Gail Runs for the Terry Fox Foundation

Fellow blogger Gail is running on September 14th in the Terry Fox Run 2008.

I lost my dad to cancer two years ago. I know many of you reading this have stories to tell, too. So does Gail.

If you'd like to help Gail raise money for cancer research, visit her site.

Thursday Night

Well! Market steamrolls back the last couple of days. GDP came in stronger than expected today. No recession anywhere to be found. At least not in the United States.

Had my first fantasy football draft tonight. Looking forward to the new NFL season! It was an auction draft, and I outbid the rest for Vikings RB Adrian Peterson in round one.

I heard the last few minutes of Obama's speech tonight. I guess I'm just getting to the age where I don't believe the crap anymore. These guys are just out to get elected. If you want a better life in this country, it's up to you.

Work is just CRAZY right now. No time for anything. Not even lunch. So forgive the slight posting activity lately. Looking forward to a long weekend!

John McCain VP Candidates

Well, we're steamrolling right through the Democratic Convention, and since we know it's all about raising taxes on the rich, who needs to watch?  Instead, lets take a peak at who John McCain may select as his Vice Presidential candidate.  After extensive research via the web and TV Guide, I've narrowed it down to four likely candidates.

1. Mitt Romney, (Not pictured), former Governor and Republican Presidential candidate.
2. Tim Pawlenty (Not pictured), current Governor.
3. Colin Powell (Not pictured), former Secretary of State.
4. Jamie Chung, from MTV's Real World San Diego and also starring as "Samurai Girl" in this weekend's ABC Family mini-series.

I think it's a no brainer.  Jamie has almost as much political experience as Barack Obama, and has also just completed a crash-course in martial arts.  What says "change" like a VP candidate wielding a Samurai sword?  Everyone always talks about courting the Black or Hispanic vote.  What about the Asian-American vote?  Her selection as Vice President would be a political shocker, but that's why John McCain is known as "the Maverick."

Watch Fox News to see if a Secret Service detail was sent to Jamie's house.  That'd be the sign that McCain avoided the obvious picks.  Who would you rather spend the next two months with on the Straight Talk Express?  Again, a no brainer.

Meanwhile, the stock market TANKED today.  Why?  Are all the buyers in the Hamptons this week?  It does appear obvious that the move up off the lows was just another bull market rally in this long and grinding road.

To add insult to injury tonight, the new Long-Short timing model gave a sell on the QQQQ and a buy on the PSQ.  The Black Box Jr. gave a buy on GLD and a sell on EEM.  Stay tuned for tomorrow's paper-trading portfolio updates!  And with Real World money, I'm 100% long and feeling the pain.

I ended up in Reno over the weekend and made some football bets.   I usually take a flyer from each conference to win the Super Bowl.  A friend took the Giants at 38-1 last year, and this year she took the Saints and the Broncos.  I went with the Redskins and the Bills.  40-1 are mine.  LOL.  But, a good running game and a defense work wonders in the NFL.  I also took the Miami Dolphins over on 5.5 wins for the season. 

USA vs Spain

Wow, what a game.

Joe Biden

Well, it's too early to say if Obama's pick for Vice President, Joe Biden (not pictured) will make any difference for the Democratic ticket.  I think it's strange from Obama's "politics of change" to go to an long-term Senator who criticized Obama's experience during the primaries.

I thought it was funny that Obama sent the text message to his faithful at 3am in the morning.  As you remember, during the primaries Hillary Clinton had asked whether or not Obama was ready to answer the phone at 3am in the morning.  Well, he certainly is ready to text!  Kind of a slap in the face to Hillary and her supporters.

John McCain was quick to react with a commercial showing Joe Biden criticizing Obama and praising McCain during the primaries.

(The picture is of Eriko Sato.  Who, IMHO, would have been a better choice for Vice President.)

End of Frakkin' Week Randomosity

• Job stress! WOOOOOOO. But Cincinnati Bengals cheerleader Alyson is today's stress reliever.
• Bernanke says inflation outlook "uncertain."  Anybody else get the feeling that Ben really sucks?
• Obama to wait to announce Vice President pick.   If suddenly I'm blogging about being whisked away to Denver, you'll know.  And if you follow me on Twitter, I'll make sure to keep you up on the haps.
• US rejects Russia's claim of pullout.  "Liars!"  Really, how do you diplomatically say that?  "Mr. President, that's a pant load."
• Of course, women probably don't fall for that "pullout" line anyways.
• Due to high fuel prices and such, Americans traveling less this Labor Day.
• Democrats to showcase "real people" during their convention, including this woman who finds herself $24 million short in the Bush Economy.
• A third Stargate TV series on the Sci-Fi channel?  Stargate: Universe.  "Universe" -- which will premiere as a two-hour movie in early 2009 and assume a regular hourly slot in the summer -- introduces a team of explorers who find an ancient unmanned ship called the Destiny. Unable to return to Earth, the crew must fend for themselves aboard the ship, which has a preprogrammed mission taking them to the far reaches of the universe.  
• I haven't watched any Stargates, except for the original movie.

