If you play bitcoin, perhaps you should wear a seat belt.
Wednesday, December 4, 2013
Bitcoin Mania?
After doing the research for my Barron's Online column "Bitcoin, Gold and Tulips" I thought more about the charts I saw. One of them is in the upper left corner of the graphic shown here - courtesy Elliott Wave International.
The chart of bitcoin sure looks like the left hand side of each of these charts but how high is high? How far into a mania is it really?
Here is another chart I ran in the column, It shows bitcoin through Monday of this week. See the resemblance? But I ask you, is this the entire mania? Or is it half way up? or 25% up? Or 61.8%?
Basically, we cannot know where we are on the mania curve and that is what makes it so dangerous for bulls and bears alike.
If you play bitcoin, perhaps you should wear a seat belt.
If you play bitcoin, perhaps you should wear a seat belt.
Friday, October 25, 2013
The New Way for TA
I have lamented, no complained, no whined for years that technical analysis is just not what it used to be. I still think it works but with the Fed distorting the market like a black hole in reverse little things like momentum, sentiment, price structure and even (shudder) earnings have taken a back seat. Forget the distortions by ETFs and inverse ETFs. We really don't know if a trade is demand, supply or hedge anymore.
Charts break down and then they don't. Stocks get crushed and immediately rebound. And bad economic news is good because it will keep the Fed puking out cash projectile style. Inflation? We don't go no stinkin' inflation - because the economy blows. But all those dollars chasing fewer goods? Forget it.
Bizarro. And because supply and demand are subverted, charts just don't do what they were created to do. You want to measure the mood of the crowd? Just look at the Fed.
This is why I ended up at Stocktoberfest last week in Coronado, CA. Besides having not good, not great but perfect weather I saw the array of speakers and presentations and just had to be there. It seemed to be the way of the future in a business when everyone and their brother has access to everything all the time. Why bother with a CMT? (just kidding, Ralph)? Who needs a $2500/month data terminal when just about everything is free? Certainly nobody needs to pay for advice (which killed the radio star for me)
So rather than trying to read a chart that is no longer being driven by what it was designed to measure, it is time to step into 2013 and learn the ways of the crowd all over again. Follow it or fade it but we can no longer ignore it.
One product trolled social media to find out what everyone loved and hated. The result? Buy Google before it gapped up and buy some more when it broke out again. There was actual chart reading involved setting objectives and understanding that there was indeed a new trend after only three data points. You cannot do that without taking the social pulse of the stock.
Another product trolled social media to find out who we should follow in the first place. It determines who is a major influencer and who has gained respect from his/her peers.
One speaker did not have a product but rather a story. He told us how he figured out what was going to be the next trend in computer hardware and bought a piece of a company that made one little, tiny yet indispensable part of that hardware. Social media can help with that.
Another speaker saw a trend in the home where everything would be wirelessly controlled. Who makes the components for that? And who makes the antidote for all the radiation we'll be bathed in?
Make your own ETF to invest in an idea. Wear technology. Think differently about crises because Detroit downgrades took top notch nearby credits with them. Or totally unrelated municipal entities that simply had Detroit in their names.
One hedge fund manager showed how he used standard TA and it did indeed still work. But then this dawned on me: We are taught that the price contains all the actions and feelings of everyone else in the market. Isn't that what social media does today? Imagine what would happen if we could crack the code of putting both together?
Maybe there is hope for this old chart reader. Who needs a consultant in their start-up?
Charts break down and then they don't. Stocks get crushed and immediately rebound. And bad economic news is good because it will keep the Fed puking out cash projectile style. Inflation? We don't go no stinkin' inflation - because the economy blows. But all those dollars chasing fewer goods? Forget it.
Bizarro. And because supply and demand are subverted, charts just don't do what they were created to do. You want to measure the mood of the crowd? Just look at the Fed.
This is why I ended up at Stocktoberfest last week in Coronado, CA. Besides having not good, not great but perfect weather I saw the array of speakers and presentations and just had to be there. It seemed to be the way of the future in a business when everyone and their brother has access to everything all the time. Why bother with a CMT? (just kidding, Ralph)? Who needs a $2500/month data terminal when just about everything is free? Certainly nobody needs to pay for advice (which killed the radio star for me)
So rather than trying to read a chart that is no longer being driven by what it was designed to measure, it is time to step into 2013 and learn the ways of the crowd all over again. Follow it or fade it but we can no longer ignore it.
One product trolled social media to find out what everyone loved and hated. The result? Buy Google before it gapped up and buy some more when it broke out again. There was actual chart reading involved setting objectives and understanding that there was indeed a new trend after only three data points. You cannot do that without taking the social pulse of the stock.
Another product trolled social media to find out who we should follow in the first place. It determines who is a major influencer and who has gained respect from his/her peers.
One speaker did not have a product but rather a story. He told us how he figured out what was going to be the next trend in computer hardware and bought a piece of a company that made one little, tiny yet indispensable part of that hardware. Social media can help with that.
Another speaker saw a trend in the home where everything would be wirelessly controlled. Who makes the components for that? And who makes the antidote for all the radiation we'll be bathed in?
Make your own ETF to invest in an idea. Wear technology. Think differently about crises because Detroit downgrades took top notch nearby credits with them. Or totally unrelated municipal entities that simply had Detroit in their names.
One hedge fund manager showed how he used standard TA and it did indeed still work. But then this dawned on me: We are taught that the price contains all the actions and feelings of everyone else in the market. Isn't that what social media does today? Imagine what would happen if we could crack the code of putting both together?
Maybe there is hope for this old chart reader. Who needs a consultant in their start-up?
Thursday, October 17, 2013
People Data Needed
I was blogging about a conference for Barron's Online but the following was not quite suited for them. Here is what I wrote.
At the #Stocktoberfest conference by social media platform @Stocktwits, founder Howard Lindzon suggested the price and volume are changing. We need more in the analysis and that means “people” data”. What are people saying about the market or individual stocks? Who is buying and who is selling? This information can help investors decide is there is too much buzz around a stock or perhaps too much bearishness.
Lindzon added that this distributed thinking means that there is no more high profile analyst coming down from the mountaintop saying to buy or sell. With social media, investors need not be experts in all types of analysis and can access the collective wisdom of everyone in the market.
At the #Stocktoberfest conference by social media platform @Stocktwits, founder Howard Lindzon suggested the price and volume are changing. We need more in the analysis and that means “people” data”. What are people saying about the market or individual stocks? Who is buying and who is selling? This information can help investors decide is there is too much buzz around a stock or perhaps too much bearishness.
Lindzon added that this distributed thinking means that there is no more high profile analyst coming down from the mountaintop saying to buy or sell. With social media, investors need not be experts in all types of analysis and can access the collective wisdom of everyone in the market.
Friday, October 11, 2013
Blue Dogs and Irony
I was chatting with a blue dog democrat the other day although this person did not realize that is exactly what they believed. Of course, Obamacare came up as did the problems with radical conservatives, especially those in the media.
One political show had drifted a bit too far to the right and in my view was messing up their message. The blue dog said that they spend time tearing down the other side and that does not help them raise themselves up. I happened to agree with that sentiment.
Then we moved on to other topics including the poor and again we agreed that there should be some sort of system in place to help those in need - true need. We also agreed that the gap between rich and poor had gotten unacceptably wide. Blue dog though taxing the rich was a good idea to help the poor.
I did not respond but thought to myself, so you want to tear them down (financially) to help close the income gap? But you just said that tearing someone down does not help raise other higher.
Yes, the income gap is bad but wouldn't it be better to raise the poor higher to close it? Tearing down the rich does not make poor people better off.
I will leave it there because this is not a political blog. The financial implications are rather obvious, well, to me anyway.
One political show had drifted a bit too far to the right and in my view was messing up their message. The blue dog said that they spend time tearing down the other side and that does not help them raise themselves up. I happened to agree with that sentiment.
Then we moved on to other topics including the poor and again we agreed that there should be some sort of system in place to help those in need - true need. We also agreed that the gap between rich and poor had gotten unacceptably wide. Blue dog though taxing the rich was a good idea to help the poor.
I did not respond but thought to myself, so you want to tear them down (financially) to help close the income gap? But you just said that tearing someone down does not help raise other higher.
Yes, the income gap is bad but wouldn't it be better to raise the poor higher to close it? Tearing down the rich does not make poor people better off.
I will leave it there because this is not a political blog. The financial implications are rather obvious, well, to me anyway.
Thursday, October 10, 2013
Twitter on the Blog
As you can see, I am playing around with Blogger Templates so I can make my Twitter feed a bit more user friendly here. There has been some feedback that people just don't want to deal with Twitter and an old friend and colleague told me many firms prohibit Twitter applications on their systems. He said Twitter will indeed come through on the blog so here we are.
When I have something to say that needs more space - and I do have a comment fomenting on the how the public really does not get what they think they do - I can publish it as a traditional blog. In the meantime, my Twitter feed is just below so scroll down.
Thanks for your support,
- mk
When I have something to say that needs more space - and I do have a comment fomenting on the how the public really does not get what they think they do - I can publish it as a traditional blog. In the meantime, my Twitter feed is just below so scroll down.
Thanks for your support,
- mk
Wednesday, October 2, 2013
Using Twitter instead
As you can tell, blog activity has gotten very sparse. Please follow me on Twitter, where I am far more active. @mnkahn
Wednesday, September 18, 2013
Silence of the Bears
Yes, Clarice, I am still alive. It's just that working on a regular blog has not gotten me any business so unless I have something to say it ain't gonna get said.
Today's Bernanke Bombshell, aka September Surprise or "Eff Yew Wall Street Smartie Pantses" rally seems to have sent the bears packing. Every post I saw on StockTwits and Twitter was "new highs - buy 'em" and I bet next week's sentiment surveys will be massively skewed towards the bullish side.
How can you...
Today's Bernanke Bombshell, aka September Surprise or "Eff Yew Wall Street Smartie Pantses" rally seems to have sent the bears packing. Every post I saw on StockTwits and Twitter was "new highs - buy 'em" and I bet next week's sentiment surveys will be massively skewed towards the bullish side.
How can you...
Tuesday, August 27, 2013
Post Office and Competition
I have not blogged in a while because frankly I am sick of the markets in their current state. No, I am not quitting and signalling the top I have always sought. Rather, I have cut back on the activities that make me no money - like blogging.
Sure, I will bare my soul with rants and whines about this and that. But as for a hardcore market post, well, what's the point? The market moves on Syria, on Bernanke, on Mylie Cyrus' upcoming pregnancy, on anything and everything that has nothing to do with capitalism.
But today, I did notice something that gave me hope.Lately, I have been using FedEx to send boxes of stuff to my daughter in her new college apartment. It was a piece of cake and the packages moved across the country in two days. It takes me longer than that to acclimate after a 3-hour plane ride.
Bravo FedEx, you do it right. And I did not even take advantage of their pickup services and personal account.
Today, however, the post office was the closest option and I asked, "why not?"
Don't get me wrong, the post office delivers my customers' book orders in no time and media mail costs almost nothing. Today was different because I was not in my usual hurry. I noticed good customer services with a smile, the offer of add-on sales (stamps, etc..), signs thanking me for my business and a full array of mailing options for the package soon to be on its way to my daughter.
Basically, the post office is starting to get it. It just seems to me that they are being run like a real business and not just a government service where they are the only game in town. You know, like motor vehicles, which, by the way, I find to be much, much better.
Without getting into the politics, the pensions and the restrictions imposed by Washington, I'd say the post office may just make it.
