Gift Fee - huh?

Portfolio effects after the rant.

Next weekend, my son will be coming home for a few days from college. Since he has been here quite a bit he thankfully tried to save us some money and take the bus from Boston to NY. He usually flies but believe it or not it usually works out to be cheaper.  Not so next weekend.

He gets the Greyhound website and finds something interesting. Some of you, including your truly, might say "disgusting" instead. It seems that if you buy a ticket for someone else with your credit card they slap om an $18 gift fee. This is where you cut to the animation of a cartoon character violently shaking his head side to side with jowls flying and hair popping off his head. Huh?  Gift fee?

As a parent, it is completely normal to buy a ticket for a student who does not have a job and therefore no credit card of his own. Basically, it sets a higher price for students. I'll let you leap to the argument that it hurts the poor, too.

Here is an article I found from 2010 detailing Greyhound's big swinging, er, nerve.
http://articles.latimes.com/2010/sep/14/business/la-fi-lazarus-20100914

So, how does this affect your portfolio? Think about how you pull back when you feel like you are getting nickel and dimed.

We refuse to fly Spirit Airlines (carry-on baggage fee). If we are stuck on Delta we only take carry ons (checked baggage fee). Do you search for certain gas stations that do not charge more when you pay with a credit card? When paying certain bills online do you opt for the bank check option over the credit card when the latter results in a 2% fee? Screw the airline miles. I've only used them twice in thirty years anyway.

The point is we alter our buying behavior to avoid fees. Merchants take note. And investors, you better figure out who is going to get hurt with the mass exodus of fee avoiders.  NetFlix anyone?

Sponge Worthy

Over the past week or so, I have had precious little to say about the markets, save for the one day of excitement Tuesday. I even resorted to running a long-term chart on the front page of the newsletter today where I usually rant about market events and offer up some less emotional observations.

Since I have not blogged in two days I felt the need to do so. But about what? Greece? Boring. Jobs? Same old excitement over something that is quite sad. Market movements? Zzzzzzzzz.  Then Seinfeld came to mind and I thought I'd write about not having anything to write. No soup for you! Yada, yada, yada.

Then it hit me. I had to figure out if something was sponge worthy. Did anything that happened this week deserve me spending time writing and more importantly you spending time reading? What was worthy of our limited supply of intellectual resources?

Well, gold found a floor and even rallied Friday as the dollar soared. Crude oil successfully tested its breakout. Cotton got a temporary bump on India export news. If I were to write about futures then coffee plunging to new lows would really make my day.  Maybe that's why Starbucks wanted to invade my K-cup maker.

No, that's not it. What might be worthy is the idea many people have that all dips should be bought. About the inevitability of higher prices because Greece has (another) deal, jobs seem to be growing and the fundamentals of oil say it should not be trading where it is. As soon as the fear subsides - after all, nobody is going to actually attack anybody (eyeroll) - then oil can settle back down and the economy gets another boost.

Tuesday was indeed a wake-up all. Hey, stocks can actually go down!  But it seems that traders never met a dip they did not like this year and sentiment rages bullish. The current trend is being extrapolated out into the future as if it must happen. My fellow bears are mighty quiet these days.

Now that is sponge worthy.

Sentiment

I noticed a headline in the financial press this morning - the day after the Dow lost 200 points in its first real down day of the year. It read, "Bulls Repair Street Breach."  At the time, the Dow had regained a whopping 30 points.

Why talk about the bulls? Why call such a tiny rebound a repair? Why call it only a breach instead of a more negative word such as "drubbing?"

The answer, in my opinion, is a bullish bias in the reporting. Not that the headline writer is biased but rather he/she and the editor agreed that was what would bring in readers - bullish readers - of which they assumed were the majority. Make that "still" the majority despite the technical damage that was done the day before.

Sentiment. A subjective art within the world of technical analysis.

This is what we are up against

I loved to make fun of bad fundamental calls but since 2008 everyone wears facial egg. Up is down. Black is white. Wednesday is Sunday at Carvel.

But this is still kind of funny - at least to those of us not long the stock.

Semis Crack

This is a chart we ran Monday before the open in Quick Takes Pro.

It shows a small head-and-shoulders top with a double left shoulder. While its shape may be out of the ordinary it has a classic bearish divergence in RSI (momentum).

Last year, industrials broke first before the market did. This year, it may be the semiconductors.

Caption Contest

What do you see in this chart? Winner gets to make money in the markets.