Cara's Commentary & Community Chat, Mon., Jan. 26, 2009

May this earth based year of the Ox be a prosperous one for all Caraistas. I know I have personally benefitted not only from Bill's insight but also from his CTAB services.

So from a Chinese boy born and raised in Hawaii but now living in Kentucky,
May the Ox plow the fields of your portfolio all year and for years to come. :)

I was reading last week on here that some budding technician saw resistance in SLW at $7. I would not take this admonition seriously and, in fact, both AUY and even more acutely SLW look to be getting ready to power northward. So beware taking resistance too seriously, specially if it's from years ago and was formed during different market conditions.

Keep your reindeers on the roof!

I would have given anything to have been able to eyeball Kaimu yesterday. And I suppose this means he will not be at the March convention. There are 3 enduring mysteries in my life.

1) Who really Killed Kennedy?
2) Does life really exist somewhere else in the universe?
3) What does Kaimu look like?

Bill I love this edit feature!

Agreed. I see resistance at $8 usd. doubt we get there this week. But i think ctab report also showed $8 resistance.

$7 WAS resistance :)

Here are some of the straddles I am tracking for earnings today. Calculations as of EOD Friday.

Company, Symbol Type Move Req
Alberto Culver Co., ACV Straddle $22.50 19.95%
Albemarle Corporation, ALB Straddle $22.50 15.06%
Amgen, AMGN Strangle $55/$52.50 9.42%
American Express Company, AXP Strangle $17.50/$15 23.36%
Bank of Hawaii Corporation, BOH Strangle $35/$30 20.44%
Caterpillar Inc., CAT Straddle $36 15.68%
Quest Diagnostics, DGX Strangle $50/$45 13.02%
Danaher, DHR Straddle $50 12.84%
Eaton, ETN Straddle $45 13.28%
First Commonwealth Financ, FCF Straddle $10 26.63%
Graco, GGG Straddle $22.50 17.10%
Kimberly Clark, KMB Strangle $55/$50 10.03%
McDonald's Corporation, MCD Straddle $57.50 9.36%
Matrixx Initiatives, Inc., MTXX Straddle $12.50 36.36%
Netflix, NFLX Straddle $30 19.32%
NuStar Energy L.P., NS Straddle $45 9.66%
Olin Corporation, OLN Strangle $17.50/$15 16.91%
Old National Bancorp, ONB Straddle $12.50 23.51%
Pactiv, PTV Strangle $22.50/$20 13.37%
PrivateBancorp, Inc., PVTB Straddle $20 22.35%
QLogic, QLGC Straddle $12.50 13.17%
Sealed Air, SEE Strangle $15/$12.50 16.05%
Steel Dynamics, STLD Strangle $12.50/$10 26.13%
Tyson Foods, TSN Strangle $10/$7.50 25.08%
Texas Instruments, TXN Straddle $15 12.74%
VMware, Inc., VMW Strangle $22.50/$20 21.14%
Weatherford International, WFT Strangle $12.50/$10 28.51%
Zions Bancorp, ZION Strangle $15/$12.50 38.79%

You can track the current price vs last price at http://straddles.nexalogic.com/

It's blast-off day for both these stocks.

"2nd, how much weight do you give TA?"

Mark- I haven't taken the time to study it (I've been telling myself for years I'll get around to it, but since I haven't yet, it may never happen). So I don't have an opinion on it. Bill has pointed out that trading is as much art as 'science,' and I agree with that. When it comes to 'art,' there are many paths to greatness. There were many pianists in the Romantic period more technically adept than Chopin (Franz Liszt being one of them), but it is Chopin's music that endures. And today, how many people even listen to Chopin? They may be cranking up music (just as creative in its own way, and certainly far more successful if measured by sales volume) written by artists who may not even read music. I think TA can be a great way to 'picture' what's going on. My only concerns regarding TA would be the same as for any other system, IF USED IN ISOLATION: (a) if everyone is watching/trading the same parameters, do you trade them or fade them, and (b) any system that consistently works has been completely exploited by the time it makes its way to print.

How ya doin' BRUDDDDDA? I hope yer planning on going to 300 percent of allocation today!!!!!!!!

sentiment

I think 2nd takes technical levels, support and resistance seriously, but he has that inner Karmic sentiment indicator. It's definately proprietary LOL!

Shark is a TA machine.

Good luck to everyone today!

