[7:02am ET] Yesterday and last evening, many here were questioning my sanity. The morning headlines, however, are shouting “Global Sell-off”. Yes, international equities and commodities are falling hard.
I stated that on Friday’s trading, it was obvious that the ‘buy the dips’ strategy wasn’t working. We had just bought a number of stocks and were scrambling to find any strength to sell into. Then, in Sunday’s Week In Review, I stated that my associate Pierre Brodeur, who is a market timing expert:
“is a little more than cautious. He wrote as follows:
Based on Friday's close:My intermediary trend indicator flattened and dropped Friday confirming that one should expect rougher times ahead as the Dow Jones begins a healthy correction back to longer term benchmarks. The ultimate worse case scenario projection would be between increasing MA200 at 8312 or so and increasing MA100 at 8475. The most likely scenario would be a pullback to the previous top of 8878 and rising MA50 at 8766 which should be near 8878 given the time span of a pullback.
Our risk measures for the US market are all pointing to extreme caution:
-1- NYSE Bullish % reached 80%. Any value above 70% is overbought and a sign for me to lighten longs. A reversal back to 74% would confirm a lengty enough pullback to initiate short positions.
-2- S&P500 Bullish % is also at 80%
-3- The NASDAQ Bullish % is now at an unsustainable 90%
-4- The Dow Jones Bullish % is at 86%
-5- The TSX Bullish % is entering the overbought zone at only 70%.”
Throughout the WIR, I stated the warning signs. One of them was that there has been a significant divergence between RSI-7 and share prices even though the RSI’s were at extremely high levels. I stated that RSI-7’s on the Daily had dropped below 70 and that was looking like it would happen to the Weeklies. It was happening across the board.
I added to the other potential shocks that could hit the market could be the one that small US banks might soon have to stand in line at the bankruptcy court, and that banks with money to lend were not doing it, and that credit card companies were dropping the credit limits. These are not positive signs. I didn’t stop there.
In the market, one never knows. But, Joe Granville taught us about the weight of the evidence, and the load has been becoming a burden. Even the Fed doesn’t know where to turn at this point.
If you are long, try to have a good day. I’ll be busy trading. Thankfully we are net short non-gold equities.
Comments
Black Monday
Watch out below! SPX targets for downside support: 982,954,938.
Most likely, 954 is probable downside target. This selloff could last perhaps 4 weeks.
Precious metals could really be hurt. Would you believe that gold could drop into the 800s and even into the 700s. Gold and silver shorts clean up this time. Later in the year a recovery should occur in PMs.
One man's opinion. Am I right? Only time will tell.
Am Happy to be able to gauge risk a little better
holding ECU.TO on Friday, was not impressed with large drop off in POG and promptly dropped ECU for a small loss. Appeared to be the right move.
Bill says he's still net long in gold equities. Need to find myself a solid PM player to accumulate on weakness.
Not sure we'll get the same great price we did for PM miners in March however.
sell off in indian stock markets
just as bill has said, china flu has affected the markets. indian stock markets end at a whopping 4.20% down, which many suspect have been fueled by Index ETF withdrawing from the market to meet redemption requests.
Cara 100 Ratings Changes
Good morning.
WMT - Upgraded to Buy @ Rochdale Securities. PT Raised from $55 to $65
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Monday Morning Blues:
Blues Legend, Muddy Waters, giving his own brand of economic advice...."You Can't Lose What You Ain't Never Had" :
http://tinyurl.com/ochnz5
Re: sell off in indian stock markets
Re: "Index ETF withdrawing from the market to meet redemption requests"
ETF's are not mutual funds; hence not sure I understand how "redemption requests" would apply. In general, aren't "redemptions" of ETF's usually effected by selling the ETF shares in the open market at the then-prevailing price?
The Parade....
LOL! This AM we have the parade of pumpers on Bloomberg...so far Abby Joseph Cohen has done her usual routine and Deve Dorbs is on deck... I wonder when Warren makes some statement about markets being a bargain at these prices?
I'm not even going to think of tuning in CNBC.....I'd need Pepto.
Undun?
Dr. Ron got me thinking....he had a new fangled version this Am on his blog, I prefer the classics....
http://www.youtube.com/watch?v=VLMF5GM0Kt8
Buy The Dip?
Let's see if this dip gets bought! Gold sure ain't dancing yet... Surprise, surprise, the $USD is up... go figure!
Simplified Index as aid to know if recession is nearing end
"Identifying a turn in the economy is tricky business, especially when each day's news seems to bring conflicting information. To cut through the noise, we've identified six key economic indicators. Two have turned fully positive – interest rates spreads and home sales – and when three of the six indicators go fully positive, it’s more than likely that the recession has ended. Stay tuned."
http://www.kiplinger.com/businessresource/recovery/
Someone just gave Ford the dropkick
Cash for clunkers not a convincing investment thesis?
sigh, pity I'm not a daytrader. 30 cent scalp in 2 mins.
China Full of Schist
For a long time I have been skeptical of many of the "articles of faith" surrounding Chinese development.
Specifically, many westerners fail to realize that China is a country on the verge of a full blown social revolution caused in part by a MASSIVE unemployment problem.
Add to that the concept of VERY uneven economic development (an hour in from every eastern city and you're back in the 19th century)
China is also on the losing end I suspect of many financial transactions with the U.S. It's looking more and more like we're screwing the Chinese big time regarding our fugazy debt. I'm sure Bernanke is in earnest, but republican politicians would love to leave China holding the doo-doo bag.
As long as we're in recession, China will suffer. And think about this for a second. We screwdoodled China and they bought our phony debt, we all know that story. But who will be around the take the other side of China's bad trades in the future? Europe? No way? Us? No. Zimbabwe?
David- Nice call on SKF sell limits
30 and 30.50 have hit for 2/3 of your positions already.
Sights on TBT/gold/NGas
...
gold here
youve seen gold do its dance,
falling into the market open, rising up to prior day's resistance then falling.
youve seen the US dollar consolidating in spite of all the bearish news about the dollar.
all the shot-callers were cheerleading that the most recent run above $950 was the big move to $1000 and beyond that was allegedly in the stars.... now that gold has fallen back, markets are falling and the US yet again is defying gravity the gold bugs are saying "soon" and "any day now" and "once the market realizes teh US dollar is toast"..... hogwash.
like it or not gold will crash along side any market crash.
the US dollar will rise on any severe market weakness.
budgets, spending, deficits and blah blah blah dont matter one bit if the US dollar continues to recover while gold flounders because almost everyone was wrong about gold's action. they will be loathe to admit it but they have no idea where gold is going, they only have a brigade of excuses to justify why gold isnt at $1000 and beyond.
when gold moves back to its 200 MA they will shout "buy buy buy, gold is testing support, that should hold and then blast off",
when gold fails at its 200 MA they will shout "watch the weekly MA for support",
when gold fails at the weekly MA they will shout "this is just hedge fund liquidation and manipulation, gold will bounce back strongly"
all the while you will be fed lies about "strong demand" which we have discussed before is tautology, it means nothing as the price cannot continue to fall if mine supply is shrinking, demand rising and inflation a foregone conclusion. you are being lied to. you are being a fed nonsense about a mythic group of people eager to buy gold, about chineese people buying in hoardes while miners are loosing money and share price. a gold bug is a player in a ponzi scheme. the difference is the game never stops because the host of excuses to justify price action is their only admirable skill. the music will in this sense never stop, it will only change players, as more fresh-faced investors buy in on fantastical notions of increased demand, of COMEX defaults and US debt.
good luck.
VXX up 5.2%
...
Re: sell off in indian stock markets
you are right.what i meant was funds like IFN were selling .IFN invests in Indian Stock markets and must have sold to protect their NAV
long yamama
long yamama
Re: Sights on TBT/gold/NGas
So 2nd, you've found targets....just keeping the powder dry? LOL!
