Respect the market, or he'll lay your soul to waste.
Spot gold/silver both closed significantly higher. Miners didn't fare so well. RYMPX closed down -0.44%. Large-cap/small-cap miners closed mixed. Maximum frustration?
I'm not ready to call it quits. On the other hand, I don't plan to turn any of my positions into investments.
I highly recommend we all read this carefully...
ReplyDeletehttp://www.ritholtz.com/blog/2013/01/one-two-three-four-i-declare-a-currency-war/
yep this is definitely a major risk for the market...the more press it gets though the less likely it is to cause a problem any time in the immediate future.
DeleteAren't foreign currency reserves actually comprised of foreign paper bought with printed paper?
DeleteTrees should be running to hide from these hooligans!
As far as market risk goes, the response to Abe's declaration and policy sure seems to have been positive. Abe's our man!
DeleteI'm not sure it is a risk for us, other than trading for less and less valuable paper.
DeleteBut if there is worldwide easing (there already is) then what is the effect? Inflating away debt can only really work if everyone doesn't do it, right?
So the end result, it seems to me, is worldwide inflation, perhaps more serious than ever before.
So it looks like anything that is a hard asset is what we should be looking at, unless it's not a hard asset but rises way faster than inflation. BUT, that is more or less the thesis we have been looking at already. Japan? Easing. The U.S. Easing. China? Manipulation/easing. Europe? Easing as a union, sooner or later splitting some off in order to ease.
BTW, I'm starting to see stories about Europe again. See Jesse's Canary in the Coalmine post tonight. "The media will come up with some crisis...."
Sequestration, debt, Europe, worldwide easing. So many crisis opportunities.
I think we see gasoline, oil, coal, NG, solar, uranium, food, coffee, timber, and yes..gold and silver, launch sometime this year. Likely the energies in late spring.
ReplyDeleteIn view of the previous post, I don't see how it is avoidable.
I stand ready to defend my country to the best of my ability should the FED solicit recruits in their effort to flood foreign countries with US dollars.
DeleteEvery man for himself, I guess.
GDX
ReplyDeleteSubmitted by jragusa (92 comments) on Wed, 01/30/2013 - 12:55 #117089
What the hell is wrong with these miners (GDX)?!? Jeez. Can't seem to catch ANY bid. Down 2% from day's high! Poised to go in the red for the day. This on a day when gold is up a percent or so.
And what's with gold??
Dollar down
Indian Ruppee UP
Oil UP
QE------>E everywhere
If the metal fails to rise in spite of ALL these factors in place, I have to wonder if there is something really wrong. Or, the CB's are doing a great job of keeping it down.
Probably a fair reflection of sentiment. Unfortunately, not bad enough.
DeleteGDX - Gotta be a supply vs demand dynamic at work? It's tough competing against computers capable of detecting hot money flow in less than a nanosecond?
DeleteMark- One thing I've noticed is your self-discipline with regard to trading activity. If you see no reason to trade, you're able to stay away for extended periods of time.
ReplyDeleteI tend to over-trade.
DeleteI keep looking and nothing stands out to me. Something will.
DeleteSwiss real estate is flying in response to the sea of liquidity. Wonder if local municipalities see that as an opportunity to increase property tax revenues, already higher assessments should have increased revenue, a growing burden on the shoulders of fixed income retirees?
ReplyDeleteHigher assessments don't necessarily = higher revenues.
DeleteIn Canada for example, the tax rate is adjusted up or down to keep the revenues for the municipalities the same. So, let's say the price of houses double on average -> the tax rates drops by half to keep the government whole. They may add 2% for a budget increase, but that's it.
If they don't do it this way, government becomes a pro-cyclical influence (increasing spending when the economy is good and house prices growing) and you really want government to be neutral to counter-cyclical.
two things that stood out to me today as potential indicators that the rally might continue:
ReplyDelete(1) the euro rallied hard
(2) copper rallied hard
Here's something I found:
DeleteGDP falling again
The BEA released today its estimate of 2012 fourth-quarter real GDP, which declined slightly from the third quarter. How scary is that?
