Damn- It's only eight in the morning, and David's at his table expounding on Kostohryz. I can't even pronounce the guy's name.
What's that- he's been here since one in the morning...tof asked them to open up a table for 'the Russians' last night.
Nice 2nd.TOF, Congratulations and best of luck to you and your sweety's bright future. T3D
RB- Not even close man. But I will warn you a second before I ban your ass.At this time on my wedding day I was painting the front porch. Right before lunch, I took a load to the dump, forgetting my wallet and running out of gas. Someone actually pulled over to help and gave me $20. I made it back home about 10 minutes before everyone was to arrive.
15 hours of 'The Wire' is messing with me. They could repackage the CDs and call it 'Rap Immersion.'
I've been in cash since Monday morning. Looking back over the past 4 days, being in cash was no different than having had positions in OAKBX, or CSCO/INTC as proxies for cash. OAKBX's Friday close was -0.10 lower than the Monday close. And any gains in CSCO would have been negated by losses in INTC.
'America’s 10 worst years start right now' newSubmitted by 2nd_ave (5139 comments) on Sat, 01/08/2011 - 12:58 #77427 http://tinyurl.com/29ucs68I always thought of Paul Farrell (he of the 'Lazy Portfolios') as a laid-back, 'this too shall pass' kind of guy, appropriate for one who resides along the California coast. So I tend to pay more attention when he turns apocalyptic.
Mark- There are Freudian implications to your actions on wedding day.
2nd...Hmmmm. I'll have to think about that. OK, that's enough. What are they?
(a) 'painting the front porch-' at 9am on your wedding day? (b) 'took a load to the dump-' you can say good-bye to a ---tload of things(c) 'forgetting my wallet-' you can fuggedaboudit for at least twenty years(d) 'running out of gas-' took off before the wedding on an empty tank? damn- if no one had stopped to help you out... (e) 'I made it back home about 10 minutes before everyone was to arrive-' use your imagination
TOF -- I gather your wedding is this weekend? If that's so, then have a great wedding! I hope it goes smoothly, pleasantly, memorably, and sets the tone for the rest of your married life!
To be fair, here is an article from Kostohryz published during the November dip in S&P below 1200:"Today's Snapback Rally: Take Your Eye Off the Ball"http://www.minyanville.com/businessmarkets/articles/market-sentiment-trading-strategies-us-economy/11/18/2010/id/31217Here is an excerpt from it:****The problem is that many equity investors are “looking at the ball” by following stock prices and using dips to get their equity allocations up from underweight toward neutral. But they may not be paying attention to how things are developing in the broader field of play that could blindside them or benefit them.So while folks are busy “keeping their eye on the ball,” and feeling relieved by “taking advantage” of the “great buying opportunity” to buy stocks that this dip is providing, I’d urge folks to take their eye off the ball and observe what's going on with bonds. US Treasury yields are spiking at an alarming rate, the municipal bond market is cratering and sovereign debt spreads in Europe have blown out to levels that are completely unsustainable.Why pay attention to bonds? For one, given current debt levels in the US, a 100-basis-point rise in financing costs can have a greater depressive effect on the US economy than the entire fiscal stimulus budgeted for 2010. Furthermore, let's not forget that the Fed’s credibility is on the line here. If the Fed can't keep interest rates down, there's going to eventually develop a sense in markets that things are out of control.“Black swans” are really not about unpredictable events; they are about everybody “keeping their eyes on the ball” and not seeing what was happening in plain sight away from the ball on the field of play.****
My congress woman has just been shot! 6 are dead. 5 miles from my house. This is surreal.Bob
Here is another article by Kostohryz from October 14, when S&P was 1180:"A Runaway Market?"http://www.minyanville.com/businessmarkets/articles/stock-market-financial-markets-quantitative-easing/10/14/2010/id/30546***I've been saying since June that stocks would probably stay in a trading range defined by 1,170 on the upside and 1,010 on the downside for the S&P 500.Now that the range has been broken, what should one do? It's tempting to play the upside break, because the way the market appears to be set up, a panic-buying route could ensue.In this sense, an upside extension of the current rally makes sense to me. However, to invest solely on the basis of such technical criteria runs counter to my investment philosophy. I don't invest in things that I don't understand fully and have conviction about fundamentally. I'd hasten to point out that I don't short in such circumstances either.So as much as I hate to “miss an opportunity,” my investment philosophy demands that I stand aside and simply watch while others enjoy and/or suffer.****So it looks like the guys was rightfully bearish through most of the recent rally and then finally gave in and turned wildly bullish in early January (in December he was still talking about inflation in China and bond yields being out of control). If he is indicative of what is happening to the masses, then the masses should soon get disappointed, right? I really think bears are such a small minority now that the market should forget about them (consider them punished enough) and instead focus on punishing the bulls -- it is their turn now.