I'm feeling pretty good about my VXX 57.54 basis and SRS 12.28, took some partial profits on both this AM.
I'm feel like the spider today, just waiting....and watching the USD/TLT for signs as usual.
Have a profitable day!
Very little panic, however?
If it's present, I don't see it. Yet.
-FYSXX (Dec 50 puts)> bid 0.09/ask 0.13
Zero volume.
Re: China Full of Schist
shark - You left out the part about how China enabled US debt. They did this knowing full well how global trade balances revert to the mean, it was only a matter of time and they get what they deserve IMO. Doesn't sound like they're complaining too much though (yet), I think they knew what was coming and they're accepting it for what it is.
Medium term this is bullish for US manufacturing.
Re: Very little panic, however?
Yes, curious about that. People see China falling "one off" and think that one swallow doesn't make a summer?
Wait and see remains the catch word.
closing my puts this AM
Closed puts on BC & CAR - this was a great gift - trading portfolio up 20% this am
still holding som Oct 15 puts on DTG - waiting for order fill...
Dave
Re: Sights on TBT/gold/NGas
Craig- Yes, I've never had much success trying to jump moving trains. The alternatives are:
(a) Waiting.
(b) Looking at other targets on the watch list while the crowd is distracted.
Re: Very little panic, however?/Maybe it's the scent of
intervention in the air, Les.
Or maybe the uber-contrarian trade here is to buy the dip?
Then we have David switching his drink to FAZ with a 'boost.'
...
Re: -FYSXX (Dec 50 puts)> bid 0.09/ask 0.13
SPY Oct 60 puts seeing a bid. Huge volume 61-63
Two ways to trade the emotions of others
(a) Fade the prevailing sentiment.
(b) Wait till it's all spent, and clean up at the end.
If gold/silver are last to leave, not looking good?
...
Re: Very little panic, however?/Maybe it's the scent of
Quick glance at Ford's daily and weekly. MACDh is doing its down leg on both. Just shorter time frames that are of course showing massive oversold signal because of this morning. Expecting rebound and will look to average down at peak before prices hit the skids again.
F still showing a sell alert on RSI app.
NLY
Taking an initial position @$16.45
The much-heralded, widely-anticipated, long-delayed sell off
Maybe that's what it is, Les. Now it's here, and a non-event. To get panic, we need another 200 points on the DJIA.
COF
don't look now but it's about to go positive. I guess higher charge offs in July won't keep it down.
Re: The much-heralded, widely-anticipated, long-delayed sell off
that's exactly what I'm thinking 2nd. Market's showing tendency towards morning movement and holding the rest of session.
Orderly evacuation has begun. Like in films, when the disaster is about to occur and people still find themselves trapped in the city (market) , then disorderly evacuation commences.
Re: COF
wow this is one strong stock.
FD:
no position but thinking about shorting right here...
Re: The much-heralded, widely-anticipated, long-delayed sell off
"disorderly evacuation"
Ah, what a phrase, one my seven-year-old would appreciate. My favorite trade is fading the kind of panic that leads others to disorderly evacuate.
Bear trap (pause the refreshes) or bull trap coming down?
This is the kind of philosophical discussion only conceivable to those in cash. Everyone else is trading right now.
Re: The much-heralded, widely-anticipated, long-delayed sell off
"disorderly evacuation"
Sounds like something one might expect with a bout of food poisoning....
Re: COF
I'm thinking black box trading TOF.
COF should be dropping according to MACDh, but like a zombie (bank) keeps on rising, with little volume.
How about you, TOF? Do we close higher or lower than 982.73?
...
Re: How about you, TOF? Do we close higher or lower than ...
i have no idea but it looks pretty weak so i would say lower. I thought it would bounce somewhat after the Empire report but no such bounce. I closed my August $102 SPY puts today for a nice double. sitting in cash now.
Re: COF
This traded perfectly from a technical perspective. It ripped back up to just below Thursday and Friday's highs and then dropped. I don't know why we didn't see this. The daily/weekly RSI's are starting to move into that setup Bill talks about so much (i.e., Daily RSI's moving lower while the Weekly is moving higher). Technically, it looks very overbought. I suspect the strength today came from a technical bounce and from the announcement that the Fed is extending TALF.
Re: COF
Why RF, F - the crap tries to rally but the 4 horseman are flat or falling?
GS - dead as a door nail.
Almost gave up on F but caught it rolling over at 7.51 and averaged down to 40% allocation.
With the big names flat, I'm a little more aggressive shorting Ford.
AUY
Out in the 8.50's
Did you guys see Y.E. Yang kick Tiger on the ass this weekend?
Yang took it to Tiger in a big way....it was a long time coming.
Re: COF
yes, see what you're talking about. pinging around like a pinball from bottom band to top band of BB's. Watching stock charts 5 mins would have provided a timely heads up to short.
This game never gets dull.
Re: China Full of Schist
"Add to that the concept of VERY uneven economic development (an hour in from every eastern city and you're back in the 19th century)"
I was in China last year and had the opportunity to travel in the countryside.
It was a little surreal. Like you said, an hour outside the city and they were literally using plows pulled by cows etc.
In a country which is growing so fast and can't provide enough of its own food I was amazed that it wouldn't try to speed up its agricultural processes. They face some very complex problems.
C
Looking pretty bullish. I wouldn't be surprised to see it move up big.
Drop and squeeze - the new daily game
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Re: C
I'm sick to my stomach at doing this but I bought C at 3.98.
Re: C
watchout.. C is turning south
HNU.to>>opened a position @ $USD 3.0265
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Re: C
haha - I gave Ford the drop for a Big Mac and change. Didn't like the action and it proved me right by 'stepping' up slowly but surely.
It's since gone flat, but I fear the power of interventionists, so I will reassess at closing.
Re: C
No dude....C is a solid daytrade buy here. I also think that in the coming bullshit stock market recovery (total detatch to reality) C will be one of the big weinners.
INCY was an imminent breakout warning of JL's
http://chart.ly/q4z7c3
It's back above Friday's close and looking to go higher today. For those in the daytrading crowd.
needless to say dyodd
Re: C
It may be a day trade, but check out page 3, paragraph 4, stating with "Commericial real estate is a $3T.
Food for thought.
Re: C
The quick view:
Commercial real estate is a $3T problem for CMBS holders, but also banks and insurers, which hold the whole loans that contribute to over 70% of the problem. Mall vacancies over 10% and office vacancies over 15% aren’t helping. The Federal Reserve wrote down losses of almost 30% in commercial mortgages and almost 40% in residential mortgages in its Maiden Lane balance sheet, while Citi continues marking both residential and commercial loans and securities at 90-95+ cents to par. Citi has an enormous CRE book and a further 20-25% write-down on its CRE assets would easily drain all of its equity. All you need to do to see how deep Citi’s valuations are embedded in fantasyland is go check out some strip malls and office space uptown.
Proportionality
1987 crash, 20 Standard deviations
today...less than 2 standard deviations...if people are feeling a lot of pain here, then they don't belong in the game IMO
"tremor not an earthquake"
Re: C
I closed my position out at $4.00...Heading to a meeting. My trade was only a trade. I'm fully aware of the problems you noted and wouldn't feel comfortable holding it long term yet.
FDIC broke?
So one thing I've been hearing a lot about is that FDIC is out of money. A guy I follow closely (who has been mentioned here - Chris Martenson) did an analysis of FDIC's losses. Like Kaimu, he looks at their actual statements to see how things are going. Apparently, actual losses from bank closures are 92% higher than announced (or anticipated losses).
This is because the FDIC bases its initial estimates of its losses based on the bank's valuation of the loans in its portfolio, which are presumably marked to fantasy right now. Unfortunately, the FDIC must actually go and sell these loans, which are fetching a LOT less on the open market than the fantasy numbers would suggest.
