend changes!

This might be the beginning of the end of usd decline.

http://bit.ly/8CADFl

giasong, love your updates re economic indicators et al, but any url or email detrius you can post re this GS directive? I have worked in an agency environment recently and am familiar with expensing protocols, but how taught a whip is being cracked here? The right to assembly is pretty fundamental imho, and if threatenend I would be among the first to be manning the barricades.

Aha yes there's the money printing option too. How could I forget about that - especially since we're doing it. You think BOJ is going to announce debt monetization to drive the yen down?

"You guys are mis-managing your currency, so to keep up, we'll start too."

I don't think the world will end in 2012, but I do think that the rickety edifice that we now call a financial system that requires growth in debt to survive will run into the massive iceberg of debt deflation and ultimately sink.

Why wouldn't scaling work inside a trend? You take a partial position in a trend that you missed initially to a pullback at a MA or resistance/support line. Stock advances, or declines and again pulls back to a MA or resistance/support and indicators show continuance, you add some more to your position. At a predetermined price target (fibonacci retracement, pivot parameter, etc.) you begin to scale out, or wait for, perhaps, a chart formation that tells you now is the time to begin cutting back. Then, perhaps the chart formation turns into a consolidation, you still have a partial position, but perhaps continuation (jump base explosion in Vad terms) seem imminent, so you add to your position either based on a break above resistance, or to retracement to support.

David... the point I was making is completely different... but OK

ALOHA!!

Not many "liability free" places to hide in the World any more. The BOJ meeting spikes GOLD in Tokyo and sends the NIKKEI rising some 2.5%. WOW ... what a shock that these fiat countries never run out of money! Something else that is always in abundance when it comes to fiat is "fraud and debt liabilities"! Those are two cornerstones of long term economic prosperity for sure! Any Harvard MBA will tell you so ... Now we have global central banks pumping the LIABILITY BUBBLE!

In the grand scheme of things the BOJ is not the BIG PICTURE. It is for the unfortunates who reside in Japan though. Just like the US FED is the "be-all-end-all" monetary system for the poor unfortunates who reside in the USA.

I will copy the second paragraph from a recent James Turk article entitled, THE FEDERAL RESERVE BECOMES THE BUYER OF LAST RESORT. Yep, you guessed it,a mainstreamer is tuning in to the waste of time debate on "inflation vs deflation" and getting to the heart of the matter with the LIABILITY BUBBLE.

Here it is ...

The inflation/deflation debate focuses only on the ‘quantity’ of dollars and completely fails to address an equally important monetary facet, the ‘quality’ of the dollar. The Federal Reserve is debasing the dollar by purchasing inferior assets of poor quality.

I would say that QUALITY trumps quantity. Ask any Zimbabwe citizen that. Now here are the last three paragraphs that spell it out.

"On December 3rd, Federal Reserve chairman Ben Bernanke will be center-stage at the Senate for his re-confirmation hearing for another term. What should be center-stage and examined closely, however, are this professor’s chalk-board theories that he is using in his untried and untested experiments to solve the ongoing financial crisis.

One doesn’t even have to read a book on monetary history to know what the Federal Reserve should be doing. We only have to recall what Paul Volcker did when he was Federal Reserve chairman at the end of the last boom-bust cycle. He kept raising interest rates to defend the dollar.

Mr. Bernanke of course is doing the exact opposite with his zero interest rate policy, on the theory that he can save the economy without damaging the dollar. However, it is becoming clear – and the above chart is only one example – that the dollar is being irreparably damaged. Consequently, rather than saving the economy, Mr. Bernanke is hastening the further downfall of the economy and the dollar’s inevitable collapse."(more)

Now I have to ask the monetary people here what was it that Volcker was doing when he raised the FED FUNDS to 20%? According to James Turk he claims that Volcker was raising rates "to defend the dollar"! But what was Volcker "defending" the dollar from? What was it that was attacking the US Dollar then that made gold rise exponentially in value?