"Don't listen to them. They are talking to INVESTORS or traders with ultra long term horizons. You are a trader with risk controls. Your FCX trade with the stops is well positioned imo."Thank you, Bob, for the encouraging words and for reminding me about risk controls. When I bought TWM at $12.40, I was actually planning to keep scaling in until the correction comes. After reading the articles by Kostohryz, I am once again becoming disgusted with my strategy of trying to time the market reversal, since indeed the market can stay irrational much longer than I can remain solvent. I got lucky by not closing my massive shorts before the May correction, but if I keep playing this game I will most likely destroy my portfolio eventually. The only way to survive this game is to trade the way you suggest (and like Craig was trying to teach us here recently), without relying on any trends continuing or reversing.So I think I should also place a sell stop order on my TWM position at $11.95, just below the recent lows. If I get faked out on my FCX and TWM stops, then I will try hard not to get my ego get in the way and re-enter the positions as soon as they move back on the original side of my stops (just like Patrick was suggesting in his recent post-close report).
RB- I heard about it on the radio driving around. Unreal. Although I'm honestly surprised this doesn't happen more often. There are a lot of crazy people out there.
David/RB...Agreed. If I could remove the losses trying to get ahead of a trend change, my port would be up about 25% over the last 2 years as opposed to flat.
RoBear: He uses Worden TeleCharts. He Looks at the indices, the sectors, then uses a software screen to sort those stocks with new highs, new lows and various other traits. Then he goes through all of those individually.This way he knows what is happening from a top down and bottom up perspective, knows which sectors are weakening/strengthening, and which stocks within strong sectors are setting up higher, and which in weak sectors might be shorts. Since he now already knows if the indices are strong or weak, and which sectors, he knows if he should continue long and adding longs, or if he should start looking at shorts.Seriously, anyone can send him an e-mail or call. I've written him in the past after I found a stock using his system to ask him about it. He responded and we wrote back and forth a few times. EVERYONE: Whay do you listen to this crazy stuff? RoBear has it right. The trend is your friend. If you still have a trend and get a pullback, buy the dip set stops and relax.Politics doesn't matter.Economics doesn't matter.What some pundit or blogger writes on a blog or in a newspapaer or says on Bloomberg or CNBC doesn't matter. It's a huge time wasting distraction.To me there are no bears or bulls. There's up and down trends and periods of sideways sitting.If selling takes hold you just wait for a bounce and go short. If buying takes hold you wait for a dip and go long. You don't have to read forecasts or be prescient. You don't have to pick tops and bottoms and you don't have to make brokers wealthy at your expense. I'm sure some people do it and make money, but plenty of people did it and got flat footed or tried to outguess the market. Only the market knows and it only speaks through charts.David: If the market is going to sell off, you don't need to front run it. WAIT for the trend to actually happen, then short the first upward correction. It's just a upside down knockout.You will know because the indices will all do it, sectors will do it, and stocks will do it.The crossing MA's on a longer term chart will verify it. Exuberance will be evident. There won't be anyone warning of a correction with few exceptions when it starts. Barring all out crashes, it will be a process, and if you are set-up your stops will prevent a problem.As for now, Mark reminded me....I need to make a dump run.
David-"So I think I should also place a sell stop order on my TWM position at $11.95, just below the recent lows. If I get faked out on my FCX and TWM stops, then I will try hard not to get my ego get in the way and re-enter the positions as soon as they move back on the original side of my stops (just like Patrick was suggesting in his recent post-close report)."Be careful w/ that stop. Typically, what will happen at these major turning points is that the hedgers as well as the smart money establish large short positions as well as puts right in this area as all of the indicators preceding a reversal are lining up. If you look at other major market tops, the market makes one final 1-2 day jump out of this distribution zone to scare out once and for all the last 3 or 4 retail shorts. That would be precisely the time that your sell stop order is triggered. I will be shorting and buying puts more aggressively should the market nudge a little higher. As I've said before, I think this is a major turning point. The end of 5 waves up from the March, 2009 bottom.
