This morning both gold and the miners are rocking. Make that rocketing. I’m pointing this out to illustrate how easily I can be played by the market.
The broader indexes are also lifting, with volatility (as measured by the VIX) dropping sharply. Thus bears are also being played.
Market sentiment is high. By at least one measure (the NNAAIM Survey of Manager Sentiment, which measures the long exposure of fund managers [a rather sophisticated group]), sentiment is at an all-time high. So the chase for performance is on!
I can’t count the number of times I’ve bailed on positions only to watch them zip by with a wave the following day. But I can’t let that change my rule re capping losses on a wrong call> there are even more instances where I’ve watched closed positions sell off hard the following day.
No positions.
2nd...it gets worse. How about those crazy missed calls?
ReplyDeleteRepost:
Want to retire? If you're like me, you MUST listen to your inner voice sometimes.
NO! Not that inner scaredy-cat voice, the one that says "Buy $50K worth of MJNA".
F _ _ K!
ok but you buy it here first ok? i'll follow.
DeleteTake a big toke next time the inner voice speaks, and you'll make the right move.
Delete"Buy $50K worth of MJNA".
DeleteLOL, yeah I know. I almost jumped in when if was first brought up months ago. I was urged to, on my end as well.
Is the federal government really going to allow this, I have my doubts b/c there are too many DEA agents making too much money importing the stuff.
If I had bought 50K when I thopught of it, I'd have been up 200K this AM and absolutely out.
DeleteAs it was I traded it for a few K and I'm not unhappy with it, it was just a huge (and risky) opportunity. I still think this sector is having major growing pains and is in it's infancy.
Imagine what the liquor industry was like the day the 18th amendment was repealed.
CP - Yeah I looked at it long and hard and thought...this thing is a scam. And then I bought AMBS!
DeleteThis story is on the Seattle news nightly. Our governor has been in mettings with the feds who assured both the former governor and the newly elected one that they are not interested in thwarting the will of the people of Washington or Colorado.
DeleteThe State liquor board is having meetings all over the state with interested parties to work out how they will license and tax farming, wholesale and retail operations. I have a friend who's stepdaughter is a paralegal and she is working for the liquor control board on researching this question. It is definitely going forward, it is legal here, it will be farmed here, it will be distributed and sold retail here, and it will be spreading to other sates as they see the revenue streams.
As for me, I made 31% yesterday and 38% today. Just not on 50K positions. So far on two co's it has been very good but could be a retirement.
"Our governor has been in mettings with the feds who assured both the former governor and the newly elected one that they are not interested in thwarting the will of the people of Washington or Colorado."
DeleteWow, this will definitely get HUGE beyond imagination if that's true. Where are the big boys, coca cola P&G, etc.....???????
And CSTR has vending machines everywhere, stuff those machines with the stuff.
DeleteCertainly hemp has bee impossible to grow in the US, hemp makes for a great textile, rope, and so much else..... Could make huge money just on hemp if you picked the right way.
Seriously, I can't turn on the nightly local news without each network covering the statewide meetings. They didn't want to do anything without the assurance from the feds that they wouldn't prosecute state workers, so it's as real as a heart attack.
DeleteI'm up another 3% on MDBX this AM too.
AMBS - What was the final verdict on this one, is that MANF stuff for real? MJFox looked pretty rough but he's been suffering for a very long time and maybe would be gone by now if it weren't for something?
ReplyDeleteHow long is the average survival rate and has it been extended by various treatments?
Aside: I can see a bright future for nano-delivery of medications, it's not a stretch, IMO
No surprise> every trade on the long side in the miners just reversed hard.
ReplyDeleteYou cannot buy strength in this sector.
DeleteI may end the day kissing a pint of Stella Artois should GDX/GDXJ close down hard.
DeleteDamn 2nd, can't you find some other way to make money?
DeleteOMG, Kendra is wearing her hair all Farrah Fawcetty.
ReplyDeleteFoxy Farrah, man what an icon! I wouldn't mind if some kind of fad brought some of that 70's stuff back for a year or two. Goes well with MJNA, eh?
DeleteOr maybe Kendra's simply having a good hair day?
Should find out more about the strength of the energy market today. Meeting with my clients from Huston. Can they afford a 1.6M Healdsburg vaca home??? Me thinks so.
ReplyDeleteMy Sonoma oil guys can!
ReplyDeleteYou'd better start coughing up something actionable before I reach through this screen and slap you!
DeleteMJNA - Look, this thing has a pretty well defined channel. Good god, 94% today, WTF did something happen?
