Big Reversal, $AMZN Kindle Fire

Today was a very negative day.  While it is natural for the market to pause after a few up days, and when it is at or near moving averages or resistance, to have a big reversal after a move up is a bit of a downer.

The market was up early. The $QQQ was up over the 200dma nicely, but then WHOOSH.

Oh, because of Europe.  But we already knew that — no matter what happened! 

The end of quarter play often ends just a bit ahead of the end of the quarter, just to hit those who jumped into the pool at the end.  Hopefully, since the whoosh down came a bit early, there may be some room to move up. We’ll see.  Depends on Europe, I guess!

The big news today?  The Amazon Kindle Fire!  Looks like a great product at a great price point.  It will do what most folks want it to do, at a much lower price.

**

Picture is a Woman of Bloomberg TV, Betty Liu.

Europe Again Randomosity!

• Los Angeles Lakers point guard Derek Fisher says the Fed “twist” will be ineffective. $SPY $QQQ
• Market was up because of Europe, then retreated because of Europe, and then hooked up near the finish because of Europe.  MVP?  Europe.
• In the worst secret since “Independence Day occurring on July 4th this year,” $AAPL to hold their “iPhone Event” on October 4th.  Which is not Independence Day, kids.  Although it may feel like fireworks going off.  There’s an app for that.
• Until Congress can get its act together and put in place policies that encourage businesses to take advantage of low interest rates, “further monetary accommodation — be it in the form of quantitative easing or performing “jujitsu” on the yield curve through efforts such as Operation Twist — will represent nothing more than pushing on a string,” Fisher said in a speech in Dallas.
• Nine American Cities Going Broke.  That’s all?  Things are a lot better than I thought!  Obama 2012!
• Yeah, I know it’s really Dallas Fed Bank dude Richard Fisher.  Who, by the way, doesn’t play for the Lakers.
• Say, NBA on strike? Why not let the players run the Fed for a while!?!?!
• Here’s my market thought of the day…  The QQQ was turned back by the 200dma.  Check it out.  Really.  The rally is on light volume.  It’s the end of the quarter and end of the month.  So, look out below?  Not doing much here.  Same positions as the last time.  Some cash, low beta stuff, some oil, and the mix of QQQ and VB trade which is again near if not profitable.   Should bank it, huh?
• Elisabetta Canalis voted off Dancing With the Stars.
• New York Governor Chris Christie says he ain’t running for President in 2012.  But he is playing it coy about trying out for Dancing With the Stars.

Show of Hands for Europe!

Raise your hands if you’re getting tired of Europe being the reason for the $SPY market ups and downs day after day.  Week after week.  Month after month.  Year after year.

Anyone?  Buehler?

U.S. stocks soared to finish near the session’s highs Monday as optimism that European leaders will reach an agreement to contain the region’s debt crisis led investors to snap up beaten-down equities before the end of the September quarter.

Tomorrow is another day.

Sunday Night Randomosity

• New Apple $AAPL iPhone coming, but on older 3G network.  While Samsung readies next Galaxy S model on the faster 4G Verizon network.
• Oh, and in tablets, the next Motorola Xoom, on 4G LTE.
• Asian stocks weak as we begin another week. Pricing in global economic weakness.
• Michael Vick breaks right hand.  That is his non-throwing hand, and he says he doesn’t know if he’ll play next week.
• In Asia, is it 2008 all over again?
• Hey, my fantasy team won today!
• I was kind of surprised that the Colts gave the Steelers a battle tonight.  I kind of wonder about that Steelers offensive line.
• I think the Republican field is a mess, but Romney wins the Michigan straw poll.
• Hey, average gas price down 12-cents.  Prices never hit the predicted $5.  Not yet, anyway.
• Americans fail to appreciate their local papers.  Well, duh.  News is on the web.

A Stock Market Buying Opportunity?

I was listening to Larry Kudlow's Saturday radio show, where Doug Kass was a guest. Both seem to think we are very close if not at stock market lows. I'm paraphrasing, of course. (Check out the Kudlow podcast for the whole interview, where they also talked about gold).

I think they're probably right. I wouldn't rule out a retest (or very close to a retest) of SP500 1100.

Any whoosh lower might be the day to lock in that rate on the 30-year mortgage refinance, too.

Saturday Randomosity! Solyndra, Refinancing, Amazon, the Dodgers!

