2016!!

Yes. The next national presidential election is in the year 2016!

I guess it just seems like a long time since the last one.....

befuddled yours,
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WARREN 2016

Rick Santelli talks about the treasury purchases by the Fed and says they are unfair to poor folks. He gives the stock price of Walmart vs. the stock price of Tiffanys as an example. Tiffanys is up three times as much as Walmart. I guess he means to point out the fact that the rich can afford to buy much more than the poor can afford because the rich peoples assets have appreciated much more than the poor folks assets. The poor have no assets. The only asset of the poor is their good health and their ability to work for an hourly wage.

Rick does not advocate for higher wages for the working poor. Unless of course the economy booms so much that the poor and their labor are indispensable. But then we would just import more from China where the workers are cheaper. That is Rick's free market capitalism.

How will this country, the USA, ever put people back to work if we don't have a debt boom like the recent past? The answer is: we will devalue our currency in order to make imports more expensive to purchase, and more desirable to make here in this country.

It is not another debt bubble that Mr. Bernanke and his Federal Reserve want. It is a depreciation of the US Dollar.

In the abscence of tariffs on imported goods what else is there? The rest of the world has been manipulating currencys to their own benefit for decades. And we had the debt bubble to show for it.

As the dollar goes down the people of the US need to stand up for increases in the minimum wage if we don't want the poor to get poorer. And if we want them to be able to afford the goods the will be making here.

I think I will get a bumper sticker for my car that reads: Warren 2016

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All is lost!

Markets, being made up of market participants who are herd animals, tend to disappoint the greatest number of those same participants. This is because the herd is in competition with each other at the same time that they depend on each other for guidance and support.

It is for this reason that markets tend to bottom when there is no hope for a rally and top when all are feeling good about the prospects of continued rise.

I have not heard much good about gold lately. (Except for the gold bugs, but they never give up!)

But I am quite sure that the US Fed is intent on a devaluation of the U.S. Dollar. No one will say it of course as that would greatly excite the partisan tea drinkers among us. But it is way past time that the U.S. economy stopped enjoying the benefits of being the sole reserve currency in the world. And the world is looking for alternatives at the same time that we are on a quest to have perpetual low interest rates. We are looking for some inflation WITH low interest rates. We may get the inflation and our interest rates may lag inflation. It is my observation that interest rates LAG the rate of inflation right up until someone or some force decides they have had enough of inflation and then they briefly surge ahead. (Volcker was the last such force. The "bond vigilantes have been bought off by the reserve currency status/Chinese)

So now may prove to be a good long term chance to buy the precious metals.

I really like the sheen of that stuff.

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NUGT

NUGT is looking like it may go up from here. This is a triple leveraged gold miner ETF. Leverage works both ways!!

 

be careful

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Losing momentum

The indexes have given up all of the "no taper" gains. And many of the charts look the same.

Bonds are holding up well. I suppose they should with more support from the Fed. But they have been going sideways for some time. Before the latest news.

The stock indexes just feel like they are running out of juice.

But the day is young.

I think I'll go work in the garden. It is time to turn things under.

gh

Here is a worthy cause.

Why Women Should Be Allowed to Go Topless in Public - Truthdig

Are you on the fence? Do you need a cause?

This is a cause we can all get behind!

Where is the nearest rally?

gh

Here, read this

This

UUP is DOWN

And David Tepper mentions the Baltic Dry Index.....

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WTF?

Today was a "Fed Day". Meaning there was a meeting of the Federal Reserve and the minutes of the meeting were released to the public at 2pm EST.

The financial world awaits the release of these minutes because they give an indication of the Fed's outlook, and the Fed's stance on interest rates, inflation, and the economy.

The Fed decision is recorded here on Bloomberg.

But it was the same on CNBC.

The news today is that the Fed did NOT start reducing their buying of US Treasury bonds. Ie, they did not start to taper their purchases. Expectation of a "taper" had been a matter of speculation in the stock and bond markets for some time, with the specter of  a rise in long term interest rates, as a result of a lack of Fed support, weighing on the markets. Stocks and bonds.

A funny thing happened today.

The gold and silver markets responded to the news 3 minutes before the news was released.
I was watching SLV at the time. It started to rally on big volume before the release of the news from the FED. Gold and GLD did the same.

This fact of an early reaction was briefly mentioned on CNBC.    Briefly.

