Sunday, August 1, 2010
8/1/10 All In Love Is Fair
All is fair in love
Love's a crazy game
Two people vow to stay
In love as one they say
But all is changed with time
The future no one can see
The road you leave behind
Ahead lies mystery
But all is fair in love
I had to go away
A writer takes his pen
To write the words again
That all in love is fair
All of fate's a chance
It's either good or bad
I tossed my coin to say
In love with me you'd stay
But all in war is so cold
You either win or lose
When all is put away
The losing side I'll play
But all is fair in love
I should never have left your side
A writer takes his pen
To write the words again
That all in love is fair
A beautiful (and oft-overlooked) ballad by Stevie Wonder.
What is it about love and war that makes deceit, betrayal, and cruelty fair game? Whatever it is, it applies to trading also.
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ES +8.50, DJIA +46.
ReplyDeleteGood stuff in this week's WIR. The one paragraph that caught my attention:
ReplyDelete'Many traders have decided to withdraw their capital from the market on account of the prevailing opening gaps higher and lower and the many intraday whip-saws caused by computer algo traders (including flash bids and offers that are intended to suck in day traders using conventional analysis, leaving them as losers).'
Conventional analysis certainly seems to have been a losing strategy. That begs the question of what to fall back on.
ReplyDeleteMake that +67 on the DJIA. Not sure if I misread the first time, or if futes jumped 20 points in the last few minutes.
ReplyDeleteA saw someone mentioning global warming this weekend, and I decided to look up the latest state of things.
ReplyDeleteDuring the past winter, many people thought that we are entering a period of global cooling because of the record low sunspot activity. Following up on this idea, I found on the Web some research that shows that when the sunspot activity is very low, the average winter temperature in Northern Europe is indeed lowered by 0.5C. Interestingly, even with the low sunspot activity during the past winter, the Greenland's ice keeps melting at an accelerating pace, just as Al Gore had warned us! Here is an article about it:
http://web.orange.co.uk/article/news/greenland_ice_cap_melt_is_accelerating
I am seeing E-Mini on CME up 7.5.
ReplyDeleteIMO, for the most part, I think a lot of investors probably got flushed out and are in CD's or money markets till they die, having been burnt so bad that there is no way they could risk going back to investing as it once was.
ReplyDeletecheapy - That sounds pretty bullish, they're gonna miss the last train out of the station???
ReplyDeleteAbsolutely, never, ever to return no matter what.
ReplyDeleteFor example, Do you think I'll EVER sell my metal to put the money back into the markets? Not on your life...
Or my Mom, over 1/2 of the remainder of her portfolio is now in laddered CD's. It will NEVER go back into risky assets, and as time goes by what's left in the mutual funds is being taken out as quickly as IRA rules allow.
I don't see it as bullish at all. That money is NEVER going back into the market. And as long as the tax hike scare is in force, they are just daring all the long term investors that are left to try and hold on and not be the last one trying to sell in a fall panic before tax rates rise. If they delay it permanently or more than 2 yrs, then I could see it being bullish, but don't see that happening till AFTER they see a crash coming.
Ok, I take that back. Show me a gold price 5 or 6 times the SP500 index and I'd say its worth taking some risk again as an investor. Things will get pretty nutty if gold goes that high or the SP500 goes that low, but I guess it tells you how much I think gold is undervalued by relative to paper promises.
ReplyDeleteHere is an interesting fact of bear mkt history.
ReplyDeleteFrom 1900-1929 we had 10 bear mkt's.
Using DJIA
1900 -31.8
1903 -37.3
1907 -45.0
1909 -26.2
1912 -23.5
1917 -40.1
1919 -46.6
1923 -18.6
1926 -16.6
1929 -90.0
Give good reason for cheapy's statement, "I think a lot of investors probably got flushed out and are in CD's or money markets till they die"
If one does not have some sort of system to mitigate losses, you just become folder for the sharks.
I really do not blame most people for saying screw the markets and just click coupon's, meager as they are.
If one does not have some sort of system to mitigate losses, you just become fodder for the sharks.
ReplyDeleteAPJ finished nicely higher and EMEA is ripping right now.
ReplyDeleteGoing to try to follow things closely this week as it sure looks to set up for some quick plunges but I have a whole week of justifying my existence at work so I'll probably only make a few trades.....that's what happens when we miss our margin forecast...:(
good luck today boys!
DJIA +110
ReplyDeleteSPX +16
Good Morning, Vietnam! Let's get out there and kick some furry butts!