• Is Solyndra scandal a threat to the solar industry?  "A green jobs-fueled recovery is a theory, and is yet unproven. There is a lot more green, in the way of cash, and a lot less energy and jobs than anticipated," Rep. Darrell Issa (R-Calif.) declared this week, adding that, "It is reasonable to predict that we could have the collapse of the entire solar panel manufacturing business in America."  Well, it’s a problem when the sun doesn’t shine 24x7x365.  And it’s not cost effective at this point.
• 30-yr. rates under 4%?  The Federal Reserve’s latest effort to prop up the economy has dropped mortgages into once unthinkable territory, with 30-year fixed-rate loans available for less than 4% — a record low.  Yeah, but banks won’t loan to folks with an upside-down mortgage. "The phone is ringing off the hook with people who want to refinance," said loan officer Darin Hardin at Premier Mortgage Group in Ladera Ranch. "But the property values just aren't there."
• But if you can refinance and free up some monthly income for something else, why not buy the Los Angeles Dodgers?  MLB asks judge to order sale of Dodgers!
• U.S. and China pressure Europe on debt … before it risks causing bank runs and pushing the global economy into ruinous recession.  (Hey, when is someone going to pressure us, the U.S., on debt?)  "The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally," U.S. Treasury Secretary Timothy Geithner said.  In other words, no one wants to see Europe turning into the LA Dodgers.
• Amazon ($AMZN): New Kindle rumors.  Release Sept. 28th in NY.  My thoughts?  If the price point is right, Amazon will sell a ton of them.  As long as folks can surf the web, check email, and log on to Facebook, it will do what most folks need it to do.  Oh, and play Angry Birds.  It. Must. Play. Angry. Birds.
• Have a great Saturday!  Football time!

#108: Market Crash, Netflix, Solyndra, Gold, Solar Energy

TGIF Randomosity! $GLD, $SLV, $NFLX!

• Say, is that the $GLD and $SLV bubbles popping?
• And $NFLX, too.  Hey, I’ve been warning about Netflix for years!  Just listen to the audioboos (here and here)!  But I missed one heck of a run up, and am missing one heck of a sell off.  Part of the selling is because of Angry Consumers (rate hike).  Part of the selling is increased competition from other web services and Dish today.  Part of the selling is because the stock market is falling apart, and the high valuation companies tend to get whacked a little more.
• Meg Whitman is the new $HPQ – Hewlett Packard CEO.  Hewlett-Packard's stock is sinking to its lowest level in six years, as investors worry that new CEO Meg Whitman isn't the right person to turn the company's fortunes around.  We;;. the verdict is in already!
• By the way, the stock market close in the green today, led by the Nasdaq.  Maybe folks are worried about a weekend announcement and are booking gains from their short positions.  While many are calling this week’s action the next leg of the bear market, I’d pause at that thought for a bit.  We could be revisiting the lows.  But I don’t know if folks should fight the Fed here. 
• Oh, and the economy still runs on oil.  So an oil sell off looks like a buying opportunity to me.  I don’t know the time frame, but as long as we keep pumping gas into cars, we need oil.
• With so many stocks and sectors on life support, why not a picture of a sexy nurse? 
• The primary debates are a bit ridiculous, as is the analysis of them. 
• The Moneyball reviews are in!  Phew, now we can rest.
• While I poked a little at Netflix, I will probably wait for Moneyball to come to my house in a red envelope. 
• Pakistan warns the US that we may lose an ally.  Who, England?  Israel?  It certainly couldn’t be Pakistan, aka the place where Osama bin Laden was hanging out for a few years.
• I have the Source Code DVD at the ready, FWIW.
• Governor Jerry Brown signs the Amazon Tax bill into law.  Saying it would save existing jobs and create new ones, Gov. Jerry Brown signed into law legislation to require Amazon.com and many other out-of-state Internet retailers to collect sales taxes on purchases by California customers.  Saying it will create and save jobs, eh? Anyone believe that?
• TGIF!

The Black Box Thoughts

Haven’t updated the Black Box Thoughts lately for $QQQ…. Not bad.

Fed Spanks Stocks!

“Fed Spanks Stocks” is the title of a marketwatch column. With the big plunge in the market after Bernanke talked today, the title is right.

The Fed basically came out and restated the same problems we’ve had all year, that expectations going forward are subdued and the Fed is worried.

Hong Kong index down more than 4% as I type.

It looks like a revisit to the lows of the trading range is at hand.

***

No change in my positions for a long time.  Some cash, some low-beta stocks, some oil.  The QQQ and VB trades are still on, and as of last week were in the money.  But back in the red today.  Not emotional about it.

