Wednesday, September 15, 2010

9/16/10 Against Traffic



Yesterday I was lamenting my inability to short the impulse to buy. Today, I succeeded in buying the impulse to sell. Well, not exactly- more like buying the impulse to wait for better entries- which may never arrive, no?

You have to fast-forward to the 4 minute mark to catch the beginning of the clip where the driver maneuvers against oncoming traffic- but that's how Natascha McElhone gets a leg up on DeNiro.

We won't know until Thursday how the move plays out- but at least I'll have an exciting open to anticipate. Damn, INTC hit $75 in August 2000? It's been downhill since then.

128 comments:

  1. INTC is just one of so many former "quality" tech stocks and many others that are not tech but have been ruined by the digital revolution, EK as an example. Ok, so AAPL has come back from the dead.

    Prices were too high in 2000 and may still be considering the collapse of all things financial and rising public debt. That's why Felix Zulauf and others say we are in a structural bear market since 2000. Interrupted by massive stimulus beginning in March 03 such as war, tax cuts and deficit spending in spades.

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  2. After reading the latest on SOH, the following scenario occurred to me:

    (a) With individual investors in cash, the market has switched to unfamiliar prey- professionals.

    (b) Thus, what used to work for many professionals (feeding on individual investors) is no longer working.

    (c) This has many formerly successful traders taking unaccustomed hits. Big ones.

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  3. So now the 'correct' trade is to fade the pros.

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  4. 2nd - the pros are all calling for a pause/pullback. i'm fading it...100% long.

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  5. tof- I'll tell you what- if the market rewards risk, then bulls should be in line for significant gains. Holding tight or going long at the upper end of the widely-touted 1040-1130 range? That's a high stakes bet. If it succeeds, the payoff should be commensurate with the [expected] odds.

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  6. What is up with Chase bank???? ? this is a bit concerning.

    "Important information about FDIC coverage; Chase is no longer participating in the FDIC Transaction Account Guarantee Program"

    https://www.chase.com/index.jsp?pg_name=ccpmapp/shared/marketing/page/outage

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  7. From MarketWatch:

    A blonde female police officer pulls over a blonde gal in a
    convertible sports car for speeding. She walks up to the car and asks the
    blond for her driver's license. The blonde convertible driver searches
    through her purse in vain.

    Finally she asks, "What does it look like?"

    The blonde police officer tells her, "It's that thing with your picture on it."

    The blonde driver searches for a few more seconds, pulls out her compact, opens it and sure enough sees herself. She hands the compact to the blonde cop.

    After a few seconds looking at the compact, the blonde cop rolls her
    eyes, hands the compact back to the blonde convertible driver and says,

    "If you would have told me you were a police officer when I first pulled you over we could have avoided this whole thing!"

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  8. Uh-oh. Just noticed that vb (a smart blonde) posted a couple of minutes earlier. Well, it may be politically incorrect, but I thought the joke was pretty slick- not really funny, but clever.

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  9. Linn Energy Founder's $24.5 Million Sale
    Linn Energy shares have risen 15% over the past three months, compared to an 8% decline for the Dow Jones U.S. Exploration & Production Index. The Standard & Poor's 500 has risen less than 1%.

    Lon Juricic, president of StreetInsider.com, says Linn sold a substantial slug of stock last year at around the same time, also citing the need to diversify.

    "If you had followed him then, you would have lost money," Juricic says.

    Still, he notes, the need for diversification rings hollow considering Linn Energy's 8% dividend yield and earnings-growth forecast.

    "Diversify into what? Where are you going to get an 8% yield? He should know his own company's dividend and how safe it is," Juricic says. "This large a sale makes me a bit nervous."

    FF

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  10. David

    I sent you an email over labor day through CC but I probably screwed it up. I'm putting together a summary of my thoughts along with information from sources like the DB slide presentation I posted on CC the other day.

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  11. 2nd- Gutsy trade man. It's one thing to hold with profits at the top of the range. It's quite another to jump back in when in cash. AND right before our weekly proctologist exam. GL.

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  12. port- Thanks for the info the last few days. Much appreciated.

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  13. MarkW, you bet. One of the questions I had for you to ask your guy is on fracking. How much control do the producers have over fracking or are they still experimenting with it. One of my supply guys said he thought that if the producer didn't like the price for a certain month, say October, then the producer could cut back on the fracking and reduce their flow rate for the well. In a way it would be like storage which would make these shale plays even more valuable.

    I still think its too early to tell. It probably takes several years for producers to figure out what they can and can't do but I thought it was interesting that one of my supply guys brought it up.