Landry-
ReplyDeleteRandom Thoughts:
I'm very impressed that the market recovered from its earlier sell off. This is especially true when you consider the number of debacle de jours we had on Thursday.
As I mentioned in the service over the weekend, the above combined with pattern suggests that the market has the potential to challenge the top of its range.
However, this in and of itself isn't reason enough to get excited.
When a market is in a range: Wait, don't anticipate.
Futures are yo huge pre-market so it looks like we'll test the top of the range sooner rather than later. Again though, wait for follow through.
Best of luck with your trading today!
'Wait. Don't anticipate.'
ReplyDeleteCertainly seems prudent right now.
Look at that freaking dollar drop and the Euro climb.
ReplyDeletelooks like the market is playing out just as i had anticipated the past couple of weeks...too bad it is AFTER i bailed! i'll probably be jumping back in at higher prices on the close if its like this at the end of the day.
ReplyDeletegotta love when you call it right but still get juked out. ahhh such is life.
tof- Yeah, well...it's only happened to me a few hundred times.
ReplyDelete2nd - if we close at these levels or higher i have to say that we need to be getting back in for a run at 1,200.
ReplyDeleteRAS off @ 2.11. 5.5%.
ReplyDeletegot to hop over to the short side, hopefulyy for a few quick $$$.
ReplyDeleteFAZ @13.19, TYP @ 37.90
Hey guys,
ReplyDeleteWatching EXK for a possible long.
What's happening is, the s and p has made an inverse head and shoulders, also we are now poking up back into the year's opening range.
JB- Don't blame you. Good too see you last night.
ReplyDeletethat didn't last long...kicking in $$$ to fido, typ off at 38.10, faz off at 13.21
ReplyDeletehey bro, great seeing you - those kids are sure darn cute (all must take after patrica). we had fun, long drive back then work calls at 3.
ReplyDeletecould be a full time trader by wed!
Was watching FAZ and it broke right through S2. Kinda out of my range now. GL bro.
ReplyDeleteHey guys,
ReplyDeleteNever did yet get on the RBY money train, still looking for a good entry:)
Still long a load of PAl's at a nice profit and hoping 4 more:)
And I thought the global economy was doomed! Or ar least that's what everyone's been saying. Big July AND a big August coming?
ReplyDeleteThis is better than expected!
jb - We all have to justify our existence eventually, self preservation and CYA should be the priority at this stage in the game.
ReplyDeletehey guys - curious what you all think is going to be the top gainer over the next 12 months. my top 5 picks are RAS, MBLX, WATG, ADES, PIR.
ReplyDeleteYou're right CP...in hi tech (at least in my exp)I've been doing this every single quarter for 15 yrs and I guess I'm just finally burned out....if I could remember anything about accounting I'd probably just go back to being a CFO.
ReplyDeletetof - i keep looking at RAS, just can't pull the trigger, will need to do a lot more DD and dig into their financials.
GL ladies. At the close.
ReplyDeleteDollar fell smartly under the 200DMA, I guess some folks were betting on a bounce there.
ReplyDeletejb - Don't give up, never give up on what you've got until there's something solid to take it's place.
ReplyDeleteI wonder who the guy was buying CADC @ $4+ a week ago??? I shoulda sold him mine and waited for a pullback... but I didn't believe a pullback was coming.
ReplyDeletestill bobbing and weaving CP, not down for the count yet.
ReplyDeleteWonder if BP's success with static kill will effect the wind in our sails?
ReplyDeleteYou know, I really can't trade this market. Might as well take a 'trading holiday.'
ReplyDeleteI thought this might amuse:
ReplyDeletehttp://www.ritholtz.com/blog/2010/08/investment-posture/
XIN - Flying yet again today... Or should I say bumping up against resistance?
ReplyDeleteGood God, Europe's monster rally actually stuck!
ReplyDeletebought DGP. dollar dropping will eventually push gold up again.
ReplyDeletebought RBY 3.5
ReplyDeleteJust bought 500 more shares of HNUZF at $6.26, so as to partially reload the 800 shares of HNU.TO I sold at $6.6 last week. The NG storage levels are falling below the last year's levels now, so the "no storage" panic this fall is becoming less likely now.
ReplyDeleteSo, is today mutual fund monday? I really can't reconcile the markets action with today's news flow.
ReplyDeleteDid I miss something, again?
Glad I had my shorts on a tight leash or it could have been ugly.
We need for gold to rise from here, not fall. I'm just not sure how far gold can go though, as the euro gains Europe will probably be selling their gold.
