Cara's Commentary & Community Chat, Thursday, Sept. 17, 2009

http://www.marketwatch.com/investing/index/DXY
Doesn't look like the Fed will do anything to salvage the falling dollar. In fact, I suspect that this might continue till well into 2010 until inflation shows up and till they get good "real" numbers on employment. Any sooner and the stronger dollar could stall the rally and create potential political problems for the ones in power. Maybe I'm right, maybe I'm not. In any case, in case the dollar trends weaker, say all the way down to 70, what are the safer places to park cash that I plan to use? Do I diversify into some other currency (the euro)? I would like it to be an electronically accessible asset, ruling out gold. But in general, what assets and what sectors in the stock market can I expect to be strong in the face of a weaker dollar? Commodities? Food or metals?

ALOHA !!

In my last weekly US TREASURY REPORT entitled US TAX REVENUE BREAKDOWN I point out a discrepancy in the way US TAX REVENUES are "viewed" by even the SPIN DOCTORS. The fact is they never report NET TAX REVENUES. Not even Matt Trivisonno deals with NET US tax revenues as all his charts only account for GROSS tax revenues in America. Remember I posted about business associates of mine in the construction industry bragging about the millions they made yet when I asked what their NET was, not GROSS, they were not so enthusiastic. That is because I know my GROSS was always hacked down by 50% because I was in the high tax brackets. So if you made $1mil and went around bragging you were a millionaire in actuality after taxes you were nowhere near a millionaire! I need to gross $1.6mil per year to claim I am an actual "millionaire"! Ask any $1MIL WINNER on the TV show SURVIVOR if they are a millionaire after the IRS and State get done with them? In the 1960s you could retire on $1mil quite nicely, even after taxes. Now you can barely afford a house in some neighborhoods of the USA even in this supposed Great Depression #2!

Well, it turns out the US government is no different. While they report gross tax revenues of $1.8TRIL the actual NET is $1.3 since they omit the nearly half a trillion they had to pay back in the form of "TAX REFUNDS" to corporations and individuals. I suspect with the poor economy and the mounting business losses(excluding NON-GAAP and FASB)that the NET REVENUES picture for FY 2010 will look even bleaker than FY 2009. Remember that in about two weeks FY 2010 will start, which will be a 100% OBAMA YEAR! No more blaming 3 months of the FY on Bush ... I can already promise without hesitation that FY 2010 will make FY 2009 look like Romper Room, especially if HEALTHCARE gets passed or any sort of "compromise". Nevermind the rest of the US government obligations that have been racked up over the past fifty years of EMPIRE building!

Already if you add the DEBT issuance and the spending together we are over the $1TRIL per month spending mark. If you want to add in the "non-marketable" IOUs known as Government Account Series we are looking at $1TRIL per week, since it is over the $52TRIL mark for the FY 2009 now. How many weeks in a year? Yeah, PER WEEK! Just how long would you last issuing that many IOUs every week? Those California IOUs are not as big a joke as US government IOUs are they? Oh and YES, the US TREASURY actually has to pay an un-negotiated interest rate on those IOUs, since there is no CHINA to appease, these are 100% internal IOUs that will be the counterparty liability to all future American generations to come. Right now EMINENT DOMAIN exists for the biggest PUBLIC TRUST FUNDS in America. This is nothing short of financial fascism!

So YES ... EMPIRE needs a diversion from reality and the truth. Throughout history that has always been WAR! Just a reminder a REAL WAR like the last real war America was in called WW2, it diverted 86% of all US spending(outlays)to the Department of Defense. In today's America that would be impossible unless Obama decided to renege on all entitlements like Social Security, Medicare, Food Stamps, Unemployment and the rest. Well, in a WW3 situation unemployment would improve dramatically and so would tax revenues as during a real war like WW2 the US saw 94% tax brackets! So Warren Buffet you may get your wish of more taxes after all! I would wager that even Warren Buffet could live well on 6% of his income! HA!!

The best course any US citizen can take at this point, is the tried and true path of GANDHI and just quit "participating" in EMPIRE! The first step is to VOTE OUT everything REP and DEM! Those two political parties have clearly been very preoccupied in EMPIRE building for decades now, which suits their needs and the needs of banking mostly, not ours. Is that not clear to Americans yet?

IT ALL WORKS UNTIL IT DOESN'T ...

Looks like I was a bit early in pulling back on the airlines yesterday. AMR announced a new $2.9B financing this morning and shares are surging up from $7.40 yesterday to $9.15 right now in premarket, dragging up other airlines as well.

You know they've succeeded when the people are talking about the particulars of the government healthcare plan as opposed to whether or not it is appropriate or even needed.

Any success at sweeping the financial crisis under the rug would seem very bullish. The question really boils down to how long it can continue to stay under the rug. So far, history indicates the answer lies in decades if not at least a century.

JoeP,

You did not mention the ETF's UUP & UDN. Those are direct plays on the $ but they sure move slowly from day to day. As for other plays, the metals seem to have reacted sharply higher against the falling dollar.

Bill,

My question is along the lines of Live4More's comment, "...is there is nobody to ask about it ..."

