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Thanks Mike, I would love to read your results. Rotation games can be a headfake to any study. Just trying to rule that out because the study is very insightful.
On the subject of a bear traps & high levels of speculation ( and this is by NO MEANS comparing the two periods but rather giving insightful fact):
After the fall of prices in 1929, a key point is missed by most authors. The devastation (ie: jumping off of buildings/suicide & such) did not happen at the '29 crash. Folks held optimism that things would turn around. When the rise in indexes followed in '30 with a very hopeful retracement accomplished, the sentiment definately bullish. There were many investors who 'climbed the wall of worry' but they are hardly ever written about.
The jumping off of buildings and the nasty consequences of the period happened after the bear trap of '30 slammed down. That was the real deal. That's when bearish sentiment ruled the day. It's also what killed hardcore speculation.
Just making sure that we all keep in mind exactly when the investing public soured on speculation. Until speculators sour, it goes on...
Just my two cents... maybe it will turn into four cents before this all plays out!
A typo (for sure)...
Reads: " and gives the U.S. a one-third stake in the banking giant."
Should be: " and gives the U.S. a one-third stake in the bankrupting giant."
Mike: Not knowing the dates of the occurances, it's hard to visualize what the other indices did. What if the stats are a result of "cyclical investors" who dump the naz in favor of the Dow or S&P? Is there a away to see what happened in the other indices?
Also, 'buying volatility' would be option-based, no?
This is a great post... thank you for running the tests... and thank you for sharing!
Sold SURG today... didn't hit the top, but got a 21% gain. I have ZERO clue as to why it is rallying the past two days. Whatever the reason, I took my profits. (Thanks for the training, Nick). I saw you got multiple 2-digit gains on $50-$60 stocks today... nice going!
On the "watching paint dry" comment, if you can just stare at this video, the guy finally gives a summation in understandable English. What is so hard to grasp is the levels that he says "if they breach this line, it is a strong signal to go short".
If you are watching the market go down, then this line (after already dropping to it) gives a signal that momentum on the downside will result??? My first question is "how do you know it won't turn around & bite you?"
I just took a trip to the south of the city. There is a Dodge/Jeep dealer that faces the road and utilizes about 1/2 city block of road frontage. Every 16 feet, an American flag (large size) is on a wooden post...
I had mixed feelings. I still have mixed feelings. It just seemed like red, white, & blue was everywhere at eye-level, And, when I raised my eyes, there were two flagpoles with old glory waving high. The reality of it all is here and now.
Mixed emotions.... and my throat tightens up...
The news this week stated that 6mm are unemployed and another 5mm are discouraged & not looking for work. They reported that the idled workers actually total 11mm.
Do you see that in the report?
Gaaaads, Richard! That's awful! I can't stop laughing!
Hubby, AKA John Wayne, runs the farm. That's HIS career. We live on the farm & I commute.
No milk cows. All registered angus. And, yes, they are awesome! He also raises tobacco as most farmers here do.
I know it's a typo, but it's a great play on words! :)
see how the market reacts to hire interest rates
Hey.. on pennies... opened SURG @ 1.22 at open
Oh, but the stimulus valuable rebates??!!! ( smile )
Here's a great video w/article next to it. Well worth the time...
http://finance.yahoo.com/techticker/article/259145/Bernanke-Freaks-Out-About-Obama's-Spending-and-Debt-Plans
Jim Rogers foresees lambourgini's driven by farmers???
What color should I buy? Can't wait to tell John Wayne.. we need to shop early..
That's a nice one day gain in gold stocks. Beats the ANNUAL rate on a savings account, no?
Hey that might happen!
Thanks to you all, sincerely. I've always wanted to say that I stayed somewhere 25 years. I'm definately NOT interested in 30... just 25.... just to say I did it. Little hoops I like to jump thru..
Then again, with all the hoops folks here have jumped through, maybe I'm the 'freshman' on the block! That's okay; I'll take 'freshman'!
Wow! How did I know you were great to your employees??? You're the best, Court... if they don't tell you, I certainly will!