Kudos, post office. And kudos free market.
Sure, I will bare my soul with rants and whines about this and that. But as for a hardcore market post, well, what's the point? The market moves on Syria, on Bernanke, on Mylie Cyrus' upcoming pregnancy, on anything and everything that has nothing to do with capitalism.
But today, I did notice something that gave me hope.Lately, I have been using FedEx to send boxes of stuff to my daughter in her new college apartment. It was a piece of cake and the packages moved across the country in two days. It takes me longer than that to acclimate after a 3-hour plane ride.
Bravo FedEx, you do it right. And I did not even take advantage of their pickup services and personal account.
Today, however, the post office was the closest option and I asked, "why not?"
Don't get me wrong, the post office delivers my customers' book orders in no time and media mail costs almost nothing. Today was different because I was not in my usual hurry. I noticed good customer services with a smile, the offer of add-on sales (stamps, etc..), signs thanking me for my business and a full array of mailing options for the package soon to be on its way to my daughter.
Basically, the post office is starting to get it. It just seems to me that they are being run like a real business and not just a government service where they are the only game in town. You know, like motor vehicles, which, by the way, I find to be much, much better.
Without getting into the politics, the pensions and the restrictions imposed by Washington, I'd say the post office may just make it.
Kudos, post office. And kudos free market.
Wednesday, July 31, 2013
Your Fame and Glory
Today, I have finally decided to tell you that when it comes to your career as an analyst or portfolio manager, you are the problem. You want more assets to manage? You want to sell more subscriptions to your newsletter? Or even, you want to get a better job on the Street?
Short of skywriting your resume over Remsenburg and Asbury Park, or worse, taking out a Facebook ad to annoy your friends, what are you going to do to further yourself? Your momma already told you - network. She did not mean to send invitations to famous people in your chosen field on LinkedIn, either.
Getting you name out there is hard and getting harder now that so many industry publications have either shrunken budgets or shuttered windows (alas, poor SFO, I knew you well). You can intern on a trading desk for no money. You can go to the Money Show and hope to get a word with your favorite speaker after he/she gives a presentation - you and every other trading nerd in attendance and I say that with extreme love for trading nerds.
You want to be on CNBC as a talking head? You want to see your name in the Wall Street Journal as a source? You would love to be the next Alan Abelson, wouldn't you?
Here is a news flash for you - journalists and producers need you. Do you think it is easy to put out "news" 12 times per day where there is no news at all? I myself put out five newsletter, two columns, a conference call, free charts and assorting articles every week. Even a prime morning time financial TV show was talking about little Prince what's-his-name over in London. Filler, filler, salaciousness and more filler.
How do you reach them? Sure, you have sent your latest research opinion to Joe Reporter. You added him to your free media distribution list. You even used his Twitter handle in one of your dozens of daily Tweets. Guess what? None of that gets read. You are wasting your time and probably pissing off the journalist by filling up his inbox with your spam. Yes, spam. That's what it is when it floods his inbox.
Let me give you a tip from someone who needs sources to someone who wants to be a source. First of all, step back and let that line sink in. We need each other. But we are like two star crossed lovers on a daytime soap opera that just cannot get it together.The tension builds but there is no climax.
From my point of view, there are plenty of others out there just like you. If Sidney does not feed me ideas, Sydney will (come on, you saw they are spelled differently). How are you going to cut trough the clutter.
Let me say that I personally am not that important in your career but collectively we journalists from analysts to real news gathering reporters are. So what's the tip? Is it really that complicated?
Give us what we need.
No, we do not need your support and resistance levels on the S&P 500. We do not need your Elliott Wave count or your earnings projections or your business forecast. We need something unique and something important. We need events that happen beneath the surface that are potential game changers in the market.
Again, no, not Elon Musk is a visionary CEO. Not falling homebuilder stocks will be bad for the Dow. But something like, "we've seen this setup before and the market moved 15% in two weeks." Or the last time there was this much short interest......or volume was this way.....or the mother of them all, Peter Eliades' "sign of the bear" indicator where he noted that when market breadth goes dead flat for three weeks the market is about to collapse.
I am paraphrasing, of course, but bring me the next Hindenburg Omen. The next dead cat bounce. Or the next double reverse whirligig (it is not every day I get to quote a fictitious indicator from my second book).
Tell me that the last two serious market crashes - 1929 and 1987 - occurred a Fibonacci 55 days from an all-time high. It happened in July of this year without the crash but tell me anyway. It makes for a good story.
As I said, don't send your newsletter. Nobody has time to read it. Nobody has time to wade through the pig poop in there to find the truffle. Instead, make contact with something useful and ask if it is OK to send a "special report" when there really is something big to tell my/our readers. And make sure it is special and not just a weekly brain dump. Think "spoon feed."
You will get quoted. And fame and fortune will soon flow your way. Well, at least the fame part. You can start your scrapbook of all your media citings to show your potential customers. At least your momma will be proud.
Short of skywriting your resume over Remsenburg and Asbury Park, or worse, taking out a Facebook ad to annoy your friends, what are you going to do to further yourself? Your momma already told you - network. She did not mean to send invitations to famous people in your chosen field on LinkedIn, either.
Getting you name out there is hard and getting harder now that so many industry publications have either shrunken budgets or shuttered windows (alas, poor SFO, I knew you well). You can intern on a trading desk for no money. You can go to the Money Show and hope to get a word with your favorite speaker after he/she gives a presentation - you and every other trading nerd in attendance and I say that with extreme love for trading nerds.
You want to be on CNBC as a talking head? You want to see your name in the Wall Street Journal as a source? You would love to be the next Alan Abelson, wouldn't you?
Here is a news flash for you - journalists and producers need you. Do you think it is easy to put out "news" 12 times per day where there is no news at all? I myself put out five newsletter, two columns, a conference call, free charts and assorting articles every week. Even a prime morning time financial TV show was talking about little Prince what's-his-name over in London. Filler, filler, salaciousness and more filler.
How do you reach them? Sure, you have sent your latest research opinion to Joe Reporter. You added him to your free media distribution list. You even used his Twitter handle in one of your dozens of daily Tweets. Guess what? None of that gets read. You are wasting your time and probably pissing off the journalist by filling up his inbox with your spam. Yes, spam. That's what it is when it floods his inbox.
Let me give you a tip from someone who needs sources to someone who wants to be a source. First of all, step back and let that line sink in. We need each other. But we are like two star crossed lovers on a daytime soap opera that just cannot get it together.The tension builds but there is no climax.
From my point of view, there are plenty of others out there just like you. If Sidney does not feed me ideas, Sydney will (come on, you saw they are spelled differently). How are you going to cut trough the clutter.
Let me say that I personally am not that important in your career but collectively we journalists from analysts to real news gathering reporters are. So what's the tip? Is it really that complicated?
Give us what we need.
No, we do not need your support and resistance levels on the S&P 500. We do not need your Elliott Wave count or your earnings projections or your business forecast. We need something unique and something important. We need events that happen beneath the surface that are potential game changers in the market.
Again, no, not Elon Musk is a visionary CEO. Not falling homebuilder stocks will be bad for the Dow. But something like, "we've seen this setup before and the market moved 15% in two weeks." Or the last time there was this much short interest......or volume was this way.....or the mother of them all, Peter Eliades' "sign of the bear" indicator where he noted that when market breadth goes dead flat for three weeks the market is about to collapse.
I am paraphrasing, of course, but bring me the next Hindenburg Omen. The next dead cat bounce. Or the next double reverse whirligig (it is not every day I get to quote a fictitious indicator from my second book).
Tell me that the last two serious market crashes - 1929 and 1987 - occurred a Fibonacci 55 days from an all-time high. It happened in July of this year without the crash but tell me anyway. It makes for a good story.
As I said, don't send your newsletter. Nobody has time to read it. Nobody has time to wade through the pig poop in there to find the truffle. Instead, make contact with something useful and ask if it is OK to send a "special report" when there really is something big to tell my/our readers. And make sure it is special and not just a weekly brain dump. Think "spoon feed."
You will get quoted. And fame and fortune will soon flow your way. Well, at least the fame part. You can start your scrapbook of all your media citings to show your potential customers. At least your momma will be proud.
Tuesday, July 30, 2013
Uh Oh ObamaCare!
I've taken some heat from readers when I post something that is anti Affordable Care Act. Costs go up anyway, they say. More people will have access, the chime.
Well, I say 13ULL5h17 (that's B@$%^^T for you unwashed masses). Aside from doctors leaving the fold and insurance companies dropping those already covered - and aside from politics - here is a little tale hitting my wife's hospital.
Hello greatest staff in the world. I regret to inform you that we will be closing this hospital in two or three months - except for the Emergency Room (because we have to keep it open) and program X (because it makes us a lot of money). We will work to get all of you placed elsewhere, most likely in the flagship hospital in our hospital system.
Hmmmm, why are they closing? Well, for starters, insurance coverage for therapy will be significantly less under the new law and since we are primarily a therapy hospital, well, you know.
I had a long blog to write but frankly I am tired of even thinking about the path this county has been on since 9/11. Patriotism is awesome but the rest is draining.
The bottom line is that the hospital said that insurance coverage would be either dropped or limited on its patients and since hospitals are actually businesses they cannot eat the difference. They said it is directly a result of ObamaCare.
When will they wake up to understand that you cannot expand one part of the health care landscape and assume everything else will stay the same. Its a great plan if there are no ripples. But there are alway ripples.
You cannot get something for nothing.
Well, I say 13ULL5h17 (that's B@$%^^T for you unwashed masses). Aside from doctors leaving the fold and insurance companies dropping those already covered - and aside from politics - here is a little tale hitting my wife's hospital.
Hello greatest staff in the world. I regret to inform you that we will be closing this hospital in two or three months - except for the Emergency Room (because we have to keep it open) and program X (because it makes us a lot of money). We will work to get all of you placed elsewhere, most likely in the flagship hospital in our hospital system.
Hmmmm, why are they closing? Well, for starters, insurance coverage for therapy will be significantly less under the new law and since we are primarily a therapy hospital, well, you know.
I had a long blog to write but frankly I am tired of even thinking about the path this county has been on since 9/11. Patriotism is awesome but the rest is draining.
The bottom line is that the hospital said that insurance coverage would be either dropped or limited on its patients and since hospitals are actually businesses they cannot eat the difference. They said it is directly a result of ObamaCare.
When will they wake up to understand that you cannot expand one part of the health care landscape and assume everything else will stay the same. Its a great plan if there are no ripples. But there are alway ripples.
You cannot get something for nothing.
Monday, July 22, 2013
Barry Goldwater, CMT
I often use a quote from Senator Barry Goldwater from his 1964 Presidential run. "I'd rather be right than President." Well, he was right - about not being President.
I used that line in a presentation to a San Francisco group a long while back and they grumbled when I merely said "he was right." I had no dog in that fight so it was not a political statement. However, liberal San Fran apparently was not enamored with "Mr. Conservative," as he was called.
But I digress. The message here for traders is "I'd rather make money than be right."
I am convinced that gold will top 2K and stocks will go into one more cyclical bear market before the next great generational investing period begins. However, holding that view in 2013 clearly proved unprofitable and there is the message. Trader what is happening and not what should happen.
Again, I am convinced it will happen. But while we wait, we might as well exploit what is happening to make some money today.
As a financial journalist, I cannot flip flop in my positions. Nobody would pay to read my stuff and even the tire kickers, you know who you are, would no longer seek out my free offerings. However, traders can change their minds whenever they feel like it - rather whenever the market says to do so.
