Friday, November 11, 2011

A lot has happened since I've been gone

    Hey, everyone...if you are still checking my blog, thank you so much.  I know I've been slacking and been lazy.  I'm going to try and be a better poster from now on even if I don't post everyday, I will try and post at least 3 times a week from now on.

     Today was quite a good day in the market's actually the past two days were quite good as we gained back almost everything we lost from Wednesday's huge selloff.  I actually thought after Wednesday we would continue downward back into the old trading range because the selloff was so powerful with 99 stocks dropping for every 1 that gained.  The bulls still have some fight in them as they wrestled back control of the market the past two days.

     As of now, we are still in a trading range market albeit a higher range than we were earlier.  On the SNP we got 1220 as the low end of the range and 1290 on the high end.
 
On the chart you can see our old trading range between 1120 and 1225 and our new one between 1225 and 1280 which we have been in for a couple of weeks now.  The bulls are buying in the 1220-1230 area and the bears are selling up around 1270-1290.  I don't see any catalyst to push us past 1280 right now although economic data is coming in good.  As long as Europe is dysfunctional we will stay in the range.

     My only position right now which I told you about last time I posted is in gold via IAU.  This trade is working out very well for me as I have a 10% gain so far which puts my trading account in positive territory for the year.  Gold has caught a bid on persistent eurozone worries and after it's nice technical bounce off the 150 day moving average which has been long term bull market support.

Gold is in a nice rising channel right now and if you were so inclined you could buy at the bottom of the channel and sell at the top.  I'm not that nimble so I'll pass on that trade.

     I have not been doing much trading recently as the market has been too headline driven for me to play.  I am not nimble enough to trade the 60 point range so I'll just watch from the sidelines with my gold.  If you put a gun to my head and said pick a direction for the SNP I'd say we are headed down and now would be a good time to lay out a short position.  But with positive seasonality, the bulls are going to be looking to prop this market into year end so it is tough to short now.

     I'll be checking all your blogs in the next few days.  Sorry for disappearing.



Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Monday, October 24, 2011

Caterpillar earnings drive markets higher

     Sorry peeps for not posting anything this weekend.  My internet has been going up and down and up and down all weekend long.  It is really starting to piss me off.  Also, I've basically been in a coma the past two days after taking this drug called Seroquel.  Man that stuff really puts my lights out.  Has any of you taken Seroquel before?  Is sleeping for two days in a row normal?  I slept till 1 in the afternoon today and I still feel groggy as hell.  Anyways, I'll be back up and running today and the rest of the week of course and I'll be checking all your blogs!

     Today was a great day in the markets as Caterpillar blew away earnings forecasts, easing fears of a global growth slowdown.  Caterpillar builds backhoes, mining equipment basically all the things needed for construction and mining so it is a good proxy for global growth.  When CAT is doing well, the global economy can't be that bad.

     CAT had record revenues and a 44% rise in quarterly profit easily beating analysts expectations.  Caterpillar's stock jumped 5.6% on the news to over 90 dollars a share after being near 70 just 2 weeks ago.

     It looks like the breakout from last week is continuing and it is okay to buy stocks here.  The DJIA finished 105 points higer and the SNP and NASDAQ rose even more gaining 1.3% and 2.35% respectively. Oil jumped nearly 5% and gold was higher by 1%.

     I think this rally is going to continue until 1270 or 1280 on the SNP as we have some serious upside momentum building and this is the seasonal best period to own stocks.  Let's see what happens.

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Friday, October 21, 2011

S&P 500 breakout

      Sorry, friends about the late post today.  My internet was down this morning so I could not post as per my usual.  I am really getting pissed off at my poor internet service.  It's has been down at least 6 hours each of the past 4 days.  I call tech support and of course they have no idea what's going on.  My line is a good distance away from the main office so that is why it's always going up and down.  I'm going to call them and ask for a free upgrade and if they don't give it to me, I'm going to get a new ISP.   Anyways, on to the markets...

     Today was a very good and powerful day for the indexes.  I'm calling the breakout on the SNP 500.  This should lead to more follow through buying next week.
 As you can see on the above chart, SPY finally popped above that little red line which had been like a brick wall for over 2 months now.  It is okay to buy stocks here and I will probably do some on Monday.

Thursday, October 20, 2011

Qaddafi is dead!

     I don't know if you all have heard yet but Moammar Qadaffi has been captured and killed.  The Misrata Military Council led an attack on Qadaffi's hometown of Sirte where the ex-dictator was hiding.  Not all the details are out yet but it seems Qadaffi was shot in the head and the legs whilst trying to escape rebel fighters in Sirte.  More details to come later on.

     Libya is the largest oil producing country in Africa and oil prices dropped on this news.

     In other news, markets are quiet today trading in a 70 point range in the early going.  There has not been much news to catalyze the markets today although new claims for unemployment benefits dropped to 403,000 which was slightly higher than economists had forecast.  More importantly the four week moving average of new claims for unemployment benefits dropped to 403,000.  This shows that even though the economy seems troubled, employers are not laying off people like crazy.

Wednesday, October 19, 2011

Apple misses earnings shares are crushed

     Wall Street's golden child AAPL missed earnings for the first time in four years yesterday!  Profits were 7.05/share which came in below analysts expectations of 7.39/share.   The stock is down 4% in early trading after being down as much as 8% in after hours trading yesterday.

     Now AAPL is notorious for low balling guidance so analysts are always trying to figure out how much more they have to up their targets from AAPL's guidance.  Last quarter AAPL predicted they would make 6.40/share.  Analysts had raised their targets all the way up to 7.39 before earnings.

     AAPL disappointed on iPhone sales selling 17.1 million iPhones while analysts were expecting 18-20 million.  Sales were especially disappointing in September as consumers awaited the new iPhone 4S.

     iPad sales were 11.1 million which was disappointing to analysts as well.  iTunes had revenue of 1.5 billion in the quarter.  The company sold 4.89 million Macs in the quarter.  Revenue from the AAPL stores was 3.6 billion.  iPhone 4S sales were 4 million in their first three days!

    Wall Street was disappointed in the past quarter but I don't think it's anything to get scared about.  After all that was LAST quarter's results...what is more important was their guidance which they raised to 9.30/share for this upcoming quarter.  To me, the stock was unfairly beaten up.  AAPL is not one of those high flying momo stocks with a 50 PE.  AAPL is still growing, raised it's guidance and isn't that expensive to boot.  This pullback is a good buying opportunity.

Tuesday, October 18, 2011

Stocks up on Bank of America earnings

     Bank stocks are up today after Bank of America posted better than expected earnings.  Bank of America stock was up almost 7% today in early trading.  The big positive surprise was Bank of America's revenue, which was  28.7 billion, increasing even in a tough quarter for most banks.

     Profit per share was .56 which was helped by a 9.8 billion gain for selling it's stake in China Construction bank.  Bank of America's core business appears to be shrinking however as it's net interest margin dropped to 2.32%.  Net interest margin is the difference between what it pays depositors for use of it's cash versus what it charges for loans.  Net interest income which is the bread and butter for banks shrank to 10.7 billion from 12.7 billion a year ago.  Bank of America stock has fallen more than 50% this year.

     In other earnings news, IBM's shares were down 4.5% in the early going after posting in line results.  Investor expectations were high for IBM after it rallied to a record high close a few days ago.   Analyst's were disappointed with the earnings which showed that IBM may have slower growth in the future.  IBM posted revenue of 26.2 billion for the quarter and profits of 3.28 a share.  IBM stock has risen more than 20% this year.

     The overall markets are higher today as of 8 AM PST after earlier being down almost 1%.  After the bell we get AAPL earnings which I will be watching closely.