All my letters to elected reps have received stock letters (at times for the wrong issue). Who are these regulators and how can we address them directly?

The diversionary tactics Live4More outlines are at times so apparent... except of course, to the parrots in the main stream media.

----------------

You asked, "...why would any professional number cruncher elect or advise to report inflation with food and gas costs removed?"

Many of us have known for some time the government numbers are a fairy tale. It is my understanding that the above "minus food and energy " measure" was first instituted when Nixon wanted to look better while running for his second term.

My oldest son has a degree in stats and once worked for a research firm who were paid to provide clients with the best, clearest and most accurate data possible. They frequently turned away business which was merely an attempt to "prove" data they provided.

Most gov. data is either based on insufficient info or, worse, deliberately skewed to for political gain.

yeh I screwed up big time on that one. I can't trade a damn but at least the price/volume print left on a chart is becoming more easily recognizable. Might try again with DRYS.

Yea Les but you were right about Dress Barn. it's down pretty good so far in PM.

ALOHA !!

Does anyone here have a list of companies that shows shippers whose business model is mainly comprised of purchasing new ships? Last night Jock sent me an e-mail about how bad off German based shipping companies are as it seems most all of Germany's largest ports are moving to idle mode, which would not reflect well on a EURO, as the German export market is the main driver for the EU. When you combine that German report with the Singapore report it looks really bleak for shippers who are tied to debt on new ship purchases.

I do not know of DRYS fleet business model but I do know that ESEA(Greek based shipper in business for over 100 years)only buys used ships and does not go to the huge expense of paying for new ships. That to me is an advantage over other shippers as debt is less. In the current economic times we are in I believe only the shippers with the least debt will survive. Well, you can extrapolate that "survival model" to any business or individual on the planet for that matter.

I do not own ESEA shares right now.

Big announcement yesterday on their Heavy Oil field in Ecuador which is confirmed to contain over 6m barrels. CORRECTION: Conference call was yesterday and stock reached $3.30s at one point.

I'm also keeping an eye on PDP.TO this morning which is also focused on heavy oil in South America. Company is partially owned by Connacher Oil and has been crushed but recently did a large financing that should help buy them some time to reorganize. Could be a short squeeze candidate.

Ah no Kaimu I recall that DRYS owner used and abused DRYS accounts like it was his personal fiefdom. The company is heavily overleveraged - someone please correct me if I'm wrong. That's what makes DRYS and to a lesser extent the airlines so interesting right now. There is a deliberate effort to lift the stock price of these stuffed industries sufficiently for owners to sell out IMO, before the ghost fleet of Singapore becomes economic reality and tourism collapses. That was my reason for getting into DRYS. Yeh yeh I'm a speculator...

edit: here you go, a CAPS top ranking player says:

"2) This company has way too much debt.
3) Management sux
4) Worst of breed...." another player says:

"The CEO is crooked, and directly owns a competing company."

OUCH!

Billy - be careful with those options my friend. The premium could come off quick if we hit a snag in the market. DRYS is very volatile.

could be in play...

"After Wednesday's bell, Moody's Investors Service said it will review ratings of Blockbuster Inc. (BBI 1.48, +0.11, +8.03%) for a possible upgrade. Moody's said the review will consider the "successful closing" of the company's proposed senior secured note transaction. Moody's will review Blockbuster's Caa2 corporate family rating, Caa3 probability of default rating, and Ca senior subordinated notes. The ratings agency also assigned a B1 rating to the DVD-rental company's proposed $675 million senior secured notes due in 2014."

Q-4 pricing at 2020 vs. 2300 at end of August.... Baltic Capesize Index fell 3.5% overnight...' Lloyds List ' quotes one of largest ship brokes, that the crunch will continue thru at least next month...

"The greater problem lies with the fact that so much published information is patently false."

Yes. contraryinvestor.com was where I first saw that 41% of GDP is based on the housing sector and measured in "Owner Equivalent Rent". This had the effect of hiding true INflation under Greenspan's reign and is now hiding the DEflation of the bursting of the housing bubble. (Rent is definitely a trailing indicator of housing.)

We also have hedonic distortion (ie: If a computer is faster and has enough more capacity you "paid less" even if the price is doubled.) job "creation" by not counting those no longer looking and many other techniques.

This is also true in business – while working on more than 60 corporate annual reports over several decades I saw the shift to hiding info in the Notes to Financial Statements section.

ALOHA !!

In my last published weekly report on US TAX REVENUE BREAKDOWN I linked to an August 2008 report from the Japanese based NOMURA RESEARCH INSTITUE, Tokyo, where the author Richard Koo tries to explain the Japanese economic woes from 1990 to 2005 and the "solutions".

LINK: http://tinyurl.com/myd4jk

It is an interesting report and was published right in the middle of the global credit meltdown.

According to his flow chart the problems in Japan started with this "Private Sector Bought Assets with Borrowed Funds"

I had to laugh at that for obvious reasons! To view his flow chart go to Exhibit #10.