• So I copied the stock numbers from Brian.  Nice snapshot.
• Philadelphia lawsuit contends Obama ineligible for Presidency.  Uh oh, there go my VP dreams!
• PetroChina gets green light to trade carbon indicators.  How about carbon indicator futures?  ETFs?  Double-beta inverse ETFs?
• Oooh, an open thread to discuss Obama's VP pick.  And no "muckdog" on that list?  Sheez.
• OK, I've had enough for one week.  The big question is where I go this weekend.  Reno.  Vegas.  LA.  Denver....  Hmmm....

TGIF Market Thoughts

• Well, the market continued it's back-and-forth ways today. Can't seem to make up its mind.  Plenty of reasons from day to day on what is causing the uncertainty.  Maybe just overall fear and skepticism on the economy.  But even that is peppered with an occassional outburst of optimism about where the country is headed.
• I remain 100% long.  I suppose in the back of my mind somewhere is the worry about a late-Summer or early-Fall selloff.  We haven't seen much of the seasonal pattern in recent years, but something to be wary of.
• The Black Box Jr. gave a buy signal on EEM last night, so I paper traded $20,000 worth in the Black Box Jr. portfolio.  The Long-Short model (QQQQ or PSQ) is still long QQQQ.  The system was on the verge of going bearish last night, but I'm sure today's action gives it some breathing room for another day (or so...).
• Not sure I "get" the EEM buy.  Plenty of headwinds there.  But not questioning the model.  Just going with it.  The first two buys were IDU and IEO, and are up 2.39% and 3.97% so far.  IEO gave back a bunch today.
• One thing I'll learn from paper trading the model, is getting a "feel" for how the model behaves.  This will help me with deciding when to take partial profits or losses, etc.

Oh, another of Moon Bloodgood. Yeow.

Wednesday Thoughts

• Lets face it, the market isn't behaving like it bottomed in July and it's a "brand new bull market."  Unfortunately.  I think the extreme pessimism is a sign we're near, but maybe there is another retest or a 50% retrace in the cards.
• No changes on the Black Box Jr. or Long-Short models.  The Black Box Jr. currently holds IDU and IEO, and is doing well.  The Long-Short model currently has QQQQ in a buy, but is very close to a sell (and a buy on the inverse, PSQ).
• Work is extremely busy.  Crazy.  Everything in control, though.  Just those losers keep scheduling meetings through lunch.  Monday, Tuesday and Thursday are basically booked.  Makes for a long day with no break in the middle.
• I don't have much interest in the Olympic track and field events.  Love diving, volleyball, and the gymnastics.
• So... I bought a Wii Fit.  Pretty fun.  The first day my Wii Fit age was 10 years older than I really am..  Two days later, the Wii Fit age is 2 days younger than I really am.  Errr...  I like the skiing games the best so far.  Running (in place!) through the dog park is entertaining. 

Technical Glitch Tuesday

My PC crashed last night. Fortunately, I was able to recover. I had upgraded to Windows XP Service Pack 3 (SP3) a few weeks ago, and everything seemed fine. But the Media Center program was crashing due to some conflict with SP3. My attempts to fix it crashed the PC.

I tried uninstalling SP3, but then a lot of programs were puking. I think went to a system restore date prior to the installation of SP3, which also caused some pukeage. The "final solution" was going back to a restore point one-day prior, and being forced to live with a broken Media Center.

I've scoured the web for those having similar issues. I'm not alone. I'll update with links later to message boards and forums from those who have also tried to resolve the problems with SP3 and Media Center.

High Diving into Monday

• Whenever I come back from a trip, I feel a bit disoriented back in the office. I head to a morning status meeting, and even though I was here on Thursday of last week, I just have no immediate recall of what the team was working on.  Sure enough, after a few minutes of questions, it's amazing how the brain starts connecting the dots.  But initially... geez. 
• I think overall, that's a good thing.  Maybe it's a sign that the trip was a success.  Totally took the mind off the day-to-day grind.
• But, speaking of being disoriented after the weekend, what happened on Wall Street today?  Sure, it's the week after options.  According to the book, that's generally a bit weak after a strong options expiration week.  The RSI(2) on the SP500 is *already* back under 30.  Holy smokes.
• But lets go to the tried and true... Yahoo Finance!  Financials Pummel Wall Street.  Title says it all.  And it's the same ol' same ol' news that we already know about, but the writers have to come up with something to explain the market behavior.   So it's Freddie and Fannie today.

Wall Street retreated Monday after Fannie Mae and Freddie Mac fell to their lowest levels in nearly 20 years on concerns that the government might need to bail out the mortgage financiers. Weakness in the overall financial sector sent the Dow Jones industrial average down more than 175 points.