Don't diminish the power of the force, seriously. I believe in it.

http://www.ritholtz.com/blog/2009/01/bianco-the-do...

not sure if you have tried to work this out Bill,
but it would be helpful if we could reply to people's posts and actually have their comments in quotes above ours. might keep the different threads more clear.

ll

are we posting shorthand now?

2nd
New fidelity site does not show my watch list, finally I loaded active trader pro. Also wealth pro and option pro. Having hard time getting use to active trader pro. Up to now I was using their simple web site. After talking fidelity they told me I have lots of free tool available.I send you an email

will reload

FAS is on the up from my buy last week. Housing sells up 6.4% on existing homes from month to month.

You guys tell me when you are selling out of the financials so I won't be holding the bag.

CNBC says the DOW should go to 8500 and hit resistance. If it can get thru that, look for 9100.

I am only holding SLW and FAS. 70% cash right now.

all i can say is, you're booking good gains selling FAS/SLW here...i'm just more of a gambler ;)

Well, the DOW is only at 8200... I certainly hope we've got more upside coming... I'd like to see 9100 again in a week so I can take profits.

I believe it was 855 on strong volume in the Cara 100.

that was a solid one...should provide more room for upside in the equity markets. The most promising thing about the report was the inventory levels. Down to 9 months, which is decent. It will bottom when the inventory gets to 6 months. Home price nationally are still 15% to 20% too high based on historical norms of avg home price to avg household income. Doesn't mean you can't find a bargain. In my neighborhood in San Diego, there are a lot of homes that seem reasonably priced now that they have dropped approx 50%.

tof- i would agree...one of my younger brothers was able to sell a home on the Peninsula, where prices have been (relatively) stable, then bought a brand new home north of San Diego-> listed in 2006 at 2.2m, marked down to 1.1m last spring...after spending 250k on landscaping, he's still way ahead...

put order to buy SRS at 49.00 may get filled in few days
sold GE which I brought friday

work has been busy today,

but no ive been watching with great interest the recent price action.
as usual im vested in the miners, and their action has been less than impressive right now on-balance. the last time spot gold was at $910, the HGU was above $16-17, right now its sitting at $14 and still falling.

but all things considered i think this is a legit breakout in gold, and many of the gold stocks are just trying to push through their 200 MA's which typically can tug things back a bit until enough power builds to crack through.

the key to me is still the action of the gold miners if and when the broad market gets hit. im almost %100 invested at the moment but will take some off the table should the stocks fail to keep pace w/ gold over the next few days.

good luck.

Price Targets Lowered:

DOW - from $16 to $14 @ Barclays
GE - from $18 to $15 @ Barclays

Bloomberg offering its take on today's economic reports.

U.S. Leading Index Rises as Fed Expands Money Supply

“The financial market components offset the weakness we’re seeing in the real economy,” John Herrmann, president of Herrmann Forecasting LLC in Summit, New Jersey, said before the report. “The real economic signals are all weakening, with no sign of a bottom.”

Some positive signs, as shown in housing numbers. But there is a lot of shadow inventory out there still and, I fear, another round of foreclosure activity as ARM resets kick in. Of course the situation is only made worse as people lose their jobs.

2nd, in my East Bay town there hasn't been a sale for two weeks now. Prices are still relatively stable. But I still see a lot of empty homes, most of which can't even find a renter.

we haven't heard from him lately
Chickenpookie
"Man, I've been trying to order more orchids all weekend now but nobody answers the phone..."
Busy with sun and sand?

I'd like to see a nice pullback in gold at least to $860 level so I can reload the half I sold Friday.... Couldn't understand why gold was so slow out of the gates, these rally's seem to come from nowhere then stumble back to a seven handle...

Sotchastics and Macd was my guide.

22% gain in 4 trading days, from my 6.05 buy. Watching slw at 7.28. Will wait for better re-entry.

Looks like people jumped on the low rate mortgage. Not sure if it will last.

Anyhow, looks like markets are responding to the news. I would venture to say that smart money is fading the move.

I'm guessing those Shoshone are winning their case against ABX...

dr.cosa are you still long HOU? finally showing signs of life.

USD down: Goldcorp is red in Canada, yet green in the US. Always good to keep in mind where the rallies really are and whether they really are rallies.

http://nexalogic.com/gg.jpg

Well, it took me a little bit of being schooled by the market on these but given the swings, one MUST trade the HOU's of the world. Great candidate for swing trading.

brought some DZZ and ESLR 23.00 and 2.25

If Obama spoke about Thain's 1 million $ office upgrades, should he be silent on this taxpayers purchase...