But this is VERY revealing for a respected economist and Japanese Economics Institute to post in a report. This ties into the ratings agencies directly. In my opinion it is a fair request given the enormity of the rating errors.

Exhibit 21. As for the Accountability…
All rating agencies who gave high ratings to subprime-related securities should be required to display the following notice in all of their public announcements for the next 50 years.

Warning: Subprime crisis has proven that ratings produced by this agency are sometimes worthless. Investors are therefore advised not to rely entirely on ratings produced by this agency in making investment decisions.

Mr. Koo is obviously very upset with rating agencies as he believes they were also to blame for Japanese financial failings during their BAD LOAN years of the 1980s and 1990s.

After reading the entire 26 page report I came away thinking that Obama and his Economic Team are going to follow what the Japanese did in 1990, although there are some significant differences as the "ONE-SIZE-FITS-ALL" economic model is not the same for every country and government.

Its the ARTHUR ANDERSON SYNDROME all over again ...

Regarding candlesticks... could GDX form a 3day bearish setup if it opens below $47.80... just curious

Blockbuster may close hundreds of stores http://bit.ly/19xiC2
Movie and video game retailer Blockbuster Inc. indicated in a regulatory filing that it may close as many as 960 stores by the end of 2010, including closings in 2009.

The Dallas-based company (NYSE: BBI) has about 35 stores in the Kansas City area, according to its Web site.

Company spokesman Randy Hargrove said Wednesday that the company isn’t disclosing a list of stores it’s considering for closure. Each store has an average of about 10 employees, he said, many of whom typically are transferred to other stores when closings occur.

The company said in a Tuesday filing with the Securities and Exchange Commission that the store closings are part of its strategy to “focus on portfolio optimization” by shutting down unprofitable stores.

According to the filing, the closures would include all store closings from 2009 and possible closings for next year. A specific estimated breakdown by year was not available.

Earlier in the year, Blockbuster denied that it was considering a bankruptcy filing after hiring law firm Kirkland & Ellis. Blockbuster said Kirkland & Ellis was hired as a consultant to help with raising capital.

Blockbuster reported a second-quarter loss of $39.7 million, or 21 cents a share, on revenue of $1.02 billion. That compares with a loss of $44.7 million, or 23 cents a share, on revenue of $1.3 billion for the same quarter last year.

Blockbuster has 3,750 company-operated and 606 franchised stores.

took 1/8 of my position off at $4.54 that I bought at $4.03

gamblers might be interested in trading this...

looking strong again.

Kaimu - Netflix has an awesome digital download feature. My friend has a samsung HDTV and a blue ray player and he has a Netflix account where he can do direct downloads from Netflix to his blue ray player. Downloads in about 15 seconds....very nice...

they announced a $250 Million equity deal and look at the stock after its initial drop...almost even. That tells me the regionals are going higher. I was probably a little early in selling 1/8 of my position in HBAN this morning...

anyone knows how a stock splits or reverses will affect the options?
example if someone own a call option before the stock reverses... what's the quantity of shares that the option holder can exercise? Still 100?

Not that anybody (except me) cares...1073...180 degrees after 1080 degrees off the March lows.

10 day NYSE breadth average > 1100

"risk contained"

You know the scene I'm referring to. Playing at a local bear blog near you.

Thanks BH, I nearly posted last night a link to Mary on Youtube but did not due to the late hour. Peter, Paul and Mary were some of the foundation that my love of music stands on.
peace from North Puget Sound

To learn how options will be adjusted for splits, consolidations, special divs, spin offs etc, just go to the learning center on one of the following sites, they are both excellent. Also note that whenever one of these cases happens, an adjustment memo will be issued explaining exactly how each specific case will be handled. In most cases the options quantity will follow the stock, in some cases there may be a price adjustment or a cash component at exercise, some of them do get quite complicated.

Chicago board of options
http://www.cboe.com/

Options Clearing Corp.
http://www.optionsclearing.com/default.jsp

Call me crazy, but I think it may be time for a good day for SRS starting from here...

in addition to yesterdays post #46165, here is another useful resource on monetary science. i am still in the process of getting through this myself, so i apologize if there is something in here that is 'wrong'. point is, i think its a good idea to education yourself on this topic, so i am trying to provide resources in order for the community to do so. that is my only intent; you should make up your own mind anyway, not believe what someone types into a blog.

http://www.monetary.org/lostscienceofmoney.html

and a review of the book:

http://www.monetary.org/toddaltmanreview.htm

----------

ps - RE: "If you truly want social equity, you will have to fight for change."

i couldnt agree more

ZION now positive...if that doesn't tell you to buy regionals I don't know what would.

HBAN has a resistance point at $4.77. Anyone looking to go long might buy after that point with a stop loss limit just under $4.77.

As someone who works in the cable biz, I've always found it odd that my company has never reported any details for VOD sales. Over the years the company has slowly increased the offerings for VOD, even offering free VOD to subscribers.
I tested the VOD out as a friendly in the early days and found it a nice concept if the company has got the infrastructure in place to let a dozen subscribers all request the same program at the same time. If not, you get frustrated pretty quick.
For myself though, I am picky about how much TV I watch anyway and I find I almost never use VOD because they don't offer the shows I'd like to watch anyway.

thanks..
they are really helpful..