The biggest drags came from a drawdown in inventories and decline in government spending. The former could reflect business concerns about the future, though the preliminary inventory estimates often see substantial revision. And the drop in defense spending relative to Q3 was in part an echo effect of the temporary surge in Q3 spending that came in prior to uncertainties about fiscal cliff negotiations. Taking these two factors out, real private demand grew at a 2.5% annual rate during the fourth quarter.
Weak exports suggest that Europe's problems are starting to take a toll on U.S. businesses, but there's some counterbalancing good news coming from increases in nonresidential fixed investment and new home construction. The upturn in house prices suggests the latter will continue. Private consumption spending was also solid in Q4. However, the Conference Board's index of consumer confidence declined in January, and the recent payroll tax increases hit consumers with a new headwind going into Q1.
TOF - EGHT was part of this package of small cap (or crap) that I was buying. I was controlling risk by using smaller position sizes. I sold most of the small stuff for a small profit earlier this month but unfortunately I didn't sell EGHT and I also had a bigger position in EGHT. I thought it was my best horse in the race. I'm still working on the mechanics of all my different strategies. In hindsight, I probably need to assign some dollar amount limit where if my investment on one stock is greater than $$$$$ then I use stops.
ReplyDeleteTBT is a great looking chart. I can't believe my buddy Ben is going to let it go up though. Could this be one market that IS bigger than him? I sold the Feb 68 strike calls for about $.40 ish, a day later would have gotten me over $1.00 ish. I see they traded down after hours but I'm not going to trade out of the calls unless the stock is trading at $68 on expiry.
ReplyDeleteSo after watching a few Landry vid's and going over CC's example showing entry price, the sell target and the stop loss a couple of weeks ago, I realize I missing something pretty big on how Landry sets up his price targets. I can't watch his weekly webinar live on Thursday's so I may just have to pay for some of those.
ReplyDeleteStill have my VXX and TZA. I was looking at a weekly chart of DIA along with the 10 week moving average. It looks like we should at least touch the old high of $141.91 which is still about 320 DOW points away.
Port, everything is set up off of historic volatility. The largest amount a stock has moved historically. This way you don't get stopped out on normal noise.
DeleteSo if a stock has moved say a dollar a day, then give it a little room and give it $1.25 or 1.50.
Then divide 2% of your total portfolio by that number. That is your position size and your stop and price target. Target and stop are one to one (the same). So as an example: $100,000 portfolio- 2% is $2000. $2000 divided by 1.25 is 1600 shares. The stop is 1.25 below the entry and the price target is $1.25 above the entry.
A lot of traders would say, 'But how do you make money if your stop (risk) and target (profit) are both 2%?"
The trick is taking HALF off at the price target and moving the stop to break-even on the last half. Now you have pocketed 1% and the last 1% (risk) is house money you can let run for longer term gains or add to on additional pullbacks. This allows you to sit through corrections and hopefully capture much longer term trends and profits. Once you hit the ST price target the risk (barring gaps) is now zero.
Entries: Most everyone here would think Landry entries are too late. They are conservative for safety. He doesn't bottom fish, he waits until the price is moving in his direction again and enters just above the start of the pullback.
Use discretion. You can trade the system mechanically but it works best if you are aware of overall market sentiment. Sometimes price will get within a few cents of the target. TAKE IT!!! Sometimes the market will stall out or some emergent situation causes prices to plummet. I don't wait for stops at those times. I hit the sell button and preserve capital. But, in a trending market like we've had for the last month or more, sometimes you just have to sit and be patient.
I'm pretty sure Dave has some videos on his web page that describe the methodology. He also has seminars every once in awhile that aren't on Thursday. He has one last Friday on another site that I missed. You may be able to find that one or others where he describes how he does it. I know there are a few youtubes out there.
SGG - This one had a decent day.
ReplyDeleteI don't quite put Ritholz in the same category as Hussman, but I do find him about as useless. In my opinion, he is hyperbolic and looking for problems, not solutions.