NFL Sunday Randomosity

• If you're long the $QQQ and started Adrian Peterson, you're happy.
• $RIM slumps. Is $NFLX the next $RIM? Both stocks flew high and one crashed while the other is crashing. $RIM fell because better products from other companies hit the market. Netflix is falling because they angered consumers with a rate change and there are other streaming options available. Plus, Netflix streaming content is sketchy at best. Now there are apps on the ipad that can stream TV shows from the networks for free.
• President Obama to adopt Warren Buffett's idea for a tax on the "mega rich." The problem is that there aren't enough mega rich to tax. It just won't generate enough money. In order to raise a lot of money, a tax has to be levied on the middle class. The populism over taxing the rich overshadows the rate increase on the middle class. If the country returns to the tax rates under Clinton, then the middle class tax rate goes up a few percent, too. That's where the bulk of the money is.
• I dropped DirecTV for ATT Uverse and like it. I don't miss the NFL Sunday Ticket, and have the NFL Red Zone channel on for $5 a month. LOL.
• I don't know what to think about Solyndra other than somebody sure made a ton of money somewhere. Something's not right there. But will it just be swept under the rug?
• My fantasy football team is bad. Chris Johnson is a bust so far. Too early to just drop him to the waiver wire, as the Titans schedule gets easier ahead. But the guy isn't doing anything. Should have drafted Fred Jackson in the first round instead of Chris Johnson! LOL.

5 Days in a Row - UP!

What a nice week in the market! The $DIA up 4.7%, and the Nasdaq up 6.3%.

The reason du jour? Europe! It's kind of like climate change - if it's cold or hot, it's climate change. If the market is up or down, it's Europe.

But is this just the annual reason for the summer sell off? After all, Europe has been in the headlines all year long - even back into 2010. It's not like it is an unknown. I think the US economic situation is more worrisome, although I'm still thinking that we're just experiencing slow growth and a lack of an economic boom compared to another recession. We'll know soon enough about that!

***

Anyway, my attention to the blog and audio boos have been a little light lately. It's not waning interest as much as it is tons of work at the Fun Factor. I've noticed an ebb and flow in activity over the years based on the stress level at work. So, I'm still here just not HERE. Be back soon...

Futures Down!

Uh oh. Stock market futures down. China says they're not going to bail out the world.

NOW WHAT? WHAT'S PLAN B?

So depending on what happens, I may get pretty aggressive on a gap down. It's getting close to the buy time and the end of Sell in May. Maybe close enough.

Unless this is a new bear market. Don't think so, but I missed the last one.

The 2-Day Trend is Up!

The stock market has been exhausting this summer, but the $QQQ (NDX) is leading the 2-day rally!

Of course, yesterday the market (SP500) bounced off of 1136. That may be pretty significant. And now we have what looks like to be a stronger NDX and Nasdaq over the general market. I think that's a good thing.

I haven't changed my positions. Still low beta, some cash, oil, etc. Oil has taken a beating as I guess nobody plans on using the stuff anymore. Or at least less of it. i don't know. Color me skeptical. If the economy is rebounding, demand increases pretty quickly.

Reason du jour for the market is whatever you want it to be. Less fear on Europe, China riding to the rescue. Tom Brady throwing for over 500 yards last night. Whatever you need.

The Poverty Surge

The big news today was the decline in US household income and rising poverty.

U.S. household income fell to its lowest level in more than a decade in 2010 and poverty rose to a 17-year high, setting the stage for the debate over jobs and the economy that will dominate the 2012 presidential race.

The GOP contenders were out there talking about it today. But we know it's all due to George Bush and global warming. Not necessarily in that order. Plus, President Obama is going to have a very rough re-election campaign if this is the economy for the next 14 months.

Anyway, not really the best of news. I think we're all getting a little weary of this recession. It seems as if it has been going on for quite a while.

China to Save Dodgers AND Italy

China to buy Italian debt? Aren't the Dodgers a big enough handful to deal with?

The news created a short-lived bounce in the markets. The interesting thing there is the SP500 1136 level. Just saying. And the NDX holding up better. Just saying again.

Considering getting more aggressive. I know it sounds ridiculous and all.

But if I am wrong, I always have the Chinese to bail me out, right?

Remembering 9.11.2001

I remember 9/11/01. I was up watching Squawk Box on CNBC, getting ready for work. It all unfolded as I watched the market news.

I was speechless watching the towers being hit and coming down. I went to work that day, but none of us in the office did much work. We were all glued to the internet, and were discussing what was going on.

All weekend long we have been watching memorials on TV and to kick off the NFL weekend. It's been very sobering to remember that this all happened ten years ago, and those who have helped from then until now.

Sunday Market Thoughts

The first weekend of NFL winding down, and I'm contemplating the $SPY and $QQQ. Maybe this is because my fantasy football team has started off the season in a severe downtrend.

Lots of columns about value investing and dividend returns. Which makes me want to avoid dividends and value, and look to growth. After all, if you follow the herd, you end up with RB Chris Johnson in the first round like I did. And by now everyone knows that Mike Tolbert is the better fantasy running back, right?

I think the gravitational pull of the bottom of the trading range is going to get the $SPY close to a retest. And the market futures are down so we may come close tomorrow.

