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Wednesday, June 29, 2011

Pissing our way out

With my best Maxwell Smart voice...
"The old trick to mention what you said is my view as opposed to your view just to make me talk about my true view" aha...it was a good one. So I'm going to talk a bit.

Rock dude, you need to calm down. If you thought that we are in some kind of pissing contest …well, probably you need to read reality better, and find another buddy.

Again and for the last time:

1)I said Sep 2 that the market was going to be in an uptrend at least 10-14 months. And was going to look like a giant wedge with three peaks in it‘s trajectory.
This means that July-November 2011 is the time for an end. I mentioned that no big drops like 25%-30% during that period will occur.

Why you say that you are bullish opposite to my view?

2)For months was letting everybody know that April-May was my main target for a decent correction. As time draw near I mentioned the first week of May as the point where it should start falling.

A decent correction is a secondary trend and I mentioned that several times.
A secondary trend means that the primary goes the opposite way and is still current.


3)Three Tuesday's ago I mentioned that I expected the market to bottom Thursday 16 with a puke and or late Wednesday or early Friday, like a 3rd order prediction. The puke didn't come but as long as the market makes the bottom that day, Thursday 16, with or without a puke, is good enough to me . Planets don’t wait for me to decide if I feel satisfied with their performance, they don’t do recaps for me.

Anyone can take a chart of the s&p500 and see that June 16 is a bottom. The puke is a violent form of bottoming usually called pipe bottom, so the FORM that I expected didn’t come but that doesn’t imply that we didn’t made a bottom June 16 for anyone to see..


So in my quest for bringing unparalleled excellence to the readers I kept looking for that puke. And probably came in a weak manner June 22nd and 23rd again with that big drop. I wasn’t too sure Thursday 22nd but Friday23rd did it again without breaking the June 16 bottom, the 200 mov. avg. and showing a rounded not impulsive bottom plus the Greek theater.

All this with certain astrological factors made me go long SPY calls at 3:16 past Friday. So I don’t really know what are you saying that my view is, but I can assure you is wrong.

My objective is to bring to people 3-5 calls that are the salient ones along a year, as a way to help (in case I’m correct) them develop their plans. That’s all.
Regarding trades is hard to keep updating what I’m doing not commenting too often

So Rock if you mention my views again in your post…(suspense)they have to be accurate. Lol.

Dan

The Herds Update

Time for the herd update from Rock.

As you know, I continually monitor ETF funds which are sector-focused to determine their relative performance to the S&P, and to attempt to determine if there is sector rotation going on. I call them "herds".

In addition to the ETF’s, I also draw channel trend lines for the stocks I follow in the various sectors. I look for an overview of the individual stock’s performance, and how it relates to or deviates from the market and herd indicator.

As a general comment, lately it seems the stocks I’m following are somewhat choppy. The research into the herd list supports this, the last 5-8 days are up-down-up-down days. A good way to make money is to identify a market trend, identify a sector trending with the market, and identify and trade in a stock trending with the market. As long as you’re monitoring the performance, then you ride the trend and get out or reverse your position when the market breaks trend, the sector breaks trend, and the stock breaks trend. This chop probably indicates a trend direction change, and is not an investment market.

Rock is always early. I said I think this week that the S&P weekly stochastics were on the bottom, as were the daily. This is the time to invest. This is the one time of the year you’ll make the most money. Well, over the last 3 weeks, the S&P has closed within 3 points, which says we’ve got some price stabilization. The Dow Transports are showing near all-time highs. Things are on the move. Early, but I’m full of bull again.

I saw a good pullback in AAPL, so I went long, and added over the last couple of days to a full position. I believe it to be undervalued. I think it’s time for that one to at least beta up and even beat the market.

We’re going into earnings season now. I look at the retail sector, and it’s pretty much holding steady. Holding steady means we’re likely to see like last earnings season, a significant number of outperforms. So I’m thinking the rally will likely come during the earnings season.

I know this is opposite to what Dastro thinks.

Looking at the media, the gloom and doom boys can’t see that solvent countries are going to do everything in their power to save the banks. Actually, the rich have the most to lose: If you’re holding dollar denominated securities and the dollar disappears, your securities can be used as wallpaper. So we’re going to save the rich.

Now let’s trade this one!

I went through the herd list, and found that many had broken their downchannel trend, such as XRT, IRET, $DJT, UCC. However, breaking their downchannel, and being positive relative to the S&P are different things. If their downchannel is so steep, breaking out may simply bring them to par with the S&P. Anyway, here’s the data:

0.03 BBH
0.02 XBI IBB XME XES
0.01 UTH ITB IGV XRT KOL UCC OIH SLX TAN
-0.01 GDX $BKX KRE KBE KIE
-0.02 KCE
-0.03 GLD

So if you’re investing in capital markets or gold, that’s down. Banks are suffering. People are getting out of that and getting into biotech, and metals again.

I will be going long in CENX into earnings. I believe in them more than AA but AA will report first and set the trend, for sure. That’s why I’ll get out of CENX before AA reports.

Tuesday, June 28, 2011

Trend Day Up


Today was about as pretty as a trend day can be, gapping up and never looking back. These are rare events so I thought I would post a chart of of it.

Trend days often start with a gap up and they close on their highs. Price tends to follow the 20 ema. Today there was a fake out near the close with everyone expecting a sell off which never materialized.

After hours the ES has not pulled back significantly (as of 9:58 central) which is bullish.

This trend day was also interesting because it came on the heels of yesterday's almost trend day which did sell off in the last hour.

Getting close

Hello everybody,

Well I'm narrowing the list of stocks to pay attention to from all the ones that I follow now.

I mentioned APKT VRSN DECK ACTG to the donside as good candidates.Now the market is moving up so I'll check how they fare, in order to confront their astrological weakness with the reality of the price action.

TXRH is on the rise but had in the past 6 months two triple tops so to speak and is close to the high of 2005 so I'll keep an eye on her particularly next week around Thursday and or Friday to see if corrects more heavily or the correction is over and plans to make a new historic high.

On the long side I'm paying attention to JBL HERO MDCO JBLU TSYS MKSI and to my regulars SPPI ACAS BSX I started paying more attention to NVTL which past year mentioned in early Oct that I liked it but wanted to see what would happen in November first. October 26 started dropping and didn't stop until past month.Followed the drop (but not getting short, just watching what kind of personality it has).

And MTW AKAM PMTI appeared under the radar too.

Regarding the s&p 500 still mantains the Thursday 16 as the low and the chances for a puke like I mentioned are getting closer and if it's going to happen should be in the next 3-4 days. Otherwise I'll have to consider Thursday 16 like the weakest point and a failed puke at least a few weeks.

Dan



Addendum
June 28, 2011
I didn't mentioned CSCO just because I forgot but is of course an important candidate in the list too.My apologies.
Dan

Monday, June 27, 2011

Manny Mondays: Gone Fishin' Open Thread Edition

Morning all! I'm not really going fishing, but my wife and I did leave a day early for our 8th wedding anniversary trip to Madeline Island, our first visit there, so have at it, folks. We've heard good things about it and are very excited about the trip. Therefore, since I didn't have time to keep up with the news this weekend and write a post, the floor is yours. Back late Thursday! Enjoy the week. Sorry for the short notice, but put your shorts on. Manny's heading out of town!

http://www.madelineisland.com/

http://tinyurl.com/66j2plz

http://www.trek-trail.com/

Friday, June 24, 2011

Friday Pot Pouri

Astute Illinois Farmers Make Out Like Bandits

"Farmers, who bet on the weather each growing season, have emerged as the shrewdest gamblers in the housing industry.

A decade ago, they began seeing land values escalate as homebuilders needed raw land to satisfy demand. They sold land to homebuilders at high prices, took their profit and invested in land downstate that they leased to local farmers. Now they are back in Chicago's far-flung suburbs, spending a pittance of what land sold for five to 10 years ago, planting crops and profiting from surging commodity prices."


One Eerie Thought About Magnificent Mile Gang Violence

"Over the last few days, I've been asked by many people: "Why aren't you writing about the downtown 'flash-mobs'? There's so much to say about race."

I've been thinking about the situation a lot. Pondering it. Wondering what's going on to make these crimes that are so very ordinary just a few miles away from the Loop finally happen there.

The truth is, I don't have much to say. I could go on and on about how this sort of criminal activity happens all the time, and why doesn't the media cover it? But that's too naive. I know perfectly well why they don't."


A storm that shook the ’burbs

Any of these photos could have been my block. It looked like a war zone when I left town. Interestingly enough, it did not seem like a terrible storm as it happened. Just a bit of high winds and not much rain.

Thursday, June 23, 2011

Thorsday!

Nothing really prepared for today's post but something I appear to have bookmarked weeks ago to share with the group. A short story on mass transit projects here in LA. I wanted to illustrate two things. First how some states and cities are very actively trying to push forward vital infrastructure costs. Second, this should help to dispel any impression that you may have left that the people of Los Angeles do not want mass transit. People here are screaming for these projects to go in. There is very little opposition to the re-laying of mass transit lines in the City of Angles. There was a time when Los Angeles had the best mass transit system in the country (a post for another day) and I can tell you from living here, and talking about these issues constantly with other frustrated commuters, that if the people of this city have anything to do with it, Los Angeles will once again lead the nation in mass transit.

On a personal level, there will be a light rail stop going in a block from my work in two years. I will be able to take the subway around the corner to my work. I can't wait, I'll never drive to work again!

Los Angeles Leads Full-Throttle Dash for U.S. Transit Cash

pened in 1990, Los Angeles County's modern-day rail system remains small. Five lines reach a sliver of this sprawling metropolis where 9.8 million people live. But a major expansion is under way, with hope that Congress might help accelerate the time table.

The Metropolitan Transportation Authority, the agency known as Metro, wants to build 12 projects over the next decade, compressing work that otherwise would occur over 30 years.

Goals include extending existing rail routes to Los Angeles International Airport and adding a line along part of the San Diego (I-405) Freeway. There is also the long-sought dream of building an underground "Subway to the Sea," which would start downtown, travel through heavily congested West Los Angeles and ideally end near the Pacific Ocean in Santa Monica.

Wednesday, June 22, 2011

Declaration of Independence

When in the course of human events, it becomes necessary for one Rock to dissolve the political and economic bands which has connected him with another, and to assume among the power of the earth, the separate and equal station to which the laws of Trading and Trading’s God entitle him, a decent respect to the opinions of mankind requires that he should declare the causes which impel him to the separation.”

I’m free. All the details aren’t in, but I’m coming home.

Ironically, the pack date starts July 4.

My son hates me. Now he has I think 45 days to poo or get off the pot. I told him he should ship his Ferrari back, and add the anti-pollution stuff required by the US. Not many folks have a right-hand-drive Ferrari in the US. But I think he likes it here. Anyway,

There’s a green board today. The news is good: Papa’s confident, Rock’s free, there’s a confirmed turnaround of the 3LB on the number of stocks trading above their 50 day MA. I put that chart here for your reference.



You may recall Rock predicted we’d see a turnaround at around 150, but we got all the way down to 80 before the turnaround. happened. I hope that’s good. I think it’s good that the 3LB shows historically that for a confirmed turnaround, the trend continues for a significant period of time. You may also recall Rock's post that the turnaround in the SPXA50 happend just before the SPY showed it's hand. Again, that happened.

In addition to the news, looking at many of my individual stocks, many have broken their downchannel to the upside. As I look back at the channels established, it seems when one stock breaks its channel and all the others don’t, then that stock is often jerked back into its previously established channel. That’s another “the trend is your friend” and “don’t fight the tape” example. Here’s one of my favorites, CENX, with the SPY just below it. It clearly shows that the SPY stays in-channel, and when CENX gets out, it gets corrected.



Now, one thing to notice is that an individual stock does not necessarily follow the herd. But I would propose that unless the herd breaks out of its channel it seems the individual cow gets jerked back to its channel should it try to deviate.

I think we have to trade this turnaround. I think it’s time to go long. The spy’s stochs are oversold, in both the daily and weekly timeframe. Take a look at history, you’ll see when this happens, the market rises. Time to free more than Rock, time to free the investment accounts and participate in the next phase.

Tuesday, June 21, 2011

Just waiting

Hello everybody.

Past week I was expecting a drop Thursday and/or Wednesday afternoon or Friday morning.

The drop came on-time making Thursday the lowest point.Though what didn't appear was the puke. So it was a mini-me version of what I was expecting, it follow the shape or pattern expected but failed in the intensity. So lowest point but no puke.

Could it be that the bottom is in? I'm going to wait a little more. In my post of Feb 15 Triplets I mentioned that Thursday 17 was the last day that I was going to wait for the beginning of a decent drop.

Friday made the top and Sunday night start dropping. So the lesson there is learn not to go too crazy with the exact day because sometimes doesn't work with that kind of precision.(Or at least I can not see it yet).

That's the reason why I' giving it a little more time unless an upside impulse is absolutely clear. For the time being I consider the "puke" higly probable during the next 7-10 days if we stay in this area.So instead of consolidation I'd be more inclined for a drop.

In case of an at least slightly positive s&p 500 for these 10 days I will pay special attention to CSCO to the upside. Will see.

The website with predictions is advancing, had some technical problems with the registrar but in the next few days will start appearing at Dastrostockmarket.com.

Next week I'll bring again the list of individual stocks and some posible new candidates according to their recent past performance and particularly during this week.

Good luck
Dan

Monday, June 20, 2011

Manny Mondays: Foreclosure Backlog "Extend & Pretend"

Morning all! As I've stated many times, I believe the deteriorating housing market continues to be the elephant in the room that most of our leaders are ignoring at their (and our) peril because it will continue to serve as a drag on the economy, with the possibility that we get pulled into double dip recession. Therefore, this eyebrow-raising article in the Sunday NY Times caught my attention over the weekend. It asserts that at the current pace of foreclosures in New York, it will take 62 years to repossess the 213,000 homes now in serious default or foreclosure.

Here a few more key excerpts from the article.

Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.

In the 27 states where the courts play no role in foreclosures, the pace is much more brisk — three years in California, two years in Nevada and Colorado — but the dynamic is the same: the foreclosure system is bogged down by the volume of cases, borrowers are fighting to keep their houses and many lenders seem to be in no hurry to add repossessed houses to their books.

“If you were in foreclosure four years ago, you were biting your nails, asking yourself, ‘When is the sheriff going to show up and put me on the street?’ ” said Herb Blecher, an LPS senior vice president. “Now you’re probably not losing any sleep.”