Investors were again uneasy about the health of financial companies after media reports of further problems in the sector. Barron's said the U.S. Treasury might have to bail out government-chartered Fannie and Freddie, which, the weekly noted, would likely wipe out shareholders' equity in the companies.

• The words "wipe out shareholders equity" never gives investors warm fuzzies.
• I remain 100% long.  No new signals from the Black Box Jr. or Long-Short models.  Looking at the calendar, no major catalysts until end-of-month dollar-cost averaging late next week.  Plus, this is the last couple weeks of summer.  Low volume?  Whippy?  Prolly...

Cheesecake Factory Friday

As I mentioned on Twitter earlier, I went to the California State Fair tonight, and the place was empty. Not many folks there. I was able to park close to the entrance. Maybe it was because it was the first day and over 100 degrees, but I've been there before and Sacramentans don't seem phased by that. The hypnotist who works a stage there even commented, "We need to fill this place up!"

There were also Chinese acrobats on stage. So I know where the gymnasts who are over the age of 15 work for a living.

Instead of eating greasy fair food, I headed to the nearby Cheesecake Factory (CAKE). Last time I was there on a Friday night it was over an hour wait. Tonight? 5 minutes! And patio seating was available immediately.

I think it was Peter Lynch who said to "buy what you know." But at least here in Sacramento you can see signs that consumers are stretched and conserving dollars.

I just checked the Black Box Jr., and it had a buy signal on CAKE as of mid-July. No sell signal yet, If other CAKE's in the country have 5-minute waits during primetime friday nights, I'd be scared to death to hold that stock into earnings.

But they do make some very good cheesecake. Didn't have any, though...

(In Edit: Copycatting Adam Warner by trying the Disqus comment system).

TGIF!

• Well, took today off and went... Fishing!  WHAT?  I haven't been in years.  Didn't catch anything.  Which is probably for the best. 
• As I type the market is playing out options expiration much as one would expect.  Flatlining...  I remain 100% long in real money, and no paper trades in either the Long-Short portfolio or Black Box Jr.
• China:  Gymnast's age based on Chinese calendar.
• Now EVERYONE is talking about the dollar rally.  And of course, EVERYONE says they called it, too.  Kind of the nature of the biz.  Watching CNBC and this guy (whoever doesn't matter) says "Just like we said months ago..."  Yeah, right.  
• Recession knock-knock-knocking on Europe's door.  They've actually had one quarter of negative GDP so far.  Unlike us, the US.
• California State Fair opens today.  Kind of the same thing year after year, but if you live in Sacramento it's kind of the thing to do.  At least once...

Market Digs Out Nice Gains

• Overall nice day in the markets. Despite the big headline inflation number and jobs data, the market went up anyways. 
• I have to get a job writing the end of day financial summary.  Here's today's from Yahoo:  Receding oil and commodity prices helped quell fears that worse-than-expected July inflation would persist. The decline in crude and commodities was partially owed to strength in the dollar, which is beginning to look more attractive as foreign economies wane. Those trends helped bolster buying in equities.
• And if I wrote it, there'd be pictures!
• You know, if we are in a recession (and we haven't had even one quarter of negative GDP yet), then the stock market may have priced it in months ago and is moving on and anticipating the next thing.  Like President Obama!
• The BIG BOSS walks by and I'm Twittering on my mobile.  LOL.
• Mark Thoma on the inflation number.
• PG&E to build two large solar plants in CA.  Good idea!  Especially when the sun is shining!  We need all kinds of effort in all fronts.  Solar is one of them.  Nice to see some action on this.
• Netflix shipping centers slammed by problems.  You know, I've had National Treasure 2 (blu ray!) sitting on my shelf for two weeks!  I've been watching a lot of streamed content from NFLX.  Watched Rita Rudner in Las Vegas last week.

Late Night Signals

• Tonight's Black Box Jr. scans reveals a buy signal on IEO, the iShares US Oil & Gas ETF.  I will buy (paper trade) this tomorrow for the Black Box Jr. portfolio.  It'll be interesting to see if this trade is a whipsaw, a bear bounce, or the sign of higher oil prices coming.
• A fresh sell signal on the Emerging Markets ETF, EEM.  I won't short in the Black Box Jr. portfolio - no shorting there.  The last buy signal for EEM resulted in about an 8% loss.
• Near a sell signal... XLF. The financial ETF isn't quite there, but looking ugly.
• The Long-Short portfolio remains long QQQQ.  It is in overbought territory, but no sell signal at this time.  Again, since it was on a buy when I started this, I haven't made a paper trade.  When a sell signal comes, I would anticipate a buy signal for the inverse NDX, the PSQ ETF.
• That's it for that.  Never a recommendation.  Just paper trading.  In the real world with real dollars, I remain 100% long equities.
• The US woman's volleyball team is amazing.  Watched a bunch tonight.  I'm watching the Olympics via DVR.  That way, I can watch about 4 hours of televised content in about 23 minutes.  Once one fast-forwards through commercials, interviews, and other fluff, the events don't take up much time.
• Barack Obama's tax plan via Greg Mankiw.  FWIW.
• From Barry Ritholtz, Alan Greenspan calls a housing bottom.
• I find myself using Twitter this time more than last time.  Nice mobile tool set makes it easy to Tweet on the go.

