Thursday, December 15, 2011
12/15/11 Mind if I change my mind?
No one should. After all, changing my mind on a dime is what I'm known for. My bullishness at the close has now dissipated, and my sentiment has pulled back to Neutral at best. Maybe a slight bias towards the Bear. So Fidelity red tape ended up allowing me a good night's sleep.
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I even closed my SLW and AA. At a loss. Well, total losses amounted to -170. Still, that's dinner for two at Alfred's.
ReplyDeleteSPX - need 2 or 3 closes above the 50dma and monthly PP (both at 1227.xx) to get more positive, IMHO.
ReplyDeleteGold lease rates: Why do I keep hearing gold lease rates are high? They are negative(historic low, you are being paid to lease the gold)!
ReplyDeleteThat's what happens when banks are trying to raise cash, they sell whatever they can, in a forced liquidation, presumably for $USD's, and for whatever reason...
Or, there may be a flight from Euro to the dollar pushing the dollar up, thus gold down.
"leased gold" what the hell does that mean and what is the purpose.I have some gold chains from the seventies for rent.
ReplyDeleteRB- Got to get all the hair out of em first dude.
ReplyDeleteMark, what MOG comments? I don't recall MOG comments and I'm trying to read everything. I did notice that I can't pull up some of the web linky things up at work. We can't pull up you tube at work.
ReplyDelete2nd, glad it worked out but I get really hacked how much our hands are tied in 401's and other work plans. Wash sale ruels? The only people that get hurt by these are retail peeps like me. It just makes end of year messier.
did nothing today, got stopped out of my SSO but I reentered. I thought today was pretty constructive. I did read Todd Harrison's message on Buzz and Banter about metals leading the market down. I'm gonning to see it that seeking alpha article is the same thing in a bit.
ReplyDeletemetals leading the market down? seriously i mean i understand why people think that...because it happened in 2008. but other than then, when before did it happen?
ReplyDeletemark - i read portions of that Ann Barnhardt Interview...gotta say she's a bit too dramatic for me. i agree that it's an outrage but this kind of crap has going on for hundreds of years.
Leasing gold - Bullion banks are known for leasing gold, it provides income. Metals traders can lease the gold and sell it into the market with the expectation they'll be able to buy it back at a lower price in the future prior to the end of their lease.
ReplyDeleteRecently lease rates turned negative, I posted this phenomenon a couple days before gold sold off $200. Negative lease rates means that traders were being paid to lease the gold, thus their risk was lowered.
The theory goes, if banks want to "manipulate" gold prices lower (Why would they ever do such mean things to a simple, plentiful rock?), they locate a stash(not necessarily an easy task, you might have to invade a country and confiscate it?) then they hire someone to dump it for them, in the open market(creating a panic works great when you're trying to cover your shorts).
Hmm, so how does that correlate with a dollar rally?
"metals leading the market down? "
ReplyDeleteYour car is made of many metals, metal makes the world go around. Metal is of vital importance, your life would involve a buggy whip if it weren't for metals. Your lungs would be filled with soot if it weren't for precious metals. There would be no such thing as a computer if it weren't for metals. Your computer is made of many different metals; aluminum, steel, copper, zinc, silicon, silver, gold, titanium, covers most of them.
Carbon isn't a metal.
Okay that's it, I won't mention metals anymore.
ReplyDeleteHere's a headline from Yahoo of all places. Why are the futures up 200 points?
ReplyDeleteBargainers reach deal to head off gov't shutdown
http://news.yahoo.com/bargainers-reach-deal-head-off-govt-shutdown-021130079.html
futures looking good. too many bears/worry warts out there.
ReplyDeleteSpending bill passed.
ReplyDeleteahhh, i just reread my comments. I meant to say something like ==> I would expect the futures to be up 200 points
ReplyDeletehard to type with a 3 yr old in your lap
i fully expect futes to tank by the time i feed the lil man in the morning
ReplyDeletePort- This was MOG's response to my What's up email...
ReplyDelete"I just returned from a week in Seattle and Calgary, all three boards and nothing too encouraging in sight. Truck market is recovering but Europe will hammer us in 2012, wish our policymakers would get their act together. Cash is not a bad position, I have taken several "protection" bets on S & P, some fancy hedges that give up the upside for downside protection, making a little money on the end of year bounce. Private equity is good if you stick with assets and financing for those still in distress."