Answer = It will go to wherever your stop is and then turn around.

3M - 29B
6M - 29B
52W - 27B
2Y - 43B
5Y - 40B
7Y - 29B

200B total

Looks like they're trying to sell a bunch of longer term notes this time around.
I wonder how many the Fed will buy?

BEE broke resistance at $1.66...could be a good point to stop out at around $1.6.

I bought more HBAN at $4.71.

I sold ACAS at $3.5 that I bought at $3.07 or so yesterday...hoping for a pullback to buy more.

sold at 4.69 what i bought at 4.71

Bought back some of the DRYS calls on the dip I was looking for.

The stupendous rally in the banks is no fluke and the ongoing policy of letting banks run amok on the US tax payer dime continues. They are taking their risk experience and making it the US taxpayer risk experience. Volcker it seems is the only one able/willing to call a spade a spade and wants to limit bank exposure to capital markets.
http://tinyurl.com/np2tck

Added more short when it was at $10.26

Goldcorp -2%, SLW -3.7%.
I guess it was distribution yesterday.

All because the dollar may be stabilizing at this level.

Ended up swapping out of HL calls and back into the common stock - averaged @4.47

I have a simple observation regarding some of todays data.

I may be incorrect. What you expected me to have the orchids to make a naked call on the market direction? I was not born yesterday or at least last night.

I do have some input however: I noticed that whenever the fed wants to sell some treasuries, especially long dated, the dollar will miraculously strengthen...is this not what happens? The rest of the story is very painful for stocks or at least it was in the past. Lets see we are ignoring fundamentals, the dumb money may be involved more than usual, and we need to sell some long dated bonds soon. I have no idea what this will do with Gold/silver...in the past it has portended a pullback...with all the SDR's talk, will this be the case?

If anyone disagrees with this please lets hear(read)it. If anyone agrees with this please lets hear it.

I think its a buying opportunity. If PMs are going to go as high as I THINK they are, there is going to have to be some major shakeouts along the way. I'll have to let mr. market tell me the truth though. Rough trading day for me so far but hangin in there...

I noted yesterday that the semis in general were flat to down while the market was significantly higher. Today NSM, INTC, and TXN are all hurting.

Keep in mind that this is after having raised guidance in all of these names. I find that as a reason to be cautious just from a price action perspective.

Did fall a bit further. However, look at the price of palladium....over 300 per Z now....the critical price as stated by PAL management to trigger a re-open of their mine in January.

When your longs have had a good run and they reach what looks to be a peak (a distribution day) you can always write covered OTM calls to help cushion those downturns while still hanging on to the underlying while allowing yourself more upside.

Then when the stock retreats a bit, you can buy back the calls at a nice discount.

We're on the cusp of an intraday upside dollar breakout. This could be interesting, as it would throw the buck into a "buy alert" status, more or less.

RSI daily=26 (and climbing), weekly=17, monthly=32

We should be writing puts right now on the buck, if we are gutsy folk. But how do we do that?

hopped back in at $1.60. Volume is strong and the chart looks solid.

one of China's largest....

Placed a sell stop order at $9.10 for the SRS shares I purchased yesterday after hours at $9.05. I am just practicing not letting a profit turn into a loss. :)

Hi TN_blogger,

you said: "Lets see we are ignoring fundamentals, the dumb money may be involved more than usual, and we need to sell some long dated bonds soon."

i was wondering if you could define 'dumb money' for me? anyone else is welcome to offer a definition as well, if they are so inclined. i understand the term in the vernacular, but am just looking to understand how others think of this oft-used term.

thanks.

Since I often use terms Smart Money vs Crowd, I'll take a stab at it.

Smart Money - segment of players that
- understand the market psychology;
- understand how various events in both news and price movements influence masses;
- monitor the price movement in order to spot and utilize errors made by the crowds;
- control their own actions with high degree of discipline
- make sure that their actions are governed by their decision-making process based on their system of trading, whatever it is, and not by emotions;
- analyze own performance and correct the action in order to optimize it.

Crowd (Dumb Money) - segment of market participants that
- allow emotions to control their trading decisions;
- are influenced by news flow and price movements according to mass psychology patterns;
- act with no discipline;
- confronted by lackluster performance, become stubborn and remain stubborn until overcome by fear;
- in doing all the above, provide those same price movements utilized by Smart Money.

It looks like UNG made a double bottom at $11.43 earlier today (thus establishing a support at that level) and then broke down through that support level, thus making it a resistance level. So I have just sold short some UNG at $11.32 and placed a buy to cover stop at $11.5, a little above the resistance level.

SRS hit my sell stop limit at $9.10 for the shares I purchased yesterday at $9.05. Just practicing not letting a profit turn into a loss...

