Wednesday, September 30, 2009

Punting Spiders Short

It my just be me but my gut is speaking but I am fighting the urge to get short. Yes I realize it could be a ramp job of the highest order given todays significance to institutional money. But when viewed in totality, first up we had ramp job religious holiday Monday (low volume rally) followed hard upon by quarter ending shakeout ahead of tape (and portfolio) painting Wednesday.

This, along with the choppy, anemic rally of the market these last few hours off the lows is enough to draw my interest.... to fade it.

Therefore I am punting the S&P500 tracking stock, more commonly referred to as the Spiders ticker SPY, here at 106.10 with a stop at $107.06


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Ultrashort Financials ticker SKF @ $24.55 stop @ $23.49
Long 1 unit i-shares Barclay 20yr ticker TLT @ $97.80 stop @ $94.94
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41
Short 1 unit Spiders ticker SPY @ $106.00 stop @ $107.06

Tuesday, September 29, 2009

Bed, Bath & Beyond - BBBY


I was surfing some retailing charts and a couple of items caught this speculators eye regarding Bed Bath and Beyond, ticker BBBY (chart above). First off, we had a bearish engulfing or outside day if you will last week on significant volume. If that was not enough, it was followed up immediately with a gap down. That gap remains open, with today being the 4th day, satisfying my (and others) minimum 3 day rule (gap must stay open 3 days). I am prepared to punt BBBY short here at $37.85 with a stop at $38.41.

You may ask why the stop there? Why not above the gap?

Well, the gap in question is from 39 to 38, basically. If we violate the gap it should be filed. The 60 minute chart shows and inverse head and shoulder that even my mother could identify, worth 1.5pts and which if taken from the neckline of the formation implies a $39.50 target, which fills the gap and then some. Hence my stop that looks inordinately tight.

I remind you to pay attention to the bonds. Yes I know this is heresy and yes I know CNBC has a love affair extraordinaire with equities and yes I know the equity guyz and galz are more comely but the real brains is found in the bond pits. One of this 2 groups is going to be very wrong with their bets. You must choose as one has the sizzle and the other has the steak. I am betting with the bonds but you are free to copper me.

Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Ultrashort Financials ticker SKF @ $24.55 stop @ $23.49
Long 1 unit i-shares Barclay 20yr ticker TLT @ $97.80 stop @ $94.94
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

Friday, September 25, 2009

TLT Chart


Had an issue getting this chart posted. So without further delay, a daily view (above) of the i-shares Barclay 20yr bond ticker TLT or the TLT's as they are called. I have been watching the 97 level which we broke thru Sept 2 with an encouraging close there, only to fall back and break thru again Sept 11 but failing to close there. Today we are thru $97 and we look strong enough to close there.

I may live to rue those words, close there, but if we can then this will be a weekly close above 97 and hence very encouraging for bond bulls. Remember when bond prices are rising like the TLT's it means rates are falling.

You may ask why is my stop at 94.94, well this is 2x the 20 average true range for the TLT's.

You may also ask why is he bullish of US. government debt given its profligate ways and the fact the Julian Robertson says we have to "pay the piper" Well, first there is no question the Feds never met something they wouldn't throw money at like a drunken sailor but in a world of profligacy and fiscal and monetary ignorance again the one-eyed man is king among the blind.

As for Mr. Robertson, founder of the very well know Tiger Fund, he is THE papa cub as he has trained and mentored many traders who have gone on to much success and are known as his cubs. Mr. Robertson is brilliant, clear thinking and to be watched closely but he is by no means perfect as evidenced by his ill advised foray into U.S. airways made only worse by averaging down (even the best succumb) as the stock cratered. His call for interest rates of 15% would render a long position imbecilic but yet I am prepared to execute it. It just wouldn't be right if the trade wasn't that hard.

Lastly, I will bet with the bond boys and against the equity boyz any day of the week as regular readers know which of these two groups I think has 'room for let' tattooed on their foreheads.

Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Ultrashort Financials ticker SKF @ $24.55 stop @ $23.49
Long 1 unit i-shares Barclay 20yr ticker TLT @ $97.80 stop @ $94.94
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71

Long the TLT's



I want to get long 1 unit of the U.S. long bond. I will execute this via the TLT's here at $97.70 with a stop 94.94

I will post a chart as soon as I can.



Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".



Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Ultrashort Financials ticker SKF @ $24.55 stop @ $23.49
Long 1 unit i-shares Barclay 20yr ticker TLT @ $97.80 stop @ $94.94
Short 1 unit I-shares Russell 2k ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71




Where Do You Stand On .....


A reader asked me to have a look at Statoil, ticker STO (weekly chart above). As my notes indicate I truly hope it is only coincidence that the shill personified, Jim Cramer, is touting it. Regardless I would counsel extreme caution with this name as the obscenely sage and wise Art Cashin would say, volume equals validity. In this case there is an extraordinary lack of it, govern yourself accordingly.