TOF- I agree..can all the Nazi crap, but she has a fucking good point. How would you feel if your MITK position was frozen for 2 weeks...Let alone your cash.
"by the time i feed the lil man in the morning."
ReplyDeleteOh man, oh man, are you screwed in the long run. What's next?? Washing dishes??
thx mark, it took me a while to figure this out, those with big money talk to others putting big money to work. we used to have an exec vp come on our floor and he would say something like "i just bought some ##, think its going to ###" and he was always right about the direction. he's gone now, I miss his tips.
ReplyDeletePort- You remember MOG is on the board or Chairman of WY/PCAR/TLM right? That's a pretty broad look at things.
ReplyDeleteHow funny, sad is this...My MS client is having a Christmas party tonight for his staff...I wonder how many will be there next year..Tomorrow I have another interview with the Quant fund dude who turns out already get's $ from my MS client. Job now looks like $3M.
ReplyDeleteI'm having tacos.
oh yeah, he would be in the know
ReplyDeleteI just read part of the Ann Barnhardt article. I think there is a lot more to this MF Global problem than we are being told and it makes no sense to me why it's taking so long to figure it out. If they ever do smash the 401's 403's and the IRA, I think we all will revolt.
I have to go through a clearing broker on some of my stuff at work and I've brought this up to peeps that should know more about it than me. They just sorta shrug their shoulders like its no big deal. I dunno, once again I'm just a mushroom in the dark.
mark, ask those guys about MF Global. All of my bankster buddies are too low on the totem pole for any good info.
ReplyDeletePort- I'll ask MOG about MF. He'd be the best one.
ReplyDeleteI'm proud to hear TOF has taken his parental duties seriously but man, lactation might be a step beyond reasonable...
ReplyDeleteAs usual during multi-day PM sell-offs, gold and silver are going up during Asian trading (like we are seeing now) and get hammered during the European trading (like we'll see tomorrow).
ReplyDeleteAnyway, if you're still interested in how leasing works, here's a link:
ReplyDeletehttp://lmgtfy.com/?q=gold+leasing
And if you want to lease any trinkets you may have to me at a negative rate, just let me know.
Oh, man, CP is on top of his game!!
ReplyDeleteThe futures are looking good tonight, but what worries me is that the TED spread is climbing up in a straight line for several months now. This means that the situation in Europe is getting worse in a straight line, like a time bomb. Only when the TED spread stops climbing can we say that the situation in Europe is under control.
ReplyDeleteTOF,
ReplyDeleteThe metals held up better than the stock marker in the 2007 / 2008 downturn. THE SPY peaked in Q2/Q3 of 2007, but commodities did not peak until Q1 / Q2, 2008. I would say it was the other way - stocks lead down and dragged the commodities with them. At that time, many hedge funds ere hiding in commodities and making reasonable numbers in a bad market. When the commodities finally fell apart, they cam down hard.
I think this time, things are more in synch with the commodities moving in tandem with the markets and the US$. The only exception has been the PM's which have stayed high and are now being dragged down to "catch-up" to the markets and other commodities.
Because so many people have not taken losses in PM's this year and a lot of money is hiding there now, I think we could see a further large pullback after a bounce.
This may be the most important, overlooked news item of the month:
ReplyDeleteLast week's moves by the ECB to widen what it would accept as collateral as well to make 3 year loans are looking like the real deal. On top of a wildly oversubscribed Spanish debt auction yesterday, French yields are diving, 10 year OATS falling 9 bps to 2.92%, below 3% for the 1st time in 2 months. - from seekingalpha
If this wokrs, it is like ECB buying and Europe QE without all the law changes.
Another morning with lots of takeover news:
ReplyDeleteTube Supply
NextG
Cooley Distillery
ISTA
Morton's
RSC
Mirvac
Another sign that stokcs are cheap relative to the value of cash on companies balance sheets (of which there is a lot)
Sorry, guys. I am ticked off big time this morning with Fido.
ReplyDeleteAfter mucho back and forth, the bottom line is:
(a) I am only able to trade mutual funds (no ETFs). That means opening/closing positions only EOD.
(b) If I accumulate enough roundtrip violations (basically open/close within 30 days), I can be banned from trading for 85 days! WTF.
So I have a work-around of sorts, but I'd better watch my step. The rules around retirement accounts are ----ed up, if you ask me.
BB- ECB/Take overs...Good points.