I was wrong to like Apple after it bonked to 450 but it's not far from there today. Not much damage.
I was wrong to think gold washed out on its first plunge to 1350 but guess what, it is not far from there today. Drawdown agita but only opportunity cost lost.
I was wrong to fight the Dow's trend earlier in the year but I did go with the secondary breakouts. Kicking and screaming and certainly not all in but enough to make some money.
I am alive to fight another day. Perhaps the reputation is besmirched a bit but alive nonetheless. Many a hedgie far smarter and better capitalized than me has blown up completely. Of course, it is not fair that they return with new suckers, er, investors, to do it again - or go into government.
I used that line in a presentation to a San Francisco group a long while back and they grumbled when I merely said "he was right." I had no dog in that fight so it was not a political statement. However, liberal San Fran apparently was not enamored with "Mr. Conservative," as he was called.
But I digress. The message here for traders is "I'd rather make money than be right."
I am convinced that gold will top 2K and stocks will go into one more cyclical bear market before the next great generational investing period begins. However, holding that view in 2013 clearly proved unprofitable and there is the message. Trader what is happening and not what should happen.
Again, I am convinced it will happen. But while we wait, we might as well exploit what is happening to make some money today.
As a financial journalist, I cannot flip flop in my positions. Nobody would pay to read my stuff and even the tire kickers, you know who you are, would no longer seek out my free offerings. However, traders can change their minds whenever they feel like it - rather whenever the market says to do so.
I was wrong to like Apple after it bonked to 450 but it's not far from there today. Not much damage.
I was wrong to think gold washed out on its first plunge to 1350 but guess what, it is not far from there today. Drawdown agita but only opportunity cost lost.
I was wrong to fight the Dow's trend earlier in the year but I did go with the secondary breakouts. Kicking and screaming and certainly not all in but enough to make some money.
I am alive to fight another day. Perhaps the reputation is besmirched a bit but alive nonetheless. Many a hedgie far smarter and better capitalized than me has blown up completely. Of course, it is not fair that they return with new suckers, er, investors, to do it again - or go into government.
Wednesday, July 10, 2013
Ben Shalom Godot
Following
the script of the 1953 play "Waiting for Godot," the bears continue
to wait for the Fed to indicate once and for all that its open ended bond
buying program will start to wind down. In the play, Godot never arrived. Worse,
we are not even sure he ever existed.
Analysis of the financial markets no longer depends on the psychology of the masses. It does not depend on how corporations are developing new products or effing up the ones they already have. And it does not depend on international capital flows, unemployment and the rest of the dismal inputs that give financial news reporters something to say.
Analysis of the financial markets no longer depends on the psychology of the masses. It does not depend on how corporations are developing new products or effing up the ones they already have. And it does not depend on international capital flows, unemployment and the rest of the dismal inputs that give financial news reporters something to say.
No, it all comes down to how one man thinks and can express himself. Our job as market professionals is to guess what pearls will emerge from his mouth before congress or the news media. Guess right and riches will follow. Guess wrong and you'd better practice your spatula technique.
Guess? Since when did I need an MBA and 27 years experience to guess what one man will do? They don't teach profiling at the NY Institute of Finance. They do suggest not buying only one stock and hoping. Rather, they suggest a basket to remove the risk of any one of them going belly up.
That's what technical analysis is all about, you know. Figuring out what the masses will do based on what they have done in similar situations in the past and then assigning probabilities on the result all with the goal of making the buy, sell or hold decision.
Yeah, it was a run-on sentence. Good writing skills don't make you money when you are guessing what the man with the most power in the world, under the deepest scrutiny, will say ahead of every other Tom, Dick and Tracy trying to guess the same thing.
It is nowt a quarter hour to the close. The Fed minutes are out and we find out that half of the board is chicken and the other half is blind. You can figure out which it which. The market sure could not as it jerked around for a solid hour.
Now we wait for Godot to speak - again.
Friday, June 28, 2013
Must be a top
Sentiment is the dark side of the force when it comes to the markets. We all get price action, momentum and even cycles such as Sell in May. But sentiment? Can be subjective. And freaky. Where else can good be bad and bad be good. Or is dope good and phat good but whack is bad?
When sentiment is really high, everyone likes it so it should do well, right? Nope. Everyone has already bought it so there is nobody left.
My personal sentiment has indeed reached an extreme. I have been looking at this market since Unkle Ben fired up the helicopter and seeing nothing good about it - except that it keeps going up. Nothing matters but the Fed and that was proven May 22 and again last week under hints of tapering. And again when the feral hogs came out to play and the market rallied when some Fed officials said they did not mean it or we just misunderstood.
I am so fed up, no pun intended, with the manipulation of the market and government meddling that I really do want to hang up my slide rule. I joke all the time about chucking it all and opening up a juice bar in Key West. Deep down, I am only half-kidding.
In past PowerPoint presentations I talked about sentiment saying things like, "What happens when entire aisles in the supermarket are dedicated to the Atkins diet and the low-carb lifestyle?" The answer is that it is time to buy bread and cereal stocks.
What happens when the NY Times puts a growling bear on the front page of the news section? Time to buy stocks. And what happens when a major player in commodities trading closes shop? Time to buy commodities.
What happens when my inner bear cannot take it any more? What happens when my inner Libertarian thinks the government is the cause, not solution, to most of our problems?
Time to double down and start marketing my services harder. Talk about cognitive dissonance as right now I want to quit. If someone offered me a job even tangentially related to what I now do I would probably take it.
That means that things are going to change for the better in my world. Maybe it will be a new job. Or maybe everyone else is about to understand that the emperor (economy, President, Fed, political parties) has no clothes and I am about to have my best year ever as a market analyst.
...but it sure would be easier to let someone else worry about the business end of things while I help clients make some money.
When sentiment is really high, everyone likes it so it should do well, right? Nope. Everyone has already bought it so there is nobody left.
My personal sentiment has indeed reached an extreme. I have been looking at this market since Unkle Ben fired up the helicopter and seeing nothing good about it - except that it keeps going up. Nothing matters but the Fed and that was proven May 22 and again last week under hints of tapering. And again when the feral hogs came out to play and the market rallied when some Fed officials said they did not mean it or we just misunderstood.
I am so fed up, no pun intended, with the manipulation of the market and government meddling that I really do want to hang up my slide rule. I joke all the time about chucking it all and opening up a juice bar in Key West. Deep down, I am only half-kidding.
In past PowerPoint presentations I talked about sentiment saying things like, "What happens when entire aisles in the supermarket are dedicated to the Atkins diet and the low-carb lifestyle?" The answer is that it is time to buy bread and cereal stocks.
What happens when the NY Times puts a growling bear on the front page of the news section? Time to buy stocks. And what happens when a major player in commodities trading closes shop? Time to buy commodities.
What happens when my inner bear cannot take it any more? What happens when my inner Libertarian thinks the government is the cause, not solution, to most of our problems?
Time to double down and start marketing my services harder. Talk about cognitive dissonance as right now I want to quit. If someone offered me a job even tangentially related to what I now do I would probably take it.
That means that things are going to change for the better in my world. Maybe it will be a new job. Or maybe everyone else is about to understand that the emperor (economy, President, Fed, political parties) has no clothes and I am about to have my best year ever as a market analyst.
...but it sure would be easier to let someone else worry about the business end of things while I help clients make some money.
Tuesday, June 18, 2013
Love Your Spam
We've all seen the Nigerian pitch to share a few million from a deceased client. We've all gotten offers to make our manhood supreme, even if we possess womanhood. There is trouble with our bank account that needs verification. And of course, it is always time to get in on the ground floor before the company's stock takes off.
Have you ever read these things all the way through? Hilarious at times but mostly they are good for a chuckle, well, if you have a geek side like me. To wit:
Good day,
We are interested in your Goods which you displayed in the site and we want to purchase some of the products on this site for our ref. please send us more information about your company for our ref. please send to our company official email address
Best Regards
Mr Edwin Martez
Purchasing Manager
Edwin Associates
Address: 479 Allen Avenue
By Charles Walter
State : stockholm ----the 51st state
Mobile Phone : 1-330-3436799 ----Ohio area code
markt03@chanqtjer.com.tw ----Taiwan email address
The scary - and sad - part is that people fall for this stuff.
Have you ever read these things all the way through? Hilarious at times but mostly they are good for a chuckle, well, if you have a geek side like me. To wit:
Good day,
We are interested in your Goods which you displayed in the site and we want to purchase some of the products on this site for our ref. please send us more information about your company for our ref. please send to our company official email address
Best Regards
Mr Edwin Martez
Purchasing Manager
Edwin Associates
Address: 479 Allen Avenue
By Charles Walter
State : stockholm ----the 51st state
Mobile Phone : 1-330-3436799 ----Ohio area code
markt03@chanqtjer.com.tw ----Taiwan email address
The scary - and sad - part is that people fall for this stuff.
Thursday, June 13, 2013
Nuts Passwords
All the talk about the government snooping on our communications sparked yet another rant. This time it is about security - specifically passwords.
I get it, the online world is fraught with hidden danger and identity theft is a big deal. I have no problem jumping through a hoop or two to prove I am me when I log into a website or call customer service via the old telly.
But as with getting a rectal exam at the airport before heading to the gate, some security measures are ridiculous. There is a limit up with which any sane person will not put (go read your Churchill). I have already cut back on my flying. Does Grandma's wheelchair really need a pat down? Am I really going to mix up a liquid bomb on board with my Evian, Starbucks and Enfamil? At five bucks each, I am going to drink every last drop of those bad boys myself.
Wait, I said bomb! Hey NSA, my cell phone number is 516-647-7466. You know where to find me - trying to eke out a living, put two kids through college and raise a special needs child.
But let's take this to something more mundane and really only an annoyance - passwords. Why are some so simple and some so complicated? My first Libertarian reaction is that everyone is covering their collective backsides trying not to get sued. Hey, we made your password so strong that even you could not remember it. I don't even bother with some of them anymore and opt just to reset the damn thing each time I use a particular website.
I think we all agree that simple passwords are really good enough for boring e-commerce sites like Poland Spring. They deliver water jugs to my door and if someone wanted to get into my account they could stop delivery or have the company dump 20 or more 5-gallon jugs at my door. Hey, go ahead and change my credit card to yours, I don't mind. Any password should be a-OK on this site.
Then there are sexier retailers such as electronics, jewelry and other products that can be delivered anywhere. Yeah, I don't want anyone monkeying around in there ordering flat screens and blue diamonds. They can require say at least six characters with at least one letter and number.
Finally, there is the heavy stuff - banks, social security, credit cards - where serious damage can be done in an instant. Eight characters with letters, numbers and maybe even capital letters is perfectly acceptable, especially since my browser saves them anyway.
So, why then does one bank and one credit card I have require the least secure version? Why does JetBlue say that if I change my password (reset it after forgetting it) that I cannot use any of the last 20 passwords I have used already. Forget that it is just an airline where the credit card and traveler name must match. I can see not reusing the last three passwords but 20? Come on, you are not that important.
I can understand why the New York State tax website demands exactly eight characters but why does E-Z Pass NY - the electronic bridge and highway toll service - demand letters, numbers and capitals? Is somebody going to void my electronic tag? Maybe. Perhaps someone wants to switch their car to my account? Nope, I still have the tag. Or order themselves a tag? Nope, it will be delivered to my address.
I get why my online merchant account requires long upper and lower case with numbers passwords but so does Kohl's. And AT&T.