Go read the whole thing here - Backlog of Cases Gives a Reprieve on Foreclosures

Meanwhile, Yves Smith over at Naked Capitalism offers a rebuttal questioning the validity of the research in the NY Times article that's also a must-read. Go check it out - More Dubious Research: “It Would Take 62 Years in New York to Repossess the Homes in Severe Default or Foreclosure”.

Either way, this is clearly a major problem that's not going away any time soon.

Friday, June 17, 2011

Friday Pot Pouri

As I pay my hefty health insurance premiums ( I could buy a new car every year with what it costs our family to purchase insurance) I saw this article:

British Fear "American Style" Health Care System

As leaders debate ways to reform healthcare, politicians repeatedly tell a worried public that Britain will not turn the National Health Service into an 'American-style' private system.

American Style Health Care terrifies the British and as the government is looking to overhaul their system, people are most frightened of the imposition of an "American Style" system. The system with the highest cost, some of the worst outcomes in the industrialized world and where people lose their homes because of health care related bankruptcy.

"Ask a Briton to describe "American-style" healthcare, and you'll hear a catalog of horrors that include grossly expensive and unnecessary medical procedures and a privatized system that favors the rich. For a people accustomed to free healthcare for all, regardless of income, the fact that millions of their cousins across the Atlantic have no insurance and can't afford decent treatment is a farce as well as a tragedy."

I fear our "American Style Health Care", too, but I find it interesting that the British system with all of it's warts and costs, is far more preferable to them than an American Style system.

Thursday, June 16, 2011

Came across a rather vicious piece of tripe a couple of weeks ago, an article written by the illustrious Amity Shlaes, more of her tireless campaign to discredit FDR and the New Deal. History has always been one of my passions, specifically Depression through Kennedy US history as these were the periods my grandparents lived through and I had heard stories of these times from a very early age. Talking runs in my family (surprise surprise) so I had, what I consider, one of the best first hand education in an important period in American History.

Amity's beef with FDR and The New Deal fascinated me because I had never heard or read anyone making her claims that he actually made the Depression worse. My grandparents, both lifelong Republicans, adored Roosevelt. I once asked them why they were such fans when they never voted Democrat. Their answer was "because he was for the people". Say what you will about Roosevelt and his policies, he was a man loved by the people of the nation he ruled.

To focused so narrowly on such a minuscule portion of what this man represented to this nation in BOTH The Depression and World War II, is, in my opinion, a glimpse into the soul of people like Amity and the psychopaths she is an apologist for. They see everything in terms of money. They hate Roosevelt because people like them lost money when he was president, he took the money they had raped from the nation and the world and gave a great deal of it back to the people who had broken their backs for generations for that money. They hate Roosevelt because he took that money and gave it to starving old women.

So without further adieu, I present a very good take-down of the whole "The New Deal made The Depression Worse" meme. It's long, but I highly recommend it as it is very useful for easily punching holes in the arguments or our less enlightened "Libertarian Leaning" brothers and sisters.


FDR's Latest Critics
Was the New Deal un-American?


So on the numbers, the U.S. economy improved briskly during the New Deal. Things that are moving quickly and in the right direction, but still haven't reached their destination after a while, are things that have a long way to go—which is true of the U.S. economy recovering from 1932. Historians disagree on which part of the New Deal most encouraged economic growth, but at the least the New Deal did not prevent this recovery.

Shlaes makes a different argument about numbers, because she uses different numbers. She starts each chapter with a rat-a-tat of just-the-facts, but instead of GDP, which represents the overall economy, she quotes the Dow Jones Industrial Average, which represents the maybe 10 percent of Americans who owned stock. And though she quotes an unemployment number, she doesn't quote the figures I've just mentioned. Instead she chooses different estimates of unemployment that (she acknowledges) show a much larger share of Americans out of work during the New Deal.

If you want to know how the New Deal treated ordinary Americans, this choice really matters. Let's look at a figure Shlaes gives twice in her book and again in her Wall Street Journal editorial: She has unemployment at 20 percent in the 1937-38 recession. That's appalling—almost as bad as 23 percent in 1932. Based on such a statistic, you could think the New Deal wasn't alleviating the Great Depression. But that number hides something: A third of the people Shlaes counts as unemployed had a job that the New Deal gave them through its relief programs.

Wednesday, June 15, 2011

I'm Baaaaaaaaaack!

From my little sojurn into Hong Kong, I observed several noteworthy things.

First, I could access the blogger, but I could not post. I suspect that even though I logged in, I was blocked (although it was a friendly block, and I wouldn’t have known I was blocked at all). It seems China is fairly friendly with it’s exclusion of google.

Second, I didn’t have time to read our blog, or do very much on-line stuff and I don’t know the general feeling here, but the IMF’s intrusion attack is very very serious. Considering who did the attack, and how they did it, it’s at the top of the chart for seriousness. Online traders haven’t been hit yet, but I suspect it won’t be long. You may wish to find a key mechanism to lock your account.