Beleaguered Citigroup is upgrading its mile-high club with a brand-new $50 million corporate jet - only this time, it's the taxpayers who are getting screwed.

Even though the bank's stock is as cheap as a gallon of gas and it's burning through a $45 billion taxpayer-funded rescue, the airhead execs pushed through the purchase of a new Dassault Falcon 7X, according to a source familiar with the deal.

The French-made luxury jet seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center, according to Dassault's sales literature. It can cruise 5,950 miles before refueling and has a top speed of 559 mph.

There are just nine of these top-of-the-line models in the United States, with Dassault's European factory churning out three to four 7Xs a month.

http://tinyurl.com/akraab

I should have more dry powder soon. at which time i will test the waters and write puts as income & hedge strategy.

and looking at HOU.to

Sounds like you have a nice system set up. My mistake was to not trade enough SLW. But, I sold today and waiting for reentry.

Why did you repurchase at 7.10? My reading on RSI(7) is over 70%. Would you mind explaining the system a bit?

It seem like the longer we churn at this level, the more the risk increases of a substantial drop.

Maybe the market is waiting for their new savior, Geithner(I'm so dumb I can't even fill out Turbotax forms correctly) to swoop in and save the day like Paulson did in summer of 06 when he parachuted in.

Rob.

My sell limit order was hit at $1.68 for 2000 shares of WGW I purchased at $1.48 last week. With gold moving up despite the dollar strength, it seems that investors are expecting inflation in a not-too-distant future. I read Jeremeny Grantham's latest quarterly review this weekend, and while stating that US will need to write off about 20 trillion of debt, he says that a very likely solution to this problem will be to inflate some part of that debt away. Don Coxe is also leaning toward gold being one of the best-performing commodities. I am getting more and more amazed at how right Bill was when he made a bullish call on gold WAY BEFORE everyone else, citing the same reasons that "experts" are beginning to recognize now. So I'll probably "tune" my WGW trading strategy now to a bullish pattern -- I'll be buying it for every $0.1 drop from the peak rather than conservatively waiting for a $0.2 drop as I did before. I'll place a buy limit order on WGW later on in the day, depending on where it closes today.

Also, the buy limit order I placed for 1000 ESLR shares last night was triggered at $2.28. One guess I have as to why ESLR had a strong decline recently is because Euro dropped recently, and ESLR sells its production mostly in Euros. However, if US inflation is coming up, then I doubt USD will have a long bull market from this point. It might just oscillate in place until the market fear subsides, at which point it should start falling. So I just placed a sell limit order at $3.1 for these ESLR shares, and will wait for it to be hit.

longer-term play..

For general stock movement i will look at the 6 month chart then study both daily and weekly charts. for intraday i switch back and forth a lot from 1 day, 3 day, 1 month etc.

In hindsight i should have waiting for lower prices, as i placed my $7 buy order three times, each time when it hit 7.06 usd today but bounced up.

If you look at the intraday chart with 5 min intevals, the rsi is actually been bouncing in the 30s.

I typically sell with conviction when stoch rolls over heading down from overbought line, but only if macd is also rolling over. for buys, i do reverse.

For buys, i am a little looser. if the stoch is above the 50 line and turning up + macd is also pointing up, i would consider it a buy. Not only when its rising from oversold levels.

but as you can see, i should have waited for even lower prices.

EDIT: if i didnt buy, i would be salivating for $6.75 or watching the same chart for stoch, rsi, and macd to start rising. also looking at where s&p is, as well as gold, gg and ofcourse slv.

***this is not advice. I am still learning and making mistakes on the way. and the learnings are basically from this blog, Bill Cara's book, and some other sources.

Thanks kindly for the explanation. I don't spend a lot if time looking at intraday RSI. My target for SLW is more like 6 but I have no TA skills.