ReplyDeleteI think he has a view and uses empirical data to sustain that view...usually a political one in the face of emotional nonsense. He will also stick to beating everyone over the head with the data until it sinks in. I don't find him hyperbolic.
DeleteFor example: http://www.ritholtz.com/blog/2013/01/have-americans-forgotten-how-to-debate/
Corinthian Colleges Inc: $0.02 2Q miss, 3Q guidance below consensus
ReplyDeleteJesse's newspaper warning....via Hussman?
ReplyDeletehttp://www.ritholtz.com/blog/2013/01/have-stock-market-bears-gone-extinct-because-of-qe/
The reason I don't like him is he writes stuff like:
Delete"We believe this is the result of the belief that the Federal Reserve will not allow bear markets. Print enough money and Wall Street gets it. Prices are not allowed to go down."
Does he mean this? Is he being sarcastic? Is he just short-term focussed? Obviously it is wrong as the market went down almost 10% starting last September when QE was in full force.
Anyhow, I'm glad you find him useful. Anyway you can make money is a good way!
Read what he is saying. He is writing about the **beliefs** of **other** people. He then goes on to provide charts IE: data, that disprove or clarify the belief he is talking about.
DeleteThe comment is IN CONTEXT with charts. I don't see that as hyperbolic.
"Comment"
"Yesterday we noted that The New York Times, USA Today and The Wall Street Journal all had lead stories about the stock market, every one of which was very bullish." ***(See Jesse's market letter)
"Regarding Hussman’s claim that bears are gone, see the first chart below. It shows the tightest range of bearish newsletter writers in the last 50 years! We have argued this shows a core of newsletter writers (about 20% to 25%) who will never change their opinion from the dark side."
"So, when the market rallies or declines, the other 75% of writers (second chart below) vacillate between bullishness and looking for a correction. Prior to a year ago it was the correction camp (blue line, second chart) that never moved and the bulls and bears moved as mirror images of each other. Now the bears are in an unusually narrow range while the vast majority of newsletter writers are bullish or bullish but looking for a correction first."
We believe this is the result of the belief that the Federal Reserve will not allow bear markets. Print enough money and Wall Street gets it. Prices are not allowed to go down.
"So it appears the only bears for the time being are the permabears that will never change their opinion. This has been the case for almost a year. You can thank the Federal Reserve for this situation."
I don't think it's hyperbolic, the charts do the talking. I think he's trying to refute or clarify Hussman's assertions, with charts.
Note this is from Bianco Research. I don't know if the comment is from Bianco or Rithholtz.
DeleteI can't confirm it either way as Bianco Research is a pay service and this story (from yesterday) isn't on their press page yet.
CLF - Ready to move over the 20SMA? Is this C&H?
ReplyDeleteURA - Double bottom coming today?
ReplyDeleteMaybe not, 20SMA is failing.
DeleteCLF - Looked good a minute ago.......
Another day, another...sell off in miners. The Rodney Dangerfield of sectors right now.
ReplyDeleteAll I can say is it must be really a bad situation considering I managed to sell my position prior to the bottom.
DeleteI also sold GMO a couple years ago as it crossed down through $4, I still think it's gonna be an TCK kind of stock eventually. Management knows what they're doing, and if the global economy isn't ruined by these stupid currency wars then GMO has the best known deposit of moly there is.
Know I'm letting the market play with my emotions, but no better feeling than seeing a stock sell off 10% a few days after you sell it due to an earnings miss (ISSI).
ReplyDeleteISSI - Honestly, I don't know what possessed you to buy that one in the first place. Hope you made out okay.
DeleteBought in 2008 for $2.29. Made 328% profit or 37% annualized.
DeleteI guess you could have bought anything back then and done well, but buying the really beaten down ones was the best strategy in hindsight.
Whoa. Now that's patience.
DeleteI need to work on holding for longer than one day.
DeleteISSI - Yeah, good to hear you did well. I guess ISSI didn't file BK, perhaps that's saying something. But man, I don't know how these little guys can survive on leftover scraps. I've been inside a number of fabs and they weren't impressive at all, vinyl tile floors don't cut it unless maybe your making large feature devises the other guys refuse to and someone's gotta have 'em. A 123 transistor would be an example.
