[8:00am ET] The US Dollar is at a crossroads, apparently in trouble. At 2:30am ET, the September Euro contract hit a high of 1.4266 against the Dollar before, I believe, the Fed came to the rescue. How many rescues are possible?
Today, the highly objective and independent technical analyst Colin Twiggs, who works in Australia, published the following summary:
Dollar Under Pressure: The US Dollar Index is testing primary support at 78.50; breakout would signal a primary decline with a target of 73*. Reversal above 0.81 is unlikely, but would test resistance from the March low at 83… The euro broke out above the recent triangle against the greenback, signaling a primary advance with a target of $1.50*. Follow-through above $1.43 would confirm the signal. Reversal below $1.38 is unlikely, but would warn of reversal to a primary down-trend.
I am on the record as saying I think the $USD will hold at this level for the short-term although – and this is quite connected -- $GOLD would make a run to close to $1,000. Here’s what I now think. President Obama’s healthcare legislation efforts lie in the balance; therefore, the Fed must keep rates down a while longer, but also continue to support the Dollar. The odds of a replay of Black Monday October 19, 1987 are rising.
If Obama fails with Healthcare, there is a better than even chance he will be considered a failed President; so the line in the sand is healthcare. It will come; the equity market will crash.
In the meantime, the Fed will either support the $USD and try to hold the price of gold from soaring or else Ben Bernanke will be forced to resign, replaced by Larry Summers. Bernanke looked confident this week, so I think he has agreed to play ball.
Ugly politics in Washington will lead to more volatility, but equities will stay in a trading range this summer. I don’t think we’ll be looking at S&P 1000 until 2010. The crash will come before then. There will be a couple months for the banks like Bank of America and Citigroup to get their financing in place. The warning bell was struck when Bernanke told Congress this week that commercial real estate would be a difficult challenge. This was a shot in the direction of the bank holding companies that hold asset backed securities.
With all the billions passed through from taxpayer to Goldman Sachs, the political card was played right before Bernanke took his trip to Congress when that firm announced the equity market was healthy and S&P 500 targets for 2009 and 2010 had been re-set much higher. So much for professionalism -- the politics of money rules America.
So bottom line; there will be some false break-downs in the US Dollar in the near-term, causing $GOLD to lift – one final time in this short- and intermediate-term cycle. The stock promoters will be active this summer. Their well-paid newsletter writers will come through with wonderful stories. The people will buy. $GOLD maybe hits $1,000, possibly a bit higher before the cycle ends abruptly.
To know when the gold cycle ends would require having an executive management chair in the boardrooms of JP Morgan and Goldman Sachs. From Washington to their ears through to the keystrokes on the prop desk will come the orders to load up on puts and to close the calls and off the stocks. I anticipate a rapid $200 drop in $GOLD will follow. Investors and traders will be stunned.
That will be the end of the dance for the S&P. People will start talking about 500 for the S&P 500, not 1000 or Goldman Sachs’ target for year-end 2009 of 1060 (upped on Monday from 940). I think the March low of S&P 666 will be tested, but probably the 780 will hold as the cycle bottom, thereby confirming March 2009 as the Bear market low. For $GOLD, I think that 780 will be the low, and in future, we are likely to see a convergence of higher $USD-higher $GOLD, which happens when interest rates rise, but before the economy reverts to 5th gear in cranking out real wealth.
These are my thoughts today. Since last Thursday in Havana I’ve had pain in my stomach, and now possibly we will share that pain. Of course, this is only one person’s view; I could be wrong.
Comments
$USD
Well I'm always going to look like a doofus next to Bill, but was looking at the greenback this morning and note my little observations
Firstly, the attached graph. For those knowledgeable in charting, is it ok for me to draw multiple trend lines like that? I see a steepening trend flattening out as we head towards the weekend. But I don't know if i've overdrawn the trend lines?
Bill, you said the dollar was going to falsely break down. But the summer party for gold bugs doesn't imply a summer breakdown in the dollar, does it? So the dollar is what?... going to spike on an intraweekly basis? While the COMEX wrecking crew permit a higher POG on the back of that spiking? So is gold breaking out briefly, or allowed to float to higher prices and draw in the crowd?
http://tinyurl.com/USD-line-in-the-sand
The relationship between the market and the dollar is getting tighter. How much tighter can it get?
http://tinyurl.com/ksww8d
EITHER WAY, sounds like time to load up on the juniors for the last feeding frenzy! Yeeeeeeeee Haw
FXP bidding at a new low
10.33
The President wants my vote as well
Isn't that illegal on my part?
I assume one or more odious financial newsletter lists have been handed over to the White House. No other way they'd be emailing Switzerland.
It doesn't surprise me that the Fed holds the line on the USD
Now that the cat is out of the bag that TA suggests a 1.49 Euro/USD relationship why shouldn't they play games with us. Trader's market.
SWY
Will you look at Vad's short? Nice. Closed 19.94 premkt 18.31-18.50
Speaking of Vad
Thanks again for sharing your photography.
Still remember the stunning Holiday photos you displayed last December of Buchart Gardens. You have more than one talent! ;)
Back to the markets.
ahhh gold.
todays commentary is not surprising in the least.
far too many are looking for a USD collapse which is not in the cards.
far too many are looking for an explosive move in gold which is not in the cards.
gold bugs are still magically hoping the market will crash and yet somehow gold and gold stocks will surge. yes yes homestake mining went up many times over during the depression. im sure we can all pick 1 stock that went up during the tech collapse of 2000, the currency collapse of 1990 and the doom of 2008.
in the mean time mining shares continue to be massively undervalued realtive to gold. this is our tell. its says that the people in the business of actually getting gold are not putting in the money to do so, and with gold screaming upward in the past 4 years they havent been able to keep up. cost pressures are no longer a viable excuse with oil cut in half.
so the reality is that gold is not on the precipice of anything, it may bounce in a range but people have hung their hat on gold's ability to surge in the face of a collapsing economy that has witnessed on each panic a flight to US t-bills, hence an upward move in the dollar as the smart people come to the realizaiton that FOREX is a game of comparative measure, and when the s%*t hits the fan, would you rather have you money in Yuan, Roubles or USD? yes yes of course we'd rather have it in gold, but at what price? and would you rather have it in something that you might have to trade in shortly after for much less? or would you rather hold US dollars during a crisis knowing that the past few years they go up when things get bad.....
ugh, of course the US fiscal situation is dire, but again, its comparative, consider what is and has been happening in the EU, the rampant speculation in China, and the multi-decade malaise in Japan. people think the US will just suddenly fold up because the deficit is too large and people will riot. thats now how its worked for virtually any large nation.
people from europe understand the slow decline, where people rely on meager paycheques, small homes and 1 car per family, simple vacations and simple living. to north americans who gasp at the thought of raising 2 kids in a 2 bedroom apartment because somehow we think kids have an entitlement to a large lawn and space to run, will begin to think twice. freedom 55 will turn to freedom 57 for government workers and despite the moans they will take it and move on with their lives, private corp workers will be freedom 60, and mabey tinker part time for extra cash. not struggling the middle class will be so much as living more simple and having to tinker a bit more in their old age to keep some extra cash on hand.
iran is not going nuclear, and isreal is not going to attack them. these assesments are bogus propaganda plain and simple. we have been hearing about this for 3 years. neither state is looking to attack. some hawks in isreal consider it the same way neo-cons talk of invading venezuela. not going to happen. iran has its own internal problems. people hanging their hat on such nonesense will get it handed back to them.
china is deploying their reserves apparently....... you know my thoughts on this nonsense. if mining shares were so valuable and so fantastic why is Barrick gold and newmont at the same price when gold was several hundred dollars lower? and why is there no volume in the gold miner group? check the volume and thats your tell. the rest is just nonsense and speculation designed to get you to buy garbage shares. where is china buying? where is the volume of all the eager buyers of miners as a group that is supposed to be happening because of the flight away from the USD? not happening.
wake up.
Re: SWY
SWY posted not bad earnings but lower guidance... getting butchered, and I am trying to make up my mind about closing it or riding it. Will probably cover partial and see if I get panic selloff for the last portion of it. 19 was a big line in the sand, and SWY is solidly below it now, next support is 17.50...
Seamus, thank you, glad to hear you like :)
Open FXP @ 10.29
...
Cara 100 Ratings Changes
Good morning.
Downgrades:
QCOM - to Market Underperform @ Charter Equity
SNDK - to Neutral @ AmTech Research
PT Raised:
MICC - from $70 to $83 @ Morgan Joseph. Buy
SNDK - from $10 to $11 @ Auriga U.S.A. Sell
Re: Open FXP @ 10.29
they're reading your mind 2nd. Put on your tin foil hat.
TSN
Stoch divergence, also daily RSI 7 up thru 30 again this morning,
long TSN @ 11.50
DOYDD
Re: Open FXP @ 10.29
They don't need to read my mind. They only need to read this blog. Or my order flow.
SLW...closed out for profits @ 9.25
...
CIT / R
CIT - Klunk!!! / R - Rollin!
" I don’t think we’ll be looking at S&P 1000 until 2010."
Pretty bold statement considering we are already basically there.
FXP- adding @ 10.06
...
Re: ahhh gold.
RE:>why is Barrick gold and newmont at the same price when gold was several hundred dollars lower? and why is there no volume in the gold miner group? check the volume and thats your tell. the rest is just nonsense and speculation designed to get you to buy garbage shares.