David-I meant to say "commercial hedgers".At a top, if the market is true to form, it would force everybody out of their short positions one last time as the market has one last "trend day". Everybody will say that they will re-enter their shorts when the market dips below their cover points. At precisely this juncture, Mr. Market will gap the market down 200 points leaving everybody long and short in the dust.
Bob- Proximity to tragic events definitely amps the impact. The San Bruno gas explosion/fire last fall was also within a few miles of where I live. Sounds like Giffords will be OK.
jesse- Yes, nothing is ever really 'different.' What concerns me about the rebound rally off 3/09 is that the initial drop far exceeded expectations. So may the rebound rally.My candid take right now? 'In the dust,' as you put it, is a given. The key will be how the market plays us all to that end. Watching gold/silver prices this week, I can't help but think that the XAU may be on the precipice of a major plunge (Cara's take notwithstanding). If that happens, I think the global markets follow. I have great respect for Bill's understanding of the interrelationships in the markets. And overall, I think he's made prescient calls on gold. I was actively trading the miners in '05/'06, following his calls. They generally worked out in the end...if one was able to avoid being shaken out. If gold/silver prices are headed higher, then I foresee a violent shakedown that even caraistas will be hard-pressed to endure.
"Everybody will say that they will re-enter their shorts when the market dips below their cover points. At precisely this juncture, Mr. Market will gap the market down 200 points leaving everybody long and short in the dust."You are right, Jesse -- I did cover my shorts prior to the correction in January 2010 and then wasn't able to enter them when we got 3 days in a row of more than 200 down points on the Dow.So are you suggesting that I remove the stops from my FCX and TWM positions and put my faith in the market being close to the top?I just checked out the market breadth indicators such as $NYHGH (new 52-week highs on NYSE), $NYA200R (stocks above their 200-day MA) and the Advance-Decline line for Russell 2000:http://www.masterdata.com/Reports/Combined/ADLine/Daily/$RUT.htmand all of them are pointing out to the narrowing market breadth. At the same time, the CDX.NA.HY index perked up over the past few days from a very complacent level, indicating that the professional junk bond traders are already getting worried (they usually get worried ahead of the J6P in the stock market).So in the light of this evidence, and thanks to Jesse for calling me out, I removed my stop on TWM and instead decided to use a mental stop at the top of the recent high of the Russell 2000 AD line. If that lines breaks out, that would mean, once again, just like in early December, a broad participation in the market rally, which will likely make it a new leg up instead of the final head fake.
Another 'guiding principle' that has become more apparent with time is 'No easy money.' There is no way the market gets to SPX 1500 on low volatility. It would be the equivalent of buy-and-holders being made whole- sort of a 'it gave me a scare, but it's all good now' experience. I don't think so. The media is good at what they do (or asked to do). I'm pretty much a believer right now in a recovering economy for '11. But there's a part of my mind (call it the ego, or super-ego) that quietly reminds me not to get too comfortable with that scenario.
Admit it- right now, it just looks like clear sailing. It certainly 'feels' that way to me. Think back to times when you felt that way. Relationships. Work. Finances. Whatever. It NEVER lasts.In fact, a variation on 'Pride comes before a fall,' would have to be 'Complacency comes before a ----storm.' It's life. This market is NOT on its way to 1500- not without a few major pullbacks along the way.
'Too Big To Fail,' by Andrew Sorkin. The more I read, the more engrossed I become in the biographies of the players at the heart of the financial crisis. It won't be a waste of your time.
I'm going back to 'The Wire' for now...
Wow, lots of great comments to digest! Anyway, I liked the Russian rough and tumble stuff, sounds like a blast to watch.Speaking of watching, I've been thinking about comments from a few days ago so decided to catch up on some movies. I finally made it through "Follow That Dream" starring Elvis Prestly. Lots of lessons here, it's one I recommend everyone watch!Now the grammar Nazi's can gas FF:"I was a dog convention in Ventura, CA"Oh really?
Oh, Congrats on your new business venture TOF!
CP: You missed my post from earlier today! Luckily it disappeared, or I would surely be in the showers.
I agree CP- Good comments. Just got back from Hoops/Soccer for the girls. Good stuff!How the hell did Seattle win?