ReplyDeleteyeah, they reported $3.39M in gross income on $5.10 M in sales in the Q ending 12/31, a $2.0 M increase Q/Q from the Q ending 08/12.
Delete"assurance from the feds that they wouldn't prosecute state workers"
DeleteAssurance from the FED's is better than gold(reference recent gold chart for proof of concept), but what the heck do state workers have to do with it?
So when do the PCP softdrinks show up in vending machines? It's been way too long since we've had a real soda-POP due to government market intervention and meddling! ;)
I don't mind government regulating environmental PCB's, but PCP regulation has questionable environmental benefit.
Anyway, hopefully you realize if you do make a ton of money you'll be obligated to change your screen name to "goof butts" unless I beat you to it.
The big worry was that if the whole deal was licensed by the state and they collected revenue, that the feds would prosecute state workers for participating a 'drug operation'.
DeleteThis concern arose out of the medical hooch business where co-ops and outlets couldn't get bank accounts because the banks had the same concern.
So now the situation is better and the big O administration has agreed they won't be prosecuting anyone operating within the state law.
See some of the stories under MJNA 'all sources news' from your broker. All of those penny stock services and momentum alerts are citing MJNA, XCHC, MDBX, GRNH, HEMP, ERBB. I like AVTC, they are the CSTR of the meds/herb industry and they also do the Blue Rhino and Marley coffee machines. IMO, Marley is wasting time with Blue Mtn Coffee, they are a natural for herb.
One step closer.
ReplyDeletePer Cashin:
Is TINA Getting A Little Too Popular? – Some time back Jason Trennert and his savvy team at Strategas began discussing TINA. That's the initials of the phrase – There Is No Alternative. Over the last year or so, managers have been forced into investments they might not ordinarily take because they believe that "there is no alternative". Now, the ever diligent Jason Goepfert at SentimenTrader seems to have come across some data that suggests TINA may have become far more wide-spread than most of us would have guessed. Here's what he wrote in his letter:
In early October 2011, the average active investment manager was holding a net short position. As we noted at the time, the only other time that had happened was the week of October 10th, 2008.
The data is courtesy of the National Association of Active Investment Managers. Unfortunately it only has a history back to the summer of 2006, but it's a different and useful survey.
NAAIM polls a sample of investment managers and asks them how they're positioned in stocks - from 200% net short to 200% net long. By being more than 100% invested either way, it means that the managers are leveraged.
That had never happened...until now.
For the latest week, the average investment manager was holding a net long position of 104%, meaning that not only were the managers fully invested, but they were leveraging their portfolios to take on even more risk. The previous high exposure was 96% in January 2007.
The most bearish manager in this survey is usually net short. It's rare to see managers who are very bearish carry a net long position - these are aggressive participants, and they tend to vote with their wallet. So if they're bearish, then they bet against the market.
Not this week. In the current survey, the most negative manager was 60% net long the stock market. That's the most bullish position in the history of the survey, for the most bearish manager.
Because even the bearish managers are net long, the "confidence" indicator surged this week. This means that not only is the average manager extremely net long, but there is a small variation among them. In other words, there's a lot of group-think going on.
There's little doubt that these folks are sharp and savvy investors. But when - as a group - they position themselves aggressively in one direction, the market tends to go the other way. This is a negative for stocks, with a medium priority level (it would be higher if we had more history).
So, we have watched active managers forced to become index huggers, then Apple huggers and now nose-holding longs. Looks a bit like a cautionary trend.
So Hulbert's 60% long MJNA in his port? He might break even this year!!!!
DeleteYeah Hul's long alright, but its with the chick in the vid. LOL
Deletehttp://www.youtube.com/watch?feature=endscreen&v=2ZxWhsB_jSQ&NR=1
Allright, so she's not that hot, but the song is and so is lennox.
DeleteNIHD is cold as ice.
VG looks healthy?
DeleteALSK is frozen as well, must go with what works?
Not exactly like the headline, but interesting...
ReplyDeletehttp://www.bloomberg.com/news/2013-01-31/cannabis-farming-has-kentucky-republicans-seeing-economic-boost.html
"“I wasn’t going to do it without a permit,” he said. “They could threaten to take my farm.”
DeleteRight, and the DEA will of course sell the farm for pennies on the dollar to a foreign firm complete with a permit to grow hemp.
"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates
ReplyDeleteTotally depressing, when did he say that?
Delete1980. Has it gotten better?