Hey I happen to hold those garbage shares and they are catching a bid! BULM and ECU.TO continue to lag the commonly known players and if someone wants to take a "bargain" off my hands, who am I to argue?
They almost have to take it to 9000
IMO
FXP below 10
...
Nice write up
Bill - I enjoyed your write up. What time frame are you thinking on the crash?
SPY Puts
I began scaling into SPY puts today. I'm buying deep in the money August and September puts as a hedge to my long positions.
Man I'm beginning to feel for Tim Knight
Among other things, his database administrator blew up his portfolio data this morning.
UNG report today
What is the prognostication likely to be?
CIT has clearly fallen out of favour. dead man walking.
UPS
Anyone else read the comments from the CEO of UPS? Pretty telling in a market that continues to march higher...can a rising equity market force their end demand to increase?
Cara 100 Update (Final)
BA - target increased at Goldman to $52 from $51. Cites the flow coming from the co.'s 2Q upside, assumptions that the 737 cut will happen in 2010, and on valuation. Maintained Neutral rating.
BA - target cut at Morgan Stanley to $45. 787 may be facing a forward loss. Equal-weight rating.
ERTS - target raised at Goldman to $25 from $24. The increase stems from higher expectations for the co.'s recent release schedule, margin expansion, and the probability of M&A's. Maintained Buy rating.
LLTC - target, estimates lifted at Barclays. Price target to $24 from $18. 2009 and 2010 EPS estimates increased to $1.27 from $1.25 and to $1.01 from $1.09, respectively. Maintain Equal Weight rating.
QCOM - target raised at Goldman to $1.34 from $1.29 for FY09 based on better margins and higher investment income. The firm believes that the co. will still experience the ongoing handset inventory correction and may have an even better result from its China 3G build out where the royalty is 3.8% vs. an expected 3.5%. Maintained Conviction Buy rating.
QCOM - target, estimates boosted at Barclays. Price target to $52 from $50. Analysts mentioned the solid quarter with sales and operating income above preannounced levels. 2009 and 2010 EPS estimates lifted to $1.78 from $1.75 and to $2.46 from $2.39, respectively. Reiterate Overweight rating.
QCOM - estimates raised at Friedman, Billings Ramsey through 2010. 3G royalty business is ramping in emerging markets, and the company should gain market shares at NOK and MOT. Outperform rating and $54 price target.
SNDK - estimates raised at Goldman to -$0.46 from -$0.90 for FY09 as the firm believes the market continue to undervalue the co.'s intellectual property. Maintained Buy rating.
SNDK - Downgraded at ThinkEquity from Buy to Accumulate. $19 price target. Risk/reward appears less favorable in the second half of the year.
More of the same from our elected leaders
Thirty people, including two mayors, arrested in federal probe of public corruption in New Jersey, prosecutors say
Re: They almost have to take it to 9000
There is your Dow 9000
S&P 500 to 1000 now???
I have my 403b all in the S&P right now, I need to get out soon....
FXY, TLT
Closing TLT AUG 51 inverse straddle for OK profit
Reducing FXY long common position as yen is getting toasted
Is today a blow-off top or new rally? The cognitive dissonance is deafening. In the meantime, the road goes on forever and the party never ends.
Re: They almost have to take it to 9000
Maybe today?
Earnings play on
Momentum gathering for this TBI today. Blow out guidance and report. 15 soon for this stock.
10 minute chart of SPX from John Lee
http://2.bp.blogspot.com/_NOVV_qpBVl4/SmheFeOGZmI/...
spx could hold at present levels.
JMTCW
Re: FXY, TLT
I think the shorts are pretty much dead. They're just tossing grenades into the room to be sure.
Re: Man I'm beginning to feel for Tim Knight
2nd- Closed out long time holding PXP. Back in January I told myself "all out @ 960". Blew right through that. I just can't see buying at these prices. Thinking of taking a loss on ERY.
FXP- off @ 10. TYP- off @ 16.07 QID- off @ 27.67
Losses on all.
Re: ahhh gold.
Sweeping generalizations based on the hourly chart, dr cosa! You have to remember that 'gold' miners are billed as such but engage in much more copper mining than anybody wishes to admit.
I have to agree that there is no will in Washington to support the U.S., and that they have tried their damned utmost to crush its value.
'Chinese' jawboning has had the effect of cominterm moral suasion. Really, you would have to understand mandarin and be sitting around when they say stuff, so in the absence of any real presence of any journalistic quality as to the statements made in the default of the presence of Chinese officials from the communist party, then somebody's just making it up.
Defibrillating the commodities markets has not had the effect of preserving carry trades in the foreign exchange. What has fallen apart since the oil price market corner crash is the notion that you could actually somehow attach currencies to the commodities market. I half believe that we are going to relearn just what it means to have no gold standard and no reliable measure of value. But then again, price superstitions about gold may have been left behind for good. Perhaps the real mistake of history was to attempt to set limits on its price.
The dollar rising, if it does, will limit the upside of the gold price, which will see its high within the year. I figure that Jim Sinclair's outlook of ~$1650/oz. is correct, given that the most probable outcome for the gold price based on prime number multiples in the advance of the gold price is a very similar number.
I think that a forex crisis is pretty much a given at this point, so this will give the impetus to the gold market. I truly wonder what bankers think of gold at this point, since they aught to be buying hand over fist, as if price is no object. A currency devaluation, say in the UK Pound would set that alight, but not necessarily change the price dynamic. I can see a strong support for gold prices here.
We are in our sixteenth month of consolidation in the gold market, which is strongly analogous to the previous move in gold prices. A review of the London Bullion Market and its turnover of the equivalent of one year of mine supply every four days is required. It becomes all the more astonishing when you think that trading in bullion leases are all footed by the taxpayers in the Gsomething or other. Somebody is on the hook for roughly 52 years of mine supply ever year, and in the last 8 years, that ball and chain extends way back beyond the industrial revolution, long before major gold deposits were discovered. These contracts are merely rolled over time and again, anticipating the crash that never comes.
http://en.wikipedia.org/wiki/London_bullion_market
During the depression, coins were said to fetch 65% over the bullion market, so we should see something very similar in the hard money valuation of gold, where it can fetch 65% over its rationalized value in the very depths.
http://www.paulvaneeden.com/Gold
Anyone shorting UNG - that was nasty!
Mark, you playing that?
Can someone press my Sell button?
I can't seem to do it. I need help. I kept telling myself just a little more and I would sell. Like a deer caught in the headlights. Anyone else have these same problems :)
Off topic - The right stuff!
http://tinyurl.com/mohux8
Re: Anyone shorting UNG - that was nasty!
Les, Still holding 2/3 with a 12.50 basis. But not for long. Looking to unload another 1/3 above 14.
Re- AMG's. I just like the lines of the CL much better. Plus, I actually could fit in the damn thing. No way with the SL.
Re: Can someone press my Sell button?
yes.. i'm too...
should i sell slw now.. or wait till it hits my target...
maybe i'll set a tight trialing
Re: FXY, TLT
I agree... it's just amazing. Stops are being run everywhere. The only reason I still hold EEM and XLF shorts is that I started with such small positions my losses in these positions is still pretty small and I always thought I would have to average down. But, this rally is more than I bargained for. I may last the day before conceding but that's it.
Re: ahhh gold.
So on the basis of Paul Van Eeden's gold chart, gold could go a little nuts in the next year or two, based on money supply.
I can never remember the economists terms for money supple. You know, M1, M2 etc. Does money supply here simply refer to money printed by the Fed and distributed to the banks? Or must it entail widespread circulation in the economy?
Re: Anyone shorting UNG - that was nasty!
but Craig, it's a girl's car. Everyone knows that in Europe.
Re: ahhh gold.
Beats me. Gold is so money, and it doesn't even know it.
I believe Mr. Van Eeden's numbers are more than a little restrained, so assume ~$1000k+ for an adjusted value. Every time gold price interventions seem to fail as they are now, then the gold price moves very strongly.
Re: Anyone shorting UNG - that was nasty!
That's not me Les....I drive a truck, it fits everybody.
Standing aside today, although I should have held my TBT/MSFT/USO.
Stopped out of my short positions for small losses. Patience.
This market feels like too much coffee.
Re: Can someone press my Sell button?
Grasshopper- What you have is not a 'problem.' Tim Knight has a problem. What you have is a 'dilemma.'
Re: Anyone shorting UNG - that was nasty!
Les- Put the wine down, it's Mark. This is the baby I drive when cruising for the ladies. Get's about the same MPG.
http://tinyurl.com/3ya7bl
and I thought I had a problem with dimwits driving Hummers
:)
Bill - have been out of the loop for a few days
So you think gold is going to crash along with the market in late 2009?
With that stance have you sold your positions in gold/gold stocks? bought puts on the market?
What about UST bonds? in your predicted case what would you expect there?
Home Sales
3 months back to back of increasing sales.