Oh, you wouldn't be talking about this one, would you FF :)...Anonymous said... RoBear: He uses Worden TeleCharts. He Looks at the indices, the sectors, then uses a software screen to sort those stocks with new highs, new lows and various other traits. Then he goes through all of those individually. This way he knows what is happening from a top down and bottom up perspective, knows which sectors are weakening/strengthening, and which stocks within strong sectors are setting up higher, and which in weak sectors might be shorts. Since he now already knows if the indices are strong or weak, and which sectors, he knows if he should continue long and adding longs, or if he should start looking at shorts. Seriously, anyone can send him an e-mail or call. I've written him in the past after I found a stock using his system to ask him about it. He responded and we wrote back and forth a few times. EVERYONE: Whay do you listen to this crazy stuff? RoBear has it right. The trend is your friend. If you still have a trend and get a pullback, buy the dip set stops and relax. Politics doesn't matter. Economics doesn't matter. What some pundit or blogger writes on a blog or in a newspapaer or says on Bloomberg or CNBC doesn't matter. It's a huge time wasting distraction. To me there are no bears or bulls. There's up and down trends and periods of sideways sitting. If selling takes hold you just wait for a bounce and go short. If buying takes hold you wait for a dip and go long. You don't have to read forecasts or be prescient. You don't have to pick tops and bottoms and you don't have to make brokers wealthy at your expense. I'm sure some people do it and make money, but plenty of people did it and got flat footed or tried to outguess the market. Only the market knows and it only speaks through charts. David: If the market is going to sell off, you don't need to front run it. WAIT for the trend to actually happen, then short the first upward correction. It's just a upside down knockout. You will know because the indices will all do it, sectors will do it, and stocks will do it. The crossing MA's on a longer term chart will verify it. Exuberance will be evident. There won't be anyone warning of a correction with few exceptions when it starts. Barring all out crashes, it will be a process, and if you are set-up your stops will prevent a problem. As for now, Mark reminded me....I need to make a dump run.
I just figured something out. The comments that don't post go to a spam file. This only happens to comments that don't have a gmail account. Why not just set one up? There aren't many in there, but what harm can it cause?
I see both spelling AND grammar errors in that FF post, double Nazi-gas for you! ;)Man, I really enjoyed that Prestly movie though, serious recommendation but not sure if it's available on DVD, my copy was on VHS.A real reminder about how an unassuming approach is of particular importance, with barely any stretch of the imagination you'll learn practical stuff that applies directly to trading.
'What some pundit or blogger writes on a blog or in a newspapaer or says on Bloomberg or CNBC doesn't matter. It's a huge time wasting distraction.'For real man them playboys put on the suits, look the part be the part right? No skin in the game, but they be pointing at charts like they know how to read one yo. You lose money, it ain't on them, it ain't on you, it's the market. You play the market, you gon' git got. WTF man...
Wow what a strange day in Toostoned, AZ. My really good friend works for the democratic party machinery. I was real worried about her but luckily she was doing an event at another location. She lost three friends today. lots of tears. Strange thing is this was a wee little event. Gabby just had a table set up much like the girl scouts do at the grocery store and there was 20 people in line to meet her. The whacked out kid runs up in front of the table and shoots Gabby in the head and then opens up on the line mowing people down like dominoes. Seems the nut job has read too many blatherings from the Kaimu's manifesto. He had posts about creating his own currency and denouncing illiteracy in a mentally disorganized manner. Put this psycho in front of FOX tv 24/7. Have him listen to RUSH---Savage. Mix in some Sarah Palin putting the cross hairs on those unpatriotic congresswomen, this shit is bound to happen.Time to cut this BS out. Pro wrestling has more intelligent discourse then our present political arena.
I really don't think it's a good idea to allow fire arms into those types of public gatherings, it's not a gun show, and there are no reasons to have them there.