Third, Rock may be re-patriated to the US. It’s really not safe out here anymore. My phase 1 was delivered on-time and inside budget, phase 2 was delivered and deploy-tested 1 year early (get that, 1 whole year early, for a software/firmware project). We decided to be like Micrososft and let the users test it for us. Thus the term deploy-tested. So now it looks like I get to come back and get off the front line. Maybe retire.

And lastly, from the South China Morning Post (English language HK newspaper) front page title “streets of fury” with some inflammatory pictures and s aubcaption “TV images capture fighting in Dadun village in Guangzhou on Friday when hundreds of migrant workers attacked police, wrecked cars and burned offices. They were incensed at the brutal treatment of a st4reet peddler and her husband. Rioting flared up again last night despite the deployment of heavily armed police.” One of the pics shows at least one tank or APC, I’m not sure what the Chinese call this thing.

“It was the third day of violence since tens of thousands of rioters smashed and overturned police cars, and torched and ravaged some local government offices. The demonstrators were mainly Sichuan migrant workers in Xintang, a denim-garment hub in Guangzhou.

“The rioting started late on Friday after a 20 year old pregnant woman, Wang Lianmei, from Sichuan was allegedly pushed to the ground in front of a supermarket in Dadun village, Xintang, by security personnel hired by the government. They were said to be trying to keep her from peddling goods.”

Sounds like a pretty small excuse to start 10s of thousands rioting.

Mannwich and Thor may still be early, but it seems the locusts are getting nervous. I thought Timmy could keep them from my door, but they may be getting ready to swarm. It wouldn’t surprise me to see some swarming in the US. Protect yourselves. There’s no telling where they’ll swarm next.

Tuesday, June 14, 2011

Sunday 9:09:09 am

Hello everybody.

I'm playing with the new data and watching how are performing the stocks that I mentioned with upside potential (if the market change direction at least for a while).
To the ones that I'm following
HERO
MDCO
JBLU
TSYS
MKSI
JBL
I'll add FMC and QUIK.

The ones that I mentioned April 27 with chances of going down:

APKT down 19%
COH is up 3%
DECK down 18%
VRSN down 15%
ACTG down 22%
TXRH down 4%

So the ones that I wouldn't think to short are the companies that drop little, but here comes the nuance about the weak performers, they have to keep behaving weak to the upside too.Their movements can not perform like the average, they cannot reverse with the same briskness like the rest of the market (in case of a bounce).
Can go up but not that much.

The confirmation of it's weaknes shouldn't be interrupted at any time on the move up to keep considering them good candidates for a nice drop.Their agility to recover has to be impaired otherwise the astrological effects that I'm considering are being hijacked by the main trend.

If they remain weak the drop with a reversal could be important.

Regarding the stock market even though a bounce is expected I'm more inclined to expect a puke before a nice advance.Thursday and/or late wednesday and early Friday could produce that kind of drop. Keep in mind that this is a mere cheap prediction of third order.

First order since early September, still on.
Second order started first week of May, still on.

The last thing is I'm going to post all my posts too at dastrostockmarket.com

I went to read what I said September 2 2010 about the big trend up that I thought was starting right there, just to discover that it doesn't exist anymore, puf...gone with the wind, Blogger's algo snatched it.

If, like I mentioned in the past, expect that my efforts (right or wrong) can withstand the test of time,I have to have it in one secure place first, dammit.

So Saturday I will set up that thing and Sunday morning are going to be, each and every fucking prediction that I make, in some kind of list.

And yes, safe from the capitalistic claws of Blogger.Lol.

Dan

Monday, June 13, 2011

Manny Mondays: Are We Continuing to Ignore the Elephant or "Sickness" at Our Peril?

Morning all! With Mr. Market now on a 6-week skid, the continued economic recovery teetering, and geopolitical stability looking less certain by the day (no, hour), these are certainly interesting times. While pondering what, outside of the prospects of more Fed QE or quasi-QE, could possibly goose the markets much higher beyond the previous top at least in the short term, I came across this article by Robert Shiller that, for me, sums up why it's going to be a long slog for the recovery (and likely now the markets) over the next few years. It also highlights just how irrational human beings can be, despite economists' claims that we are "rational actors", and thereby markets are "efficient".

The Sickness Beneath the Slump

For me, these were the key excerpts:

Professor Case and I have conducted annual spring surveys of home-buyer attitudes for many years. We ask about long-term expectations: “On average over the next 10 years how much do you expect the value of your property to change each year?”

The survey we conducted in spring 2005, near the end of the bubble, included 407 home buyers. In it, the median expectation for home price appreciation over the next decade — until 2015 — was 7 percent a year. That is substantially less than the 10 percent a year that Americans had recently experienced.

But expected increases of 7 percent a year still implied another doubling of home prices by 2015. And about a quarter of our respondents in 2005 anticipated increases of at least 15 percent a year for the next decade. Something was very wrong with this picture, but few noticed it.

As it turned out, of course, those expected increases didn’t happen. Instead, home prices tumbled 34 percent nationally from the peak in the first quarter of 2006 to the first quarter of 2011 — or 40 percent in real terms — and they still appear to be falling. The brief “recovery” in home prices of 2009 and 2010 was most likely spurred by federal housing stimulus measures like the home buyer tax credit. After that stimulus ended, prices resumed their downward trend.


This is why in my mind this recovery will end up being shorter and more shallow than the prior two, despite all of the Fed's best attempts at monetary stimulus. New household formation, more than anything, is a big driver of the economy, so with housing in the tank, it's hard to see how this recovery can keep feeding itself for very much longer before we see another dip, and possibly a significant one.

This article makes me wonder if this time we've merely swapped out, yet again, once bubble for another, namely housing for equities and commodities. In the '90s we had an equity bubble of epic proportions, followed by a crash, shallow recession, followed by a shallow recovery, then followed by the biggest credit and housing bubble of all time, and subsequent crash, deep recession, and even more shallow recovery. Back and forth we go, yo-yo between asset bubbles, while the real economic "recoveries" get weaker and weaker (with the top getting richer and richer). Go read the whole article this morning. Housing remains the elephant in the room with regards to the viability of the economic recovery. Eventually the markets will reflect that reality as well.

Friday, June 10, 2011

Friday Pot Pouri

Odds and ends for Friday



An Awakening That Keeps Them Up All Night

"Until recently, young people in Spain were dismissed as an apathetic generation, uninterested in party politics. But the outpouring of young people who have taken to the streets since May 15 — at one point about 28,000 protesters spent the night in Madrid’s Puerta del Sol square — has changed all that, forcing the country to take heed and reconsider."

The slide show with the article is a good representation of what we saw when we went to the square just a few blocks from our hotel.

The plight of their young people mirrors our own struggles here with un and underemployment. The same story in Eqypt.

Why Spaniards Are Protesting, Arab Style

The youth-driven nature of this nascent movement and its determination to overthrow a traditional political model have led many to see it as an extension of the Arab Spring across the Mediterranean. But given that Spain is a democracy with a Socialist government, a more apt comparison might be with Iceland, whose people have rejected, via referendums, paying compensation to other nations following a financial collapse.

Not everyone is buying gold...

Gold Dealers Provide Needed Cash In Struggling Spain

"The other effect of gold's high price became evident as hundreds of gold dealers sprung up around the country, relieving Spaniards of unwanted jewelry and trinkets as their country was buffeted by economic downturn and a sovereign debt crisis."

Thursday, June 9, 2011

Corruption All Around

Came across this article in my readings and have also been hearing about it on the news. Another local example of how far the rot has seeped into our government.

Pay raises at top leave county employees in tears

A dozen county employees, including a county librarian who walked away in tears, told the Board of Supervisors Tuesday they felt betrayed after revelations by a county auditor that top county executives received double-digit raises while hundreds of county employees were being laid off and furloughed.

Five politically connected employees of the County of Orange, including a Santa Ana city councilman and a member of the Santa Ana school board, were promoted by the county and several were given multiple raises that added up to as much as 33 percent in less than six months, public documents and interviews show.

Wednesday, June 8, 2011

Percentages

From last week, Dss said
"Worst sectors today, down more than 2%:

XLF
XME
XLB
VNQ
XHB
XLI"

If you, like me, wish to short, don't short strength. Never short AAPL, it will rip your face off.

This really choppy correction began 5/2.

Last week, I gave you these: in XLF, the performance is:
JPM -10.8%
GS -10%
WFC -08.6%
BRK.B -6.4%
C -12%
BAC -11%
AXP +1%
USB -4.5%
MET -9.2%
MS -12%

And I promised the rest. Here’s the work

In XME, we have
ICO +1%
MCP - 17.9%
RTI +1.9%
CRS –1.6%
RGLD 0.6%
ANV –18%
MEE –3.7%
NEM –8.0%
ANR –16.2%
JRCC –17.34%

In XLB we have
DD – 10.5%
FCX –8.4%
DOW –14.9%
MON +0.7%
NEM –8% (did that one already)
PX –4.3%
APD –4.4%
AA –8.8%
PPG –8.9%
IP –7.7%

In VNQ we have
SPG –0.6%
EQR +1.4%
PSA –1%
HCP –8.3%
VNO –2%
BXP 0%
HST –5%
AVB +4%
PLD –6.1%
HCN –4.8%

In XHB we have
PIR –6.7%
TPX –6.4%
PHM –9.4%
BBBY –6.4%
MHK +1.4%
LEG –9%
OC –2.9%
WSM –12.2%
RYL 0
DHI –8.1%

In XLI we have
GE –9.7%
UTX –7.5%
UPS –6.8%
CAT –12.6%
MMM –6.2%
BA –6.7%
UNP –2.8%
HON –7.2%
EMR –15.4%
DE –16.6%

How can this data be used? First, you can see how any individual stock fares versus the SPY since 5/2. The SPY lost 5.3%. So we call this factor “relative strength,” over a period of around 26 trading days. BA’s relative strength is almost the same as the SPY, while DE is around ½ the relative strength of BA.

