Monday, November 29, 2010

Kick save and a beauty

Sportscaster Marv Albert used to say that during NY Rangers games when the goalie made a particularly nice save. The Dow cratered at the open on the Ireland bailout but came clawing back in the afternoon. The S&P 500 actually went into the green in the final hour before easing back into the red. And the trannies went green and stayed green. Al Gore would be so proud.

The point? The stock market remains incredibly resilient in the face of bad news. One day, the piper will appear and he will be pissed about not getting paid for so long. But until that day, stocks do not equal reality. Angela and Co. kept the EU liquidity pumps open and they don't even have a helicopter.   Liquidity does equal rising stock prices.

Tuesday, November 23, 2010

Non-market musings

Sorry, gang, this is another of my philosophical musings based on what is happening in real life.  If you just want market comments, you will have to wait until after Thanksgiving.

Yes, everyone likes to put out a seasonal blog post on giving thanks and sharing what the holiday means to them. Some don't even talk about buying the day before Thanksgiving and selling the following Monday.   :-)

I work in a home office most of the time and as you can imagine life creeps into the business day. Of course, the business day does it fair share of encroachment on life, too, such as writing an article after dinner and before Monday Night Football kicks off - while the kids need shuttling to after-school activities.  Today, I had to hang around the house while workers installed new shower doors in the bathroom.

So, I am in earshot, trying to catch up on emails and following up on presentations. Planning for future events and marketing initiatives is a full time job by itself.

After a few hours of trying to tune out the drilling and banging emanating from the bathroom, something amazing started to happen. Several of the seeds I had sown weeks, months and even years ago suddenly came back to me as live opportunities.

The guy I have been after for possibly four years on a firm-wide research deal passed my latest proposal off to an underling who contacted me to get started.

An organization with tens of thousands of members wants an article for their magazine.

Two different organizations added me to their list of guest bloggers.

No contracts yet but I got a healthy dose of encouragement. Keep plugging. Some days absolutely suck and maybe one quarter of the time I feel like I am moving backwards let alone merely stuck in the mud. But as someone said - maybe it was even a cartoon I saw years ago - if your don't ask, you don't get. The NY lottery says, "you have to be in it to win it."

Keep yourself in it. Keep asking. Keep working and something will happen. It may not be exactly what you planned but opportunities are everywhere - under rocks, behind trees and sometimes at the bottom of a steaming pile of poo.

What's the alternative? Giving up? Whining about the economy? Blaming someone else?

I'll close with this quote from a technical analysis chat room posted by my favorite re-tweeter Alex Spiroglou:

"I've missed more than 9000 shots in my career.
I've lost almost 300 games.
26 times, I've been trusted to take the game winning shot and missed.
I've failed over and over and over again in my life.
And that is why I succeed."
- Michael Jordan

A Happy Thanksgiving to all!

Monday, November 22, 2010

Not Peaceful Uneasy Feeling

'cause I gotta peaceful easy feeling
and I know you won't let me down
'cause I'm already standing
on the ground
- The Eagles (1972)

Ireland won't take it then they will. But uh-oh, now Portugal and Spain are waiting. Will there be enough money? How much money is there in the EU, anyway?

Charles Payne wrote this morning:

"When it's our turn where will the bailout come from? I know India would like to pick up the pieces at fire sale prices, look how much they overpay for the assets of their former colonial master. China can't wait to take a victory lap on our carcass, and Brazil would samba through the night to get a piece of the action as well. But, the thing is, combined all the hot economies of the world couldn't bail out the United States"

In other words, there is not enough money on the planet to get the job done. So why oh why is the dollar rallying? Is it still the safe haven?All that posturing out there to replace it as reserve currency seems to be a lot of hot air.

This airport scanning/groping thing is really worrisome, too. Does the government really think it knows best? And do scanners pick up bombs shoved where the sun don't shine? Or even plastic explosives?   They sure do pick up urine bags on bladder cancer survivors.  Watch out! The terrorist will pee on you!

They seem to be doing their best to squash business at every turn, from taxes to regulations, all in the name of recovery and/or safety.

I am torn between believing in the power of the USA to wake up and fix things (hence the world still beating a path to our door) and blind politicians who cannot see what is happening.

Let gold come down to my buy stop.

Friday, November 19, 2010


I am in Orlando today to speak at the Advisors MoneyShow.  Every February, I am down here to speak at the "regular" MoneyShow and there are usually 3000 attendees. For the Advisor show,they tell me 800 people signed up and only 300 are here.  It makes senses that individuals would swamp advisors at these things but 10 to one?   Sad.

The Peabody Hotel is hyooge (that's huge with an affect). I still cannot figure out where things are and what is their fascination with ducks? Strange. Across the street is the convention center and it is the biggest building I have ever seen - not in height but in end to end length. Someone told me one mile across. Maybe but it is huge-er than huge.

Back in this hotel, it feels empty. I walked around yesterday afternoon and barely saw a soul. So much for a recovery in this business.

So when I saw my bill for an overnight stay, my jaw dropped. It was disgusting - special rate of 239 for the room, state sales tax, county convention tax, convention surcharge and then a "resort" fee. Up to $287 for the sleep.  I did not use the resort, did not see the free coffee and still have seen the ducks they parade around the lobby. OK, I used the free internet but at that rate it better be included.

And try to grab a bagel and coffee. I could grab a coffee and overpriced pastry. Or I could sit down at a restaurant for a full meal. I enjoyed my stay in a Marriott Courtyard better.

Ducks aside, it is no wonder advisors stayed home.

Wednesday, November 17, 2010

Inflation in Id

The Wizard of Id
by Parker and Hart

Is this in the CPI? Or is it considered to be food and therefore not "core."


They call him Flipper, Flipper, faster than lightning,
No-one you see, is smarter than he,
And we know Flipper, lives in a world full of wonder,
Flying there-under, under the sea!

- from the 1964 TV show "Flipper" (a dolphin)

What other reason could there be for such demand for the General Motors IPO this week? They already raised the offering price range. And now they've raised the number of shares to make this the biggest IPO of all time - bigger than the monster one in China!

Do you buy shares because GM makes great cars? (I own a Chevy Traverse and am quite happy with it). Do you buy because the economy is on the mend?

Or do you buy because of the buzz allowing you to flip your shares on day one and get out of Dodge? Oh wait, that's a Chrysler brand.

But it's all moot anyway because Average Joe won't be able to play, anyway.

Tuesday, November 16, 2010


I see a lot of headlines today about the weak euro boosting the dollar. Problems in Europe have resurfaced, not that they ever went away, and global jitters are back in general. But look at this chart:

This is the Euro index (E) - a basket of currencies vs. the euro just like the US dollar index (DX) is a basket vs. the greenback. But E is not the opposite of DX. And they do not pay homage to each other in the same way.

In English, DX is half weighted to the euro but E is only 1/3 weighted to the dollar and just about the same weight to sterling.

So, to say the dollar is getting boosted by the euro is not quite right. The E index is flat on the day as I write this and even spent a good chunk of the  European day in the black.

Monday, November 15, 2010

Retail and GM

Retail data was good today and the stock market responded with a rally. Unfortunately, retail itself did not. Yes, some superstars such as AZO stayed firm in nosebleed territory. ODP was up big but after a crappy 2010 who cares?

The point is that one sector sparked the rally but it did not participate in it. Seems strange to me.

This week, Government Motors will IPO back to General Motors and my skin tingles with antic.................

........pation (Got that Brad and Janet?)

Coincidence or not - the biggest retail gainers today are the above mentioned AutoZone, Pep Boys and Genuine Parts - auto parts retailers, all.  Are they telling us something about GM quality?

I have no idea why used auto dealer KMX is soaring.

Friday, November 12, 2010

Wild Week

A lot of bombs dropped this week on Wall Street and we can begin by just digging in.

Boeing suffered a big problem with its brand new product and tanked
Apple broke its trendline
Gold and Silver bonked big time
Oil had a fake trading range breakout
Cisco kid was NOT a friend of mine (name that group) but Juniper (direct competitor) sure did like it.
Bonds of several ilks broke down 
And, of course, China, which was to blame for only the oil slick above

On the plus side, the PIIGS were flying on Friday as the EU backstopped them.

Wednesday, November 10, 2010

Yield Wave

While I wish the "Yield Wave" were the name of a new analytical technique I discovered it is more mundane - and negative.

In today's Barron's Online column, I talk about the wild ride all markets took Tuesday and what it means going forward. Towards the bottom of the piece I talk about Treasuries and how the long bond has been trending lower for several weeks.

It was no secret that the long end and short end of the curve looked different with the short yield chart heading down, down, down, the middle holding its ground and the long yield moving higher.Today, before the Fed said it would basically do what it said it would do last week - buy billions (use a Carl Sagan accent) of dollars worth of Treasuries - the 10-year yield had a tentative inverted head-and-shoulders breakout. It already had a breakout and test of a falling trendline so this was more evidence that the bond rally was over.

Then I talked about the wave spreading over the short-end, too, with the five-year sporting a bullish RSI divergence (did not say that last part in the column) and the two-year edging higher all week.

The yield curve is on the move even though it does not look like much on an actual yield curve chart just yet.

All of you bond market spread junkies are encouraged to chime in with your take.

Tuesday, November 9, 2010

US a manipulator?

Is this why the Fed and Treasury are playing this game?

