Farley describes Adam as having the um, pointed appendage, and Eve having the, um, rounded bottom. Last week we looked at the double-top and traded TEX on that one. Looking at the chart for TEX, it fell for awhile, with it’s relative strength below the S&P, but it’s climbing back up. Set stops.
Today, I want to show POT and ANF as examples of Adam and Eve. First, POT
And today, POT is in fact off by .39% in a flat market.
Now, here’s ANF
And today, ANF is up, what??!! 11%?????!!!! How can that have happened? It just completed a proven topping pattern!!!
Well, you don’t suppose that ANF finance people noticed this topping pattern, do you? According to Yahoo’s earnings schedule, ANF is due to report May 16. Not yesterday. And you don’t think that they scheduled this middle-of-the term conference call because they just wanted to, do you? They most certainly wanted to provide guidance so their topping pattern isn’t traded by the algos.
Set stops, ladies & gents. Maybe, even, don’t stay in overnight.
Thanks Rock. I hope I have time to go through this lesson. But I am still late on last week ones, plus must catch up on comments.
ReplyDeleteMeanwhile, I wanted to react on the google debate from yesterday, especially you comment from 6:42PM.
ReplyDeleteOne of my friends started using AdWords recently, so wanted to share a quick recap for fellows who may not know about it. AdWords is one of the systems (the main one I think) through which Google monetizes its search engine.
It offers a way for companies to buy a good exposure on the search results page for their ads.
ReplyDeleteThey can choose for their ads to show up either at the top of the results, in which case their link appears inside a yellow area titled "ads", or on the right side of the results.
In both case there's a clear visual separation between paid for links and links which are the actual results of the algorithms.
I believe AdWords is the only official way for a company to buy a good exposure for their links inside the search results.
ReplyDeleteBased on that, my understanding is that this case against google has to do with it manipulating the results behind the scenes, outside of the scope of AdWords, in order to give an edge to their own brands or possibly partners' ones.
@Wolfstreet:
ReplyDeleteThat's a cool link. Now I understand the advertising monitization.
When you want your add to appear when a set of keywords are searched (but the ads appear only on Google and Google partner sites), you can bid or price the appearance of the ad using AdWords. So if I want my classic guitar store's ad to appear, I would pick a set of transparent keywords which the AdWords tool would help me identify, put those in the metadata section of my webpage, then I would either bid or flat-rate pay Goog to put that ad on their search result page, or perhaps on one of their partner's pages. Then if the user clicks that ad, I would pay.
From AdWords:
"Important Note: We cannot guarantee that these keywords will improve your campaign performance."
What a great disclaimer. So I had no idea that goog would provide an app which would let you sculpt your keywords for optimum (google) search hits.
But there's still no info on how Goog puts which search hit first. I certainly doubt it's a mathematical model based on probability matches. I'm sure you pay to be first.
Rock I'm going to steal this post and move it to tomorrow morning :-) I was going to post an open thread for Thorsday but I thought this post deserved another look-see, hope you don't mind!
ReplyDeleteThor = Thanks for clearing that up, I was scratching my head wondering what was going on.
ReplyDeleteBut that makes sense.
Mutt
truthfully, I'm wiped, this has been the busiest quarter since I started working at my company. Non stop!
ReplyDelete@Mutt
ReplyDeleteWhich foot do you use?
@Rock: I've seen similar, ahem, manipulations, I mean, things, happen with another stock that I've watched and nibbled at lately. Good one.
ReplyDeleteThis must be bullish too? Everything else seems to be.
ReplyDeletehttp://www.calculatedriskblog.com/2011/04/corelogic-house-prices-declined-27-in.html
On second thought, there she goes. Lower high in place?
ReplyDelete7.4 quake hit Tokyo? Is this right? If so, holy black swan, although I'm not sure if anything can be truly a "black swan".
ReplyDeletehttp://www.zerohedge.com/article/futures-plunge-new-74-magnitude-earthquake-tsunami-alert
I can't seem to confirm this anywhere else and I don't trust ZH for obvious reasons.
ReplyDeleteA powerful new opponent for banks?
ReplyDeletehttp://economix.blogs.nytimes.com/2011/04/07/big-banks-have-a-powerful-new-opponent/
Rock - Normally when scratting my head I use my right rear foot, but when getting a belly rub, it is my left leg that goes all crazy :)
ReplyDeleteMangy Mutt
morning folks!
ReplyDeleteManny - yes, confirmed, but almost 80 miles north of Fukishima and off the coast, not Tokyo.
ReplyDeleteI'll be curious to see if we recover after the panic subsides, so far no major damage or tsunami that I can find.
ReplyDeleteYummy. Red fits you so well. Now THAT's what we want to see.
ReplyDeleteMannwich (10:48)- Although I am a Creationist, I do believe evolution takes place. Without evolution we would all look very similar and species would not be able to adapt to changing environments.
ReplyDeleteAn Elephant is an elephant no matter where it was born, yet there are several different types of elephants, same with horses, cows, pigs and humans. And although we are genetically similar to all other humans on earth and come from the same Creator, evolution is the reason there are such vast visual differences between us.
So when driven by nature evolution tends to be a good thing.
But evolution can also be forced upon an environment, these forced changes normally have unexpected and dire consequences, because that is not the way nature (The Creator) intended them.
You and much of the world is looking for a Black Swan event that will help correct things back to a “normal” state, yet almost every week we see, hear and experience earth shaking (In some cases literally) events that should have an impact on not just the economy but our way of life. Yet these events hardly get attention, they may get their ‘huh’ moment were people stop to stare, but then life moves on.
It seems like we now have flocks of Black Swans flying above us and they go un-noticed. It almost seems like the sheer force of man has allowed these Black Swans have evolved to become the dominant species.
So perhaps we should be looking for a Green, Red or Purple Swan?
Mutt
@Mannwich:
ReplyDeleteIt's odd. For some reason, I took a taxi home from work this afternoon, I've been tired since my business trip, and normally I walk the mile or so, but it was a taxi today.
The taxi driver told me that they had predicted another large quake for Japan within the next 5 years.
I told him I was thinking about buying some Tokyo property after the values plummet.
@Mannwich:
ReplyDeleteAnother odd think I had: looking at the SPY weekly, I think I see Adam.
Rock - I think the RE market in Tokyo has been down for 20 years, with a falling population you might want to consider that RE purchase ;-)
ReplyDeleteHi all.
ReplyDeleteSlow start today, tying up lose ends from being gone a few days. I didn't get to do any analysis last night, either.
@Thor: I think our RE market is going to follow a similar path - a long, slow slide downward for years and years, and this will serve to put a serious drag on the economy, but maybe not the markets, it seems.
ReplyDeleteObviously, we are in a precarious position in the markets. Is the market rolling over after it's test of the February highs? Or just taking a breather at an inflection point before pushing to new highs?
ReplyDeleteThat is the million dollar question.
Mall vacancy rates rise. A long, super slow mo slide ahead, while the DOW hits 36K and S&P hits 5K?
ReplyDeletehttp://www.calculatedriskblog.com/2011/04/reis-mall-vacancy-rates-increase-in-q1.html
Financials have lagged badly. The former leader, tech, is also lagging.
ReplyDeleteAnd APPL, another former leader, is following tech on the way down.
Manny,
ReplyDeleteI agree with you about our real estate market, but it could be saved with population growth and immigration.
What is different about the US from Japan and Europe is that our population is still growing, their populations are declining.
Manny,
ReplyDeleteI see more of a structural change in the economy and the way that people consume more to blame for the decline in mall vacancies. XRT is going through the roof, pardon my pun.
DOW and S&P are filled with large multinational companies these days, they can power ahead even with a domestic economy that is just recovering. Plus oil and oil service make up a huge portion of the S&P.
OK, Dss: Save us. Have babies. Lots and lots of babies.
ReplyDeleteAgreed Denise on both accounts, but what to do about a country awash in WAY too much commercial and residential real estate? I don't see a baby boom coming any time soon, especially if a lack of confidence persists with young people coming onto a very shaky job market, at best. Therefore, new household formations won't likely form either, which will further serve to put a drag on real estate. Look at the malaise in Japan. Young people don't have the confidence to start families anymore, largely as a result of their economic malaise, and this has put a further drag on their economy.
ReplyDeleteRock,
ReplyDeleteI did my part!
Manny,
ReplyDeleteThis is not the first time we have been awash in extra real estate caused by greed, fraud and excessive speculation. Eventually, supply and demand go back into balance.
We don't need a baby boom to keep our population growing:
"Future fertility and immigration may play major roles in the Nation's growth.
The two major components driving the population growth are fertility (births) and net immigration. In the middle series, the number of births is projected to decrease slightly as the century ends and then increase progressively throughout the projection period. After 2011, the number of births each year would exceed the highest annual number of births ever achieved in the United States.
Almost one-third of the current population growth is caused by net immigration. By 2000, the Nation's population is pro-jected to be 8 million larger than it would have been if there were no net immigration after July 1, 1992. By 2050, this difference would increase to 82 million. In fact, about 86 percent of the population growth during the year 2050 may be due to the effects of post-1992 net immigration. "
US Census Bureau: Population Profile of the United States
Japan is not a good comparison to the US as they have negative population growth and they do not embrace immigration, not to mention other structural differences in their economy.
ReplyDeleteWorld Bank USA:JPN population growth
@Denise: I hear you but population growth in and of itself, without meaningful job creation (meaning decent paying jobs) for enough of that population still doesn't bode well for the U.S., and with the propensity to send so many jobs elsewhere, while not creating as good or better ones here is an ominous sign for us as a nation, absent of some groundbreaking invention (see the Internet) that creates a boatload of jobs at once.
ReplyDeleteWhere all of the good jobs going to come from? That's my question. And nobody has sufficiently answered it to my liking anyway.
ReplyDeleteManny,
ReplyDeleteI agree with you about the jobs, that is the most important part of the equation.
All that I can say is that I remember hearing the same types of laments in the 70's and early 80's when the entire baby boom generation was coming into the work force, during a time of terrible economic times, recessions, oil shocks, out of control inflation, and the end of the Viet Nam war where hundreds of thousands of people were coming home without jobs. Jobs weren't being shipped over seas because there were no jobs to ship.
Unemployment peaked at 10.8% in 1982. (which actually was a great time to buy the stock market)
All I am saying is that these things take time to resolve themselves, we have gone through tough times before and we will again.
No one could have predicted the rise of the personal computer, the internet, and tech during the 70's.
What is coming next is anyone's guess.
It seems that with the globalization of the economy, the U.S. and other powers may see itself on the decline due to loss of good paying jobs (and not enough new ones to replace them), while many of the EM's benefit. Our biggest export (good jobs) is largely benefiting citizens of other nations.
ReplyDeleteI do believe that our standard of living is going to continue to fall over time, and there is no question that it is due to globalization.
ReplyDeleteAbsent a truly ground-breaking invention of some sort (which is, of course, entirely possible), there simply aren't enough meaningful paying jobs (assuming those employed continue to work 40+ hours/week) out there to keep unemployment as low as it previously been in recent years/decades. And with the middle class continually being squeezed on their wages, I can't see how the economy doesn't stay in its current malaise for quite a while, unless the credit spigots continue to stay wide open, which I can't see how that can go on forever either.
ReplyDeleteManny,
ReplyDeleteThe two biggest areas of innovation will be in green energy and biotech. How many jobs that those industries will create is another story.
biotech for sure. Mauldin is big on this lately, and for good reason, I think we're at the cusp of some pretty amazing medical breakthroughs. I have a very good friend who is a scientist (chemistry) who works on chip based diagnostics. The end result of which would be putting a few drops of blood onto the chip and having a full panel run almost instantly.
ReplyDelete@Dss
ReplyDeleteIn order for biotech to become meaningful, we need structural reform in costs, and cost control. Right now, doctors can't make money, hospitals can't make money, and drug companies constantly get happered with lawsuits, some as stupid as the double "not" on a box.
An interesting page is
www.world-nuclear.org/info/inf02.html
It says wind is as cheap or cheaper than nuclear.
Rock,
ReplyDeleteIf the US would reform their health care delivery system then we could see some meaningful change. Right now the Neanderthals in the House are trying to take us back to the bad old days.
But if there are some break through biotech advances, nothing would stop them. Like a cure for cancer (don't laugh), or diabetes, or like Thor said, chips.
Biotech companies are in a league of their own, most don't make a nickel, but the promise is huge. If a biotech company comes up with some incredible solution it doesn't matter if the doctors or hospitals are making money, especially if the solution saves money or lives.
Oil making new highs again.
ReplyDeleteMe-thinks the over-reaching by Walker and the GOP neanderthals is coming home to roost.
ReplyDeletehttp://www.huffingtonpost.com/2011/04/07/scott-walker-wisconsin-election-supreme-court_n_846042.html
@Dss
ReplyDeleteHospitals can't make money because they have to provide service to people who can't pay. Those are the people who typically sue. My brother is on the hospital budget committee for the St. Louis area, and he says they've got about 3 years of operating capital left. They can't replace any of their aging equipment and have to buy used parts to fix it. OR and ICU and radiology equipment is about worn out.
Doctors can't make money because they aren't allowed to charge the people that can pay enough to cover the people who cant, because of hospital's agreements with insurance carriers. The doctors typically have to provide service to the people who can't pay, and they are the ones that typically sue. The lawsuits got so bad in California that for awhile, OBGYNs were moving their practices to Nevada.