S&P having hard time staying over 850

not liking the action in the gold shares. HGU at 13 w/ gold holding on to $900 is disappointing.

i dont feel as if this rally will hold for the moment at least.
im partially out looking to reload on a pull back.

i think the move on friday was a false-flag to give people the impression the FMOC comments were going to move gold in a big way.

if gold moves up and over $920 in the next few days then ill bite bullet and get back in. im leaning towards a short term fall here, i think the shares are the canary in the mine.

financials still looking weak, im wondering how much this is weighting down the gold shares.

that's almost 5% in 20 minutes, i'll take it...money management

I just tried to sell short some more FAZ, since the market does not seem to want to plunge to Nov 20 lows despite having broken through S&P support at 850 recently. I think this is very bullish, since *everyone* was saying that if we break 850 on S&P, then we are going down to Nov 20 lows. In any case, I just tried to sell short some more FAZ in Scottrade and e-Trade, and both of them said that there are no shares available for shorting. I guess people caught onto my idea of this being "easy money"...

What a wild day of tradings!!!AUY up and down, my acct went up and down more times than......the space shuttle?

Quick note on straddles in play for Jan 27:

http://1.bp.blogspot.com/_iV5yDiKxCdk/SX3GrPJdsVI/...

There were some big movers today.

NYU-
Its a great spread sheet to look at I'm sure.....its the "making it happen" that gives most of us trouble.

In PFE today 15.90 (down so far)
FAS worked for a day trade

Not so good for the Average Joe...

Corporations in the United States and Europe on Monday disclosed plans to lay off more than 70,000 workers as they cope with a severe economic downturn.

Blue-chip U.S. companies Pfizer and Caterpillar announced the largest cuts, while European heavyweights ING and Philips also unveiled plans to slash thousands of jobs.

Outright layoffs are by no means the only moves companies are making to cut costs. A study by consulting firm Challenger, Gray & Christmas found almost half of employers had avoided cutting staff through measures including salary freezes and cutting back workers' hours.

http://tinyurl.com/bdefmd

"If you start the 1st week of 2009 and go out 52 weeks = approx $480k."

Hey man, that's some crazy TA there... ;)

"Hey man, that's some crazy TA there... ;)

CP- I don't think anyone can turn 40k into 480k in 52 weeks using TA...I can see someone using T&A to generate those kinds of numbers, though...

Currently quite a few bullish tails are being painted on the daily charts of most precious metal stocks I have on my watchscreen. Hopefully this trend can continue into the close.

yeh...i am not saying its remotely possible, but its just a reminder for me, not to be in on the big down moves.

It helps me keep a strong sell discipline. Although i missed the bottom on SLW today, it helped not miss the top. That was a 10% move down if i had never sold, huge opportunity cost.

Looks like David's 'money pump' is hitting the long strokes.
Congratulations!

FD: Long WGW, positive and holding.

Maybe Obama will decide to outsource Congress and the American financial system... I'd support that!!!

BSI-

I will try your trade....it sets up easy enough.

In FITB @ 2.69
Stop at 2.49

What type of failure rate do you have on these types of capitulation trades?
The system looks interesting.

NFLX just beat earnings and is up 7% AH.

Rob.

Grym
IMO it is a fair comment on unemployment but after record low unemployment numbers for years now, I tend to think that many unemployed are on the fringes in some cases and haven't a useable skill set in others. As Woody Allen once said "80 percent of success is just showing up", working isn't just about 'showing up' so not everyone has the capacity to be employed and this can show up in the employment numbers by default. Not to degrade anyone who has lost their job it is a terrible situation only I would venture to guess the 'real' number of skilled and motivated unemployed is closer the 5% nationwide.

Even though I said earlier today that I will be buying WGW in $0.1 increments now, I figured that the recent 2-day move was extreme, and so I just placed a buy limit order at $1.58 ($0.2 below today's closing price). However, I did move my previous buy limit order from $1.42 to $1.48.

MCD Q4 EPS 87 cents beats street by 4 cents. Ronald is sipping the grande, hot, decaf, triple five-pump vanilla, non-fat, no foam, whip cream, extra hot, extra carmel, upside down, carmel machiatto out of Starbucks...

http://tinyurl.com/buww96

Down aftermarket.

I freely advise everyone to make their own trading decisions. I don't want to be responsible for anyone's losses or gains.

I've always had an interest in trying to identify max pessimism. Readings under 10 on the 7 day RSI have worked well so I don't catch knives. The max pain options indicator has helped to indicate stocks with some sort of potentia upward pull despite the bad news.

I'd use 5% * 10 day ATR subtracted from the 52 week low, or 2.45. That 2.49 is very visible and the big boys like to gun them.