Snoozapalooza Randomosity

• As I mentioned in the last entry, I've been in meetings all day. Finaly have a break.  It's difficult to go from one to another all day long, and give each topic its due.  Getting a little glazed over!
• I love the market sector widget on the side.  Check out what did well today:  Energy, Utilities, and basic materials.  Everything else was BLECH!  Light volume, though.
• Once again, the theme was "financials are in trouble."  If the financials head back down, it'll be really tough for the rest of the market to advance or even hold up.  But you do have to admire the Nasdaq for trying! 
• And for those who "missed" the rally in financials off the lows:  If you were waiting for a pullback, when do you get in?  See, now it gets scary again with all the negative chatter out there.
• Resumed trading today in the Black Box Jr. with the IDU buy.  Eliminated the previous trades (PM and PGH) that were error driven.  Again, not a recommendation.  Just paper trading. 
• Chinese President revealed as lip-syncing fake.  (The story on the girl was pretty sad, I thought).
• Might want to book Adam Warner's blogtalkradio segments on your calendars.  I need to do that, if I can get out of these "Muckdog's in a coma, I know I know" meetings. 
• I think my watermelon eating days are numbered.  What's next, apples?
• Speaking of, Best Buy to sell iPhones.  Good for Apple and Best Buy.
• Over 33,000 folks signed up to buy GM's electric car, the Volt.  GM says it costs $40,000 to build.  I hope those who think they'll be saving lots of money at the pump realize what electric cars will do to their energy bill.  After all, you plug those things into a wall socket.  Which is connected to a coal-fired electric plant, FWIW. 
• We need a lot more nuclear power infrastructure to support electric cars. 
• The nice thing about apples?  Much better shelf life.

Quick Wed Hit

Long-short model update... Buy signal on the IDU, everything else status quo. Buys on all stock indexes, sells on gold and oil.  Although oil appears to be extremely oversold and due for a rally. 

Market selling off this morning.  Why?  Retail sales are horrible.  Auto sales are horrible.  Well, gasoline has acted like a huge tax on consumers.  The other thing few ever mention, is that a few years ago auto companies had 0% financing.  The warning at the time was that this would steal from future auto sales.  Well...  That could be part of it. 

Meetings all day today.   Even over lunch.  I hate that.  My boss says, "It's the only time open on your calendar."  Okay, note to self:  Recurring meeting from 12-1pm at Subway.  Daily.

Oh, Credit Trouble You Say?

• The "oil down =stocks up" model took a breather today, but it's back to the "Oh my God the financials are in trouble!" model.  ... the financial sector was hit by more evidence of ongoing credit-related trouble, with the damage partially offset by crude's retreat to $113 a barrel.  "How this story plays out really depends on whether the weakness in financials bleeds out to other sectors in the economy," said Linda Duessel, equity strategist at Federated Investors.
• This must certainly give the bears an emotional bump.  They were warning yesterday that the last two times the market closed above the 200dma, it was just a head fake and the market crashed. 
• But boys and girls, IBD says it is NOT a distribution day.
• Will run the Long-Short model scans later tonight.
• Microsoft's "blue screen of death" strikes Olympics opening ceremony!  Classic!
• Consumer's confidence 1-point away from an all-time low!
• Nancy Pelosi and Michelle Obama to kick off Democratic National Convention.  Pelosi is out trying to sell her Pulitzer (ranked #1929 on Amazon).  And I thought Michelle was in seclusion in a cave somewhere near the Pakistan border.  Where's she been?

Monday Market Mid-day!

The market begins options expiration week! Morning weakness bought up by mid-day. Financials, consumer cyclicals, and the service sector leading the way. Oil tanking, which of course is a catalyst for stocks these days.

I replaced the market snapshot widget with a market sector summary snapshot. We all know what the market is doing, so I thought this would give a better overview of what's happening under the covers.

I know, I know: "You had me at 'under the covers.'"

I remain long. Nothing to do here but enjoy. Many out there calling this yet another bear market rally, and the sentiment numbers would show that to be a common view. So far, those folks have been right on previous rally attempts. Someday, they'll be wrong. Is it this time? And then it'll be obvious in hindsight and they'll have claimed to call it anyways!!!

Quick Tech Hit

Just a quick note.  If you want to edit pictures for your blog or clips for Youtube without spending the bucks on Adobe or other software, check out some of the open source free stuff out there.  For example, Gimp for photos and Avidemux for videos.  I haven't used them too much, but for the simple quick stuff, they suite me fine.

There are others, too.  Check The Google!

Long-Short Model Update (and more!)

• The Long-Short model still is on a buy on the QQQQ, but it is nearing overbought territory.  Still on the sell for GLD, IEO, and USO.  IEO and USO are especially oversold here, so I'd imagine a bounce is coming but will keep an eye on the model.
• I am still only "paper trading" this model.  Virtual trading, that's all.  In real life, I remain 100% long.  None of this is a recommendation, of course.
• Thinking about the fall in oil and the rally in stocks, I wonder if the speculative money that was in oil is looking for something else to speculate in?  Real estate isn't there yet with high inventory numbers.  Commodities have crashed.  Maybe the speculative dollars are coming back into stocks.  Just a thought.
• You can follow me on Twitter.  Oh, and the blog, too.
• In Beijing, Michael Phelps set a record in the 400-meter.  Woot!
• Market sentiment update from Headline Charts.  Look at the bull-bear ratio on the Investors Intelligence survey.  Holy smokes.  (No smoking picture today, the air in Beijing is polluted enough).
• The Barack Obama do it yourself Hawaiian certificate of live birth (COLB) kit!  Sure to be a hit this holiday season!
• There is a huge net storm over Barack Obama's birth certificate, whether or not it is a fake, and if he's eligible to run for President or not.  Or if he's the antichrist.  LOL. 
• From Mish, Marc Faber is bullish on the US Dollar, and bearish on commodities.  And there's a video!
• The NFL Network is televising pre-season games back-to-back-to-back all weekend long!
• Daily Speculations has Mr. Market is the Trickster!
• Buy on the Dip with Apple store happenings in La Jolla.  Long lines for the iPhone.  SOLD OUT.
• I'm not checking NFL scores.  I'm recording some of the pre-season games on the DVR.  Something to do tomorrow.  LOL.
• Barry Ritholtz on the Least Trustworthy CEO on Wall Street.
• Cool mobile Twitter tools for a Windows Mobile phone?  Twit Today lets you "tweet" from the Today screen without launching an application.  Very nice.  Twitterfeed logs your blog entries on Twitter via your RSS feed.  Sweet.  And Tiny Twitter is an application that lets you follow updates, post your own, etc.  Noice!

8/8/08 Really Big News

• Yeah, yeah.  China olympics in Beijing.  Thousands of folks dressed up in costumes and banging on drums.  Got it.  Nice LCD screen, by the way.
• Meanwhile, the big news is the signing of Chad Pennington (not pictured) by the Miami Dolphins.  Pennington was immediately named the starter.
• The announcement sent the DOW up over 300 points.
• I don't know what you're thinking, but there has to be a way to trade these NFL QB moves.
• Heading into the weekend, I remain 100% invested.  We're heading into options week, and it's hard to imagine that could add any volatility to what we've been seeing.
• The Long-Short system remains on a buy.  Duh, of course.  Nearing the top of the range so it'll be interesting to see how it acts next week.
• I think a lot of IBD followers are still on the sidelines.  We did have the confirmation day, but we haven't had the kind of leadership one would like to see in a New Bull Market.
• I think the Fed is on the sidelines until after the election.  Maybe some random comment about inflation or such, but they'll steer clear of The Main Event in November.
• John Edwards says, well... He did it.  With Rielle Hunter.  Another headlines grabber for awhile.  Aren't we getting a little numb to this stuff by now?
• Oh, that's Dolphins rookie cheerleader Jennifer!

Smokin' NDX!

• The market is smokin' hot! NDX breakout!
• There seems to be an inverse relationship between oil and stocks.  Pete and Repeat go out on a boat. Pete falls off.  Who is left?
• I think I just made Adam's head explode.
• Isn't oil now officially in a bear market?  Peaked at $147, now at $116.  That's over 20% according to my Windows calculator.
• Stronger dollar, too.  Isn't it near a year high against some others?
• When one buys a house, one hopes that later it can be sold at a higher price.  In order to do that, what we really need is wage inflation.  Somebody has to make more money down the road to buy that house.  We haven't had much wage inflation at all the past few years. 
• IBM cuts wages of 3500 in New York.
• Haven't tried to fix Black Box Jr.  yet.  Maybe a weekend project on some upcoming football weekend. 
• But the Long-Short NDX is still on a buy for the QQQQ.  That one's working out so far.  1-1.  It's NEVER failed!  Like Eli Manning in Super Bowls. 
• One cool thing about DirecTV is being able to set the DVR over the internet.  For example, like setting the DVR to record the Olympics tonight!
• There are a lot of hot Asian chicks in China.  FYI.
• So with Obama giving Michigan and Florida full delegate counts at the Democratic National Convention, how hard will Hillary work on changing a few superdelegate minds between now and then?  Just watching the radar, that's all.

Market Flight

• Brett Favre (not pictured) traded to ... the New York Jets!  Poor guy.  But I think Jets cheerleader (flight girl) Kate is happy about that.
• Opening weekend, Sept 7th, Brett Favre and the NY Jets travel to Miami to play the Mighty Mighty Dolphins. 
• And you know the Miami rules... You have to pound a beer everytime the Dolphins PUNT.   (Because if you wait for them to score, you may never ever get a beer...)
• Meanwhile, the market had a big late-day fade today.  One of the earlier Yahoo Finance reports called it "a pessimistic day of trade."  End of day report says that New unemployment benefit claims climbed to a six year high, AIG posted its third consecutive loss quarterly loss, crude oil prices rose and retailers reported disappointing July same-store sales. In turn, the stock market posted a steep loss on Thursday, with all ten sectors posting ended the day in negative territory.
• Maybe it's just that we're seeing another quarterback hero leave his team that set the melancholy pace.  Maybe it's the realization that no matter how oil prices go, there is significant resistance by the US Congress to even bother coming up with a well-thought out energy plan.
• As oil goes, so goes stocks.  So goes the economy.  Higher oil prices are a big tax on you, me and the companies we deal with on a daily basis.  Without an energy plan that reduces our future demand on fossil fuels, it seems likely that energy prices will continue to trend higher.  Even if we inflate our tires to the proper level.

Black Box Jr. Broken!

One of the reasons to paper trade or virtual trade a system is to discover bugs. Unfortunately, I found one in the Black Box Jr. after 3 days of live data.

The Long-Short model seems to be okay so far, and I will continue to update from that. It is on a buy for the market as of last week. But I'm waiting for the next signal to virtual-trade.

In addition, the "original" Black Box is still alive and well, but only gives a few signals a year. It is also on a buy.

Energy

Who's the idiot who loaded the entire Elton John collection on his MP3 player? Sure, "Island Girl" was a bit nostalgic at first.  And who designed the random shuffle feature to torture me so?  With 3000 songs on this thing, get out of the "J's" please!

The biggest issue for me in the 2008 election is America's energy future.  We've heard too little about this, yet this economy runs on energy.  We need electricity.  We need fuel for our homes and cars.  So, where do the Democrats and Republicans stand on this issue as we head into November?

Obama vs. McCain on energy.  From Obama:

Obama has proposed an excess profits tax on Big Oil to finance a $1,000-per-family energy rebate to deal with high fuel costs. 

Exxon-Mobil "makes in 30 seconds what the typical Ohio worker makes in a year," Obama said.  "We need more jobs and economic development. Why don't we focus on clean energy and reopening factories and putting people back to work? Nobody is benefiting from jobs that are leaving the community," he said.

Sounds like populist rhetoric, not a plan.  I know folks cringe at oil profits, but what does Exxon-Mobil have to do with the price of a barrel of oil?  It's a global commodity!

And from McCain:

Outside Detroit, another depressed Rust Belt city, McCain became the first presidential candidate in recent memory to tour a nuclear plant. His energy proposals include building 45 nuclear power plants by 2030 to reduce the nation's reliance on oil imports.

"Sen. Obama has said that expanding our nuclear power plants 'doesn't make sense for America.' He also says no to nuclear storage and reprocessing. I couldn't disagree more. I have proposed a plan to build additional nuclear plants. That means new jobs, and that means new energy. If we want to enable the technologies of tomorrow like plug-in electric cars, we need electricity to plug into," McCain said at the Enrico Fermi Nuclear Plant.

"Now, nuclear power alone is not enough. Drilling alone is not enough. We need to do all this and more. That is why I am calling for an 'all of the above' approach." Like Obama, McCain has multibillion-dollar, long-term plans to reduce oil imports.

All of the above.  Do everything.  This one sounds more comprehensive and forward-looking than raising taxes on Exxon-Mobil and mailing people a $1000 check.  Because oil companies just pass along costs and taxes to the price at the pump, and once the $1000 is gone, it's gone.  We'd still be importing oil.  And who thinks we need to send more money to Saudi Arabia and Venezuela?

 

Hump Day Again?

• Market started off a little rocky, but has picked up some buyers as we cruise along. Looks like tech is leading here today.
• I remain 100% long.  Of course, it's now August and many are expecting some late-Summer swoon that leads to some sort of bear market capitulation.  You have to wonder, though.  So many folks seem to be on that page, that if the market wanted to play them for the fools, it'd keep going up!
• Who is hoping California raises taxes to deal with the $17B budget deficit?  Nevada!  “(Chuck) Alvey runs the Economic Development Authority of western Nevada, which recruits businesses to the Reno area, and he’s glad to talk about Nevada’s low-tax climate. Gov. Arnold Schwarzenegger’s proposal to tack an extra penny on California’s sales tax could offer him another selling point.
• Corn prices falling!  Good corn-growin' weather and a stronger dollar, they say.
• Looking for an easy way to Twitter from your Windows Mobile phone?  There are lots of applications out there that do both sending and receiving of data, but that can suck your phone battery dry!  Twit Today puts a text box on your Today menu.  No application to load!  You just type in what you want to say, and click OK!  Easy!

Tuesday Randomosity

• Michelle Trachtenberg. I remember her from Buffy the Vampire Slayer.  "Dawn is the key."  I think capitalized is better: "The Key."  Kind of a goofy end-of-series story line when that show had run its course.
• I'm on pins and needles, needles and pins, waiting for The Fed.  I have a meeting prior to the big release, and into the afternoon.
• I forgot about the pre-season game Sunday night until near the end.  Drat.
• Okay, just got back and the market went totally flippin' wild today.  And afterhours on CSCO, too.  From Yahoo Finance:  The stock market posted its largest percent gain in four months on Tuesday in a broad-based rally that was aided by favorable wording in the Fed's latest directive, a drop in crude prices and a better-than-expected economic reading on the services sector.
• The Fed didn't really say anything different at first glance.  "Although downside risks to growth remain, the upside risks to inflation are also of significant concern," the Fed said in a statement outlining its decision.
• Oh, wait for it. ...it omitted a phrase from the June statement that had said risks to growth appeared "to have diminished somewhat."  And it dropped language from June saying those risks "have increased"
• Dallas Federal Reserve Bank President Richard Fisher was the lone dissenter, preferring higher rates to head off inflation.  He's nuts.
• Tropical Storm Edouard downgraded to tropical depression.  Depression?  We haven't even had a recession!  Darn Bush haters.
• It's a Three-Year Anniversary in Sacramento!  Not a good one... Three years ago this month, median sales prices peaked in Sacramento County. The result: The end of the housing boom. Across three years, the damage has piled up. In 2006, the spring rebound that area real estate agents were predicting failed to materialize...A discussion at year's end with some real estate professionals had a common thread: Foreclosures probably wouldn't get out of control.
• Only Tuesday?  Yeesh. 
• David wonders if it's getting time to put on the shorts.  As long as you're keeping the web cam above the belt, I say feel free to keep the shorts off and be comfortable.  But, it's all about style.
• Adam Warner is talking Packers bikini girls and more.  And to comment on Brett Farve for a bit, I think if he goes to the Vikings that'd be ... Well, it'd be like Joe Montana going to Kansas City.  The truth is that it'd probably help the Vikings for a season, since their quarterback is a statistical nightmare.

In Edit: Blogger was down so I'm posting this in the PM...

Black Box Jr. Portfolio Update

• "B" for buy, "S" for sell. It all makes perfect sense to have Brenda Song as the portfolio update girl.
• Last night (Monday) was the first afterhours scan for the Black Box Jr. market timing system.  I ran it on the total market of stocks that trade above $2 and above 100,000 trading volume.  It came up with 178 buys and 330 sells!  That's a bit much for me.  So, I'm confining the first buys to stocks I've had in my watch list, but will expand the list over time.  Maybe popular NDX stocks or something.  We'll see.
• The first buys are PM (Philip Morris International) and PGH (Pengrowth Energy Trust).  I've made the virtual PGH trade and will get in PM sometime today. 
• I think the PGH signal is an interesting one since it's been tanking as oil prices have gone down.  My initial gut-feeling reaction is skeptical on that one.  But we'll go with it.  I imagine if it continues down, there will be a quick sell signal from Black Box Jr.
• PM had a big move yesterday, and continues up as I type.  I always hate to chase stocks after a large percentage move, since it seems like "I've missed it!"  Of course, the reality is that my biggest winners have often come buying the big moves.
• Limiting stocks to roughly 4% of initial stake of $100,000. 
• Again, this is just virtual dollars, or online "paper trading."  None of the stocks listed are a recommendation to buy or sell.  I may or may not have actual positions in the stocks listed, and may change positions at any time. 
• Brenda Song was born in Carmichael, CA.  That is a suburb of sorts here in the Sacramento area. 
• Image lawsuit of Brenda featured in an LA escort ad.

Ben Bernanke on Deck!

clipped from www.marketwatch.com Federal Reserve policymakers are not going to give a clear signal of where rates are headed after their meeting on Tuesday, economists said. Economists expect a "neutral" statement that won't prepare markets for a rate hike in the near term. "The next policy statement is unlikely to include a signal to financial markets that the FOMC is prepared to raise interest rates at the next meeting [on September 16]," wrote Brian Fabbri, chief U.S. economist at BNP Paribas. "Should the actual rate climb above the Fed's upper limit, it would forestall any chance that there would be a tightening in monetary policy, especially during a Presidential Election Year," he said. But at the same time, the central bankers will be reluctant to back away from its tough talk about inflation, Fed watchers said.