Based on all this math, he speculates the reason the FDIC isn't closing more banks is simply because they don't have the money. Think the FDIC running out of money will be a newsworthy event? Sure, they can go to the treasury for more dough. Think they want to do that? How does that mesh with "our economy is recovering, getting better, etc?" They get a new traunche of cash in Sept from the special assessment. Perhaps they are waiting for that. The new cash should get them another few months. But then what?
Even more exciting is that the commercial real estate cleanup hasn't started yet.
Re: FDIC broke?
Do you ever notice that when rational people write about banks a certain trend develops.
marked to fantasy
fantasy numbers
fantasy land
Disney land
"Listening" to the paint dry
Was most amused by a piece of music coming through the classic internet station I listen to. Never heard music by Paganini but found this great:
http://www.youtube.com/watch?v=5XSng-PkNBg
Video not great, but the music is the best example I could find on Youtube.
Impressed by the violinist? Watch him go to work as a 12 year old:
http://www.youtube.com/watch?v=Xt6nzIy66eQ
Re: gold here
So, Dr, then you must actually BELIEVE that the US is going to REPAY all this debt WITH interest, and without devaluing the repaid money?
GET REAL!
Ain't gonna happen, no way, no how! The pile of debt is already at STAGGERING heights, and that doesn't include all the unfunded promises unaccounted for like Social Security or Medicare!
Re: gold here - and natural gas
"So, Dr, then you must actually BELIEVE that the US is going to REPaAY all this debt WITH interest, and without devaluing the repaid money?"
Precisely. There is no way this debt will be repaid without devaluing the currency. The sad thing is that those who are invested in money markets may be left holding the bag.
2nd, fundamentally long term natural gas will still go down, but for short term trades (Sep-Nov) it is starting to look attractive. I have traded HND profitably about 7 consecutive times this summer (every time there was a spike up), it's about time to try the longs just for the Claudettes and Bills (the hurricane) out there. Problem is that storage will overflow in the same period, so nothing is without risk. Those who trade options and straddles, gas.to now offers options, very thinly traded a couple of months out, but at very low max. moves to profit required (in the range of 6-10% for October to December in-the-money options).
Re: gold here
On short and medium term anything can happen. Gold and silver just gave me another sell signal today. Precious metals have not done anything right since that last high in February. Yes, the dollar has fallen, but so did gold and silver. Is that strength? Not for me. In fact, PM has been one of the worst positions of all possible since the stock market turned up in March. So, lets say the stock market goes down a bit from here. PM goes up? I would rather bet on that it goes down.
Gold needs to break through 1032USD/Oz and set a new high on heavy volume in order to say that it is in a short and medium term bull market. The long-term trend is up however.
/long 1 Oz coins
EDIT: approx. 960USD/Oz for short term up, 1032USD/Oz for medium term up, long term is up as long as approx 700USD/Oz holds. A huge sell of here is the perfect storm. Just like WTIC retraced to 50USD/barrel in January 2007, but ran up 200% into the summer of 2008.
Re: gold here
Yes, but I think its a long term move, not measured in days or weeks, or maybe not even in months. Our creditors will decide when they have sufficiently exited or hedged, and THEN the dam will break, slowly at first, and as the dollars come home, its value will decline dramatically, and those left holding them will be no better off than those left holding any of the other major currencies that have collapsed over time.
I was thinking about a confiscation... I came up with the theory that we are already seeing a gold confiscation, but its a voluntary one, run privately, that appears to be collecting up about 400 of the 600 tons we exported last year. Cash for Gold. You see it everywhere. They are taking what they can get on the cheap and exporting it out, as long as the government and central banks are suppressing the price. What happens when the volume dries up to a trickle?
Yesterday and last evening, many here were questioning my sanity
Genius walks where we mere mortals cannot see. It's merely a reflection of fear.
Re: Yesterday and last evening, many here were questioning ...
100% on the money Nemo - onwards and upwards
Re: gold here
Nah...it's just as Kaimu points out...they will confiscate through the GLD. It has many times more volume and cash flow than cash for gold schemes on TV.
Scrap gold isn't a big part of the pool. It only gets big when gold reaches it's high or near...ASAMOF, that will be one of the signs we're near the top, when J6P gets in on the game it's almost always the top. Same for the markets, real estate, etc. The greater fool theory is what we live for.
Re: gold here
The only way the enormous debt can possibly be "repaid" without devaluation is to keep rolling it over long enough for the economy to grow out of it.
The debt isn't going to just magically evaporate or currency escape devaluation, I see a combination of both: 1) Perpetual rolling over of the debt and 2) Gradual devaluation of the currency. Because the strong $USD makes American exports less competitive in the global market and the time has come for America to earn her way instead of living large on a helium filled credit bubble.
Investors really need to work on their imaginations as opposed to always migrating towards the most crowded trade, sheesh, this roller coaster ride is getting seriously old...
trades today
As 2nd_ave pointed out already, 2/3 of the sell limit orders I placed on SKF last were executed: one at $30.25 and the other at $30.50. Also, I just sold manually around 7% of my SRS at $13.30, so as to start the game of catching all SRS fluctuations.
To my surprise, I saw that the total value of all my 3 trading accounts (Scottrade, ETrade and OptionsHouse) went down by about 0.3% today. If I wouldn't have my shorts, however, then accounts would be off by 7-10% today, which was the average hit to my remaining highly volatile commodity positions. And that is despite the fact that in a preparation for this sell-off, I was gradually selling my long positions (all my SLW at $9.90 two weeks ago and PNP.TO at CAD$1.81 last week). I guess the total short bias to my portfolio was not as large as I thought it was...
So I am thinking now that I shouldn't be too eager to reduce my shorts at this point, and hence I just placed a buy limit order at $30 for the SKF shares I sold today at the average price of $30.37. Also, I just placed a buy limit order at $13 for the shares I SRS I sold today at $13.30.
The interesting thing to note is that if today's sell-off is the beginning of the next leg down, then the growth of my ultra-shorts will compound over time while the absolute loss on my remaining long positions will keep decreasing over time. So even if my portfolio is market neutral now, it will become more and more "short" as this sell-off progresses, assuming I will not be taking gradual profits on my shorts.
Time Preference
We don't focus enough on time, IMO.
If you believe in hyperinflation (I do, eventually), then you short bonds...but you don't do it when the 'fear' is coming back into the market.
It doesn't help me to own TBT today, if it goes down 5 - 10 points and I can't/won't hold it.
Mike Shedlock (MISH) has a lot of compelling arguments for SHORT-TERM deflation (home prices, unemployment, credit cycle still creeping south, retail sales, 'frugality' (even Goldman employees told to avoid conspicuous consumption)...
So we can believe in both inflation and deflation, but accept that they occur on different time spans. For example, maybe silver goes to 50, but if goes to 10 first, will I hold? That's the beauty of Bill's teachings/algorithm.
Re: Yesterday and last evening, many here were questioning ...
nemo - They came to interrogate me last night as well, I told them to get the heck off my front porch and go back to where they came from!
Re: gold here
I agree with dr.cosa, gold will bounce around like a ping-pong ball, first up, then down, breaking gold bug hearts left and right. Right up until we encounter a tipping point. There will be the gold market before this event, and the gold market after the event. I'm guessing it won't be easy to get on board after the event.
My historical cases include the many devaluations in europe during the 1930s involving massive debt defaults, Argentina in 2001 and Vietnam just last year. One day the government will change its policy, and - well I hope you have gold before that happens.
Vietnam "temporarily banned gold imports to help fight inflation" last June, 2008. I could find nothing about their resuming gold imports. Its amazing what governments can do under the label "temporary."
http://english.vietnamnet.vn/biz/2008/10/810632/
Just for the record, I think we will get some kind of warning before such a thing takes place. I don't think it will be a bolt from the blue. We might even get some denials before this happens. "Oh no, we have no intent to...." and then a month or two later, they do exactly that.
Is the dollar setting up for a reversal tomorrow?
http://futuresource.quote.com/charts/charts.jsp?s=...