The position size is critical since the stocks are low priced and highly volatile. If u used the 1.5* 10 day ATR, you'd give up 1.05 on a 2.60 stock. Won't last long trading like that.

If one had 100,000 of equity and wished to risk no more than .5% of it on any one trade (100000*.005), it works out to $500 (equity, not total $ in the position size. $500/(1.5* 10 day ATR) or in this case, 500/(1.5*.7)=476 shares. I try to keep my trading costs to 1% or less on entry and ditto on exit. 1.5 means I'll let a day and half of movement against me before I close out. Usually I use 2 instead - means my position size is smaller. I try to control risk as possible since I can't control the price.

This is to show that there is more than a stock pick in making the trade work.

Thanks, I'm building a list of companies still reporting higher revenue and earnings. Some of these companies will be the next leaders.

Rob.

I hope I didn't miss the top today for this run. I thought about selling but didn't pull the trigger. It would be just like SLW to have a false breakout. 6.68 was the breakout point I calculated. Hopefully it can stay above that. Long-term though, paying down debt in this environment is very smart. Just think how many banks would love to be doing the same thing right now but can't because they're so compromised. It may hurt us in the short-term but I think it was a smart move by SLW management.

Rob.

NYUGRAD Your Post #8691was very good .Best of all was your Attachment ! Could you tell us about what software you used to make that Attachment. Thank you, Bob.

Its a small position and I wouldn't hold you accountable. : ' )

Besides I plan a 3 bagger with this one. LOL

I am trying to see your point on the stop loss @ 2.49, but I dont see much diff in 2.45.....I guess I dont understand what you mean by visibility? I will be using mental stop anyway. Regardless, I would like to know what you meant?

That is TD Ameritrade. i just took a screenshot into adobe photoshop and saved to web. then attached to the post.

EDIT:

I use stockcharts.com, but mostly software from Worden. The free older version is called Blocks, no longer supported. but the new one is called stockfinder. Just google Worden Stockfinder.

I highly recommend. i have buckets of stocks, IBD (400+ stocks), Cara 100, personal watchlist, etc.

You can setup combo conditions such as stoch crossing up thru oversold line & MACD crossing up thru MovAvg9, and it sorts thousands of stocks in seconds. being able to go thru 100 charts already pre sorted to conditions i want to see, by hitting the space key repeatedly is a TIME SAVER.

TD ameritrade is ok for trade execution but I love the Worden software.

"Our focus going forward is to continue to grow the asset base in an accretive manner, by adding high quality silver streams from low-cost mines that are already in production."

This sure sounds bullish for certain Jr.'s. How soon will they make their moves? Who fits this criteria?

Earnings, while bad, were priced in. Job losses, while traumatic for some individual families, seem slight - 5000 for MFST? Plz, what's that, 3% of their workforce? My take on TA suggests we are damn lucky that prices retraced near the Nov 20-21 lows. I redeployed a lot of cash today, thanking my lucky stars that the markets hadn't waved goodbye to me weeks ago.

Well the rally might start tomorrow if Geithner(the only person in America who doesn't know he's supposed to pay SS and Medicare taxes) has as much pull as Paulson.

And don't forget how huge that rally was.

Rob.

List of how your US Senators voted http://tinyurl.com/aplojl a quick scan seems to indicate Business as usual. Tax evasion - nooo problem, just a strick party line finger to the American taxpayer.

haha - I heard that too... but it seems to be a broken record too.

recovery in 2nd half of 2007, recovery in 4th quarter of 2007, first half of 2008, 3rd quarter of 2008, late 2nd half of 2008. First quarter of 2009, 3rd quarter of 2009.

Near term, - slightly bullish or more. Would love to go bear hunting.
afterwards - bearish - would love to shoot me some cowboys.

heeeyaw!

I agree with most of your points. That's why I'm focusing on companies that have increased revenues as well as beat the lowered earnings estimates.

This market could really tank hard no doubt. And that's why I want to pay more attention to companies that have revenue growth. Most companies that can grow revenues in this environment will be kicking butt when conditions become better.

Rob.

Before Open

GLW,EMC,Phoenix Technologies,Lexmark,Check Point,Tellabs,Verizon
After the close

Yahoo,Sun Microsystems,Altera,Emluex,Hutchinson Technology,Plantronics
Keynote Systems,Websense,F Micro Devices,Openwave,LogicVision,Vistaprint,Callidus Software

it dawned on me that up until now SLW was a fancy silver ferrari but the bankers were driving. SLW is now in a driver position, no longer just waiting for spot prices to rise (and this was their only play) with the looming debt constantly present.