Monday, October 17, 2011

Down and dirty all day long

      We have had one hell of a rally in the US where prices have risen 14.1% on the SNP 500 since bottoming October 4th.  We had been rangebound on the SNP 500 for the past two months but it now looks like we are going to break out of the range and head upwards.  It has been a truly remarkable rally.

        US stock futures are up and Asian and European market's are as well on a continuation of positive momentum from the past two weeks.  US Dow stock futures are up 81 points as of 1:15 AM PST.

     The Hong Kong Hang Seng index has also had quite a rally.  It is now 18,800 after rallying nearly 3000 points in the past week and a half.  That is a years worth of gains in less than two weeks!

     European bourses are up as well across the board with the FTSE, DAX and CAC all up over 1%.  It looks like we will get more rallying tomorrow.  I plan on buying some AAPL when I wake up.

Saturday, October 15, 2011

My favorite songs of all time part 3

     In the past, I always liked listening to different music and was always on the lookout for great new radio stations to listen too.  One day whilst spinning the dial I found a station called KCRW.  To those that don't know, KCRW is the Santa Monica City College station and they are also affiliated with National Public Radio.  During the day they have various NPR shows but at night, KCRW plays some of the best tripped out electronic music that you could never find on any other radio station especially back when I started listening in 1998.

     There were a few great shows on there but my favorite was Chocolate City hosted by Garth Trinidad. I listened to it all the time for awhile and really enjoyed the hip hop, soul and world rhythms Trinidad mixed together seamlessly.  I think it was on twice a week back then but now it's is on only infrequently.  You can still listen to the occasional podcasts of Chocolate City here.  This show is where I found out about great bands like Kruder and Dorfmeister and Thievery Corporation, Gotan Project and St. Germain which I feature below.

Friday, October 14, 2011

Google blows away expectations

     Our favorite benefactor Google, reported monstrous earnings yesterday and the stockholders are reaping the rewards today.  Google was up more than 6% today after reporting a 26% gain in profits from a year ago.

     Google makes most of it's money from search ads and it has 76% of the US market and even more of the rest of the world.

     The number of clicks on ads rose 28% from the year ago period and the price they charge per click increased 5%.

     Google +, Google's answer to the Facebook threat increased it's user base to 40,000,000 increasing from 10,000,000 in July.

     Google is also grabbing a larger share of the smartphone marketplace with over 190,000,000 Android phones active worldwide.

     Google's profit for the 3rd quarter was 2.3 billion on sales of 7.51 billion.This equates to profits of about 8.33/share.  Google is a cash machine.

     Market's are up on this good news continuing the positive momentum of the past 2 weeks.  As of 8:00 AM PST the DOW is up almost 1%.  The SNP 500 keeps bumping it's head on the 1220 level.

Thursday, October 13, 2011

Bank stocks drag averages lower

     Poor earnings results from JP Morgan  are dragging the entire market lower today and especially the financial sector.  JP Morgan's net income dropped 4 pct over the July-September period and investment banking revenues declined 31 pct because of increased volatility in the financial markets over the summer.  JP Morgan's results do not bode well for the rest of the financial sector.

     JP Morgan stock is down almost 6% as of 10:53 AM PST and down about 25% YTD.  Bank of America stock is down almost 5% to 6.23.  The broader market's were down as well with the DOW down as much as 150 points early in the session but has recovered somewhat to be down only 50 points at the time of this writing.  The SNP 500 was down about .5% but the NASDAQ was green because AAPL was higher by about 1%.

     After the bell we get Google earnings.

Wednesday, October 12, 2011

Stocks and Breaking Bad



<------mfw I win   

     Sorry about the late post friends.  I woke up late this morning and had to get out of the house really fast and so did not have time to put up a preliminary post as per my usual.

     Anyways, before I get to stocks, did you see the Breaking Bad finale??  OMFG, I just got around to watching the last two episodes last night and it was EPICCCCCC.  This show is the definition of epic!  I don't want to spoil it for anyone who hasn't seen it but it was just a sick ass finale.  Breaking Bad has to be one of the greatest shows on television right now and Tio has to be one of the greatest characters.  I don't know how they are going to top this past season next year.  It will be interesting to watch.  What did you guys think of it if you saw it?

Tuesday, October 11, 2011

3rd quarter earnings season kicks off today

     Earnings season is upon us!!  First up on the docket today is Alcoa(AA) after the bell.  Alcoa is an aluminum company that is somewhat of a bellweather for the global economy.  Alcoa's aluminum goes into the production of cars, trucks and airplanes so it will be intredasting to see what they have to say about these industries and the global economy in general.

     Other earnings this week will be PepsiCo, Mattel and JP Morgan.  JP Morgan will be an important one later in the week because we will get to see the state of the financial industry.  Expectations have been really lowered for bank profits because of this volatile market environment.  JP Morgan's stock has lost almost 30% of its value this year.

     This earnings season will be especially interesting to monitor because they can confirm or deny a global economic slowdown and a US recession.  Companies not only report 3rd quarter earnings but also give their outlook for the future which will be much more important with so much uncertainty around.  With the market having rallied over 100 SNP points in the past week or so, I believe we will need to see some good earnings from companies to sustain the rally.

Sunday, October 9, 2011

Stocks blast off on European hopes

     US stock futures are up this evening as German chancellor Angela Merkel and French president Nicolas Sarkozy pledged to have a plan in place by the November 3rd G20 summit to address the slow motion train wreck that is the European debt crisis.  There will include a European bank recapitalization and a plan to deal with the Greece mess.

     Stock futures were up over 100 Dow points as of 10:30 PM PST.  The euro was also up by more than half a percent.

     French and Belgium officials also pledged to backstop the failing bank Dexia.  Merkel and the European leaders pledged to do "everything necessary" to stem contagion from the crisis.

     This week starts off the third quarter earnings season with Alcoa reporting after the bell Teusday.  The earnings reports will go a long way to show the sustainability of the recent rally.  Pepsico, JP Morgan, Google and Mattel all report earnings next week. 

Saturday, October 8, 2011

#OCCUPYWALLSTREET

     I don't know if you all have been following the Occupy Wall Street protests recently but the occupation is really gaining momentum.  I have been watching it from the beginning when I first heard about it in the middle of August.  Here was my first post about it here.

     To be honest, I thought that this occupation promoted by online hactivist collective Anonymous and Adbusters had a real chance to create some havoc and I was worried about the effect on the stock market and my investments.  I kept close tabs on the protest on the first day of the occupation on September 17th, watching the livestream all day long.  Then the market opened on Monday and there was no media coverage of the event and I thought the occupation would just peter out.

     It seemed that way when the thousands of people who initially occupied the park dwindled to hundreds, but then something crazy happened.  After an incident with the police where some protestors got pepper sprayed, the movement finally got some media coverage and the protests really gained some traction.

Friday, October 7, 2011

A Nice Jobs Report

     Markets are up in the early going after a better than expected jobs report eased fears of a recession in the US.  The government non farms payroll report showed  that 103.000 jobs were created in September, a number greater than economists had forecast.  Economists were expecting 60.000 jobs created.  The unemployment rate held steady at 9.1% as more people rejoined the workforce.

     In some more good news, payroll data for July and August were revised upward by 99.000.  Remember that horrible payroll number from August were we added a big fat 0 jobs?  Well, it was wrong.  Everybody panicked over that number but it turns out the US economy isn't as bad as the market thinks.  The economic data we have been getting recently are consistent with an economy that is slowly growing and not an economy going into a recession.