There's a big ole 'edible bouquet' here... fruit/choclate... really neat... and lots of congrat's. The President of our company just called with good spirits and delivered a basket of thank you's. What a great day!
Thanks for expanding on it. Like today, I just didn't have time.
Hey.. it's my 25th anniversay here! Gotta say, I wish I got a watch. In fact, I wish we gave 'something' to folks who hit the 25-yr mark. I'll bet Court gives his people watches...
Sighhhhh...
(Should I pull out the violins? LOL!)
First of all (and, yes... this makes me mad) most of the AIG first round of taxpayer money went to overseas coffers. It wasn't a bailout of AIG, it was a bailout incognito of foreign coffers. Just my simple angry outlook about it all....
Agree with your post. Read this marketwatch clip of an hour or so ago... emphasis is mine... but the overriding consideration is that Moody's forecast can be relied on??? Tell that to folks with empty bank accounts...
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Bondholders are likely to recover less than normal if a company defaults on its debt because of a spike in the number of defaults and more difficulties for firms to find financing, Moody's Investors Service said.
Bondholders of non-financial company debt will likely recover between 35% and 40% of their investment in the current credit cycle, Moody's said in a report released Wednesday. That compares with recovery of about 50% over the last 20 years.
Trading in the bonds of some of the most high-risk companies' debt show that forecast may even be overly optimistic.
Moody's said the lower recovery rate will be partially attributable to a spike higher in default rates in the first place. The rating agency expects speculative-grade debt defaults to peak at 14.5% in the fourth quarter of 2009.
It's also lower than the 45% average in the last two recessions, which were shorter and shallower than the current one is expected to be, analysts said.
"The high default rate is the one we currently think is most likely to directly affect recovery rates," said analysts led by David Keisman. "As the amount of available defaulted debt and the number of defaulted companies rise in relation to demand from investors who buy distressed debt, it will tend to command a lower valuation in the marketplace."
Economic weakness and tight credit are also keeping a lid on valuations for distressed companies shedding assets, they said.
Recovery rates may be even lower on debt involved in distressed exchanged or prepackaged bankruptcies, because it is harder for companies to find debtor-in-possession financing.
Greg: I can't tell much about the product (whether it is pumped up or a real value) by the narrative or the financials. But... some big folks have done their homework & are taking a chance on it.
Most of these positions are March 31st (obviously after the Mar 9 low) & they are still hanging on. Note that the mutual fund holders 'kinda' moved out, but the institutional owners have hung on (no sell off's during Q1'09).
This is about all I have time to get you:
MUTUAL FUND OWNERSHIP
Http://moneycentral.msn.com/ownership?Holding=Mutual+Fund+Ownership&Symbol=ULU
INSTITUTIONAL OWNERSHIP
Http://moneycentral.msn.com/ownership?Holding=Institutional+Ownership&Symbol=ULU
You said it better than I did, but don't forget that not all bonds are alike and that they carry different clauses of protection up to & including re-insurance.
Just adding a quick take...
Frankly, you are making a little history here: On a (small) Bradley turn day, Nick breaks tradition and buys gold.
LOL! That's tooooooooo unpredictable!!!
If he WAS an expert, he'd produce a birth certificate, no? Hey, let's just push that teensy little law aside...
He needs to step up to the plate so that this unresolved issue in American minds gets put to rest.
Actually, it's the Uniform Commericial Code that dictates the framework for business law. But, you are right: There is enough case law on the books to fill several libraries concerning unsecured and secured creditors, bondholders, validity of clauses/terms, you name it. Precedence is already within 360 FULL degrees of sight.
I can not believe that we throw out the lawbooks, conclusions of all previous cases, & then follow the pipers' bad tune.
Also, there is an uptick in shipping. Rates (once $200,000+/day dropping to $2,000+/day) are recovering around $8,900/day. I can't tell what rates go with dry goods shipping & which rates go with oil tankers. But I'll have it all down before I pull the trigger.