With the added funds, they can control their own destiny, and now have capital to pick and choose a potential silver stream acquisition, in addition to rising silver, with less debt. So there may be more shares, but each share has more upside for growth.

I am not a mining expert but i do think this is generally positive news, and hope there will be some type of addendum to the CTAB report provided last week.

What a difference a week makes!

http://tinyurl.com/b9xvqb

http://tinyurl.com/czfgk7

Someone has to pay for the extravagant excesses of corporate America for the last decade.
Most of these CEO's have a half dozen multi million dollar iron gated compounds in the US and various other countries around the world. Yacht's, private jets, 5 story libraries with their name over the front door, million dollar antiques on every wall of their gated compounds, gold watches that cost ten times more then a second class persons home, a dozen guest workers making minimum wage while catering to their every whim, a lazy streak a mile long, the ability to lie at any given moment, limousines with tinted windows and another guest work to chauffeur them where ever they want to go, laws that say they don't have to pay taxes like the working class. The list could go on all night, but I have to quit so I can get to work tomorrow and pay some more taxes.
What's in your wallet?

if i had more time i would start a blog tracking all these frauds and scammers coming out of the woodworks. i could prob make a nice living selling ads on the site too.

NYUGrad yes it is sad but true, there will be plenty more of these to come if for no other reason than there is heightened diligence/awareness.
I still believe these guys should be doing hard time in a small cell w/Bubba. They are far worse than an armed robber IMO as they affect and ruin far more people in a more destructive fashion.

Two more possibles for the list:

DGX, DHR

You could look at it with a positive spin, but you could also say it is as you stated before a dilution of stock. It also maybe a needed look for new pipelines of silver. SLW business model is basically to pay a discount on silver that is not mined yet. A lot of that silver is in base metal mines. World econ slump blah blah. Then there is a retraction in base mining due to low metal prices and demand. Walla all of a sudden SLW owns a lot of silver that might not be mined for years. This is why I think the price of SLW is more correlated with the price of copper then with the price of silver. Run a two year chart of FCX SLW and SLV. Which one's are correlated? So just like a pharma running low on product SLW maybe looking for new pipelines. That is why the person who said this dilution might be beneficial to JR. Gold miners with significant silver deposits might be on to something. IMHO
Bob

BSI,
Similar logic to my own although I don't go after stocks so sold out below RSI(7)<10. What are you using as a profit stop(s) on trades like these? I'll go back through some of my local bourse data to see how that may have worked out. Have you performed any analysis of how this has gone and are there any conditions that would make you stay out of a trade be they either TA or fundamentals, not necessarily financials?

Thanks for sharing your thoughts.

ARE there "no laws in existence that punish execs for extravagant greed" ?

If their extravagant greed contributed to the downfall of an institution that is now being funded by we, the tax payers-- I'll be first in line to demand accountability. These same banks are playing hardball with disabled veterans who can't pay their mortgage after our fine VA and other social services have cut back their medical coverage. It's sinful to think we are sitting idly by while high flyers keep flying over the devastation they caused. I guess one could define 'sin' as colluding with these devils while raking in our chips. Somehow owning BAC or CITI seems like feeding the beast..be careful what you feed!

I personally find the best approach is to use as many perspectives as you can till you get a feel for what works for you. For example looking at global equity markets I used the following perspectives.

I look at the market from the following wide range of perspectives and also conclude that global equity markets have a fair way to fall.
1. Is it meaningful to talk about a global equity market at the moment. Yes - Strong equity market correlations in recessions and this has been the case for a couple of years now.
2. The scope for government action is growing more limited as they run out of monetary and fiscal bullets so there is less ability to support the market.
3. We're unlikely to be in the last 6 months of the recession where equity returns are usually strong.
4. PE ratios stocks are not cheap by historical standards.
5. Equity prices compared to asset prices of the companies are not cheap compared to historical standards during recessions.
6. Primary long term trends in all major stock markets are clearly down
7. How are markets responding to news? Equity markets are rebounding based on possible government actions and falling on the reality of earnings and broader economic data. Given the reality of the coming data the pressure is on the downside.
8. The new administration has given hope but political stockmarket cycles in the US suggest the first two years for the US president are likely to have low returns as the current administration talks things down by blaming the previous administration.
8. If Buffet is buying isn't that a good sign. Yes buffet has bought some but he doesn't try and time the market and readily admits he often buys in early when markets crash.