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  14. One of the things I missed earlier this week. CIBC sent out a note that at below $4.00/mmbtu they see value in owning natty for the balance of 2010. "This year the gas price trajectory has followed 2009 seasonality closely, and if this trend is borne out it would suggest upside in Q4 relative to where the forward curve is now pricing. With non-commercials shorter than they were at this time last year, a weather event could easily trigger a temporty rally."

    However, they also thought you should wait till after this weeks EIA report before initiating this position. For tomorrow, I've seen estimates ranging from +62 to +98 with most of my sources showing upper 80's to low 90's. Anything with a 9 in front will be big but it seems like that should be priced in.

    Whoops. I didn't. I saw that the Oct contract was still above my resistance level after lunch so I paid up for 500 UNG at $6.75 with a $6.54 stop. I think the correct stop would have been below $6.45 but that was the most pain I was willing to take today. Now tomorrow I'm going to see how prices look before the storage report. If I get a chance I may sell out of UNG before the storage report.

    Basically I agree with David, I believe prices could go lower but I feel like we're closer to a bottom and I could just start selling covered calls to reduce my cost.

    Everyday this month I've been watching cash prices and they just keep getting stronger and stronger relative to the forwards. For storage players in the Texas area, it makes more sense to buy Oct to inject and sell cash. BNP Paribas said that there is a rumors floating around that there were some big natty positions short Oct and long Jan and those positions are starting to unwind. Over the last couple of days we've seen that spread tighten and its just killing my storage spreads.

    One last note before I go. We're starting to look at rolling some of our storage withdrawals from this winter to next winter. If we're looking at it, and we're usually late to the party, I'm sure others are/have been looking at it too.

    Good trading tomorrow.

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  15. port- GL to you also. It's my understanding and will check to with MOG tomorrow, that drillers can reduce frac flow to decrease well head production.

    I'll get back to you on that.

    What has me worried, and the drillers, is the new EPA mandate that drillers have to disclose their frac water chemical balance. This is industry sensitive that that drillers don't want to give away for free. I think that's why we are seeing weakness in the natty players and HEK while the spot price has held.

    I'll let you know what I find out.

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  16. BTW..I missed opening, again, HEK/XCO/SWN by a few penny's on each.

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  17. David- You should be damn proud of your results. I'm still negative from the get go. I retract my offer to buy drinks Sat. Their on you :)!!

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  18. Difficult waters to navigate right now. I can honestly say I feel better having all your eyes on this with me.

    Thanks to everyone for the time they take to post thoughts/comments in a high sea.

    Your the best. GL tomorrow.

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  19. Unless we have a real cold winter, nat gas is a bet on industrial production, especially of plastics and fertilizers, I think, picking up a lot. Otherwise, its waiting for peaker demand if its real hot next summer, or for production to drop off, or for T Boone's mandatory useage for trucking dreams to become reality.

    No expert here, just my observations from over the years.

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  20. No problems, Mark! :)

    There is one caveat to such results, though: a very high volatility in my portfolio. So it shouldn't come as a surprise to anyone if my profit turns into a loss at the early stages of the next recession, if I jump in on the long train too early as I did in October 2008. I will, of course, try to prevent this from happening this time, and hopefully my recent experience with day trading and setting stops will help me avoid large drawdowns in the future.

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  21. 2nd...is it me or does Veech sound like Landry in the closing report?
    FF

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  22. Since HNUZF closed at $4.22 today, I figured that my original sell limit target of $4.50 if far enough (7% away) that I *should* keep that limit for tomorrow, since a 3.5% jump in NG futures is a respectable jump after all. There is no reason to be so greedy as to hold for even bigger gains, given that my position is very large already and my last purchase was made when HNUZF was at $3.70 (so taking some profits off the table at $4.50 would represent a respectable 22% gain on that last purchase).

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  23. added TRE, BTIM YCL (counter trend play, go Yen!) and C to my spec acct, trading more each day, freestockcharts is great, signed up for a new acct at TS, since i'm expanding into futes and options (pls TS has great back testing functionality).

    on the long side starting new positions/adding to VNQ, RWX and DBB

    I think it was Mark who mentioned Bespoke..THX! they have great info, esp for managing my long portfolio, I'm slowly unwinding all my mutual funds and I'm going to a 100% ETF portfolio.

    wow, I'm a long winded slob today...have fun out there!

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  24. Q2 current account deficit up 12.9% from Q1 8:30a
    U.S. Q2 current account deficit $123.3 bln 8:30a
    Wholesale prices climb 0.4% in August 8:30a
    Core rate of producer prices up 0.1% in August 8:30a
    Weekly jobless claims fall 3,000 to 450,000 8:30a
    4-week claims average down 13,500 to 464,750 8:30a
    Continuing claims drop 84,000 to 4.49 million

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  25. Landry-

    Random Thoughts:

    The indices had a marginal up day. This action keeps them bumping up against the top of their trading ranges. And, it keeps them overbought.

