DJIA futures were up as much as +260 points
pre-market. The DJIA opened +160 points,
then dipped to +73 points. At that
point, I opened the following positions:
VT (Vanguard Total World Stock Market) @ 52.67 + BND (Vanguard Total
Bond Fund) @ using an allocation weighting of 65%/ 35%.
pre-market. The DJIA opened +160 points,
then dipped to +73 points. At that
point, I opened the following positions:
VT (Vanguard Total World Stock Market) @ 52.67 + BND (Vanguard Total
Bond Fund) @ using an allocation weighting of 65%/ 35%.
At today's close, I will transition that part of my
portfolio which allows only mutual fund trades into VTWSX (Vanguard Total World
Stock Market) + VBMFX (Vanguard Total Bond Market Index) using the same
weighting.
portfolio which allows only mutual fund trades into VTWSX (Vanguard Total World
Stock Market) + VBMFX (Vanguard Total Bond Market Index) using the same
weighting.
The above transactions will likely be the last I execute
prior to retirement.
prior to retirement.
If I had to guess, the SPX (S&P500) will squeeze
shorts up to its LT trend line around 1960, then drop to 1750 before we see a
durable low. In other words, I'm still
bearish.
shorts up to its LT trend line around 1960, then drop to 1750 before we see a
durable low. In other words, I'm still
bearish.
I wrote the paragraphs below last night, and decided to
'sleep on it' before making the decisions above.
'sleep on it' before making the decisions above.
I've often envisioned returning to playing the piano and
composing when I retire at age 67 (about five years from now). That should give me 20+ years to see what I
can do. Last week, David Bowie succumbed
to cancer at 69, and yesterday Glenn Frey passed away at 67. How much time do any of us really have?
composing when I retire at age 67 (about five years from now). That should give me 20+ years to see what I
can do. Last week, David Bowie succumbed
to cancer at 69, and yesterday Glenn Frey passed away at 67. How much time do any of us really have?
In 1979 I submitted a recording of a composition titled
Mill Street + two letters of recommendation (one from another pianist, one from
a composition professor at Michigan) and was admitted to the Berklee College of
Music in Boston. I drove east the
following August, and stayed briefly with Lin and his wife (Lin was a
graduate student in meteorology at MIT and his wife a law student at
Harvard). I spent a great deal of time
with them debating the pros and cons of a career in music. Lin was quite adamant that I should take the
leap. I've rationalized over the years
my decision to turn around and ultimately become a pharmacist, but the truth is
I didn't have the confidence to stake it all on 'black.' It's a tough career that depends far too much
on being in the right place at the right time.
Mill Street + two letters of recommendation (one from another pianist, one from
a composition professor at Michigan) and was admitted to the Berklee College of
Music in Boston. I drove east the
following August, and stayed briefly with Lin and his wife (Lin was a
graduate student in meteorology at MIT and his wife a law student at
Harvard). I spent a great deal of time
with them debating the pros and cons of a career in music. Lin was quite adamant that I should take the
leap. I've rationalized over the years
my decision to turn around and ultimately become a pharmacist, but the truth is
I didn't have the confidence to stake it all on 'black.' It's a tough career that depends far too much
on being in the right place at the right time.
Given another five years, what really matters? Going forward, we’ll be discussing ‘things
that [really] matter,’ and talking very little about the capital markets.
that [really] matter,’ and talking very little about the capital markets.
https://www.youtube.com/watch?v=aTuKDK9U0qg
ReplyDeleteIn 1967 music publisher Dick James signed two unknowns (Reg Dwight and Bernie Taupin) to a recording contract. When I got around to buying their second album (titled simply ‘Elton John’) in 1970, 'First Episode at Hienton' (a ballad in G-minor) was the first of their compositions I learned note-for-note. Whoever it was James hired for the piano transcriptions was an unusually talented (or motivated) guy- back then you were lucky to find a chord chart for most pop songs. Things went downhill quickly after 1972, and in my opinion nothing after 'Honky Chateau' is worth listening to.
US indexes giving up the bulk of their gains heading into the close. DJIA +59 points, SPX +0.25%, NDQ negative.
2nd- Give me the top 5 reasons you have right now for a 5 year hold outlined above.
ReplyDeleteWife. The big guy. Parents. The dog. Music.