Delete"What if everything is an illusion and nothing exists? In that case, I definitely overpaid for my carpet."
Delete"I definitely overpaid for my carpet."
DeleteOf course you did, just try selling it if you want the answer.
BACML
ReplyDeleteABFS 01/30/13 Underperform -> Buy Report
I think I'm flashing back to late 1999 and irrational exuberance. Hopefully it goes on for 6 mos.
ReplyDeleteNSPH - Seems like 2013's gonna suck for this stock, I bet it loses 50%....
ReplyDeleteGoing short - Wake me up when it's time. Tired of getting burned, I can wait for as long as it takes.
ReplyDelete"In the current survey, the most negative manager was 60% net long the stock market. That's the most bullish position in the history of the survey, for the most bearish manager. Because even the bearish managers are net long, the "confidence" indicator surged this week. This means that not only is the average manager extremely net long, but there is a small variation among them. In other words, there's a lot of group-think going on."
ReplyDeleteThat's some heavy stuff, folks. I hope you have started scaling into TVIX today... This type of group-think can keep going for several weeks, but since VIX is already at historic low levels, it will not drop much more. For example, TVIX is higher today than it was last week, even though S&P is at a multi-year high today. However, when a pullback starts, it will be like a snowball, until all those net long manager significantly scale down their long positions. TVIX will just at least 50% at that time, probably close to 100%.
Remember Keynes irrational statement, who knows when the market will give it up. My take is that it indicates an elevated risk environment.
DeleteAs much as I would like to see the market drop, I just cannot see what will cause it other than streched ST.
You certainly go for a challenge when trading the market David. TVIX is another one of those horrible products that goes down under it's own weight. Down 97% in the last year with VIX only down about 22%.
DeleteHave to get your timing pretty much perfect trading something like that.
BB Canada, I am well aware of the TVIX/VXX properties. I'll be the first one to buy puts on these when VIX rises above 25. The rate with which they "evaporate" depends on the degree of contango in VIX futures. Right now, the contango is not very steep, and coupling that with the fact that VIX is at historic low levels, my only risk going forward is a slow contango-related decay. Well, those buying at-the-money S&P puts are subjecting themselves to time decay. Basically, any time you want to play the short side with a limited maximum damage, you have to subject yourself to some kind of position decay until the market actually starts dropping.
DeleteI took a loss on my TZA last week and am glad I did. As I mentioned before I think the wisest move is to wait for divergences to pop up on the daily chart. They're starting right now. All of the major indexes have made higher highs on weakening momentum readings. While I wouldn't be surprised to see a top very imminently, I think the best strategy is to see a close below yesterday's close as a sign to get short...or if we continue higher then wait for a pullback and if there are higher highs then wait for a close below that pullbacks close to trigger a short. This has worked in prior corrections when momentum was weakening and the market was going higher and saves your ass. Just picking a spot and looking at indicators like overbought readings, % above 50 DMA / 200 DMA, New Highs minus New Lows...all of that stuff can be used as indicators for how frothy the market is, but divergences are usually a very reliable sign.
DeleteThe weekly RSI_EMA readings have been getting weaker over the past 9 months which could be a good signal to go short here or very soon for at least a 3 to 4% pullback...
DeleteThe tops for the last couple of seem to broad as opposed to spike type tops, so a lower high is probably a sign the top is in. But the way this market is behaving, it may go a lot further than people think.
DeleteVMW, anyone have a take on this?
ReplyDeleteThinking about GG re-entry.
http://www.ritholtz.com/blog/2013/02/wall-st-feeling-better-but-far-from-bullish/
ReplyDeleteNIHD - now THAT is why I prefer selling "breakouts". It broke above $7.58 and went to like $7.80. I think I got out around $7.50. It's down 13% from that point. Yikes!
ReplyDeleteIMHO, market direction is now officially driven by (a) short-covering, (b) performance-chasing fund managers, and (c) sadistic black-box programs designed to take advantage of (a) + (b).
ReplyDeleteOn the plus side, today's action is exactly what landry wants to see, followed by an orderly pullback.
ReplyDeleteI'm beginning to sense the emotions I had during May 2011, when I felt compelled to shift to buy-and-hold mode. Just before the -20% drop.
ReplyDeleteI'm feeling the need to reduce risk and position size. They'll close this thing at new highs to suck in passengers on the evening news/Sunday talk shows.
DeleteNIHD, went long that which I sold at 7.10 new entry 6.54 ish.
ReplyDeleteWhy still expect choppy action, is still in a confirmed ST up-trend, 6.30 is the 50 sma and 6.30 is a .50 Fib.
