Chinese “Growth”
Here are some interesting quotes from this paper from the American Enterprise Institute:
“As of June, China’s exports were declining rapidly, at a year-over-year rate of 21.2 percent.”
“…state-owned enterprises and other recipients of stimulus funds have purchased stocks themselves rather than leaving funds idle until they can be disbursed for actual projects and have already been counted in GDP data as having been undertaken.”
“Many of the households that purchased washing machines, or were virtually given such machines, have found them unusable because their homes lack either the running water or electricity (or both) necessary to make use of a modern appliance.”
Matt, the do-gooders always miss that little detail when they start their projects in the 3rd world. Water and electricity. This time, the Keynesians missed it.
But hey, GDP will go up. We should all celebrate.
Marty, I am short since 3 days ago and I am very biased with my positions. I usually sit for months when I take a position. It is a 2 x Short ETF.
I think the monetary stimulus game across the world will soon lose its effectiveness in blowing up assets bubbles. I don’t think they are able to throw EVER more stimuli at this skeleton. And if they cannot throw EVER more stimuli at the skeleton, the skeleton will fall out of the closet.
ES pivots..
1021.75, 1014.75, 1003.75
P 996.75
985.75, 978.75, 967.75
currently below the pivot at 993.25 so if recent history has taught me anything is we might see a swing to 980′s or lower. have a great night
I awoke from my sleep and finally got SD email alerts working. let’s see if i get the cutting edge now
paula,
Seems to me like that is a conflict of interest with those news shows pumping and dumping the market onto the public. That’s a good way to influence the market, which we know it does.
Larry,
I saw Mars next to the full moon. The next astrocycle is upon us.
QID broke out of its 9/36/15 on Wednesday. SRS, SDS and SKF broke out Thursday. All of these are ready for a relief-rally if for nothing else. They make good risk/reward candidates when breakouts finally do occur.
I’ve been over-trading lately (trading too many stocks simultaneously) and in order to manage that without constant intervention is to use stops. Normally, managing a trade requires a combo of MA crossover plus a negative MACD to exit. It is difficult, if not impossible, to know where a manual stop would be placed to meet both those conditions. Instead, I rely upon the next best place, the stochastic.
I put stops at the stochastic low at the time of entry. This is the most logical place when using stochastic and MACD entries. I don’t give it much slack because the theory is that price should cycle up from there to at least a stochastic sell if not higher into a MA or MACD sell signal.
Selling takes time. With my broker’s trading platform, it will only handle one order at a time. No “brackets” and all of that fancy stuff. So a stop would need to be canceled before a limit sell is placed. That means shuffling through a lot of screens to perform one simple task. I get around that problem by having several login sessions to my broker and have each screen setting at its respective task all pre’ped and ready to go. That eliminates shuffling throught several screens to perform the string of tasks.
That’s another reason I have so many monitors.
Got short at the end of the day. PUTS on SMH and SPY.
That Mars stuff is on the internet all the time. It actually happened in August of 2001.
Currrently Mars is not that impressive and is not near the moon. Mars is red, you are seeing Jupiter next to the moon. Check it out with simple binoculars and you can see up to four moons all in a line around Jupiter, a nice sight.
GLTA
Thanks Hank. So it was Jupiter. I read in the paper that Jupiter and the Sun are in exact opposition next Friday. Whatever that means.
Shanghai with another down day. Closed -2.85%
Well that explains what the guy I heard on the radio meant when he said that he didn’t trust the statistics coming out of China.
marty, almost covered my $9 fxp short puts. (aka betting FXP would go up). glad I didn’t
oh BTW for you usd/cad guys and gals…
I had that chart yesterday. well it’s been holding up and it broke over R1 so far today. good news for bears if it keeps it up
oh and did I mention VIX will hit 26.50+ today?
Hank
Thanks for the Mars update. Jupiter was still pretty neat to look at last night though. Guess you can’t trust everything you read.
String
rofl – had to sell my gambling chips after *that* candle
Baltic Dry -4.6%. It’s down 17.3% for the week.
TNX booming… up +1.06. Now at 3.852. What was that about rising interest rates? Should be an up day today if that continues.
Everything points to Mars…
WOW!!!!
Mars is getting farer away I have learnt – is Venus approaching for a change?
the rally is fake. Courtesy of SuperK.
i bought JNK and sold REW just followin my system..
Larry, K,
If the SPX manages to trade over 1007, I would not be short, imho. Next stop 1044, at least that’s what I’ve read. This rally has been fake from 830 on. That doesn’t mean it won’t gore the bears. Larry, I built my QID position up over a month before the last leg up thinking there was a good dip coming. The only dip was in my bank account.
In other words, my call about the market moving down yesterday has been wrong so far. 1007 is a brick wall, so if they fail there, then there’s a chance for a move down. But if they bust through and close through, I’m closing my TLT position.
dollar is up, by the way, so there goes my whole thesis… Mitch, kudos to you!
On days like this, I worry that everything is a headfake…
k, I’m still holding a small (very small) FXP position, I’m waiting for confirmation candles before I add…
I just shorted AIG via a aug 20 put lol
I hear you Marty. I am sitting.
Nice call by Cohen from GS yesterday. She will be wrong next week.
btw am reading the classic Reminiscences of a Stock Operator
i like it
K,
I bought AFF on Wednesday after the AIG move. It’s the AIG preferred senior debt–senior to the govt’s position–. I played this back in April. Up nicely since then, and it broke a major resistance level. The follow through on AIG from the move two days ago reads as very bullish, imho.
Key is reading $6.66;)
damn it AIG. i’m never ever going against my signals
usd/cad can’t break R1 because if it does…. LOL god help you
K, you’re the first one to go broke with a perfect system
marty, ~1014 – reread Matt’s box article. Some serious resistance sitting around these levels.
better download before it is gone – GS on the market (from ZH):
http://tulpenwoede.tornflag.com/statemar.pdf
Yerk.
I bought JNK and sold REW. and have few other stocks on my strategy following account.
the hardhead account is bleeding hard
Yerk,
Thanks for the box number. Will keep it in mind.
And thanks Matt. The boxes are classic.
K – that’s good to hear!
This should reverse today, shouldn’t it? Looks toppy to me, and blowing off it does quite a bit. George makes the market, so he will know.
Thanks for the link Yerk.
Nice move in EUR/USD
Base metals, warehouse levels in London. Last 30 days.
http://www.kitcometals.com/charts/lmewarehouse.html
Yerk,
I don’t see anything as of yet to support a turnaround. Something would have to develop rather quickly in the form of a crash. Once the monthly turns, it is hard to turn it around.
However, SPY is getting close to the daily 38% Fib retracement by my calculations. That has to count for something.
…meanwhile, what’s not to like? BBT up over a buck, SSO up almost a dollah, ICE almost two dollah, UYG up .38c – this is mainstreet candy.
George, no crash. Just the 38Fib and this is the first try. I was thinking about today, not the longer time frame. The move up is getting slower… The daily es was first bumping along the upper bb, now it is holding above the 9ma which is getting flatter.
With this strength, SPY could go up to 50%. Everyone expecting a reversal at 38%… no accommodations in this market. Shorts will be eyeballing that area and buy-to-cover at the slighest green sprout.
S&P flirting with Political Calculations’ August target of 1020:
http://politicalcalculations.blogspot.com/2009/08/august-and-us-stock-market.html
I drew SPY 15min channel upward trending. It just touched the top of that channel and currently pulled back. I’ll respect a break either way.
I’m getting to like channels. I can see where a play can be made with a known logical area for a stop. I’ve yet to figure out how to detect the beginning of a channel when it is first born.
Like everything else, they are not perfect.
Just bought the gabelli global deal fund as a 3Q M&A play. We’ll see how this one works out. Nice divvy while I wait…
well JNK doing me ok I wish I had 500 shares instead of 15 but system testing is all am doing
Yerk,
That report from Goldman is awesome. It’s worth serious study…. My Gabelli Deal Fund buy is due to seeing them confirm my and mitch’s discussion on M&A/bankrupties in the 3Q as a market neutral strategy….
Thanks!
George,
Just checked…and the bus is full…no more
seats. This is a typical big traders day…a
lot of hype about a jobs number…get
everyone to think short. Every big trader
we know was 200% long prior to the jobs
number release.
Have a great weekend
Yerk,
Odds are against a reverse today. Big traders
are going to take every penny the shorts have.
Enjoy.
paula,
Thanks, I was wondering if we were at full capacity yet.
paula, thanks… even I was long… and the reversal IS elusive. Trend is up – in ancient times there were retracements within trends.
Have to dig more into the gs stuff I posted. So far I have not found where exactly it’s saying buy stocks … Does Abbey read their own research?
SPY 15min went a bit above the channel trendline and has now turned down below it.
Paula/George,
What bus are you guys talking about, if I might be nosy?
Marty,
The 10 day moving average $TRIN bus. All
seats are taken when the $TRIN 10 DMA
is 0.8 or less.
resiliant bear is at it again but my urg 95 cents are up nicely today.
I guess that Fib was hit… I lost my settings. Either way, they’s some hot stuff moving now.
paula has this thing down to a science…, what I’m talking about.
I mean, can you imagine the number of gaps the inverse has to fill? Mercy! When this reversal does catch hold, ring the register.
Hi all,
been away for a while. Dealing with some whiplash from the car accident and my newborn son 2 days after the accident.
Just wanted to say that hi to everyone. BTW.. perhaps I hit my head during the accident, but I did go short the SPY bvia sept 100 puts when SPX was at 1014.
If the .38 fib retrace breaks and this market goes higher, it is going to first offer up some resistance first.
Congratulations on your son Charlie! I have a couple of crumb snatchers – one hit the potty for the first time today. The other one is ready for some mini half-pike action with a new skateboard. Like So:
http://www.youtube.com/user/nikeskateboarding
Charlie,
Gracious… hope you and your family are okay now. Whiplash is serious as to what it does to the spine.
Take care.
That all for the wishes.. It is certainly an exciting and trying time. I’m still not sure if I am dazed from the whiplash or if it is from the sudden birth of my son to be honest. The labor and delivery came so fast that we certainly were not prepared. My wife said she felt funny and 2 hrs later, he was born!
hope everyone heals their health wounds and in some cases market wounds over the weekend !
i had no nerve to add anything to my positions today.
just keyed in a quote for SRS, wow, in the low 11′s…where does that bottom ?
after,
SRS looks to be forming a “V” shape move – that last-gasp down before bouncing back up. This is going to be one of the nice ones to buy when it turns back up – and it will.
or George,
another way is to short URE, the opposite of SRS. That is assuming you can borrow shares. The reason I would short the inverse is because of the degradation of ETFs over time.. It just adds a little bit more risk mitigation in case you time it wrong and end up having to hold the shares a bit longer for a profitable trade.
Charlie
New birth is great, congrats!!! I am just real glad you get to raise him. After four of them, I feel like I did my part. Boys are easier, I saved my girl till last. She was a treat as a child, and a bear as a teenager.
String
Charlie,
Congratulations on the new baby, and I hope you recover from your whiplash quickly.
Matt
Matt
A lettter went out today to Smith Barney MS,LM,Merrill etc.telling them to close out all leveraged ETF’s and to not take and more orders for them.They said they were not suited for investors only day traders.That means if they sell them they would be open to law suits.I look for SRS,SKF,FAZ and the like to go away soon.
Steve
That is strange Steve. Last year I just sat in an 2 x ETF in Europe from Feb/April to December (with the occassional trigger-happy panic in/out that had no serious effect).
Overall I made some really serious money, except in April/May and at the end (December).
Are they implying that buy and hold financial shares (and other shares) were better suited for investors? Last time I checked they all went BK or were bailed out by the taxpayers in both Europe and the U.S.
Then again I am a fool and I am going sell and hold again.
http://www.tradersnarrative.com/why-do-traders-fail-2825.html
we just set up for at least a 30-40 point move coming up. which way? hmm interesting question
today is like june 11th go check back. preferably 4hr candles
I can understand why leveraged ETFs would be difficult to manage. Trade, yes, but to include them into a portfolio with their skewedness (is that a word?) could be hazardous without constant care.
