Undecided?

Are you one of those undecided voters that I've heard about? Well if you are maybe you should watch this.

https://www.youtube.com/watch?v=6TiXUF9xbTo&feature=player_embedded

I hope this can help you decide. The future of our great country is depending on you!

GASL update

I use quite a few posts to point out what I think may be good trades or even good investments but at heart I am a trader. So I only want to be around for the profits, not the losses.

I don't talk much about when to exit a trade. This may be because it is the hardest part of trading. The entries are relatively easy to spot. The exits not so much. The main thing about exiting is to remember why the trade was put on in the first place. When those conditions change the trade is no longer valid as a trade. This rule applies to "investing" as well, defined in my mind as a longer time frame trade usually based more on fundamentals as opposed to technical indicators. Keep in mind what your "edge" is. The traders edge is the basis of his advantage in the market. My edge is an ability to see momentum in the price and volume and to curb my emotions and remember my "edge". (the second part is the hardest)

A while ago I pointed out the volume bulge in GASL and used it as an indicator of a bottom forming in this security. GASL corresponds to the gas producers Anadarko Pete (ANP) and Apache(APA).

There probably is a bottom forming in these stocks. But the move up is some time away. I had established a position in GASL and was waiting for an anticipated strong move up. There was a break to the upside and the expected pullback to a range. Then the price broke up out of the range but the volume was pathetic. This indicated to me that the enthusiasm for this security was not there. And that meant that all the "me's" out there were probably going to throw in the towel. I wanted to be the first if that started to happen. It is important to recognize when the "big money" is buying, but it is also important to recognize that there is a lot of "little" money that can stampede without continued support of the big players, whose timeframe is longer.
So I have exited this trade with a decent profit, but not the size I had expected.  Now I must look for signs of renewed momentum if I want to put on another position in this security. I don't know when that may be. The danger is that this security becomes a favorite and I let my judgement get clouded by my past hopes!
I hope the chart makes sense:

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FEMA is insurance.

A good editorial in the New York Times.

Using national resources to rescue states has always made sense. It is about spreading the risk. That is what the concept of insurance is all about. Spreading the risk over the largest population to support local populations or individuals in time of defined need.

Where is our national health care plan?

http://www.nytimes.com/2012/10/30/opinion/a-big-storm-requires-big-government.html?_r=0

See you tomorrow.
gh

What happens in 'Vegas?

Home sales up. Oil down. Gasoline under pressure.

DATA SNAP: U.S. New Home Sales Jump 5.7% in Sept

==========================================================
New Home Sales Sep Aug ! Consensus: !
Overall Sales: 389K 368Kr ! 386K !
Percentage Change: +5.7% -1.3%r ! Actual: !
Months' Supply: 4.5 4.7r ! 389K !
==========================================================

By Sarah Portlock and Eric Morath

WASHINGTON--Sales of newly built homes in the U.S. rose to its highest level in more than two years, continuing evidence that the housing market is picking up steam amid an otherwise slow recovery.
New single-family home sales increased by 5.7% last month from August to a seasonally adjusted annual rate of 389,000, the Commerce Department said Wednesday. It is the highest level since April 2010, when first-time home buyers were rushing to qualify for a tax credit.
New home sales were up 27.1% compared to the same month a year ago.
The September results were above expectations. Economists surveyed by Dow Jones Newswires had forecast an annual sales rate of 386,000.
The number of new homes listed for sale, seasonally adjusted, at the end of September was 145,000, a supply that would take 4.5 months to deplete at the current sales pace. That is the lowest rate since October 2005.
Low inventory and solid sales could encourage home builders to increase construction, which would be a boon to the overall economy.
The median price for a new home in September was $242,400, down from $250,400 the previous month, the Commerce Department said.
However, in a separate measure Tuesday, U.S. home prices rose for the seventh straight month in August, up 0.7% on a seasonally adjusted basis from a month earlier, according to the Federal Housing Finance Agency's monthly home-price index. That is calculated by using the prices of houses purchased with mortgages backed by government-controlled mortgage companies Fannie Mae (FNMA) and Freddie Mac (FMCC).
In another positive sign, construction of new homes jumped 15% last month to the highest level since July 2008, the Commerce Department said last week. Compared with a year earlier, new construction was up by nearly 35%.
But the housing market still has a long way to go before it fully recovers. Sales and construction levels are well below pre-bubble levels and tightened credit restrictions make it difficult to secure a mortgage. Many prospective homeowners have too little home-equity to sell their current residence and buy another home.
New-home sales peaked in July 2005, when they hit an annual pace of nearly 1.4 million, and declined sharply in the run up to the financial crisis. Last year's level of 306,000 sales was the lowest on record.
September's new-home sales rose in three out of the four U.S. regions. Sales grew 16.7% in the Northeast, 16.8% in the South and 3.9% in the West, but dropped 37.3% in the Midwest.
A copy of the full report is available at: http://www.census.gov/construction/nrs.