Re: ahhh gold.
very cogent points F6,
accept that with everything that has happened gold has failed to breach 1000 on a sustainable basis.
so what going forward must happen to provoke the move?
yes a move up and just above $1000 might happen but $1650 is a pipe-dream as far as im concerned in the next year or two.
calls for gold change, so people relying on analyst's estimates will be subject to those changes. Bills commentary today highlights the change. and that is what a good analyst does, they dont simply stick to past estimates when the situation changes.
how much longer can Jim Sinclair (bless his heart and his efforts) continue to write daily about events that simply arent occuring? his claims of oil were very very much wrong, his claims of the gold price from a macro perspective of many years were spot on, but the past 8 months or so its been the same "this is it" sudden rhetoric alongside praise for the shares, but neither has made headway, and dont even get me started on the price of TRE.
a fall to $880 by gold would be accompanied by the usual cries of manipulation and how bankers "cant hold doen the price much longer what with all the money printing in the US"... how much longer can gold bugs hold out with false-profecy that will chant high gold prices and make excuses for low prices for ever?
what do you think the gold bugs and Jim Sinclair will say should gold hit $780 as Bill opined? what will they say when 1 year from now gold remained in a $780-$1020 range and the shares continue to go nowhere to down? will people still claim inflation is on the way and that the US dollar is due for a crash.... that china will somehow rescue the goldies?
no currency in the world can come close to the USD, however flawed it might be at this time, the only reason it still enjoys the flight to safety is that precise reason.
F6 ive said many times before that base-metal hedging is and will be more of a problem going forward (yamana) as gold miners bring out a new host of problems as to why they continue to not make more money as the gold price rises. bad currency hedging was used but now the fashionable move was to abandon hedges... but copper hedging will be the next shoe to drop farther than it has.
Barrick is about the same price it was when gold was about $750.
is $200 in gold isnt enough to move the price, why would another $50 do it?
im always cautious of a potential explosion upward in gold, i hold a certain level just for this very event. dont get it twisted, but most of what passes for bullish gold news is nothing more than propaganda imho.
Re: Can someone press my Sell button?
Yes!
When I get in this dilemma, I either sell 1/3 and watch or I buy a small amount of short etf.
My challenge today? I bought the etf short 2 days ago, and forgot to put the stops on it! So today, the short is tanking which hurting my bottom line profits. Do I dump the short at a loss or hold till it comes back. Not a lot of money so I will prob hold it
vb
SLW
Did y'all give up on SLW?
I made a few sheckles long Yamana earlier, eye not on the SLW prize.
Congratuations to those who didn't pack it in.
Re: Anyone shorting UNG - that was nasty!
Careful, Mark. You're practically begging CP to post the baby he flies.
http://tinyurl.com/lvgzjs
Re: Can someone press my Sell button?
vb- Dump it and don't look back. It may be a small amount now, but it can turn big in a hurry. Ask Knight. I've bailed on the shorts almost every day this week, with minor dents. But it would have been major body work had I held on/added.
Ann Arbor
U of M town's newspaper closes. Blaming it on "that guy Craig."
http://news.ino.com/headlines/?newsid=68997577182792
************************
VIX 23.65
TRIN 0.80
USD 78.641, down -0.19%
Re: Anyone shorting UNG - that was nasty!
What is that 2nd? Texan public transport?
Re: and I thought I had a problem with dimwits driving Hummers
Les- See, that's the thing. I don't have a problem with Hummer drivers. I just drive over them...Hey, what's flying over me...oh #$%@ it's CP!
Re: Ann Arbor
Man, don't I wish *this* Craig had thought of *that* list.....
Re: Can someone press my Sell button?
RE:>Dump it and don't look back.
Ditto. Was too busy writing to the family about what Bill had to say and didn't realise the time. I should have gotten rid of those shorts that I hedged with yesterday pre market but got my butt kicked instead. Dropped them like a lead balloon.
Be careful. watch volume
When you look at a top performer on the day, ISRG, and almost 3X avg vol and up 20%, this shows massive strength and buying pressure.
Then you look at gold stocks like GG, GDX, UXG, KGC, etc. the volumes are not that impressive. prec metals might be going up only on sentiment of the broad rally + weakness in USD today.
EDIT: I also remember comments learned here, about precious metals usually lagging the broad market moves by a day or so. Which could be good news for miners tomorrow.
FXP
Opened up a position on FXP @10.79
Looking for a turn around in the area of 975-980 which should complete the final wave [5th] of A up.
Re: Can someone press my Sell button?
grasshopper - my two cents. Vad said to us once, "let the market do the selling for you" - or words to that effect.
As things move up, put a stop market order underneath the most recent reaction low. That way you will be taken out if it falls below that - which would indicate a change in trend, preserving your gains in the event of something dramatic happening to the downside.
Since it sounds like you're a swing trader, that means you look at the daily chart for these reaction lows.
Vad can correct me if I've said something wrong. This is my memory of what he said at the conference about how to let your gains run until a trend change occurs.
We're looking at the highest close of the year
And then all the other Schmedley's will buy long when CNBC 's Dennis Kneel talks about a rising index for the year.
Re: Can someone press my Sell button?
2nd,
dump it even if it is in accumulation zone right now??
It is also the days low right at this min.
fxp and eev
vb
fxp
2nd.. you are still in this?
it hurts.. even just seeing it
Jumping in front of a train
I bought some FAZ @ $39.70, and sold all my S&P500 holdings just over the 975 level.
I just wonder what tomorrow holds, or even the rest of today?
Re: fxp
gc- Read post 38303.
Re: Can someone press my Sell button?
I DID IT! And it FEELS GOOD. I sold SLW this am. Very small position but sold at profit! yea. And cause it was a small position, if it goes up...ah well. Looked at profit, then looked at chart...thought what would Bill do? Bill usta be,would hold until rsi crossed back down. But I'm just a lil guy who is down ytd and would like to keep profits I have. Now I'm looking at SPNG and AUY in the same way....hungrily.
Peace from North Puget Sound
goldman's predictions
I'm remembering back a while ago when Goldman predicted gold would get to $1000. Sure enough, it started to march upward, breaking through that $1000 barrier, if even just briefly.
Perhaps we will have the same thing here. Goldman says something, the market dutifully moves to that level, and proceeds to tank hard just like gold did coming off $1000. Just a thought.
Re: Can someone press my Sell button?
slw just trigger my super tight stop..
Something to watch
Something to watch on the ascent.
PERFORMANCE ANXIETY by Hedgies. Institutionals, Fund managers who don’t want to be left behind . . . but they usually will buy puts to protect on the downside, especially in these circumstances. You should see the VIX move up, even if only a little. If not seeing that and VIX continues to slide down near 20, 21, without any pullback, signals complacency to me and that can be dangerous, very dangerous IMO
Knight's latest
"Last night, I started reading Brett Steenbarger's book, Enhancing Trader Performance (because, God knows, the prior eight days I've felt like I could use some real enhancing).
"The first chapter starts off with a couple of traders, Al and Mick. They are both trading the e-mini S&P, and they're both having rough days. The first one, Al, keeps his cool, changes his strategy when needed, and steps away from the markets for lunch to collect himself and do better when he gets back. The second, Mick, is furious with himself, angrily re-analyzes his mistakes to zoom in on where he screwed up, and in general seems like a psychological mess.
"The surprise is that Mick is the one who's actually a really successful trader. I imagine most readers, like me, were expecting Al to be the hero. I'm only one chapter into the book, so I'm intrigued to learn more about this paradox.
"You can imagine I'm having an absolutely horrible day in the markets. I am eerily calm about it (like "Al", which is distressing, I suppose). I imagine, even years from now, I will regarding my failure to take advantage of the rise from mid-March to now as one of the biggest mistakes of my trading life. But what's done is done.
"At this point, I'm going to clear my mind, go through all the charts again, and find out what I see. The bulls are having an absolutely field day, though. Incredible."
Maybe we need to get a little more emotional? If that's a requirement (which I'm not buying), I would have to stop trading. That just isn't me.
Re: Can someone press my Sell button?
"Very small position but sold at profit! yea. And cause it was a small position, if it goes up...ah well."
So you're the one who made it go up:)
Ford looks like there's more
Ford looks like there's more "up" in it.
Re: ahhh gold.
"Upward explosions" of the gold price haven't really occurred, since the bullion price is as boring as the bond market.
Or, it should be. I would be more wary of a market corner in the gold, because the fundamentals of that market are saying that it can be cornered.
As an experiment, do your due dilligence on the major gold miners through their websites, and I'm fairly certain that you can't come up with any real figures of base metals production. This is because their gold mining production is deeply dependent on base metals credits, where all of their investment capital goes, and their off balance sheet credit derivatives obligations rely. They need to expand their production at all costs and cannot stand a collapse of base metals demand.
Its highly likely that what passes for gold on the books are really gold equivalent ounces in the leases that are sold in the market surreptitiously, extending from the gold miners themselves.
I haven't seen any great variables to the cost of gold mining, but then again, going over the numbers seems a futile excercise. It's been a puzzle why gold mining is not terribly sustainable, since the disposition of gold in the earth's crust is so limited in quantity. It 'should' be valued for sustainable mining efforts in every sense of the word, but we don't see it just yet.
The great secret in the gold market is that its a starting point for the derivatives pyramid and ponzi lending. And THAT goes back quite some time now.
dollar hitting new lows
http://futuresource.quote.com/charts/charts.jsp?s=...
The Commodity Train Is Leaving the Station
"We have been preaching about a US dollar rally and have been getting a lot of heat. Nothing has changed, we still expect a rally from around these levels. In my experience some of my best trades in my career have been the ones with the most controversy. With most investors thinking the dollar will go down precipitously, I feel good about the trade because most investors are wrong. Sorry, not meant to be a jab, just the sad reality.