ReplyDeleteWhat that means for me is- I need to wait for clear extremes in sentiment before taking positions. Trying to grab 1% overnight just isn't worth putting violation points on my account.
ReplyDelete2nd- What % of your funds are in the 401K?
ReplyDeleteWish crude was a little higher here and that I bought BAS yesterday like I wanted to.
55%
ReplyDeleteGap and go? I've got my doubts. I'm in between gaps, probably the gap down from above and not the gap up from this morning fills first, no doubt.
ReplyDeleteLooks like SPY accomplished the same feat.
"Oh man, oh man, are you screwed in the long run. What's next?? Washing dishes?? "
ReplyDeleteMark - doing what it takes to make the wife happy...and praying it pays dividends later
2nd - Just go long bro. Buy and hold here will succeed.
MITK looks to have made yet another higher low since it bottomed on 11/29 at $6.54. In fact, if you go back to 2010, then there is a series of higher lows all the way through on the daily chart. Just for kicks I went back to the 1980s and 1990s on MSFT to get a sense of how a huge winner traded over time. I'm not saying MITK will be a MSFT but I think it could be a huge winner.
Anyway, in 1990 MSFT got dragged down with the market and even for a period of time traded below its 200 DMA. If people bailed on it because it traded below its 200 DMA then they missed out on HUGE gains. However, if they stuck in there because it kept making higher highs then they were extremely happy.
Oh, forget that gap stuff, seems I was mistaken.
ReplyDeleteDollar climbing, what did Merkosy say this time?
ReplyDelete12/12 - "Chancellor Merkel has openly stated that she will not be coerced by an UNELECTED FORCE CALLED THE MARKET."
ReplyDeleteHow refreshing that would be but wow, this must be BS... Tell me Merkel doesn't represent a special interests group and I've got some Az Oceanfront to show you.
55%- Shit, you have plenty of day trading power bro. Get in there man!
ReplyDeleteJust turned on CNBC and heard Gary Kaminski (spelling?) basically try to impress people by saying he was ahead of the curve in talking about Europe way back in February 2010.
ReplyDeleteWhat he failed to mention is that since then the US markets are up about 15%.
"Europe way back in February 2010. "
ReplyDeleteI'd rather know where Europe's likely to be Feb 2012...
Looks like in the shitter, if you have no faith in TPTB averting the demise of fractional reserve banking.
CP > I guess the decision we need to make is if things will impact the US or not. I'm beginning to think more and more that the US is stronger than people think. Whenever we have long lasting downturns in our markets its due to a US downturn. It's very rare for downturns solely in other markets to impact us for much longer than a few months
ReplyDeleteTLT - Up nicely, not gonna have that equities rally today?
ReplyDeleteTouchy work, juicing markets with nitrous when oil is in the upper 90's.
WTH is up with oil anyway, just not enough to go around?
Man they keep selling MITK. I'm down about $.60 now on my purchase. My suspicion is they're just trying to get longs to throw in the towel before the next run up. This happened in REDF several times.
ReplyDeleteTBF - Nice, no decay option like TBT... just 0.45% from 52wk low, too.
ReplyDeleteWhere no man has gone before...
At this point, I should be thanking Fido for not allowing me to buy an index fund last night.
ReplyDeleteSWHC - Nice run there... hmmm... ATF Christmas present to drug cartel?
ReplyDeleteSWHC - I'd short this thing with both barrels...
ReplyDeletePatricia just bought 3,500 shares of MITK @ 7.07.
ReplyDeleteOccupy protesters arrive to court wearing thongs...
ReplyDeleteI'd have to carry a ripe banana in one hand if I were doing that.
Don't tell her. It's a surprise!
ReplyDeleteNice Mark.
ReplyDeleteSo this is all the bears got? C'mon man. I mean Fitch put Cyprus on downgrade watch. That's some nasty sh*t man!
hopefully that surprise won't be a lump of coal.
ReplyDeletefor your sake and mine.
ReplyDeleteThe stimulus guns have been loaded. Get in now or miss the next 150 S&P pts.
ReplyDeleteBidding 3500 @ 6.89.
ReplyDeleteCiao...At the close.
Bears can kiss my...ripe banana.
LDK - Heading up, WFR nicely green but man, so deep in the weeds., FSLR not so good.
ReplyDeleteThin-film solar doesn't hold a candle, apparently, or GE will become the thin-film gorilla on the roof?