Mostly looking for dry goods movements from Central/South America to China as well as Australia to China.
On dry good shipping, two companies looked pretty good from the small pool I have been sampling: Diana (DSX) and Eagle (EGLE). Dividend changes aside, they just look like winners. Lately, the penny stock 'whatevers' have been touting DryShips (DRYS) and it has been a daytraders dream for the past 10 days. On oil tankers, I still am watching Frontline (FRO).
I'm sure there are others and if anyone can shed light on the sector, I'm all ears! Oh yeah.... do you have any knowledge of (energy sector natural gas) EEP or ETP? Also, in coal NRP? There used to be a saying that "I've never seen a limited partnership that didn't fail".... and Globalstar still stings. These are all partnerships... successful... but would like your opinion if you are familiar with them.
Gotta run... it's my night to cook...
Hey guy... I tried to forget Kevin!! The number you & Alan did on him was a c-l-a-s-s-i-c! Made me CERTAIN that I'd never drum up anything fictious! Wow... that whole episode was better than the BEST drama out of Hollywood. I think every poster there was close to cardiac arrest. Whewwwww... scares me just remembering! Good job, guy... good job!
On another note, I've been all over the place this evening trying to get a feel of flavor of confusion in the markets.
What I found was incredibly interesting. On the WSJ site (hope this link works & isn't just a subscriber-only thing), the data chart on 'Money Flow: Buying on Weakness' shows a great deal. There is also a tab for Selling on Strength. It updates every hour during trading. I REALLY hope this link works:
http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow.html?mod=mdc_leader
Regardless, money flow IN was top in GSG (commodity fund); also inflow on SDS (Ultra short S&P500); Lots of issues...
On the selling on strength, I was surprised to see GLD. There was also the Q's, SKF, & I-Shares SP500G. Again, lots of issues. (Why is Cisco on it? Don't funds need to buy on it's Dow entry date?)
It appeared, looking at the issues on the Buying side (which had short fund ETF's) & the selling side, it was semi-bearish to me.
OT:
It's not hard to forget a writer taking time to write from Germany! I can remember (several times) that though we seem to be in our states-side world, that contributions came from around the globe. Also, the timeliness of the posts was something else.... I never could figure out what time you were posting!
After I read your post, I thought about the migration from IF... that we still had Hatem & Mike (the lawyer from Las Vegas) but we lost Hanna on the move to RB. Wow... Cindy's gone... not sure whatever happened to Ron Anderson in NY & his port#1, port#2, and his outcome on Visa zero-financed mortgage. (I'm sure Richard just got a huge flashback!) Lots of good folks & lots of good stories!
Anytime you want to fill us in, have at it! Glad I can still make you smile; if nothing else, I'll print your post out & see if I can garner some brownie points from the guy upstairs. This is a good day... very glad you posted!
With that, I feel less uncertain... and more certain that I need to stay nimble. Those stats reek of 'winds of change'...
I liked the "sit on my hands" from Emmett. He said that was SOMH?
Get some rest... I'll dig up what stats I can find..
OMG! It is a genuine blast-from-the-past! You go waaaaaaay back to IF... RB... then here! You were in Germany, no? Then (I think) around Alans' PA area... then to the west coast, no?
I don't know if you read every day or not... but I certainly want to correct myself. Just yesterday, I wrote that the Bulls were all here (except BPrice). I c-e-r-t-a-i-n-l-y want to say I was wrong! Welcome back! I hope Eric gets a chance to catch your post!
Gaaaaadsss... this is just great!
Is that 'net short' report right? Does the report vary substantially from day to day?
I just read a report that said "Smart Money (Commercial Futures Traders) is still positioned heavily on the Short side, despite this market advance. As of 05/26, the COT Report (Commitment of Traders) shows they are net Short the market with - 77,545 contracts. Chart courtesy of timingcharts.com "
With June 30th as "D-Day" (profit sharing/401K quarterly statements), this might be the last hurrah for profit before re-positioning/window dressing for quarter end. (ie: push market lower, buy the dip, bring the market back up by month end).