Silver and gold were higher on the day, sit in your current position as it may be a bumpy ride but a road that should lead to higher ground."
http://seekingalpha.com/article/150568-today-in-co...
DGP - starting new position @ 20.85
Starting small - may add later
Re: Anyone shorting UNG - that was nasty!
Sorry, what was that? I was merging 880 north in my chick magnet...
AIG
bought back in at $13.03.
Re: Anyone shorting UNG - that was nasty!
SIG ALERT on 880 North....traffic slow down due to some dufus in a green three wheeler....take alternate routes....
Re: AIG
insurance are all +5% and above...
http://www.google.com/finance?catid=us-56977266
SRS
at 16.80 at the moment....tempting but I am almost hitting stops on QID and VXX already. Dang market anyway. Should have held the SSO for the run to 1000 "everyone" said was coming.
May unload the TBT to somewhat offset the losses it seems I may be taking with my QID/VXX.
Then there is MTW hitting 6.10......not my day.
edit trying SRS @16.62
& off TBT @53.25
2nd edit- last burst took me out of QID& VXX for nice little loses.
took off VZ @ 31.50 as well to counter some losses a it ran almost 5% today
only holding a small amount of COW and DBA.....now 98% cash
Re: AIG
Can you share your reasoning? I see macd and stoch rising but... isn't this really open to any bad news? Just curious so I don't have to read all the snickers about selling SLW
Re: Anyone shorting UNG - that was nasty!
Thanks for the heads up Craig.
You can take the back roads but beware of those mud puddles and quick sand.
I am in 4 wheel drive!
vb
more TLT
close TLT AUG 96 for about 65% gain...
Really hate these kinds of days, forces me to make adjustments and increases transaction costs.
Re: more TLT
Sorry - those were TLT AUG 96 short calls
Re: Anyone shorting UNG - that was nasty!
Craig- LOL. I'm on cruise control in the Camry (100% cash). But I have a 24-pack handy should I run into Tim Knight.
Re: Anyone shorting UNG - that was nasty!
Right about now a 24 pack wouldn't quite do it for me. To say I'm frustrated would be an understatement. I'm glad I don't live down there in high bridge country.....
I am noticing TLT is looking like it is finding it's bottom for the day, might take a stab at it, but everything I've touched lately has turned to mierda.
GLD
Close AUG 92 inverse straddle for 50% net gain
Taking a couple %age points on DAG. 5min oversold
and I ain't gonna be greedy in this silly market.
Re: TSN
Can't stick around all day, taking the profit.
Sold @ 11.92
I like the chart though.
OIH
Close OCT 115 short calls, JAN 10 85 short puts for about 50% gain
This was a pretty good win and OIH is so crazed it's just easier to get out of the way and let it blow off steam and simply re-enter later with a new position.
Charts are screaming "short me!!!"
ain't biting yet.
Passing this lame session with my other favourite video pastime - Japanese anime.
Re: Charts are screaming "short me!!!"
Les-
Probably means a +300 DOW day. I am out of the way for the most part.
looking back 2 years and we've never been this overbought
http://tinyurl.com/I-WANNA-GO-SHORT
Re: Anyone shorting UNG - that was nasty!
"Right about now a 24 pack wouldn't quite do it for me."
Here's a simple but effective suggestion:
Re: looking back 2 years and we've never been this overbought
There is a guy I like, Howard Simons, who had this to say re: over/underbought...
"The terms "overbought" and "oversold" are over-used, especially in the early stages of a move out of a trading range to either side. Nearly all indicators that are constructed to measure excess movement tend to flash an incorrect warning sign during these phases. The results can take you out of an early move too soon or, worse, put you in a top- or bottom-picking mode.
The key question to ask is whether the underlying economic value has changed. If it has, price has to move strongly and swiftly (and always belatedly) to catch up to value. That will result in large interday price changes but not an overbought or oversold price-relative-to-value situation.
Is the present move in the broad market overbought? No. Resist the temptation to be the first kid on your block to either exit or go short. Top-picking is a poor substitute for baseball as our national pasttime."
possible reversal in the making - negative diverging signals...
everywhere. But we know the limitations of TA. Trader's market.
http://tinyurl.com/WATCH-YER-BACK-JACK
Week ago wed.
The S&P is looking like a week ago wed. Rally into the close with maybe a slight selloff at the end. In the meantime, the volume is looking weak into this rally.
Re: possible reversal in the making - negative diverging ...
Les, did that chart come out the way you intended? All I see is 3 candlesticks. Surely you don't think a chart with 3 candlesticks in any way represents TA?
noticed some odd buying
crme.
Re: Anyone shorting UNG - that was nasty!
CP- I can do you one better. Here's what Knight really needs-
http://www.youtube.com/watch?v=8KyUQCqjcEU
Re: possible reversal in the making - negative diverging ...
RE:>All I see is 3 candlesticks. Surely you don't think a chart with 3 candlesticks in any way represents TA?
well as a matter of fact, i do think 3 candlesticks constitutes TA! Think of it like Alice, Tweedledee and Tweedledumb dancing in Wonderland!
Dunno Mackinaw, works fine for me. spx on the 10 min chart.
okay the market can tank now
I just dumped my TZA ultrashort for a 10% haircut on the position...
dollar back strong - up to 79 again.
http://futuresource.quote.com/charts/charts.jsp?s=...
pushing it further overnight?
Off Topic - Arrests
http://tinyurl.com/npfww6
I'm thankful we have the banksters and politicians to lookup to.
Interesting posts by Karl Denninger
Holly!@#!!Treasury-Auction-Schedule
http://tinyurl.com/nn9mny
Commercial R/E: Tick... tick... BOOM!
http://tinyurl.com/ns397j
Take the stops, Love the losses
Those reminders from Vad, Pat Veech (and Gann) could not have come at a better time. I have probably taken more losses in the past two weeks than at any other point in my trading 'career.' But, they have without exception been minor losses, with the majority of losing positions sold the same day.
(a) I admit to using 'mental' stops most of the time, but I take them. When the portfolio value slips by a certain daily percentage, I clear losing positions.
(b) Think I commented once that "we don't really love the losses, of course...," but I have a different take on it today. Reading Knight's blog, the analogy that comes to mind is appreciating the minor faults in old girlfriends you once complained about...after dating a beauty queen who turns on you in a big way. Learn to love those losses- they'll save your house and your marriage and leave your confidence intact.
(c) Down 1.2% in two weeks. Normally something to complain about. Not today, man- today I love the minus 1.2%.
And thank you to Vad and Veech.
Re: Interesting posts by Karl Denninger
Great articles Bev, thanks.
Re: Interesting posts by Karl Denninger
GS is a big player in the debt markets as well. Wondering if they drop equities to force people into treasuries next week?
NAZ up 13% in 10 days ... color me STUPID ...
Nasdaq comp up 13% in 10 days without a pause.
I keep trying to make SENSE out of this market.
Color me STUPID !
GS approaching resistance area
One can see range bound trading for GS in 2008 just above its present price that will provide some (significant?) resistance, the volume bar length indicating total volume at this price range. How do they deal with all these potential sellers? Gap up? Reversal? No way in hell are they going to convince people to snap the shares up now.
http://stockcharts.com/h-sc/ui?s=GS&p=D&yr=1&mn=6&...
Today's trading pattern doesn't indicate distribution IMO.
For you folk watching US TV I'd be interested to hear if the usual idiots are selling bank shares tonight, tomorrow and over the weekend.
ok, now its 30x earnings... market had it right at 6500...
I hope there is a God... don't think Goldman can buy that one...
Re: ok, now its 30x earnings... market had it right at 6500...
Baz, you need to drink the Kool-aid!
"Brian Wesbury, chief economist at First Trust Advisors, got the 'Tech Ticker' crowd going on Wednesday, when he made a similar call, saying stocks are 50% undervalued and the Dow could hit 10,000 by year end. Lemonides' call is even more bold: "I don't think it would be surprising to see a 12,000 number [on the Dow] six months to a year out," he says.
But he's not done there: "You'll see the market retrace its old high which means I think that over a couple of years you'll see 15,000 on the Dow."
http://tinyurl.com/DRINK-THE-KOOL-AID-BAZ
you know what's coming when they sell us this garbage, don't you!
Delayed Health Care Reform Vote
Bill:
With the Senate delaying the health care vote until Sept. what does that do to your timing, per your commentary? Does this speed up the major correction or do things get put on hold until Sept.
Thanks. Get up the good work.
Bill: Very bold discourse
Hi Bill,
This has been one of your boldest forward looking notes that I have read in a while. I am finding it hard not to get distracted by the "it's all fixed now" messages all over the place. In that regard I must hand it to you for your gutsy notes. Given this outlook, and given that you often comment that you are more conservative in your trading account than in your discourse, what actions to you plan to take? Scale out of what and into what? Are you going to be buying puts ? Any timeframes in mind? Just had to ask :-)
bought some more SRS
I have some short SRS puts, and now I just bought some shares at $16.60 (for about 1.5% of my portfolio). Nothing moves in a straight line, and the market advance over the past 2 weeks so far resembles a straight line.
Re: NAZ up 13% in 10 days ... color me STUPID ...
No, I think we'll color you smart for staying out of the way.