Those institutions may get rid of them. I think they will be around a while longer. I can’t imagine what would be involved to close them out. Nightmare on Wall Street.
K,
Is that June of this year? Looks like the direction will be down to me. Hey, thanks for the 240 time frame tip. I’ve been using it to show general direction along with a MACD of 90,40,16.
That MACD setting creates inverted trendlines of the MACD. It isn’t fast, i.e., it doesn’t get the exact turns, but keeps me honest. Check it out to see if it is of use. Tweak it and let me know if you come up with something more efficient.
Two more banks, these in Florida, were closed Friday, bringing the total to 71 in 2009. (Source: MarketWatch News).
Hmmm, with no comparison to how this stacks up with “normal” economic times doesn’t really have an impact. For example, many fast food chains are closing and opening locations continually. Also, one bank had deposits of $387 million while the other had $93 million. Chump change for the Fed.
I’m on a roll.
In the past 19 days, SPY has only touched the 9MA one time. All others are well away from that MA.
This move up has been good for those who have lost so much during those 18 or so months. I’m personally happy to see them regain some of those losses. This situation is not merely consumer-driven: much of the blame has to be put on the Fed policies and tinkering.
The sad part of this story is the unknown by mainstreet as to what remains that could be destructive. Without this, it is impossible to make financial investment decisions to protect wealth.
The happy part of this story is that WE the people will prevail, albeit through additional hardship and sacrifice.
George, the ETF’s also serve well as a hedge for people in long positions. It’s not only for day traders. And everyone and their dog now knows the volatility of these ETF’s. I don’t see how they can decide that these instruments are not for investors.
While Banks with an average equity of 4% is for investors. Clearly 2008 showed that they are not.
Forget my blabber on the ETF’s.
If anyone is in a feel-good mood, here is Mr Celente to take you down.
http://www.lewrockwell.com/orig10/marshall1.1.1.html
Larry,
Good link. I like his term “bailout bubble”. Those that can see the forest beyond the trees in this mess (I certainly can’t) are, hopefully, bringing their views and ideas to those that matter who can effect change, like the Obama administration.
One has to wonder what would have happened if there was no bailout. Would the stock market continue its fall, or find a bottom and rest there for a year or so until the economy improved? We’ll never know, but whatever… this bailout bubble has helped the market and traders in more ways than one.
yup george, june of this year
946 to 983 at least. so am being conservative and calling a 30 pt drop
http://www.ritholtz.com/blog/2009/08/zero-10-year-us-job-creation/
George, see last paragraph in End of Recession.
http://en.wikipedia.org/wiki/1921_recession
Based upon that paragraph and Mr Celente, war is next. That must be in addition to the two we have already.
we don’t have wars. those are fun playgrounds where you can die. the real war is not there yet
http://feedproxy.google.com/~r/CalculatedRisk/~3/3RfSUwXbOW8/uk-record-33-thousand-people-declared.html
hahahaah i cannot believe this! I had drawn a fib from May 22nd to may27th of this year for eur/usd and just went to that chart randomly… well wouldn’t you know it.. 261.8% was $1.4409
from 8/3/2009 to 8/6/2009 the euro was trending near that fib line and then POOOF.. break down.
it is now hovering at 161.8% of that fib line ($1.41748) from way back in may. next up is 61.8% ($1.39405) ?
I know words might confuse but my chart has too many studies on it and it’s too much work to take em all off. Take care.
http://247wallst.com/2009/08/07/brokerage-giant-restricts-leveraged-and-inverse-etf-products-fas-faz-uyg-skf-sds-sso/#more-43499
More on ETF’s
If a picture is worth a thousand words, what’s this clock worth?
http://www.usdebtclock.org/
Very, very scary. It should be required viewing by our government as well as every single American. Maybe then we could get a call to action.
http://www.creditloan.com/infographics/the-history-of-us-government-corporate-bailouts/
history of bailouts
Mr. Yerk
That GS link was some neat insight. I agree with you I see nothing there indicating they expect equities to rise. The thing I need your help understanding is there position on REITs. They suggest defaults on Commercial loans and decreased retail traffic will kill retail REITs, but at the same time suggest buying CBMS AAA rated bonds. That seems to be in conflict. Do you understand their position. right this minute Retail REITS look parabolic. Wouldn’t want to short that train. Maybe GS is goosing that meteor. Shorting at higher levels would be more profitable for them.