DeleteBoy, ENPH sure looks good here for a run to 2.80ish.
ReplyDeleteGreat post. It's probably worth going through the exercise: can you sit through an additional 30% drop? Not saying it happens but worth asking
ReplyDeleteThe reason I bring this up is in the off chance that China really pulls everything down and we see earnings of $90 and a pe of 15 due to declining earnings...i.e. 1350 s&p.
DeleteRealistically that would take a long long time and need a lot more deterioration to happen. And knowing you 2nd you will be out by next week!
Delete"Before today's open, shares were downgraded to Hold from Buy at Stifel, which said NES likely would restructure its balance sheet and not wipe out the common equity to do so."
ReplyDeleteBULLSHIT!
Is that heckmann?
DeleteGood for you 2nd. More important things in life than the stock market for sure.
ReplyDeleteIf you can ignore the ups and downs of the market, you should get a reasonable return with your approach.
Added to SPY at 184.25
ReplyDeleteSDRL
ReplyDeleteCLR/WLL....again....
Delete‘Turned a whiter shade of pale’
ReplyDeletehttps://www.youtube.com/watch?v=xtzRRwfOXus
If you’re learning to play the piano, but want to skip the ‘John Thompson Grades 1-3’ series, try Procol Harum’s A Whiter Shade of Pale. The left hand plays a descending bass line in C major, over which the right hand places straightforward C major-F major-G major-A minor chords. The newer electric pianos will actually allow you to simulate a bass in the lower register + an organ in the upper register!
The DJIA gaps down over -200 points at the open. That sounds a little scary (and a CNBC anchor who attempted to downplay [what is now] a -15% correction this morning looked a little ashen), but Dow futures plunged as much as -385 points overnight. It’s all good. We’re moving nicely from ‘denial’ to ‘despair.’ S&P500 futures traded as low as 1829 in the early morning hours. That’s almost -100 handles from Tuesday’s (futures) high of 1924! My ‘target’ for the SPX is 1750. At this point (1850), that’s only a further -5% drop. If you’ve stuck with the correction so far, we’re likely not far from a medium term low.
Added to ENPH at 1.98
ReplyDeleteBody and Soul
ReplyDeletehttps://www.youtube.com/watch?v=_OFMkCeP6ok
This comment has been removed by the author.
DeleteThis Market is a Tramp
Deletehttps://www.youtube.com/watch?v=ZPAmDULCVrU
AEG, gap filled.
ReplyDeleteInterest rates the hiding place.
ZROZ rocks!
Rates are heading up, eh? Loving these rate increase rallies, today's result -46 points on S&P as of this moment.
ReplyDeleteKeep an eye on volume for eem as indication of washout. If we see 150m+ then we could bounce. With fed making no comments then quite frankly I could see this market dropping a good deal more though
ReplyDeleteMoving more money out of US$ into Canada. About 8% of holdings this time, so about 10% in total including a move last month.
ReplyDeleteCurrent rate is $1.45 CDN to the US$, Purchasing parity is about $1.22, so US$ way overvalued on a fundamental basis, but energy dragging CDN $ down. Looking to invest in some Canadian manufacturing companies which sell in US$, but pay in CDN$ as a margin expansion story.
With the US$ so high, might be a good time for you guys to look at stocks in companies outside the US. Maybe something like ING which is at a 1 year low in Euro's. but a 3 year low in US$. Good way to play Europe expansion and good company now as I've talked about before.
The DJIA went on to set an intraday low of 15451, or -565 points from Tuesday’s close. This is good news, as it (a) leads to the kind of desperation/despair required to set a durable low, and (b) allows the proprietary trading units (‘prop desks’) of large brokerages to buy back the inventory they likely sold at 18,351 (the same guys who pay MIT engineers and Harvard behavioral finance whizzes to design algos)!
ReplyDeleteOn days like this, I have plenty of informed (ie, been there, done that, or had my --- kicked!) advice to pass on:
(a) Don’t panic. (The right time to panic was before everyone else joined in.)
(b) Sit back and remind yourself the goal is to buy low, sell high. (The goal is not to regret having bought in a bit early, only to sell lower!)
(c) Today’s a good day to buy or add to existing positions!
(d) The DJIA ‘summit’ likely to be reached in my lifetime is probably 30,000+ (no joke). We all know climbers will often backtrack or descend into valleys on their way to a summit. January 2016 will be one of those instances.
(e) Relax. In the time it took me to write this, the DJIA rallied from -297 points to -169 points.
It would not surprise me to see all US indexes close well in the green. Classic market action today, a morning gap down + intraday shakedown (with matching CNBC ‘crash’ talk) which leads weak hands to capitulate straight into the hands of prop desk traders
DeleteThe intraday low for the S&P500 was 1812, which is about 4% above my ‘target’ of 1750. We may still get there, but given the ferocity of selling today + the late session sharp reversal I’d be surprised if we get there anytime soon.
ReplyDeleteMy advice: if u want to go long don't chase it
ReplyDeleteQuite a day. Wow. Wound up flat. hard to believe.
ReplyDeleteI also have the luxury of transferring money into my margin account, which I just did, to bring me to 'BE' on the year. Is this smart? Who knows, but it makes it easier for me to trade without so much pressure.
DeleteNice job
DeleteOn the deposit? :)
DeleteI wonder if I would have sold TWTR today at 19ish...I think so.
Ha yeah on the deposit. You are really good at that!
DeleteIt's so wired. I have this number in my head that I don't like to dip below. When I do I add. So lame, but I know the ultimate goal is 15 years from now, not tomorrow, so it's cool.
DeleteThis whole Chinese stuff is going to come to a head right before they take off for a week for Chinese New Year. Their market closes for a week in early Feb.
ReplyDeleteFrom the TD Quant Guys:
ReplyDeleteYesterday, we saw what could be a described as a technical breach in the S&P 500,
as the market has become a very technical (i.e. price momentum)-driven market, in
our view. We believe that technicians could
look to the last major correction in the
summer of 2011 as a possible replay of the market trading patterns. If the current
correction was to follow the example of
the 2011 correction (U.S. debt ceiling
crisis), we could see a peak-to-trough dec
line of 17% in the S&P 500. This would
take the S&P 500 to 1,725, which also corresponds to what we view to be its next
level of technical price support. If so, we believe that the S&P/TSX Composite
could retest its lows seen through the 2011–2012 period (Exhibits 1 and 2).
However, from a more macro perspective, it is important to recognize that the 2011
correction was U.S.-based, with fears cen
tering on the U.S. debt ceiling and the
possibility of a double-dip recession. The 2012 correction was centered on the
European sovereign debt crisis. The current correction is centered on China,
emerging markets, and commodities. From a macro perspective, we believe that
the 1998 correction, a period we have drawn considerable comparisons to, is more
applicable to today’s markets. Similar to today, we also had a relatively strong U.S.
economy and a strong U.S. dollar, combined with weak global growth and
commodities.
In 1998, the S&P 500 also had a 17% correction. What is also important to note is
that, like most corrections, we saw a double-bottom formation at the trough. The
initial relief rally in that formation was likely the result of a sharp drop in short-
term rates followed by three Fed rate cuts. For us, the most important reason to
analyze the 1998 correction is the recove
ry and sector leadership following the
double-bottom. If global recession fears subside, and the U.S. economy holds up as
we saw in the late 1998–1999 period, we could see a similar, although less
pronounced, recovery with similar sector leadership (Exhibits 5 to 10).
2
Given these historical precedents, we could see another 5.0% downside in the S&P
500. We also believe that the upcoming Fed meeting next week (January 27) could
be a potential catalyst to begin a bottoming formation. Although perhaps not as
positive as an actual Fed rate cut (as we saw in 1998), we believe that a dovish
statement could act as an initial catalyst to take markets higher. We could see a
potential relief rally in commodities if the Fed messaging weakens the U.S. dollar.
However, we would not expect the resource sectors to take market leadership.
Instead, we would expect the previous sector leaders — technology and consumers
— to regain their leadership. This is very similar to what we saw in the late-1998
recovery. As a result, we would look to add to Canadian names with exposure to
the U.S. consumer. For this view to hold, it is contingent that we do not see rising
fears of a global recession spreading into the U.S. Accordingly, it is important that
the domestic U.S. economic data and domestically focused Q4 earnings remain
positive.
I sold EDZ today. Too much volatility with the Euro stepping in most likely the fed follows
ReplyDeleteENPH- Sold the shares I bought at 1.98 @ 2.25.