DeleteOtherwise, as smartphones, etc. evolve, large scale integration is going to soak up opportunity, this is what's gonna eat MLNX's lunch in the near future, they're at INTC's mercy and that's not a good place to be. All INTC has to do is include the external device in their next large scale integration revision and POOF! Although, it may not be worth it to INTC, b/c making your die larger adds to yield pressure.
The goal though is to cut down on the quantity of separate devices, the entire idea behind the technology.
But if you just need a big honking transistor as a slave to pull in a power contactor or something, INTC isn't gonna squeeze you.
FCS is one of these filling that market nitch.
ISSI is a fabless company, so they can outsource production to the cheapest source. They also focus on parts of the market like automotive which the big guys probably don't see enough opportunity. I think it is the only viable business model for a small guy.
Delete"ISSI is a fabless company" Oh duh, I get it now........
DeleteMLNX - Sucking in a new crowd, or are we watching a short squeeze attempt?
ReplyDeleteThis thing belongs under $30, IMO
AGO - This one sure loves to rest $XX.75, $13.75, 14.75, 16.75, 17.75
ReplyDeleteCOCO - looks cheap based on earnings. Sentiment is at very low levels in the education stocks.
ReplyDeleteIs it weird I'm nervous about the Nat Gas Inv report and I'm not even holding UGAZ anymore?
ReplyDeleteWhat's weird about it? It would take Valium to sit still holding a large position in UGAZ going into the inventory report.
DeleteAnd that's why.
DeleteI meant to say, it's like watching an accident about to happen. Even if you're on the sidelines, it's a jittery scenario.
DeleteIf $3.20 holds I think it provides for a nice set up to go long UGAZ. Having made a nice gain yesterday on a big position, though, I'm really not mentally ready to go down that road again.
DeleteNSPH - Slow bleed on this one, and I need some encouragement. Am I the only one here clinging onto this one?
ReplyDeletei'm watching from the sidelines.
DeleteYeah, so many more questions than answers. Over my head in terms of comprehending why it's a winner and slightly under water.
Delete"How much does it cost, I'll buy it" or "Over my head"
DMND strikes me as the only one left to not run hard...I think it does it now that it has thoroughly shaken a lot of people off it. FD: I'm long with a fairly large position at $14.2 avg.
ReplyDeleteI'm looking maily for stuff that's going to be up from here in a year or more. Maybe I should be waiting for the next big crash back to 666......
Delete"They may add 2% for a budget increase, but that's it."
ReplyDeleteWell, that seemingly increase just took another bite from the fixed income folks. I guess senior citizens must get some kind of break on their property taxes, they do receive a small break here but theirs go up and down at the mercy of local authorities who have to make sure the county meets financial obligations.
They want to install a water pipeline from the river about 20 miles away into the town, everyone will have to pay for that through property taxes regardless of the fact you've got your own water supply you already bought and paid for and have been paying taxes on, you still won't have access to the town water supply. Just hope they don't locate the sewage plant in such a way that when torrential rains come the waste overflow contaminates your riparian area. Stuff like this is always an afterthought.
It's almost impossible to be a impoverished senior in Canada. Assuming you've worked part of your life and get Canada Pension, the minimum you get as a couple is around $35,000, plus free health care of course, and free prescription drugs over 65. You can also apply for a property tax reduction if you can't afford it and we fund a lot less of our government through property taxes than many places in the US does - probably average property tax is $2,200 in a midsized city, $3,500 in big centres like Toronto.
DeleteHere in my county property taxes run ~$0.008 per $1000 of assessment. The local good ol' boys club decides what they need, we're at the mercy of state funding to pay for the school system plus other stuff. Austin, Tx. is slightly more than double b/c there are no state income taxes.
Deletehttp://www.bloomberg.com/news/2013-01-30/bonds-most-overbought-in-55-years-loomis-sayles-s-fuss-says.html
ReplyDeleteSeems like a compelling reason to hold insurance companies like AGO.