ReplyDeleteSuch as life... tick-tock,tick-tock, dong, dong, dong!
I heard a ruckus last evening and rushed out to discover a red fox making off with a duck. Funny, he must have killed it straight away and laid it down while trying to get another b/c when he heard me yelling he picked up the dead bird and high-tailed it out of there.
Thankfully it was a useless male, there are way too many of them anyway.
jb - As I understand it, China's manufacturing index was a bit softer so the thought on that is that further tightening isn't likely. There's even some argument that China may have dropped below 50.
ReplyDeleteGermany's manufacturing index blew away estimates and the rest of Europe did reasonably well as did the US, all above 50.
China: July 51.2 down from June 52.1
Euro-zone: July 56.7 up from June 55.6
United States: July 55.5 down from June 56.2
"In the euro-zone Germany scored a three-year high of 61.2 over June's 58.4; the U.K was a little wobbly dropping to 57.3 from 57.6 but still quite decent. The bad boys of Europe did reasonably well too - Italy and Spain picked up, while the decline in Greek manufacturing activity slowed."
Thx CP....apparently mr market was much more impressed with the various ISM #'s than I.
ReplyDeletewe see foxes now and then out at our place. they are cool looking animals.
Bought 700 shares of TWM at $19.30 for a day trade, placing a mental stop at $19.25 -- the top of the horizontal range from which it just broke out.
ReplyDeleteStopped out again -- that breakout in TWM turned out to be a false one...
ReplyDeleteYep! Back in the day, they used to use Irish Setters as duck hunting dogs because of their red color. A wild duck will actually chase a fox that's running away so they just set up a net and train the dog to run away from the ducks. The ducks then while chasing the red dog are captured in the net.
ReplyDeleteA couple of years ago I saw a red fox out here that was every bit the size of a fully grown Irish Setter.
i'm going out on a huge limb and putting zero capital at risk that we see a bit of an intraday pullback shortly to test the resolve of the bulls. i still see a close above the 200 DMA. this market looks very similar to the 1998 market, where a russian/asian sovereign debt crisis scared the crap out of a lot of people.
ReplyDeleteI am placing sell limit orders at $6.75, $7, $7.25 and $7.50 for 500 shares each of HNUZF (which I was purchasing in 500 share lots between $5.75 and $6.5)
ReplyDeletedid i say pullback? maybe i meant pushforward!
ReplyDeletedoes anyone know anything about RSO? they are paying a 16% dividend...
Yikes...
ReplyDeleteRSO, an RE reit (mainly commercial) also leases equipment, just purchased a lot of CDO financing packages/debt for which it showed profits.
ReplyDeleteCEO say they will be paying .25 div per quarter for this year. Just paid July 29 (I think that's the date they printed).
A buck a year on a 6.22 stock isn't bad, but for myself I tend to want to diversify that type of holding and use relatively tight stops.
It's got a gap (down) and some overhead, but may be pretty good on a pullback or a breakout at 6.40
You what, man? It's obvious I have NO edge whatsoever right now. Which means, from a common sense POV, that I should consider another game. Maybe we all should.
ReplyDelete2nd: Patience is a virtue. Especially in a range bound/possible trend change market.
ReplyDeleteIt pays to just sit in the blind, drink and play cards while we wait for prey.
I think we see some upside action followed by a resumption of the LT trend....down. Smoke em' if you got em.
2nd - If it's any consolation, the gap up has yet to be filled... but there are still some open downward gaps as well.
ReplyDeleteIn other words, to be long here seems incredibly moronic in addition to magnificently stupid, just as it felt back in March of last year.
ReplyDeleteWill dumb luck work it's magic once more? I doubt it, that's why I'm still long.
if you're at all interested in bank stocks, one stock i have followed for a while is FRME...in fact i shorted them a while ago. i believe they are looking like a very good LONG opportunity right now. they reported earnings last week which were ok. assets have been shrinking a bit and their mix of assets has been moving more toward low risk investments and away from higher risk loans. they still are provision for a lot of loan losses ($15 Million this quarter) which ate away all of their pre-tax pre-provision earnings. they did about $17 Million in pre-tax pre-provision earnings. if provisions start coming down with an improving jobs market, which I think Friday will continue to show, then the company could be in line for big gains. they were paying out about $.90/share in dividends for almost a decade before the economy hit the crapper. if they get back to those payouts, which is possible if provisions fall back into the $2 to $3 Million level, then you could be looking at a dividend payout of 12% or so on today's stock price and if that happens then the company would probably also be trading at between 1.0 to 1.5 times book value, which is lower than what it used to trade at, which is about 2 times book value.
ReplyDeleteso assuming the economy continues to gradually grow, provisions would fall, dividends would rise, and the stock price could go up two to 3 times its current value.
moving 1/3 of my long term account into SPY and emerging markets index funds at close.
ReplyDeletecraig- For me, it goes beyond the current environment. I basically haven't made 'significant' headway since last summer. Over a year.
ReplyDelete2nd_ave -- I am just as frustrated as you are with the daily market moves. I was getting stopped out of all my day trades for the past couple of weeks as all breakout patterns have turned out to be fakes. I am stopping day trading for now and turning back to my usual game -- shifting the balance of my portfolio gradually to the short side if this rally keeps going higher. As Hussman said, the market won't be able to ignore the deteriorating economic situation for a long time, maybe a couple of months at most (until the ISM numbers drop below 50, which should happen in September).
ReplyDeleteI'll start by placing stops under some of my long positions: stop limit at 10.90/10.80 under all my UCO.
ReplyDeleteI thought a little about my trading performance and I realized what I did wrong. I placed too much of my conviction into a certain market direction (down), which prevented me from taking profits on TWM when it rose above 20 last week (I bought some at $19.50, $19, and $18.50). I'll try not to repeat this mistake again. Instead, I'll be opening a moderate long-term position in the market direction I expect to see, and ALL other purchases in that direction will be for trading purposes only, and profits on those other purchases will be taken as soon as it appears.
ReplyDeleteSo now I have 1000 shares of TWM -- my moderate long-term position. In addition, I am placing buy limit orders for 100 shares at $18.50 and $18, and if they get triggered, I'll place sell limit orders $1 above the purchasing price.
With this strategy, the black boxes/manipulators can jerk the market up and down as much as they want -- I'll keep automatically buying in selling a little TWM while still keeping my long-term position (until S&P drops below 950).
well, it looks like i forgot to submit my buy orders for my long only account, which isn't that big of a deal because it was only 1/3 of my account that i would have been putting at risk.
ReplyDeleteno doubt, this market has been frustrating. over the past 3 months i have managed to give away almost all of my gains that i built up in january through april. oh well. such is life.
holding DGP
ReplyDeleteI'm still operating under the belief we're going to follow China's lead:
ReplyDelete"China's economy grew 11.1 percent year-on-year to hit 17.28 trillion yuan ($2.55 trillion) in the first six months, the National Bureau of Statistics (NBS) said Thursday.
The gross domestic product (GDP) rose 10.3 percent in the second quarter over a year earlier, slowing from the 11.9 percent growth in the first three months, according to the NBS.
.......................
China's retail sales grew 18.2 percent to 7.27 trillion yuan in the first half of the year from a year earlier, according to the NBS.
Urban consumption hit 6.27 trillion yuan in the first six months, up 18.6 percent from a year earlier, while rural residents spent 1 trillion yuan, up 15.6 percent.
China's auto sales in the first half of the year rose 37.1 percent from a year earlier, furniture sales were up 38.5 percent and home appliances sales climbed 28.8 percent. "
http://www.chinadaily.com.cn/china/2010-07/15/content_10110093.htm
Household appliances would be DEER(+2.22%), BTW.
Then of course there's the other side of the coin for consideration, which might signal a red light and further tightening?:
ReplyDelete"Local officials may be playing fast and loose with GDP
Updated: 2010-08-02 09:00
BEIJING - The total sum of China's regional GDP figures in the first half of this year was about 1.5 trillion yuan ($220 billion) more than the national figure released by the National Bureau of Statistics (NBS), a strong indication that there is false reporting by regional governments, according to analysts, officials and media reports. "
http://www.chinadaily.com.cn/bizchina/2010-08/02/content_11078763.htm
I have to say, GMO and PAL just haven't experienced quite the "lift-off" I was anticipating. Not quite sure why exactly, could be a number of contributing factors both good and bad.
ReplyDeleteI am growing very tired of racking my brain over this idiotic market though...
I'm reading a lot of frustration here, which means we either lift off decisively or we get an opportunity to enter at lower levels.
ReplyDeleteFrustration usually = chase.
I'm still thinking of the second option, although I do hold a few longs in energy, ag and reits. If it doesn't work I'm good stopping out with partial profits.
FF- We're definitely at one of those 'something's got to give' points.
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