Hello everybody
I was expecting a rally Aug 9-12 or at least a consolidation to stop the downward movement that started July 22.
Few minutes into Aug 9 started going up from 1080 (+/-) to reach 1180 18 hours later.Then retrace most of the advance and started going up again reaching s&p 1200 yesterday. Up 11%, not bad at all.
So we got the rally. It’s very encouraging to me that kind of results because tells me to trust more and more the method that I’m trying to develop with less and less input from the “outside world” so to speak. Which means less variables to pay attention to. Or less holes that need to be filled with exogenous causes.
Can the rally last? After two good calls the most common mistake to me is hubris, so I’m going to try to shut up and try some humble pie, and let the market tell us what to do.
The retracement happened at -20% (where technically a bear starts) and it jumped.
Because of that I keep the bullish view. Only if we broke the 1000 level clearly and very fast I’ll change my mind. I’m a trend follower so I stick with the trend until it tells me something different, even though from a rational standpoint I look stupid.
The point is that I don’t consider everyday rationality to be particularly insightful analyzing market action, so I don’t care.
The stock market is a game, and when we think we got the rules “logically” in the bag they change, that’s why I prefer Astrology.
With all that shit going on for weeks: debt collapse, Europe, economic slowdown that MSM is feeding the masses it’s just hard for me to believe we go down hard now because basically, we already did that.
Been busy with work fortunately, so not to much time to study.
But I want to research more this weekend some potential events that I laid eyes on and get it clearer by Sunday or Monday night to share.
Thank you and good luck.
Dan
Dan - Very much appreciate your posts and your market calls they have not only been entertaining but very unformative. Keep up the good work.
ReplyDeleteAs spot on as you have been, I have to say I appreciate when you say things like "try some humble pie", because (For me anyway) the times I looked the most foolish was when I thought I was going to look the coolest.
As soon as I think I can ride my bike with no hands, down I crash.
And even though you have proved you can ride your bike with no hands, you are not taking a victory lap.
Good calls over the past couple weeks though and keep up the good work.
Mutt
@Dastro
ReplyDeleteThanks for the post. Please don't shut up. After nailing it, please put your .02 in.
I got out yesterday and am thinking we might revisit the lows of last week, but like you, I'm going to watch and let the market tell me.
Based on the W formation, I'm entering long a starter amount (25 shares) again this morning and am watching the tape to see if it reverses on me or revisits yesterday's high.
There's low volume, so that favors an uptrend, but will see.
Rock - The only pattern I have seen over the past couple weeks that makes much sense to me, is if the market starts the day higher it ends higher, if it starts lower, it ends lower.
ReplyDeleteThere are only a handful of stocks I am currently watching, one of which is Thor's excellent call on Ford.
However I too agree with Dastro and you that it looks like we have hit a temporary market low....But now what?
I want another Pizza :)
Mutt
Morning guys, Busy week for me. Manny's still out of town yes?
ReplyDeleteGood article - http://www.foreignpolicy.com/articles/2011/08/15/the_shape_of_the_global_economy_will_fundamentally_change
ReplyDeleteGreetings everyone! Just got back in town after a very nice trip. Such a great summer area up there. Very busy getting caught up on everything. Will check in again tomorrow.
ReplyDeletewelcome back Manny!
ReplyDeleteSorry all for a late post. I have a huge container unloading fiasco and have not had time.
ReplyDeleteI will try to put one together for tomorrow, so let's please use Dastro's for Wednesday.
Thanks.
I had to leave after putting my longs on (25 shares) and got completely stopped out. Nothing goes straight up forever.
Very good post over at NC about the media basically ignoring the widening Murdoch scandal? Is it that we simply have too much scandal nowawdays that it evokes a collective "yawn" at this point, meaning nobody's really suprised, or maybe even cares, this stuff is happening anymore?
ReplyDeletehttp://www.nakedcapitalism.com/2011/08/why-is-the-us-media-going-easy-on-the-rapidly-widening-murdoch-scandal.html
Or, maybe the rest of the media is doing similar shady tactics as well? I'll bet that's part of it and it's far more widespread than we had thought or still think.
ReplyDeleteThis is very good as well. So basically the Tea Party is basically made up largely of former "W" supporters who still think he did a good job. Not at all shocking.
ReplyDeletehttp://www.nytimes.com/2011/08/17/opinion/crashing-the-tea-party.html?_r=1&hp
The moral decay and failure of leadership is global. No surprise to anyone here, least of all yours truly.
ReplyDeletehttp://blogs.telegraph.co.uk/news/peteroborne/100100708/the-moral-decay-of-our-society-is-as-bad-at-the-top-as-the-bottom/
Manny - I've been hearing about the widening Murdoch scandal on NPR a lot. . .
ReplyDeleteRock - and no worries! I've been busy this week too!
ReplyDeleteManny - The Tea Party article was really good. I didn't realize the Religious Right had become so unpopular in this country. I guess 10 years of fighting religious zealots abroad has made us less tolerant of our own here at home.
ReplyDeleteI'm still taking the position that the Tea Party will harm the GOP.
@Thor: But is there much of an outcry anywhere else, considering how big this scandal really looks at this point? That's my point. Is it just that we're on scandal or crisis overload now?
ReplyDeleteManny - read this too, it's long, but good. Money quote below which I agree strongly with.
ReplyDeleteWhen I started going to Tea Party meetings two years ago, I was sympathetic. Just after attending one in North Dakota in August of 2009, I wrote: "Most tea partiers are not bad people. They're just mad. In many meaningful ways, today's Tea Party attendees' lives have gotten consistently worse for the last 20 years, regardless of which party was in power." I concluded that trying to figure out what they wanted was a dead end because what they wanted was simply to complain—that the Tea Party "is not a group of listen and respond; this is a group of respond and respond."
Two years of Tea Party functions later, and I finally know what the Tea Party wants: A Christian nation.
http://www.theawl.com/2011/08/what-i-learned-in-two-years-at-the-tea-party
I agree, Thor, and Karl Rove is even saying similar things particularly that the GOP had better be careful about latching onto these radicals, which will likely make their own candidate unelectable in a general election, as more and more are repulsed by their nihilistic "burn it down to start anew" mentality.
ReplyDeleteManny - Oh I think it's scandal overload. I think CNN, and MSNBC would normally be all over this but there's so much else going on here right now . . .
ReplyDeleteIf this thing keeps getting bigger though, I'll bet they move in for the kill.
Case in point:
ReplyDeletehttp://fivethirtyeight.blogs.nytimes.com/2011/08/17/pondering-perrys-electability/?hp
TLT bouncing again today. I'm letting this sucker ride.
ReplyDelete@Mannwich
ReplyDeleteThose bond vigilantes sure showed Washington who's the boss!
That joke really never gets old, emmy.
ReplyDeleteOn that very topic, emmy:
ReplyDeletehttp://krugman.blogs.nytimes.com/2011/08/17/the-printing-press-mystery/
@Mannwich
ReplyDelete"The point is that fears of default, by driving up interest costs, can themselves trigger default — and that because there’s a crossing-the-Rubicon aspect to default, once a country crosses that line it will probably impose fairly severe losses on creditors. A country with its own currency isn’t in the same position: even if it is pushed into some inflation, there’s no red line that need be crossed."
Which makes our dysfunctional politics even more deadly for trying to impose default (and S&P correct for noting this).
Bingo emmy. Such needless insanity. When/how will it end? Will the sane people left stand up and lead?
ReplyDeleteNice post by Invictus over at TBP. Wonder if the MSM will report on those "miracles"? I think not.
ReplyDeletehttp://www.ritholtz.com/blog/2011/08/the-texas-miracle/
Is the SEC covering up Wall Street crimes? What do you all think at this point? I think you know what I think.
ReplyDeletehttp://www.rollingstone.com/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817
Justice department now (strange timing, no?) investigating S&P. Let the games continue. What fun.
ReplyDeletehttp://www.nytimes.com/2011/08/18/business/us-inquiry-said-to-focus-on-s-p-ratings.html
Yikes, a little comments smackdown over at TBP. Some other comments from a few usual suspects evoking a minor dust up too. I'll let you read the comments but I'm sure you can guess who in a few guesses. LOL.
ReplyDeleteAndy T Says:
August 17th, 2011 at 10:26 pm
DELETED
~~~
Editor: Shouldn’t you be making obnoxious comments about this blog behind its author(s) back elsewhere? That’s what you usually do.
Rock
ReplyDeleteYes, I'm going to keep telling what I think is probable to happen.
It's just that sometimes either didn't have too much time to develop an idea or the alignments that are relevant to me are not present.
And the risk saying something just for the sake of it, is that if I was very accurate let's say in the two previous calls, maybe make people assume that what I post now could be interpreted as equally important as my previous two calls, with the potential of doing more harm than good.
Sometimes I explain what my view is and usually I mention dates.Those are important.
The point is my own narcissism is always eager to say the most important thing in the world every fucking time, it's only that if I don't have anything to say I stop himm on his tracks as much as possible avoiding people any harm if possible.
In a year there are usually 5-7 movements worth mentioning and that's my focus. I'll let everybody know where I stand in each one of them.
Dan
Manny - OY! The more things change . . . .
ReplyDeleteManny - read it, WOW!
ReplyDeleteI wish false-hoods like this were more readily exposed in the MSM.
ReplyDeletehttp://www.huffingtonpost.com/2011/08/17/michele-bachmann-stimulus_n_929168.html
While it's true that the number of Transportation workers making $170,000 or more a year increased after Obama took office, the boost, authorized under President George W. Bush, was caused by a modest pay raise for highly-trained employees, not a hiring spree associated with stimulus spending. What's more, Bachmann herself voted in 2008 for a separate bill that increased federal worker pay. Bachmann's office did not respond to a request for comment on the statistic, which she has oft-cited.
Well, here we go again with the wild swings. Me-thinks this really IS '08 all over again, but hopefully it's just '08-lite.
ReplyDeleteBail, bail!
ReplyDeleteTLT at $110+! Vigiliantes! Soon the markets will be paying the U.S. government to borrow money, all the while our austerians continue to worry (or fake about worrying) about the wrong things.
ReplyDeleteMaybe the new Manny indicator is when I get back HOME from vacation? The markets actually fared quite well while I was away. The last few times in fact.
ReplyDeleteThe bond vigilantes are clearly trying to intimidate the American people with a 3.4% 30-year yield.
ReplyDeleteShort Fears Weigh on DAX
ReplyDeleteI'm sorry I have to shirk my duties this week. The unpacking of the container is not going well, and I don't have time to trade or post. Sorry. Hope everyone is well. Next weeks should be back in shape. I hope.
ReplyDeleteLOL emmy. Borrow you idiots, borrow!! Or wait until rates are even lower. I think the latter. Hello again Deflation. We barely missed ye.
ReplyDeleteThor - "a modest pay raise for highly-trained employees," The other day I read an old but interesting article about "The Peter Principle."
ReplyDeleteThe basic premise is once a person's pay is increased to a certain level, they are no longer interested in doing a good job, but in holding onto their level of pay.
So I would contend that at $170,000 these "Highly trained employees" have just been turned into nothing more then Highly paid Employees.
And Bachmann voting to increase the pay of federal employees based solely on the fact that they are "Federal" only goes to show why she and Sarah Palin should be running this country.
Mutt
(takes a break, returns)
ReplyDeleteWhoa!
A 112 handle for TLT!
ReplyDeleteI think before all is said and done, some form of isolationism (or protectionishm) will be back as a backlash to all of the tightly linked global economies. That's one prediction, anyway. Welcome back 1930's.
ReplyDeleteManny - Nice to see your little TLT Chugging along so nicely.
ReplyDeleteMutt
10 year yield below 2%.