Re: ok, now its 30x earnings... market had it right at 6500...
yeah ! remember Wesbury on CNBC at 11,000 saying it was the time to buy financials... then in late April, he was appx. 80% cash... these crooks never change... the really shi##y thing about it, is, he is getting paid with OPM ( other peoples money ) to make such stupid calls.... Once China TOTALLY restocks ( early September ) watch for the retest Bill talked about this am.. watch for top out on RTP and BHP... they are the key to the entire market metals flow....
once again,
crme is having unusual buying patterns... mongers still peg. Aug. as decision time... betting ' yea ' ( as does MRK )..
Re: ok, now its 30x earnings... market had it right at 6500...
RE:>watch for top out on RTP and BHP... they are the key to the entire market metals flow....
yeh was late for the opening this morning as I was giving a heads up to the family, particularly my sister and her husband located out at Karratha in Western Australia working for Rio. They bought shares last year, don't know at what price but I told them if they'll listen to a man I trust they'll have a heads up in advance.
Google map Karratha, look WNW on the coastline and you can see the bulk ships loading up on iron ore. They're getting paid a fortune to be in such a hole, the lucky sods.
And, why don't the ' pro's ' at bubblevision comment on
Earning per Share valuations from 1999 to 2009... pick a tech, any tech... if that meant anything, Naz woulb be at 500.....
a "blow-off top"
Would feel something like we had over the past two weeks, culminating in today's "grenade" as 2nd_ave put it. Feels very similar to what we had in May 2008, when DOW rose above 13100 and everyone got convinced that it is on its way to 14000. Had I been net short today with a large short position, which I watched explode on me over the past 2 weeks, the pain today would have been excruciating. When S&P paused at 950, I would have had a lot of last hope mixed with fear, and today that fear would have exploded into pain. Those sitting on large profits over the past two weeks would be VERY compelled to take profits on Friday.
Re: a "blow-off top"
Yes I actually expected to see a lot more buying into the close (short covering)- so perhaps that's a signal that most shorts already covered.
Dave
Re: a "blow-off top"
yeh they're not squeezing anyone are they? so maybe a down day to start with, or during happy hour before 1030.
night all.
Summer Doldrums?
Nice day for longs.
AMZN down $5 a/h ; MSFT down $1 a/h
guess today was distribution
Dave
Re: a "blow-off top"
that's me right here, net short and taking pain, feeling stupid, worthless, etc. i mean if you trade you probably know the feeling.
SPY
Sold 50% of my remaining long position in SPY and now left with only 25% long. Just being prudent after a 11% jump up in 2 weeks.
Re: SPY
Great call off 880 TOF! Congrats!
Re: a "blow-off top"
David- That's what puzzles me about Knight. At 843 am he was down 16% (from his 2009 peak). This is after 10 1/2 days of standing his ground (in addition to already having a number of stops take him out of earlier positions to begin with). I may be wrong, but I wouldn't think a professional would allow himself to get into this position. I would think he'd be netting his positions each close and marking them to market. Stops that allow a 16% hit are pretty loose stops IMO. And although he's doing a good job of standing tall on his blog, there's no way to hide that kind of pain- it shows. I'm thinking he could have gotten out last Friday at perhaps -8%.
In any case, it looks like he's catching a break on the after hours news.
LEN short
I tried to short Lennar (LEN) today at the close, but for the first time in memory, I could not get any stock. It's a pretty heavily traded homebuilder, and - no stock? I had to write calls instead. Blech.
I'm guessing there are plenty of folks going short.
Re: a "blow-off top"
Yes I know the feeling of net short pain. A few days back, I was more or less hedged with longs, but I kept selling off the longs on the way up...
We're not
We're not "overbought".......We're just seeing some predictably tough earnings coming out which may cause a selloff tomorrow but as it stands, all systems are still generally go. We knew earnings were gonna be bad.
I'm more worried about the dollar getting stronger than I am of any bad earnings.
Mister Softy
Taking a one-two punch to the abdomen. ;)
Re: a "blow-off top"
Dave- I guess you could say there was no way the market was going to reclaim 9000 in any predictable way. Of course, we 'knew' that. So it did exactly what it was supposed to do. And although we're all puzzled, our puzzlement should come as no surprise.
Fed reduced the monetary base last week
Yesterday I posted a link to Chris Puplava's comments (every Wednesday) at
http://www.financialsense.com/Market/daily/wednesd...
In that article he showed that a change in the adjusted monetary base coincides with medium-term turning points in the market, suggesting that liquidity provided by the Fed is what is driving this market. Fed started contracting the monetary base in early June and S&P fell from 945 to 880. On July 12, Fed started expanding its monetary base and the recent short covering rally was fueled. Today's after hours report by the Fed showed that it contracted its liquidity once again. I think the rally is over.
I just bought more SRS after hours at 17.08, bring today's total purchase of SRS to about 5.5% of my portfolio.
Is FASB reinstating the mark-to-market?
http://www.bloomberg.com/apps/news?pid=20601039&si...
“Now the FASB says it may expand the use of fair-market values on corporate income statements and balance sheets in ways it never has before. Even loans would have to be carried on the balance sheet at fair value, under a preliminary decision reached July 15. The board might decide whether to issue a formal proposal on the matter as soon as next month.”
I don't see coverage anywhere...
It's Beer-O-Clock
Chickenpookie, I apologize for asking which "King of the Hill" character you resemble. I did watch the show last night, and I am guessing it's Hank's neighbor Bill, but you let me know. I mean, I'm sorry. I didn't mean to say that. It's wrong. Just plain wrong.
I almost came on and touted ESLR today. It is doing well after hours.
I did make money today, using nothing more than my coconut and my thumb. I pushed 2 buttons! 8 million years of Hominid evolution, and it's all come down to this!
Re: Bill: Very bold discourse
joe_the_plumber,
Appropriately, my mind has been more on plumbing today than the market. I have been suffering Montezuma's Revenge, picked up last Thursday in Havana. Got a lot worse by Tuesday, my birthday.
I'll reply to this tomorrow. But, I do agree with many of you that there is too much talk of economic growth. Why even the ex-Goldman Sachs head of the Bank of Canada says the recession is over in Canada.
http://www.thestar.com/business/article/670645
If Mark Carney is wrong, will he resign?
I was bullish a week ago Monday and set up several trades that worked out well.
We bought the AA Aug 10 calls @$0.53 on the 13th and sold 1/3 at $0.98 on the 21st and most of the rest today at $1.03.
We sold the AA Aug 9 puts short at $0.45 on the 14th and bought them back in at $0.15 on the 20th.
We bought a lot of other calls and sold lots of puts a week ago and these have done well.
We bought retailer JNY, which I liked on the 13th, on the 20th at 10.44 and sold it today at 11.83 and 11.85.
It's been a good week and a half. Early this morning, on the conference call I opined that I felt silver would bounce and take gold with it, which it did until 1:00pm, and we did ok there too.
But, when I got up this morning, I started thinking Gann and all the hyped reports, and looked at that string of NASDAQ wins, and figured the odds were not good. I figured we would see one final push above S&P 955 and that would be it. Maybe Goldman Sachs can carry the market to 1000, and at 976 it's close, but I still think that buyers of stock going into S&P 1000 are going to regret it.
Among our traders, we feel that late September or October could be the cycle peak. We look at the market daily for set-ups, and we have been in and then out in a few days only, so preparing today for puts that we anticipate buying in 60-90 days is premature.
Our biggest defense is cash, where we are close to 90% right now. We do intend to be aggressive in buying puts if we see the right set-ups. But for now we are being patient.
And if my stomach doesn't feel better soon, I may end up being a patient.
Re: a "blow-off top"
I got stopped out today several times looking for an entry point for SRS and DUG. Sheesh. I like my positions, just some of them have that nasty red ink all over them for the moment. And being short homebuilders when they go up 8-10% - well, its just a good thing my position size isn't that big. I started scaling in at S&P 940 and look where we are now? Well I scaled in more today.
I did reload my S&P bearish call spread today once the big move up started going sideways. Based on the after market fun, it may have been fortunate timing. Short S&P 98 calls, long 100 calls, and long 90 puts. That worked out for me last time.
Montezuma's Revenge
Sounds like you probably ought to fly back to New York and check in to Mount Sinai for a total look-see.....God knows what you picked up in Cuba.......
When you're better I'll take a car into the city and we'll go get a fantastic lunch. Vinod can fly down for the day.
CAT
Sold my CAT today, a position I held since October. Really did not see much good in their recent earnings announcement. Recent gains based on fluffy predictions, IMO. Market thought otherwise though.
sold some ESRL
Thanks, shark, for pointing out that ESLR is up after hours. Given that the broad indexes are down after hours, I just sold at $2.22 1/9 of my ESLR position that I purchased two weeks ago at $2. I am glad that I decided to start trading a small part of my ESLR as opposed to keeping all my shares as a long-term core position.
Re: sold some ESLR
David,
I've noticed your reports of some of your swing trades, and I'm glad to be a part of that success! Seriously, you're probably right taking nice profits in the present environment. Then again, maybe the stock does make a move from here. Let's see the market react to earnings. I am still 70% bullish even here.
Re: Bill: Very bold discourse
Bill,
Have you ever seen the media/pundits, etc., so far apart as they are now? It's either Armageddon or Happy Days and nothing in between.
Re: Bill: Montezuma
Bill,
Next time before you go, I'll set you up with a family, right by the Malecon and this will never happen. Or better still, you can head off to Trinidad (Cuba) a sweet little town with lots to do. Sorry to hear. Never had a problem with the food there.