Re: Time Preference
huh, didn't realise I was looking at MISH's writing over at Minyanville.
A pertinent remark (not from Mish) that chimes with Ron Sen's post:
"Ok, so what can this possibly mean? Inflation and deflation at the same time? Stagflation? Let's take a look.
Inflation is an increase in the money supply. When the effects of that increase are rising nominal prices then the real value of money is eroded. We have had inflation for decades now, which necessarily sows the seeds for deflation, and which can only occur after a prior inflation. Stagflation is a stopping point in that transition.
Deflation, however, occurs when the money supply EVEN IF INCREASED fails to exceed the demand to hold dollars at the prevailing price level. This is important to understand. Following nominal price levels alone will never yield an accurate view of whether we are experiencing deflation. Over the past two years, the money supply has increased dramatically, but the velocity of transactions has continued to decline because people are using those increased dollars to destroy debt, or simply saving them.
This can clearly be seen in the monetary aggregate charts. (See the charts here via St. Louis Federal Reserve). Pay particular attention to the chart of M2, because that is the area where Fed expansion policies have the least impact. If you want to understand what keeps Federal Reserve Chairman Ben Bernanke up at night, then all you need to do is consider how much Fed activity it has taken to simply prevent M2 from totally collapsing."
http://www.minyanville.com/articles/gold-+dollar-+...
So, sock away enough money, then the consumer begins to feel like consuming again, and watch out!
Re: gold here
"Nah...it's just as Kaimu points out...they will confiscate through the GLD. It has many times more volume and cash flow than cash for gold schemes on TV."
Total value of world's gold reserves on June 23 (when gold was at $921) was $1.2T. GLD itself only had $32B! (http://shockedinvestor.blogspot.com/2009/06/total-... ) .
It would seem that the importance of GLD and gold itself are a little over emphasized compared with the many trillions that have been printed recently. GLD in particular seems like peanuts.
cancelling the sell limit order for a part of my SKF
After giving a little more thought to my portfolio and to the appropriate trading strategy, I decided to cancel the sell limit order for SKF at $31, which I placed last night for 1/3 of the SKF shares I had in Scottrade at that point (I also have some SKF in my OptionsHouse and in my ETrade accounts). I also cancelled in my Scottrade account the buy limit order at $30 for the SKF shares I sold today at $30.37. Since the total value of my Scottrade account went down about 1% today, then I figured I should keep some SKF there alongside with FAZ, SRS and FCX short.
I also realized that if I want to make money on all fluctuations of ultra-shorts now, then I should instead do that at OptionsHouse, which charges $2.95 flat fee for stock trades instead of $7 at Scottrade. So in addition to a buy limit order at $13, I also just placed a buy limit order for 125 shares of SRS there at $12.50, while still keeping the sell limit orders for 125 shares each at $13.50, $14, $14.50, $15, $15.50, $16, etc.
It will be interesting to see, by the time SRS reaches $16, if I would have been better off keeping all my SRS and selling it at $16, or if this "incremental" trading strategy (selling a little SRS for each $0.5 increment in price and buying a little for each $0.5 drop in price) will give me more profit. This is just a "fun" experiment, which I had always wanted to do. :)
Mr. Mortgage and the Foreclosure 2nd Wave
Mr. Mortgage (Mark Hansen) has a new article and some great charts on the 2nd foreclosure wave. To summarize for the busy executives on here, it boils down to increased NODs, increased NTS, but no increase in foreclosures because of government intervention. His contention is, there is a continuing buildup of "foreclosure-ready properties" out there just waiting some event to convert them into housing supply. What will this event be? That's anyone's guess. How far we can kick the can down the road? Right now that seems to be policy. But this will definitely show up in NPA percentages on bank portfolios - perhaps that's why 300 banks have 5% of assets non performing.
My guess is, just like the homeowners who are "renting out their properties a year and hoping for a rebound", banks too are attempting to refrain from foreclosures all the while incurring penalties & interest on the former homeowner, hoping for a rebound in prices in order to increase their eventual recovery rates - a "call option" on the housing market. Think that bodes well for a property recovery, when both Ma & Pa Organic AND banks are waiting in the wings to sell at the first sign of a bounce?
Low previous savings rates, 36% of homeowners near-underwater, and upwards of 20% americans "employment impaired" should keep those NODs coming.
The nextissue for me to ponder is, how will this all manifest, and at what point does it become a trade?
http://mhanson.com/archives/96
Re: gold here
SiO2 - "t would seem that the importance of GLD and gold itself are a little over emphasized compared with the many trillions that have been printed recently. GLD in particular seems like peanuts."
Good point, it's amazing how stable the POG is in comparison to the $USD, you would think with the multiple trillions of dollars that move each day a gnat like gold would be all over the map. Yet it isn't really.
Just imagine the effect if some larger than normal percentage of the fiat sloshing around suddenly decided to chase gold... POW!
I was a happy bird last night when I found the meat I usually buy at the grocery store back down to prices of early last year, an almost 8% decline...
Re: Mr. Mortgage and the Foreclosure 2nd Wave
Davefairtex your guy is largely commenting on California. Yes there are waves and yes there are those who will make some tough decisions. Have you noticed the sheer number of boats and RV's and skidoos for sale on roadsides? The rest of the world is not so strapped (or hunkering down) and banks are seeing the value of postponing NOD's to work with borrowers due to their much bigger losses if they kick everyone out. A vacant home creates havoc in the neighborhood...lowers values and so do homeless people create demands on the local economy. The very fact a bank will LOSE big time in legal, maintenance and of course even lower sale prices than they predicted is giving them cause for pause. Besides which modifications do buy time if nothing else. In our area (PNW) for example some price ranges are stabilizing. There is fierce competition for lower value homes for first time buyers actually bidding them up.
Re: cancelling the sell limit order for a part of my SKF
Seems like hard work to put in all those limit orders. I'm looking for the 50 day EMA to cap the movement for the short ETF's or the 7 day RSI to get above 70, drop, and then retest 70 for an opportunity to close the position.
I also try to keep my commissions to 1% of the trade so my profit isn't eaten up.
JMO, good luck/trading.
Did C halt trading?
and then resume? chart looks like it.
correction? What dorrection? I don't see any correction!
buying Dec $4 puts on C
Just bought Dec $4 puts on C. Looking for newly rumored changes in MTM accounting to push this one down in the near future.
Dave
Here Come the Bears
There is already too bearish a consensus...this pullback won't last.
Gold
When my small town paper had an article on gold on the 2nd section in May, usually reserved for local sports, farmers with unusual farm animals, etc, my antenna went up big time.
I had lunch today at BK. Watching the Fox News Channel, here's freaking G Gordon Liddy touting gold. Double antenna raising
Toss on top of that the RSI miners scan which showed a couple miners giving a sell signal and I'm less than enthusiastic about gold...at these prices.
FD: long DZZ
Re: Mr. Mortgage and the Foreclosure 2nd Wave
loannetter, Mr Mortgage has definitely observed that the lower end is seeing some bids now that those properties are getting closer to that rent/own "fair market value" level.
However, he claims that the high end is just starting its move down now. Is this just in California? What's average time on the market for higher end stuff in your area? Has it increased, like in California? Are you seeing more or fewer move-up buyers where you are?
His speculation as to why the delay in the higher end property value crash is because those higher end homeowners had more of a cushion, but they are running out of cushion now, and the move-up buyer has been largely taken out of the picture by being underwater and employment impaired. If you can't sell your house and use the proceeds as a down payment, you aren't going anywhere.
This higher end property crash is having the perverse effect of actually raising median prices, because instead of being non existent (because they were listed at 2007 prices), they are now some being sold at significant discounts - but with much higher average selling prices than the lower end homes, which raises average selling prices. Bad news marketed as good news.
