Saturday, October 3, 2009

Chart of Charts 100309

This first picture, is of course, those green shoots that sprouted up in summer.

Moderately short is indicated. I would like to see the slow heatmap show dark red before going big short. There is a good chance there will be a move up from here. There is some serious stuff coming down on financials, mortgage resets, and green shoots.

Comments appreciated.

Market Prediction Funnies

FCIC Committee Members

I thought it would be interesting to review who the FCIC was.  Take a look

Heather Murren -- Las Vegas Resident (no bubble there) and former Managing Director of Global Securities Research and Economics at Merrill Lynch. Now running the Nevada Cancer Institute, maybe paying her penance.

Byron Georgiou -- Also a Las Vegas Resident, running his own company involved in some non-bubbly things like carbon emission in China and residential and commercial real estate.

Phil Angelides, Former California State Treasurer -- Obviously someone who can spot a bubble a mile away.

Bill Thomas --Former Ways and Means Committee Chair. 'Nuff said.

Brooksley E. Born is a public official who, from August 26, 1996, to June 1, 1999 CFTC the federal agency that oversee the futures and commodity options markets. Good thing she didn't reign during a bubble period :), also she graduated in 1961 so will she have the energy to really pursue the Madoff's that are still out there?

Daniel Robert "Bob" Graham (born November 9, 1936)Senator from Florida, up until 2005. Again, no bubbles there.

Keith Hennessey -- served as the senior White House economic advisor to President George W. Bush. His job was to coordinate economic policy for the President, including macroeconomic issues, financial markets and institutions, tax policy, energy and climate change, health care, pensions, Social Security and Medicare reform, housing, transportation, technology and telecommunications, and agriculture. He also worked on budget and international trade and financial issues. Well that makes me feel all warm and fuzzy.

Douglas Holtz-Eakin, Economic Advisor to John McCain. He must be talented since John McCain is as "old school" corruption as old school gets. McCain was performing classic economic hit man activities of lying to thrid world countries about how their GDP would improve if we did massive infrastructure projects that made them slaves of debt. Sound familiar. Now we aren't even just targeting third world countries, the rampant greed requires that "we" target ourselves (fellow Americans).

John W Thompson--A black leader of IBM and Symantec. He got paid $71M last year. I am sure he knows how to look out for the common man.
Comment from blogger who worked for (mostly) and with (several times) Mr. Thompson--
I know John Thompson from his years as CEO at Symantec. Just for the record, he actually does get it and he will look out for the common man. He has my endorsement.

steveo77 [Moderator] 27 minutes ago in reply to dandy1
Appreciate the comment

Do you know him from working with him, or closely studying corporate decisions? Seriously...if there are a handful of people on this committee who may rise to the occasion, lets identify them, and encourage them!!

dandy1 [Moderator] 6 minutes ago in reply to steveo77
Both. I was just a working stiff techy but John is extremely approachable and I worked with him directly on many occasions over several years. John will stop and listen to anyone and give their ideas serious attention. That is what makes him a good leader.

Peter J. Wallison -- hey this guy might "get it", like Obama. Check out the link, its worth it.

FCIC Then and Now

First off, 25 years ago I wanted to be an engineer. Back then I couldn't even spell engineer, now I are one. Forgive the grammar. The point is to make a point.

Congress set up the "Financial Crisis Inquiry Commission". FCIC was established in May 2009. Have "we" learned anything? CIT is on the brink, ready to try to stab their bond holders in the back. This is the same as disruption of contract to the wild west. With Bernanke in the saddle, how does that make you feel?

Since then banks have ramped up their risk levels, increasing profits by risky bets.

In 1929, after the first drop, an investigation was launched, although before it ever got off the ground, and a "good size" stock market recovery was already occurring, people began losing interest in banking reform...after all the system was working.  Any intervention was cast in the light of being disturbing to the recovery.  Instead the banking system headed towards "policing themselves".   OK can I be cynical here?  The wolves are watching the wolves, decide which sheep can be decimated.

After much foot dragging, in 1932 the first hearings into the financial fiasco were conducted.  Hoover had finally allowed the investigation to start.  The commission that was appointed to investigate the Great Depression was basically a bunch of lame ducks, one leader after another failing to get any traction against the highly motivated and smooth talking operators of Wallstreet.

Roosevelt won the election in 1932 with a landslide win by his "New Deal Coalition".

It is interesting that in 1919, the Volstead Act was passed, Prohibition.  But at the time it was considered a big enough measure that it required the 18th Amendment of the United States Constitution.   Amazing, that nowadays, Government can allow things like torture based on simple letter commissioned by a Berkeley Professor.    Back then just outlawing booze required a change to the Constitution.
Then the Roaring 20's ensued, with a chicken in every pot, and a continuously high plateau where economic cycles and downturns never need be feared again.

1933 -  Roosevelt works to repeal Prohibition.

In 1988, the Omnicus Drug Act and the Defeince Authorization Act, the "War on Drugs" had officially been started, but without any Constitutional Amendment.  Note how coincident with this War on Drugs, that a raging bull pushing into the end of the millineum occurred.  Similar to Prohibition in the Roaring 20's.

Now Obama states that the term "War on Drugs" will no longer be used. 

Theory in a Nutshell -- Social mood creates a need to vilify some of our vices (Prohibition and War on Drugs), however these vices are somewhat repressed, and transformed into other avenues (Speak Easy's, Opium use, and in this last War--a transition to easy to transport, manufacture and deliver, on a dollar per pound basis, uppers like cocaine and meta-amphetamine) and other vices---in particular ---Greed.

Thesis--The net total of vices of the human population as a whole, stays about the same, just shifting in type.

OK back to the stock market proper: 

In 1932, more than 2 full years after the first crash, the first hearings were starting investigating why the crash happened and if there were any illegal dealings, in particular short selling by those who crashed the market.  A 30 year old "junior" corruption investigator was put in charge of the investigation, and requested 500 subpoenas, to which he was shot down in flying colors.  Obviously no one with vested interests wanted the truth to come out.  

Finally in 1933, someone with the knowledge and guts to attack the problem was appointed, an Assistant District Attorney from New York.   Ferdinand Pecora.   AND he was given broad powers to subpoena which he did, resulting in many public floggings of financiers of all sorts including JP Morgan Junior. 

The public was suffering through the Depression, they wanted a pound of flesh and they got it.

In January 2009, The NYT asked "Where is our Ferdinand Pecora"

Where indeed.  

It seems like Mr Clean, Sptizer, had the chance to take the reins and bring some reality to the current investigation.   But he was setup with a prostitute and then run out of town.

Who indeed.

The new FCIC may also be a lame duck, like the 1929 investigation started.  The FCIC is promising a "no holds barred" investigation. 

They publicly ask the question "Why wasn't this crisis detected".  This leads me to believe that either they are ignorant or are intentionally just on a witch hunt.   Why?  Because they are asking the wrong question---  because in fact, many people detected this crisis way before it blew up.   I can provide dozens of samples.

The members of the "new" Financial Crisis Inquiry  Committee:

Friday, October 2, 2009

AFter all this is a Banking Crisis, which means credit crises.

Until the government starts provided low interest loans directly to Americans, and the Fruadster's that are masquerading as our beloved Banksta's, we are in deep Kim Chee.

Correlation Broken USD and SPY

I haven't been reading the blogs today, so if this information is "old news" forgive me.

Using EUR/USD as a proxy for USD strength, and correlating to SPY, you can see the correlation has been tight, but and episode last Friday and now today shows some sharp departures from that correlation. I still believe the dollar rallies from here....big daddy is still one....someone said....I hate the USD the worst, except for all the others.

But at the same time, equities tank. That causes and amplifies the flight to "big daddy". There were elements of fear lately. Many people know this is a house of cards.

Look at the lower links to longer time frame charts, the correlation has never been perfect and has often varied, so this is not perfect, but it's another straw placed on the camel's back.

Thursday, October 1, 2009

Astro Freak Stuff

OK, so do I really believe the full on gamut of Astro Investing?  Well, as compared to what, I would have to state the relevancy only as a comparison to other events, triggers, "news".   

So for now, "just saying", but...

The Earth is composed of shifting plates, and some areas are "hot spots", and sometimes a build up of tension over time results in an earthquake.   But think about the "last straw", the gravitational pull of other system bodies such as the moon, planets, and sun, especially  when they act in unison or in opposition, or even at 90 degrees-- a pull me, slide me effect.

So I have not researched the current juxtaposition of all that, but just saying, it's a full moon coming and there have been some massive earthquakes just of late. 

An update on the:
Mercury Retrograde (which did incidentally, blow up my computer 2 days after I anticipatorily did a system image which saved me) is officially technically over but still in a very powerful phase, check out this link.

Thursday Musings

Above, lots of head and shoulders are popping up, this is courtesy Finviz, which is a permanent link on our blog

If you went short in late August early Septermber, the recent declines did alot to alievate the pain of the month, however the index changes and losses since then are still significant up to this point.   I don't think that a 2% drop is "panic".  Although alot of charts I follow did break upward wedges.  

Jefferson and Junk Bonds

Tuesday, September 29, 2009

Quote of the Week

You Can't Be Contrarian Just By Being Wrong

The QQQQ was really bought huge yesterday by block traders. See the bottom of report...SPY also had huge volume, but nearly equal on the uptick and downtick.

Risk is en-vogue...great timing for a Wave 3.

More on the Euro / USD Currency Pair

Maybe I had too much fun playing this pair the other night.  However, I still see it bearish against backdrop of such low percent dollar bulls. 

Some other FX traders think Eur/USD could shoot to 1.49 out of a bigger rising wedge. 

That would shoot the SPY up 3 to 5%.   No time to get complacent unless you are sitting in cash.  Ouch...which cash?  Is there no safe place left? 

Monday, September 28, 2009

Double Down on Perfect 12345 and ABC and Person Pivot!

Double Down, this is as big as my trades (call them bets) go.  

This is like gambling in Vegas except it one deck blackjack and you can see the dealers down card.

EUR Short, heck you can do this everyday.

This combination of a nice triangle (even though blown up a time or two), and a person pivot, in the headwind of a potential USD rally, 3% Dollar bulls, and potential geopolitical instability says....short!!

Could stop out, for sure, so be it, take a small hit and move on.   Or if the trade moves my way, lower the stop to breakeven and risk higher stop out chances, but zero loss is a beautiful thing.  

Berk USD Platinum and VIX - What do these have in common.

Berk, a former participant/partner at Evil Speculator, appears to have returned after running Amok in "Corporate America".  Mole, once cited Berk as the "Best Trader, barr none" even though he is only 25 YO.  Maybe this is like a young Gandalf riding into the fray at the turn of the tides...and so it begins.

Perfect timing.  My brother has been "out of the market" since April, busily working on 10 projects that improve his infrastructure and future profitability in a number of ways.  He just returned he "won"

Think of all that time I could have saved....or done something better with...trying to analyze an insane market on a daily basis.

Remember the 2004 to 2007 runup......think of how long that lasted whilst insanity was clearly the only pricing mechanism in play.  OK--substitute exuberance for insanity if you wish, or irrational.

Speaking of "Corporate nightmares" -- it is amazing how companies and governments can find the exactly wrong thing to do.  It is an amazing testament to the human being....that we can be so jacked up, AND YET still produce something!   I am extremely concerned that my beloved TOS while likely be pillaged by Ameritrade...I am learning my Interactive Brokers account functions so I can bail efficiently. 

The expected bad trades, poor service, and reduction in functionallity (to give the platform wider appeal) in TOS will probably happen at the worst P3, or they will just stop allowing shorts at all, and then the put pricing will become expensive of course.  OK, sorry, just wanted to say hello, and got into mini-rant.

Entered a Platinum Short

Last week I opined on how the COT reports for many of the precious metals had increasing large positions on the short side.

Weakness has certainly been shown.  Entered this short trade on Platinum.

Copper is also weak.   Doctor Copper, an expert in diagnosing the economy.

This great site has loads of information on futures of all sorts and the graphical display of positions by Commercial, Non-Commercial and Non-reportable

Sunday, September 27, 2009



Look at the long term charts.  This puppy could have a long way to fall. 

I can't believe I didn't see anyone mention a H&S on this main currency play that is directly  related to the US Equities prices. 

Just a many technicians got burned by the S&P H&S in August, that now people are afraid to bet. 

The first chart is a counter intuitive "sell on weakness" play. 

I placed my largest FX trade ever 200,000 short.