Walking up La Rampa from the Malecón, you will reach the Vedado, one of the most charming areas of the city, with its 19th century houses and mansions, many of them now housing embassies, ministries and cultural organisations. On the corner of La Rampa and L Street is the ice-cream parlour Coppelia, famous for its excellent tropical fruit ice-creams. Up a short slope from here, you will come to the Plaza Ignacio Agromonte and Havana University, a set of impressive neo-classical buildings. There are also two museums: the Montané Anthropology Museum and the Felipe Poey Natural History Museum. Continuing in this direction, you will eventually come out onto the Plaza de la Revolución, where President Fidel Castro makes his Mayday speech to the masses every year. At the center of this vast, star-shaped space stands a huge monument to national hero José Martí. The view from the top is sensational. Opposite the statue, on the other side of a broad avenue is a fresco of revolutionary hero Ché Guevara.
http://whiteyinhavana.blogspot.com/2007/09/where-t...
Re: Bill: Very bold discourse
Bill are you sure you dont have Travelers Diarrhea?
http://www.mayoclinic.com/health/travelers-diarrhe...
I dont know if you can get ciprofloxacin (Cipro) over the counter down there, but that would probably take care of it if it is indeed the issue. Not meant as any form of internet diagnosis as I don't know your health situation, allergies, or symptoms other than what you have mentioned, but something to consider.
Hope you feel better soon.
Comic Relief from Zerohedge
Wherein Bernanke describes the brain size of the average CNBC viewer and more.
http://www.zerohedge.com/sites/default/files/image...
BTW Havana source: http://whiteyinhavana.blogspot.com/2007/09/where-t...
Re: sold some ESRL
"I am glad that I decided to start trading a small part of my ESLR as opposed to keeping all my shares as a long-term core position."
David- Is anything long-term anymore? It's amazing how many long-term core positions have turned into long-term care positions. That applies to positions long or short, and especially to any leveraged ETF (you were of course one of the first traders to point that out).
Wenzhou Sharpies
About 4 years ago I read about Wenzhou a coastal region south of Shanghai, cut off by mountains, and how their entrepreneurial instincts kickstarted whole world beating industries from zero, ahead of the rest of China. They did it thru small loan curb exchanges amongst trusted family and friends groups, no paperwork, no banks, no help from the state, no formal education, nada. Simply collaboration to build wealth and enterprises. These small enterprises so financed came out of nowhere to knock the lighter, shoe, and many industries flat on their asses world wide, and people became billionaires in the process. They are legendary in China.
Why not here?
I googled for an update. They've got their people combing the less developed regions of the world, looking for new efficient ways to deploy their capital.
Why not here?
America needs to fire up her business instincts and start producing something to pay back all those iou's to foreigners.
Just a thought.
http://www.ft.com/cms/s/0/e8cd9db2-cba3-11dd-ba02-...
Re: sold some ESRL
So true 2nd. I picked up TBT two days ago for a "long term" hold, its gone already. I just don't have the conviction of a bull yet. The more they are trying to convince me (aka 46% run up) the more bearish I seem to get. It has cost me dearly (opportunity wise), but I sleep well at night. I am keeping pace with the YTD market return at least and my risk is much smaller being at least 80% cash at the end of most days. Its hard to change the bearish sentiment when it was only March and people said the next great depression was upon us. Now the fools say onward to 14K.....
Re: Bill: Very bold discourse/ Time to cut the day trading cord
"Among our traders, we feel that late September or October could be the cycle peak. We look at the market daily for set-ups, and we have been in and then out in a few days only, so preparing today for puts that we anticipate buying in 60-90 days is premature."
Man that's at least two months away. A long, long time for a day trader to be sitting out.
But then, I'm not really a day trader. I have to remind myself that I switched to day trading only two years ago, after discovering it was a strategy that seemed to be working in the market environment we had then. Obviously, it's not working right now (at least not for me). So really, what's the right move here? It's possible to make your year waiting for the right moment. I think it's prudent.
I'm going to hang up the day trading belt for awhile.
Knight strikes back/I'll take my lumps
http://www.slopeofhope.com/
"And, as a trader, in the spring of last year, I was getting devastated. The typical suspects (Goldman, CNBC, other bankers) were cramming their crap down everyone's throat and pushing the market higher. I was getting mauled. My accounts were plunging in value, and I was a laughingstock to friends and family. Hateful voicemails arrived. I got mocked on other blogs. I doubted I had any talent at all. I closed the year with my two biggest accounts having gains of over 180% and 350%."
"To the 99% of the folks who have written me supportive emails and comments, I thank you, and I'm sorry for all of us this is so hard. Slopers are, by definition, smart, disciplined, and mutually supportive. To the 1% who have recovered a portion of their losses and are getting their jollies spitting in our faces: go to hell. And if you're lonely, stick around and wait for Blankfein to drop dead, since he'll give you some company there later on."
Touche.
Re: ultras for the long term
2nd_ave, after thinking some more about ultra ETFs, I changed my mind on them once again. It is OK, I think, to start accumulating a small position in an ultra-short ETF when a market rally seems to be exhausted and size that position the way one would size up a position in long-term puts. An alternative is to short the market out right, which is dangerous since a new bull market can start unexpectedly. Another alternative is to start buying put options, but they decay over time faster than ultra-shorts in a range-bound market.
I started scaling into SKF in May when I thought the market rally was exhausted. I kept buying it on the way down and then sold it a few times on the way up, significantly reducing my initial cost basis. When the downtrend finally begins, SKF's growth will be compounded every day, and it will grow more than 2X% for a given X% decline in XLF.
So while a pure buy-and-hold (for a year or so) is deadly with ultra-shorts, scaling into them AFTER a significant rally and scaling out on any small market decline (so as to keep a core position and then trade around it), until the next leg down finally begins, might be a reasonable thing to do.
Re: ultras for the long term/ Try another path?
David- Just for a moment, consider the following:
(a) Your balance at the end of each day is it. Whether it's all cash, partly cash, or entirely in non-cash assets.
(b) If everyone's expectations/'predictions' (especially your own) about market direction/movement are being thwarted on a daily basis (algo-boxes and outright manipulations notwithstanding), why hold assets that can and do change markedly in value overnight? What's the point? Because you may be right?
(c) Smarter traders than you (than me, anyway) are getting their ----s kicked. Is this the best time for us to be running around the streets?
(d) When trading is fun, it makes sense to trade. When it turns into frustration, take some time off. And the only way to take time off is to be in cash.
(e) No guts, no glory? No pain, no gain? Well, OK. I understand that philosophy (and I'm not saying it's yours), but I don't subscribe to it. There's value to pain and suffering, but the value becomes dubious when it's pain that's mainly avoidable through prudence, and even more so if self-inflicted.
(f) There are other ways to accumulate wealth. I would even say better ways. I don't have any figures, but I would assume the stock market is responsible for very little of the wealth the average person accumulates.
Re: Fed reduced the monetary base last week
David
Thanks for the link to Puplava's comments. I agree with what you posted about this being liquidity driven. The other day I read this by a trader I watch called mole.
"Again, the credit markets are a bit alien to me but I have spent quite some time researching this TOMO/repo business. As mentioned a few days ago - it looks to me as if there is a massive drain in liquidity looming, just about the beginning of August. This would seriously diminish the amount of ‘monopoly money’ available to various primary dealers. Could it be that this is why they are in such a hurry and are not even granting us a ‘token consolidation’?"
[see chart]
Where exactly can you find where the Fed shows that it contracts or expands liquidity?
"I think the rally is over." <--- you may be right. We should know within these next 6 trading days.
Re: Bill: Very bold discourse
Bill I have been there. I feel for you. I thought this was amusing I got this off Wikipedia so who knows if it is really true. Any Camels in the Bahama's?
"Furthermore, Lewin (2001) reports that "... consumption of fresh, warm camel feces has been recommended by Bedouins as a remedy for bacterial dysentery; its efficacy (probably attributable to the antibiotic subtilisin from Bacillus subtilis) was confirmed by German soldiers in Africa during World War II."[4] In addition, sheep feces contain the same antibiotic as camel feces. There are numerous reports from German soldiers of the effectiveness of sheep and camel feces being effective cures for dysentery."
Seriously if this persist don't be a bonehead like me, and go see a doctor. I traveled throughout Southern Mexico and Central America for two months, one bathroom at a time. Not a pretty sight at all. It may be an Amoeba which will need more serious treatment than Camel dung.
Bob
Re: SPY
Thanks Pill. I began buying my in the money puts today too early as I was down 20% at the end of the day. Hopefully tomorrow I'll see some green.
Re: Bill: Very bold discourse
Bob- What can I say? The day may come when I'll actually find your post useful. It's happened before- you know, the comment you laugh off or barely pay attention to comes back to you one day when you really need it. But I hope like hell I won't.
Re: Bill: Very bold discourse
Just to reinforce it in your mind, just in case. "It needs to be warm and fresh."
Re: $USD
I side with Bill on this one. There are just too many people saying the dollar is crashing or going to crash for me. Not that it doesnt deserve to, but you can bet your last pennies that when it gets nasty the Fed/Treasury will put everything they have into making the dollar bounce to where dollar shorts and gold bugs panic, etc, regardless of that it will kill the equity and bond markets to do so. I wouldnt put it past them to have lies posted for regularly published numbers (pick any important ones), or any other illegal acts needed to produce the end results, either.