David- Please don't adjust your trades on my account. When it comes to the market, I am 100% totally insane. I have lost 7 figures and gone broke on 2 occasions in the past 7 years by betting big on situations just like this. My risk profile is totally unlike that of any other. Just use common sense. Something that I was born without:)Instead, I ask you to read this great analysis by Hussman Funds. btw- the readings have become quite a bit more stretched since this analysis was written... "From our standpoint, the return/risk profile of the equity market is the most negative that we ever observe historically"....http://www.hussmanfunds.com/wmc/wmc101213.htm
Okay, back to the showers for me. Double gas?The first time was a doozy.Politicians have jacked up the level of discourse pitting citizen against citizen, then are shocked when they get some unstable kook so inflamed that he acts upon it violently.They love to blame video games and rock music for inciting violence, but when they do it in the real world it surprises them?Then of course they don't want to talk about controlling firearms to certain people who might be dangerous with access to semi-auto pistols and extra-capacity clips. I know we have the 2nd amendment, but do we really need firearms in shopping centers with crowds of people?This is like that guy carrying weapons to the Obama gathering in a park. I know some people in Arizona think their rights are important, but the problem is, once someone is shot it's too late to do anything to protect THEIR right to safety. There needs to be some balance.So we have all kinds of nut cases packing heat and we have political hacks going out and irresponsibly winding the populace tighter and tighter. It's fuel looking for a spark.We also have this crazy bitch Palin talking about hunting down various people like Julian Assange and inciting violence outside of the U.S. because she doesn't agree with them.I don't agree with her, does that give me the right to pop her in the head?How can anyone entertain the notion of someone so irresponsible as President?Don't forget RoBear, Mrs. McMahon (WWE)ran for office......it's starting to cross over.We used to have controls on this kind of thing in the fairness doctrine, but Reagan got rid of that and we got FOX. How long did it take to go back to yellow journalism, muck raking and inciting violence?We never seem to learn from our own screwed up history. Until these asshats politicos are held responsible we are in for some serious trouble.
So I leave this site and head over to Ritholtz's 'The Big Picture' and what does he have?http://www.ritholtz.com/blog/2011/01/take-aim/We can always count on Barry.Let's end this insanity by Palin and other irresponsible war mongers and inciters of violence right now. Hopefully this will become viral and Americans will reject this form of discourse once and for all.I'm sending it to everyone on my e-mail list and the political blogs I'm on. The very best way to end this type of discourse is to end the political careers of those who participate in it.
Sentiment Signals: A call for cautionhttp://www.investmentpostcards.com/2011/01/09/sentiment-signals-a-call-for-caution/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+wordpress/VYxj+(Investment+Postcards+from+Cape+Town)
Jim Rodgers, a little dated.http://martinkronicle.com/2010/11/09/jim-rogers-mises-institute-summit-schlarbaum-prize/
jesse- If you were up 6m at one point, what stopped you from putting say 4m into LT bonds to generate a stream of income while playing with the remaining 2m?
With the way these things normally shakeout, I suspect a bailout in a matter of days...(Reuters) - Portugal denied on Sunday that it is under pressure by France and Germany to seek a bailout from Brussels and the IMF to ease concerns over its debts, like Greece and Ireland before it.German magazine Der Spiegel said on Saturday that Germany and France want Lisbon to accept an international bailout as soon as possible to prevent the euro zone debt crisis from spreading.But a Portuguese government spokesman denied any such pressures, saying the country was focused on boosting economic growth."This (Der Spiegel) story has no foundations, it is false," the spokesman said.In Germany, a finance ministry spokesman said: "Germany is not pushing anyone to accept a bailout."Investors are increasingly concerned that Portugal will be unable to finance itself in debt markets, forcing it to seek funding from overseas instead.A Reuters poll of economists last week showed most expect Portugal to need a bailout.
They were saying Ireland didn't need, and wasn't seeking bailout just a few weeks ago.In order to live, rats must chew.
Kudos TOF! :)
Hey Guys - It's official...I'm hitched! Thanks a lot for your wishes. It's great to get kind words from a bunch of people I've never met before. The wedding was an absolute blast! It went perfectly and the location was unbelievable. We got married right on the cliffs in Ocean Beach (about 4 miles north of downtown San Diego) at a private villa. It was about 60-62 degrees and sunny and the view was amazing. My wife was stunning in her dress. We started the wedding at 2pm just in case it got too cold and planned on ending at 7pm but we had a huge dance party and ended up hiring the DJ and bartender for another 3 hours. Everyone I talked to and heard said it was the best wedding they've ever been to. I can't wait to get pictures...I'll show you guys them when we get them. We will post them to our website. Oh - and my brother gave a hilarious speech, basically just making fun of me for my forgetfulness and tradition of doing things at the last minute. He got a lot of laughs.Anyway, thanks again for the words and hope you all had a good weekend too. It's good to be hitched!
oh and by the way...RAS! Common dividend was just announced.