Write to Sarah Portlock at sarah.portlock@dowjones.com and Eric Morath at eric.morath@dowjones.com.
-
(END) Dow Jones Newswires
October 24, 2012 10:00 ET (14:00 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.- - 10 00 AM EDT 10-24-12


Let's go to Las Vegas..... Or Macau!
Watch this one:

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Happy Anniversary!

The talking heads are reminding the traders that today is the 25th anniversary of "Black Monday". That was the day in 1987 that the Dow sold off 20% in one day. 

There were some poor earnings out. Google's little mishap caused a large part of yesterdays weakness and it carried over to today. CMG was weak on poor earning also, I think I heard them say. I haven't followed the Chipotle story. I have never seen a Chipotle where I live. When they said today that they were a competitor of Taco Bell it made me wonder why a fast food taco joint could be held to such high value... Looking at the chart now it looks like it had quadrupled over the last couple years.. DOH!

Todays selloff is the biggest in a few weeks. Unless we get a late day rally. I am always suspect of any move that happens on an anniversary that is widely publicized. I think it will be more of the rotation out of tech and retail and into gas, metals, and real estate. Real stuff. But time will tell, of course.

A couple things have caught my eye.

One is the difference between Silver Wheaton and SLV the silver ETF... I have for quite some time considered SLW to be the "adult" in the room where silver speculation was considered.

Another thing: TBT, the short bond fund was revalued on Oct. 5. They did a reverse stock split. 4/1. The price went from $15 to $60... The volume went up however. At least looking at the chart it shows that there are more shares trading than before. To take that at face value I would consider that there is a lot more big money interested in shorting long bonds than in buying them. When comparing TLT to TBT..  And TLT looks like it is finding support on the old ceiling. It may turn up, but it looks weak to me so far. Look out if it falls through the ceiling!  We'll see.

The charts:

If anyone has info on the TBT volume thing let me know..

gh

Another reason to be optimistic?

A couple posts back I noted that I feel better about the markets and the economy in general when I start seeing bullish patterns forming in a variety of stocks and markets. (Unless it is the long bond market! LOL)
Here is a sign of a possible bottom in Cliffs Natural Resources. They mine iron.

http://www.cliffsnaturalresources.com/EN/Pages/default.aspx

When this stock gets hot it gets hot. But right now I still feel it needs to make another small top here. Then, IF it goes higher it has a good chance of a sustained trend.

But it is seeing things like this that give me an indication of the general strength of the world economy. There is some accumulation going on in this stock or lots of shorts covering. I don't know. I don't really care. I trade the price and the volume. It is probably a combination of those reasons.

Control risk.
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Index update.

An update on the progress of the smallcap index. Although the smallcaps have lagged the larger caps lately, they still are closer to all time highs on a longer term.

The chart still looks good. I won't be surprised to hear more talk of "triple tops" by the MSM.

For the long term investor it would be wise to be long if these markets get to alltime highs. There are no guarantees tho, there are many headwinds blowing. Timing is important. As is money management/positions size management.

gh

What this election is about.