From MarketWatch:

The U.S. has been after China to loosen the peg on Yuan against the Dollar.  So far, China has committed only to a gradual devaluation of the currency into wider free-exchange bands.  That may take too long, and this move to print money to buy up assets may force China to unload currency in that peg.  Even if China holds on to its Dollar horde, the impact may be the same.  Where this becomes a conundrum is that China would likely unload Treasury securities along the way and it would likely buy even fewer Treasuries as a percentage of its Central Bank assets ahead.  That would imply that China could keep selling and large portions of the money freshly printed just went to buy up the debt held by China.

The FOMC wants inflation a bit closer to its 2% implied target, far higher than what has been seen.  With the FOMC keeping short-term rates low at near-zero and with the Treasury increasing its balance sheet by buying Treasuries, this forces investors into risk-based assets.  If you can magically get inflation to 2% and short-term and intermediate-term Treasury rates are so low, what does that do to real returns on an inflation-adjusted basis?  Yep, negative real rates of return

Fed Forcing China's Commodities Buying Binge?

From Phil Flynn, energy guy at

How will the Chinese get even with us for our dollar printing ways? Well the easy answer is to just buy more commodities. The hot money is pouring in as the dollar gets wacked and commodities take off again.

Hedge funds bullish positions in oil hit a 4 year high as they have no other choice but to react to the bullish actions of the Fed. No one should blame speculators for driving up prices because the Fed gave the hedge funds no choice.

The Chinese have no choice either as the Fed action may force them into another commodity buying binge. The Chinese are already stockpiling oil and panic buying in cotton and other commodities may start to take the place of buying US debt.

Monday, November 8, 2010

Gold is the real deal

Everyone is talking about the weak dollar and strong commodities relationship but there is more to the gold rally than money falling from helicopters.

To wit: this is gold priced in euros - the major component of the US dollar index. That is a short-term upside breakout in a long-term bull market. Dollar schmollar. Gold is going to 1500, next.

To infinity....and beyond!

Friday, November 5, 2010

It's the liquidity, stupid

(With no apologies to Clinton campaign strategist James Carville)

It's the massive deficits that are bullish not fibonacci ratios as such babble.
- Larry Williams, trader extraordinaire (and really generous guy)

The Church of What's Working Now

The question is, "what changed in the mid-1990s that made this indicator work? Not the bull market/bear market change. 
Interestingly, it was the last time the Republicans swept into power. It was also the end of a bond market bear.

Your thoughts?

Wednesday, November 3, 2010

Social Media and Scams

This may not have to do with your portfolio but it does have to do with your wallet. Last month, we got a call from detective with Westchester County police asking to speak with my 15-year old daughter. Why?, we asked.

We are trying to reach XXX (my 18-year old son), he said.

Again, why?

"He was involved with a missing gun and we need to ask him some questions."

But why didn't the detective just ask for my son directly? Clearly, this was a scam and when pressed for details the scammers hung up.

Fact - our daughter spends a lot of time in Westchester with her friends. So how did this scammer know the few facts he did know? We think it was Facebook. After all, my kids are FB friends and the list the same high school. My daughter lists her friends and a good chunk of them are from Westchester.

Getting my point? Your personal info is out there for anyone to piece together. I admit to tracking down some old high school friends using news and clues found on the web although I have never scammed them.

Then just today my mom gets a call. In gravely voice, "hello Grandma, it me, your granddaughter and I got into an accident.


I was with my friend from Florida. (Fact - we lived in Florida a few years ago).

"Who is this? XXX?

Yes, its me XXX. (Mistake - my mom offered up my daughter's real name).

Anyway, since my mom is savvy enough, she realized it was a scam but a friend of hers fell for a similar ruse several weeks earlier. Her son was actually in Europe so it was possible he really did need money wired "right away."

I love Facebook and use LinkedIn often. I am also very wary about posting personal information - including where I might be taking a vacation - and anything that might come back to bite me later - such as photos from that party in college. The Internet is forever.

PS- We called the local police who basically said to be careful. Then we called the Westchester police who at least admitted there was little to do and that it was not the first time they've heard about it.

PPS - Be wary of unknown people trying to "friend" you. We heard of a jilted boyfriend getting into the girl's account and friending everyone to try to squeeze our some information.

Tuesday, November 2, 2010

CNBCee ya later!

Uh oh! Viewership is down.

The article ends with this:

"The decline could suggest that investors are turning to rival networks including Bloomberg TV and Fox Business Network. In addition, stock related video content on the Internet has gotten better over the years...."

I don't believe that. Retail is gone, goodbye, kaput, farblungen.

This dovetails with my posts that retail stock trading has jumped the shark (August 2009).

Quote of the Day

This is feeling to me increasingly like 2007 when I knew a disaster was building but we all had to chase the last 4%.

-  Mike Anderegg (from a chat room)

Monday, November 1, 2010


Here is a chart of the milk futures contract I mentioned in today's column.  Note it has been rallying since early 2009 after falling during the bear.
Take that cheeseheads!