Judging by some of the questions I have received in my email box, it seems I have quite a few new readers to the blog. First off, thank you for stopping in and visiting and more importantly taking the time to ask my opinion and question my conclusions. It is much appreciated !

The emails cover many topics and various items surrounding the capital markets and my positions on them. I will attempt to touch on them all, keeping it brief and to the point. Feel free to agree or disagree just make sure you do your homework, stay informed and remember that when you look around the poker table and don't see the sucker, leave post haste, as you are the sucker!


I am not a perma-bear or perma-bull. I am a mercenary who wants to fight for the winning side and not on a day to day basis either! Sorry if this disappoints the ADHD clowns on CNBC's Fast Money, who want everyone playing chicken with the market on a day to day basis.

I trust the charts everywhere and always but I want to marry the technicals with the fundamentals on the ground.

News conforms to the tape not the other way around. Wall St. loves people who trade the news as it keeps them in good humor as well as in the Hamptons every summer.

I am a political atheist, believing in neither. It is all a charade just like WWF wrestling. I am a libertarian and believe wholeheartedly in the constitution.

Big Picture - I believe we are only just exiting a credit bubble that dwarfs all other bubbles. The "mother of all bubbles" so to speak. We don't correct this type of excess that has been brewing for decades in a span of 18 months, no matter what the Bob Dolls, Vince Farrells, Bill Spiropolous' , and other assorted shills and book talkers of the world may say.


Among many indicators I watch 2 indicators I follow religiously are tax receipts and electricity usage. No other indicators tell me more about an economy than these 2. (In china, which I'll get to later, these numbers don't jive with their published economic numbers but why let facts get in the way of a great story!)


I believe we are in a deflationary depression, much like the U.S. circa 1929 or Japan 1989 (take your pick).The Fed and Treasury are printing 1x money when the credit and debt losses are in the 10-12x area. The boat is sinking (deflating) faster than they can bail the water (print) out hence the deflation call. Much of the factual data in this area like wages, rents and real estate values validate this. (for what its worth Nintendo is cutting the price of its popular WII game by $50)

To believe in inflation or hyper inflation means you think your house value will double or that your wages from your employer will double or increase dramatically. I will be kind and simply call this "quite a stretch" in my opinion.

Insider selling is outpacing buying somewhere around 35:1 right now. They are not perfect nor are their utterances to be believed but they do speak with their pocketbooks and if stocks are such a screaming buy why are the hitting the exits?

I believe the FDIC is broke or on the doorstep of being broke. The FHA is now doing the same crap the private sector was doing before the shit hit the fan. The same can be said of the Fannie, Freddie et al. Govern yourself accordingly. Oh yeah, they are all very well capitalized. Gotta keep confidence up, right?

Banks are not lending, in some extreme cases no matter impeccable credit history and worthiness. The wounds are so great they are just hunkering down. I wish the people, who believe banks can "earn"their way out of this mess with the positively sloped yield curve, all the best, as they will most surely need it.

Small banks you never ever heard lent money the old fashioned way, they got to know you, checked you out and lent based on the 4 C's. Now those same banks are being asked to pony up FDIC premiums that will wipe them out. I know not why they stand for this. We should all be patronizing these banks and they are our future of banking. Count on it.

The "too big to fail" banks are sitting on massive portfolios of foreclosed properties they are holding back (shadow inventory) petrified that if dumped on the market it would further depress prices, geee ya think? Many out there are still living in homes having gone months (8-10) without paying their mortgage with no word from the bank!

I believe the vast majority of the "too big to fail" banks are insolvent and are playing the extend and pretend game. Bear Stearns and Lehman were not anomalies as banking and finance are the biggest copycat game on the planet. Once again I repeat it is insolvency not illiquidity.


These same banks continue to play games with accounting tricks and yet your pension fund manager buys them because he wants his bonus and needs a job.

The official unemployment rate is a joke only a politician, a CNBC anchor or commissioned financial employee could love. The unofficial rate is closer to 16% and even that might be on the light side.

The FIRE - finance, insurance, and real estate economy we have become accustomed to is finished as we knew it.

I prefer calling FIRE,
Frankensteinian
Ignorant
Reprehensible
Experiment

Wall St. is full of chemical engineers who are extraordinarily adapt at turning money into shit.

I would be ecstatic if I could find an ETF to short hedge fund managers, investment bankers, stock brokers, financial planners, etc. Conversely an ETF on securities litigation lawyers would be a wonderful long for any portfolio. Please let me know if you know of this, I will be in your debt.


I believe the Fed should be abolished, shut down immediately. They have been at the root of the cancer not the solution. What more can you say about an institution whose charter was passed on a late evening session of congress right before Christmas.

