Down and Dirty

I think the dry bulkers are in a bottoming process.

At least for those that survive.

It occurred to me that I remembered Jim Cramer talking up Diana Shipping some time back. A google search revealed that it was in Nov. of 2009. He never seems to pick a bottom for his devoted followers. Mostly he picks tops. On a couple of occasions I have looked at a chart of something he is recommending and the chart looked fairly strong, but the stock then sells off strong. I think his recommendations are used to distribute.

I, on the other hand, despite my professed desire to buy late and sell early, also cannot resist the temptation to pick bottoms. Although there are many bottoms, the trick is to be there at THE bottom, and that is only evident in hindsight. So the first rule is do not lose too much on the bets. The way I do this is watch the volume for evidence of accumulation or short covering and buy on the way up, trying to have a maximum or near maximum position on when the stock finally confirms a bottom by a price pattern over a period of time. Rounding bottoms are my favorites for this exercise. (look at a chart of GLD)

Here is Jim Cramer's Call in 2009


Here is my call:

Control risk,

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Yellen Speak

Chair Yellen set to speak in minutes before the Economic Club of NY.

Is there any real doubt about what it will take to resolve the debt problem?

Will the Fed cause the US dollar to appreciate substantially?

I think not.

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US DOLLAR TOP?

The Federal Reserve decision yesterday and comments by the chairman seemed like a pivot in expectations as Chair Yellen made clear that the board had no intention of raising interest rates until inflation was clearly in the 2% range.

The market seems to take it as a fact that there is an unstated move to weaken the US Dollar on the part of the Federal Reserve.

Gold is holding up pretty well, as well, without near the volatility one would expect at multi-week highs in price.

On a related note, the Baltic Dry Index has been moving up for the last month after a long steady decline. Again time will tell if this is a bottom, but if the dollar is topping I would expect finicky ship owners to demand more dollars per ship/day as compensation for the risk of a weakened currency, not to mention the costs of bunker fuel rising.


On this weekly chart the dollar looks to be making a long term top. Time will tell.

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Kuroda is a Lightweight

Compared to Janet Yellen, Mr. Kuroda of Japan is a lightweight.

Janet Yellen is doing a masterful job of guiding the U.S. dollar down to it's real level.

Is there any doubt that there is an unstated goal of weakening the dollar?

Ms. Yellen speaks of a goal of a 2% inflation rate, and puts her expectations of that goal to be two years away. My expectation is that she will be very careful to stay behind inflation with any moves by the Fed to raise rates. She runs the risk of a runaway inflation because of her desire to not let this opportunity to stimulate get away from her.

She will be the next Alan Greenspan.

We may be in for the 5th wave in a stock market surge. (Another 5th wave?)

We live in interesting times.

Control your risk,

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Solar?

Here is a stock that has held up surprisingly well during a long and vicious decline in the price of energy. First Solar is forming up on the price charts as a triple top bottom, to coin a phrase.

I suspect the solar space will be the future. And furthermore I expect a Democrat in the White House in a year, with a renewed push for alternative energy sources.

It is the technical aspects of this chart that look strong to me.

I am in this for the money.....

Buy on the way up.

control your risk,

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The Long View

No, I'm not making predictions.

I am remembering the story of a famous trader, who when asked what his secret was, threw a chart down on the floor and got up on the desk to look down at it. The point being that it was necessary to look at the big picture. I find it helps tremendously to always see where a stock is in relation to time.

Look at the weekly charts for several years. Particularly when trying to catch a bottom.


The examples abound in the mining and materials space.

USE THE SHORTER TERM CHARTS TO POSITION YOURSELF FOR THE LONGER TERM.

CONTROL RISK!

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