But here is the real pièce de résistance. My daughter's college account not only requires letters and numbers but also special characters. But not just any group of letters and numbers - no email addresses and names. OK, that's cool. But no actual words, either. So, "blunt@1234" is no good. Neither would "youhavetobekidding$3."
This is a college account, not a mortgage loan. I had to actually think of sounds and made-up words from when I was a kid so I would not have to resort to a random letter generator. And speaking of that, if the restrictions are that tight, why not just assign something to us when we sign up? The only reason to let someone choose their own password is so they can choose something they can remember.
I'd love to tell you what I ended up creating but I don't need the government looking at my daughter's grades.
So listen up on-line people, most of you are just not that important in terms of need for security. Identity thieves are not registering for classes or buying me a new iPhone.
Nobody is going to rush the cockpit now that they are secured. Nobody is going to take the time to crack the code of some website unless there is a payoff worth the risk (money theft, SEC or FDA rulings, the military). Nobody is trying to blow up the passenger pickup area at the airport so how about stationing some of that security at the entrances to the LIRR train tunnel in Queens?
Can we please be reasonable and make the security commensurate with the risk?
I get it, the online world is fraught with hidden danger and identity theft is a big deal. I have no problem jumping through a hoop or two to prove I am me when I log into a website or call customer service via the old telly.
But as with getting a rectal exam at the airport before heading to the gate, some security measures are ridiculous. There is a limit up with which any sane person will not put (go read your Churchill). I have already cut back on my flying. Does Grandma's wheelchair really need a pat down? Am I really going to mix up a liquid bomb on board with my Evian, Starbucks and Enfamil? At five bucks each, I am going to drink every last drop of those bad boys myself.
Wait, I said bomb! Hey NSA, my cell phone number is 516-647-7466. You know where to find me - trying to eke out a living, put two kids through college and raise a special needs child.
But let's take this to something more mundane and really only an annoyance - passwords. Why are some so simple and some so complicated? My first Libertarian reaction is that everyone is covering their collective backsides trying not to get sued. Hey, we made your password so strong that even you could not remember it. I don't even bother with some of them anymore and opt just to reset the damn thing each time I use a particular website.
I think we all agree that simple passwords are really good enough for boring e-commerce sites like Poland Spring. They deliver water jugs to my door and if someone wanted to get into my account they could stop delivery or have the company dump 20 or more 5-gallon jugs at my door. Hey, go ahead and change my credit card to yours, I don't mind. Any password should be a-OK on this site.
Then there are sexier retailers such as electronics, jewelry and other products that can be delivered anywhere. Yeah, I don't want anyone monkeying around in there ordering flat screens and blue diamonds. They can require say at least six characters with at least one letter and number.
Finally, there is the heavy stuff - banks, social security, credit cards - where serious damage can be done in an instant. Eight characters with letters, numbers and maybe even capital letters is perfectly acceptable, especially since my browser saves them anyway.
So, why then does one bank and one credit card I have require the least secure version? Why does JetBlue say that if I change my password (reset it after forgetting it) that I cannot use any of the last 20 passwords I have used already. Forget that it is just an airline where the credit card and traveler name must match. I can see not reusing the last three passwords but 20? Come on, you are not that important.
I can understand why the New York State tax website demands exactly eight characters but why does E-Z Pass NY - the electronic bridge and highway toll service - demand letters, numbers and capitals? Is somebody going to void my electronic tag? Maybe. Perhaps someone wants to switch their car to my account? Nope, I still have the tag. Or order themselves a tag? Nope, it will be delivered to my address.
I get why my online merchant account requires long upper and lower case with numbers passwords but so does Kohl's. And AT&T.
But here is the real pièce de résistance. My daughter's college account not only requires letters and numbers but also special characters. But not just any group of letters and numbers - no email addresses and names. OK, that's cool. But no actual words, either. So, "blunt@1234" is no good. Neither would "youhavetobekidding$3."
This is a college account, not a mortgage loan. I had to actually think of sounds and made-up words from when I was a kid so I would not have to resort to a random letter generator. And speaking of that, if the restrictions are that tight, why not just assign something to us when we sign up? The only reason to let someone choose their own password is so they can choose something they can remember.
I'd love to tell you what I ended up creating but I don't need the government looking at my daughter's grades.
So listen up on-line people, most of you are just not that important in terms of need for security. Identity thieves are not registering for classes or buying me a new iPhone.
Nobody is going to rush the cockpit now that they are secured. Nobody is going to take the time to crack the code of some website unless there is a payoff worth the risk (money theft, SEC or FDA rulings, the military). Nobody is trying to blow up the passenger pickup area at the airport so how about stationing some of that security at the entrances to the LIRR train tunnel in Queens?
Can we please be reasonable and make the security commensurate with the risk?
Thursday, June 6, 2013
Headline Corny
I've been writing a financial column for 12 years and I have the same pet peeve. In the endless search to stand out from the crowd and get people to click on my links, editors slap all sorts of "interesting" titles on my stuff.
My all-time fave was from the Barron's print edition many years ago when I wrote a bullish article (hey, it happens) on the stock market. The title? Wolf Whistle Bait. Apparently, the market looked like a pretty girl eliciting whistles from the wolves, i.e. boys standing on the corner.
The more usual fare is less obtuse and filled with corn. Gold stocks shine! Oil stocks hit a slick. Teachers do it with class.
I have to put up with the single headline like that as I do understand the media needs to sell papers (register eyeballs). That translate directly into subscription sales and ad revenues. Got it.
But today on Fox Business during the rare actual business segment on the Imus in the Morning Show, I happened to catch the anchor with the quin-fecta (trifecta, quadfecta, quinfecta - look it up!) of corn.
Talking about the top five market sectors of the previous whatever.
Semiconductors chipped in with gains
Telecom services dialed in
Pharmaceuticals had the right prescription
Investors were thirsty for beverage stocks and
Oil and gas stocks gushed in the lead
Makes you want to slap the writer and the anchor for her complicity.
My all-time fave was from the Barron's print edition many years ago when I wrote a bullish article (hey, it happens) on the stock market. The title? Wolf Whistle Bait. Apparently, the market looked like a pretty girl eliciting whistles from the wolves, i.e. boys standing on the corner.
The more usual fare is less obtuse and filled with corn. Gold stocks shine! Oil stocks hit a slick. Teachers do it with class.
I have to put up with the single headline like that as I do understand the media needs to sell papers (register eyeballs). That translate directly into subscription sales and ad revenues. Got it.
But today on Fox Business during the rare actual business segment on the Imus in the Morning Show, I happened to catch the anchor with the quin-fecta (trifecta, quadfecta, quinfecta - look it up!) of corn.
Talking about the top five market sectors of the previous whatever.
Semiconductors chipped in with gains
Telecom services dialed in
Pharmaceuticals had the right prescription
Investors were thirsty for beverage stocks and
Oil and gas stocks gushed in the lead
Makes you want to slap the writer and the anchor for her complicity.
Wednesday, May 29, 2013
Ha Ha!
Last week when I was putting the finishing touches on my column entitled "Charts Show Speed Bump Ahead for Stocks" I added a little phase "which may have happened today" just before publication. The column is written before lunch but posts the the website shortly after the close so there are times the market screws me good. This time, I acknowledged the potential key reversal but did not say it was a definite.
My editor send me an email notifying me of the reversal (I already knew). But more important, everyone with any sort of technical analysis training saw that the market gapped up to a new record high but closed below the previous day's low. It is, or should I say was, a classic signal for the end of a rally. The final blow off on some sort of news where everyone finally agreed that stocks would never be lower again.
OK, a little exaggeration but you get the point. I thought to myself, "this is too obvious."
Everyone saw it. Everyone wrote about it. Everyone suddenly got a little scared. After all, sentiment indicators were screaming "sell" with their extreme bullish readings.
The next few days saw no real change. Then there was Memorial Day and when the US returned to work it was to a roaring gap up speedball of a rally on Asia and consumer sentiment. They're baaack!!! Wasn't that from Poltergeist? For you folks on Long Island, it could also be the Great Neck Nisan pitch guy.
Up, up and away, uh wait a minute. The Dow was up 200 plus and then closed up 106. Looks good on the evening news but we technicians knew better. That was a fairly strong give-back and it avoided negating the key reversal.
But bonds tanked! So did utes and mREITS. OK, the great rotation was finally here. Pundits all over the place said money was fleeing bonds and heading to stocks. Whoopee!
And then Wednesday arrived and stocks continued lower. In the premarket, they had given back the rest of Tuesday morning's gains - and bonds stayed low. That's not rotation unless you consider a rotation from assets to cash and not necessarily the greenback. Could it be into gold?
The point of all of this is that the key reversal was too obvious and the bears got punished Tuesday morning. But the Tuesday rally was painted with the roaring 20's boom brush and it set up the bulls to get punished. Ha ha (it's from the Simpsons).
Now the market can decide what it wants to do now that everyone has been humbled.
My editor send me an email notifying me of the reversal (I already knew). But more important, everyone with any sort of technical analysis training saw that the market gapped up to a new record high but closed below the previous day's low. It is, or should I say was, a classic signal for the end of a rally. The final blow off on some sort of news where everyone finally agreed that stocks would never be lower again.
OK, a little exaggeration but you get the point. I thought to myself, "this is too obvious."
Everyone saw it. Everyone wrote about it. Everyone suddenly got a little scared. After all, sentiment indicators were screaming "sell" with their extreme bullish readings.
The next few days saw no real change. Then there was Memorial Day and when the US returned to work it was to a roaring gap up speedball of a rally on Asia and consumer sentiment. They're baaack!!! Wasn't that from Poltergeist? For you folks on Long Island, it could also be the Great Neck Nisan pitch guy.
Up, up and away, uh wait a minute. The Dow was up 200 plus and then closed up 106. Looks good on the evening news but we technicians knew better. That was a fairly strong give-back and it avoided negating the key reversal.
But bonds tanked! So did utes and mREITS. OK, the great rotation was finally here. Pundits all over the place said money was fleeing bonds and heading to stocks. Whoopee!
And then Wednesday arrived and stocks continued lower. In the premarket, they had given back the rest of Tuesday morning's gains - and bonds stayed low. That's not rotation unless you consider a rotation from assets to cash and not necessarily the greenback. Could it be into gold?
The point of all of this is that the key reversal was too obvious and the bears got punished Tuesday morning. But the Tuesday rally was painted with the roaring 20's boom brush and it set up the bulls to get punished. Ha ha (it's from the Simpsons).
Now the market can decide what it wants to do now that everyone has been humbled.
Wednesday, May 15, 2013
Everything is perfect
An excerpt from this morning's Quick Takes Pro newsletter:
Everything is going right for the market now. Good news is
good. Bad news is good. No news is good. And no bears are on television saying
things are not what they seem. Perhaps they are what they seem but the lack of
bears is very troubling for wall of worry watchers and anyone who believes the
market will not accommodate such one-sided sentiment for long.
Yet as we say every single day, until the market shows an
actual sign of reversing all we can do is acquiesce.
Tuesday, April 30, 2013
The In Your Face Move
This is from Tuesday's Quick Takes Pro newsletter in the "Today's Lesson" section. Enjoy!
The chart of Qualcomm really illustrates what has been becoming a bit too common in this market.
False moves, fake-outs and a "whichever way the wind blows" culture
is driving old school chartists crazy. Exceptions are now the rule and we
wonder if technical analysis would have even gotten off the ground it if were
invented today.