Here is the link to the entire James Turk article ...
LINK: http://tinyurl.com/yk8n53x

http://tinyurl.com/ye69hwd

I posted a chart like this one before, but it occurred to me to use envelopes whose lengths are derived from my best fit sine-cosine wave analysis. Based on the periods of the two frequency curve fit for gold I posted previously (posted again here for easy reference) I took one half of each period and built the Hurst envelopes around those (using centered MA's). The results are more satisfactory than before.

I used period lengths of one-half the indicated sine-cosine wave periods because that allows those cycles to show through clearly. In general, cycles whose periods are twice as long as the MA will have their amplitudes reduced by half by the MA. Cycles that are less than twice as long become progressively harder to see and can even be inversed by the MA (MA decreasing while prices are increasing, for example). I have also included a chart where the prices are almost transparant so that the centered MA cross-overs display some of their cyclic behavior:

http://tinyurl.com/yjsdcd6

I have also used the slope of the MACD in these charts. Note that it gives earlier signals than the MACD crossover themselves! I got this idea from the following, accessible to members of Stockcharts:

http://tinyurl.com/yepzwq8

DYODD

Reported at 745 ET:

Store Sales W/W change: Prior 0%, Actual -0.1%

The dominoes come to mind; My ego is not really that familiar with them, but when they fall, if they even do-the pieces of banks, how ugly can it get and more importantly how can I protect my precious capital which motivates my continual searching and striving to find justice that we can all believe in? I did not make that phrase up, but it sure has a nice rang/ring to it!

I read the first link, you must be a machine Bill and we are lucky to have you. I jotted some notes that came to mind while reading and then I said, well, lord willing, I will finish the rest...hear are these notes, the ones that I captured:

1. I think and am now validated in my thoughts that we do not use nearly as much of our minds, perhaps neuronal connections even, as we can.

2. I take exception with the probably time-constrained placement of the supposed oxymoron "persuasive economic theory". I guess it depends on ones vantage point...degrees of freedom are strongly recommended in this particular case...if I felt economic theory is "now presently" (see the irony?) negatively portrayed by our favorite medium of choice, then we would have a (+,-) relationship, but if ET is considered by an author to be positive , then we would have a (-,-) relationship, which looks sleepy, just a joke...I will leave it to others to sort the details. My, how interesting are the implications for what else, but the People! ()...)( it is what it is.

Some other matters:
Z. I heard or read Alfred Gore was being confronted about his theories of unquestionable global warming he has created. It would be a shame if those concerned about the truth ever found out were his wealth creating idea nurtured by greed came from.

Y. I also during reading the first link came to the conclusion that dark pools are so much dribble and like the Moth, does seek its own dust. Also, I realize that what we really need in this world of ours is a revolution in language so that we communicate the truth rather than an abstraction. If we talk it over with each other, we can see our prosperity and most Holy advantage, in any translation by the way. If we choose not to say anything, we still speak volumes. Words may fail us, but there is one word that cannot fail!...this changes everything...humpty dumpty is in danger of falling, but would he make a sound, if no one was around to hear him?

X. Same article...should we call it "animal spirits"? Does this still today rob us, like so many bandits...such constricting and biased labels in my mind will only beat down the person entertaining them or rob them of choice.

W. Why would the Market, which is us be maligned so much of late? Capitalism's concept and fruition is in many minds God's gift and providential treatment that keeps giving freedom. The path of anti-capitalism, what is that?, anti-people?, this path is not leading to any kind of reality I want to live in for sure. Hey, others differ in this regard and their orientation and I would encourage them to make a case that stands on consistent logic and selfless understanding.

Wow, them brain cells are screaming at me...hope this is helpful and change that we all can share and believe in.

Number two sun, don't despair; we have care bare and Barney to help lead us...and they will be true to the image we have of them; hope they are prepared to ride their own energies. Unfortunately, our children have been told to just shut up and take it like a soon to be man-woman-other.