The second thing we can do with this data is determine a possible momentum trade. Momentum trades are all I do because I do not try to find a top or a bottom, and look for in-channel prices. When the price falls out of the channel, the momentum trade is over. I think yesterday, Mannwich set a momentum trade on C. Good trade. Relative strength compared to SPY is really poor. I too am short C, and have been for a number of days. When it falls out of its downchannel, I’m out.

The third thing we can do with this data is determine possible longs, when the turn-around does start. For example, you see AXP in the financials has a 1% increase while the SPY has a 5% decrease. When the SPY turns around, it is likely that AXP will follow it up faster than a stock that lost say 12%, assuming AXP has some correlation with the SPY. You can check this by overlaying the 2 charts. (you have to be careful with this one, because of something like MHK, the volatility might falsify your observations). (As might the short interest).

The 4th thing we can do with this data is determine who might pop as a result of a short-covering rally. Like ANV and JRCC have lost the most, maybe by shorts (you can’t get recent short interest, only the members of the exchanges get this data and it’s kept secret, so you have to guess). So on a short-covering rally, they may pop the highest.

So there’s your data. As I promised.

On a personal note, Friday I have to travel to Hong Kong, because now I am persona non-grata in China, and I have some meetings with some Chinese. The boss wants to send me to Taiwan for the next phase, but this means I can opt out of my contract (I think they forgot this clause) and I get my pension. Remember, youngsters: hope springs eternal. Like DSS says, the hard work pays off. So tomorrow I may not be on-line, but I should be back by Tuesday night next week. So I shouldn’t miss a post.

Tuesday, June 7, 2011

Almost done

Hello everybody.

Still couldn't finish running all the tests that I wanted to with the stocks, as I promised. Is going to be another week.

I finished a database of 300 stocks and I had loaded manually (there's no other way) 6,500 datapoints that I need it.Very tedious work the last 3 weeks but will allowed me to check whatever theory I decide to entertained and test it pretty fast compared to the the way I do it regularly.

In the meantime I'll keep an eye in all the stocks that I mentioned (the bullish and the bearish ones).

Glad to see that for the past month and something, the first week of May was clearly the line in the sand as I thought.

I don't mean that is a "definitive" top or anything but 5 or 6 weeks (at least) doing what I was expecting from an astrological point of view is more than encouraging to me.

I have to check the indexes too to see what comes next with them.So much work so little time, oh well.

Next week I can be more precise about the stocks that I already mentioned using the new data.

Cheers
Dan

Monday, June 6, 2011

Manny Mondays: Summer Hours Open Thread

Morning all! As always happens when the weather turns great here in the summer, yours truly had a VERY busy weekend soaking up the outdoors doing the following: golfing, hitting the corner Art Fair with friends (didn't see a ton of actual buying there, by the way, but lots of bored looking merchants), walking the dog around the lake, getting our gardening done (tomatoes and flowers), and capping it off with Sunday evening dinner on Lake Minnetonka. So what does that mean? It basically means that aside from reading a few posts here and there, I've basically been out to lunch and have nothing for you this morning.

Here is one unfolding, and very interesting, battle that I've been following between Yves Smith at Naked Capitalism and the Roosevelt Institute, other so-called "progressive" institutions and their backers whom she believes has been co-opted by big money by being brought into the Pete Peterson discussion on the fate of Social Security. Kudos to Yves for calling these people out. Incidentally, this theme is very much the same one in Chris Hedges' great book, Death of the Liberal Class. Note just how defensive some of these entrenched insiders (e.g. Mike Konczal) in these "liberal" institutions are getting with Yves. I find that very interesting on many levels.

Bribes Work: How Peterson, the Enemy of Social Security, Bought the Roosevelt Name

On Fauxgressive Rationalizations of Selling Out to Powerful, Moneyed Backers

So, what's on everyone's minds this morning? Will the stock market get off its 5-week losing schneide this week? Or will there be more pain in store for equities?

Friday, June 3, 2011

June 4, 2011 Linkfest

Let's count the copper with dust on it

WSJ: The decline of the WTI benchmark

China's thirst for water grows

Russian Central Bank may pause after surprise rate increase. Inflation, inflation everywhere.

Goldman on Chinese PMI numbers vs. The China Domino has fallen!, China Lending-Binge Hangover Looms as Wen Spurs Construction




Beijing’s Bad Debt Bailout: Problem Solved?. And with that next bailout, Michael Pettis, Andy Xie, and Victor Shih go into my "A" book of quality economic/market thinkers.

Do or die for China premier Wen Jiabao. This will probably be important in sometime next year.

China takes on its massive muni mess with a $463bn bailout, Financial Shock and Awe in China. 10% GDP, translated to US GDP, is about $1.4 trillion. But why allow local government issue bonds?