Long term, I think the dollar declines substantially, but shorter term I think the COT commercial gold shorts are too high for the bottom to have been made, and there are just too many writers saying to buy gold for it to be correct, IMO.
My guess is that magically those huge treasury auctions next week go well as the market pulls back and money flows into treasuries.
Re: Fed reduced the monetary base last week
Bev, the econoday reports for today showed that both M2 and Reserve Bank Credit contracted last week. The Adjusted Monetary Base is computed by St. Lois Fed, and they present the result in the graphical form at http://research.stlouisfed.org/publications/usfd/p...
and in numerical form at the bottom of http://research.stlouisfed.org/fred2/series/BASE
Note that the date in the "page3" chart was updated today but the graph itself was not updated: it still shows the 1707 number for July 15. Hopefully later on tonight both of the above links will be updated. I suspect the Adjusted Monetary Base will follow the way of M2 and Reserve Bank Credit.
Why does the trader you watch (mole?) think that a massive contraction in credit is coming in August?
Re: Bill: Very bold discourse
Thanks, I'll bet that part will come in especially useful. That's the way it is with these things.
Nikkei taking AMZN/MSFT in stride>>up 1.3% to over 9900
http://www.nni.nikkei.co.jp/e/fr/freetop.aspx
Seoul hits a new high for 2009>>1510
...
Re: It's Beer-O-Clock
sharkie - "I apologize for asking which "King of the Hill" character you resemble. I did watch the show last night, and I am guessing it's Hank's neighbor Bill, but you let me know.
Your antics don't bother me in the least, you know that!
Re: It's Beer-O-Clock
New meaning to speak softly and carry a big stick.
Comparison of bear market rallies>1930 v 2009/ Stimulus effect?
There was a 48% rally in 1930. So we've exceeded that. My question is how the combined fiscal stimulus packages of global governments will affect the current rally. Enough to boost this market beyond what 'comparative charting' might predict?
C$ at Crossroads
Bill wrote this A.M. that he believes U.S.$ is at a crossroads. Not uncoincidently, I think C$ is at one also. We're once again back to the Jun 2 high where I believed there was a mountain of resistance - which came to fruition. Combine that with an overheated TSX and I can't help but think that profit will be flowing from north to south (or elsewhere) tommorow and probably next week also. Of course there's a chance that Carney's enthusiasm today might propel us to new 2009 highs in both TSX and C$ but I'm unconvinced about that one.
So here I am once again (like June 2) wondering where I should be deploying some strong C$ cash (and market profits) to capitalize on recent strength AND likely downside pressure. And once again I seem to be already deployed in those assets...except Japan...which looks just as dodgy as it did on Jun 2. This is getting a lot harder since December...a lot of the easy recovery money has been made.
c$: http://stockcharts.com/h-sc/ui?s=FXC&p=D&b=4&g=0&i...
tsx: http://tinyurl.com/mzl8s4
Re: ultras for the long term/ Try another path?
> David- Just for a moment, consider the following:
> (a) Your balance at the end of each day is it. Whether it's all cash, partly cash, or entirely in non-cash assets."
I try to keep this in mind since the time you posted this idea a while ago. Thank you for reminding us about this idea!
> (b) If everyone's expectations/'predictions' (especially your own) about market direction/movement are being thwarted on a daily basis (algo-boxes and outright manipulations notwithstanding), why hold assets that can and do change markedly in value overnight? What's the point? Because you may be right?
For the past couple of months, I was expecting the market to move down but was allowing for a move up (as I have basically converged myself to the trading philosophy Hussman explained in his latest market comment). Therefore, I was buying SKF in small quantities as a hedge on my longs, and my portfolio was net long up until my large SRS purchase after hours today. The gradual hedging of my portfolio was consistent with my expectation of the increasing risk of being net long.
> (c) Smarter traders than you (than me, anyway) are getting their ----s kicked. Is this the best time for us to be running around the streets?
I agree: running around the streets unhedged is not a prudent strategy now. That's why I was gradually hedging my portfolio, protecting the recent gains that brought me yesterday to the highest level since October 2008.
> (d) When trading is fun, it makes sense to trade. When it turns into frustration, take some time off. And the only way to take time off is to be in cash.
Or to be fully hedged against market fluctuations while allowing for my long positions (e.g., POT) to outperform my short (e.g., FCX) over the medium term, which I expect to happen.
> (e) No guts, no glory? No pain, no gain? Well, OK. I understand that philosophy (and I'm not saying it's yours), but I don't subscribe to it. There's value to pain and suffering, but the value becomes dubious when it's pain that's mainly avoidable through prudence, and even more so if self-inflicted.
I agree. I really like Hussman's idea of allowing (and having a contingency plan) for every market outcome, which should never lead to pain because every outcome was allowed in the first place.
> (f) There are other ways to accumulate wealth. I would even say better ways. I don't have any figures, but I would assume the stock market is responsible for very little of the wealth the average person accumulates.
Now that housing prices in Campbell (which has good public schools) have decline to the point that total mortgage payments became equal to rent (I am renting a house now in Santa Clara for $2200/month), I will most likely cash out 90% of my position at some point and buy a house there. I am just waiting for THE bottom in housing, which I expect to occur in 2011/2012, after the second wave of mortgage resets runs its course (and takes housing prices down another 20% or so).
Re: C$ at Crossroads
and I see Carney is concerned about C$ again:
http://www.theglobeandmail.com/report-on-business/...
He might try calling his old GS buddies and ask them to lighten up a bit on the speculative/commodities bets.
BTW, I think his threat to intervene in currency markets is lamo - I don't think Canada has done that in decades, and probably lacks the means to do it in any direct fashion anyway.
Full of gems...
Reminscences of a Stock Operator...
The news simply meant that the bull cliques were still fighting
desperately against conditions -- against common sense and
against common honesty, for they knew what was coming and were
resorting to such schemes to put up the market in order to
unload stocks before the storm struck them. It is possible they
really did not believe the danger was as serious or as close at
hand as I thought. The big men of the Street are as prone to be
wishful thinkers as the politicians or the plain suckers. I
myself can't work that way. In a speculator such an attitude is
fatal. Perhaps a manufacturer of securities or a promoter of new
enterprises can afford to indulge in hope-jags.
Re: ultras for the long term/ Try another path?
Hey, Campbell's a great place. Clean, quiet, good mix of older/younger families. I had a colleague in the nineties (younger Mom) who always looked forward to driving back to her home near 'beautiful downtown Campbell.' She loved her small town.
Re: LEN short
Dave- FWIW, shares of LEN are available to short at Schwab. So it might just be your broker.
Re: Bill: Very bold discourse
I too will remember the "warm and fresh" part, maybe forever. It just kind of sticks in your mind...and your craw.
Interesting posts by Karl Denninger / Treasury Auction $236B!!!
Bev - Good post, $236B is a lot of Treasury paper to push next week. No wonder gold was under attack today... And the FED has nearly reached it's $300B commitment already.
Re: Bill: Very bold discourse
Getting back to subject: Bill said "The US Dollar is at a crossroads, apparently in trouble. At 2:30am ET, the September Euro contract hit a high of 1.4266 against the Dollar before, I believe, the Fed came to the rescue."
Today FXE had a wild ride with a high of 142.86 and a close at 141.94. FWIW.
Re: Bill: Very bold discourse
Last comment. The discoverer of this cure is certainly a pioneer of medicine. A Jonas Salk of the bowels. Who in the world would think to test such a cure. Well it must be true if the German's confirmed it. Right? Maybe there is more resources in the Arab world then oil. The new export that changed the world. I'm sure the Greeks will want to get in on the mania. Ticker WMS. Warm Moist Ships.
Re: Bill: Very bold discourse
Don't forget the slogan- I'd walk a mile for a Camel.
Mr. Soffty
What's surprising to me is that MSFT would handle their earnings this way. They had plenty of time to massage the message. Under stating expected earnings is one thing but this only hurts the Co. Poorly handled indeed.
FD- Mac user.
Re: Mr. Soffty
Maybe they want to talk the stock price down to facilitate a stock-swap merger with YHOO.
Hang Seng above 20,000
...
I think S+P 1000/NDQ 2000 is in the cards.
DJIA 10,000? That's a stretch. But no longer out of the question.
Re: Mr. Soffty
Devious, but doesn't this also weaken their hand? I bet Carol Bartz is laughing over a glass of Cab. (Harlan Estate no doubt)
Another rule broken today, answered with swift retribution... UNG +12% to +6%.
Breaking the rules
"Another rule broken today, answered with swift retribution... TBT +12% to +6%."
Mark- It's OK to break the rules and get slammed. It's also OK to follow the rules and get slammed. It's just life, and it happens to all of us just as often outside the markets. I read your posts, and you seem to take it in stride.
Speaking of which- One rule that gets broken at high cost is (for lack of a better term at this time) the need to keep things inside. You know, Knight has a point, and I will refrain from further bashing (I have no idea who his target audience was, and it doesn't matter). But the way he made his point did not go down well (IMO). Too much bitterness came through. I mean, for crying out loud, don't we all deal with criticism and things going against us every day? How do you get through high school without learning how to handle it?
I can only think of three ways (offhand) to answer critics (I don't even think it's criticism- for the most part, it's puzzlement/serious questioning of tactics by followers and/or the usual man-to-man [alright, person-to-person] bashing that takes place at work):
(1) Silence.
(2) Point by point refutation.
(3) Achievement. As in let your actions do the talking.