It's hard to be optimistic when such a range of data and perspectives say there is plenty of downside

I go through all of this in detail at http://reflexivityfinance.blogspot.com/

Cheers
Steve van Emmerik

"Borrowing from the axiom that, “a picture is worth a thousand words,” today we are going to view the incredulity of recent macro-economic events with the aid of charts and graphs. First up is a chart of the price of gold [POG] over the past year with a few “milestones” pasted in for good measure:

It saddens me to point out that – collectively - the milestones on the chart above are all indicative or symptomatic of systemic financial collapse. It saddens me even more knowing that the price of gold has acted counter-intuitively – getting hammered – each and every time these unfolding events should have propelled it higher.

How It’s Done"

http://www.financialsense.com/Market/wrapup.htm

The recent 2-day move in WGW has been somewhat extreme, and I expect it to pull back soon. However, in case it makes another spike tomorrow morning, I am placing a sell limit order for 2000 shares at $1.88.

I don't think you will know until tomorrow. The upper tail indicates seller pressure and rejection of higher prices. A Shooting Star confirmation is represented by trading below the body of the star. Given RSI(7) daily overbought it is likely there may be a retracement in the short term.

However this is all conjecture as any broader market influence will likely have a greater effect on GLD than instrument intrinsics.

Bon adventure!

yvrapx,

First of all why should we disregard the the unskilled unemployed? Many of whose jobs are now being done by the formerly skilled workers.

The Unmotivated? Sure there are some who don't want to work and I'll go along with the Little Red Hen — you don't want to work — you get no lunch or pretend job. (They live off the taxpayer rather than starve, however.)

But, here in the midwest, Detroit isn't the only area devastated by the export of jobs. More than 10,000 factory jobs left our city, Rockford, IL, during the 1990s as we became a "service economy". I'm talking about machine tool makers, engineers, designers, metal lithographers. Those in supporting roles, secretaries, clerks, accountants and bookkeepers, janitorial staff, maintenance crews were also out. And independent suppliers to those companies — like me.

It began in the mid 1980s with little, simple things like ordinary nuts and bolts (cold header operators jobs) which went to Taiwan first then to anyone still cheaper. Two of my former clients were fastener companies — one was bought-out, merged away the jobs and left town. The other gradually off-shored until nothing was left here and still went bankrupt in are entirely gone.

Nearby in LaGrange, IL, GM Electro-Motive moved their assembly to Canada and dragged the locos to Mexico for painting (a saving of $50,000 since who cares if Juan breathes fumes?)

I could go on with examples of people who I know in banking, sales and architecture, but it is now down to barbers and dentists — you have less go go less often.

Anyone who is interested in the real job story can read the criteria or measuring at both the U.S. Census Bureau and the Bureau of Labor Statistics websites. All are skewed to make the data look better than reality.

These stories are not guesses.

yvrapx,

Thanks for your comments.

I realize nearly 25 years of downward drift locally has colored my views, but while things began to improve a bit since 2000, there is now a marked downshift obvious here again.

Fear is a great influence. When you have no longer have earned income, defense is the name of the game.

I consider my ability to close out 2008 at break even was only due to increased vigilance and trading. So I do realize we are not helpless and I have benefitted from others' opinions , like yours.

2008 for me was "...the best of times and the worst of times." Trading SKF, SRS and GLD had me at the top of my 40+ years of investing. By July I had made more than I ever earned working full time in any two years. I became complacent, over confident that I knew a pattern which was reliable and quit using sell stops. Then the rules were changed. (I had already read Black Swan and thought the sick financials were it — until a blacker swan drowned ll my gains and then some.

Soon I was down 11 or 12 percent. Now I am wiser and far more careful once again. I only know the anecdotal stories I hear from people I know are far more reliable than the data diet we are fed.

If they are engineered to go up twice as fast (daily basis) and down twice as fast, "buying and holding them" gets you nowhere that a single return ETF wouldn't (except additional complication and counterparty risk).

SO, it seems to me, they're ONLY better if you can time the turns, and hold them when the added returns will apply.

For example, a friend of mine held GDX until gold really looked like it had bottomed, then switched to PMPIX (double return gold stock mutual fund). But he'll be out of there at the next cycle top.

Am I missing something?