A similar occurrence occurred a couple months ago regarding some economic data from one of the major universities that does economic research. It may have been the "purchasing managers index" or something similar.
As it was reported on CNBC, the fact that the markets responded before the official release of the data to the public was not anything new, and they went on to report that private studies are often sold to private concerns a few seconds before they are released to the public. This being private enterprise in action and as a way for the publisher of the study to make money.

The Federal Reserve Board is not a private business. Is it?
Then why did the markets in gold and silver explode minutes before the data/minutes were publicly released?

The charts:
Gold

the daily move

 

by the minute

 

SLV daily

and by the minute:

 

 

 

Does the Federal Reserve Board release the minutes of their meeting early to those who can pay for the information?

 

If so, why? Do they need the extra money?

 

They can print the fucking money if they need it.  Who gets the information early?

 

And why?!

 

somebody had early warning.

 

This looks like more proof of the fact that it takes money to make money.

 

 

And one more reason for more regulation of the big money.

Grab yer pitchforks!

 

 

gh



OUCH!

Fed says no taper yet!

Silver and gold rocket.

Dollar plummets.

Stock shorts lose money.

DOH!

gh

Livermore was the all time master

If you haven't read "Reminiscences of a Stock Operator" and you want to trade you have a strike against you.

here is a link I ran across over on Abnormal Returns about the things a trader experiences as related by Jesse Livermore


gh

History stutters

On a recent post I noticed the similarity in the price action of the Russell 2000 ETF.

The dips and rallies all had a similar appearance.

Until today. Today was a high open on the news of Larry Summers and a decline all day. No rally at the end like has been the norm. All eyes on the Fed meeting this week and the possible start of the dreaded taper of Fed buying of Treasuries.

But. I don't like the smell of things.  I smell a skunk. We may get our Sept. swoon after all.

I know it is early. But my bear woke up today.....

 

 

It may be just the hangover from last week. I had my best trade ever with GNK. The chart tells the story. I was also long DRYS, EGLE, and DSX. I closed them out during the week as they moved higher. I saved GNK for last.

After a big trade is over I always feel a let down. So maybe that explains the way I look at the markets today.....

But......Bot some TWM and VXX....

careful out there,
gh

Summers is over

The news came out today, a Sunday, that Larry Summers has declined to be nominated to the chairmanship of the U.S. Federal Reserve Board.

Stock futures are up strongly. The Dollar is down strongly.

Here is El-Arian on the news.

And here is a silver chart from some time ago.....

And from last Friday....

 



Bon Appetit!

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Mark Fisher on CNBC

Here is a link of Mark Fisher on CNBC today.....

Like I said on my last post.........



Mark Fisher


And some background on Mr. Fisher.  I might have to buy the book.....   HERE



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HERO on 9/11

It is September 11.

twelve years after the world trade center bombing. The U.S. has extricated itself from Iraq, and almost out of Afghanistan. Now Syria is on the radar. But we will extricate ourselves from this sticky wicket. Oil is up. Supposedly on the Syria news. But I don't think oil will decline very much as the Syria urgency abates. The world economy is picking up and I think this will hole energy up there. Not to mention the softness in the USD.

This chart is my latest interest:

Control risk,
gh

History rhymes

Is it just me or do you see similar patterns in this chart of the Russell 2000 Index.....

gh

PRICELESS!!

The look on Michelle Caruso-Cabrera's face when her guests both told her that they thought that the Obama-care health exchanges would work, and that they expected large companies to take advantage of them to offset health care costs.

It looked like she swallowed a lemon.

Priceless.

How to trade

It has been some time since I have said more about trading than "control risk", my signoff.

Let us assume that the trader is ignorant of stock trading and has no clue about which way a market will go. But it makes sense that if the trader buys a stock and it goes up for quite awhile he will make money on the stock.

Let's dissect that last sentence. There are three things that need to happen for the trader to make money. First: Buy some stock. Second: stock goes up.  Third: for awhile. Meaning over time.

The trader has control of the first. Hopefully! He can buy and sell a stock. Anytime he wants. Without conflict in his mind or his finances. This first part is really the key.

The second part. The stock goes up. This may or may not occur after the trader buys. The trader must be able to recognize if the stock has gone up, or down, after he bought some stock. Not so hard, right! I hope not.

Third. If the trader is to make significant money the stock has to go up for a period of time. It is possible that the stock will surge overnight and give the trader extraordinary gains, but it is not likely. And the definition of "not likely", in my trading mind, is that it means not "probable". And the trader must put probabilities in his favor if he intends to succeed over time. He cannot hope to get rich quick. Just steadily.