For those wondering about the captions, we try to keep the
swearing to a minimum. Look what happened this month - a trend break that
lasted more than just a day, a strong rally to prove it was false, and then a
total collapse to be sure everyone lost money.
What we have is a broken trend and now a broken support.
We have observed that the market does finally give proper signals after this
sort of shake-and-bake, for lack of a better term.
As for the CeeLo Green reference, that is the cleaned up
radio version of the f-bomb.
Monday, April 22, 2013
Sign of a Top
We all know that despite educators' and hand holders' best efforts, the little guy is always the last to the party. When the public starts to bite on Wall Street hype you know it is getting very close to time to sell everything and hide in a bunker (or spider hole of you are a deposed Middle Eastern dictator).
This is why the magazine cover indicator works. When editors believe the public is sufficiently hungry for a certain type of information they put it on their covers to spark sales. You don't see covers touting stocks at the end of bear market because nobody wants to touch them with a 39 1/2 foot pole. Of course, that is exactly the time to cozy up to Mr. Grinch.
Here is the transcript, accurate to my own stenographic abilities, of a John Hancock Financial Services commercial I saw on a financial news show this morning.It showed several couples in different JH offices talking to their respective advisors.
Couple 1 - "We felt better holding on to our money"
Couple 2 - "But waiting? We shouldn't wait any more."
Couple 3- "So here we are. We need to invest again."
Couple 1 again - "We just need to find the right thing to do."
Break out the pic-i-nic baskets, the bears are comin' to town.
This is why the magazine cover indicator works. When editors believe the public is sufficiently hungry for a certain type of information they put it on their covers to spark sales. You don't see covers touting stocks at the end of bear market because nobody wants to touch them with a 39 1/2 foot pole. Of course, that is exactly the time to cozy up to Mr. Grinch.
Here is the transcript, accurate to my own stenographic abilities, of a John Hancock Financial Services commercial I saw on a financial news show this morning.It showed several couples in different JH offices talking to their respective advisors.
Couple 1 - "We felt better holding on to our money"
Couple 2 - "But waiting? We shouldn't wait any more."
Couple 3- "So here we are. We need to invest again."
Couple 1 again - "We just need to find the right thing to do."
Break out the pic-i-nic baskets, the bears are comin' to town.
Wednesday, April 17, 2013
Free Market Will Soon Have Enough
From this morning's Quick Takes Pro newsletter. The answer to a letter to the editor.
Your worries over the market's dysfunction are echoed everywhere. However, the market may be manipulated by the Fed and gamed by the algos (algorithmic trading) and taken off line in dark pools but sooner or later the free market will come back and purge itself of this nonsense. We have already seen how QE is getting less effective and shorter-lived. Inflation must come back by definition and indeed we are seeing it rise under the radar. True, commodities are falling hard but sooner or later debt is going to crush us.
Australia has already made a move to trade with China without having to convert to US dollars first. We know the Middle East has already floated the idea of selling oil in euros or even their own currency. Money and business will eventually move to where it is most productive and the flight from high tax and regulation states to low tax/reg states is clear. Sooner or later (we like that phrase) it will start to leave the US altogether.
But for now, the only thing that has worked is following the trend and taking a blind leap of faith that the trend - which is still up on the S&P 500 - will always be intact. Of course, we know that cannot be true. But it is true until it isn't.
As a technical analyst, seeing cherished indicators fail all the time is frustrating. Watching pattern breakouts/breakdown fail all the time is worse. Only the trend followers are happy these days and only in they chose the stocks that look different from the others. For example, look at UTX in the Dow vs. XOM. One was a steady climber. The other formed patterns and was completely frustrating. And then look at HPQ, which was a steady climber - until it wasn't.
There is no shame in taking it easy, cutting back trading and lowering risk. As for the question of who is selling gold stocks at five-year lows, blame the trend followers. However, sooner or later (there we go again) value investors will find them. Technical traders will spot extreme bearish sentiment and oversold conditions.
QE will end one day. And when it does, look out below. Interest rates will soar and gold will take off. The disconnect between stocks and the fundamentals can stay in place longer than we can remain solvent (who said that?) but it will return one day. The longer it takes, the worse the snap back will be.
Your worries over the market's dysfunction are echoed everywhere. However, the market may be manipulated by the Fed and gamed by the algos (algorithmic trading) and taken off line in dark pools but sooner or later the free market will come back and purge itself of this nonsense. We have already seen how QE is getting less effective and shorter-lived. Inflation must come back by definition and indeed we are seeing it rise under the radar. True, commodities are falling hard but sooner or later debt is going to crush us.
Australia has already made a move to trade with China without having to convert to US dollars first. We know the Middle East has already floated the idea of selling oil in euros or even their own currency. Money and business will eventually move to where it is most productive and the flight from high tax and regulation states to low tax/reg states is clear. Sooner or later (we like that phrase) it will start to leave the US altogether.
But for now, the only thing that has worked is following the trend and taking a blind leap of faith that the trend - which is still up on the S&P 500 - will always be intact. Of course, we know that cannot be true. But it is true until it isn't.
As a technical analyst, seeing cherished indicators fail all the time is frustrating. Watching pattern breakouts/breakdown fail all the time is worse. Only the trend followers are happy these days and only in they chose the stocks that look different from the others. For example, look at UTX in the Dow vs. XOM. One was a steady climber. The other formed patterns and was completely frustrating. And then look at HPQ, which was a steady climber - until it wasn't.
There is no shame in taking it easy, cutting back trading and lowering risk. As for the question of who is selling gold stocks at five-year lows, blame the trend followers. However, sooner or later (there we go again) value investors will find them. Technical traders will spot extreme bearish sentiment and oversold conditions.
QE will end one day. And when it does, look out below. Interest rates will soar and gold will take off. The disconnect between stocks and the fundamentals can stay in place longer than we can remain solvent (who said that?) but it will return one day. The longer it takes, the worse the snap back will be.
Monday, April 15, 2013
Why?
The events in Boston today were a reminder that the world is not the same as it was when I was a naive numbskull in college. And as a suburban New Yorker, this attack, of course, instantly takes me back to that sunny Tuesday 12 years ago. This time it was not me in the vicinity but my son, in college, a mere five blocks down the road from the marathon's finish line. He walked by that area countless times over his still unfinished school career just like I walked through the concourse under the twin towers countless times in my work career.
He is fine but he, and his school, is shaken.
It was easy to forget that gold plunged, stocks tumbled and bonds rallied hard. It was gratifying to see a Facebook post saying NY was with Boston - an arch, archrival in sports. We are.
It is easy to wonder why all of this happens. It is easy to look over your shoulder for the next event. But that is not what we do here. We go about our business. We hoist a bird at the perpetrators. And we figure a way to make things better. It was my honor and pleasure to drive right over the Throgs Neck bridge in New York City the very day of the 10th anniversary of 9/11. I knew the police had made sure it would be alright. And it was.
Like many, I now question why I continue to run with the rats instead of enjoying each day.
He is fine but he, and his school, is shaken.
It was easy to forget that gold plunged, stocks tumbled and bonds rallied hard. It was gratifying to see a Facebook post saying NY was with Boston - an arch, archrival in sports. We are.
It is easy to wonder why all of this happens. It is easy to look over your shoulder for the next event. But that is not what we do here. We go about our business. We hoist a bird at the perpetrators. And we figure a way to make things better. It was my honor and pleasure to drive right over the Throgs Neck bridge in New York City the very day of the 10th anniversary of 9/11. I knew the police had made sure it would be alright. And it was.
Like many, I now question why I continue to run with the rats instead of enjoying each day.
Friday, April 5, 2013
Free Market Rules
“This is a punch to the gut. This is not a good number. And I think now
you’re going to interestingly start seeing a lot of discussion about
maybe the sequester’s a bigger deal than people thought it was.” —
Austan Goolsbee, former chairman of President Barack Obama’s Council of
Economic Advisers, in an interview on CNBC.
First of all, this guy with the funny name is a tool. I have been listening him defend his former boss for many months and he makes my skin crawl with his blind devotion and kool-aid drunken mindset. It should come as no surprise that the economic numbers will eventually start to reflect reality and not just the cooked books and hidden problems hidden by gobs of free money puked out by the Fed.This is structural, not a short-term effect of the sequester, which itself was insignificant bull$&!^.
Forget the talk about hurting job creators. I can see the left's argument that tax breaks do not necessarily create jobs because rich people may not invest in business but in themselves. That is their right, by the way.
Tax breaks for the rich may not help the economy but because money will flow to its most profitable uses, it may indeed hurt it. Capital will be used in its most efficient way unless the government mandates it do something else - which by definition will be less efficient and less productive.
Rich people are mobile, and so is their money. Just ask former Californians who fled for lower tax, lower regulation states. Rich people also have the luxury of saying "F#*! it, I don't need this headache anymore and I am going to shut down my business."
So, Mr. Goolsbee, your punch in the gut was self-inflicted. Unintended consequences. What always happens when the government gets involved in the name of fairness.
Now before you start flinging your poo at me, I am not an anarchist. There is a need for regulation and laws and I also want it live in a country where there is a safety net to help those who truly need help. But the way to help the majority is to let the free market crank up its engine and raise everyone up. If the rich get richer, so be it. As long as those in the lower levels of the economic strata get richer then we all win. Does it hurt me if my neighbor makes a gazillion dollars? As long as he does not control the government then we both win.
Guess who won under TARP and QE? Not you and me. It was the so-called fat-cat bankers that the President hates so much. Interest rates are not low due to the Fed. They are low because the economy blows and there is no demand for money.
Ask yourself, other than refinancing your mortgage at a lower rate, what has QE done for you? If you answered that it made your 401K go up, then you win. It has not helped the economy as the jobs report proves. But if you think that it your 401K will stay up when the Fed stops printing money then you lose.
There are needs for laws to protect my person, my property and my borders. There are needs to restrict business if it impacts people and yes, the environment, in a negative way. But telling me to wear a seat belt in my own car should be between me, my family and my insurance company. Yes, Nanny Mike, I understand your admirable desire to help people attain good health and the economic benefits of not having to care for people who bring it on themselves. But there has to be an element of personal responsibility here. If I choose to be fat, so be it. That is between me, my family and my insurance company.
And for those who do not have health insurance, I don't have that answer. Obamacare aint' it. Admirable yes but don't forget the unintended consequences of less doctors, more wait times and despite the kool-aid, higher prices. Did someone say economics 101? Less service, more demand, higher prices.
You want higher wages? So do I. But when Mr. Dumpka (yeah, I said it. He makes a quarter million in salary, by the way) demands higher wages he effectively reduces available jobs. You can force me to pay my workers more but you cannot stop me from cutting back on the number of workers I hire.
I am very happy to see the free market making its presence known again in the form of lousy data. It will eventually force we stupid humans to to what we should have done in the first place, let the market work. When enough pensions are busted due to bankruptcy and the ranks of the government assistance programs swell so much that there is not enough to go around then people will demand a return to what got us to be the richest nation on Earth in the first place. Hint, it was not the government.
First of all, this guy with the funny name is a tool. I have been listening him defend his former boss for many months and he makes my skin crawl with his blind devotion and kool-aid drunken mindset. It should come as no surprise that the economic numbers will eventually start to reflect reality and not just the cooked books and hidden problems hidden by gobs of free money puked out by the Fed.This is structural, not a short-term effect of the sequester, which itself was insignificant bull$&!^.