‘Real’ US Treasury yields go back to zero


The great gilt mystery

Is bond trading dying?. I blame Mannwich.

The Taylor Rule recommends raising rates to 1%

The stocks-housing disconnect


Hunger for foreign tech stocks overrides risk and Is the cryptocurrency Bitcoin a good idea? and Meet the guy that cost John Paulson $500 million

Gov. Rick Scott, Solantic and conflict of interest: What's the deal?. Only in Florida!

Friday Pot Pouri - Travelogue Portugal and Spain

Madrid Airport Concourse

Toledo - Cathedral of Toledo (my photo did not do this town and cathedral justice so I found this one to post)

Obidos

Obidos - Blue borders ward off evil spirits


I could have done an entire portfolio of the "Dogs of Spain"


Ancient castle and graveyard

Typical sweet shop

Alcoa

Woman dressed in traditional clothes at market

Roman aqueduct assembled with no mortar from about 1st century in Segovia

Kicking back in Segovia, the dog was adorable.

Roman Forum in Merida dating back to 16 b.c.





Parc Guell in Barcelona designed by Gaudi Parc Guell

Tarragona amphitheater

La Sagrada Familia by Gaudi still under construction

La Sagrada Familia - Gaudi's cathedral in Barcelona


We just returned from our trip to Portugal and Spain and both country's beauty, history and people continued to surprise and amaze us. We visited Lisbon, Merida, Toledo, Madrid and Barcelona where we saw ancient churches, medieval enclaves, Roman ruins, indescribable architecture, historic sites, and art work by the masters.

Most Memorable Restaurant - Four Cats

The Four Cats, known by it's more romantic name of El Quatre Gats dates back to the days of Picasso when he used to frequent it with his other avant-garde bohemian friends. It was at this restaurant that Picasso had his first exhibition. Picasso also designed the menu cover for El Quatre Gats.

El Quatre Gats

The slide show is very good as it shows the medieval alley that the restaurant was located in and the charming interiors of the restaurant.

Most Memorable Museum - Picasso Museum Barcelona

Museu Picasso

Barcelona was our favorite city by far situated between the mountains and the sea with incredible architecture, large public squares surrounded by wide boulevards, medieval cobblestone alleys lined with cafes, shops, and ancient residences.

Thursday, June 2, 2011

Thorsday!

I know we're all anxiously awaiting this mornings open, and frankly I'm exhausted, so I'm going to take the cheap way out and throw up yet another open thread. Business is about to enter our slow season so hopefully I'll have more time soon for more interesting posts!

Wednesday, June 1, 2011

Up, Up, and Away? Or Triple-Top?

Don’t you just love these “where do we go from here?” posts!!??!! I haven't read yesterday's blog because I had to work, so I hope I don't step on anyone's toes here.

Here’s my view. First, the SPY



Notice the triple top forming? (60 minute chart). The red down channel on the left created a lower low than the previous low around the 17th, but mostly that was the bad news on the 23’rd. Since the 26th, we’ve been in a clear upchannel until yesterday, where we had a lower breakout, but recovered by the end of the day. I wouldn't exactly call this a "triple top" because the Stochastics did not return to the 20% level. But it is clearly a potential double top.

Now look also at the big volumes, and note most of them are at the lows. This to me means that more buyers are coming up from underneath at the low points than there are sellers above that want to keep and hold. This is an upward pressure for price.

Next is the RSP pic. The RSP is the unweighted SPY. For those of you who don’t know, the SPY is weighted by market cap. So it is representative of market value. The RSP is unweighted, and is more representative of market volumes (not market value).



See the areas of big volume around the 17th and 24th lows. What do we know about volumes? It’s your best buddy for a tell, next to price. See the double-and-triple volumes at those pricepoints? What does that mean? To me, it means that a lot of sideliners showed support and bought on those days. The RSP is in a clear upchannel, and is about to hit the resistance around 51.80. Is that meaningful resistance? No, because the volumes around the 19th, when that resistance was established, are quite low.

The other tell is that there was price follow-through after the “Big Vol” areas with much lower volume. That means there is continued sideline money flowing in, bidding the prices up.

This chart is full of bull. I am full of bull.

And Europe is full of bull. Not gonna let Greece fail yet, we will simply postpone the inevitable. But these charts reinforce my belief that any market effect of a Greek failure or restructure or whatever they want to call it will be a Braxton Hick, a fake contraction, and a buying opportunity.


It’s too bad I had to go back to work last night, so I couldn’t manage my shorts, but it seems RIMM is doing as we all expect, APPL continues to put it out of business, so that one’s OK, but my other ones, well, I’ll be hurt tonight on the open on my shorts, but my longs (like AAPL) will be outweighing the shorts so the total hurt shouldn’t be too bad.

I’ll bet there’s a pop on the open. As Dastro says, Will see.

So my conclusion is that this is an Up Up and Away pattern, and it will take more than Greece to bring us down! As it should, since only the banks will be pasted, when that happens.