BillySundance,

I liked your idea for a paired trade on HL and SLV that you posted the other evening. It looks to me like HL has huge swings with small moves in the price of silver. I just entered a small position that is a variation of what you proposed. I sold 10 SLV Jan09 calls with a strike price of 20 for $0.80 and then bought 10 HL Jan09 calls with a strike price of 5 for $0.80. The only cost is commissions. When silver hits $20 I believe HL will be far above $5, jeez, it was flirting with $5 at silver $17.50ish. Thanks for the idea, it will be fun to watch this one play out. Pretty good call on SRS today as well, not too bad for an off day. :)

BEE looking really strong. Check out the properties they own:

http://www.strategichotels.com/index.html

In the near term, the next good entry on the short side will be when/if $USD rises above $76.4, which served both as a support level and then as a resistance level on the daily chart over the past few days. At that point, one could set a mental stop trigger for the position if $USD falls a little below $76.4. A good trade, as I recall, is the one that has a well defined stop.

In at 11.33 and a stop at 10.84 and a target of 14.19.

gademsky,

See the menu at the top of the page, " Site Index" >> "Website Help" >> "RSI Tool"
Or just follow the direct link below, this information pretty well covers your question along with a few other pointers.
http://caracommunity.com/content/rsi-tool

Every system uses something a little different but for the RSI tool you need the symbols based on Yahoo finance, so you just have to find the symbols there first.

" fly on the w ".....

"They have no more use for this President, no fear for what he can do to them, and see no reason to show support. They have moved on – "

Speaking on Wall Street at noon Monday, President Obama laid blame for the crisis and recession of 2008-09 squarely at the feet of the financial sector. The diagnosis was sound but the rest of his speech was disappointing – the administration’s draft regulatory reforms look lame, banks are fully mobilized against the only proposal with any teeth (a consumer protection agency for financial products), and the President’s call to “please don’t do it again” surely fell on deaf ears.

In fact, were any of the most relevant ears even listening? The real news from Monday was not the substance of the speech or the stony silence of the financial elite in the audience, but rather that not a single chief executive officer (CEO) of a major bank was in attendance.

This is striking because CEOs were the natural and repeated point of contact for the President and his staff throughout the crisis – as seen, for example, at the pivotal White House meeting in March. This makes sense, because it was the CEOs whose jobs and reputations were on the line – people like Lloyd Blankfein (Goldman Sachs), Kenneth Lewis (Bank of America), Jamie Dimon (JP Morgan Chase), and John Mack (Morgan Stanley). And these same CEOs are today the key decision makers for everything the President wants to urge: careful risk management, responsible compensation schemes, and improved business ethics.

These CEOs are, of course, busy people and no doubt many or all had good excuses and sent nice apology notes. But their collective absence is beyond remarkable. The President saved their jobs, bonuses, pensions and much more after he came in office; this was a gutsy call on his part and one that may still sully his legacy. And in this endeavor, the President represented both the Congress of the United States – for example, in deciding how to implement the Troubled Assets Relief Program (TARP) – as well as all taxpayers and every citizen. Usually, you have to stand in line for a long time to sit in the same room as the President of the United States.

But not a single big bank CEO apparently had the time to show a little respect or gratitude, and to pay even lip service to better behavior in the future?

More than any technical discussion of raising capital standards or tightening leverage ratios, this presumably uncoordinated failure to show up speaks volumes about current attitudes on Wall Street. The CEOs of our biggest banks have weighed the man and done the trade. They have no more use for this President, no fear for what he can do to them, and see no reason to show support. They have moved on – presumably back to whatever they were doing before the events of September 2008 so rudely interrupted. And their obvious presumption, contrary to the words and body language of the President on Monday, is that next time – when they need it – the representative of the taxpayer will be there for them again, with generous bailout packages and extraordinary kindness.

By Simon Johnson

Banking Life Means Never Having to Say Sorry: Margaret Carlson
mbernold, this from Bloomberg:
http://tinyurl.com/ngo7z

Quasi,

Thank you for the help and pointing me to direction page.

I am stilling having trouble with symbols however and have been trying different things for a few weeks now.

I am not that knowlegeable about this stuff and could being making a simple mistake.

For example in yahoo:

gold chart has symbol.....GCU09.CMX....this does not work on RSI app
Dow has symbol DJI... this does not work in RSI app

There are a lot more that i have been trying various symbols for and can't find the one that works.

Quasi,

Thank you for the help and pointing me to direction page.

I am stilling having trouble with symbols however and have been trying different things for a few weeks now.

I am not that knowlegeable about this stuff and could being making a simple mistake.

For example in yahoo:

gold chart has symbol.....GCU09.CMX....this does not work on RSI app
Dow has symbol DJI... this does not work in RSI app

There are a lot more that i have been trying various symbols for and can't find the one that works.

Now is the time. I bought Bed Bath & Beyond puts Oct 40 for $2.10 today. (GYHVN). I have been patient. The all time high on this stock is $45.90. I really don't care what the charts show. This stock is very overvalued If I'm wrong in Oct I'll double down in Nov. I doubt I will have to do this.

I looked closer at the $USD chart now and saw that it has just bounced off the $76.2 level, which also looks like a support now. So I just bought back at $9.16 the SRS shares I sold earlier at $8.98 with the intention to sell them again should $USD fall down below $76.2.