Forget the talk about hurting job creators. I can see the left's argument that tax breaks do not necessarily create jobs because rich people may not invest in business but in themselves. That is their right, by the way.
Tax breaks for the rich may not help the economy but because money will flow to its most profitable uses, it may indeed hurt it. Capital will be used in its most efficient way unless the government mandates it do something else - which by definition will be less efficient and less productive.
Rich people are mobile, and so is their money. Just ask former Californians who fled for lower tax, lower regulation states. Rich people also have the luxury of saying "F#*! it, I don't need this headache anymore and I am going to shut down my business."
So, Mr. Goolsbee, your punch in the gut was self-inflicted. Unintended consequences. What always happens when the government gets involved in the name of fairness.
Now before you start flinging your poo at me, I am not an anarchist. There is a need for regulation and laws and I also want it live in a country where there is a safety net to help those who truly need help. But the way to help the majority is to let the free market crank up its engine and raise everyone up. If the rich get richer, so be it. As long as those in the lower levels of the economic strata get richer then we all win. Does it hurt me if my neighbor makes a gazillion dollars? As long as he does not control the government then we both win.
Guess who won under TARP and QE? Not you and me. It was the so-called fat-cat bankers that the President hates so much. Interest rates are not low due to the Fed. They are low because the economy blows and there is no demand for money.
Ask yourself, other than refinancing your mortgage at a lower rate, what has QE done for you? If you answered that it made your 401K go up, then you win. It has not helped the economy as the jobs report proves. But if you think that it your 401K will stay up when the Fed stops printing money then you lose.
There are needs for laws to protect my person, my property and my borders. There are needs to restrict business if it impacts people and yes, the environment, in a negative way. But telling me to wear a seat belt in my own car should be between me, my family and my insurance company. Yes, Nanny Mike, I understand your admirable desire to help people attain good health and the economic benefits of not having to care for people who bring it on themselves. But there has to be an element of personal responsibility here. If I choose to be fat, so be it. That is between me, my family and my insurance company.
And for those who do not have health insurance, I don't have that answer. Obamacare aint' it. Admirable yes but don't forget the unintended consequences of less doctors, more wait times and despite the kool-aid, higher prices. Did someone say economics 101? Less service, more demand, higher prices.
You want higher wages? So do I. But when Mr. Dumpka (yeah, I said it. He makes a quarter million in salary, by the way) demands higher wages he effectively reduces available jobs. You can force me to pay my workers more but you cannot stop me from cutting back on the number of workers I hire.
I am very happy to see the free market making its presence known again in the form of lousy data. It will eventually force we stupid humans to to what we should have done in the first place, let the market work. When enough pensions are busted due to bankruptcy and the ranks of the government assistance programs swell so much that there is not enough to go around then people will demand a return to what got us to be the richest nation on Earth in the first place. Hint, it was not the government.
Tuesday, April 2, 2013
Still Alive
Help I'm alive
My heart keeps beating like a hammer
- Metric, Help I'm Alive (2008)
Sorry for being so inactive but I was away last week and honestly it is easier to send quick updates out on three social media platforms at one time using HootSuite. If there is something requiring a longer treatment or I need to rant about something I will send out notices on social media with links back here.
Thanks for reading this blog and thanks for understanding.
- mk
My heart keeps beating like a hammer
- Metric, Help I'm Alive (2008)
Sorry for being so inactive but I was away last week and honestly it is easier to send quick updates out on three social media platforms at one time using HootSuite. If there is something requiring a longer treatment or I need to rant about something I will send out notices on social media with links back here.
Thanks for reading this blog and thanks for understanding.
- mk
Wednesday, March 20, 2013
Unintended Success
I did something today that I never do - I watched a bit of Ben Bernanke's speech following the end of the FOMC. Other than being totally crisis-ed out over the government, economy and world, Ben's recounting of the Fed's successes in fixing the economy struck me as almost comical. I say that to not say "sad."
Stay with me for this analogy. I love them!
I don't know about your corner of the world but challenging property tax assessments in the NYC suburbs seems to be big business. I get letters from a half dozen or so companies periodically asking for permission to challenge my assessment on my behalf. For their troubles, I would agree to pay them half of the first year's savings. Considering property taxes here in a tony Nassau County village easily top $20 grand (you read that right - twenty thousand dollars per year - how else can we pay our school superintendent a half million a year? - giant eyeroll - sad but true) and some of the newer, bigger properties are over $30 grand the savings can be big.
FWIW, I am talking about sizable houses on an acre of land but not true Dynasty or South Fork mansions overlooking the Malibu surf.
One year, I actually hired one of them. My tax assessment went down and I had to pay them a few hundred dollars. Sounds like a good deal. If my taxes did not go down it cost me nothing. And any savings was more savings than I had before so again, a good deal.
Then it dawned on me what had just happened. It was 2008 and house values were plummeting. My own house was down about 20% since I moved in three years earlier and my taxes would have gone down anyway. Keep in mind that the assessment process has a two year lead time so the benefit would not appear until 2010 or so.
But the tax reduction company took full credit - just like the current administration and current Fed.
While I do have strong feelings about economic mismanagement by the current government, let me say that I thought the previous government was lousy in that regard, too. Keep your liberal fireballs to yourself. And conservatives, don't send me any fundraiser requests, either.
Everyone thinks their efforts nursed a recovery while I say it was the never ending spirit of entrepreneurs that refused to quit. Or the natural rebound from an economic calamity that occurs sure as day follows night.
So, Mr. Bernanke, you do not get to pat yourself on the back. If you had taken your trillions and paid it directly to citizens you would have seen a better result. Right now, only banks and investors smart or lucky enough to be in the stock market for the past few years are thriving. And only companies of other types smart or lucky enough to be doing business overseas are making profits that drive their stock prices higher. It is not the domestic economy, that is for sure.
Stay with me for this analogy. I love them!
I don't know about your corner of the world but challenging property tax assessments in the NYC suburbs seems to be big business. I get letters from a half dozen or so companies periodically asking for permission to challenge my assessment on my behalf. For their troubles, I would agree to pay them half of the first year's savings. Considering property taxes here in a tony Nassau County village easily top $20 grand (you read that right - twenty thousand dollars per year - how else can we pay our school superintendent a half million a year? - giant eyeroll - sad but true) and some of the newer, bigger properties are over $30 grand the savings can be big.
FWIW, I am talking about sizable houses on an acre of land but not true Dynasty or South Fork mansions overlooking the Malibu surf.
One year, I actually hired one of them. My tax assessment went down and I had to pay them a few hundred dollars. Sounds like a good deal. If my taxes did not go down it cost me nothing. And any savings was more savings than I had before so again, a good deal.
Then it dawned on me what had just happened. It was 2008 and house values were plummeting. My own house was down about 20% since I moved in three years earlier and my taxes would have gone down anyway. Keep in mind that the assessment process has a two year lead time so the benefit would not appear until 2010 or so.
But the tax reduction company took full credit - just like the current administration and current Fed.
While I do have strong feelings about economic mismanagement by the current government, let me say that I thought the previous government was lousy in that regard, too. Keep your liberal fireballs to yourself. And conservatives, don't send me any fundraiser requests, either.
Everyone thinks their efforts nursed a recovery while I say it was the never ending spirit of entrepreneurs that refused to quit. Or the natural rebound from an economic calamity that occurs sure as day follows night.
So, Mr. Bernanke, you do not get to pat yourself on the back. If you had taken your trillions and paid it directly to citizens you would have seen a better result. Right now, only banks and investors smart or lucky enough to be in the stock market for the past few years are thriving. And only companies of other types smart or lucky enough to be doing business overseas are making profits that drive their stock prices higher. It is not the domestic economy, that is for sure.
Friday, March 8, 2013
Personal Capitulation
In recent missives, I wrote about what seems to be the silence of the lambs, er, bears. These days, vocal bears do indeed get made into chops, served with a nice mint jelly (and fava beans).
Today, I've got a little soul searching and how "once bitten, twice shy" applies to your humble technical journalist (that would be me).
Each Friday, I discuss possible topics with my editors for next week's columns. There are some perennial favorites - banks, gold, Apple - and they do get a bit more coverage than say containers and packaging. But I look at international markets, currencies, bonds, commodities, energy and healthcare as interesting patterns arise.
Recently, they asked if gold looked like a good topic. After all, it was falling like an atomically heavier-than-lead balloon and the world was rife with calls of even further losses. I politely declined because a few weeks earlier I was still a raving bull on the sector. The correction was nearing its end, so I thought, and my previous call for a breakout lasted about two days before the downtrend resumed.
A trader can and should shrug off being wrong but as a journalist I can only take being called an idiot for so long.
And what happens if I decide now that gold is going lower, too? It is always a good idea to change at the right time. Better late than never. Don't go down with the ship. Live to trade another day. Blah, blah, blah.
But what would happen if I throw in the towel, aka - capitulate? If the market keeps going down, well, that would be OK. But what would happen if it doesn't? What if I change my view right at the bottom? The personal downside risk is too huge because unlike a trader where money could care less if you were wrong the last time, readers of financial analysis and news have long memories. Fighting the trend all the way down and changing your mind at exactly the wrong time can not only fire up the flame machine but lose a hefty chunk of readership. It takes a long time to build a following but one (very) bad call to lose it.
So, dear reader, you have a window into the mind of a journalist. There is risk in writing anything and unlike a trader, who can take a day off, journalists have to produce - every day - whether there is something important happening or not.
So, do I think the stock market rally can continue? Absolutely!
Will I recommend backing up the truck? No way. I am not changing my tune now although I have completely backed off fighting it.
And shorting? Been there, tried that.
A portfolio of puts and calls, along with a vacation, would be nice right about now. And a nice kee-Anne-tee.
Today, I've got a little soul searching and how "once bitten, twice shy" applies to your humble technical journalist (that would be me).
Each Friday, I discuss possible topics with my editors for next week's columns. There are some perennial favorites - banks, gold, Apple - and they do get a bit more coverage than say containers and packaging. But I look at international markets, currencies, bonds, commodities, energy and healthcare as interesting patterns arise.
Recently, they asked if gold looked like a good topic. After all, it was falling like an atomically heavier-than-lead balloon and the world was rife with calls of even further losses. I politely declined because a few weeks earlier I was still a raving bull on the sector. The correction was nearing its end, so I thought, and my previous call for a breakout lasted about two days before the downtrend resumed.
A trader can and should shrug off being wrong but as a journalist I can only take being called an idiot for so long.
And what happens if I decide now that gold is going lower, too? It is always a good idea to change at the right time. Better late than never. Don't go down with the ship. Live to trade another day. Blah, blah, blah.
But what would happen if I throw in the towel, aka - capitulate? If the market keeps going down, well, that would be OK. But what would happen if it doesn't? What if I change my view right at the bottom? The personal downside risk is too huge because unlike a trader where money could care less if you were wrong the last time, readers of financial analysis and news have long memories. Fighting the trend all the way down and changing your mind at exactly the wrong time can not only fire up the flame machine but lose a hefty chunk of readership. It takes a long time to build a following but one (very) bad call to lose it.
So, dear reader, you have a window into the mind of a journalist. There is risk in writing anything and unlike a trader, who can take a day off, journalists have to produce - every day - whether there is something important happening or not.
So, do I think the stock market rally can continue? Absolutely!
Will I recommend backing up the truck? No way. I am not changing my tune now although I have completely backed off fighting it.
And shorting? Been there, tried that.
A portfolio of puts and calls, along with a vacation, would be nice right about now. And a nice kee-Anne-tee.
Wednesday, March 6, 2013
Capitulation?
I won't get into explaining, justifying or denigrating the new high on the Dow. You've seen plenty of pundits do it already so let me talk about what the market "feels" like today.
An analogy:
You are driving on a four-lane highway somewhere in the outer reaches of the local city radio station. There is not much around except for an occasional mulch farm and a billboard saying "turn right in 10 miles for XYZ hotel." Perhaps it is mountainous and your car is struggling on some of the steeper hills but you are chugging along most of the time near 80.
Up ahead is a slower car. You gain on it slowly so it is probably doing about 75 - certainly not that slow but slow enough where you want to pass. It is also fast enough that it takes a lot of time to accomplish. He seems to be speeding up. Your leg is extended, foot forced down on the gas pedal, but you are really only picking up a few yards per minute.
Is this guy racing me? Why?
After what seems like an eternity, you push ahead. Space opens up between you and the other car. And then more space. And more. Soon, the other car is a shrinking dot in your rear view mirror.
What happened? Did the other driver realize he was not going to stave you off and just gave up? Was he toying with you?
That is what it feels like now that the Dow has finally pushed through resistance. It took forever to break out once the Dow got close but the deed is done. The bears seem to have given up. Capitulation.
Isn't it funny that the cop hiding around the next bend to nail you for speeding is called a bear (smokey the bear) in CB radio lingo?
An analogy:
You are driving on a four-lane highway somewhere in the outer reaches of the local city radio station. There is not much around except for an occasional mulch farm and a billboard saying "turn right in 10 miles for XYZ hotel." Perhaps it is mountainous and your car is struggling on some of the steeper hills but you are chugging along most of the time near 80.
Up ahead is a slower car. You gain on it slowly so it is probably doing about 75 - certainly not that slow but slow enough where you want to pass. It is also fast enough that it takes a lot of time to accomplish. He seems to be speeding up. Your leg is extended, foot forced down on the gas pedal, but you are really only picking up a few yards per minute.
Is this guy racing me? Why?
After what seems like an eternity, you push ahead. Space opens up between you and the other car. And then more space. And more. Soon, the other car is a shrinking dot in your rear view mirror.
What happened? Did the other driver realize he was not going to stave you off and just gave up? Was he toying with you?
That is what it feels like now that the Dow has finally pushed through resistance. It took forever to break out once the Dow got close but the deed is done. The bears seem to have given up. Capitulation.
Isn't it funny that the cop hiding around the next bend to nail you for speeding is called a bear (smokey the bear) in CB radio lingo?
Friday, February 22, 2013
Public Servants - not
Rant against what our government has become - local edition.
I pay just about all my bills online and earlier this month attempted to pay my local real estate taxes. I do this four times per year without incident but apparently I missed hitting the final button to actually submit the payment. You know the kind of website that says "hit this button" and you do but then it gives you one more screen and in tiny letters says you have to hit the other button? How many of you fall victim to that?
So after a few days of not seeing the payment in the bank account, I look at the website. It says payment rejected with date, time and amount. They knew I tried.
I call the town and they said a lot of people do that. Red flag! If a lot of people do that shouldn't they change it? After all, it is supposed to cut out calls like the one I made. But no, this is public service and if it ain't broke, sort of, then don't touch it.
I plead my case saying I always do this and while I cannot confirm I made no mistake I show how I have been doing this successfully for years.
"Sorry, you have to pay a late fee. "
"OK, can't you waive it? You have proof I actually tried, in good faith, to pay on time. And if so many people have problems then the website is unclear."
"Sorry, it is a state law that we cannot waive fees."
"Excuse me? A state law dictating to the town what the town has to charge for town taxes?
Yes, it is a law.
OK, can you tell me what that law is so I can see it?
I do not know (she was only a clerk, not a boss or lawyer). I will have someone call you.
Yeah right, I thought. Two days later, I call back.The same person answered and was very nice. She said she checked with the deputy receiver of taxes who said, and I quote, "We do not have to tell you what the law is."
My jaw dropped.
"Are you kidding? Do you know how this sounds?"
True, you do not have to tell me but isn't that sort of what customer service is all about? You do not have to flush to toilet either but it is the right thing to do.
She apologized and I told here I would not bother her any more.
Needless to say, I am now going to contact a few real estate lawyer friends of mine.
1 - why is the state telling the town what to do?
2 - what is the big deal to tell me what the law is or at least how to find out?
I am not going into the "I pay your salary" rant because that is irrelevant. What is relevant is the attitude that government does not have to answer to the people. My cable company pulled a stunt like that on me and I switched to a different provider. Not so many options in a government monopoly.
I pay just about all my bills online and earlier this month attempted to pay my local real estate taxes. I do this four times per year without incident but apparently I missed hitting the final button to actually submit the payment. You know the kind of website that says "hit this button" and you do but then it gives you one more screen and in tiny letters says you have to hit the other button? How many of you fall victim to that?
So after a few days of not seeing the payment in the bank account, I look at the website. It says payment rejected with date, time and amount. They knew I tried.
I call the town and they said a lot of people do that. Red flag! If a lot of people do that shouldn't they change it? After all, it is supposed to cut out calls like the one I made. But no, this is public service and if it ain't broke, sort of, then don't touch it.
I plead my case saying I always do this and while I cannot confirm I made no mistake I show how I have been doing this successfully for years.
"Sorry, you have to pay a late fee. "
"OK, can't you waive it? You have proof I actually tried, in good faith, to pay on time. And if so many people have problems then the website is unclear."
"Sorry, it is a state law that we cannot waive fees."
"Excuse me? A state law dictating to the town what the town has to charge for town taxes?
Yes, it is a law.
OK, can you tell me what that law is so I can see it?
I do not know (she was only a clerk, not a boss or lawyer). I will have someone call you.
Yeah right, I thought. Two days later, I call back.The same person answered and was very nice. She said she checked with the deputy receiver of taxes who said, and I quote, "We do not have to tell you what the law is."
My jaw dropped.
"Are you kidding? Do you know how this sounds?"
True, you do not have to tell me but isn't that sort of what customer service is all about? You do not have to flush to toilet either but it is the right thing to do.
She apologized and I told here I would not bother her any more.
Needless to say, I am now going to contact a few real estate lawyer friends of mine.
1 - why is the state telling the town what to do?
2 - what is the big deal to tell me what the law is or at least how to find out?
I am not going into the "I pay your salary" rant because that is irrelevant. What is relevant is the attitude that government does not have to answer to the people. My cable company pulled a stunt like that on me and I switched to a different provider. Not so many options in a government monopoly.
Wednesday, February 20, 2013
Naz vs financial bubble
Many analysts like analogs and I admit I like them too. In writing a recent Barron's Online column on financials, I looked at how that bubble compared to the one before it and saw something interesting. Unfortunately, it was left on the cutting room floor. Here is what I wrote fleshed out a bit more.
Before looking at the chart, I have to tell you that the time frames do not line up. In other words, the tech./Nasdaq collapse in 2000 took about 2 1/2 years and the financial collapse in 2007 took only 1 1/2, both rounded a lot. Therefore, in order to get the ebb and flow to match, the data for one of them is stretched to fit the other.
The point is not to say they are following the exact timing but rather they are following the same structure. Is this how bubbles work? I don't know and honestly I am too busy trying to earn a living (journalism deadlines) than pursue this all the way.
But it is interesting.
So what is in the chart? Basically, the financial bubble recovery, based on what the Nasdaq did, "should" have already peaked. I'll blame the government for prolonging this thing with QE/TARP and all the other money they threw at the problem instead of letting the free market clean its own house.
Think about the broad market back at new highs. What 2007-2009 bear market? But not so for the financials with only a Fibonacci 38.2% (closer to 30%) retracement.
After the 2000-2002 bear, the Nasdaq in 2007 only retraced a 38.2% (actually closer to 45% but it ruins the flow). Where was the broad market? At or near new highs and saying "what bear market?"
The bubble markets retraced less than half while the rest got it all back.
Under this scenario - without any true statistical backing - it is time for the financials and the market as a whole to top out again.
Wouldn't it be cool to see the current bubble - bonds - follow the same script? If they do, then there is a lot of pain ahead for the next two years.
Before looking at the chart, I have to tell you that the time frames do not line up. In other words, the tech./Nasdaq collapse in 2000 took about 2 1/2 years and the financial collapse in 2007 took only 1 1/2, both rounded a lot. Therefore, in order to get the ebb and flow to match, the data for one of them is stretched to fit the other.
The point is not to say they are following the exact timing but rather they are following the same structure. Is this how bubbles work? I don't know and honestly I am too busy trying to earn a living (journalism deadlines) than pursue this all the way.
But it is interesting.
So what is in the chart? Basically, the financial bubble recovery, based on what the Nasdaq did, "should" have already peaked. I'll blame the government for prolonging this thing with QE/TARP and all the other money they threw at the problem instead of letting the free market clean its own house.
Think about the broad market back at new highs. What 2007-2009 bear market? But not so for the financials with only a Fibonacci 38.2% (closer to 30%) retracement.
After the 2000-2002 bear, the Nasdaq in 2007 only retraced a 38.2% (actually closer to 45% but it ruins the flow). Where was the broad market? At or near new highs and saying "what bear market?"
The bubble markets retraced less than half while the rest got it all back.
Under this scenario - without any true statistical backing - it is time for the financials and the market as a whole to top out again.
Wouldn't it be cool to see the current bubble - bonds - follow the same script? If they do, then there is a lot of pain ahead for the next two years.
Tuesday, February 19, 2013
Red Robin - Yummm. Wait!
Here is one of today's big movers. Captions say it all.
Earnings, not takeover. Or was it? (cue detective music).
Earnings, not takeover. Or was it? (cue detective music).
Thursday, February 14, 2013
Stuff that that pickles my gherkin
I have decided that I have been in this business long enough to write stuff here only when I have something to say (vs every day to try to coax you all to love me and buy my newsletter). And as an old timer (not really) what I usually write will be something that ticks me off.
Today, in a well read financial media site, I read something that makes technical analysts look not just bad but plain stupid. We have a hard time plying our trade with the masses let alone trying to prove a point with charts to people who actually know what they are talking about.
To wit:
The author is disingenuous because he used a log scale to accentuate what he calls a quadruple top. And I see a hell of a lot more "tops" than just four. What happens when the data breaks out? Don't forget, this data cannot get larger than 100%. Putting patterns on this sort of data is pure crap.
If you are going to use charts, use them correctly. If not, please use a disclaimer saying you are making it all up.
Calling multiple tops before they are actually developed is one of my pet peeves. So is somebody writing a caption on a photo saying, "Here is Joey and I at the circus." It's "Joey and me." Or, writing, "your right about that." It's "you're right."
How about football coach Jimmy Johnson asking in his charting commercial about the 50 moving day average? eyeroll.
Stop trying to look smart with skills you are lacking.
OK, I feel better now. Time for a cocktail.
Today, in a well read financial media site, I read something that makes technical analysts look not just bad but plain stupid. We have a hard time plying our trade with the masses let alone trying to prove a point with charts to people who actually know what they are talking about.
To wit:
Starting with technical indicators, a chart of the S&P 500 dating back to 1998 demonstrates how the index has established a triple-top over the period from 1998 through the present.
No my friend, the market has established a resistance area.
A triple top is not a triple top until the bottom of the pattern is broken to the downside. Otherwise, it is just a trading range. And in this case, how do we know the market is not going to break out to the upside making it a failed potential double top?
Next:
A second chart that gets little attention is the chart depicting the percentage of S&P 100 stocks above their 200-day moving average. This chart presents a fascinating study of buying habits in the S&P 500, and it's easy to see that we're now also at a quadruple-top level in this data series.This chart gets little attention because more people look at the percent S&P 500 stocks and almost everyone else looks at the NYSE. But I digress.
The author is disingenuous because he used a log scale to accentuate what he calls a quadruple top. And I see a hell of a lot more "tops" than just four. What happens when the data breaks out? Don't forget, this data cannot get larger than 100%. Putting patterns on this sort of data is pure crap.
If you are going to use charts, use them correctly. If not, please use a disclaimer saying you are making it all up.
Calling multiple tops before they are actually developed is one of my pet peeves. So is somebody writing a caption on a photo saying, "Here is Joey and I at the circus." It's "Joey and me." Or, writing, "your right about that." It's "you're right."
How about football coach Jimmy Johnson asking in his charting commercial about the 50 moving day average? eyeroll.
Stop trying to look smart with skills you are lacking.
OK, I feel better now. Time for a cocktail.
Tuesday, February 5, 2013
Tech was not the driver
Who read the market headlines after the close today? "The market bounced back led by tech." Yahoo! I mean GoogleBing! As long as I am digressing, does anyone remember HotBot, Excite and Lycos? They still exist. So does Altavista but it is now only a facade for Yahoo.
Anyway, the market was led by tech, they say. How does this little list of ETFs look to you?
The tech ETF was number five on this list, barely beating the SPY itself. Retail was the leader followed by biotech and consumer staples. Housing was just a tad better than tech.
Listen up people, do your own fact checking. You are not going to get that from the media. Believe me, I know as I am on so many deadlines each week that it is very tempting to break out the Hershey's (OK, bad example. There really is no household name brand for fudge).
Anyway, the market was led by tech, they say. How does this little list of ETFs look to you?
The tech ETF was number five on this list, barely beating the SPY itself. Retail was the leader followed by biotech and consumer staples. Housing was just a tad better than tech.
Listen up people, do your own fact checking. You are not going to get that from the media. Believe me, I know as I am on so many deadlines each week that it is very tempting to break out the Hershey's (OK, bad example. There really is no household name brand for fudge).
- Trust but verify
- All the news that fits, we print
- More people get their news from the Daily Show.....than probably should
Monday, February 4, 2013
Right on Schedule
In case you've been wondering where I have been or even if I am still on the planet, you can stop. I just had nothing to say.
So here is today's thought - retail is coming back into the market just in time for the top. No, I am not going to call a top here although it is tempting. There is no limit to how far a market can go against what it "should" be doing.
Just a spoonful of QE makes the economy look bright,
the economy look bright,
the economy look briiiiiight
- (Julie Andrews still looks and sounds good at age 77).
But here is some of the stuff happening right now:
So here is today's thought - retail is coming back into the market just in time for the top. No, I am not going to call a top here although it is tempting. There is no limit to how far a market can go against what it "should" be doing.
Just a spoonful of QE makes the economy look bright,
the economy look bright,
the economy look briiiiiight
- (Julie Andrews still looks and sounds good at age 77).
But here is some of the stuff happening right now:
- Money is pouring into money markets thanks to this year's higher taxes pushing all sorts of payments and dividends into last year. Sorry, Al Gore, you were too slow with Al J.
- Money is pouring into junk bonds
- The VIX is stupid low
- Sentiment surveys are at bullish extremes
- Financial news shows are focusing on the little guy getting back into the market
Wednesday, January 23, 2013
Pre-Apple Blahs
I am writing this with less than a half hour to go before Apple reports its earnings although by the time it is published the news will be out.
Wouldn't it be nice if your company got such attention? The world has been on hold for days leading into the cult's revelations. Did they manage expectations? We'll see but don't you feel like you need a shower after earnings season? You've been managed, manipulated, distracted and, if you guess wrong, embarrassed.
When did earnings become so, so important on each report? Wasn't the long-term trend in earnings the secret to making money and not buying the rumor and selling the fact on a day-to-day basis. I sound like an old codger but today's markets move too fast for their own good. Remember when 10% was a good year? Now it is a few days. Come on, Netflix jumps 25% on one single earnings report? They did not exactly cure cancer (OK, I cheated and I am writing some of this after the bell).
I've been away from blogging for a while for two reasons:
1 - I was away on a cruise with my son for his 21st birthday. Rock Legends. Poolside concerts at sea by the original artists or derivatives of the orignals - Foreigner, Kansas, Bad Company, Bachman Turner, Foghat, Lynyrd Skynrd, Molly Hatchett, Marshall Tucker, Pat Travers - boom boom, out go the lights! You did not expect a blog during that, did you?
2 - There is nothing to say. Between the crap in Washington, the self-anointed gods at the Fed and a stock market in total disconnect from the economy, what can anyone do? Is it me - burned out? Or have cherished concepts such as sector rotation and momentum been trumped by the 24/7 news cycle? Maybe I should get Honey Boo Boo on board. At least she knows how to make money.
It has not just been the past few days, either, despite the Apple countdown. Have you seen NYSE volume? it is low, low, low and don't try to blame it on ETFs. Retail is not engaged at all and that leaves machines to trade with machines at lightning speed but based on math, not supply and demand.
Yes, I know, I am whining once again but I do not have the luxury of doing nothing. My clients pay for daily or weekly reports and that is what I must deliver. Let me tell you, the one day off I took for the cruise (the second in 12 years) and the four days of absolutely zero internet connectivity was bliss. And when I got back to civilization (or was I leaving civilization to return to the modern world?) absolutely everything was just as I left it. Everything. The Dow. Bonds. Dollar, PIIGS, Gold and the rest of the CRB index. There were not even any fires to put out in my own business.
Is it any wonder I say on a desert island I'd be the first one eaten because I have no useful skills such as medicine, construction, hunting or entertainment.
I have many friends in the analysis business and most of them feel the same way. The advent of free information, regardless of its quality, changed the game and there are far too many qualified people giving it away for free just to market themselves to eventually get paid.
This would indeed be a good time for that sabbatical. Too bad my mortgage holder would object.
Wouldn't it be nice if your company got such attention? The world has been on hold for days leading into the cult's revelations. Did they manage expectations? We'll see but don't you feel like you need a shower after earnings season? You've been managed, manipulated, distracted and, if you guess wrong, embarrassed.
When did earnings become so, so important on each report? Wasn't the long-term trend in earnings the secret to making money and not buying the rumor and selling the fact on a day-to-day basis. I sound like an old codger but today's markets move too fast for their own good. Remember when 10% was a good year? Now it is a few days. Come on, Netflix jumps 25% on one single earnings report? They did not exactly cure cancer (OK, I cheated and I am writing some of this after the bell).
I've been away from blogging for a while for two reasons:
1 - I was away on a cruise with my son for his 21st birthday. Rock Legends. Poolside concerts at sea by the original artists or derivatives of the orignals - Foreigner, Kansas, Bad Company, Bachman Turner, Foghat, Lynyrd Skynrd, Molly Hatchett, Marshall Tucker, Pat Travers - boom boom, out go the lights! You did not expect a blog during that, did you?
2 - There is nothing to say. Between the crap in Washington, the self-anointed gods at the Fed and a stock market in total disconnect from the economy, what can anyone do? Is it me - burned out? Or have cherished concepts such as sector rotation and momentum been trumped by the 24/7 news cycle? Maybe I should get Honey Boo Boo on board. At least she knows how to make money.
It has not just been the past few days, either, despite the Apple countdown. Have you seen NYSE volume? it is low, low, low and don't try to blame it on ETFs. Retail is not engaged at all and that leaves machines to trade with machines at lightning speed but based on math, not supply and demand.
Yes, I know, I am whining once again but I do not have the luxury of doing nothing. My clients pay for daily or weekly reports and that is what I must deliver. Let me tell you, the one day off I took for the cruise (the second in 12 years) and the four days of absolutely zero internet connectivity was bliss. And when I got back to civilization (or was I leaving civilization to return to the modern world?) absolutely everything was just as I left it. Everything. The Dow. Bonds. Dollar, PIIGS, Gold and the rest of the CRB index. There were not even any fires to put out in my own business.
Is it any wonder I say on a desert island I'd be the first one eaten because I have no useful skills such as medicine, construction, hunting or entertainment.
I have many friends in the analysis business and most of them feel the same way. The advent of free information, regardless of its quality, changed the game and there are far too many qualified people giving it away for free just to market themselves to eventually get paid.
This would indeed be a good time for that sabbatical. Too bad my mortgage holder would object.
Wednesday, January 2, 2013
Congress Saved Us!
Of course the title of this blog post is sarcastic. You all know me better than that.And if you are sick of reading about the fiscal cliff, just skip to the bottom two paragraphs.
I don't know who to credit but somebody said that the opposite of PROgress is CONgress. How can so many individually accomplished people become such a collective failure? Forget that it took months to even try to make a deal on the fiscal cliff but the deal they worked out did very little. And as usual the unintended consequences of trying to protect the middle class from tax increases did exactly the opposite. Taxes on everyone who actually pays taxes went up.
No, tax rates were "reduced" back to the previous Bush rates that expired. Now everyone is a tax cutter. Vote for me! I cut your taxes!
But look at your next paycheck and tell me what you see. Payroll taxes are back. And look at your brokerage statements. Investment taxes are up for many (not all). And don't forget not to die because that rate went up too.
This takes hypocrisy a whole new level.
Lewis Black once said,
We are in deep doo-doo and congress does not have the incentive to fix it. Patch it, yes (vote for me!) but fixing it means saying "no" to people. We need the fiscal cliff. We need China to stop buying our bonds. We need an oil shock. We need a food crisis. We need the economy to tank.
Yes, we need any or all of those things. Yes, they will be painful. But the only way an economy can heal itself is to go through the steps and the longer we put it off the worse it will be. Government cannot heal an economy. Government only gets in the way like bad medicine with killer side effects. The road to hell is indeed paved with good intentions.
I don't know who to credit but somebody said that the opposite of PROgress is CONgress. How can so many individually accomplished people become such a collective failure? Forget that it took months to even try to make a deal on the fiscal cliff but the deal they worked out did very little. And as usual the unintended consequences of trying to protect the middle class from tax increases did exactly the opposite. Taxes on everyone who actually pays taxes went up.
No, tax rates were "reduced" back to the previous Bush rates that expired. Now everyone is a tax cutter. Vote for me! I cut your taxes!
But look at your next paycheck and tell me what you see. Payroll taxes are back. And look at your brokerage statements. Investment taxes are up for many (not all). And don't forget not to die because that rate went up too.
This takes hypocrisy a whole new level.
Lewis Black once said,
"The only thing dumber than a Democrat or a Republican is when those pricks work together. You see, in our two-party system, the Democrats are the party of no ideas and the Republicans are the party of bad ideas."I disagree. It is Democrats with bad ideas and Republicans with no ideas.
We are in deep doo-doo and congress does not have the incentive to fix it. Patch it, yes (vote for me!) but fixing it means saying "no" to people. We need the fiscal cliff. We need China to stop buying our bonds. We need an oil shock. We need a food crisis. We need the economy to tank.
Yes, we need any or all of those things. Yes, they will be painful. But the only way an economy can heal itself is to go through the steps and the longer we put it off the worse it will be. Government cannot heal an economy. Government only gets in the way like bad medicine with killer side effects. The road to hell is indeed paved with good intentions.
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