Not sure if that will happen, but with every manager facing the same stat publication (lipor avg), then there is certainly an incentive to manipulate! A calling card "A++" would be that the manager made the most money in the first 'up market qtr' in the last 3. Hmmmmmmm. I wonder. I just feel very uncertain...
This is from today (06/02) issue of Everbank's 'The Daily Pfennig' (Chuck Butler, author) and gives a 'hint' as to what Geithner said (only the first three 'dots' are mine):
"... U.S. Treasury Sec. Geithner, who told the Chinese that the U.S. was going to shrink the deficit... He also told them that their assets were "safe"...
Ty sent me something on this that he found yesterday... "Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.
His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home."
Actually, I think it says MORE about the perspective of the Chinese educated youth who will someday be the leaders. It also says a great deal about what is being taught/discussed in their colleges. It is hard to shake a collegiate perspective over the decades that follow.
I didn't realize that there was an agreement to use the currency for a specific purpose. This makes sense. I wonder if there is any history of amendments to the original agreement (and, if there were, would those agreements equate to 'allied' action).
Wouldn't a simple agreement to allow for use of the currency for specific national goals (ie: oil) to combat the effects of OPEC price influence?
The QE was 'quantitative easing'... sorry... I'm a product of shorthand!
Why can't China put pressure on QE without lifting a finger? Rumors or perceived threats of non-participation puts the fun-house in full 'crazy' mode.
That's a good article. Quite clear.
What I don't understand is why the Fed, buying Euros, doesn't utilize holding them in reserve. This cushion would play well in currency exchanges when oil prices rise (should the seller be pegged to the Euro) and when the excess liquidity needs to be pulled out of the system (given a fallen dollar).
Would this not help? I can't read your response until tomorrow, but I would be interested in reading it.
TIA
Elena
Emmett:
Don't forget: We 'watch' the Bradley. Small turn 6/3, strong turn 7/14. I bet you knew my thoughts when I pulled up the latest 'daily' gann chart. Something tells me alot of voodoo (this should make Elroy smile) surrounds mid-July:
So, if the government (with the help of other governments) cannot prevent a rise in interest rates (causing deflation to reassert itself), then all the "G" meetings were of temporary, not longterm, value? Would that not be the point of agreement?
Court, what does that do to the grandiose amount of Re-sets in mortgages that are rolling onto the stage? If I understand the re-cast (setting of higher mortgage payments) and the re-sets (re-setting the interest rates), the two things could occur:
1) the re-cast's are forced to look for refinancing or accept the higher payment and
2) the re-sets are forced to shop in a higher interest rate market (established by the 10yr).
Is the interest rate market (given all the auctions in our future) naturally moving up or could it be partially setting up to grab the resets & recasts?
We will ever know what Geithner said?
The dollar purchasing value if used to buy domestic products might not show the devaluation of the dollar. Domestic goods & services move within our country boundaries with price tags we agree to pay each other. However, if we step over the ocean, or over the Mexican or Canadian borders to purchase something, then the value gets set via currency exchanges... and, uhmmmmmm.... with a falling dollar, we have to cough up MORE money to get the same product.
I know you know that, but a hidden benefit is to spark domestic supply & edge out imports. This is a low-profile way of getting around the protectionism/tariff discussion because the American buyer is 'choosing' American and... hey... what politician could possibly be responsible for that? ( I would be tickled to death to see industry sparked!) It would mean that we could possibly produce & consume inferior goods, but I really don't think 'inferior' will happen on any large scale. Americans know what Americans expect, they abide by warranty laws, & my guess is that we can compete handily in some areas of replaced demand.
I just wanted to chime in & say "Pssssssst: Nick has given you m-a-n-y trades today. He sold into the rally, gave his profit percent, and told you the current favorable price to "buy back" those shares. If I had the time during working hours to jot notes, trade, and prepare for the next trade, I would be trading alongside of him. And, given time, I would be yackin' about prices & teasing him if I got in earlier & out with a better profit.