DeleteI can't think of a better industry in general than insurance that will benefit from rising rates. You'll get the double benefit of higher reinvestment returns to drive profits and an increase in valuations as they are almost all cheap relative to historical values because people are concerned about interest rates. And, of r the most part, you get a dividend yield to help while you wait.
DeleteThe risk is that rates rise very quickly, then people will cancel policies in order to buy new ones with lower premiums / higher payouts and the insurance companies will lose a lot of their current business and have to repay agents to sell these policies. I don't see any sign of that in the next few years, but it could happen and it does make sense that it would be a major surprise to the system (or else it wouldn't happen).
Doubt interest rates do a moon shot, considering the recovery is near snail pace in relation to past recoveries. More like an air mattress with slow leak?
DeleteI was thinking buyers might begin embracing the 10yr at 2%, looks like mabye the answer is yes but companies like AGO aren't taking a smackdown b/c rates aren't doing a moon shot as you point out.
What's up with a collapse in gold & silver? $USD is DOWN today, in case the traders have not noticed!
ReplyDeleteWish I had the correct answer....
DeleteFed and central banks selling to buy debt?
Deleteooh ooh: 14 year bull market that came to an end?
DeleteAGO - Someone can't buy this one fast enough.
ReplyDeleteSNE -- at least the pullback in this one seems to be well contained... Too many people who missed the initial train departure?
ReplyDeleteNSPH - Maybe if I'm extremely lucky the developing H&S pattern will have a flat or positively sloped neckline.......
ReplyDeleteThese long shots are always so iffy, I'd just sell here and switch to AGO if I had any brains.
PGH had classic capitulation 2 days ago. if nat gas continues to go higher which I think it ultimately does, then they could be very very cheap in a year or two. The logical buy trigger spot would be a weekly close above $4.77 (march 2009 lows). However, I think like any bottoming process it takes time and it's best to wait for the chart to bottom out sideways or have a retest of lows and then to wait for a cross above the 10wk EMA with a retest to consider it a low risk entry point. The div yield is enticing and they have assets to back it up (which I think they're targeting to sell to cover the div while they get their main project up in Canada up and running).
ReplyDelete5 year chart what a disaster -78%, so oppurtunity if things improve.
DeletePengrowth Energy Corporation engages in the acquisition, exploration, development, and production of oil and natural gas reserves in Canada. It primarily explores for crude oil, natural gas, and natural gas liquids in the provinces of Alberta, British Columbia, Saskatchewan, and Nova Scotia.
UPL another -82%
Deeper value! ;)
DeleteLaszlo B is suppose to be on bloomberg this hour.
ReplyDeleteThe show is touting his 50/50 chance/prediction of SP500 going to 1600.
What is AUMN doing in the green, with S&P in the red and silver down 2%? Oh, I forget -- it *IS* traded by computers who like doing things opposite to what humans would expect, so as to repeatedly lure them into positions and then shake them out of positions...
ReplyDeleteNever try and figure out the market! I could make a sexist comment that it is like a woman and will tell you one thing when it means another, except when it does mean what it says, most of the time...
DeleteIt's OK to be sexist. vb left a long time ago.
DeleteBB, cut that out, you'll get Mark excited!
DeleteThat is, you're familiar with how selfish Mark is with sharing his women.
DeleteBiryini up next, as in now if interested on BloomBerg
ReplyDeleteMKT is so easy, I just needed to buy yesterday CTXS, SWKS, PBI, JDSU
DeleteIf I think about a potential trap for the Nat Gas market to set over the coming week it would be this:
ReplyDeletemost people are looking at $3.2 as a must not break level. As such, I would be a buyer below $3.2...possibly around $3.17.
Birinyi points:
ReplyDelete1. earnings growth IBM. GE
2. housing steady improvement
3. mutual fund flows
Hard to see that those don't play out and drive markets higher.
DeleteHow is any of this bearish, aside from the third which doesn't specify amplitude, direction or period? I seem to recall MF flows were negative somewhere near last year's bottom, is this a mechanism for top calling?