    Once again, the above suggests that the market is due to correct.

    That in and of itself isn't reason enough to get excited.

    The big blue arrow continues to point sideways.

    Therefore, your best action is probably no action.

    Futures are soft pre-market.

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  26. Craig- Landry and Veech have sounded alike for some time now.

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  27. FDX recovering nicely from earlier levels.

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  28. Liking the opening sell-off- shaking out a few weak hands.

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  29. Bought back into the BGU I sold at $49.81.

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  30. Added to STT at $38.4

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  31. actually, $38.42

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  32. TLT
    Submitted by teamonfuego (2173 comments) on Thu, 09/16/2010 - 09:31 #69289
    Just as I expected...it was a bear trap (assuming it continues below the 50DMA)

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  33. Re: TLT newSubmitted by 2nd_ave (4574 comments) on Thu, 09/16/2010 - 09:54 #69294 (in reply to #69289)
    Nice call.

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  34. bought CLF right at the pivot, 63.30, will try to ride this one to 66+

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  35. Added BGU at $49.7

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  36. Even the Philly Fed can't keep this market down.

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  37. Re: Philly Fed newSubmitted by 2nd_ave (4575 comments) on Thu, 09/16/2010 - 10:06 #69301 (in reply to #69292)
    A negative Philly Fed is getting bought? I don't think this market wants to go down. Not yet, anyway.

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  38. Now 110% long. First time in margin in a while, although the margin segment will be closed by close.

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  39. REDF sure looks like its ready to make another move higher. it held the $3 ground nicely. watch, it will sell off now.

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  40. never used margin, maybe some day.

    CLF is moving up nicely.

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  41. REDF- Looks like it to me TOF. Go getum!!

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  42. I must watch only good stocks. All up very nicely, but the market is flat.

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  43. HEY HEY HEY

    IS UXG GONNA RIP ON THE CEO INTERVIEW COMING UP ON CNBC?

    KINDA LOOKS LIKE IT COULD

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  44. i FELT i HAD TO LIQUIDATE LARGE AMOUNTS OF auy BASED ON THE MOVE

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  45. WHOAAAA EIA +103,
    2013

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  46. Did one TZA trade. Got lucky and by mistake had the trade on manual submit instead of automatic, and as a result it took a minute extra to realize it and do the extra steps to sell. Anyway, in the meantime it got to 29.92 and my sell went thru at 29.90 for $625 profit.

    I'm working on a new methodology, and TZA looks cheap, here, not that I know anything...

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  47. Natty bomb! I'll look to reload SWN/XCO soon for a longer term swing trade.

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  48. For UNG...wait for the 2nd wave down if it comes. Usually happens.

    Good job Sharkie!!!

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  49. back in auy 10.83 thanks mark

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  50. It looks to me like the banks are basing and getting ready to move up. If that happens we power through 1,130 today.

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  51. http://news.softpedia.com/news/Microsoft-India-Partners-with-Rediff-IndiaTimes-NDTV-Zapak-to-Promote-IE9-156726.shtml

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  52. SWI & ATVI - some take-downs

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  53. 50,000 share buy order went through on REDF

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  54. C and GS picking up a little momentum.

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  55. Back out of Yamana 10.95:)

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  56. Today's NG storage report was quite disappointing in the sense that the amount in storage over the past week grew faster than the 5-year average. If this continues, then my bullish case for NG will cease to make sense...

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  57. Make no mistake guys...

    Although I did predict this upmove generally, and although I do expect a bit of a correction today/tomorrow whatever, AUY is setting up to be VERY buyable as an investment for those who like such things.

    It (AUY) just crossed some important moving averages, it should be a steal back at those levels, which are the ten-sixty ten-seventy levels. A correction to those points should be jumped all over like a supermodel covered with fluffernutter:)

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  58. "Not gonna see 1130 today... "
    CP - I wouldn't count the bulls out yet!

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  59. 1130? I think we see 1150+ by Friday's close.

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  60. UNG - a little weather forecaster help

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  61. WHATT??? WHATT JUST HAPPENED TO UNG??? Are you seeing the same thing I am seeing or is it some data fluke on my side?

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  62. Kyle -- what kind of forecast was that???

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  63. REDF is on fire. This is the exact reason why I didn't sell when it spiked up a week ago. If I sold then would I have bought back in on the dip at $3? Or would I have watched it spike up today and wonder if I should buy back with the potential of watching it drop again? That is too much pressure to put on oneself with these volatile stocks.

