Jobs are job-one

OK, I borrowed Ford slogan of old - quality is job-one. How fitting to use a car company boast in these times.

This is a snapshot from MarketWatch. What I like is how much "they" overestimated the improvement in job losses. So much for all the recovery-niks.

The technician in me see a broken trend of things getting "less-bad."

Golden Cross or Golden Goose?

The title of this blog post was the pre-edited title for today's column. Considering I think that stocks will not turn to gold it is a much better capture of my thinking. Perhaps it was just not snappy enough as a headline for an online news magazine where I have to compete for eyeballs.

Here's the "abstract" telling the reader what the story is about:

"Some think that the Nasdaq has rung the bell making it safe to buy stocks again."

Clearly, I do not and I do not believe that the golden cross on the Nasdaq or the tech sector or the yen for that matter mean anything for the market as a whole.

I've taken a lot of heat lately for not accepting the bull side. Somehow that makes me feel better in that I do not agree with the masses. I learned from a trader friend a long time ago that if make a trade and then want to throw up on your keyboard you probably made a good trade.

Agree to Disagree

Never before have I seen so many polar opposite forecasts as I am seeing now. I agree with people with whom I never agree (or respect, in some cases) and I disagree with people with whom I usually agree (and respect a lot). But then again, not all of them on both sides.

Some say healthcare is the way to go yet I panned hospitals a few weeks ago.

Some say tech will carry the bull but I panned it a few weeks ago.

Some say bear market to new uncharted (at least not in the past 50 years) territory and others say a new major bull market is underway.

The VIX at 27 is a good thing while some say it is not good at all.

Some say sell in May while others look for the summer rally

Some say inflation while others say deflation (funny, nobody talks about benign ole' disinflation).

Some say the consumer is coming back and others think he/she is still scared poop-less.

Some say the government is fixing things while other say they are making it worse.

You say tomato, someone else says tomatoe. You can keep your to-mah-to.

What the deal? Who knows? Nobody knows but that is no excuse for investment paralysis. I called it "retreating into an investment cocoon" on another website. Do your homework, follow some respected analyst's analysis (but make your own conclusions) and then control risk.

As was mentioned in a previous post, it really is all about money management - make your bed and lie in it and control the heck out of risk. A good trader can make money no matter what portfolio he is given because he will cut the crap out right away and let the correct decisions ride. Trite but true.

Steve Nison, aka Mr. Candlesticks, likes to push a trading triad - Eastern Technicals, Western Technicals and Money Management. Everyone knows how to buy but few really master the art of selling.

Still More Observations from the Advisor Conference

Just found this note I wrote to myself on the plane ride back from the Insite Advisor Conference in Ft' Lauderdale three weeks ago.

Michael Lewis, the Liar's Poker guy, spoke at the conference and his presentation was called "What Happened?" (more or less). He went through the events leading to the meltdown, CDOs, leverage, hubris and everything else as though he wrote it for one of his books. Bottom line - there were some really big Wall Street geniuses who were allowed to run amok. Scary, obvious in hindsight and proof that greed drives bubbles.

Another session had three advisor/trainer types talking about how to restore client trust. They made a lot of sense with strategies of simply talking to client saying "I am still here for you."

Then they starting in with asset allocation does not work and long-term investing is still the way to go. They scoffed at timing. (Their timing at realizing asset allocation bombed was pretty bad, wasn't it?)

Of course, I was seething but it was their show not mine. They can figure out how a 20-year time horizon in the stock market produced a return of zero. That's zero. A bagel. Goose egg. Squat.

T-bills outperformed, I think you get my drift. But then again, that is a secular bear market and asset allocators were out or greatly underweighted in long-term portfolios.

They went on to say that clients need advisors more than ever now and I totally agree. But not the guys that were blind to what was happening as they clung to old ways of doing business - ways that worked in secular bull markets.

But now that we are at the back end of a bear, at least a cyclical bear, buy and hold is going to work again. Just when these knuckleheads have capitulated to the idea that it is dead.

Fuddy Duddy Buys Gold

Bloomberg reported a few weeks ago that Northwestern Mutual bought gold for the first time in its 152-year history as a hedge against asset declines. Click here for the full story.

A colleague passed along the thoughts of John Serrapere, President of Arrow Insights:

Quote:

Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time the company's 152-year history to hedge against further asset declines. This is very significant in that this firm is considered one of the most prudent asset managers in the world.

My (his) take away: Institutions invest as a herd. Many more will follow this firm. Retail investors will also begin to follow institutions over the next few years, which is when we will become sellers of gold.

This is big news.

End Quote

Sounds pretty good. Except that this is like Warren Buffett buying into high tech (he is notoriously averse to things he does not understand although he is a lot smarter than he lets on.) When the last holdout capitulates the game is over.

The question is not so much about gold but about asset values. NOW is when they decide to hedge? If they are so good then then should have hedged a year and a half ago.

The followup and some tidbits

First the tidbits
- Fitch downgrades the State of California
- Pipelines attacked in Nigeria
- Helicopter Ben gets defensive over his role in BofA/Merrill (too defensive?)
- from a chat room, posted by Isam Laroui, CMT

There's a blog (http://newsfrom1930.blogspot.com) that posts a selection of articles from the WSJ from each week 79 years ago. One bullish article from June 1930 made the following point:

"Historically there has been no case in this country since 1900 when business failed to turn upward the year following a depression."

The implication was that, since the depression was over as almost everybody thought at the time, business was bound to do better sooner or later. A 3-year depression was not even considered possible.

Back to the present: Pretty good stuff, right?

And on to the followup:

Today's big rally does not change my view that the market has probably topped. But as I wrote yesterday in the column, I was not about to "call that top" due to ongoing unstable conditions in the markets since last year. The TED spread is back to normal but both the T and the ED are still at near zero levels. That is not what I'd call normal.

Volume was rather light on the day, too, so I'll just take it as another black eye on the way to winning the fight.

Review of an old forecast

Here is a link to a March 20, 2008 post in this blog:
http://quicktakespro.blogspot.com/2009/03/bottoms-up.html

Essentially, I laid out a framework for the next year or two and how I saw two cycles of rally and decline before the major basing process completed. As we all know, the first rally was hot and if I am right it ended this month.

In today's column, you will see that the upper border for the pattern has been flattened out but the cycles remain. I am not after short-term trading turns but rather a framework on which to hang your strategy.

More after the column is published. I don't want to step on it.