     Stocks have reacted well to the news with the DJIA up 75 points in the early going as of 7:47 AM PST.  The other major averages are mixed.  European bourses are all higher by more than 1% and the Asian indexes closed green as well with the Hang Seng up almost 10% in the past two days.

Thursday, October 6, 2011

Quiet and observant day in the markets so far

     Steve Jobs was a true visionary whose loss will be felt for a long time in the company he cofounded with Steve Wozniak and the products he pioneered.  Steve Jobs changed all aspects of our lives.  He was a tech geek and his life was computers.  He is the type of person that epitomizes the entrepeneurial and innovative spirit of America.    He will be missed.

     After the frenetic activity of the past few months, today has been a quieter day so far.  I believe that traders are not making too many big moves in observance.  AAPL stock has not sold off like many believed and was actually up a little bit as I type this.  I was hoping for a huge selloff by idiots so I could purchase some shares on the cheap but it didn't happen.

     All markets are green so far today.

Wednesday, October 5, 2011

RIP Steve Jobs

You will be missed...

Stocks struggle in the early going

     Well it turns out that huge spike into the close yesterday where the SNP 500 rose 4.1% in about 45 minutes was caused by a story in the Financial Times that the Europeans finance ministers are finalizing a plan to recapitalize the European banks.  It is estimated that European banks will need up to 261 billion dollars to protect themselves from insolvency should Greece or other European nations default.  A failure of large banks in Europe could set off a chain reaction which destroys the financial system of the world and sends the world into an epic depression which would last for years.  It is amazing to me how close we are to armageddon.

     Meanwhile, the US markets have opened today slightly in the red.  We got some good economic data out today and on the whole the data has been better than expected and consistent with an economy which is growing albeit slowly.  Markets have not had much reaction to the data however as our fortunes are tied to Europe at this point.   Right now, it is a headline driven market which makes it untradeable for me.

Economic Data
     The ISM Services Index for September came in at 53 this morning which was above economists forecasts of 52.8.  Any reading above 50 indicates expansion.   This index measures the activity of the services part of our economy like retailing and hotels and restaurants. 

     The ADP private payroll survey also came in better than expected with private industry adding 91,000 jobs on expectations of 75,000.  On Friday, we get the government non farm payroll number which is expected to show a gain of 60,000 jobs.

Market Recap
     Well today was very constructive in the markets.  The DJIA rose another 130 points today building on the 400 point rally from yesterday.  Strong momentum is propelling the markets upwards right now.  It looked like the market was going to breakdown after Monday and early yesterday but we have reversed and risen back into the trading range from previously.

     The best performing sector today was the energy sector.  XLE rose over 3.5% as oil was up over 4 dollars.  Technology stocks also performed well as AAPL the biggest component of the technology sector rose almost 2%.  AAPL made a picture perfect tag of the 200 day moving average yesterday at 354 and has exploded to the upside rising almost 10 pct from there. 

     Gold also rose today as people were bargain hunting after a big drop yesterday.  Gold has found support near the 150 day moving average and it would seem like a good place to initiate a position.  Gold is one of the strongest markets right now technically.

     European stocks had large gains across the board with the DAX rising almost 5% and most other bourses rising 3-4%.  One notable outlier from the bullish action is the continuing decline of the Hang Seng index which dropped another 3.5% last night.  That makes an almost 10% drop in only 3 days!  I don't think the Asian economies are that bad and so the selloff is way overdone and it is definitely time to buy.  I expect the Hong Kong index to bounce back strongly soon and as a matter of fact EWH which is the Hong Kong index ETF was up 3% today. 

     I think we have put in the bottom for awhile.  Newsflow out of Europe is more positive and it looks like the policymakers there understand the gravity of the situation.  US economic data has not fallen off a cliff considering the horrible consumer confidence data.  Jobs are still being added and the manufacturing and service sectors are still growing.  Despite the best efforts of US policymakers besides Bernanke to wreck the economy, we are still chugging along in a slow growth scenario.  All this says to me is moar trading range. 

PS
Natural One asked me how much cash it would take to get started making real money in the markets. 

I guess that depends on what your definition of "real money."  There are some brokerage accounts that require a 500 dollar minimum deposit, but if you are only buying 500 dollar worth of stock you are not going to make much money and transaction costs will eat up your profits.  Generally it costs between 5-10 dollars to buy and sell stock in a single transaction.  Even if you bought 500 dollars worth of stock and made 20% on your trade, you would only make 90 dollars after buying and selling.  This market is tough as well so it would be hard to make 20% unless you are buying a risky stock.

     I would say it would take about 5000 dollars to start off with to make a decent amount of money after transaction costs.  I don't know your experience level or knowledge of trading but what you can do if you want to learn to trade is to start a play money account.  Start off with 10000 dollars of fake money and make some pretend trades and see how you do.  That is a good way to start off and learn the ins and outs of trading.  This market is very dangerous right now so its definitely best to practice before you get in it.  If you do a search on play money trading accounts on google, there are numerous places to get started.
     

    

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Tuesday, October 4, 2011

October is the cruelest month

     For stocks it is.  Here are some fun market facts for stocks in October

  • October 28-29 1929 The stock market crashed 25% in two days heralding the onset of the great depression
  • October 19,1987 The stock market crashed 20% in one day on what became known as Black Monday
  • October 6-10, 2008 The stock market dropped 20% in one week as it looked like the entire financial system was going to meltdown.  
  • October has marked the end of the 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998 and 2002 bear markets
     The lesson?  While there is lots of panic now, get your buy list ready because there are going to be some bargains out there coming up.

     Markets have opened sharply lower today as the European Union has denied a vital aid payment to Greece.  The Greeks keep missing their budgeting targets and the European Union has said that they must cut more.  It looks like a Greek default is imminent and that is why market's are crashing.  Like I said before, trying to get money out the Greek people is like squeezing blood from a turnip!  It's time to let Greece default and let the chips fall where they may.  This extend and pretend just isn't working anymore.

Market Recap
     WOW, WHAT A FREAKING DAY FOR THE MARKET!!!!!!  Just insane movements today.  In the last hour of trading, we moved up over 350 points!!  There was some BIG BIG MONEY in the markets today buying in the last hour of trading.  Some say it was the PPT or Plunge Protection Team, but whatever it was, big institutions were putting money to work today in the markets.

     The DJIA ended up 153 points today after earlier being down as much as 250 points.  The S&P 500 more than 2% and the NASDAQ was up 3%.  Oil was down 1% and gold was down 3%!  This looks like the bottom for now.

     In the early going stocks spiked up and I thought we might have a huge reversal today so I closed my short positions that I opened yesterday for a tiny loss.  Good thing I did because had I kept them I would have been stopped out already!!  The Dumb Money indicator works!

     Unfortunately, I did not go long at the end of the day because my brain is fried right now watching this crazy action and I was too frozen to do anything.  I would have loved to buy some AAPL today which tagged it's 200 day moving average in a vicious selloff on the release of the iPhone 4GS.  Apple dropped from 384 to 354 during the day and then bounced hugely off the 200 day moving average to finish at 372.

     Just an insane day in the markets today.  I went ahead and bought some small caps, european large caps and ems today for my long term portfolio.  This could be the bottom for awhile.  Let's see what happens.

    

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Sunday, October 2, 2011

Hang Seng getting hanged tonight

     Any last words for the Hang Seng index? The Hong Kong index is getting creamed tonight on China growth worries. It has completely broken down and is back to May of 2009 levels. Stocks connected to the China growth story are getting hammered the most with Wynn Macau down over 10% and CNOOC or China National Oil Company down over 5%. The Hang Seng index is down 870 points as of 9:47 PM PST.  It looks to be another interesting day in the markets tomorrow.