One more point to make. Bill's TOG says, "the 35 year bull market in bonds is over." Since a home purchase is a long term trade, a generally increasing interest rate is distinctly bearish for home prices, because as you know, affordability goes down as interest rates rise.
All of this stuff tells me, don't buy now because you want to make money. Buy now if you really want to be in a home, and it costs you less to buy than it does to rent.
Re: Gold
bsi87
"Toss on top of that the RSI miners scan which showed a couple miners giving a sell signal and I'm less than enthusiastic about gold...at these prices."
Take a look at gam.to; beauty may be in the eye of the beholder but that is one ugly chart.
March lows
A parade of talking/writing heads have been saying all along that any pullback would not retest the March lows and being very insistent about it.
I don't think I heard/read one so called expert who said the lows would be retested, more like there'll be a slight pullback.
Expect the unexpected or at least, prepare for it.
Re: Time Preference
"Following nominal price levels alone will never yield an accurate view of whether we are experiencing deflation. Over the past two years, the money supply has increased dramatically, but the velocity of transactions has continued to decline because people are using those increased dollars to destroy debt, or simply saving them."
This is what happened in the 1930s. People were afraid to spend. When you have little or less income than you had you won't spend. When you have no income you can't spend.
There is another aspect of deflation which is important to consider...
We have too many goods available — too many houses, cars, shopping malls, offices, too many apartments. Interestingly, the CPI was distorted and hiding inflation due to using "owner equivalent rent" as the housing number. The same thing is no minimizing deflation. This is 41% of the total CPI.
To increase velocity the increase in the money supply must be more than the surpluses in all of the above categories. We're talking $ trillions — one estimate I've seen is $30 T!, but I have no idea how accurate this is.
Medium to long term outlook...
I have the following view...
Generally speaking, I feel the overall standard of living for Americans is going down. There is a decrease in wages, higher taxes for an already excessively taxed population, and a rising unemployment.
Basically, the middle and lower class will end up saving what they can, and buy only necessities...food, gasoline, electricity and wait for better times ahead. At this point I don't see any signs of a significantly better economy coming along in the U.S. Most of the country has over-built and there is an oversupply of housing so construction is going to be minimal.
So I think commodity prices will go higher but everything else will deflate due to lack of demand and oversupply.
So how does this sound...for the medium to long term?
*Buy quality commodity related companies
*Sell high end consumer discretionary
*Buy large multinational companies
*Sell financials
*Buy low end retailers
Any comments on the deconstruction of this amateur analysis will be appreciated?
Thanks
Re: Mr. Mortgage and the Foreclosure 2nd Wave
Loannetter,
Re: boats
Not just for sale. At Lake Geneva Wisconsin a couple weeks ago I noticed how few boats were being driven. There were clusters all along the shore with people eating, drinking, just chatting and playing cards. Can't sell it or afford to run it — might as well just float and wait.
I the '30s some former millionaires burned their Tuxedo Park mansions to the ground to avoid the RE taxes. So far I have sen a lot of long-time for sale houses around me and a few walk-aways, but no destroying yet here.
change in mood
If we don't have a "5 minute drill" that at least partially saves the day today, does that change where you place your bets tomorrow?
Just FYI, I haven't closed out any more of my shorts today. I will wait for those daily RSIs to show a "buy signal" before I collect on any more of them.
RSI calculator
doesn't appear to be working.
just sold a little more SRS
A sell limit order for another 125 shares of my SRS (which is about 7% of my total SRS position) was just executed at $13.50. I already have buy limit orders for 125 shares each at $13 and $12.50, so I am just waiting now to see what happens next. If SRS keeps rising, then so be it -- I'll keep gradually scaling out of it with profit. If SRS takes a dive tomorrow (which is reasonable to expect after today's sell-off), then I'll re-load the shares I sold today at better prices.
FXP
sold some for 16% gain.
Re: change in mood
I think they'll (the big boys) will try to gap the market down at the open to trigger the sell stops set today from the bulls and the buy to cover orders from the bears.
Re: Is the dollar setting up for a reversal tomorrow?
Looking at FAS come close of day. Noted entry point and thought of buying but saw how quickly bears were wrestling with the bulls at the end there.
Wondering if bulls will win come tomorrow, as 79.40, originally support in that bearish intraday triangle now looks like resistance for Uncle Buck (that or an imminent breakout).
http://futuresource.quote.com/charts/charts.jsp?s=...
I've no money to risk on such bets. Wait and see.
night all.
Re: Mr. Mortgage and the Foreclosure 2nd Wave
re: burn downs
There was a recent article in USA Today about cars being driven into the desert around Vegas, stripped of anything worthwhile, then burned for the insurance money.
no rally at end of day
Is this just another trick by HB&B, or was the market actually speaking clearly today for the first time in a while?
I got stopped out of all my gold miners today. It will be most unfortunate if the buck tanks tomorrow... :)
Re: cancelling the sell limit order for a part of my SKF
"Seems like hard work to put in all those limit orders."
Not really -- less than a minute per day. :)
"I also try to keep my commissions to 1% of the trade so my profit isn't eaten up."
Are you talking about 1% of the trade profit? Common, if someone is giving you money, then you can be a little more generous when sharing with them. :) This is especially true in my case, since I don't use stops and 99% of the time close a trade only when I see a profit in it (and so the commissions on unprofitable trades does not eat up my total P/L). With my current strategy of buying/selling 125 shares of SRS for each $0.5 increment, my desired trading profit is 125*$0.5 = $75 with 2*$2.95 commission (7.8% of the intended profit), which results in a net profit of $69. I know, it is a tiny profit relative to my portfolio size, but then, if I am able to do it 10 times, then it already becomes reasonable. Let's see if I am able to collect the $69 profit 10 times before SRS hits $17. :)
If I thought we are going to be in a flat market for a while, then I would double or triple the trade size for SRS. But right now I think we are in a downtrend, and so I don't want to be too eager to sell a lot of my SRS too soon. Hence the VERY GRADUAL scaling out of SRS with some fun in the process. :)
Re: change in mood
that sounds about right to me. i would buy a big down open for a trade or short a small down open that goes up to even immediately....
when to jump in on the short side?
2nd_ave, on Friday you took a bite out of FAZ but then said that it is better to wait for a confirmation of the downtrend on Monday before going short big time. Do you think the downtrend has been confirmed today? Or are you now waiting for a "reflex rally toward resistance" to put on shorts? If so, what resistance level for S&P do you have in mind?
Re: Here Come the Bears
I've got to agree with you Shark - not to say a little bit more pull back can't or won't happen - but a main difference between now and when we were last around S&P 1,000 is how welcoming the general consensus seems to be towards a market drop. In other words, the nervous nellies that were here to incite panic selling back in 10/08, 11/08 and 2/09 aren't very much invested in the market IMO. In order to return to the levels of panic of a few months back, there would have ot be some very unexpected destabilizing geopolitical event I think.
Re: Here Come the Bears
"There is already too bearish a consensus...this pullback won't last."
Shark, I think we should not confuse expectations of something happening eventually with the fear of the opposite lasting a little longer. In this respect, the current situation is almost a mirror image of what was happening near March lows. Everyone understood that the market is greatly oversold and everyone was waiting for a rebound, but people were afraid of buying in big time too soon, since every day the market was plunging by a significant amount. The fact that everyone understood that the market is greatly oversold and everyone looking at the long side and waiting for a rebound to happen any day did not prevent that rebound from happening and lasting for a LONG time. Similarly, I don't think that the current realization of the market being greatly overbought and everyone looking at the short side (but not necessarily participating fully because of the fear that the recent rally continues after a small pullback) will prevent this correction from testing March lows.
Manufacturing to lead us out of downturn?
Laughable if you ask me, but here it is:
http://news.yahoo.com/s/nm/20090817/bs_nm/us_usa_e...
"...New York state factories grew for the first time since April 2008, suggesting manufacturers could lead the economy out of its worst downturn since the Great Depression."