Now is the time. I bought Bed Bath & Beyond puts Oct 40 for $2.10 today. (GYHVN). I have been patient. The all time high on this stock is $45.90. I really don't care what the charts show. This stock is very overvalued If I'm wrong in Oct I'll double down in Nov. I doubt I will have to do this.

Someone was monitoring this one... fresh news just now:

4:02:07 PM
Arena Pharmaceuticals Inc To Host Conference Call and Webcast on Friday, September 18, 2009, to Discuss Results from the BLOSSOM Phase 3 Trial of Lorcaserin for Weight Management
- The company today announced it will hold a conference call and webcast presentation on Friday, September 18, 2009, at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time) to discuss top-line results from BLOSSOM (Behavioral modification and LOrcaserin Second Study for Obesity Management), the second of two pivotal trials evaluating the safety and efficacy of lorcaserin for weight management.

bought at $3.26 before close.

Holding shares that represent my profit in BEE. Bobby - I agree about the issues with BEE. I did read that they put down more in equity than normal for a lot of their properties so maybe they are in a better position than people expect to sell them??? just speculating.

Jesse,

Glad to hear that the paired SLW/SLV option trade idea appealed to you. I'm eager to watch it unfold. I think it is a very low risk/high reward play and a trade that will allow you to walk away from the screen (unlike holding a large position of the actual stock).

Hopefully that UAUA trade worked out for you too and hope Salt Lake will have some solid powder for you this season!

"Now is the time. I bought Bed Bath & Beyond puts Oct 40 for $2.10 today. (GYHVN). I have been patient"

Woha pauldkk. If I didn't know any better I'd say you were lacking some patience with the page reload :)

Joe Saluzzi twits that CEO of Robert Toll sold 1.5 million shares of $TOL yesterday. Actions a repeat of June/July 2005 when the bros. sold 2.5 million shares. Deja vu? Take a look at 2005 on the $TOL weekly chart. Not pretty.

night all.

Gademsky, I don't think the RSI Tool will work for commodities or indexes, but you might want to post a question for Korvus, its his program so he will know all the limitations.

However its not working right now even for stocks, so must be something wrong.

Edit: Its working again and seems to be OK for indexes on Yahoo, but you have to include the ^ prefix, so the Dow Jones is ^DJI

But it doesn't seem to work with the commodities, must be as the data comes from other exchanges ie CMX, or CBT or Nymx.

Bought back after hours at $9.13 the shares of SRS I sold earlier today at $9.10. As I mentioned earlier today, $USD has recently bounced off the $76.2 level, which looks like a support of some kind now. I'll sell these SRS shares at a small loss if $USD fall down below $76.2.

Well I think its a pennant - or a flag, with declining volume. I have no prediction on which way it will break out; MACD shows it in a downtrend currently.

http://stockcharts.com/h-sc/ui?s=AIG&p=D&b=5&g=0&i...

It probably missing couple important points:
--ability to get important information ahead of others
--ability to ‘manipulate’ crowd’s behavior by use of mass-media and distorting market movements when it’s possible

I have just noticed that the intra-day $USD chart made a wedge formation since about 9am this morning. The $USD is sitting now right at the tip of the wedge, at $76.2, which I have earlier identified as a support level. If this wedge is broken to the downside, then I'll sell after hours the SRS shares I bought earlier today.

Continues (STARTING WITH $10,000 INVESTED IN EACH STOCK ON 9/16/2009)

AAPL - $10,391 STOCK UP +1.47% ($152.00) NEW VALUE $10,543
SLW - $10,161 STOCK DOWN -1.89% ($192.00) NEW VALUE $9,968

AAPL STILL ON TOP

La Jolla, CA.----Bay Area home sales bucked the seasonal norm and fell last month from July, though they remained higher than a year ago for the 12th consecutive month. The region’s overall median sale price also declined as a greater portion of sales occurred in more affordable areas, a real estate information service reported.

A total of 7,518 new and resale houses and condos closed escrow in the nine-county Bay Area last month. That was down 14.3 percent from 8,771 in July and up 4.0 percent from 7,232 in August 2008, according to MDA DataQuick of San Diego.

Last month’s sales were 24 percent below the average number of sales, 9,886, for the month of August since 1988, when DataQuick’s stats begin. August sales have ranged from a low of 6,688 in 1992 to a high of 13,940 in 2004.

http://tinyurl.com/lkw7n8

FROM VAD

KTEL CEO/owner hasn't sold his share at $80 saying "I am told by professionals it goes to 100", and allegedly kept them all the way back down and to delisting. He was certainly insider but what group would you put him to?

HE BELONGS IN THE GROUP OF IDIOTS

I would also say there is some danger of blogs like this where there are many amateurs posting their various buy and sells daily. Hopefully, readers take it all with a grain of salt and make their own trading decision based on whatever they like to use for making those decision as long as they are hopeully fundamentally sound systems and not just rolling dice or throwing darts or listening to other peoples hype.

Just as an example: I bought SDS yeaterday at 39.60 and another blogger had done the same. A little later on he sold out at 39.45 and I kept mine. For curiosity I decided to see what it was about 39.45 which promted his sale and for me I could not find one. At no time did I even think about getting out of my position as I had bought mine for a particular strategy and I don't generally pay much attention to others unless I know them personally as people that should be listened to. Anyway, it is not for me to get caught up in that particular traders mind set as to why he does something or not as that can be very dangerous and create doubt. Unfortunately peer pressure can and does play a role on other traders who may just be beginning.

I have and will continue to listen to Bill as his daily market commentary is a source of great information however, as for particular stocks he may reccommend I tend to make those decisions on my own. But because it is Bill making the recommendation I will look at the particulars of his trading recommendation and see if it warrants my participation. I have done so in the past and have profited by it to this day. Thanks again Bill.

I am sorry, I am going to have to disagree... I don't see any of those being necessary "fixtures" of Smart Money. Big Money - may be. Interventionista Money - may be. Dirty Money - OK. But it's certainly possible to be Smart Money without those two points, and a lot of market participants prove that day in day out.

pauldkk- Looks you're having second, third, fourth, fifth, and sixth thoughts about that. I could chime in with my own examples of stocks I tried to short in the late nineties (on Fleckenstein's calls). The nerve pain in Marathon Man was easily deadened with a litte clove oil, whereas the pain of a runaway short squeeze can last a lifetime. Hope you're keeping the bet small- my idea of small is losing it all will sting, and that's all it does.

http://tinyurl.com/kvtp5y

By the way, I think it was golong who referred to the 'dweebs from Wharton' as late arrivals to the trading game. This is purely based on personal experience, but if I wanted a better than even chance of making some money and I had to hand my chips to a surrogate trader, it would be to the guy from Staten Island.

Bev, would be nice to see the bar for September last year in the chart in order to compare apples with apples.

A comment left there is great though:

"This does not matter - the Big Banks will not let the "market" drop. I was bearish until it occurred to me that elevated stock prices are just part of the bailout/recovery plan. This is the only way to explain the sudden reversal in the stock market in March, the disproportionate rise of stock prices relative to the economy and earnings, and the lack of any significant correction in spite of continued underlying bad news.

Except for small downturns to make it look realistic, there will be no significant correction because the Big Banks will prevent it. In return for the fed/gov’t bailout goodies, the Big Banks were required to start moving the stock market up in March and then keep it up. Now after establishing huge positions after filling in the crater during March lows, all they have to do is fill in the pot holes to lure more investors in and keep the market moving up. They can start cashing out when the herd starts jumping in to prevent an obvious bubble, but not enough to trigger a sell off. This is also their restitution for screwing the middle class, and it helps prevent substantial market reform and regulation since negative public sentiment is subsiding.

In return, the Big Banks get recapitalized through equity offerings and investment/trading gains, and the ability to make huge profits on their new loans using free money from the fed. They also get bigger as smaller banks, which were left out of the deal, fail.

The stress tests were a side show to reinforce the scheme. They didn't have to be too stressful because the assumptions were based on the plan working. To put the icing on the cake, the fed keeps feeding the press with their positive outlook which Big Media passes on without a blink of the eye.

Consumers become more confident as their net worth recovers, which also helps housing prices reducing the accumulation of toxic assets by the Big Banks.

It is all a big show - the stock market is more of a propoganda machine now.

Thus, even though the bears have the best argument based on economic data, the stock market is still guaranteed to go up - the recovery plan is based on it. So you might as well buy some long-leveraged ETFs and ride the wave. "

----

Oh , oh, trouble in Japan tonight. 3rd largest lender does not have money.

I actually like them for their diabetes platform..... their last obesity update was less than inspiring... of course, this is Wonderland, so who knows.... bol.

Make that North American gas. Tug of war continues says WSJ's MarketBeat Blog:

http://blogs.wsj.com/marketbeat/2009/09/17/natural...

I note also that UNG has narrowed the premium over NAV to 3.5% as of yesterday, the latest available from ETFConnect as of now based on Wednesday's prices.

I have occasionally used UNG for trading but not lately. Too many problems with that ETF for me. I do hold integrated oil company stocks and still am short one company which is heavily reliant on shale gas, as a hedge against the oil longs.

2nd I agree. I think if you were referring to floor trading YES but I am thinking that isn't necessary the case for an upstairs trader in front of a Quotron machine. Maybe the Dweeb has a better advantage over the street smart street guy from Queens..

The last time it was down big was March...market has done ok since then.

Nice Vad. I was following ARNA. I have yet to develop a system where all these stocks that I follow with knowledge that important decision dates coming up are translated into actionable trades. - CBRX, DNDN, ARNA. It appears that a solid news feed like you've got is the best way to trade these stocks. I could buy and hold them until they make their move? With further capitalisation and a market not in crisis that would be a comfortable move. Capitalisation remains the issue I suspect.