ReplyDeleteLong NFLX at $103.85. Long MMYT, looking for others. I think this is a good rally point
ReplyDeleteFreaking Crapple.
ReplyDeleteNFLX targeting 500 Million subs worldwide. If they get that (long shot but you never know) that would equate to $60Billion to $70 Billion annual recurring revenues.
ReplyDeleteWow.
Grabbed some BAC and BIIB
ReplyDeleteAll most likely for short term trades. Hoping we get some Fed heads talking down rate rises to get this rally back up to 1940 or so.
DeleteSheesh, about time sentiment improves...
ReplyDeleteAside: DC snow-mageddon coming this weekend starting tonight, supposed to be blizzard conditions and 2~3 feet of snow in places. Hopefully it's super light powdery you can walk through and easy to shovel.
SPH - Too funny, I almost added yesterday but thought I'd wait and see if I could get more even lower.... Oh well, still might happen.
ReplyDeleteWow - just noticed BAC down 22% YTD and at a 2.5 year low. Hard to see how buying this doesn't work out well.
ReplyDeletePlacing a sell limit order at 4.50 for the shares of ECA I purchased at the open on Tuesday at 3.72.
ReplyDeleteAlso, I just purchased some BTE at 1.63 and placed a sell limit at 2.20.
ReplyDeletehttps://www.youtube.com/watch?v=va_u_m20C1M
ReplyDeleteUnless you attended high school or college in the Seventies, you’ve probably never heard of Tom Rush. I was kicking back at lunchtime in the auditorium of a high school in the suburbs of Pittsburgh when I first heard this song (written by Canadian folksinger Murray McLauchlan). It was near the end of the school year, and one of the seniors took the stage (open to any and all performers during lunch) for a solo rendition with just guitar and mike. I think he did a better job than Rush! Back then we were all wannabe guitarists, and I learned the chords from my younger brother Jeff. Two years later I was living in the (University of Michigan) Oxford dorms at the top of South University when my roommate and I made the decision to drop our classes and head to California. While reminiscing with at a family dinner last Christmas, my Mom exclaimed ‘I can’t believe we let you go, or that I actually drove you out to I-94 and dropped you off!’
Crude oil prices are up +5% today, which may (or may not) ‘explain’ the overdue bounce in stock prices. All in all, it’s a pretty tame rally (+1%). Expect a period of churning as investors make their way through Desolation Row.
Interestingly, Tom Rush played a 150 seat theater near me in Kitchener, Ontario last year, so he's still making the rounds. Had never heard of him and didn't attend.
DeleteSold another chunck of ENPH at 2.46.
ReplyDeleteSLB will probably tell us where we are going tomorrow...
ReplyDeleteYou guys want me to buy SBUX here to officially put in a all time high?
ReplyDeleteThat would be at the all time high though not $56
DeleteI sold nflx for a nice gain but not biib mmyt or bac, all very small positions. I plan on slowly adding to mmyt and stowing it away
ReplyDeleteBought back into edz as well. I just think with the market clearly having rolled over and the China issue being unresolved that we are due for a good deal more downside especially in light of 20% drawdowns from the 2011 and 1998 overseas crises which pales in comparison to this potential Chinese currency crisis
Nice bounce in oil today and a lot of short covering in the stocks I'm sure, but the supply/ demand stats still indicate too much oil being produced. Hard to see prices going much lower, but who knows? With commodities, prices can go a lot further than you think until fundamentals realign.
ReplyDeleteTough to get too much edge on anything right now. I think we are about 1/3 of the way thru a potential major currency outflow out of fx. I think we could see 3 or so legs lower.
Deletei.e. We are in leg one. If this is right I'm thinking we see a -75% or so move from top to bottom for EEM.
DeleteDoesn't mean we won't see rallies along the way but my guess if oil and copper and the BDI amongst others are telling us there's a major crisis brewing in China and Brazil and Russia. I don't think it's reflected yet in their markets or currencies. Kind of like subprime being ahead of the curve
DeleteIf this happens it will be interesting to see how the s&p does. Would be nice to get some decoupling action
Delete2nd_ave, why don't you put aside 20K so as to have some fun trading some high-beta stocks? They are well correlated with broad sector, so if your gut feeling tells you something about the sector, you can play it via the high-beta stocks...
ReplyDeletenew post
ReplyDelete