I got sick, really sick, in Taiwan. I was taken to the hospital, where I was admitted to the ER, spent 8 hours in a bed, received several shots, had a prescription filled. It cost $23 US. You can't sue in Taiwan.
@Dss
ReplyDeleteWhy do you suppose the financials are lagging?
Are we going to move our cash to the ECB banks where we can get interest?
No more prop trading, and derivatives may come under scrutiny by the SEC, the riskier private securities aren't offered to US investors (like facebook) probably because of valuation is crazy and the SEC might get pissed off).
How can the banks make money if they aren't allowed to help people gamble and lose? They can't lend because the need all that 1.5T reserves in case mark-to-market sentiment changes.
You think that may be whats going on?
Rock,
ReplyDeleteI know a number of doctors personally and they are all doing just fine. Better than fine, actually. Hospitals, I don't know anything about except the hospital in my little suburb is putting on ginormous addition and remodeling the rest of the hospital. Not sure how they could do that if they were not making money.
But I am not sure what either have to do with a biotech company or any other medical supply type company.
Rock,
ReplyDeleteI am strictly a technician, fundamental analysis to me is a waste of time, and is often wildly inaccurate due to lies, fraud and mismanagement.
I just don't spend a lot of time trying to figure out the "why" of something. I take note of sectors that are over or under performing, drill down to see if the whole sector is doing well or just a few large stocks, and extrapolate from there. Divergences from the overall trend give me information to form an opinion and then I use other technical indicators to confirm that opinion.
I belong to the "the dog didn't bark" school of trading.
From sentimentrader.com and tradermike.net,
ReplyDeleteOEX Open Interest Put/Call ratio = 1.76
Smart money is betting this market is going to reverse and historically they are correct.
But Blaine at tradermike.com hasn't changed his trend table. It's still .
ICan
^The trend table shows maret up
ReplyDeleteFrom marketwatch.com
ReplyDelete"China data spark slew of upgrades".
HSBC, Citigroup and Credit Suisse recommend buy China!
ICan
my god what a day - I worked harder today at home than I ever have, plus I did a bunch of yard work. I'm going to have to think some more about this "working from home" thing. :-/
ReplyDeleteSorry I missed a great conversation, Rock and Denise, I love to see you two discuss your methodology like that, it's so educational!
@Dss:
ReplyDeleteYes, it's probably just my family that's in the medical community and not doing well. There may be a reason for that. Needs further study.
My daughter lives in a Harlem walk-up. She's an OBGYN, (Or maybe just GYN, even this dad's not sure). She's a resident and works at Columbia's hospital, I forget the name. Hardly makes enough to support the flat; I bought her a charcoal hibachi so she could grill on the fire escape. My other daughter's a vet, and works to neuter and spay, spay and neuter. My brother's a recognized invasional radiologist, who can't afford to retire at 4 years older than Rock. Which is almost ancient. Or is ancient.
I guess one of the things they don't teach in school is how to be successful.
In any case, if the doctors who dole out the pharmas can't be successful, IMHO, that means the pharma manufacturers can't be successful. They need their distributors. If the hospitals can't stay in business, then the companies that manufacture the equipment for the hospitals can't be successful. They need their end users.
Basically, every company needs its sales and distribution organization to be successful. In the case of pharmas, the USG and insurance companies regulate their sales and distribution organization. Right now, both the USG and insurance companies are squeezing their distribution organization. Can't be good for future business.
Google around for provenge, as one of many many examples. Insurance companies won't pay. Limits big pharma's market penetration.
This probably doesn't matter for this week's or month's charts, but can't be good for the future. And we have yet to see big pharma lobbies side with doctors. I guess they haven't had the wake-up-call yet.
Rock,
ReplyDeleteAll of the doctors that we know are either at the peak of their careers or closer to retirement and I would describe everyone of them as very, very successful, and they will retire comfortably with millions. Do they complain that they are not making the money they used to? Yes. Not sure that a resident or a vet is a fair comparison.
One of our radiologist friends has a net worth of more than 10 million. The heart surgeon we know probably has more than that. Not sure if this is a regional thing or an anachronism.
I know that insurance companies routinely deny costly drugs, but I don't think that the biotechs/pharmas as a whole are suffering that much. XBI is making new highs. IBB is going out of it's mind. XPH is doing the same.
Someone is making money! The point I was trying to make is that that biotech could be a growth area for the US economy in the future as opposed to manufacturing of goods.