    Having said that, it could just as easily peak at $3.40ish again which would make it 3 times that it has peaked out at that level. Investing is 5% research and 95% mental.

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  64. OK, screw it -- I am lowering my sell limit on HNUZF to $4.40, so as to hopefully sell it into this strange spike. I am off to a meeting at work now -- will find out the results later on in the day...

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  65. David - they said on cnbc that a weather forecaster had changed his opinion re where a hurricane was headed into the gulf

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  66. Kyle- That must be one trusted weather forecaster.

    TOF- WAY TO GO!!!!

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  67. Mark - don't know...but it allowed me to buy back some short Jan 7 puts

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  68. If we are going to go higher, BAC/WFC have to hold up right now.

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  69. BAC- Bid/Ask right now is saying...OK, that's enough.

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  70. I really F'ed up on PXP/HUN/AONE.

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  71. Played UCO for a quick trade adding another $190 in profit to the day. Now at $815 for the day. Too bad, but I was watching UNG and couldn't pull the trigger at $6.45. Also see TZA took off, which I'd sold earlier.

    Oh well, at least I made money. I don't spend more than $200 a day even including college tuition, room, board and expenses, etc for 1 in school and the other doing internships, so its no big deal...

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  72. and I gave the dog a piece of beef jerky...

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  73. COCO - Hasn't been mentioned much (by name anyway) on this paid education thing & continues to move up nicely...

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  74. Let's see how the pit closes Natty.

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  75. SPX 1150 by EOD Friday? newSubmitted by 2nd_ave (4576 comments) on Thu, 09/16/2010 - 14:21 #69348
    Not out of the question, IMO.

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  76. Nothing like a little controversy.

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  77. 2nd - with this being OPEX believe prices will be 'pinned' close to current levels

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  78. C (from Buckingham)
    Submitted by teamonfuego (2175 comments) on Thu, 09/16/2010 - 14:45 #69353

    Reaffirm Buy and $6.50 target.

    Growth Drivers:
    Growth Drivers include: improving macro-economic backdrop, Capital markets activity levels, declining credit costs, consumer and corporate loan demand, and international expansion.

    • Asian Expansion Ramping Up – China a Major Focus. In a series of recently published interviews with senior management of C’s Asian operations, we see the company’s expansion plans in Asia (previously undisclosed) coming into focus. And clearly, the pace of investment is ramping up, with the expectation of material increases in retail bank branches and personnel, as well as significant increases in Asian-focused trading desks within its Institutional Clients Group. Although it is not surprising that China is a major focus, the scale of C’s expansion efforts are. In fact, C expects to triple its workforce in China over three years from 4,500 employees to 12,000 – which would make China C’s third largest market by staff (after the US and Mexico).

    • Retail Banking – Adding the Maximum Branches. With 29 branches, C is the third largest foreign retail bank in mainland China, behind HSBC’s 102 and Standard Chartered’s 59. Chinese regulators cap branch opening at no more than two per month, and C plans on opening the maximum branches allowed for the foreseeable future – i.e. adding 10 more by the end of this year (including August). On top of investments in the mainland, C is growing its presence in Hong Kong (adding nearly 10 branches this year) and Taiwan, as well as recentlystarting retail banking in Vietnam.

    • Institutional – Doubling Asian-Focused Trading Desks. C management is “optimistic” that it can find a local partner in China for securities underwriting – an issue that has taken on more importance recently with China’s announcement a month ago that it plans to begin opening up debt underwriting to foreign banks. Elsewhere, C expects to double its Asian-focused trading desks from 13 currently. Much of these desks will be concentrated in areas where trade with Asia is growing rapidly, including Latin America and Africa. The focus will be on serving Asian corporate customers in these markets via FX, derivatives, treasury, lending, and advisory services.

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  79. More.....


    • LT Revenue & Earnings Impact Not Immaterial. With C’s Asian operations generating a 1.7% ROA in 1H10 and pre-tax margins near 45% (vs. North America’s 1.0% and 25%), we believe the ROI potential on these investments is high. And while the impact is a few years down the road, the revenue and earnings impact is not immaterial. We would note that in 1H10, the average revenue per employee in Asia was $290,000. Assuming similar productivity, adding 7,500+ employees would equate to $2.2bn in revenue. At a 45% pre-tax margin, that translates into nearly $1bn in pre-tax income – or 3.2% additive to normalized earnings.