String
Make that CMBS, you know my typing skills.
Just scanned the comments, everyone in bull mode
Larry, nice link. There is life under the rug where everything got pushed under in q1. fnm/fre to pop up in the next weeks, so will we come full circle? Caveat: as long as the bubble is not popped, we go higher.
Re multiple-ETFs there is a lawsuit going on because these things eventually fall to zero regardless of the price-move of the underlying. So they shouldn’t be held in a investing account – it seems the question is if the fine print was big enough for investors to understand that. The time-effect will be dependent on the specific instrument, maybe Larry is trading something with better time stability.
qe to be stopped by the fed is said to have put a bottom under the dollar. This should stop oil etc. maybe even stocks in due course.
String, yep “Equity values might have downside” LOL But no sooner than liquidity is stopped – qe should play in that direction. The JPM report I read as bullish short term but bearish longer term. I’m no expert on ICBMs – on p. 34 it says “The Hedge Fund Strategies Group estimates that there is a divergence in CRE price estimates between equity and CMBS markets close to 25%” so it is a relative not absolute value play they are suggesting. P 35 at the right shows the difference in priced in CRE value decline between the two markets. The higher stocks rise, the even more attractive this trade will become.
Yerk
So what we need to do is wait for this moon shot on RTL to roll over and short it , buying CMBS AAA at the same time. I like the long Commodity currency countries Canada, Australia, as well as oil. I think Japan is in trouble too. I really don’t understand the plays they discuss. I am not a currency trader. The document is very interesting though. Thanks for posting. That is about the most informative thing posted lately, with the exception of Paula’s Pearls. I still miss the other Coors Light twin though.
String
it took me 7hrs to backetst the Russel 2007 from october 10 2007 to march 10 2009 using a portfolio of $10 commission and $500 per trade.
120% profit while S&P was down 56%.
biggest losing stock was -25%
Biggest gainer 200% (runner up 80%)
mind you the profit was after commission.. total of 900 trades were performed. LOL
Just sayin…. now i will perform one march 10th till now.. LOL
Larry,
Re: Jupiter in opposition. That means Jupiter is literally in the opposite direction than the Sun from our geocentric point of view. At sunset Jupiter is just rising, at sunrise Jupiter is setting. Or more fun to think about, at noon Jupiter is below your feet. At midnight Jupiter is half way across the sky. Hope that helps.
Did you try looking at Jupiter with binoculars? If you never have seen the moons all lined up you will be impressed. If you look every day you will see the moons have moved on you! It was one of the big data points for Galileo to believe the Sun was not the center of the universe.
Still shorting SMH & SPY.
here you go hank and Larry
Jup and Moons courtesy of K
K Says:
August 8th, 2009 at 11:32 am
“we don’t have wars. those are fun playgrounds where you can die. the real war is not there yet”
Maybe instead of WWIII, we will have IIIWW (three world wars, simultaneously). Remember, you heard it here first – an inverse play on world wars.
K,
This is the most comprehensive debt clock I’ve seen. The clock has the United States Seal – full disclosure.
This should be the desktop background screen for our elected officials.
K,
I’m impressed with your backtest. Are you using SD? I can’t figure why it is so slow doing backtests for a year or longer.
Nice job.
Steve,
Thanks for that link. To me, these investment firms shouldn’t be using the leveraged inverse anyway unless specifically requested by their individual investors. Unless those firms are active money managers, they could actually win most of their trades while losing capital.
Some here may follow “Ty” Andros. I have for years. Here is his latest rant on the economic situation.
Regardless of Mr. Andros’ analysis, look at the bullet items on page 3 that quote Abraham Lincoln, one of Mr. Obama’s idols.
http://www.traderview.com/tedbits/tedbits-Aug06-09.pdf