ReplyDelete"The disappointing survey, with negative reading on overall activity, orders shipments and employees, echoes the unexpected drop in NY Fed's Empire State's business conditions index to -7.72 this month. Taken togther, report suggests factory sector is in trouble."
Maybe it was all that uncertainty?
"WASHINGTON (MarketWatch)-- Manufacturing activity weakened sharply in the Philadelphia region in August, the Philadelphia Federal Reserve reported Thursday. The bank's business condition index fell to negative 30.7 in August from 3.2 in July. This is the lowevel level since March 2009 . The size of the decline surprised analysts. Economists polled by MarketWatch expected a slight decline in the index to 0.5. The headline business condition index is a separate question and not a buildup of components. As a result, economists pay close attention to the details of the report, which were also very weak. The index for new orders fell to negative 26.8 in August from 0.1 in July. The index for number of employees decreased to negative 5.2 in August from 8.9 in the prior month. The prices paid index declined to 12.8 in August from 25.1 in July."
ReplyDeleteIt's OK Rock, we see how you are.....Moving..... unpacking.......settling in and taking care of the 1000's of unexpected items that pop up during a move are more important then us - BOO HOOO :(
ReplyDeleteYou take care of what is important to you and your family, you and your insight will be missed, but you have bigger fish to fry and we will still be here when you get settle in.
Best of luck to you man.
Mutt
@emmy: Worse than expected? What a joke. These "surprised" analysts should be all be fired (or at least have rotten produce thrown at them).
ReplyDeleteTook a smidgeon of TLT off the table.
ReplyDeleteMannwich - Enjoy our hard earned profits and congradulations.
ReplyDeleteAlthough I am now wondering if Thor is going to add to his Ford?
Thor any word on what you plan on doing during this pullback?
Mutt
another rout I see. Congrats Manny!
ReplyDeleteThis is good. I had noticed this as well but think Gold will ultimately prove to be a bubble. Probably has more room to run as gamblers look for anywhere to hide. I'd prefer TLT. At least there's a yield there. With Gold, it's all about the next sucker, although we may never run out of those.
ReplyDeletehttp://www.ritholtz.com/blog/2011/08/gold-treasuries/
Gold and Treasuries, the new pair trade. Called by Rock and others (myself) on the weekend of the S&P downgrade.
ReplyDeleteIs QE3 now basically a certainty? I say it is, but that the Fed will wait for the panic to really set in first. We know the president and Congress won't do anything so it will be up to the Fed.
ReplyDeleteMunching on some T (AT&T) today. Nearly 6% divvy. I'll take that.
ReplyDeleteTLT dip bought (not by me though).
ReplyDeleteVXX up nearly 18%. Hit a 40 handle briefly. Wow, I weep for my ill-advised early call and exit on that one.
ReplyDeleteI thought this was VERY interesting. People getting tired of being taken advantage of with slabor labor pay?
ReplyDeletehttp://www.nytimes.com/2011/08/18/us/18immig.html?pagewanted=all&src=ISMR_HP_LO_MST_FB
Minnesota lost over 19K jobs last month. Leading cause being attributed to the government shut down.
ReplyDeleteThe Debt Crisis at American Colleges
ReplyDelete"As this semester begins, college loans are nearing the $1 trillion mark, more than what all households owe on their credit cards."
Emmie - we're raping this generation from birth to grave. They'll pay for that education, and then pay again with higher taxes and less benefits to pay back the nations debt.
ReplyDeleteJoy
@Thor: Me-thinks we'll pay for it with the coming backlash by these young people. I know it seems unlikely but it's coming and building. When it happens, it will seem like out of nowhere, but not in reality. Simmering beneath the surface.
ReplyDeleteThe strip mining of everyone and everything in this country is a disheartening thing to watch unfold.
ReplyDeleteSeems like the forecast downgrade revisions are coming at a fast pace. HP is just the latest. So many people thought that '11/'12 would be the problem and it's look like they were right.
ReplyDeleteHey - we were down 420 today!
ReplyDeleteThat probably only means something to me :-)
Thor - Good Catch on the 420, now if we can just get TPTB to stop smoking the green stuff and start planting it, we might get some actual green shoots.....Ok, We won't but it was a nice thought.
ReplyDeleteMutt
Mutt - hah! :-) Heck, it's legal here, and I do have a prescription ;-)
ReplyDeleteLife is a little different down here in wacky land
Dow futures down 93 S&P 10
ReplyDeleteThor - There is no such thing as a victim less crime as you are hurting yourself....
ReplyDeleteHave you ever noticed how all these laws that are supposed to protect us from ourselves only seems to make criminals out of innocent people?
Mutt
This is unreal, although not surprising. What's shocking is these folks don't even seem to care to hide this corruption anymore. And why should they when everyone is in on it?
ReplyDeletehttp://www.zerohedge.com/news/bank-americas-dead-drop-rick-perry-we-will-help-you-out
http://www.huffingtonpost.com/bob-cesca/rick-perry-is-a-socialist_b_930916.html
ReplyDeleteA bubble forming in apartments? I'm seeing a lot of apartment buildings going up here in Minneapolis. With so many small homes and condos empty, it's hard to see how they are not creating a glut of rentals now as well.
ReplyDeletehttp://www.irvinehousingblog.com/blog/comments/apartments-are-the-next-real-estate-bubble/
Mannwich - if I was single or for whatever reason lost my current house, I would seriously concider moving into one of the numberous empty houses around my area and living rent free.
ReplyDeleteIf I was fortunate to stay their long enuff, I would then claim adverse possession.
If I was found out and evicted then, I would just move into one of the other countless abandon houses around town.
Mutt
Morning guys! hoping next week won't be so busy!
ReplyDeleteThor - If memory serves correct you should have recently or just now been finishing up on your program.
ReplyDeleteAre you allowed to give us any details or is still Informaion = Death :)
Mangy Mutt
Here comes the "I don't want to be long going into the weekend" selling.
ReplyDeleteManny - I was just noticing the same selling (Which is not a surprise at all), but the question is.
ReplyDeleteAre YOU brave enuff to get a short and hold it over the weekend?
More just a rhetorical question then anything.
Mangy Mutt
Mannwich - I looks like your "Here comes the "I don't want to be long going into the weekend" selling." has turned into a race for the doors.
ReplyDeleteMutt
Wow, F under a 10 spot.
ReplyDeleteJapan mulling another FX intervention - Nikkei
ReplyDeleteMutt - Hah! THey extended the program another 90 days to make it a 90 day program. Results are incredible but can't say too much other than I'm in the best shape of my life at this point, with six more weeks to go. . . .
ReplyDeleteThor - I am glad to hear you are getting good results from the program and that you are able to stick with it.
ReplyDeleteI have let myself go over the summer but once my youngest starts back to school, he and I plan on working out in the morning.
I will be interested in seeing how your final results are and finding out more about your program once you are able to actually talk about it.
Mutt
Mutt - thanks buddy, I'll be talking like crazy about this program once they remove the cone of silence from our heads. Great great great program and I've had such wonderful results, of course I'll share ! :-)
ReplyDeleteQE3 rally today? Looks like it to me.
ReplyDeleteAll my gold futures got sold in the middle of the night. Quite the ride! Looking to buy Oct gold puts if we get into the 1900's today or tomorrow.
ReplyDeleteI think it's fair to say gold is not an anti-dollar trade, nor an inflation trade, and perhaps not even a QE trade (Gold up $400 since QE2 ended June 30th). Mostly just a bull market story that the mainstream (i.e mutual fund) investment community still hates.
I intially thought this was going to be wave 5. But I am fairly sure the last 3 years was a third wave, with a 1 to 3 year sideways consolidation ($1400 to $2000), and then a massive wave 5 after that. That's my current thinking.
Steve
Well, I'm starting to come back to work a little. Still in the middle of getting back tonormal. Let's see what happened while I was gone
ReplyDeleteWOW!!!! Who pulled the rug out? Good thing I got out. I was sorely tempted to let it ride.