    • Reinforces Above Average Organic Growth Opportunities. As we highlighted late last year when we upgraded the stock, we believe C’s exposure to faster growth emerging markets (45% of Citicorp’s revenues) is a significant differentiating factor vis-à-vis its more domestic oriented rivals. We saw this play out in 2Q10, where growth in Latin America and Asia offset declines in North America. As C continues to shrink Citi Holdings and the credit environment further improves, we believe investors will increasingly take notice – and pay for – this growth potential.

    • Remains a Top Pick. On top of C’s above average organic growth potential, we see substantial excess capital build up over the next 3-5 years from balance sheet shrinkage (25% of total assets) and DTA utilization. Moreover, at 0.87x 4Q10E TBV of $4.42 and 5.0x-5.5x our normalized EPS range of $0.70-$0.75, we believe the stock is materially oversold.

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  80. I sure wish I could get a decent realtime quote from my broker. Most everything's delayed 20 min, who the hell wants delayed quotes???

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  81. XCO off @ 13.40...I think I can get it a little lower.

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  82. HEK..pulled bid. The Ask volume keeps chasing it down. Still trying to get back into XCO.

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  83. cp - sounds like you went backwards man...what platform did you switch too???

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  84. OK...HEK @ 3.82. Bid/ask has flipped.

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  85. Bumping CADC up to 3.26.

    Damn CP- Get a NEW broker!!!

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  86. shark - is REE anything worth-while or is it a POS??? Thanks man

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  87. Not sure Kyle. REE is on my radar along with MCP but I haven't been in either one yet. REE looks a little like it's rolling over.

    I like MU either here and now or on a 7 re-test.

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  88. Man, they moved all the BAC accounts over to Merrill accounts and the interface bites. BAC's was sparse, but at least we had realtime quotes and some ability to place conditional orders.

    Not with ML! Yea realtime quotes are available, but not unless you're logged in and auto log-out is every 30 min. The log in process is long over a modem.

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  89. shark - Thanks man. There were several that 'looked like' they might be turning the corner (LEAP, MYGN, MAS, MU, VRGY, SWI) but not so sure today...WTFO

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  90. The problem with RE's as I see it is there's no manufacturing remaining in the western world anyway, so who needs 'em unless they export to Asia?

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  91. INTC Oct 18 Calls Closed @ 1.23 newSubmitted by 2nd_ave (4577 comments) on Thu, 09/16/2010 - 15:47 #69370
    One day gain of 17%. That'll do it for me. Keeping the INTC shares.

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  92. I think this ML interface is constructed with investment in mind as opposed to trading.

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  93. PCP - I think I could trade this one...

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  94. cp, time to get a different broker.

    thinkorswim might work ok on dialup if you kept the number of things to watch or chart at a low level so as not to overload the i/o capability of your connection.

    they are very attuned to trading, and the only times i really have troubles is when they do software upgrades.

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  95. ps: from what i understand, if you have a TD Ameritrade account, you can also trade it on thinkorswim. That might be a good reason to try that one, because you'd have the choice or interfaces to use as a result.

    full disc: i have TD Amtd accounts, too, but have never tried trading them on thinkorswim

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  96. I have tradestation, interactive brokers and fidelity and schwab, also, but the TD Ameritrade and Thinkorsswim combo is the one I choose to trade 95% of the time, and the others are used as backup when I run out of margin or have trouble connecting, which isn't very often

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  97. cheapy - I used TD Amtd and I use the think or swim thing...it's pretty solid.

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  98. I really like the thinkorswim charting, and i plan to use their custom scans more in future. also the on demand thing is great to test out trading ideas. If he went the TD Ameritrade account route, he'd also have their strategy desk and tax accounting built in, which thinkorswim doesn't have.

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  99. yeah, td ameritrade is significantly better than schwab or etrade. i would highly recommend it.

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  100. TOF -- congratulations on your REDF hold! What fraction of your portfolio is invested into it?

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  101. Thanks guys, I'll look into TD Ameritrade.

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  102. I am glad that I lowered my sell limit on HNUZF to $4.40 -- it was hit today (for a $300 profit on 500 shares), and $4.40 was the high of the day! Now I'll feel good either way -- if UNG drops below $6.20, I'll reload HNUZF and feel like I made a cool trade (unloading high and reloading low). If HNUZF keeps powering up, then I have plenty of sell limit orders above to meet it (at $5, $5.50, $6, etc.)

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  103. Getting started: In the case of TD Ameritrade, are there any parasitic fees I should be aware of?

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  104. No fees that I've been hit with. I believe all the rates are published. You should be able to get a number of free trades for opening the account and assuming you have a decent sized account, trades are under $10 for any qty of shares, and they do options as well. For futures I think you need to do those trades on Thinkorswim.

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