I've been reading Polyani's "The Great Transformation" lately. Thanks to Jesse at the Cafe Americain'.

I sent a submission to the local paper today.

Here is the text:

Which path do we choose?



There is a national election coming up. You may have heard. The debate over the next president is a debate over the state of the economy. We heard years ago the phrase, "it's the economy, stupid!" And then the idea that people "vote their pocketbooks". As I review history I am struck by the fact that these debates we are having today are the same debates people have been having for centuries.
In the 17th century at the start of this thing we call capitalism the control of the economy rested with the kings and squires that controlled their own small pieces of the world. Merchants were beholden to the royalty as much as the peasants. With the passage of time the power of the merchants rose, and their whispering into the ears of the rulers had some influence. Often good influence as it was not in the interest of exporters to have major wars ruin their businesses. In those years the wars tended to be smaller. But the control of the the social situation resided with the royalty and those commissions that made the laws. Capitalism and economic theories were new then and were referred to as liberal ideas. The power of the churches was still strong and they were charged with administering the social welfare. They took care of the poor. The rich contributed to the churches not only to save their souls but to prevent a revolution by the hungry peasants.

The ideas of a free market gained traction in the industrial revolution and gradually the ideas of "laizzez faire" gained traction. However as this occurred there came a large increase in the number of the starving and destitute. A backlash in the late years of the 18th century coincided with the American and the French revolutions. These were rebellions caused by economic conditions. The debt of a speculative bubble in the middle 1700's was the major factor in the public unrest that led people to take up arms for liberty and equality.

The pedulum kept swinging as people and generations forgot the lessons of their parents. Laizzez faire gained traction again. After the Civil war in the U.S. there was a period of rapid industrial expansion. This period was characterized by a cycle of booms and busts. Particulary in the stock markets. The banking panic of 1907 was particulary severe. There came more political revolution in the early 20th century. This resulted in the spread of Communism as people searched for shelter from the harsh effects of capitalism unleashed. The result was the totalitarianism of Russia and then later China. In this country the move was toward a socialism that combined the good of the capitalist system with the safety nets of socialism. A balanced solution that worked magnificently for 60 years. And then we forgot lessons learned again. The Reagan revolution happened and the pendulum swung to the side of capitalism again. Over the next 30 years the share of wealth flowed to the rich. The wage earners lost purchasing power and went into debt. The number of the poor increased as the gap between rich and poor widened.

So here we are again. We are voting for a president in whom we hope will be a deciding influence on the type of society that we have. On the one hand we have a pure capitalist. A man who spent his professional life taking advantage of the power of money. On the other side we have a man who made a career out of helping the disadvantaged to organize in order to obtain greater political power. The man elected president will have thousands of decisions to make over the next four years. How he votes on any one issue or question wil be dependent on the conditions at the time the decision needs to be made. Neither can make any hard promises nor should we expect any. The decision we as voters need to make is about the charactor of the man who is president. What direction will he tend to take us. I advocate for revolution at the ballot box and a revolution in the hearts of the people of this country. I advocate for a departure from the path of believing in the all knowing and all powerful market. A true revolution would be to re-elect a president who's instinct is for the common man. I will vote for progress. It is where history shows we will go anyway, even if we have to make all the wrong choices first!

Thank you,
gh

Blackberry?

Research in Motion is the makers of the Blackberry device. I don't know anything about them except that they have had a hard time competing against the other devices out there.

The chart of the stock is pointing to a possible trading opportunity however.

Another of those "triple tops" perhaps....

Keep in mind that the profitability of any single stock is heavily dependent on what is going on in the broader market. This is a very important point. If the stock market as a whole is strong a breakout through previous highs will often be thought a buying opportunity. However if the general market is weak those same prices will be a selling opportunity as market participants reduce risk.
This is why it is important to pay attention to big picture items and market averages.

Control risk,
gh

Another nice pattern

The chart say it:

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