I believe the perpetrators of the debacle must be held accountable for their actions. The list includes politicians, executives, bureaucrats. Allan Greenspan, Hank Paulson, Franklin Raines, Angelo Mozilo, Chris Dodd, et all just to mention a few. People rob banks when there is no consequences. Case study; just provide a 6 yr old with no consequences and watch his behaviour.

I believe if you peel back the onion on the pension funds you would be horrified at what you see. Commercial real estate up to the eyeballs for starters. The phrase 'institutional smart money' is the biggest oxy moron around, just listen in on an institutional conference call once. You will want to laugh but then realize they are running your retirement money and you will then want to cry. Institutional money is really going to lunch and finding out through the grapevine what others are buying, also known as follow the leader money as no one wants to be left behind.


I believe commercial real estate is a mushroom cloud, most just cannot or will not recognize it. I base this on the data out there like cap rate data, rents, and more importantly with discussions I have had with local people directly and indirectly involved with commercial real estate. Besides just drive around and look at what is going on.


China - I believe it NOT to be the miracle many claim it to be. (circa Japan 1989.) and may end of being the biggest charade of all! Yes I know this flies in the face of men like Jim Rogers and others who believe China is THE place to be. I just have a had time reconciling the numbers they keep putting out which scream of a make-believe story. I believe their financial chemistry and chicanery would make the likes of Bernie Madoff, Angelo Mozilo, and Franklin Raines blush. Time will time but for now I am taking the under.

Bonds - I have been short the bonds in the past with the TBT's as this game of borrowing money you cannot pay back cannot go on forever. People forget how low rates went in Japan. Look at a 5yr CD rate now. Can you envision 0.5%? I fully realize the debt the government is running up will end in tears. The problem I have is that in the valley of the blind the one eyed man is king. U.S. federal paper is that one eyed king. This line of thinking I have might have something to do with the U.S. fleet of aircraft carriers but I digress. Hence I am bullish on bonds. tentatively so but yes bullish. So is Gary Shilling so one has good company here.

Side note, I saw Julian Robertson on CNBC yesterday in which he said rates could go to 15%. One can make the argument for either 0.5% or 15%. Might credit quality factor into this in some way? Where are Japanese 10 yr rates today? just a thought. Oh yeah they're at 1.35%

Precious Metals - I own physical gold and silver. It is the ultimate insurance that will always pay its claim. I am worried that in an environment of deflation people will be getting liquid and precious metals is the ultimate liquidity. The other side of the coin is that gold could get smashed first as people sell it to sustain themselves and then as fear take over and it recovers as money. So yes, I am bullish and bearish. Bullish as I own it and bearish as I can easily envision it trading at $600-650.

Energy - I like energy as it is not subject to the Frankensteinian experiments of ivy league squash players like paper assets. Yes I believe in peak oil. Yes I believe we have found all the easy oil. Yes I believe hybrid and battery power is there but I fail to see how it moves an 18 wheeler loaded with goods. I can easily envision oil trading triple digits again simply because the economies of going 20,000 feet below the sea level to find it dictate it. I am bullish and bearish.

U.S. Dollar - Yes I do realize all fiat currencies go to zero. Yes I realize who is running the show here. Yes I realize Richard Russell's mantra of "inflate or die". I also recognize that the vast majority of global debts are in dollars and they either are repaid or defaulted upon. Currently the daily sentiment index numbers show U.S. dollar bulls at 3. Everyone and their brother is dollar bearish. Hence my bullish stance. Cash is king as everything will be on sale in a deflationary world. Think of it as a global garage sale. Again, I am bullish.

Equities
- I do not see how this global corner of equities, and yes dear reader what we have witnessed is a corner last done by the infamous Hunt brothers. You see dear reader when the government runs a scam it is fine and dandy but when you or I do it they put the coals to us. Equities will be a buy when no one and I truly mean NO ONE wants them ! I am bearish, have been proven wrong and am yet bearish yet again. Stupid or stubborn, you decide.

Having said all this, as a speculator I must remain flexible and not remained married to a position leading to big losses. You must admit one is wrong quickly and head to high ground taking lots of little losses, living to fight another day and the big winner ! One must change one's position as the facts and the charts dictate. My apologies for the long post and you're quite welcome if this piece serves as a cure for your insomnia.

Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".



Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Ultrashort Financials ticker SKF @ $24.55 stop @ $23.49
Short 1 unit I-shares Russell 2k ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71

Thursday, September 24, 2009

Short Financials


Based on the outside reversal, or bearish engulfing candle (if you prefer), which occurred yesterday on the financial spiders ticker XLF, I am prepared to get long the Ultrashort Financial ticker SKF this morning here at $24.45 with a stop just below the recent lows.


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Ultrashort Financials ticker SKF @ $24.55 stop @ $23.49
Short 1 unit I-shares Russell 2k ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71

Wednesday, September 23, 2009

Short Vornado


The daily view of Vornado, ticker VNO, shows 2 very well defined channels. The stock seems to be kissing up against a former support zone. I am prepared to punt VNO short as this area should now serve as resistance.

I am punting 1 unit short of VNO here at $68.40 with a stop just above the recent highs at $70.51


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Short 1 unit I-shares Russell 2k ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71

Punting Costco Short

A long term view of retailer Costco shows inordinate strength, of late. The stock does seem to be sitting just below a former support zone which may now serve as resistance.

I am punting 1 unit of COST short here at $58.10 with a stop at $60.11




Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Short 1 unit I-shares Russell 2k ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11

Short the Russell 2K


The chart above is a long term (10yr) view of the Russell 2000 tracking stock the I-shares ticker IWM. We seem to be bumping up against some significant resistance which I am comfortable fading. I fully realize the 'buy-the-dip' crowd's confidence grows daily. Call me crazy

I am prepared to short 1 unit of this, ticker IWM, here at $61.80 with a stop at 63.80

I am also prepared to get long the proshares ultrashort Russell 2000 ticker TWM here at $27.40 with a stop at $26.40

Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Short 1 unit Ishares Russell 2k ticker IWM @ $61.70 stop @ $63.80

Back From Vacation

Took a quick vacation Thursday of last week with a visit to one of my most favourite places, Lake City, Colorado. They have a wine festival out there complete with great wine and wonderful people. If you have not had a chance to get out there I highly recommend the sights are truly spectacular. The best way there is to fly into Denver and catch one of two daily flights to Gunnison which then leaves you with about an hour drive that is breathtaking.

I followed very little in the way of market news while away and am doing some quick catch up today.

I have received much email as to why I refuse to get long many of the names that are breaking out on the charts. I must admit that some of the charts are extraordinarily compelling. The problem I have is that I cannot close my nose and buy. I prefer to marry the technicals to the fundamentals. In this particular case I see no improvement in the employment picture or the income picture. I also see no improvement in the toxic debt situation. I could go on and on but it will fall on deaf ears as so many are caught up in the game of chasing this market.

Housekeeping notes;


Thursday of last week, I was stopped out of my FXC position at $94.10 for a loss of about $2 1/4 pts. The same day I was also stopped out of my ANF position at $33.35 about a 1/4 pt loss.


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:

None

Wednesday, September 16, 2009

One Liners

Are you watching the parade of clowns on financial television. Don't you just love all the quips and one-liners which are so reminiscent of the post game one-liners we get from professional sports athletes day in and day out on ESPN.

The clowns and shills on pom pom TV have em' all, don't fight the tape, don't stand in front of this market, don't fight the Fed, close your eyes and buy, fundamentals always play catch up, tons of cash on the sidelines, M&A activity, blah, blah, blah. I have heard it all before, repeated over and over again, most often by the managers and custodians of "other peoples" money. You know the really 'smart money' !

The fear of being left behind, the fear of missing out is so strong so compelling, is THE reason the vast majority of the this so called "smart money set" was caught 'all in' when the shit hit the fan last year as the markets mercilessly rolled over. Do yourself a favour and listen in on an institutional conference call just once, it'll be an eye opener I can assure you!

And it is for this same reason, fear of performance flacidity, that they will get caught again. It matters not to them because it is a win win proposition for them.
This is the reason dear reader that none of these pundits can "see" the downside as it does not exist for them in the same sense as it does for you and me. Heads they win, via their bonus, tails you lose. Best of all, the clairvoyant himself Ben Bernanke has declared the recession over !! Yes dear readers the man who saw none of this coming, the man who called sub prime contained, is qualified to call the recession over. The hubris of these folks is staggering, their arrogance and lies knows no bounds.

I received some interesting email regarding my thoughts on the U.S. dollar, of which you know I am bullish, which puts me in the very, very distinct minority. For those looking to play this trade there are many vehicles, one in particular that seems to have a following is ticker UUP.


I caught an interview recently with Louise Yamada, a technician whom I have tremendous respect and admiration for in which she commented on how this market has been one of the most difficult markets to trade in much less figure out. Now lets compare a statement like that with the fact that Goldman had not only a profitable quarter but one of the most profitable in it's entire history. I am no Sherlock Holmes but I one might be inclined to think, as does Andy Serwer managing editor over at Fortune is, that maybe just maybe someone is in the know.

But hey, it's just urban myth that Lloyd Blankfein was sitting in on that AIG meeting, yes that same AIG that Goldman claimed they had no material exposure to, right Steve Liesman?

Wonderful system we have no? Sadly we can only blame ourselves for it as we sit back and continue to "take it".


Housekeeping notes:

Late Monday afternoon I was stopped out of JPM at $43.66 for a flat trade.


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33
Short 1 unit Currencyshares C$ ticker FXC @ $91.95 stop @ $94.03

Monday, September 14, 2009

Short the Loonie



My earlier post outlined my thoughts on the U.S. dollar. I am now bullish on it. To position myself for this trade I wish to get short the loonie. I shall accomplish this via the currencyshares Cdn dollar, ticker FXC (weekly chart above) here at $92.05 with a stop at $94.03


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $43.66
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33
Short 1 unit Currencyshares C$ ticker FXC @ $91.95 stop @ $94.03


U.S. Dollar

My apologies for the lack of charts. I had a computer problem that was not corrected until late yesterday and here in mid-Michigan it was far too nice a day to be sitting behind a terminal laboring away. Now that I am up and running I will be posting as promised.


I want to touch on something I have been chewing on, the U.S. Dollar.

Right now everyone and their brother is U.S. dollar bearish. Everywhere I turn the crowd is universally bearish on the dollar. To their credit, the bearish story on the U.S. buck is extraordinarily compelling.
But, (isn't there always a but) I caught some very interesting numbers from the Daily Sentiment Index people which currently show U.S. dollar bulls level currently at, drumroll please........... 3% bullish.

No readers that is not a misprint, it is at a 3% bullish reading! 3 out of 100 traders are bullish! For what its worth this index sat at over 90% bullish back in March when the US dollar index was sitting north of 89. Currently it is south of 77
. The last time the sentiment index was this low was back in early 2008 when it sat at around 5% bullish as the dollar bottomed around 71.

If this is a major dollar bottom, (which I think it is), where might equities be headed? Down I would think. So, based on this and my inherent belief that we are in a deflationary environment I am very fearful for all stocks and commodities in general. And yes dear reader this includes Gold. I own bullion, both gold and silver, as it is the ultimate insurance policy that I never have to worry if if can pay the claim. Hence this idiot blogger sleeps extraordinarily well at night.

Everyone is pounding the table on Gold and this makes this trader/blogger very,very nervous. Yes I can see the charts, yes I can see the writing on the wall with all the issues that make the story on gold watertight. But the gold trade, right now anyway, just seems to easy.

As a trader I was taught that the hardest trade is the right trade. As a broker in my former life I learned that the more the clients fought me and looked at me like I had an eye in the middle of my forehead that this was often the right trade. For what it's worth I fear shakout of shakeouts could be in store for the gold bulls. I hope I am wrong but the trade seems awfully crowded with everone on one side of the boat, and I do know (first hand !) what happens when everyone is on one side of the perverebial boat !

I worry so when I see sentiment readers that are this far gone. It does not mean that things need to turn today but when the engine light is on, the oil light is flashing, the RPM gauge in north of 7k it would seem prudent to pay attention. That is if your subsistence were not dependent on the buying and selling of others, hence the crumb chasing, perma-buy calls emanating from most of Wall St. 24/7.


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $43.66
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33

Friday, September 11, 2009

End of the Week

I will be posting a smorgasbord of charts over the weekend for your viewing pleasure.

There are those who continue to wonder why I continue to crap on CNBC. Well, today's blockbuster interview on the network with John Mack CEO of Morgan Stanley, should answer any and all questions on the subject. Mack was introduced by host Ms. Caruso-Cabrera as the "esteemed" John Mack. He was addressed by co-host Bill Griffith as MR. Mack, emphasis on Mister.

To Bill Griffith, I would advise you get some 'onions' as you are addressing a "king crumb chaser" (re:Bonfire of the Vanities) and not Dr. Pasteur, Mother Theresa or Dr. M.L. King.

To Ms. Caruso-Cabrera, sorry but I'll take the title of 'idiot blogger' over grovelling, ass kissing, make-believe financial journalist any day of the week.

And as for John Mack, yes the same John Mack of the insider trading with Pequot Capital, he is living proof
of everything that is wrong with Wall St. I am sure he is nice to his pets, adored at his place of worship, and he is very generous with charities, charlatans always are. But make no mistake, the rules and laws of our society and as they apply to you and I do not apply to men like John Mack, Hank Paulson, et al.


You have to love Mack's comment of "judge me by how I brought Morgan Stanley through the crisis". Yup, drove the boat onto the rocks but ya gotta judge me by how I delicately and carefully helped recover and unload the dead bodies. Simply flabbergasting to put it mildly. It seems to me that history revisionist is an occupation in a full blown bull market.

Regular readers know that I am a political atheist believing that politics is no different than the WWF wrestling. I hate them equally as they are all the same. I came across the following excellent piece by Doug Casey, well known author and investor which I have re-printed below (hat tip to The Big Picture)

Baby Bush: The Worst President in History?

By Doug Casey

I recognize that I’ve antagonized many subscribers over the years with “Bush Bashing.” In the January TCR, just after OBAMA!’s election, I said I wouldn’t mention Bush again, his departure having made him irrelevant. I only feel bad that he and his minions will apparently get away scot-free with their crimes; better they had all been brought up before a tribunal and tried for crimes against humanity in general and the U.S. Constitution in particular. But that is objectively true of almost all presidents since at least Lincoln.