Wow! lookit the VIX!!! This is a really good time to look at M formations and short that one! The VXX at 42.20 will return to the low 20's so you could double your money!
Don't you die on me, Steve!
ReplyDeleteNew 52-week low for FDX? Bellweather for the economy?
ReplyDeleteOverall, rally fading. Again.
New 52-week lows for F and JPM as well.
ReplyDeleteManny - Looks like I got that F just in time! I paid 10.08 for it. . . .
ReplyDeleteI grabbed a few shares as well, Thor. Hope it doesn't go much lower.
ReplyDeletesome fun :-)
ReplyDeletehttp://i219.photobucket.com/albums/cc41/GenevieveMarie613/Republicancandidates.jpg
New 52-week low for the squid.
ReplyDeleteApparently Lloyd has sought legal defense counsel? Interesting. Long way to go yet in this saga, it seems.
ReplyDeletehttp://www.zerohedge.com/news/news-blankfein-hires-prominent-defense-attorney-send-gs-stock-tumbling-gold-futures-soaring-ove
Could it all be as simple as demographics? It was for Japan.
ReplyDeletehttp://www.bloomberg.com/news/2011-08-22/baby-boomers-selling-shares-may-depress-stocks-for-decades-fed-paper-says.html
mike
Mike - NOW you tell me ;-)
ReplyDelete@mike
ReplyDeleteI've often wondered how the dynamics of that play out.
"At the same time, foreign investors, including sovereign wealth funds, may decide to hold a larger share of U.S. equities, Liu and Spiegel said. Also, emerging market countries such as China may ease capital controls, allowing their citizens to invest in U.S. equities, they said."
Question: why would anybody in the emerging markets chose to invest in US equities over their own domestic equities?
And why does anybody listen to Jeremy Siegel at this point?
@mike:
ReplyDeleteLots of "may"'s in that article.
First, I read somewhere that fewer than 10% of American households own stocks. I can't remember if that includes mutual funds through IRAs. But IRA's are a separate subject because of the drawdown requirements.
Second, boomeers I know are selling north and moving south, if they're even or have profit in their homes. Boomers are moving out of CA because of taxes on unearned income.
But they're not selling stocks. The ones I know, anyway.
I assume you all know about supercookies, if not
ReplyDeletehttp://online.wsj.com/article/SB10001424053111903480904576508382675931492.html
Blogger.com has been whacking me on a port they shouldn't be using. I'm not sure if Symantec catches these or not, but nobody's website should try to open a port on your machine without you requesting it.
More on this later.
The VXX has broken out of it's upchannel at around 43.55.
ReplyDeleteI hate to talk turn-around, but it is Tuesday, and it could be the chop I'm expecting is around the 1120 to 1220 range. I'm thinking to start a little short in the VXX
Blankfiend engaged a criminal attorney yesterday, making GS tank.
ReplyDeleteThe loan from the FED is just noise. In the TARP bill, this is exactly the kind of transaction the bill allowed, and Bernank and Tim cannot be held accountable for any laws broken. All Bernank has to say is "I told them to do it". (Which, BTW he probably did).
Get ready for a big move up for GS. It's almost to the amount where tking it private makes sense.
And, once it's private, GS can thumb their noses at any request for records, by saying "go show probable cause and get a court order". That will be pretty hard to do, without a whistleblower.
@mike: I had the very same thoughts after reading that article. Maybe it really is that simple? Of course, policy bungling doesn't help matters but maybe these things are basically beyond our control. We humans often think we can control everything but that's just delusion if you ask me.
ReplyDeleteI agree with you about the VXX, Rock. Think it could be ripe for a quick short.
ReplyDelete@Mannwich:
ReplyDeleteIf you short it, make sure you're out overnight. That one can rip your face off.
If you long it, make sure you're out overnight. That one can rip your face off.
Hmmmmmmm.......
Thanks Rock. Unfortunately it has ripped my face off once or twice already, mostly by virtue of getting out way too soon and missing this latest ~100% run from the low 20's to the low 40's. Arrrgggghhhh.
ReplyDelete