If you want to follow winners, jot down the notes of today. Then jot tomorrow. With some dedication (and time), you might be able to cover some of your loss. (And, that would be nice).
Glad to see that you put the tombstone in the shed... at least for now...
Who here said that they thought GM would end up Government Motors? Somehow, I just couldn't shake that new name!
No offense to your comments, but here goes:
A plethora of full agreement replies. Yes, good writing but somehow still it brings to mind Guinness' animation commercials where two eccentric scientists are complimenting one another's ideas as "brilliant!"
The plethora of full agreement did NOT come from good writing and did NOT come from good ideas. The plethora of agreement came because I stated the facts correctly & gave a correct overview of our thoughts. Not my thoughts, our thoughts.
My problem with this board is that there is an excess of self righteousness toward any sign that the economy will be taking us back to the stone ages
We have 3 owners of businesses here who have NOT sold out their business interests in anticipation of the stone ages. We have a career trader (Nick) who continues to go long, is successful, & tells you his every move... we have a poster with real estate interests who surveys that landscape & who will buy properties or make investments at the bottom with full intention of profiting (how could he profit in a stone age environment?)
Why has this board become a bear only zone? Why are so few bulls still wring here?... it used to be one of the best boards on IHUB... What bull is gone? Everyone is still here except for BPrice (whom we miss dearly).
You are welcome to read my post of April 29 (# 48680) but here's what was important (and I would RE WRITE the same information TODAY): "... I've reviewed 3 of my best chartists & read their interpretations. The best assessment I got was the attraction of prices (in this upturn) to be pulled by a Dow level of 9000-9655 and an S&P level at 1000. Prices should NOT exceed those levels, but rather are "attracted" to those levels. Of course, an upturn can stop shy of those levels.
Once that push upward finds its exhaustion, a pretty doggone tough downturn will commence. This is probably why every studious reader of the market knows that the bear trap is in play. Precisely said in the previous post, the High Risk Takers are propelling the upturn and will, as they normally do, cause low-risk folks to move assets from safe havens & put it back to work in the market.
What would be the benefit enjoying this upturn investment-wise and then arguing on this forum that it is permanent? Would that make people like us better?
Bye bye, I haven't read that anyone here missed the upturn. Even the commodity plays are working out...
I just don't agree with your perspective about this board. That's okay. Since you are putting your homemade tombstone on this board, my thought is that it is made of a composite and will not stand the test of time. I will say now, since you might never read here again, that I hope you come out okay (in the longrun) with your GM bonds. This not tongue-in-cheek, it is sincere.
Well now, Mike S....
Are we being told to stand at attention? Chest out; spine straight; clerity of vision? No, I don't think so. But maybe your reading does not go back to last fall? Here's what you missed:
Most folks on this board are completely free of debt and therefore have a great vested interest in protecting & growing what base they have by using their own wit, perception, vision, experience, and intuition. My guess is that, you (too), are investing with the same fervor.
Using our common sense, some tea leaves we have all acquired, and our experience in the market, I do not recall even ONE post from any participant on this board whereby they were harmed by the downturn from Oct'07... and more specifically, the downturn since the Fall of 2008. And, if they were harmed in any manner, then they have focused on short term trading profits to cover those losses. So far, this is a background of 'people' type of paragraph. Let's get to the nitty gritty.
Having lived through, and analyzed Q308 and Q408 in 'real time', discussion hit this board in early '09 as to what path might follow. Though the media & every article out there said that a bottom would come in Summer or sometime in Q3, we ascertained that a bottom was coming in Q1. Big difference in time, no? Stepping aside, nibbling (but never giving the market the motherload), we were all very prepared for the March 9 low. A good reading that the market was moving higher put investments back into play the 3rd week of March (you are welcome to go back to that timeframe & read).
