Lagging Tax Refunds Are Not News

Zero Hedge has posted a dumb piece on how tax refunds are running behind last year’s pace.

As a matter of fact, refunds have “plunged” because the IRS had to re-write a bunch of code to handle the changes that Congress and the President squabbled over until the last minute.

Here is what IRS Commissioner Doug Shulman said on February 15th:

“We worked hard to update our systems and get the changes in place as quickly as possible. We appreciate the patience of those impacted by the delay. We urge taxpayers to use e-file with direct deposit, and they can get their refunds within days.”

Note to Zero Hedge: the Sheriff of Withholding Town is still walking the beat.

Stocks Yawn at Middle East

The market didn’t react to events in the Middle East until things turned ugly in Egypt on January 28th. The day before, the S&P 500 had closed at 1299.54. Today, the SPX closed at 1307.40, eight points higher. Weird, right? (click chart to enlarge):

The market bounced right back after the Egypt Plunge (black arrows on chart), and rallied up so far that the Libya Plunge hasn’t caused any serious technical damage as of yet. In fact, the SPX bounced smartly off of the pre-Egypt level (blue line) when it dropped within a penny of it today (purple arrows).

Maybe it isn’t done speaking on the subject, but so far the market is saying that it doesn’t care much about Tunisia, Egypt, Yemen, Bahrain, Libya, etc. It cared way more about less-insignificant Greece last year. Things are relatively quit in Saudi Arabia, though I’m sure the market would care a lot more if that changed.

Fractal Stock Grapher – Beta 2 Release

Fractal Stock Grapher is my desktop app that plots the Fractal Dimension Index on stock charts for those of you using platforms that don’t have the FDI indicator. You can download it on the Fractal Stock Grapher home page.

This version will fetch the data from Yahoo Finance for you. Just punch in a symbol and click the Graph button. Much easier.

If you have the first version installed, you can just download the installer and run it.

Note: now is a very good time to look at the FDI on the weekly charts of the SPX, NDX, DJIA, and Russel 2000.

George’s 9-36-15 Strategy

I did some back-testing with George’s 9-36-15 strategy using SPY and SH, and it is definitely a technique you want use. Believe it or not, bears could have shorted this historic rally by trading SH (the inverse S&P 500 ETF) and lived to tell about it.

Since the rally began in September, if you had gone long SH on every 9-36-15 cross-up, and gotten out before the bell, you would have only lost 2%. That’s pretty miraculous, and way better than having your face completely ripped off. Of course, trading SPY would have made profits instead, showing that it’s always a good idea to trade in the direction of the primary trend no matter how good your techniques are.

I used a longer 1,000 day period for the results that you can see on the 9-36-15 Cross page.

The rules that I used were suitable for a computerized strategy. For example, after a cross, it just goes long. In reality, you could probably get better entry points by waiting for a dip on the 1-minute chart, or using additional signals from the stochastic, MACD, etc.

Is Oil the Next Natural Gas?

With such a cold winter, you might think that oil supplies would be dipping, but that is not the case. As a matter of fact, supplies at Cushing, Oklahoma, the official delivery point for NYMEX futures contracts, recently hit an all-time high.

How is that possible? Two things: the Canadians are ramping up their tar-sands production (see the chart here), and “fracking” is starting to do for oil what it did for natural gas. Here is a quote from this Fox News story:

“In the Bakken formation, production is rising so fast there is no space in pipelines to bring the oil to market. Instead, it is being transported to refineries by rail and truck. Drilling companies have had to erect camps to house workers.”

Can you imagine that? Production is on such a rampage that it is overwhelming our infrastructure. We need to build more pipelines to handle it all.

At first, the experts didn’t think that fracking would work on the larger, stickier oil molecule. But they were wrong. Here’s Aubrey McClendon, CEO of Chesapeake Energy:

“We’ve completely transformed the natural gas industry, and I wouldn’t be surprised if we transform the oil business in the next few years too.”

A Credit Suisse analyst thinks that the USA might be able to cut imports by 60 percent in the next nine years.

Is that why President Obama thinks that he has the luxury of encouraging revolution in the Middle East?

And why is gasoline still so expensive?

Oil is the only commodity that comes in scores of different grades, and refineries are finicky about what they will allow into their enormously complex systems. Will we need to build more refineries capable of handling the Canadian sludge as opposed to our traditional “light, sweet” crude? I won’t pretend to be able to predict the price of gasoline. We might have to go through several years of an extensive infrastructure overhaul, but it should lower prices eventually, no?

With all the talk of Ben Bernanke inflating commodities, it’s good to consider the supply effects on prices also. And oil futures (symbol: CL) are down a couple of bucks so far this year, having yawned at the turmoil (ha, ha) in the Middle East. If oil goes into a UNG-like downtrend after things calm down, that could be an un-expected boost to corporate profit margins.

Is Free Trade a National Security Threat?

We are about to find out – officially.

China’s embargo of rare-earth minerals last year looks to have been a major wake-up call for the USA. After all, it just won’t do to have our high-tech weaponry depend upon the kindness of strangers – Chinese strangers.

Or our low-tech weaponry. It seems that we are down to one plant in Pennsylvania that can make military-grade steel – and it is owned by a foreign company (ArcelorMittal). That was a bottleneck during the 2007 “surge” in Iraq.

The Director for National Intelligence has begun work on a “National Intelligence Estimate” to determine whether or not exporting our manufacturing base is bad for national defense. And that’s a big deal. Richard McCormack broke the story here.

This could eventually lead to trade barriers aimed at keeping out state-subsidized products from China, such as steel. So, domestic industrial companies could be expected to benefit, but high-tech companies too. McCormack recently published a story about Chinese networking companies, and wrote: “…many global telecom high rollers argue, in effect, that resistance is futile.”

Amazon is Respected, but not in Texas

In 2010, Amazon rocketed up the ranks of most-respected companies to the #2 position – in the opinion of money managers.

But the State of Texas has a quibble – a quarter-of-billion dollar quibble. They think that Amazon should have been collecting sales tax in Texas, and have sent Amazon a $269 million bill.

Amazon’s response? They are bugging out of the state.

In other news, Texas, which has a large budget deficit, has already closed four community colleges. And Borders is going belly-up.

In our Apocalyptic future, Gypsy booksellers like Amazon will travel from state-to-state, staying one step ahead of the revenuers, while searching for customers who are able to read.

Steven Segal – Trainer of Champions

Last week, Anderson Silva knocked out Vitor Belfort with a front-kick:

Turns out, the kick was a super-secret technique known only to actor, Steven Segal who taught it to Silva. Or so says Segal. Thirty-five years ago, my karate instructor called it a “snap kick” but what did he know, right? In any case, if there were an Academy Award for “Being Full of Yourself” Segal would win it in a landslide for this performance: