Friday, December 4, 2009

Riddle me This (Unemployment)

The USA lost jobs this week, but the unemployment rate WENT DOWN?

How does that make any sense?

Because lot's of people have been out of work for so long, that they have given up AND they are no longer receiving unemployment benefits.  No spirit and no financial resources.  Gov Speak says that's bullish.

Gold Bull?

Thursday, December 3, 2009


2 of the 3 of my favorite BB's

Bollinger Bands (get the book, Bollinger by Bollinger)
Black Betty --what a classic Jam by hippies that were burnt out decades ago!
oh, and the third....check the video.  His voice is cracking and he spends 90% of the time not meeting the eyes or camera.  BB is pushed to the limits, although he knows his keepers are basically happy.   Bankers and Gov officials are going to need body guards.

Why this is likely to be a top -- "We" have learned nothing

I called Schwab today.   Looks like with a 10 minute phone interview I can be pre-approved to refinance my house. 

I can get a 5 year or 7 year interest only loan and pay less than 4% APR.   This will cut my payments by more the 50%!

Its a gamble I have taken in the past to great success.   Refinancing in 5 years (at whatever rate! be it 12% or 20%) or paying off the loan, or selling the house are the options.  Options 2 and 3 are the good ones.  The interest savings in 5 years are enough to cover 25% of paying off the loan.  

Morgan Stanley has something very similar.

10 minutes on the phone, no upfront costs.  Refinance a house with a Diamond Head view.  Does this seem absurd?

Awesome stuff for me.   Ominous Moral Hazard for the long term good.

Some market analyst state in laymans terms:

The Fed lies
The Fed is saying that will someday have to raise rates.
The Fed lies
The Fed may raise rates rapidly and sooner than expected, and without warning.

Don't get greedy, consider a refinance now, it can't get much better.

We have learned nothing.....this is not punch in the punchbowl....It's a crack hit, and "we" can't get off of it.


How to Make a Million Dollars

First get $999,999 and put it in your account.

Now short the Nikkei, with say $10.  That should be enough to get you to a million.

Total Market - Very Interesting Chart

The latest chart is on the bottom.  The upper chart is from the 1st.

Sure they can bang this tape higher.  But maybe it's time for a turn.

Tuesday, December 1, 2009

One Simple Thought -- Distribution

Keep in Mind -- This One Thing -- Distribution.

It may take months for the big money to distribute their stocks to elsewhere.  Elsewhere may be retirement funds, Sovereign wealth, School funds, and retail. 

When things don't "make sense" ---  Just focus back in on the obvious -- the big money controls the government and the media, and they are distributing their stocks.

GS insiders own about 10% of GS.   GS went from 190 recently to 167, while other markets are finding tops.  Hmmmm......

Total Market Log and Lin Charts and an Interesting Channel

Huge volume on USD futures /DX

I don't know what to make of this monthly chart, except look at the huge volume.
Many people betting on the dollar, up or down.

Thats what futures is....and equal and opposite position.  With a time element baked in, but nothing like option "theta burn"

I see little difference between the large commercial, small commercial, and non-reportables (small speculators---which are by the way, not necessarily evil nor necessarily wrong)

Sunday, November 29, 2009

Dow at 250,000 and Copper Short

Well I have been waiting for this, and why stop at Dow to 36,000.....go directly to 250,000 per the Motley Fool.   And would you really take investing advice from people who call themselves the Motley fool?

More bullish tomfoolery.

And anatomy of a copper short.  Using futures because a big move may happen tonight and I don't really know the miners, just FCX which is highly gamed.

They call it Doctor Copper.  And this Doctor ought to be taking handyman jobs on the side to pay the mortgage on his McMansion, but nooooooooooooooooo.....Copper has made a tremendous run up yet industrial and house building demand is not that hot. 

It's trading, and perhaps its trading too high.

Heatmap, 5, 10, 20 all say bearish. This doesnt happen often.

Keep in mind, I am thinking a sharp drop, then a stroll or rocket up to 1120 area.

The heat map is a little confusing by itself.   "Now" is at the far bottom.  I am using 5 day simple moving average, 10 SMA, and 20 SMA.

I posted this reply to a question:

"Sorry doodlebug, that heat map is a proprietary thing with all kind of custom settings on custom data.

I use it as follows
Light Red I scale into shorts
Deeper red I add shorts
Tan means I scale out of shorts or longs (nuetral)
Light blue I scale into longs (or hedge shorts with futures)
Deeper blue I add longs or long hedges -- but seriously, if its deep blue...I would rather be out of all shorts and heavy long."

The 5 and 10 day have returned 58% and 52% annually during trending markets.  Lately the 5 has been OK and the 10 has been whipsawed pretty badly as we top out through this 29 calendar day cycle.

I may muster a 15 day cycle since that would pretty clearly match the half cycle period that seems predominant right now.  Check next week.  I usually superimpose this on a frankensteinian conglomeration of 4 or 5 charts melded into one, and that takes alot of time. 

I am quite good at Excel charts, but have not come up with a way to automate the process and presentation.

Mutual Fund Cash Flows - Updated from Early November data

Money continues to flow into bonds and out of US equities.  Some money is flowing into foreign equities.

Percent Bears....Tech Analysis on an Indicator

A while back I did a "Questioned Practice" on applying tech analysis to a "Percent Bears" Chart.

We are now right about at the expected measured move.  There be a little more "downside" towards even a few percent less bears.

29 Day Cycles and What I Intend on Doing

This cycle has had uncanny predictive power.  All things do come to an end, though, but until they do, I think it silly to pre-guess that this cycle has come to an end.

My guess is that the PPT has shot all of it's readily available bullets.  The Gov is not going to get GS to pump a few billion into the market without being able to provide that in at least as good a format as an interest free loan.  In other words, a phone call is not going to do it.  It will be a "show me the money" event. 

Our fearless leaders (sometimes I wish they has some fear) are probably scratching their head this weekend, wondering if this Dubai thing matters or not.  Those banks with significant exposure are likely to know it.  See XLF chart at end.

Anyhow, lets say we drop to 1040 in a day or two, as this chart suggests is, well, the most likely path.  Our leaders will be mustering support and a new source of money to pump the market with....and yes, they will win again....since we all know that all we need is confidence (j/k), and a nice rally towards Christmas to get the consumer back in the game.  After all, check out XRT, rally time!

That said, I will be ready to close out short side gains in the next day or two.  At the very least, hedge with long futures.  But really, with a quick drop, quick spike in Vix, put options are probably best closed out.

However, all that said, if the chart below does not "hold" then all these assumptions can be tossed, and then reassess the whole situation.  Until that point though, this looks like a good play to me.  That said...don't follow me, my expertise is in solar engineering, not lunar financial engineering.

Finally, AMBG has a site I don't visit often enough, but finally but the darn link on my desktop.   Springheel Jack follows AMBG several times a weeks and states that his market projections are really good.   His market projections match mine precisely in time and price SO HE MUST BE GOOD!  j/k matching my prediction could be a contra-indicator!  :-)
Original chart can be found at:

Dubai World

If you like this synopsis...leave a comment!  Thanks!

Is Dubai World likely to bring down the American Banking System and force large losses on many US investors with secondary exposure to Dubai World debt.   NO.  But the Royal Bank of Scotland, as the lead loan arranger (p.s. now owned by none other than the British Citizens), may be getting a little skittish.

However, it is the tip of the iceberg of financial models of non-sustainability caused by Mania.  And don't miss the video link at the bottom to a Sam Kinison classic.

The first link here is my favorite, it sums it all up.

 Above is a collage I made from their Home page.

Below is a "development".  I betcha those contractors aren't exactly racing ahead when the bills arent getting paid.  And check the PDF below which is from their website on 11-29-09.

And a few links from our mates down under.

The related part to this post comes in around the 5:00 minute mark in this video.  It is a good reminder about efficient allocation of resources in a sustainable manner.  Please review this important and funny video clip.

The funny thing is that Dubai doesn't even have oil....they are living in a desert without oil.