Um, how insignificant is manufacturing in the US now?
http://www.bls.gov/news.release/empsit.nr0.htm
Looks like 9% of non-farm employment is in manufacturing with about 12 million people still employed in that area.
Given the long term decline of manufacturing, large amounts of local and global overcapacity, i don't see how that will be leading anything upward for quite a while yet...
Verizon link to Bahamas was out all day
MIA. Sorry, but I have different computers with different OS and different ISP's -- cable and dsl -- and I had no access to this site all day, but all else seemed to be ok.
Tough day all around. Time for the Hash.
Re: RSI calculator
Yeah, sorry about that. I know how to fix it, but since my only real net access is via my cell phone right now, I'm going to wait until I'm home. It should be up later tonight.
Re: Gold
I don't disagree with you, shorter term, and I had sold almost all my miners last week because of it getting to where everyone was saying to buy gold, but at some point the chickens will come home to roost for all this currency debasement.
When I see big volume COT commercial covering, I'll be tagging along on their trade, again.
Time for the Hash.
Bill,
Are you trying to get me and Shark down for the conference in January. Or do you mean HHH.
Bob
Re: Manufacturing to lead us out of downturn?
proudpapa - "Given the long term decline of manufacturing, large amounts of local and global overcapacity, i don't see how that will be leading anything upward for quite a while yet..."
The article didn't provide a time horizon, so it sounds like you might be willing to agree. Possibly a prolonged (albeit slow) manufacturing growth period is in store?
And then there are other areas likely to grow as well, such as biomedicine and alternative energy. A well planned incentive program could assist progress in targeted sectors.
Doesn't sound like we're on an exceedingly steep trajectory to recovery, does it? Thank God for NAFTA and the infinite wisdom of our political elite!
Re: Gold
bsi87 - Let me get this straight, you eat lunch at BK yet you invest in WEN? What's with that, some kind of twisted grass is greener wizard of OZ fairytale or some such thing? (just kidding, of course!)
I hope the trade went to your advantage...
SHORT TERM SKEWING!
ALOHA !!
US DEBT ... I focus on that and the ability of America to "service" that debt.
Based on the US TREASURY DAILY STATEMENT last week ...
As of August 2009 FY:
Total outlays = $10.3TRIL USD
Total receipts = $1.72TRIL USD
Total Cash Flow = ($8.58TRIL USD)
Obviously the US government is overspending and that has been the case ever since I was born!
How to make up the GAP?
US DEBT ISSUED ...
Total Bills = $6.25TRIL USD
Total Notes/Bonds = $1.6TRIL USD
Total DEBT Issued = $7.85TRIL USD
Bills have a maturity of one year or less, while Notes are 1-10 years and Bonds are over 7 year maturities. SHORT TERM is where everybody is! US TBonds have only $90BIL issued.
ITS A SHORT TERM SKEWING! Where's the faith?
None of the above US DEBT issued takes into account any of the $38TRIL issued in "non-marketable" Government Account Series securities issued to Trust Funds for FY 2009.
In my book, which is one of the simplest ACCOUNTING BOOKS known to Harvard, the true "deficit" in America is $8.58TRIL USD. That is the difference between what the US government has in tax receipts and outlay expenditures. That is the only GAP I care about and the only way to fill that GAP in my book is to radically shrink the US government, so that its outlays are less than its receipts, so that means shrinking government six times smaller from where it is today. From where I live here in Hawaii, you could shrink government 100 times and nobody here would notice! That is because we have NOTHING compared to say ... PALO ALTO or HONOLULU ... Heck we can go months without ever seeing one single cop drive by!
By the way US personal savings rate 12 month average just dropped below 4% down to 3.8% according to the latest BEA data. It was as high as 6.4% earlier this year! DEBT ATTRITION sets in ...
ITS THE DEBT STUPID!
Re: Here Come the Bears
David,
I moved up my stops in my short etf's, but still plan on giving lots of room. I am betting on a trend change to the downside here, So I hope to have a strong, but not stubborn hand in regaurds to this position. I really have completely shielded myself from all business media except this board. I really don't care what everyone says. The numbers tell me the direction is down for a while. Of coarse I am hoping for a turn around Tuesday with a 50 % retracement of todays losses and I will press my short positions.
Bob
Re: SHORT TERM SKEWING!
kaimu - "From where I live here in Hawaii, you could shrink government 100 times and nobody here would notice! That is because we have NOTHING compared to say ... PALO ALTO or HONOLULU ... Heck we can go months without ever seeing one single cop drive by!"
Similar situation for my location as well, but with a slight twist: I own my own water and sewage systems for which I bought and paid dearly for and am taxed on the improvements on an annual basis, but to add insult to injury, they increased the County property tax rates a couple of years ago to pay for installation of a public water system that will serve only a minority of residents. The remainder of us are having to pay not just for our own systems, but also for the privilege of providing water for others.
SPX valuation
There is a web site - CXOadvisory.com/status that uses two models to value the SPX. They have a very good track record in forecasting. Both their reversion-to- value and real earning yield models show SPX at approximately 750,now and through 2010. That's 25% below where we are/were and if we go that far down we will probably overshoot to March low of 666.
DYODD
Dan
Re: Mr. Mortgage and the Foreclosure 2nd Wave
My understanding is the burning of the houses was not part of any insurance fraud just the owners getting rid of them.
Kind of risky to chance a charge for scamming the insurance company for the value of a car. Yikes!
Re: Manufacturing to lead us out of downturn?
CP,
"Doesn't sound like we're on an exceedingly steep trajectory to recovery, does it? Thank God for NAFTA and the infinite wisdom of our political elite!"
Thanks for a chuckle to wrap up the day. Actually had a good last week and a pretty good day today. I think we may be in for a fairly good pullback here. Whether engineered or not bonds are doing just what I want.
Making my list
I'm still not sure of the trend of this market over the next several weeks/months as this prior run was a tremendous one and it seems to me that the run can't possibly die in two days. With that in mind, I do see the overwhelmingly negative structural issues as presenting problems for the bulls over the next few years. In the meantime, I'm going to make up a list of what I believe are the top long term trends that we should be investing in and then within those groups which stocks are the best so that should we get a long pullback, I will have a good price at which to buy into a business that I believe has a lot of good long term growth ahead of it.
Re: Manufacturing to lead us out of downturn?
Grym - I'm mostly in cash, and what I think is better than cash. I view Treasuries on a nearly equal basis as cash, just my jaded view perhaps.... But please buy up those Treasuries, I need a steep yield curve if you please.
When they finish taking this market down, I'll jump back in.
Re: Making my list
TOF - I'd like to take a gander at your list if/when you're so inclined to share. ;)
Gold
Down, but not forgotten...
Re: Gold
CP - Gold down but not forgotton? Try this trade: Long gold short silver.
Better entry point woulda been yesterday, but still. Looks like a clean chart to me.
http://stockcharts.com/h-sc/ui?s=$GOLD:$SILVER&p=D&b=5&g=0&id=p93303949705
Re: when to jump in on the short side?
David- Sorry for the late reply. I opened a position in NGas (HNU.to), and then decided to spend the remainder of the day on matters non-financial (as Brinker might say).
What would 'confirm' a downtrend for me? I don't know, but today didn't do it for me.
From past experience, I know better than to worry about being 'left behind.' There are trading opportunities every day, and 'Don't lose money' is still the king of rules. Let's face it- if I had held onto FAZ last Friday, I would have sold it this morning. Whereas a 'trend play' (in my mind) would mean a position that I feel comfortable holding for a longer period.
I keep thinking back to last March, when Doug Kass' introduction of the 'generational low' into our commentary provided the conceptual confidence for me to invest the buy-and-hold half of the portfolio for 6 weeks. Not sure what it would take to give me enough confidence to hold short positions for 6 weeks. I'll find out. (And the answer may be I am unable to hold them for 6 weeks. Being long and being short are very different games.)