Most of our subscribers appear to be libertarians or classical liberals — i.e., people who believe in a maximum of both social and economic freedom for the individual. The next largest group are “conservatives.” It’s a bit harder to define a conservative. Is it someone who atavistically just wants to conserve the existing order of things (either now, or perhaps as they perceived them 50, or 100, or 200, or however many years ago)? Or is a conservative someone who believes in limiting social freedoms (generally that means suppressing things like sex, drugs, outrĂ© clothing and customs, and bad- mouthing the government) while claiming to support economic freedoms (although with considerable caveats and exceptions)? It’s unclear to me what, if any, philosophical foundation conservatism, by whatever definition, rests on.

Which leads me to the question: Why do conservatives seem to have this warm and fuzzy feeling for George W. Bush? I can only speculate it’s because Bush liked to talk a lot about freedom and traditional American values, and did so in such an ungrammatical way that it made him seem sincere. Bush’s tendency to fumble words and concepts contrasted to Clinton’s eloquence, which made him look “slick.”

I’m forced to the conclusion that what “conservatives” like about Bush is his style, such as it was. Because the only good thing I can recall that Bush ever did was to shepherd through some tax cuts. But even these were targeted and piecemeal, tossing bones to favored interests, rather than any principled abolition of any levies or a wholesale cut in rates.

Is it possible that Bush was actually the worst president ever? I’d say he’s a strong contender. He started out with a gigantic lie — that he would cut the size of government, reduce taxes, and stay out of foreign wars — and things got much worse from there.

Let’s look at just some of the highpoints in the catalog of disasters the Bush regime created:

No Child Left Behind. Forget about abolishing the Department of Education. Bush made the federal government a much more intrusive and costly part of local schools. Project Safe Neighborhood

Project Safe Neighborhoods. A draconian law that further guts the 2nd Amendment, like 20,000 other unconstitutional gun laws before it.

Medicare Prescription Drug Benefit. This the largest expansion of the welfare state since LBJ and will cost the already bankrupt Medicare system trillions more.

Sarbanes-Oxley Act. Possibly the most expensive and restrictive change to the securities laws since the ‘30s. A major reason why companies will either stay private or go public outside the U.S.

Katrina. A total disaster of bureaucratic mismanagement, featuring martial law.

Ownership Society. The immediate root of the current financial crisis lies in Bush’s encouragement of easy credit to everybody and inflating the housing market.

Nationalizations and Bailouts. In response to the crisis he created, he nationalized Fannie Mae and Freddie Mac and passed by far the largest bailouts in U.S. history (until OBAMA!).

• Free-Speech Zones. Originally a device for keeping war protesters away when Bush appeared on camera, they’re now used to herd.

The Patriot Act. This 132-page bill, presented for passage only 45 days after 9/11 (how is it possible to write something of that size and complexity in only 45 days?) basically allows the government to do whatever it wishes with its subjects. Warrantless searches. All kinds of communications monitoring. Greatly expanded asset forfeiture provisions.

The War on Terror. The scope of the War on Drugs (which Bush also expanded) is exceeded only by the war on nobody in particular but on a tactic. It’s become a cause of mass hysteria and an excuse for the government doing anything.

Invasions of Afghanistan and Iraq. Bush started two completely pointless, counterproductive, and immensely expensive wars, neither of which has any prospect of ending anytime soon.

Dept. of Homeland Security. This is the largest and most dangerous of all agencies, now with its own gigantic campus in Washington, DC. It will never go away and centralizes the functions of a police state.

Guantanamo. Hundreds of individuals, most of them (like the Uighurs recently in the news) guilty only of being in the wrong place at the wrong time, are incarcerated for years. A precedent is set for anyone who is accused of being an “enemy combatant” to be completely deprived of any rights at all.

Abu Ghraib and Torture. After imprisoning scores of thousands of foreign nationals, Bush made it a U.S. policy to use torture to extract information, based on a suspicion or nothing but a guard’s whim. This is certainly one of the most damaging things to the reputation of the U.S. ever. It says to the world, “We stand for nothing.”

The No-Fly List. His administration has placed the names of over a million people on this list, and it’s still growing at about 20,000 a month. I promise it will be used for other purposes in the future…

The TSA. Somehow the Bush cabal found 50,000 middle-aged people who were willing to go through their fellow citizens’ dirty laundry and take themselves quite seriously. God forbid you’re not polite to them…

Farm Subsidies. Farm subsidies are the antithesis of the free market. Rather than trying to abolish or cut them back, Bush signed a record $190 billion farm bill.