The real problem I see with thin film is that by definition, thin films just aren't thick, like a silicon substrate.
MITK - So what's new, I look at that chart and see an H&S formation with head in September and what looks like a sub $3 target.
ReplyDeleteMan, I really need to stop looking at charts and check myself into a mental ward.
Since I am approaching the limits of my solvency, I realized it is time to start getting some protecting for the downside. So instead of raising a little cash by selling today the May $26 GDXJ call options I picked yesterday, I just bought 10 Feb $26 GDXJ puts at $2.50 each. I'll be more than glad if they expire, because in that case my solvency limits will not be tested and both GDXJ and AUMN will be higher than they are now (and I'll make money on GDXJ calls and all my AUMN calls).
ReplyDeleteYou see how it works: my purchase of GDXJ puts immediately caused it to shoot up, taking AUMN with it! That was my intention in the first place. :)
ReplyDeleteCP - The fundamentals in my opinion have improved greatly with MITK. They doubled the number of banks signed on to their service in q3 up to over 180 banks. Of those, only 35 were "live" as of 9/30/11. All of those should be live within a quarter or two. As a result, revenue growth should explode. And from the research I have read, just about every single bank wants to offer mobile check deposit and MITK is the only game in town.
ReplyDeleteThis wasn't the only thing that got me back in. The other is that they won Progressive insurance as a new customer in a different industry. From what I've found, Progressive will begin using their technology for filing claims...just take a picture of your VIN and insurance card to file a claim at the time of an accident is my impression.
The CEO hinted that they were in negotiations with an insurance company back in the summer time so he followed through on his promise. He has also mentioned that they should have a tier 1 banking customer signed on to their Mobile Bill Pay (take photo of a bill, it reads the bill and then pays it without you having to send a check etc (i.e, the bank captures the data and sends the check out for you)). Additionally over the summer he mentioned that they are in negotiations with a large health care company about their technology to help reduce paperwork in that industry.
The stock is really volatile so its not for the faint of heart. But sentiment is poor and the trading is poor...that's the perfect time to get in, in my opinion.
MF Global - Apparently some small segregated account holders will recover access to 2/3 of their cash by Wednesday next week.
ReplyDeleteWestcoaster posted the following re SP500 indexing on CC. Good Post IMHO...
ReplyDeleteHow govs steal from you
Submitted by westcoaster (691 comments) on Fri, 12/16/2011 - 14:11 #102252
The stark truth is a shocker
A FA friend in Detroit put this out to his clients today:
The stock market is zig zaging back and forth and has made no real progress in either direction since early August. But along the way, it has been a very bumpy ride with large whoosh downs and large quick rallies.
This type of market behavior is clearly a corrective pattern and not impulsive. It is difficult to make money during these types of patterns because they chop up and down very quickly with no clear trends developing.
In fact, if we look longer-term at the S&P 500 Index, it is right where it was in 1998! This does not factor in inflation and the destructive force of the dollar's lost value. This chart shows the dollar has lost over 20% of its purchasing power (value) since 1998.
This clearly illustrates stock market levels fail to show the entire story. +21.5% is what investors needed to make over the last 13 years in their accounts, to offset dollar loss, and breakeven.
If we factor in inflation, an investor had to make an additional +38.8% since 1998 to breakeven. Calculate it yourself here on the Bureau of Labor and Statistics calculator: http://www.bls.gov/data/inflation_calculator.htm.
So all in, if investors are simply invested in mutual funds that mimicked the S&P500 index, they are down somewhere near -60.3% over the last 13 years even if their statements show the same dollar value. This is not the way to fund a prosperous retirement.
MITK - TOF, trust me, I'm pounding the table for MITK to move up. Even though I have no position...
ReplyDeleteAnd I promise you as well that if it does go sub $3 for inexplicable reasons, I will be buying there somewhere. I don't expect it will, b/c I don't believe my eyes and I will have missed a sweet trade if it doesn't.
"Last week's moves by the ECB to widen what it would accept as collateral as well to make 3 year loans are looking like the real deal. On top of a wildly oversubscribed Spanish debt auction yesterday, French yields are diving..."
ReplyDeleteBB Canada, all European yields shot up after the ECB's announcement last week, with Italian yield nearing the all-time high. Let me repeat what Hussman said about the speculation about the banks using the liquidity to buy government bonds:
"Draghi said that he was "kind of surprised" that that others misinterpreted his phrase "other measures might follow" as a suggestion that massive ECB bond-buying would be allowed once a fiscal union was more clearly established. To the contrary, he rejected any sort of "grand bargain," saying "We have a Treaty, and Article 123 prohibits financing of governments. It embodies the best tradition of the Bundesbank. We shouldn't try to circumvent the spirit of the treaty." He specifically warned against attempts to use "legal tricks" to circumvent the EU Treaties.
Notably, the restriction in Article 123 specifically prohibits the ECB from "any financing of the public sector's obligations vis-a-vis third parties" - this does not simply restrict the ECB from buying debt directly (which could be circumvented by buying distressed debt on the open market). Rather, it is a restriction against using the ECB as a funding mechanism for public sector obligations.
We've seen some theories that Europe intends to address the problem through ECB lending to banks, taking distressed debt as collateral, with the banks turning around and buying more distressed debt. Apart from the fact that this would be the sort of "legal trick" that the ECB would be unwilling to facilitate, this would imply an increase in bank leverage ratios far beyond the 30-40 multiples that already exist (which would be a disaster when tighter Basel III capital requirements kick in). In practice, depositors would flee, and you would end up with a European banking system where bank bondholders, not the ECB, would be subject to the losses, since the ECB's collateral claims would be senior."
The TED spread rose yet again today...
ReplyDelete"Mark - doing what it takes to make the wife happy...and praying it pays dividends later"
ReplyDeleteTOF -- we know you are VERY good in finding great long-term undervalued investments, so I don't doubt you'll succeed here as well. :)
"CP > I guess the decision we need to make is if things will impact the US or not."
ReplyDeleteEconomically -- definitely not in the long term. Stock market wise in the short term -- sure as hell.
"TBF - Nice, no decay option like TBT..."
ReplyDeleteCP, if you do the math, you'll see that even a 1X inverse ETF decays on fluctuations -- just not as fast as 2X or 3X.
CIE - on the move...
ReplyDeleteCobalt International Energy Inc. (CIE), the deep-water oil explorer with wells in the U.S. Gulf of Mexico and West Africa, surged the most since its 2009 initial share sale amid plans to prolong drilling on prospects that may hold 2 billion barrels of crude.
IBM - Ick, yuck...
ReplyDeleteS&P had a perfectly good chance today to break above Wednesday's highs. Instead, it dived down. I am afraid next week is going to be a big down week...
ReplyDeleteEuro very close to yesterday's close.
ReplyDeleteDollar down slightly.
Bonds up a little over 1%, new low for TBT....
Big blue arrow still sideways. Just kinda looking sucky.
All I want for Christmas is a trend up or down. I don't care if it's up or down, just something besides sideways.
Which is of course the long way of telling the fricking Europeans to shit or get off the pot.
http://twitter.com/grassosteve ...
ReplyDelete50dma is key 1228 , then its 1234 for a stutter , 1242 and 1257 support below is 1209(low from 12/14) 1204 ultimately
"IBM - Ick, yuck... "
ReplyDeleteWow...I didn't realize how well that thing is doing this year. Very impressive.
CP - For what it's worth I confirmed today with the company that:
ReplyDelete"We haven't come off of the expectation for a bill pay customer by year end and we expect to be able to provide an update on our 1Q12 call in Feb. As with most customers, they tend to be reluctant to make themselves known until they actually launch which restricts us from making specific announcements"
ZIP.
ReplyDeleteITM - Like a rock.
ReplyDeleteTOF - Thanks, no argument whatsoever. The TT secret weapon is invincible IMO! ;)
ReplyDeletePWZ - Hmmm.......
ReplyDeleteVIX --
ReplyDeletehttp://www.zerohedge.com/news/guest-post-do-we-get-year-end-rally-or-not-santa-dukes-it-out-mr-vix
Spotlight on China: Is China's current accounts surplus responsible for global financial distress?
ReplyDeletehttp://www.ssc.wisc.edu/~mchinn/CCQ.pdf
You guys catch the close in GMO? Rebalancing?
ReplyDeleteSame close for MDW as GMO.
ReplyDeleteVALE - Almost looks like a possible double bottom, the one I've been anticipating.
ReplyDeleteIn the case of VALE, I wonder what the status of their three new ships from China will be, since the first one delivered was reportedly cracked, and taking on water....