Re: Making my list
I have a feeling it's going to take a while to make this list up...what industries to you think we most benefit from structural changes going on in the world? Resources come first to mind given the rapid population growth over the past 20 years...
Re: Gold
BSI87 "Watching the Fox News Channel, here's freaking G Gordon Liddy touting gold. Double antenna raising"
He gives me the creeps. Isn't it wonderful that a "major" TV network keeps his name alive? Its been more than 35 years since his little boat capsized under Captain Nixon.
That aside, gold reacted down today as most commodities, but to a lesser extent.
Re: Gold
davefairtex - Now that's what I call putting your nose to the grindstone... Nice idea!
Re: Making my list
TOF - Well to be honest, I hadn't been thinking lately in terms of sectors, I've been thinking more along the lines of mispriced value. A few off the top for consideration might be:
NTLS
HRS
DISH
Re: Time for the Hash.
Bob- I know you know (about the drinkers with a running problem), but there may be readers who don't:
http://nassauhash.com/
At least they're not traders with a disorderly evacuation problem.
Re: Making my list
FAN, ETF. Top of long term list. Oil/Gas as an interim play. Energy will rule.
Here comes Bill Bill
This one should leave you alone there in Nassau (knock on wood), but I wouldn't be sailing to Bermuda mid week. Happy Trading
Re: Time for the Hash.
bobbyo,
Tonight I invited the Nassau Hash Harriers to the Conference. We'll have to see how that works out. But, I think you'd like to join their run/walk. Lots of fun. We had a visiting HHH tonight from Phuket Thailand.
Re: Making my list
One company I like for the very long haul is ORA (worlds leader in geothermal technology and production). Stable company with long-term cash flow and modest dividend. There seem to be some very high barriers to entry in the geothermal market due to high capital requirements and technological expertise. I think its somewhat fully valued now but I'd like another chance at it in the mid $20-range where I'd consider holding for 3-5 years+
Re: Making my list
Billy, that one sounds interesting, although FCF aren't so hot. I wonder if that's an industry wide thing.
I agree with Illini about FAN, although i'd almost rather invest directly in Gamesa and Vestas. I don't like a couple of the holdings in there. TAN is an interesting ETF as well...
Re: Making my list
I think the ugly look FCF number for ORA (Ormat) is deceiving due to the nature of geothermal development - very high initial construction and start-up costs but backed by very reliable long term revenues. Still need to do official DD to clarify that issue but that is my intuitive stab at the reasoning.
Bill, if I did not know better,
I would swear Dr. Hunter S. T. was alive and well in Freeport....!!
Re: Time for the Hash.
HHH at the conference? Is this a working conference? At least you will not have to worry about entertainment. A hash would be a lot of fun. I know I have had a great time each one I have attended. The hashers certainly know how to loosen people up. By the way how do you pronounce Phuket. I pronounce it with a short U sound, but on T.v. I heard them pronounce it with a oo sound. Gee Bill not only don't I want you to teach me world markets and trading now I want a phonics lesson. Well just Phucket.
Bob
Where I stand...
CP- I wanted to respond to your comment yesterday about my thoughts on the market direction. I've been trying to get short for the past month or so. Mostly with positive outcomes. Although this has been a very small percentage of my portfolio.
Why? As you know, I'm new at this and rely on Bill, and all here as much as anything else. But I do get some pretty early indications from the clients I work for that have a pretty good first hand look at current prices. Their take...things are stabilizing. Job reductions are almost done and earnings increased due to cost cuts, restocking, China, and the STILL to come bulk of stimulus money. However, none of them have suggested their stocks are under valued. I remember posting about 8 months ago that a market recovery would out pace economic data. This has happened. Did I play right? Not really. I lost so much money before I took over my account about 1 1/2 years ago that profits were taken quickly in a defensive reaction.
So, to the point. Where do we go from here? Obviously I'm not confident one way or the other. But I will continue to play the short side as the risk to reward seems in my favor. I'll continue to play for quick profits, as I stopped averaging down about 2 months ago. All of the stocks that I last sold are now below the sale price.
HOWEVER, I am starting to look for companies that I would like to hold for more than 24 hrs. TOF is working on a list and so am I with some help from above.
GL.....OK, OK....damn it. FTWR at sub .40 is a buy!!
Re: Making my list
Has anyone done any research on SYNA? I have traded IMMR several times because they are in the thick of a theme (touch screen technology) that I think will take several years to play out. I believe SYNA is the other major player in this area; however, they offer different technologies. IMMR is focused on force feedback or "haptics", which adds feedback when touching screens on mobile devices, auto touch screens, and many other applications (e.g., when you type a text message on a touch phone, each time you hit a key it "feels" just like it would if you were typing on a keyboard). I've done a lot of research in this area and I believe this (touch screen devices) will be a huge growth industry for years to come. Applications include everything from game consoles (think Wii controllers), cell phones, touch screens on the dashboard of cars, robots used in surgery, and slot machines at casinos...
Re: Making my list
teamonfuego.....try this page: http://thepatternsite.com/RSUpdate.html
Sectors/industries by relative strength. I think it's updated daily. I've been using it to select the strongest sectors, then going through charts of each in all time frames to pick the best trending charts of the strongest sectors, then which is basing, breaking out, how much room they have to run into resistance, support if there's a correction, etc. etc. It gives me a nice list to go over on the weekends and where I will take partial profits, set support and so on. I get in on a pullback if possible or on the break, take half at the target, move my stop up on the remaining shares and let the market decide. Either it continues or it takes me out. I'm looking for stocks that will run long but start it as a swing trade.
I have been able to find trades in each strong industry and some even did well today while the rest of the markets pulled back. Example: J. Lee posted INCY over the weekend, I've been watching it for over a week and was in before he had it as an "imminent" breakout, which it did today.
This system has been working for me and free's me up from monitor monitoring on a constant basis. I've also been using conditional/one cancels the other type trades. If I let my computer trade for me my emotions play less a part, which is good for me.
Re: Where I stand...
Mark - It's reassuring to hear of your continued interest in FTWR, you know how to place a stink bid, I might do so again as well. If the Overlords are willing and the creeks don't rise, stimulus recipients will be named in November!
This Christmas season promises to be a knock-out one-two punch for retailers, much worse than last year. CRE is really going to feel the effects and mid-tier banks(the holders of a great majority of Commercial Real Estate) will feel the brunt.
On which Christmas turkeys will the Titans of Finance(ie: the Wall Street fat cats) first feast?
Speaking of stimulus and Overlords, can we count on a little stimuli for Kris Kringle's helpers?
For that matter, I wonder if our Magnificent Overlord will pull a rabbit out of his hat and cut military funding forever just to pay the interest on the federal deficit, or will we be witness to federal employee furloughs?
One more subject for this evening's ponder: Our political leaders should be deliberating an increase of the Federal debt ceiling (currently $12.1T) somewhere around end of year, how about I coin a phrase in advance: "The 2nd Great Confluence"?
Mr. Toad's wild ride, plenty of unanswered questions my friend...
Re: Making my list
TOF,
Are you looking for stocks up trending now or ones that will be in the future. Now the boring tire and paper sectors are in a significant uptrend. If you are in the hyper inflation camp forest product companies could be a hedge against a debased currency. They not only have in ground commodities(trees), but vast amounts of real estate. If we get a significant pull back I am going to scale into IP, CTB and WY. WY for example owns 6 million acres and has a market cap of 7 billion dollars.
For the future how about education. Although they have had a rip.Online Educational software is the trend of the future in education. Think about it. Schools are broke. States are broke. How much cheaper will it be just to give Johnny a computer at home. In 20 years a significant portion of all students will not leave their home. Most of the noise right now is at the college level, but the big money is to be made in the lower grade levels. PSO and LRN are names to keep an eye on.
Bob
Ryan Puplava
Our stock market, as of late, has shown strong market internals since the rally from July 10th. This would suggest that we have a shallow correction ahead—one investors should use to accumulate value. Shanghai led our market recovery by four months. It may be that it's leading our bear market rally by 3-4 months and that we could see a major top in the U.S. stock market by yearend; maybe on news of a lackluster holiday retail season? I can see it now in which Wall Street's old adage may apply with a "buy the rumor" rally (inventory increases and positive GDP) and a "sell the news" correction (retail disappoints yet again).
http://www.financialsense.com/Market/wrapup.htm
Perhaps explains why some stocks were being accumulated yesterday, before failing in the afternoon.
Puplava's use of market indicators
...has got me looking again at charts I've but glanced at in the past.
First up is $NYSI. The example presented here as an attachment - a link provided by stockcharts.com - is not showing the same parameters as the example provided on the website, but I believe it's correct. Here's stockcharts.com's explanation of the McClellan Oscillator:
http://stockcharts.com/school/doku.php?id=chart_sc...
Buy/sell signals generated at blue line. Of course, as can be seen by recent head and shoulders consolidation, decline issues did not reach the sell signal of zero and the advance was fairly clean following the upturn. "Watch this space" for a turnabout to the advance in the near future.
Secondly, the NYSE composite ($NYA). Again, head and shoulders fairly clear. Brief, small advances during this period did not make a change in direction (one swallow...) until the clear trend resumes on the 2nd week of July. That is the signal for the uber cautious trader, which is what I must be now.
As Puplava remarks, volume accompanying the recent rally confirmed prices. Decreasing volume on present "retreat" (let's avoid "orderly evacuation") by same logic, does not validate price. Traders are perhaps not selling, merely pausing. $NYAD advance/decline at -2400 is showing a neat trend of a series of negative readings (orange line). Can anyone tell me what $NYUD is? Appears to be used similarly to $NYAD. $NYHL? Puplava annotates $NYHL in a manner that suggests to me some sort of high/low index. It has read negative signals only briefly in the last couple of months, I'm curious to see how negative a reading it shows during the present pause.
I will impose the discipline on myself to look at these daily and if they offer some clues to the end of the present decline, will post them again.
Re: Mr. Mortgage and the Foreclosure 2nd Wave
The very high end in our area has dropped but more to the point: just not selling. I am having fun finding investors who are willing to fund (back) condos over $500K. Listings over $750K are hacked to bits. But all is possible for the A1 borrower who has the means. Certain categories are on the block due to a glut of spec developments. Equates to bad market research. The losing (holding) banks are merging with capital infusionists who get it that undervalued real estate does indeed have bottom appeal NOW. Want a nice waterview condo at auction? Bring hard cold cash or 40% down and 740+ FICO score. Buy now if you want to make a serous profit in 2 years. kick yourself in 3 years if you chicken and coulda.
Commentary from Mad Hedge Fund Trader
I’m sorry I’m late with my letter today, but the lady in front of me in line at MacDonald’s (MCD) with the four screaming kids maxed out all four of her credit cards buying some hamburgers and happy toys. Her new SUV with the chrome wheels baked outside in the summer heat. Sign of the times.
When I got back to the office, Egg McMuffin in hand, I was surprised when someone told me that the recession in Europe was over, that Germany has reported Q2 GDP of a positive 0.3%. What immediately came to mind was that their “Cash for Clunkers” program started much earlier and was much larger than ours, that they has fewer banks drinking the subprime Kool-Aid, and they saw a housing boom that was only a shadow of the mania that swept the US. Europe is also closer to Asia, does a lot more business there, and is being dragged up by the gangbusters Q2 growth in China.
But when I looked at the figures closer, I found more fudges than one of Warren Buffet’s See’s Candies factories. The seasonal adjustment was big, there was more tweaking with the number of working days in the year, and if you strip these out, the number was still negative. The fact is, that heavily export dependent German GDP is down 5.9% YOY, with the euro zone shrinking at a 4.6% rate. It will take years to make this back. So don’t pour the schnapps just yet. I think I’ll go back to being a vegetarian.
I love it. The fat lady is singing on natural gas. Not only did we plunge to a multi month low of $3.23/MCF, the crude/gas ratio blew out to yet another new high of an amazing 21 times, wiping out yet another generation of quant players. How many standard deviations is this? Their computers must be melting from the models that are exploding. Didn’t anyone tell them these are just tools, and not gospel?
http://blog.madhedgefundtrader.com/
read point number 3 on the nuclear industry - interesting.
Re: Mr. Mortgage and the Foreclosure 2nd Wave
Honestly, I'm not sure why you feel safe to assert that properties will make "a serious profit in 2 years". All the research I've done on similar "real estate down markets" say real estate is a supertanker that takes years to recover its losses. Even the gentle downturn in LA in the 90s took 7 years to rebound. Why do you feel so strongly it is different this time, and will only take 2 years to bounce back?
Are property prices down below 2000 prices? Is rent vs own showing a compelling case to own? Is there a general sense in the area "it is better to rent", showing revulsion of real estate as an investment vehicle, thus perhaps marking a (contrarian) bottom? What is the actual sign of a bottom you are seeing?
Buying something because the price is lower than last year, or buying motivated by a fear of missing out, seems like a dangerous investment strategy. This sort of thinking gets me to buy stocks in the middle of a big price move down. it's also called knife-catching. I did it on Friday, actually, much to my chagrin.
Re: Mr. Mortgage and the Foreclosure 2nd Wave
RE:>This sort of thinking gets me to buy stocks in the middle of a big price move down. it's also called knife-catching. I did it on Friday, actually, much to my chagrin.
I remember that. You were under the influence of nasty Parisian bistro wine and you bought KGC, was it? Just to dampen further enthusiasm for gold mining stocks, see attached.
It *could* go the other way, if dollar - which failed to decisively break 79.40 resistance dilly dallies in a southerly direction - who knows. But by end of today I'd be looking to see if we have a firming up of the dollar.
No auctions this week so curious to see dollar's behaviour.
Re: Manufacturing to lead us out of downturn?
CP,
I gritted my teeth and watched CNBC with the sound on to catch their buzz.
I heard a number of guests saying thigs like...
"Things always slow down in the summer, we're buying the dip."
"People have been talking of a pullback, we've been waiting to get XYZ at lower prices."
"The market needs a time to digest. This is a time to buy if you've missed the beginning of the recovery."
When Rick Santelli came on with a few others he must have said something I would have liked because he was immediately drowned out by the bimbos white their Colgate smiles suddenly turned upside down. (I clicked off)
Money Magazine (from my neighbor)...
"Asset allocation still works..."
"You can't time the market..."
"Recognizing a bubble is hard..."
Each of the above is followed by some inane bit of drivel designed to let make prior advice acceptable under a situation "which no one could have seen coming.
I'm 50% cash nearly 50% gov bonds. Recently bought a little SRS and FXP.
Re: Mr. Mortgage and the Foreclosure 2nd Wave
davefairtex,
"Buying something because the price is lower than last year, or buying motivated by a fear of missing out, seems like a dangerous investment strategy."
Just made this same argument to a friend over the weekend.
He has been very philosophical about his 40% drop in net worth saying, "Everything was simply overpriced and is returning to its true value. The house across the street is still too high, but when it goes ridiculously low, to about $80,000, I'd buy it." (He is 85 and always an optimist — we balance each other:-)
My question, "How do you know the "true value" isn't $40,000 now? As always, value is only what people are willing to pay.""
Re: Mr. Mortgage and the Foreclosure 2nd Wave
Just a localized view of values that have dropped less than national average. People are still retiring here and bringing their city chips for a slice of PNW heaven. YOY the average property values improve about 4.5% according to historical models ( not taking inflation into account) so buying low makes decent sense if you like the place and can afford to park 20% or more for record low financing rates. OK so it might take 5 years? The knife cuts both sides if you miss the handle eh?!