BEE, ACAS, NM, USG, NCS, WNR, HBAN, PG, MTW, AAPL, GE, LYG

Regional Banks:
There have been two offerings in the past 24 hours from the two most heavily watched regionals: HBAN and ZION. Watching how the price reacts is key. ZION dropped $1 on the news immediately, then rallied higher only to fall back to its lows. HBAN announced the same after hours and the price dropped immediately about 5% then rallied a bit. Regarding HBAN, this news was already announced from what I remember so I'm not sure why they would react at all to the news but we shall see.

FD: No position in any of the regionals; sold HBAN today and will look to re-enter.

Hotel REITS:
All hotel REITs are in play as the possibility of an economic recovery is playing into these highly leveraged REITs. Should the hotel business rebound then any hotel REIT that is highly leveraged will have huge gains in cash flows and earnings and buying at these depressed prices could turn into large gains if you can stomach the volatility.

FD: I own shares in BEE.

NCS - They announced a big convertible deal with a lender a month ago to stave off debts due in October. This deal gets them through the next several years. The company has cut costs significantly in this downturn and their business could throw off huge cash flows and earnings should a recovery continue in the economy. If so, even with the dilutive conversion deal they announced, they could earn at least $2/share in the next up turn. Not bad for a stock at $4.

LYG - This will be all over the news tomorrow. Lloyds is having issues with insuring their assets...

The $11.50 stop level I used today was based on the intra-day UNG chart. Now that this chart is no longer relevant, the stop has to be based on the daily November NG futures chart (since UNG is fully tracking the November futures now). The November futures closed at $4.7 yesterday, the highest point during the recent NG rally, and dropped down to $4.45 today. In order for them to rise from 4.45 to 4.7, they would need to make a 5.6% gain. Such a gain on UNG would place it at $11.91. Since we need to get the uptrend the benefit of the doubt, I have just adjusted my stop to be a little above the mid-point between $11.28 and $11.91, at $11.63 (to make it a nice round 30-cent loss on the shares I shorted today at $11.33). If a downtrend has started, then the odds of moving to this mid-point for UNG are less than 50%. On the other hand, if UNG does move to this mid-point, then I would say the odds of the uptrend still being in place are greater than 50% and hence an exit from a short position at that point would make sense.

So Singapore clamps down on speculative real estate, HK punishes egregious trader behaviour on its beat. When is it the US's turn? Or does it risk being the pariah as Asia takes the lead on setting standards? Perhaps oversimplified but illustrative of differences observed through the media.

"HONG KONG (AP) -- An ex-Morgan Stanley banker was sentenced Friday to seven years in prison in Hong Kong's biggest insider trading case.

Du Jun, a former managing director of the New York-based investment bank, also was fined about 23 million Hong Kong dollars ($3 million).

It was the maximum sentence Du faced after being convicted last week on nine counts of insider dealing in the shares of Citic Resources Holdings Limited before the company's announcement of an acquisition in 2007. He was also convicted of a tenth related charge for helping his wife to deal in the shares.

He reportedly reaped about HK$33 million ($4.3 million) from his illegal trades."

Interesting that LVS appears on this list when its stock over the last 2 weeks has rissen 25%. Is this OLD information? Word on the street is that anyone working with China these days will succeed where other may not. LVS is one of those companies. Addmittedly they are in a tight spot though, financially speaking.

His chart from EOD yesterday. He's puzzled by the leader faltering when everything else is apparently solid (see attached). So there is an anomaly developing that traders are questioning. He apparently sees it as an aberration, rather than a possible indicator.

I guess the drug is not doing what was supposed to, I am glad I missed it. I did get into AUXL and VVUS on time for the ride.
http://tinyurl.com/lungxl
JoeAl

Good morning.

Upgrades:

SBUX - to Overweight @ Piper Jaffray. PT Raised from $13 to $24
PG - to Buy @ Citigroup. PT Raised from $54 to $66

PT Raised:

GOOG - from $500 to $600 @ Collins Stewart. Buy

---------

sharkie wrote:

".... have I disturbed the sensibilities of some Amish farm kids again?"

I resemble that remark. :^)
j/k

Regards,
BH

http://tinyurl.com/mstj76

And that's why everything is just a trade. Look how rosy yesterday's headline sounded, and how bleak stock trades today. Sic transit gloria mundi. Perfect illustration to a few concepts: risk control necessity and how it's done, information being only part of the puzzle, price movement overriding it all.

I like ETFC also....ABOVE these current levels and on real abiding strength. My alerts are set and I'm ready to join the party, will bring favors.

Also for those of you who appreciate this sort of thing, a general idea, not today necessarily and only if the rally continues, but BPZ resources looks like a potential winner to me.

If they're going to set the bears up, it will be done with consummate timing. That's how traps work- a thorough understanding of human psychology.

An early afternoon take down to shake out newbie longs/suck the shorts in, followed by a violent spike up. Just my take, which is to say, that's the way I would do it.

Got rid of some residual WNR at $7.89 this morning. This was a leftover from a busted trade. Refiners are doing well again today. The daily RSI7 on WNR was up to 92 when I opted out.

coming back up after the morning fill...why I didn't see that with my early morning buys I don't know. Volume is pretty heavy.