Anyone with an audience who publicly leads them into the valley has the responsibility of either answering questions free of emotional hang-ups/anger, or leading them out of the valley by example. Anything else- keep it inside, please.
Re: ultras for the long term/ Try another path?
> David- Just for a moment, consider the following:
> (a) Your balance at the end of each day is it. Whether it's all cash, partly cash, or entirely in non-cash assets."
I try to keep this in mind since the time you posted this idea a while ago. Thank you for reminding us about this idea!
> (b) If everyone's expectations/'predictions' (especially your own) about market direction/movement are being thwarted on a daily basis (algo-boxes and outright manipulations notwithstanding), why hold assets that can and do change markedly in value overnight? What's the point? Because you may be right?
For the past couple of months, I was expecting the market to move down but was allowing for a move up (as I have basically converged myself to the trading philosophy Hussman explained in his latest market comment). Therefore, I was buying SKF in small quantities as a hedge on my longs, and my portfolio was net long up until my large SRS purchase after hours today. The gradual hedging of my portfolio was consistent with my expectation of the increasing risk of being net long.
> (c) Smarter traders than you (than me, anyway) are getting their ----s kicked. Is this the best time for us to be running around the streets?
I agree: running around the streets unhedged is not a prudent strategy now. That's why I was gradually hedging my portfolio, protecting the recent gains that brought me yesterday to the highest level since October 2008.
> (d) When trading is fun, it makes sense to trade. When it turns into frustration, take some time off. And the only way to take time off is to be in cash.
Or to be fully hedged against market fluctuations while allowing for my long positions (e.g., POT) to outperform my short (e.g., FCX) over the medium term, which I expect to happen.
> (e) No guts, no glory? No pain, no gain? Well, OK. I understand that philosophy (and I'm not saying it's yours), but I don't subscribe to it. There's value to pain and suffering, but the value becomes dubious when it's pain that's mainly avoidable through prudence, and even more so if self-inflicted.
I agree. I really like Hussman's idea of allowing (and having a contingency plan) for every market outcome, which should never lead to pain because every outcome was allowed in the first place.
> (f) There are other ways to accumulate wealth. I would even say better ways. I don't have any figures, but I would assume the stock market is responsible for very little of the wealth the average person accumulates.
Now that housing prices in Campbell (which has good public schools) have decline to the point that total mortgage payments became equal to rent (I am renting a house now in Santa Clara for $2200/month), I will most likely cash out 90% of my position at some point and buy a house there. I am just waiting for THE bottom in housing, which I expect to occur in 2011/2012, after the second wave of mortgage resets runs its course (and takes housing prices down another 20% or so).
Re: Breaking the rules
2nd- This will be first post I'll print and save. Thank you.
The last 2 years have been the best learning experience I've had since college. Most things in life have come easy to me, but have always been the result of hard work. This is exactly the same. Posting my mistakes keeps me honest.
"But the way he made his point did not go down well (IMO)." I agree. That's why I try to add a little humor along with the comments.
And I'll always stick with (C). Trading losses are nothing compared to life's difficulties one sees as a paramedic.
FWIW, I'll be looking at add to ERY on any weakness PM.
Re: Mr. Soffty
I think it is to MSFT's benefit to keep the price down since they borrowed all that moola (bonds) from JP Morgan to do share buybacks. I think Ballmer is done with Yahoo myself.
I had a stop on my MSFT at 25.25 that didn't get filled at the close. I had purchased these shares at 22.46 a few days back. I canceled my stop order and added another 300 at 23.38 after hours.
Re: Mr. Soffty
I think it is to MSFT's benefit to keep the price down since they borrowed all that moola (bonds) from JP Morgan to do share buybacks. I think Ballmer is done with Yahoo myself.
I had a stop on my MSFT at 25.25 that didn't get filled at the close. I had purchased these shares at 22.46 a few days back. I canceled my stop order and added another 300 at 23.38 after hours.
Re: Mr. Soffty
RBill- Isn't that the same as shorting your own stock on margin? Rookie here so take it easy on me!
Interesting Chart
Posted back in early March:
http://4.bp.blogspot.com/_TwUS3GyHKsQ/SbhoAkoPEBI/...
Crude Oil Net Flow
Simple list of world sources and sinks of crude oil.
Re: Crude Oil Net Flow/ Off topic
Congrats helicopter CP! You've played this right from the get go. I couldn't be happier. Well, perhaps I could, but that's for another day.
sorry, repost
none
Re: Crude Oil Net Flow/ Off topic
Mark - We'll see about that. The real test will be if I can let go of gold near the top, a move I have yet to get right.
I was leaning on the short button all day today, TZA is my poison for the first leg down if/when it comes. I figure we can't rally another 200pt+ day nearly as easily as we can fall a couple hundred feet... I'm used to being the driver steering the car and working the peddles around the slalom course.... Trading feels foreign and tests my patience, definitely not my forte.
Re: Mr. Soffty
roseville - This is yet another example of why I feel a certain level of disdain towards Mr. Softy.
preparing to cover short SLW puts
Placing a buy to cover limit order at $0.15 for the August $7.50 SLW puts I sold a few weeks ago at $0.85. If the market comes crashing down tomorrow, then there is a chance that SLW will drop below $7.50 in August, and so I would rather free up the cash I am using as a collateral for these puts now so as to be able to re-deploy this cash by possibly selling the same $7.50 puts but at much higher prices.
Free webinar on Emerging Market ETF's
http://www.indexuniverse.com/webinars/EmergingMark...
Analysis of Australian Dollar
Relationship between Beijing's Infrastructure plan, Yen carry trade and Ben "bubbles" Bernanke's Fed strategy.
http://seekingalpha.com/article/150910-analyzing-t...
China's buying more US Treasuries to buy solid US companies
An alternative take on China's probable "refusal" to purchase more T-bills.
"But what these folks don’t understand is this: China can’t stop buying U.S. Treasuries, and can’t cease to accumulate U.S. greenbacks – even if its leaders wanted to.
In fact, based on my 20 years of experience in the region, I expect China to accelerate its Treasury purchases throughout the rest of this year and into 2010, which will come as a shock to all those expecting U.S. Treasury sales to crater. But I also expect the Red Dragon to take a few other steps that also will catch most western observers by surprise.
As noted above, the relaxation or outright removal of these foreign-investment curbs by China is simply another strategy designed to slow the accumulation of dollar-denominated reserves and to reduce the risks associated with the shaky greenback.
But China-based companies will go on a shopping spree, seeking out the world’s biggest bargains. And right now, some of the biggest markdowns can be found in the U.S. market. The bottom line is this: In making these moves, China has essentially installed a big neon arrow that tells us where the hot money is headed – specifically, right into companies involved with oil, commodities and currencies. Companies with high-tech know-how will be prime takeover targets."
http://www.moneymorning.com/2009/07/17/china-hot-m...
Makes sense. Stabilise the American dollar and launder that paper crap through foreign investment and buy real stuff. How do you say Boeing in Mandarin?
Same Data, Different Day
http://ronsen.blogspot.com/2009/07/we-all-see-same...
More Green Shoots in UK GDP Data
"LONDON -- Hopes that the U.K. economy was on the road to recovery after a severe recession received a major blow Friday with official data showing output contracted far more than expected in the second quarter.
The Office for National Statistics said output declined 0.8% in the second quarter and dropped 5.6% on the year, the largest annual decline since quarterly records began in 1955."
http://online.wsj.com/article/SB124842361764178567...
GS has the bond market covered as well
From Jesse's Café Américain
"Build America Bonds" Paying a Shocking Premium to Corporates
The “Build America Bonds” were created by Bill S.238 called "The Build America Bonds Act of 2009 which provides $50 billion of federal taxpayer funds to subsidize state and local government tax free bonds in support of 'shovel ready' infrastructure projects.
The U.S. Government gives the issuing municipality or state a 35% rebate on the interest that the issuer pays to the bond holders. This is a huge benefit for local governments.
We have not yet found out why, but it is apparently giving a big benefit to the buyers of the bonds who are getting an income stream at well below market prices for comparable issues. In some cases the BAB bonds are pricing at 149 basis points over comparably rated corporate bonds.
Where is the inefficiency coming from in this bond offering? Who is taking the differential, the vigorish, being granted to the state and cities? Who are the underwriters and the market makers? Who are the big market makers besides Pimco? What are the fee structures being charged compared to the overall bond market?
Meredith Whitney, star analyst that she is, was the closest with her $4.65 prediction. She thinks the stock has lots of room to run, notes Fortune. Goldman, in her mind, will surf the economic woes now roiling the country. Goldman is a top underwriter of municipal bonds and the No. 1 underwriter of Build America Bonds. "These are a new type of municipal bond, part of the Obama administration's $787 billion stimulus plan. Cities, states, universities and government entities use BABs, as they're known, to finance infrastructure projects. This is a potential $50 billion annual market, Whitney says, and Goldman currently holds a 25 percent share," reports a Fortune article
Oh now it all makes sense. Droit de Seigneur."
http://jessescrossroadscafe.blogspot.com/
Punditocracy-Media-Academia Shill Class In Session
*WARREN BUFFETT SAYS YOU CAN'T HAVE ANYONE BETTER THAN BERNANKE
*BUFFETT SAYS BERNANKE IS RIGHT MAN FOR JOB :BRK/A US
Yes men, almost everywhere.
"In God We Trust, All Others Need Data"