Legislative Free Ride. And he vetoed less of what Congress did than any other president in history. The only reason I can imagine why a person who is not “evil” (to use a word he favored), completely uninformed, or thoughtless would favor Bush is because he wasn’t a Democrat. Not that there’s any real difference between the two parties anymore…

As disastrous as he was, I rather hate to put him in competition for “worst president” in the company of Lincoln, McKinley, Wilson, the two Roosevelts, Truman, Johnson, and Nixon. He is simply too small a character — psychologically aberrant, ignorant, unintelligent, shallow, duplicitous, small-minded — to merit inclusion in any list.

On second thought, looking over that list of his personal characteristics, he’s probably most like FDR, except he lacked FDR’s polish and rhetorical skills. I suspect he’ll just fade away as a non-entity, recognized as an embarrassment. Not even worth the trouble of hanging by his heels from a lamp post, although Americans aren’t (yet) accustomed to doing that to their leaders.

Those who once supported him will, at least if they have any circumspection and intellectual honesty, feel shame at how dim they were to have been duped by a nobody.

The worst shame of Bush — worse than the spending, the new agencies, the torture, or the wars — is that he used so much pro-liberty and pro-free-market rhetoric in the very process of destroying those institutions. That makes his actions ten times worse than if an avowed socialist had done the same thing. People will blame the full suite of disasters Bush caused on the free market simply because Bush constantly said he believed in it.

And he’s left OBAMA! with a fantastic starting point for what I expect to be even greater intrusions into your life and finances. Eventually, the Bush era will look like The Good Old Days. But only in the way that the Romans looked back with nostalgia on Tiberius and Claudius And then Nero. And then the first of many imperial coups and civil wars.

Maybe just maybe the likes of Sean Hannity and the rest of the "Bush-kept-us-safe crowd" could read stuff like this, not that it would do any good mind you.


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $43.66
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33

Thursday, September 10, 2009

Nothing to See Here, Move Along.


I came across an interesting article entitled The Coming Consequences of Banking Fraud by J.S. Kim. I would encourage you to take the time to read it as it sums up my sentiments exactly. You could also decide to skip the article, vowing not let anyone stomp on a good equity bull buzz and continue to enjoy the party.

Just remember to be sure you blame the dastardly short sellers and unpatriotic doom and gloomers when equities go red. You might also have your congressman/woman's phone number at the ready, so when Cramer screams for you to start begging once again for re-instatement of the uptick rule you can join in the festivities.

And when all else fails you can just refer to your CNBC equity decision making cheat sheet.

Cheat Sheet for Reacting to Market Data Releases:

weak data = Fed ease, stocks rally

consensus data = lower volatility, stocks rally

strong data = economy strengthening, stocks rally

bank loses $4bln = bad news out of the way, stocks rally

oil spikes = great for energy companies, stocks rally

oil drops = great for the consumer, stocks rally

dollar plunges = great for multinationals, stocks rally

dollar spikes = lowers inflation, stocks rally

inflation spikes = will inflate all assets, stocks rally

inflation drops = improves earnings quality, stocks rally




Housekeeping notes:

Yesterday I was stopped out of my AMZN position at $ 81.11 for a loss of 1 1/4 pts on 1 unit.

Earlier today I was stopped out of my MMM position at $73.93 for a loss of3 pts on 1 unit.


Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $43.66
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33


Wednesday, September 9, 2009

Back to Work

I am back at my post and hope all had a safe and enjoyable long holiday weekend.

For those that did care to notice the most recent unemployment number jumped to 9.7%. David Rosenberg had some interesting comments in Lunch with Dave piece, Not Labor's Day. But why would any of that matter when GE is upgraded by JP Morgan on, you cannot make this up, sentiment. (hat tip Zero Hedge). Yes you read that correctly sentiment. And you wonder why I have the opinion I do of many Wall St. inhabitants.

I encourage you to click on the following 4 links. They are all well worth your time.

Chinese Economy 2009

Debtors Revolt

Living in Beverly Hills

Eclectica August Comments


Housekeeping notes:

On Friday, I was stopped out of my FXP positions at $10.14 as it gapped lower on Friday for a loss of about 1/2 pt. on the 2 units.

I was also stopped out of ARO at the open of $42.10 for a loss of 1.5 pts on 1 unit as it continues to power higher.

Yesterday, (Monday morning) I was stopped out of my SRS position at $11.92 for a flat trade.

Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $43.66
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33
Short 1 unit Amazon ticker AMZN @ $79.86 stop @ $81.11
Short 1 unit 3M Company ticker MMM @70.95 stop @ $73.93

Thursday, September 3, 2009

Long Weekend

I am commencing the long holiday weekend a little early. I want to take this opportunity to wish all my readers a safe and enjoyable weekend.


I was stopped out of my ARO position earlier at $40.91 for basically a flat trade. I realize I lowered my stop in a defensive move only to get flushed out.

I am prepared to re-enter the trade shorting 1 unit of ARO here at $40.75 with a stop at $42.06 which is just above the recent high.

Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 2 units Ultrashort FTSE/Xinhua 25 ticker FXP @ $10.58 stops @ $10.14/$10.54
Long 1 unit Ultrashort Real Estate ticker SRS @ $11.93 stop @ $11.93
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $43.66
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33
Short 1 unit Amazon ticker AMZN @ $79.86 stop @ $81.11
Short 1 unit 3M Company ticker MMM @70.95 stop @ $73.93
Short 1 unit 3M Company ticker MMM @70.95 stop @ $73.93
Short 1 unit Aeropostale ticker ARO @ $40.65 stop @ $42.06




Wednesday, September 2, 2009

STOPs Maintenance

Housekeeping notes;

As a defensive measure against the various high frequency dirt bags, errrr excuse me, liquidity providers, and front runners (Goldman Sachs) that now rule the market I wish to raise some stops to break even.

Yes I realize I run the risk that these previously mentioned opportunists of our new version of purportedly 'free market' capitalism can run and gun the stops only to crush the stock later. Ya think the SEC would ever look into this.

Ha Ha Ha too funny. The same outfit of Keystone Cops that couldn't see the wart on their nose that was Bernie Madoff, handed to them on a silver platter by Harry Markopolous. Talk about requiring a skill set above their pay grade. When you play cards with thiefs, thugs and cheats you have 2 choices, either don't play (stay in cash) or you need to expect they will pull every deceitful trick in the book.

Too bad is isn't like a card game back in the frontier land that was the wild west, where a six-shooter on everyone's hip kept all at the table honest.

Any way I want to, so I can sleep better, raise my stops on the following just as precautionary measures against more hallucinatory green haze... errrr I mean shoots popping up.

FXP to $10.14 and $10.54
SRS to $11.93
JPM to $43.66
ANF to $33.31
ARO to $40.91


Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 2 units Ultrashort FTSE/Xinhua 25 ticker FXP @ $10.58 stops @ $10.14/$10.54
Long 1 unit Ultrashort Real Estate ticker SRS @ $11.93 stop @ $11.93
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $43.66
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $33.33
Short 1 unit Aeropostale ticker ARO @ $40.81 stop @ $40.91
Short 1 unit Amazon ticker AMZN @ $79.86 stop @ $81.11
Short 1 unit 3M Company ticker MMM @70.95 stop @ $73.93

Short 3M - MMM


3M ticker MMM (daily chart above) shows a very nice looking channel with a double top. We must repect that the double top could morph into a head and shoulders top as well. I am shorting 1 unit of MMM here at $71.05. My notes on the chart indicate a stop of $72.86 I want to modify this to $73.93 which is 2x the 20 day average true range for 3M which currently stands at $1.44586.


Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 2 units Ultrashort FTSE/Xinhua 25 ticker FXP @ $10.58 stops @ $9.94/9.54
Long 1 unit Ultrashort Real Estate ticker SRS @ $11.93 stop @ $10.94
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $44.71
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $35.33
Short 1 unit Aeropostale ticker ARO @ $40.81 stop @ $42.36
Short 1 unit Amazon ticker AMZN @ $79.86 stop @ $81.11
Short 1 unit 3M Company ticker MMM @70.95 stop @ $73.93

Tuesday, September 1, 2009

Short Amazon - AMZN

Per my notes on the Amazon chart, ticker AMZN, this morning I have shorted 1 unit of AMZN at $79.96 as it broke down thru $80. It is my intention to add a 2nd unit if we finish this week with a close below $80


Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 2 units Ultrashort FTSE/Xinhua 25 ticker FXP @ $10.58 stops @ $9.94/9.54
Long 1 unit Ultrashort Real Estate ticker SRS @ $11.93 stop @ $10.94
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $44.71
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $35.33
Short 1 unit Aeropostale ticker ARO @ $40.81 stop @ $42.36
Short 1 unit Amazon ticker AMZN @ $79.86 stop @ $81.11

Amazon - AMZN


Amazon daily (above) shows the stock having formed a distinct island reversal. The stock gapped down thru $82.50, as well as, coincidentally?, an uptrend line going back to Nov/08. All this excited the bears only to quickly reverse and shake them all out.

AMZN is now sitting on the downtrend line from the highs going back to the bull market highs in the fall of 2007(descending red line). A break of this and more importantly a weekly close below would be most interesting, on the short side.


Good speculating and remind them to please don't ever forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 2 units Ultrashort FTSE/Xinhua 25 ticker FXP @ $10.58 stops @ $9.94/9.54
Long 1 unit Ultrashort Real Estate ticker SRS @ $11.93 stop @ $10.94
Short 1 unit JP Morgan ticker JPM @ $43.66 stop @ $44.71
Short 1 unit Abercrombie ticker ANF @ $33.23 stop @ $35.33
Short 1 unit Aeropostale ticker ARO @ $40.81 stop @ $42.36