DeleteIt's probably reasonable to anticipate a rush into housing as spring and the end of school year approach just as it appears rates are beginning to rise(tell your potential buyer that rates are expected to rise!), provoking potential buyers into making a decision.
SNE filled its gap, 4 more to go
ReplyDeleteSID filled its gap, 1 more to go
AREX still like it but missed the low today
Just watching and waiting.
Although a gap is simply an obligation and not an inflection point indicator, I still see plenty of initial gaps up that I don't believe can possibly fill this year.
DeleteSID - I don't see any open gaps up remaining, got a date? There are at least two gaps down, though.
down Jan-30-2013 5.58 to 5.55
down Jan-17-2013 5.92 to 5.9
And it doesn't seem the May '12 gap down was satisfied, either.
The stickman just called a ‘seven out!’ All chips will be swept off by end of day. GDX/ GDXJ off with -1.x% losses, MUX/ AUMN off with -1.x% losses, and RYPMX will probably come in around -1%.
ReplyDeleteI was incorrect on market direction, and (always) take losses immediately to cap the damage. There’s really no point in second-guessing the bet> it was just the wrong call, which happens all the time. The one paramount never-to-be-messed-with rule in trading is to take losses (or stop out) quickly. It’s the only way to avoid serious dents to the portfolio (which can be life-changing, as the 2008 crash made evident). In this case, my +0.93% YTD gain will likely be erased, and I’ll be back to Square One. Back to a tee shot is not bad! Were I to insist on holding my positions in the belief that I’ll be proven right, odds are I’ll end up with a -5% handicap!
It’s good to get slapped once in a while. I respect trades that go against me, and I don’t argue with market direction. Which leaves me free to reopen all positions as early as Friday!
To be honest, the 'call' was correct. However, (a) I wasn't able to capitalize on Wednesday's launch in silver/gold spot prices, and (b) opened additional positions despite reservations re opening on strength. I take full responsibility, of course, for the results of the trade.
DeleteNot that it's all important or particularly insightful but I've noticed the sector is very unforgiving to those who buy into strength. Perhaps this explains all the bull calls following those 30 min rallies?
DeleteWere you buying strength?
Unfortunately, I was. And partly b/c I was ticked off at having offed miners the day before the +2% rally. So in retrospect, I have to admit to emotional involvement.
DeleteI'm going to mention this because it is about the only thing that rocked for me today...
ReplyDeleteMJNA - up 28% Even I never thought, but I think these doob stocks have a way to run.
I'm always smokin' the wrong stuff! :(
DeleteThe mighty TVIX, which moves like a crazy monkey, finished flat on the day -- how rare is that?
ReplyDeleteAt the last second, computers decided to bring AUMN in line with GDXJ...
ReplyDeleteIf you think the market is meant to move lower, then tomorrow would be a good time to start the pullback, as the S&P chart seems to be ripe:
ReplyDeletehttp://www.finviz.com/futures_charts.ashx?t=ES&p=h1
Interestingly, even if you think that the market is meant to move higher, then with such an overbullish sentiment, a scary drop to 1450 would shake out the weak hands, lure short sellers in, and would create the required vacuum on the long side to allow the market to move back up.
Finally, if you think the market is meant to move sideways, then it should do so with a much higher volatility than the historic low levels we have recently been observing.
Thus, in all cases I can see, TVIX should rise to $6 soon.
TVIX is already half way to it's next reverse split!!!!!!! ;)
DeleteHmm, double top or day four of H&S pattern? You bought at just the right time, congrats!
DeleteMITK- "Earnings" a little better than I thought.
ReplyDeleteNever accept responsibility for something you have no control over(such as sexual discipline), results were better than you were led to believe?
DeleteVery good! I'll have to remember that!!!
DeleteHEK - Is it a stretch of the imagination to say this chart looks kinda like a bull flag?
ReplyDeleteSee pinch play progress report:
Deletehttp://stockcharts.com/h-sc/ui?s=HEK&p=W&b=5&g=0&id=p46564934971
new post
ReplyDeleteOPK - Interesting chart?
ReplyDelete