     Dow Futures are down a more modest 80 pts. Gold is up and oil and copper are down.  The Euro is down a small amount as well.

   
Market Recap
      The SNP 500 and Russell 2000 small cap indexes have made new lows for the year as the DOW was off 260 points at the close today.  The SNP 500 was off 32 points finishing below 1100 for the first time in a year.  Gold was up 27 dollars and oil was down 3% to 77.

     European shares also finished lower by 1-2% and the Euro got obliterated today dropping 1% which is a big move in currency markets.  The dollar rose against most major currencies as the flight to safety continues.  10 year treasury yields dropped to their lowest level in a few weeks at 1.784.    

My Take
      Bend over and grab your ankles!  That is how the market felt today.  We got a complete breakdown of the 1120 level on the SNP that had been providing support for the past 2 months.  It looks like we are starting the next leg down in this bear market.  I have been busy this morning but got to the computer in time to put on a short position on the Russell 2000 small cap index via RWM and also put on a short of the MSCI All World index via EFZ.  I will buy more only if they go higher and I have set a 5% stop on them in case my trade goes against me.  I anticipate we will get a quick and sharp drop down to 1040 as we have breached the 1100 level at the close today.  I also got stopped out of my XLE position early on in the day for a 3% loss. 

     October traditionally has been the month with the most stock market crashes by far.  I think this October will follow that script as stock traders are a superstitious bunch.  The good news is however, that after crashing during October, the market finds it footing and rallies into the end of the year.  The last quarter of the year is the best performing quarter of them all with average gains of 4%.  That is the script I will follow for the time being unless things change. 


Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Saturday, October 1, 2011

Some more of my favorite songs

      In my last post, I put some of my favorite rap songs of all time.  I wanted to put many more but I know no one wants to sit here for an hour listening to music so I only put four.  As I got older, my taste's started to get more varied.  I moved to old school R&B to see where all these rap songs came from.  I found that Juicy was just an Mtume sample and a lot of rap was just sampled from old school songs.  So I really got into old school R&B for a time.

     I tell you, I think the 80's was the best decade for music.  Everything seemed so fresh with the first electronic music coming out.  One of my favorite's was Kraftwerk who has been sampled numerous times of course especially this song...


I love Kraftwerk so much, I am going to put another Kraftwerk song.  This is such a great video.  KrazyBen did a sick ass mashup of this song with Timbaland too.  It is here if you want to check it out. 


I guess those songs aren't really old school R&B so I will put some of my favorites.  I've got to put Juicy Fruit by Mtume, one of the best songs ever and one of my personal favorites.

Another one of my favorites was Double Dutch Bus...



Since I did two Kraftwerk songs, I'll go ahead and post one more old school R&B song.  Another one of my personal favorites is...I'll be a freak-a-zoid come on and wind me up!  I love these old music video's they are a trip to watch nowadays.


Old school R&B is some of the best music ever.  There is so many more songs I could've put.  Anyways, these are some of the songs I got into besides rap.  What are some of your favorite old school songs of all time?

For those of you who wanted to hear some of the songs I made way back when, here is another one.  I put one in my music post from last week which is here if you want to check it out.
  

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Friday, September 30, 2011

Markets fall as quarter ends

     Well, we are getting no window dressing at the end of the quarter unfortunately.  In fact it seems people are selling their winners rather than buying them at the end of this quarter!  All the stocks that have performed the best in this quarter have been getting whacked.  It is the high growth or "beta" names that have performed particularly badly in the past couple of days.

     Green Mountain Coffee Roasters(GMCR) is down about 15% in two days after rising about 20% in the quarter.  Apple one of my favorite's of course is down about 5% in a few days after rising more than 20% to a record high of 422 during the quarter.  Internet darling Baidu.com(BIDU) is getting taken to the woodshed as well after rising 10% during the quarter.  It has gotten smacked down to the tune of 30% in little more than a week.  Remember when I mentioned the window dressing trade yesterday?  This is like the anti window dressing trade. 

     Markets opened lower today as economic gloom pervaded the markets.  There was no significant news to cause us to open lower, only perhaps anticipation of bad economic data to come later in the day.  We opened lower by over 100 points on the DJIA.  We have recovered some of the losses in the first hour of trading as economic data has come in pretty good.

Economic Data
     The University of Michigan Consumer Confidence Survey came in better than economist had expected as consumer's mood perked up due to lower gas prices and a moderation in the stock market's decline.  Consumers were still worried about jobs and the economy but they were not as worried as last month.

"The data indicate that consumers have shifted from anticipating deeper declines to the growing belief that the economy will stagnate at its currently depressed level," said survey director Richard Curtin.

     The Chicago PMI or purchasing managers index was out as well which is an important reading on manufacturing activity in the Midwest.  This metric came in much better than economist had expected which contributed to a rise in stock prices in the early going.  The reading improved to 60.4 in August.  Economists had forecasted a drop to 54.5.  Any reading above 50 indicates economic expansion.

    This is a very positive number and I'm surprised markets haven't reacted strongly to this news.  Sure we've added a few points to indexes but we are still in negative territory.  A 60 print for the PMI is very bullish.

Market Recap
     Well, that was an ugly finish to an ugly quarter.  The SNP 500 dropped almost 14% for one of the worst quarters since 2008. I was looking at the reasons for today's selloff even in the face of a good PMI number and it turns out that incomes dropped for August.  It's been 2 years since incomes fell month over month and this is a horrible sign for the economy.  Worker's are getting less share of the pie and that will translate to weaker consumer spending and confidence.

     Stocks across the board were sold today and in the final 15 minutes of trading especially.  XLE was down almost 3% putting me down about 2 pct on my trade.  I am not optimistic about October as many stock market crashes have happened in the past during this month.  September is traditionally a horrible month and October is too and I expect it will be again this time.  My thesis is that we will break to new lows in the coming months as it looks like the US economy is sliding into a recession.  After making new lows in October, we get a relief rally into the end of the year. 

     

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Thursday, September 29, 2011

Markets rally on German vote

     Markets were rallying early Thursday morning as the German bundestag approved new powers for the European Financial Stability Fund.

     From Reuters...    

"The Bundestag (lower house) overwhelmingly approved new powers for the 440-billion-euro EFSF fund to make precautionary loans, help recapitalize banks and buy distressed countries' bonds in the secondary market."

      The markets welcomed this news as a sign of greater European solidarity as fears of German non participation in the bailout receded.  The Frankfurt DAX which had fallen almost 35% from the highs has been rallying strongly recently as German chancellor Angela Merkel has reiterated that the EU would not let Greece default and would keep the EU together.

     Other good news in the markets today was US 2nd quarter GDP was revised upwards to 1.3% from a previous 1% print.  This was on the back of better consumer spending and exports than previously thought. 

     Initial jobless claims also came in better than expected alleviating fears that the United States was sliding back into a recession.  Initial jobless claims came in at a seasonally adjusted 391,000 which was much lower than the 420,000 that economists had forecast.  Initial jobless claims measures the amount of new people filing for unemployment benefits in the past week.

     Markets are strong across the board this morning with the Dow up 200 points as of 7:23 AM PST.  The SNP 500 and NASDAQ are also solidly in the green up 1.4% and .67% respectively.  European stocks are up as well with the German DAX and Paris CAC up over 1%.  Across South America, the Brazilian Bovespa was up 1.3% and the Mexican IPC Index was up over 2%.

Market Recap
     Well, today had to be a frustrating day if you are a bull or a bear!  Markets opened up strongly and then sold off all day going from 250 pts up to 50 pts down on the DJIA only to rally in the final half hour to end up 143 pts higher.

      The interesting thing about today's market was the complete obliteration of some of the best performing momentum stocks today.  AAPL, BIDU, GMCR, AMZN, FOSL, RL all were clobbered today.  BIDU was down over 9% today on no news that I can see.  AAPL was down 1.6%.  All these had done well this year and with end of the quarter window dressing, I would have thought they would be going up on a good day like today.  It seems fund managers may be dumping the stocks they have profits in and scooping up perceived bargains like bank stocks.  Bank stocks were up across the board today with BAC and C up over 3% today.

     I got stopped out of AAPL today with a 4% loss.  It was a poor trade all around and I seem to have lost my mojo with AAPL for now and I will stay away from trading it for awhile.  I have almost given up all the gains I had for the year with the last few poor trades.  My XLE trade is working well for now (fingers crossed) although it did not look so good earlier in the day.  Today's close was quite powerful and I look for a continuation of the strength into tomorrow.  We should be able to get some follow through. 

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Wednesday, September 28, 2011

Do we get some window dressing?

     At the end of every quarter on wall street there exists a phenomenon called "window dressing".  This is where portfolio managers and traders buy up stocks  that have done well in the quarter and sell the ones that have done bad to make their portfolio's look better to their investors.  Generally this is a time when stocks rise as money is put to work to make the quarter look better than it really was.  If you look at the end of the last quarter in June, you can see a good example of it.  Stocks really rose at the end of June.

     We are coming to another end of quarter and after last weeks drubbing, markets are looking for any reason to rally.  As such, stocks are once again up today nearly 100 points on the DJIA in the early going and the SNP and NASDAQ are up as well.   We gave back 150 pts of gain on the DJIA yesterday and today we may get it all back!  The headlines will say we are up on "European hopes" but we know better...it's because of window dressing!

     After flying yesterday, European stocks have settled down a bit mostly in the red by modest amounts.  London was down almost 1%, Frankfurt was up with a marginal gain and Paris was down by .4%.  Gold remains near yesterday's closing price and seems to be stabilizing and silver is down a small amount.  Oil is down almost 1%.  The euro is rallying once again up a third of a percent.

     Across South America, the Brazilian Bovespa is up over 1% and the Argentina Merval is not open but was up 2% yesterday.  Asian shares were mixed with Tokyo up and Hong Kong down.

Tuesday, September 27, 2011

Gold bounces back

     Gold  was higher today a huge selloff cause prices to drop 350 dollars from the peak.  At one point in overnight Sunday, gold was at 1530 dollars but was near 1650 in recent trading up 4% from yesterday's closing price.  Silver also recovered up 9% after an even sharper 30% decline over the past week or so.

     Markets were higher once again this morning on hopes that European policymakers were finally getting a plan in place to fix the European debt crisis.

     "This comes after a European official said that a detailed plan to leverage money in the EFSF was in the works and that the it would use a portion of the money from the fund to shore up European bank capital, while another portion would be used as seed money for a European Investment Bank," said a CNBC article.  

     The DJIA opened up 150 points and quickly rose to 250 points higher in early trading.  Bank and energy stocks were leading the way with BAC up 3% and XLE up 4%.

     European shares rocketed higher with the FTSE up 3% and the DAX up 4.5%.  Asian shares rebounded as well with Hang Seng and Nikkei both registering large gains.  Across South America, the Brazilian Bovespa was up 900 pts.

Market Recap
     Wow, that was a pretty bad finish if you are a bull today.  We were up as much as 300 points on the DJIA but gave over half of it back in the last hour of trading finishing up about 150.  I'm not sure what caused the 200 point selloff at the end of the day but it might be because of fighting between countries about who's going to eat the cost of the bailout.  Governments want bondholders to eat a bigger portion of the cost. 

     From the Financial Times...

     A split has opened in the eurozone over the terms of Greece’s second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger writedown on their Greek bond holdings, according to senior European officials.

     The divisions have emerged amid mounting concerns that Athens’ funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July.

      While hardliners in Germany and the Netherlands are leading the calls for more losses to be imposed on the private sector, France and the European Central Bank are fiercely resisting any such move. They fear re-opening the bond deal could spark renewed selling of shares in European banks, which have significant holdings of Greek and other peripheral eurozone debt."

     Needless to say, this is a bad sign for tomorrow.  I purchased some AAPL stock amid the euphoria early on and am quickly in the hole 1.5%.  AAPL had been outperforming the market recently but has lagged the last 2 days on the news that they are ordering parts for less ipads than expected.  This has led people to believe their sales are not as good as forecast which has put pressure on the stock.   It looks like this trade is not going to work out for me but I have a stop loss on the stock so it won't hurt me too much unless we get a huge gap down tomorrow which is possible. 

     This market is completely news driven right now which makes it hard to trade, for me anyways.  If I get stopped out of this AAPL trade, I will probably sit on my hands for awhile until a trend emerges.  I will keep adding to core holdings on big dips as well.


    


     If you are into trading, please check out my friend's blog.  It's called the Chartographer's Map Room.  This guy really knows his stuff.  Thanks.

      

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Sunday, September 25, 2011

Gold and silver in liquidation mode

     Gold and silver were in total liquidation mode on Monday morning as European and Asian traders are looking to raise cash anywhere they can.  Gold continued it's decline from the past 3 days as the dollar strengthened versus major currencies.  Gold was down 3.5% while silver was down a whopping 12.4% to 26 and change after earlier dropping as much as 17%!
                                               Yikes!

     There is full blown panic in the commodities space as oil and copper were down big as well.  Oil was down 2.50 to 77.50 and copper was down 5.5%. 

      Well it looks to be another roller coaster day on Wall Street after a weekend of talks between central bankers and policymakers from around the world failed to produce any agreement on how to deal with the European debt crisis.

     "There was very little official detail on the talks however as speech after speech outlined how worried global policy makers were, without offering any clear signals on what the response will be to the debt crisis," said a CNBC article.

     There was talk of a shock and awe trillion dollar upgrade to the European Financial Stability Fund or EFSF but little consensus about implementation of such a plan.  Markets have been reacting negatively to all the confusion.

Saturday, September 24, 2011

Some of my favorite songs of all time

     There's a lot of great new music blogs on blogger like Sub-Radar Mike'sD4's and Lee Lee's and listening to the music out now it got me thinking about how I don't really keep up with music anymore.  I still love music and listen to it all the time but I guess I'm stuck in a past era like most people who get older.  Nowadays, I just listen to my old school rap on KDAY and various rock on JACK and it's good enough for me.

     When I was younger, I always had to be up on the latest jams.  I was a huge hip hop fan and when I was into it (1993-2005), it was a golden age for rap.  From the Wu-Tang Clan to Group Home to Mobb Deep, The Dawg Pound and Snoop and Dre, rap was great and I loved it all.  I got so into it I even started producing it myself!  My mom got me a Roland Groovebox for my birthday when I was 19 and it was on from there!  I started producing my own music along with a friend of mine and pretty soon we got a song on a demo by a rapper called Knoc-turn'al. We weren't that talented but my buddy was his brother in law so we got hooked up.  I even got a chance to meet Dr. Dre when Knoc-turn'al later started working with him.  I got a bunch of songs that we made back then that I soundclouded and I'll put them up in another post if you guys want.

     When I first started listening to hip hop, one of the first album's I bought was A Tribe Called Quest's Midnight Marauders.  I loved this CD so much especially this song...


Friday, September 23, 2011

Support is holding for now

     World markets are selling off once again today but strong support at 1120 is holding on the S&P 500.

     As you can see from this chart, the 112 level has been support for the last two months on SPY which is the ETF that represents the S&P 500.  Every time prices hit this level, buyers have come in and sent us back higher.  That is why it is called support.  I'm of the opinion that that we are finally going to break through 112 and head lower.   Generally when we break through support, more people start selling and we head dramatically lower.  If we can hold support here, we will probably head higher back to 1200.  We are in a trading range market for now as long as support holds.  If we break support, look out below!

Market Recap
    The big story today was gold which fell 100 dollars!  Gold has formed a double top formation and there could be more downside on the way.
    The reasons for gold's selloff is that hedge funds are selling their winners to raise cash.  Also, with the dollar strengthening gold's appeal as a currency hedge is lessened.

    There will probably be a buying opportunity coming up however so I am going to keep my eye on gold.  The Chartographer has a great post on gold here and basically called the top in gold.  I am real glad I sold my gold yesterday, I would not want to ride out this kind of move.

     Stocks finished today in the green with technology stocks showing strength.  The Dow was up 38 pts but the S&P 500 was up 7 and the NASDAQ was up 28.  Support at 1120 has held for now.  Overnight, SPY hit a low 110.85 but we bounced back smartly from there.  We could be heading back up the range, however, I don't know if there is strength enough for us to power to 1200 again.  But we could have a little rally from here to 1160-1170.  

     Foreign stocks did good today with European and Emergent Markets stocks doing well after getting obliterated yesterday.  I thought the selloff was way overdone on foreign stocks and so dipped my toe in yesterday and bought some EM's for my long term portfolio.  That is working out well so far as EM's are up about 2.5% today.  You can track Emergent Market's stocks with EEM.  My friend the Hasidic Plumber likes to track the Brazilian Bovespa and the Argentina Merval and you can track those with EWZ and ARGT or the Argentine Merval index if you like.

     I was away from the computer all morning so wasn't able to track the stock market and did not do anything with my portfolio.  I am definitely looking to get back into AAPL and start a position in MCD at this time.  I like stocks that have shown strength and AAPL and MCD are two of the strongest stocks in the market right now.  Cyclical stocks like CAT and energy stocks like XLE have really gotten bombed recently.  XLE is an energy index and CAT or Caterpillar is a good proxy for global growth.  These sectors are so weak it's best to stay away from them right now and stick with tech and consumer staples.  Utility stocks are also strong right now.

     Being at the bottom of the range, it would seem like a good time to get back in and set a stop at the recent lows.  I will probably do that on Monday, although I will be away from the computer that day as well. 
     


Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Thursday, September 22, 2011

Stocks plunge worldwide

     A dour outlook from Fed chairman Ben Bernanke and slowing growth in China are contributing to a worldwide market selloff this morning.   US stocks are down 300 pts at the open.

     Yesterday's Fed statement offered a bleak assessment of the prospects of future economic growth in the US and said there are "significant downside risks to the economic outlook."  Markets sold off 284 pts after yesterdays Fed statement.

     Also, Chinese Flash PMI which is the purchasing manager's index, a measure or manufacturing output, declined to 49.4, the lowest in two months.  This is adding to fears that global economic growth is cooling.

     US Markets opened 300 pts lower with the SNP down 31 to 1135 and the NASDAQ off 66.  Oil cratered tumbling over 6% to 81 and change.  Gold fell sharply off almost 4% or 70 dollars down to 1737.70.  Meanwhile US 10 year yields hit a new 60 year low at 1.77%

     Foreign markets were down with the Hang Seng Index trading down 900 points or 5% and the Nikkei down 180.  European stocks as you can imagine are tanking as well with the French, German and British bourses all down 4% or more.

     Across South America, the Brazilian Bovespa is down 3.5% and the Argentina Merval is down 4.3%.

     It looks like we could be starting the next leg down in the selloff.  We still haven't broken down through support so I won't add any shorts until we do.  The bulls need to make a stand soon if they want to hold this bottom.  Interestingly enough, small cap stocks are outperforming today in a horrible tape which could mean we get a bounce from the lows.

Stocks I'm Watching
     IWM- The Russell 2000 small cap index is outperforming today in a brutal tape.  It is down 1% less than the Dow.  I watch the small caps for signs or risk taking and risk aversion.  Usually on a bad tape, the small caps underperform.  I'm taking this as a signal that we could bounce back from here and am adding a long.

     AAPL- Apple is also performing well today in a bad tape.  It seems to be a safe haven in this market environment.  AAPL is down only half as much as the DOW.  I will probably buy my AAPL back today.

     MCD- McDonalds is also performing well today down about half as much as the DOW.  MCD is a great place to hide out in this market.

     CAT- Caterpillar has been performing horribly lately.  It has completely broken down from support around 80 dollars.  This is a bad sign for global growth.  CAT is down over 10% in the last 2 days! 

     NFLX- NFLX is up today!  This is mildly surprising to me as today is a risk off day and NFLX short is a risk on trade.  NFLX is up 1%. 

     FCX- Freeport McMoran Copper and Gold has been getting absolutely obliterated lately on slowing global growth.  The breakdown in this name is a strong signal about slowing global growth.  It is down 9% today and 15% in two days.

Market Recap
     Well it was a pretty bad day for my trading account.  I sold my gold long for a 6 percent loss and I tried to trade AAPL today unsucessfully.  I bought AAPL in the early going and got stopped out when it dropped past 400 later in the day losing about 2 pct.  Today's action was brutal.  I don't understand this market right now.  I don't see how we can be down 500 pts on basically no news and when Greece was going to hell last week we were rallying!  Emergent Markets were down 6-9% today!  FCX was down 12%!  What the hell!  There was no news to justify that kind of action.  I know global growth was slowing but so did everybody else I thought.  China's PMI wasn't that bad last night! You would have thought Greece went belly up today based on the price action. 
    
    With that being said, I am now 100% cash in my trading account.  It looks like the market wants to break down from here.  EM's have already started the second leg down, it's just a matter of time for the US markets I believe.  Call me crazy but on day's like this I like to buy for my long term portfolio so I picked up a small amount of emerging markets stock today.  It's probably a mistake trying to bottom feed here but I don't see the justification for the kind of move we had today so I'll pick up some on the cheap. 

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Wednesday, September 21, 2011

Let's Do the Twist


     The FOMC meeting concludes today with the market widely expecting the Fed to implement a new program to help stimulate the economy called Operation Twist.  The Fed has a dual mandate which is to keep inflation in check and promote employment.  With the economy struggling along and the unemployment rate remaining around 9% expectations are that the Fed has to do something to stimuate growth.  Back in the 1960s, the Fed implemented a program called Operation Twist so named because "The Twist" was a popular dance craze at the time.  The Fed bought longer term bonds and sold shorter term bonds on their balance sheet to flatten the yield curve.

    "By doing so the Fed drives down the desirability of 'safe' investments, making riskier options like investing in a business instead of government debt more attractive," says an article on Yahoo! Breakout. 

    This hopefully encourages investors to take on more risk by selling government bonds and buying stocks.  It also could potentially help the housing market by lowering borrowing costs.  The Fed is to make an announcement later today on what if anything they will do to help stimulate the economy.  Whatever they do, it will move the markets.

FOMC statement
     Well the Fed statement came out and as expected is going to implement the program known as "Operation Twist".  From the FOMC statement...

     "To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less. This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate."

     Stocks reacted negatively to the news with the DJIA now plumbing new session lows down some 170 pts.

Final Recap
     Wow, the markets did not like that at all!  The Dow went straight down after the FOMC meeting results finishing 282 points lower!  I don't know what happened to set off all that selling and will have to look into it.  I suspect it is the algos that run the markets nowadays took the markets down because of no surprise stimulis from Bernanke.  Regardless, it looks as if we are heading back down the trading range and I suspect we might break through the bottom this time.  Lots of global growth names are getting slammed right now like CAT and EM's look very weak and of course Dr. Copper who has a PHD in economics is signaling problems.  I might put on a R2K short tomorrow or a European short. I don't like the looks of this market right now.  Today's reaction to the Fed was pretty bad. 

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!

Tuesday, September 20, 2011

Italy downgraded!

Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!   

      Yesterday, after the markets closed S&P downgraded Italian debt from Triple A to A+ rating citing a heavy debt load and weak growth and a dysfunctional political environment.  Hmm, sounds familiar?  Amazing they didn't cut it before.  S&P are real idiots and probably should be arrested for causing so much havoc in the financial markets.  How can you cut the US debt before you cut Italian debt, it makes no sense unless you have an agenda!  Not saying that the US debt deserves a triple A rating but the bond market sure thinks so with 10 years below 2 percent!!  Italian debt is junk and it's a travesty that S& P is only now getting around to downgrading Italy! Put them out of business, they are worthless!  Now there is word that the SEC is investigating insider trading by hedge funds ahead of the US debt downgrade.  S&P are crooks, lock them up and throw away the key!

     The Italian debt downgrade seems to have had a limited impact on the markets so far as futures dropped about 80 pts on the news but have since recovered and moved into positive territory.  Markets opened with a 40 pt gain but quickly sold off into negative territory before recovering.  Gold and oil are both up even with a stronger dollar and the euro is down. 

     European stocks are solidly in the green at 7:18 AM PST with the FTSE up 1% and the DAX up 1.5%.  The Hang Seng index finished up 100 pts while the Japanese Nikkei played catchup from yesterday and fell 140 pts.

     The markets seem to be trading fairly well ahead of the 2 day FOMC meeting where it is widely expected the Fed will do another bond buying operation called Operation Twist.  This is where they will try to extend the duration of their portfolio of bonds by selling shorter duration bonds and buying longer duration bonds.  The size of their balance sheet will remain the same but their mix of bonds will change.  I don't see how this is going to help things because the 30 yr is already around 3.2%.  How low do they want it to go?

Stocks I'm watching
     AAPL-  Apple is making another new all time high in early going as the breakout continues.  Fast Money traders speculated that AAPL is becoming a safe haven and I had been saying that for awhile now.  AAPL has hit an all time high of 419.87 just below the magical level of 420.  OK AAPL has just hit 420 for a new all time high, so to speak.

     MCD-  McDonalds is trading very well again today up about 1% outperforming the overall market.

     IAU-  Gold is bouncing back nicely after yesterday's selloff as the chop continues.  IAU is up 1.3 pct in the early going.

     NFLX-  Netflix is down another 8% today as investors are piling out of the stock after yesterdays perplexing move by CEO Reed Hastings to split the company in two.  Netflix is the cool name, nobody gives a hoot about Qwikster!

     EEM-  Emerging markets have been underperforming US markets pretty significantly recently.  I'm not sure what's causing this.  It could be the stronger US dollar and lower commodity prices or perhaps investors fear a slowdown in the global economy.  Whatever the reasons, it is definitely worth monitoring.
One month chart of SPY(SNP 500 in yellow) vs EEM(in blue) the emerging markets index.  As you can see EM's have underperformed by about 7% coinciding with a rise in the US dollar.

Final recap
     Markets sold off in the final hour of trading today.  This was not a good finish for the bulls.  We are near the top of the range and had a big intraday reversal going from up 150 to up 10 at the bell.  I suppose it is a small victory that we did not go negative.  I got caught up in the selloff as I got stopped out of my AAPL today for about 413.63.  I had been raising my stop as I went along and AAPL got hit hard in the late day selloff and my stop was triggered.  It was still a very nice trade as I made 5% in about 5 days.  AAPL looks like it has topped for now but I will be looking to get back into AAPL at some point.

     The Dow finished up 10 pts and the SNP 500 was down by about 2 pts but the NASDAQ was down almost 1%.  NASDAQ had been outperforming recently but got hit hard in the late day selloff. Gold was up 30 bucks and oil was up a buck to 86 and change.

     This could be the top of this recent rally and we might start heading back down again.  Small caps performed very poorly today as well.  The wild card is the FOMC meeting going on.  Whatever the Fed says in the next few days will move the markets.

PS  Hey everybody, if you are interested in trading, I want you to check out a friend's blog.  It's called the Chartographer's Map Room.  This guy really knows his stuff and he's definitely a better trader than me!  So check it out if you are interested, especially if you are starting out looking to get into it, he has a lot of good advice.

http://swingtrading101.blogspot.com

Monday, September 19, 2011

Apple Breakout City!

Disclaimer:  Nothing in this blog should be construed as a recommendation to buy or sell any securities!  Please do your own due dilligence before buying any stocks or bonds!  

      I was just checking out the futures before bed and I noticed they were down about 1.5%.  Apparently, the Greeks are having some problems with their budget...AGAIN!  They are having problems meeting their budget cutting targets to get the next tranche of bailout money from the rest of the EU.  The Greek economy is in major contraction and trying to get more money out of the greek people is like squeezing blood from a turnip!  This has renewed the fears of traders who have pushed down stock futures.  US Dow futures are down 141 pts and the London FTSE is down 1%.  The German Dax is down 2% and the Hang Seng is down 450 pts as of 12:25 AM PST.  It looks like it could be another interesting day tomorrow!  I was hoping for a continuation of the rally but it looks like we are going to head back down in the trading range we've been in for a month now.

6:36 AM PST Update
    Stocks open lower investors fret over Greek default scenario.  Investors are dumping Euro's and European stocks today as fears of a Greek default grow.  Over the weekend, EU finance ministers met to discuss the situation but failed to come up with any new resolutions and German chancellor Angela Merkel lost another regional election putting more doubt into Germany's participation in the bailout.

     The IMF told Greece that it needs to make more cuts in government spending to receive a new 8 billion bailout payment.

     "Additional savings measures were needed to cut the public deficit to a sustainable level and reduce the public sector's claim on resources—code for axing jobs and cutting pay and pensions—while improving tax collection rather than adding further taxes," said a CNBC article.

     The Euro was down by 1.5% and European stocks were down 2.5% or more.  Oil was down over 2% and even gold was down about 1% as the dollar strengthened.    The 10 year US treasury bond yield cratered to 1.96% as traders sought the safety of US Government debt.  The DJIA was down 200 pts in early going and the dollar was up against a basket of currencies by about 1%.

1:14 PM PST Update
     Markets surged in the last hour trading after news broke that Greece was near an agreement with its lenders.

     "Greece is near an agreement with its international lenders to continue receiving bailout funds, a Greek finance ministry official said on Monday after a conference call between Finance Minister Evangelos Venizelos and inspectors from the EU, IMF and ECB, known as the 'troika',"said CNBC.

     The Dow Jones Industrial Average after being down 250 pts in the early going finished down 109 pts after the last hour surge.  The SNP 500 was down 1% and the tech heavy NASDAQ was outperforming down .36%.  The NASDAQ was green at one point during the day as AAPL hit an all time record high.

Stocks I'm watching
    AAPL-  Apple was up 11 bucks and hit an all time high at 413.23 earlier today.  This is trade is working out very well for me so far and if I had any more money I would be adding to this trade right here.  There could be another 10-40 dollars of upside right here.
                                  Break out city!



    NFLX-  Netflix after earlier being up 3% finished down 7%.  They are splitting their DVD and streaming services into separate businesses.

    We realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. It’s hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

-- Reed Hastings, Co-Founder and CEO, Netflix


    If I had some nads I'd short the shit out of NFLX right now.  NFLX is a broken high growth stock and I think there is much more downside to go.
                                    U-G-L-Y you ain't got no alibi, charts ugly!

     IAU-  Gold tanked today after the dollar rose against a basket of currencies.  Gold is trading the opposite of the dollar recently.  When the dollar goes up, gold goes down.  Gold looks like it is going to chop around for awhile as it consolidates it's huge gains from the past few months.  My gold trade isn't working too well for me right now.  I won't be adding to it unless it goes past my original buy price.  I won't be selling it either.

     MCD-  McDonalds is performing real well in a bad tape up .59% at the close.  MCD is a classic defensive play in this environment and I am looking to add it to my portfolio.  It has a nice 2.8% dividend yield as well.  Problems include exposure to Europe, but they have nice growth in Asia and people like their cheap eats in this economic environment.  Their chart looks pretty as well.
                                       Its always a good thing when the price goes from the lower left to the upper right.

     DBC-  Commodities across the board got smoked today on dollar strength.  Copper fell 4%, oil fell 2.5% and gold of course fell 2%.   If copper drops because of dollar strength that is okay but if its down because of economic weakness, it's bad.

     Today's action at the end of the day makes me constructive on tomorrow.  If Greece get's their money it should be all systems go.  Tomorrow, the FOMC starts their two days of meetings to discuss monetary policy.  The market is expecting something called Operation Twist to come out of these meetings as the Fed looks to stimulate the economy.  Let's see what happens.

PS  Hey everybody, if you are interested in trading, I want you to check out a friend's blog.  It's called the Chartographer's Map Room.  This guy really knows his stuff and he's definitely a better trader than me!  So check it out if you are interested, especially if you are starting out looking to get into it, he has a lot of good advice.

http://swingtrading101.blogspot.com

Saturday, September 17, 2011

Anonymous Occupies Wall Street

I have posted a livestream of the event on this page.

Background on this occupation.

Anonymous and Adbusters are at Wall Street planning to stay a long time and they hope to gather more people.

There are thousands of people there.

There is a media blackout of the event so as not to encourage more people to attend.

There is free kool aid at the bull tomorrow.

How to buy American Part 2 of ?: Car Edition

    A couple of weeks back, I made my first post on how to buy American.  In that post, I said that it is time to declare war on the Great Recession and the way we fight this war is by buying American made goods.  If everybody in the US spent 100 dollars on American made goods instead of foreign made goods, it would create hundreds of thousands of jobs.  Here is how to buy American cars...

     By one estimate, the US Auto Industry contributes 500 billion dollars to US GDP.  The US GDP is 13 trillion dollars so the auto industry makes up about 4% of the US economy.  That's huge!  It is clear that if we all got together to buy a US car we could seriously impact the US economy in a positive way and generate jobs. 

     "Some private industries are integral to long-term national financial viability. The Detroit car industry—like our aircraft manufacturing capacity—falls into this category," says Bloomberg Business Week.

Some facts about the US auto industry....
  •  The American auto industry supports 3 million jobs including auto dealers, parts suppliers and of course assemblers.
  • American car manufacturers spend billions of dollars on plant equipment and research and development every year directly contributing to jobs in other industries.
  • Car manufacturers are important to national security.
  • Manufacturing is the single biggest contributor to national economic activity and auto manufacturing is the biggest part of US manufacturing.
           After the bailouts of 2 major US car manufacturers GM and Chrysler, the industry has had to reinvent itself.  GM and Chrysler were drowning in red ink and made cars that were too big, cost too much and made by workers who made too much and received too many benefits.  After their near death experience the companies renegotiated the contracts with their unions and resolved to make better cars that Americans want to buy and are smaller and more efficient.  Largely, they have succeeded.   While the quality isn't as good as other manufacturers like Ford or Toyota, they are improving.

     Ford on the other hand, never took a dime from the government and is positioned better than ever to succeed.  They renegotiated the contracts with their unions and will be solidly profitable even in hard times.  They have great new small fuel efficient cars like the Focus and they still make the #1 selling pickup in the United States the F150.  Their quality has improved greatly and is even better than Toyota's now in some surveys.

     The best way to support the US Auto industry is to buy an American car made in the USA.  You might ask, "wait aren't all American cars made in the USA?"   Surprisingly, the answer is no, there are many American cars made in Canada and Mexico.  Car companies moved some of their manufacturing there because wages are lower and unions are weaker.  In order to support the American worker, it is best to buy an American car assembled in America and avoid those cars assembled in Mexico, Canada and elsewhere.

     Here are all the American cars assembled in the USA according to www.howtobuyamerican.com

Chrysler- Chrysler Sebring, Dodge Avenger, Dodge Calibur, Dodge Dakota, Dodge Nitro, Jeep Compass, Jeep Grand Cherokee, Jeep Liberty, Jeep Patriot, Jeep Wrangler, Dodge Ram

GM- Cadillac CTS, DTS, STS, Escalade, Chevy Corvette, Cruze, Colorado, Express, Malibu, Silverado, Suburban, Tahoe, Tahoe hybrid, Traverse, GMC Acadia, Canyon, Savana, Sierra, Yukon.

Ford- Ford Econoline, Escape, Escape Hybrid, Expedition, Explorer, F150, F250, Focus, Mustang, Ranger, Shelby GT500, Taurus, Lincoln MKS and Navigator.

     Even some foreign cars are assembled here in USA however, they generally do not use too many American parts. 

BMW- X3, X5, X5M, X6, X6 M, X6 hybrid

Honda- Acura RDX, Acura TL, Honda Accord, Accord (Crosstour), Civic Sedans, CR-V, Element, Odyssey, Pilot and Ridgeline

Hyundai- Hyundai Santa Fe and Sonata

Kia- Kia Sorrento

Mazda- Mazda 6, Mazda Tribute, Mazda Tribute hybrid

Mercedes-Benz- Mercedes GL-class, M-class, R-class

Mitsubishi- Eclipse, Eclipse Spyder, Edeavour, Galant

Nissan- Altima, Armada, Frontier, Maxima, Pathfinder, Titan, Xterra

Subaru- Legacy, Outback, Tribeca, Equator

Toyota- Avalon, Camry, Camry hybrid, Highlander, Sequoia, Sienna, Tacoma, Tundra and Venza

      Here are cars that are not assembled in America and could be avoided(although buying the American ones still support America)

Assembled in Canada- Acura MDX, ZDX, Chevy Camaro, Equinox, Impala, Chrysler 300, Town & Country, Dodge Challenger, Charger, Grand Caravan, Ford Flex, Edge,  GMC Terrain, Honda Civic Sedan, Civic Coupe, Civic Coupe Si, Lexus RX 350, Lincoln MKT, MKX, Toyota Corolla, Matrix, Volkswagen Routan

Assembled in Mexico- Cadillac Escalade EXT, SRX, Chevrolet Avalanche, Aveo, HHR, Silverado, Silverado hybrid, Dodge Journey, Ford Fiesta, Fusion, Fusion hybrid, GMC Sierra, Sierra hybrid, Sierra crew cab, Honda CR-V, Lincoln MKZ, MKZ hybrid, Nissan Sentra, Versa, Dodge Ram 2500, 3500, 4500, 5500, Toyota Tacoma(made in USA as well), Volkswagen Jetta, Jetta sportswagon.

     While this list is by no means comprehensive, it can give you a reference to go by once you decide to purchase your American car.  To get the most bang for your buck when trying to support the US economy it's best to buy American cars assembled in America.  Second best would be to buy foreign cars made in America.  To fight the war on the Great Recession we need to buy more American made goods and support American manufacturing!  More later...