What we realize is that the fall from Oct'07 highs took 17 months to the March 9 low. The market retraced nearly 30% of that fall from grace in merely a month... a juicy bone to a starving populace. Most retracements take longer than a month... & here we are chalking up a 2nd month (which is more reasonable) It could be that we dally longer but the retracement will not get more than a fibonnaci level & then will turn down again. Some think (as do I) that it will bust the Mar 9 lows (or get very close to it) when it turns. This is nothing more that the famous bear trap that we read about but never have trully experienced. To place the motherload into the market when all reason says that we will surely be a victim of a bear trap begs us to continue protecting the motherload.
So... we look for evidence that we could possibly be wrong. The evidence we read & hear is mostly cheerleading for the 'upside'. The 'real' evidence is horrible (at best) with a Service economy wholly dependent upon debt... with debt destruction on our banks, our populace, our cities, our states, our local communities, our industries, and our educational system. The tentacles of what is happening financially to our country are masked with bandaids courtesy of our government & the Central bank. Those bandaids are hiding a great deal & have given 'scared folks' some calm, but they are b-a-n-d-a-i-d-s. The infection lies underneath.
This is to say that no solution to problems has come from the bottom up, but rather is coming from the top down. The infection has not subsided & (even with current discussions on this board) are seen to seep out. Compounding the problem of the infection spreading (unseen through the bandaids) is the vulnerability of what appears to be 'healthy or semi-healthy' adjacent areas.
Let's just look at one of the last vestiges of industry in this country.... metal based products. Industry is dang near shut down due to debt, is barely humming in light of bandaid aura, & the infection is enormous. Possible saving grace? Stimulus plans (top-down solution... not bottom up... and it will be--yet another--bandaid). Will it work?
For instance, when two car companies shut down for 60 days, what happens when the ripple effect hits supporting industries, and their supporting industries? Two more EXTRA LEAN months on top of over a year of 'kinda lean' months will put many companies over the brink... many companies waaaaaaay out there on the 'supporting industry' chain. It's clear that whatever cash was hoarded, whatever cost cutting was done, only a small stash is left to ride out the consequences of what the next 60 days will bring to our c-o-u-n-t-r-y. It's like being kicked when you're down. Not everyone is going to get up. This isn't 'bearish' talk, this is just the reality of what might come down the pipeline.
And, facing that, can we prolong a rally in a market which is more than speculative now? Can we rally because businesses "meet or exceed" their SEVERELY reduced outlooks? Are we seeing and experiencing the makings of the bear trap which, so far, looks like will happen? Should the retracement of the 17 months last longer than 2 months? Can it last 4 months? Is the bottom in on your "reverse J" economic recovery? I don't know. But I feel certain that the market (separate from economic recovery) is not done with downturns.
The market and the economy, being two separate animals, will... at some point... come face to face. When that happens, anyone who has money to invest will buy at the low. And, will we wonder 'Is the low of lows?'? Of course we will. And, we'll discuss, cheer, caution, & give our two cents. The opinions of t-h-e-s-e people count.
I just want to be successfull; whether it is bearish or bullish doesn't matter. Success happens in both environments. And, trust me, when Ahab & crew see the whale, the ship sets it course. There will be reaction from every poster here closely watching its path and when to make the best (not necessarily the clearest) move. In some respects, that is where we now stand: anticipating when the bear trap will shut. That takes discussion. It never matters who is successful in the dialog, it only matters that the dialog occurred.
This is to say that, though Alan left before he started his rant, I shot you mine! What a great way to start a weekend!
Just my two cents on probably the longest post I've done in years... gotta rest ....
While you're at it, see if you can find mine!
If the hunt costs you less than 40 hrs, then we need to be clear that there will be no overtime for less than 40 hrs...
I wouldn't want you to hunt without purpose or direction...
It's a blue violin. Has some stars, has some stripes. I pledge to you that it's mine. Court will pay the overtime if you exceed 40...
uhmmmmmm, honest.
ETF Bearish US Dollar --Powershares: UDN
From MSN:
"The investment seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Short US Dollar Futures index. The index is comprised solely of short futures contracts. The futures contract is designed to replicate the performance of being short the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc."