Dow Up for the Year!

Can I get a hallelujah? The $DIA is up for the year! 

It’s a little underwhelming, considering the market activity since May.  And today’s action was a bit underwhelming, but price is the ultimate indicator.

I was thinking about the week before Labor Day 2010, and that was the start of an incredible bull market run.  Now, here we are having a nice rally the week before the week before Labor Day.  It was almost as if folks were trying to get in ahead of the run-up, and then creating the run-up and rally themselves!

I remain positioned in low-beta stuff, cash, some oil, and the QQQ and VB trade.  I think the latter is close to positive, and offsets the (now) small loss in the QQQ trade.  So those trades have been like being in a money market fund, but much more exciting, right?

Check out the Long Beach Press Telegram App

This is the Long Beach Press Telegram app for the iPad. Check it out.

The app shows the newspaper as-is, and then when you select an article, the article appears in a readable format on the right-half of the screen. Kind of cool. Different.

When I was a kid, I used to sprawl out on the living room floor with the Sports section, reading about the Dodgers and Angels. I remember an 8th-grade math teacher who had us pick stocks, and the with the largest percentage gaining stock received extra credit.

It wasn't me.

$HPQ: The Right Price Point

Have you followed the Hewlett Packard $HPQ tablet story? I only have because my coworkers have all been scrambling to pick up a $99 tablet. Hey, they want it for checking email and surfing the web. Not a bad deal, right?

My thought, initially, was that it would be better to spend the money and get an iPad or some Android tablet. Why spend money on a failed platform without vendor support? But now here comes an article where HP is going to make some more at this price point.

Maybe it's the right price point. Maybe it could be a loss-leader that opens up an app store of profitability. Should HP give up on their tablet so soon, just as they've found the magic price point?

#106: Thoughts on $AAPL (Apple) Stock

Rich Guy in a Bathtub – $BAC

$BAC: Comment from a Clearstation thread on Bank of America!

Those who buy after Warren Buffett does, tend to get in at higher prices and may not reap the rewards of following the Oracle of Omaha.  I always say that it would be nice to know what Buffett is going to do before he does it.  Otherwise, why bother?  One could just buy his stock instead of trying to shadow him.

TGIF Randomosity! $GLD! $AAPL

• Steve Jobs and $AAPL, Hurricane Irene, $GLD bubble collapse, Libya…
• 7 ways to play the Gold collapse.
• The gadget guide to survive Hurricane Irene.
• Picture is of Bloomberg TV’s Susan Li. And… I find myself watching more Bloomberg these days.
• Are folks just going to have to learn to live with less? “The U.S. has yet to wrestle with the question of public policy priorities in a world of scarce resources,” Harvard professor Katherine Baicker. That doesn’t sound like an election year winner.
• You know greedy Wall Street… Investors look at Lowes and Home Depot for gains from Hurricane Irene boost.
• Meet the Women of Bloomberg. Sounds like an old Playboy magazine feature, eh?
• I guess Bernanke also predicted long term US economic growth.  The interesting thing is that the market was down early, right?  And even with no action by the Fed, it looks like the market recovered with no problem.  Maybe the lack of action is seen as a boost.  LOL.
• So, Ray Rice as #1 Fantasy Football draft pick?
• My concern with $AAPL and the departure of Steve Jobs, is that there is a high premium in the stock for being the hot and innovative tech leader.  I think iPhones and iPads will continue to sell well, but what about the risk premium in the stock that is tied to Steve Jobs?  I suppose one could argue that some of that has come out the past few years, but all of it?  Stock is ignoring the news and is strong.
• I remain invested the same… No changes for awhile.  It’s interesting as we approach Labor Day.  Remember last year, the market bottomed and had the Labor Day rally, then never looked back. It’s almost as if that is being priced in this year, no?  I’m not sure where we go from here, but I’m remaining in the low beta stuff, some cash, the QQQ and VB trades still on, and some oil.  That’s about it.

TGIF!

The market is finishing the week with a rally!  Bernanke gave a “let’s wait and see” speech in Jackson Hole.

“The Fed has a range of tools that could be used to provide additional monetary stimulus…  We will continue to consider these and other pertinent issues...at our meeting in September,” Bernanke said.

Nasdaq up almost 2.5% as I type, while the SP500 is up nearly 1.5%.

Party on, Wayne.

Obama’s Stimulus Plan–4% Refinancing?

If President Obama reduced homeowner’s interest rates to 4%, the lower monthly payments would have a huge impact on the economy. 

This kind of thing seems wrong at first glance.  But with interest rates near 4% anyway, the only thing preventing folks from refinancing is that they owe more on the mortgage than their home is worth.  This across-the-board refinancing removes that unfortunate situation.  If folks still can’t make the payment, they lose the home anyway, right?

I think it’s an election year winner.

Steve Jobs Resigns From $AAPL

This is why I don't owned $AAPL. Steve Jobs has resigned from Apple. The stock is taking a hit after hours.

Of course I did miss the run up to $400.

But this will create some uncertainty around the company. The question going forward is what kind of valuation and risk premium will investors put on Apple?

It will be interesting to keep an eye on. The company has great products now but faces increasing challenges from Android.

What a Day for Stocks

We have had some of these days before only to see it all sold away. But, remember last year when the market bottomed on August 30th and never looked back.

Back from Reno

I took a break from life, and went up to Reno this weekend. 7-1 in sports bets, including 4-0 in preseason football! Also went to two Reno Aces games, as they hosted the dreaded Tacoma Raniers. The other casino games were a little more difficult this weekend...

Thoughts on the market?

I don't know. I keep thinking maybe I will put more cash in and get aggressive. That's my gut feeling. I know there are many out there who think the bull market is over and this is the next bear market.

The second thought I have right now is on home refinancing. 15 year rates are in the 3's... Holy smokes. Now this is the kind of thing that will make the history books. (Or, at least that will make wikipedia...)

Another Leg Down?

Typical bear trend action. A plunge, a recovery on light volume where the TV crowd tells us all is okay, followed by the next plunge.

Will the lows hold or is this the next leg down?

So this is all because of Europe again? Or the realization that we may be in a global recession and governments are already running huge deficits?

Things will get very ugly for most of us if this is another recession. It's not like there is much slack in the system to absorb another round of hard times.

No changes in my portfolio. Still have cash, low beta stocks, and the QQQ and VB longs, plus oil. The latter three are ugly but not big plays. I think there is still huge upside for oil.

Isotopes at Rivercats

I'd rather be at the River Cats game than at work. #Rivercats

Isotopes up 2-0 after 5.

All after market eyes on the big game here at Raley Field. :)

Dude, You're Getting the Blame

Yeah, Marketwatch blaming $DELL for today's tech selling. Is Dell really a bellwether anymore? Mobile computing has taken a huge bite from the desktop market. Not to make light of the need for laptops, but there are plenty of options there, too. Heck, I just got a new HP, dude!

Rather than blame Dell, I think we are just in a corrective phase here. I expect the rally to resume but it may take another test of the lows...

France and Germany

France and Germany working together to fix Europe with balanced budgets and taxes.

Sarkozy and Merkel also proposed a Europe-wide tax on financial transactions and pledged to harmonize their countries' corporate taxes...

(From a Yahoo Finance story -- I don't have the link handy).

I don't like to wax too political here, but I'm not sure higher taxes and fees are the solution to runaway entitlement programs. Seems to me this risks slowing down economies even further.

Plus, I worry that some of these ideas will be introduced here. There has been chatter about financial transaction fees for years. And as we know, corporations don't pay taxes, they collect taxes by charging higher prices to consumers.

The Death Cross

Have you seen the Death Cross in the $SPX? This is where the 50dma crosses down over the 200dma and is said to predict bear markets. It seems natural, right? After all, if stocks are going from a bull market, where the 50dma is above the 200dma, it makes sense that if the market were on its way to a 20% or greater decline, it's just a matter of time before the 50dma crosses down below the 200dma.

As they say, the Death Cross has predicted 10 of the last 3 bear markets.

Another thing they say is that bull markets live above the 200dma and bear markets live below the 200dma. That's another one that seems rather obvious and most of the time too late to act upon it.

As the column mentions, there have been whipsaws in the indicator, and that's where it hits a snag. How many times does one get whipsawed around for 5-10% trying to avoid the 20% loss?

Stocks Continue Rally

Just last week the market was falling apart -- remember? Today, the $SPY performed better than the $QQQ or $DIA, and market breadth suggested it was going to be a tough day for the bears to fight back.

For the record, I remain long low-beta stocks, with some oil, the $QQQ and $VB trades, and some cash.

If I had to give an opinion, it's probably the same one everyone else has. That is, the market will probably rally to some point, and then pull back and retest the previous lows. But to be honest, it's tough to have that kind of typical and practical view of a correction, when there has been so many external headline events smacking us around. From Europe, to the S&P downgrade, to the debt ceiling fight, to slowing economic numbers, and to the tragedy in Japan, it seems as if we have had constant motion to keep us all a little unsettled.

Yet, the market is now above the S&P downgrade!

Many wonder if this is like 2008 all over again. But this time, I think company balance sheets are much better off.
***

The days are getting shorter, as I really have to hustle to get a bike ride in after work...

Meanwhile, at the Post Office...

Did you read where the Post Office is looking at cutting 220,000 jobs? That's 1/3rd of their work force!

That is one organization that has taken a body blow by social media. The Post Office was in trouble when we all started emailing and texting each other. Does anyone ever send a letter anymore? Most (if not all) banks now offer bill-paying services, too. Does anyone mail checks anymore? The internet also delivers news and media, reducing magazine and newspaper subscriptions.

It seems to me that the Post Office is reduced to delivering advertisements and credit card offers. Maybe some folks still receive a bill here or there.

The times have changed, and the Post Office is changing, too.

test

Jim Rogers

5% a Day Returns Made EASY!

$SPY Trading Made Easy! Short last Friday's close and make 5% on Monday. Go long at the Monday close and make 5% on Tuesday. Short the Tuesday close and make 5% on Wednesday. Go long the Wednesday close and make 5% on Thursday.

I hope you knew what to do with your compounded returns at the close today for Friday's 5% returns.

Yes, it's just that EASY! Well, kind of like knowing which color of the roulette wheel is going to come up the next day, right? As long as you're plugged in, just let the profits roll.

Today's difference is that the internals were much stronger than Tuesday. Although, the little dip in the last 10 minutes throw a little doubt, right?

Friday -- Bring it on!

Jim Rogers on US Fiscal Armageddon

The cheerful Jim Rogers on the US fiscal situation.

Turnabouts

Didn't blog yesterday, but the market sure seems in full bear mode. I don't have much to add other than this looks like it will take some time to work out. Is this a return to the secular bear bottom? It doesn't feel like it to me, but I was wrong about it in 2008.

Either this is like last summer and we get a bottom in and a retest, or it does play out like 2008.

How's that for fence sitting?

I still have a bunch of cash and low beta stuff, in addition to the oil play (ouch) and the QQQ and VB positions.

I think any dip in oil prices is temporary. Cars still run on gasoline, and not too many folks are buying the electric cars (that run on coal).

Monday Randomosity

• The Dow plunged 635 points, as President Obama blamed Miami Dolphins RB Reggie Bush for the country's economic mess and the recent credit sanctions from S&P.
• For stat junkies, today was the 6th biggest market drop! The biggest drop since December 2008!
• So, secular bear market since 2000 and all. Do you think the cyclical bull market that started in March 2009 is over?
• Oil dropped 6% today after the downgrade, as consumers lined up at horse and buggy dealers to trade in their cars for something a little more retro, and a little more green.
• Still cycling. Weight lifting has been a little rough in summer, with the new puppy and, well, cycling. Tried to change the routine but didn't like it, so back to the 4 days a week, which seems to take me 2 weeks to get through these days.
• MGM posted a 2nd quarter profit. With bonds at near 0% rates, and stocks down huge lately, maybe the Wheel of Fortune slot machine is the safest place to put your money these days.
• Warren Buffett basically said the S&P was full of crap, and that if there were an AAAA rating, the US should have that.
• So the running line on Twitter is "You know what else Obama inherited from Bush? A 5.7% unemployment rate and a AAA rating!"
• Helicopter Ben Bernanke tomorrow...

A Picture is Worth 635 Points...

Nice drubbing in the stock market. Things got worse in the last 30 minutes.

No changes for me. Just watching. I think the temptation is to throw money at the decline. That has usually worked out (in the end) for me, but I haven't done it this time. The market is going to be very volatile and may rip to the upside at any moment. I'm actually thinking about lightening up on a bounce if we get one! I'd like it to be a 500 point bounce, though...

Disaster Watch

We are drawn to disasters. Even though many are getting crushed and the repercussions throughout the economy will lead to job losses, falling tax revenues, government job losses, pension shortfalls, and such.

Since 2000, we have seen the economy and stock market peak, collapse, peak again, collapse again, and then peak. Is this the next collapse? Is this the resumption of the primary trend of a bear market? I'm not that bearish yet but it doesn't feel good today.

We all acknowledge that we are witnessing a historic event. This is a story that shapes our lives and that we will share with kids and grandkids.

I remain with cash, low beta stocks, some oil and small positions in QQQ and VB. The plan for the latter is to sell on a retest of the 200dm on the upside but who knows where that is going to be. It feels like the market has some work to do.

Overall, I am still bullish on the future. Sometimes these moves get a little scary but I think the emotional money needs to get out so that we can base, move up past the 200dma, and suck them back in at higher prices.

Just thinking out loud...

Letting it Tank

Not doing anything. Letting this baby tank. $QQQ $SPY.

Keeping existing positions. Haven't put cash to work. Not rotating into higher beta yet.

I wonder what the last hour will look like? Naz down over 5% as I type!

A Look at the Stock Market Futures!

I just got back from a bike ride, so I thought I'd hunker down with some Market Futures... $SPY

Gird your loins!

It will be an interesting open. I haven't decided if I'm going to put cash to work and buy the dip and rotate from low-beta to high-beta, or just watch it play out. My thought is that this will take a few weeks to unfold, with trading ranges and retests of bottoms and such. But my other thought is that money put to work on the gap down tomorrow will be higher in the coming months.

Of course, everyone probably thinks that, eh?

Reminder: Stock Market Circuit Breakers at the Ready!

Ask 100 people, and 100 people will say that the stock market is going to crash tomorrow. $SPY $QQQ

It's all but certain, right? Well, maybe. Remember just last Sunday when a debt ceiling deal was all but imminent, and the futures were up huge? How'd that one work out?

Anyway, here's a reminder on how the stock market circuit breakers work from Forbes.

And this is all a result of the 2010 Flash Crash. Remember that, Apple fans?

***
It's Sunday. I'm out on the patio with the puppy. She's out chewing dirt or something while I surf the iPad and read the pessimistic tweets and blogs!

US Downgrade: Somebody Knew, Huh?

When the market plunges and then is follows withing a day or so of big news like a credit downgrade, I always wonder if somebody knew. What about you?

But now I'm wondering if the market move is because of economic worries or because of a headline news event? Maybe if it's the latter then this selling is short-lived. Granted, the US does have a debt problem.

Just thinking out loud.

Thursday Slaughterfest

I added some $VB at the close, just to average down and give the latest trade a chance to bounce and level out. But it could just be catching a falling knife.

At least the VIX was green, eh?

Moves this big feel like capitulation, as if everyone is throwing in the towel and going to the beach. "Just get me out!"

The reason du jour? Worries about global economic slowdown, debt, etc. It's as if all the worries of the past few months all colluded together for this one big day -- or for the last two weeks. Remember the rallies we had where it didn't matter? Followed by the sell-offs where it did matter? We bounced back and forth all year long until this week, where the buyers didn't show up to take us back up to the top of the range. We fell. We fell through the bottom, and with the 200dma broken, the sellers picked up steam.

Where from here?

My strategy is always the same. I look for a trading range and divergences at bottoms or tops. Combine that with historical trends, the calendar, and sentimental nonsense, and I'll continue to do what has worked for me more often than not. I talk about what I do on the Audioboos. It just never feels good when I miss a call!

But it happens. Of course it does.

Overall, I think the market is worried about economic growth slowing. The really bad news is that the federal and local governments are hurting for revenues, and this won't help schools. This comes at a time where companies are worried about their tax rates, health care costs, and regulations. Where does growth come from at this point?

Rather than wax too pessimistic, I'll just restate that I added longs and more beta today. I'm still a believer in America and the future, even if growth is at a slower pace than we'd like.

My black box isn't saying much, and the other indicators aren't looking good, but I will look for and anticipate the next long and high-beta opportunity. I don't think it's all over. The market will continue to fluctuate and provide opportunities to grow a portfolio.
***

Meanwhile, the new puppy seems oblivious to the huge rise in the VIX today and seems more concerned about the flocks of geese flying overhead.

The Baby, Bathwater and Piano Player

The baby, bathwater and piano player all being sold today. The $SPY, $DIA, and $QQQ down over 3% as I type!

It's so bad out there, even $AAPL is down a couple of percent -- Apple! The stock everyone must own!

No need to be a hero yet. I still have the low beta stuff and some cash, plus the very lame $QQQ trade and oil. Nothing is working on the long side, and I'm not going to play the short side on a v move down. I'm giving the QQQ a long leash, as it isn't a huge percentage of the portfolio.

But I need to give the new puppy a few rawhides tonight and hunker down with the Black Box.

So That's How It's Going To Be?

Big $QQQ spanking early, now a big push off the lows. Like yesterday?

The selloff this time from the top of the trading range, to the bottom, and then crashing through resistance and the 200dma sure feels different this time. And it also feels uncomfortable. Like "hey, are we going to 666 on the $SPX again?"

No change in positions.

Thinking about getting more aggressively Long. Really.

Bouncy Bouncy

I am still long the $QQQ trade from last Friday.

It never feels good to see the trade thesis blasted. The SP500 fell below the 200dma, which many use to denote a bear market. The index also fell below the March and June lows, breaking resistance. Many view this as a sign the market is going lower.

I am not a stickler on the technicals. Obviously I watch them, but I think the market fudges a little around the moving averages and other metrics. It's not exact. So, I have viewed it as a concern but since I entered the trade near the bottom of the trading range have some wiggle room before I get out of the trade.

The market bounced significantly off the lows today. Many are saying that it's just short covering. But a lot of times, that's how reversals start.

Watching... No changes in positions. The QQQ trade is still on, I have some cash, low beta stuff, and some oil. The latter has been a bit ugly. But this is more of a fundamental play for me as I view energy prices only going higher with the economy and a reluctance to use any other viable forms of energy other than oil for transportation.

Stock Market Breaking Down

Today's reason du jour for the market crash is "uncertainty.". The political Kabuki theater surrounding the debt ceiling increase is over, but we are left with an overspending government and a sluggish economy.

While the news channels are more concerned about which political party bested the other, consumers are sitting on their wallets!

Looks like the market is breaking below the trading range with 30 minutes to go. Stay tuned!!

Weak Consumers!

The market is in a losing streak that is making people forget about the Seattle Mariners. Getting the blame today? Weak consumer spending! The savings rate is also up.

None of this is stopping people from buying Apple products, but it is having a dent at other retail and restaurants.

This is also one of the things that is easiest to turn around. People like to spend.

Market still holding around the bottom of the 2011 trading range. It would be nice to see the range hold and for the market to head higher. One of these times the range will fail, but I hope that's an upside breakout!

#105: Debt Ceiling Deal Overshadowed so Far

Gap and Crap!

Gap and crap! The pop in the futures and at the open cashed in and sold off. Now everyone is wondering if the bull market is over.

Will the SP500 make a beeline for 666? Are we heading towards another recession? Imagine the state budgets and government pension woes if that happens.

Didn't sell the open, unfortunately! I was out walking the puppy!

Watching...