I think it's highly unlikely that the Fed will make any rate decisions at this point, as we cruise into the November election. I'd imagine they'd want to remove themselves from the political equation.

Watch Muckdog Lose Virtual Dollars!

I've been refining the Black Box timing system I use to trade. I'm now going to virtual trade the system to get comfortable with it. I've created two portfolios over at Herdstreet. Herdstreet has the capability of embedding widgets to track the portfolio. Hopefully, the whole thing works well enough to have some fun with.

"Black Box Jr." will track a portfolio of individual stocks. Long or cash only, no shorting. This portfolio will start with $100,000 in cash. I anticipate building positions over time as the signals come in.

"Long Short" will track the trading of the the Nasdaq 100 and its inverse, via the QQQQ and PSQ. This portfolio will start with $10,000 in cash. The QQQQ are now on a buy signal, so I will start with the next signal generated.

I haven't tried Herdstreet, so this is all experimental. The site seems to be down right now, as a matter of fact. Anyways, I'll post the portfolio updates on days that trades are made, and at the end of the week to track progress. Posts will be tagged "portfolio" to make them easy to find down the road.

Disclaimor: None of the picks should be considered a recommendation to buy or sell. I may or may not have positions in the stocks mentioned.

Measuring the Economy

clipped from blogs.wsj.com most consumers, along with a big slice of the economics profession, believe the economy, under the weight of ongoing housing strains and financial market tumult, is in recession. The problem remains, however, that much of the data continues to tilt against that view. This week is emblematic of that curious environment, which also explains why the Federal Reserve can keep interest rates steady and not cut them further. For those who want to argue against the recession view, a number of top tier reports this week provide ammunition. Most notably, overall growth in the second quarter posted a 1.9% annualized increase, on top of the first quarter’s 0.9% gain. While that’s clearly not gangbusters growth, it’s still an expansion and not a contraction. A general rule of thumb defines a recession as two quarters of contracting growth.

More thoughts on the economy. Even though the economy is sluggish, it's not a recession. The tax rebates are helping. Energy prices have fallen the past few weeks, and that'll help, too.

Kayaking TGIF!

• Just got back from kayaking. The advantage of heading out earlier in the day is that there isn't much wind. The downside is that the Sun is beating down on your head. But it was great out, not too hot, and very peaceful. I love summer!
  
• The market continued to disappoint after Tuesday's follow-through day. I'm not sure how many of those days we've had since the bear market started, but certainly enough head fakes to make us all dizzy.
  
• Even Larry Kudlow on CNBC, a notorious economic Pollyanna, says the country is in a "mild recession." "There's no way around it," he said.
  
• Yahoo Finance makes the link between oil and stocks, as if any other economic news is on the back burner.

Crude oil prices continued the recent trend of volatile swings. Prices climbed as much as 3.6% on reports that Israel's prime minister said that Iran is close to a major breakthrough in its nuclear weapons program. Prices eased off their highs, however, to settle with a 0.8% gain at $125.09. The stock market's worst level of the session, a loss of 1.0%, corresponded with the session high for oil prices.

• Now, even Barack Obama wants to drill for oil offshore. "If, in order to get that passed, we have to compromise in terms of a careful, well thought-out drilling strategy that was carefully circumscribed to avoid significant environmental damage — I don't want to be so rigid that we can't get something done."
  
• TGIF!

What Recession?

What Chair?

What Recession?

The real GDP figure came in positive again during the 2Q, showing that the economy grew at 1.9 percent. Therefore, once again every recession junkie that told us that we are in a recession during the second quarter has now been proven wrong. This marks the 7th consecutive quarter that the recession camp has told us that we are in a recession. How many quarters will it take until people stop believing them?

I read about a philosophy professor, who taught philosophy 101 for freshman at a state university. It was the end of the semester, and so he gave to them for their final exam a very simple question to answer. He took a folding chair and put it on his desk, the professor challenged his students asking the question 'prove to me why this chair doesn't exist.' All those freshman philosophy students began to ponder and write at length page after page for the balance of class. But there was one guy who was done in less than a minute. He wrote something short and then put his pencil down. And he was the only one in the class to get an A on the final exam. What did he write? Simply this, just two words 'what chair?'

Philosophies, they can be oh so confusing, but for you in me its simple. There are those in the recession camp that continue to chastise us by telling us to prove to them that this recession doesn't exist. And my answer to them is very simple 'what recession?' Because until we have two consecutive negative quarters of real GDP a recession doesn't exist. I don't need to prove the existence of a recession that isn't a reality and doesn't exist. So again I say, 'what recession?'