I consider Jesse Livermore the greatest trader of all time. And from what I can see he has been the inspiration for some of the greatest traders, including some of the most successful hedge fund operators. One of his sayings was that "the big money is made in the big move". Or to that effect. Meaning the really big money is made over time as a stock makes that big move.

How do we make sure we are there for the big move up, and not there for the big move down. When we have bought?

Here is the simple secret:

Buy on the way UP!

Decide what a full position size is for you. Divide that by 3. Now, when you decide a stock is going to make a move up buy 1/3 of a full position. Wait for the stock to go up. IF it goes up buy another third. Then wait. IF the stock goes up again buy another third. Now you have on a full position and the stock is trending in your favor. TRENDING. If you only buy on the way up you are only adding to those stocks that are making you money.

If you make your initial purchase and the stock declines limit your initial lost to 5-7% of your initial purchase. Control your risk. Your timing was wrong. So get out!
If the same stock looks, or starts to rise, and you think this is the time, start the buying process over.

Look for those "pivot" points. The spot where the stock takes off for a sustained move. It may not be the big move, but if you buy as it starts you will have a risk free start. Then make additional buys as the strength continues. As you see the market go up after a period of selling. The trick to spotting a strong market is not spotting the rise. It is seeing how the market acts after a rise.

If you control your risk in this manner, and adjust your timeframe to one that suits you, you will start consistently making money.

The absolute key is that you MUST control your EGO.

 Do not guess or hope a stock will go up. It may or may not. And it is not hard to tell just by looking. IF it makes a big move you will have a large position on. If it doesn't, you will not be out much money. Sometimes it takes several tries to get a good position. Don't get down on yourself if you have false starts. But ask yourself if you are really right in expecting a big move. Act accordingly.

After you have a full position on and a stock is working in your favor you have to sit tight as long as you can. This is the hardest part for me. I can take a loss and forget about it overnight, if it is a small loss. But as a stock goes up and your profits grow large it is might hard to let the market keep pouring money in your pocket. When to get out takes some practice. You can always get back in if you want. It is just putting on the initial position in a low risk way again. And don't let price bother you. It doesn't not matter what price you pay. The thing that matters is that you make money on the trade. In other words what matters is putting the probability of having a win in your favor. The price may seem high, but what matters is that it goes higher. We are not out to buy the absolute low and sell the absolute high of a move. That never happens. That goal is for bragging rights. And we will not allow ourselves to brag about any trade. The EGO wants to brag. We want to make money. The two are not compatible.

Now. I think I will go outside and try to distract my attention from the shipping stocks that are filling my pockets. AAARRRGGH!

Try that on for size.

gh

Line of least resistance is up

The broader markets opened higher this morning on the weaker than expected job numbers in the hope that the Fed would continue the easy money. And then sold off hard on the Syria thing. At least that is the explanation by the talking heads. The same heads that have been predicting a big selloff in September. Why? Why, because that is what stocks do in September. Sell off!

Right. Whenever I hear of a big selloff coming I expect the opposite to occur.

At any rate the stocks rallied back to gains this morning. The panic was short lived. This is a good indicator of the resilience and the optimism of the stock market, and I think it reflects a growing awareness of the underlying strength of the world economy. EEM looking good as well.

The Baltic dry index was up another 5% overnight. Another strong indicator. IMHO.

I sent Josh Brown of the The Reformed Broker an email pointing out the strength of the BDI. He sent a short note back. I am kind of hoping they start to mention this on the Tellyvision (cnbc). But that is a mixed blessing since some will take that as a chance to sell to the less informed........

We will see..

Todays chart:

And by the way, there is another bulk carrier... Safe Bulk... SB
control risk,
gh

Microsoft in the market for Blackberry?

The idea came to me that maybe MS wants BBRY. They bot Nokia first.
I am not a tech person. I don't use any of the gadgets or social media.
What is MS going to do with a handset business?

Just thinkin'.

But BBRY has started up again. There is a gap to fill overhead.

Just into wishin'

Control risk,
gh

WLT

Walter Energy looks like it may have a rally here.

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Beady Eye Pops!

The BDI, aka the Baltic Dry Index broke out to the upside from a long base after huge declines over the last several years. There has been accumulation of the dry bulk shipper stocks for some time as evidenced in the stock charts. There is undoubtedly some short covering going on also.

Look at the BDI numbers here at the DryShips site


I look at the BDI chart at http://ycharts.com/indices/%5EBDIY

The others are DRYS, DSX, and EGLE.

Is anyone listening. If you are you are making money today.

gh