Time will tell
PGH: V bottom?
ReplyDelete2nd,
ReplyDeleteCould also be new money flowing into the equities market as seen by the mutual fund reports this year. This type of money doesn't wait for pullbacks - fund managers have to get it working or fall behind the rising market and lose their bonus.
There was a time when I would have begun scaling into QID, TZA, and TVIX going into the close. Those days are gone.
ReplyDeleteThe black boxes know what you're going to do before you do it. The solution is to game the black boxes which are gaming the crowd. I haven't yet figured out what that means.
DeleteI think the black boxes know what they are going to do and they do it with so many trades it's an illusion. About the time you think it's going one way they are reversing the trade. It just feels like they know what you are going to do because they are leading you.
DeleteThe solution is to trade smaller, less researched and followed securities and stick with the trades longer.
One example of that would be a stock (or an ETF) that makes a double bottom, then starts going up again, all humans jump in, the computers push the stock (ETF) down below the support level and then quickly reverse it back above the support level after all stops have been hit. Then, you jump in, knowing that you'll be on board with mostly computers long and humans out of the game. But we need a lot of patience to wait for such setups to materialize...
DeleteMaybe on high liquidity securities, because HFT are scalping fractions, so they make it by pushing it (large positions) in fractions one way or the other while we need larger positions to do anything.
DeleteI think sticking to small caps with good liquidity and higher volatility takes them out of their game. You have to be willing to endure swings within historic volatility.
If you are day trading a popular vehicle with very tight stops the machines will eat you.
We may get our edge back during times of large swings and panic because the HTF of the machines get's drowned out by human emotional actions, but when it's this steady persistent trend, the machines rule.
Steve Wynn, Bloomberg is going to have an interview with him by Trish. The guy is so interesting and his thoughts are worthwhile.
ReplyDeleteListen to his conf call yesterday.
Energy secretary Stephen Chu steps down....
ReplyDelete"it may go a lot further than people think."
ReplyDeleteAbsolutely agree, seems like markets don't predict but actually dictate the future.
I always liked Governor Moonbeam. Nailing Linda Ronstadt (in the day) puts him head and shoulders above the maid chasing Arnold.
ReplyDeleteLooks like he's turned the Golden State around.
http://www.bloomberg.com/news/2013-02-01/california-turns-corner-with-upgrade-as-pensions-choke-illinois.html
I like positive results, can't understand why Arnold couldn't deliver. Perhaps the situation wasn't desperate enough to obtain the license he needed.
DeleteMaria Bartiromo on CNBC (not the brightest light):
ReplyDeleteWe all know why the markets are going up - because you can't get a good return anywhere else so everyone is chasing mulitnationals with yield. But what happens when the cheap money stops?
=> If this really is why people are doing it, we have a long, long way to go before we hit exuberance and a real bear market.
Don't let em' take the gold....
ReplyDeletehttp://www.dailymotion.com/video/xoe30c_the-black-keys-gold-on-the-ceiling-official-video_music#.UQwld6Vi58E
HEK +5%
ReplyDeleteHII - LOL, It just came to me what might've happened to this stock beginning of November... I think someone bought a large position by mistake and then turned back around and dumped it.
ReplyDeleteJudging by recent volume, what would you conclude might be happening, I think someone's buying the hell out of it...
DeleteP/S is 0.33, cap is just $2.2B for a company that essentially has full control over the largest military harbor in existence?
DeleteNATI - How do ya like this chart, man I didn't buy this one 3 months ago b/c the CEO basically said he didn't know how the next Q might go.
ReplyDeletePJC - Heck of a lot of volume is this one done?
ReplyDeleteFolks, take a look at the M2 chart:
ReplyDeletehttp://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=M2&s[1][range]=1yr
M2 has been going down since the beginning of the year. Does anyone know the reason? Are people actively paying down their debts? Or are they taking money from their bank accounts and investing them into stocks?
Gun to head, I'd go with the latter. Recall that Port heard through the grape vine the red-hat society were long stocks more than they have been, almost ever.
DeleteI don't think anyone can make money day trading any more - the machines are way too fast and their algorithms are constantly being updated by very smart people.
ReplyDeleteGot to take advantage of being an individual investor and that is not going to be speed.
SVM/AUMN/GPL/MUX all closed green, the entire sector was on fire today!
ReplyDeleteAnd RBY as well, actually rose instead of making another 52wk low! MUX produced a nice round figure.
Deletenew post
ReplyDelete