Oh, September is historically the worst performing month for the stock market. Just a reminder as it seems to be playing out in front of us.

Anyway, it does seem as if we're in another recession. I don't think the government spending money we don't have is the answer. I'm thinking that the government just has to let the economy do what it needs to do. The government seems to just be prolonging the malaise.

JMHO.

***

Sitting on my butt all day. Going for a ride before the night game... Starting Miles Austin in the Flex position against the Jets. This weekend is already lost for me so it doesn't matter. I was debating starting Reggie Bush. LOL. Doesn't matter anyway.

Can the US Borrow Its Way Into Prosperity?

I'm not a big believer in President Obama's new stimulus/jobs program. Obama proposed cuts in the payroll tax, extending unemployment benefits, and new infrastructure projects.

First, Social Security is projected to run dry in the not-so-distant future. While the system is a pay as you go system from the unified budget, excess money is spent on other stuff. A payroll tax cut leads to less excess money. So the other stuff that needs to be funded still needs to be funded. This just leads to more borrowing. Can we borrow our way into prosperity? That doesn't make too much sense to me.

Unemployment benefits have gone from covering the gap in-between jobs to just giving cash to people who don't work. We have a social program called "welfare" for that. If folks still can't find work after some period of time, it's time for them to move back in with mom and dad, the kids, a sibling, or get some roommates. Maybe the unemployed will have to take any job out there while going back to school to learn a new skill. It could be that the old job has moved to China or been made obsolete by productivity gains.

Infrastructure is one of those things that everyone believes we need more of, but then when it comes to actually identifying what it is, nobody wants it near their homes, schools, and cities. You have to fight the environmentalists to build new roads and bridges. The environmentalists don't like new power lines, either. Maybe these days, infrastructure means filling pot holes. Yet, any unemployed office jockeys ready to go back to work in lower-paying jobs filling pot holes? (Not while the unemployment checks keep coming in, right?)

That's what I think.

***

More on stocks later. It sure seems like the trading range is pulling the SP500 down to the August lows...

Market Timing and Dividend Yields

Just wanted to share a Marketwatch column on using dividend yields as an investing market timing methodology.

It isn't as sexy as timing $NDX buys and sells. But look at the yields over time. I think it is worth consideration.

Of course this strategy has done well in a decade plus of bear markets. And maybe it works less well or growth rebounds in the next decade plus. That sort of thing happens and keeps us all a bit off balanced.

Still, I think it is worth consideration.

The New Trading Range

Check out the $SPY chart and look for divergences as we get close to the bottom of the trading range. I'm thinking it is worth a play as we get near it -- and in high beta stuff.

Not doing anything yet. Watching...

Are Stocks Undervalued? $NFLX vs. $VOD

Mark Hulbert asks if stocks are undervalued.

Valuation is always such an interesting metric, as it is based on earnings and optimism.  If folks are more excited about Netflix compared to Vodafone, demand for Netflix pushes up valuation.  Meanwhile, Vodafone keeps expanding and cranking out a 7% dividend.  I don’t want to argue growth vs. value, but PE multiples are what they are – based on enthusiasm.

Netflix PE is 54.08.

Vodafone PE is 10.74.

Want the 7% dividend?  Well, look at the 5 year chart.

Woo, no wonder folks have been a bit excited about Netflix.  But this is a view of the past.  Going forward, would you rather own $NFLX or $VOD?

The Futures

I’ve seen better market futures.  The $DIA down more than 200.  Enjoy the barbecue!  Wave the red, white and blue! 

But seriously…  As we get closer to a retest of the lows, I will be putting cash to work and getting more aggressive.  In other words, I will be selling the low beta and buying high beta (ie, QQQ and VB kind of stuff).

Hey, if we’re all going broke anyway, might as well pretend to have a plan, right?

At this point, all we need is a positive surprise or two in the numbers…

***

Heading to the movies at noon. Some Anne Hathaway movie.  I think it is a romantic comedy.  It was either that, or the latest Planet of the Apes movie.  I really want to see the latter, but I can’t have it my way 100% of the time, right?

Saturday Night Thoughts

As I sit here on my new patio I am contemplating not just the Oregon loss to LSU, but the stock market in general.

Everyone seems pretty pessimistic at this point. Who can blame them? We just had the first Zero jobs growth since 1945! Previous jobs numbers were revised downward. In California, solar power companies are shutting down and going bankrupt, while tech companies move jobs out of state.

Not a pretty picture.

I just resubscribed to Barrons for a low, discount, rate. Why? I need to read some Alan Ableson at this point. He is so gloomy that he makes pessimists seem optimistic. Yeah, really.

I don't know where we go from here, but I do believe that this is just a pause in the bull market. Despite the horrible August and horrible start to September. I think it is important to reallocate as we get closer to retesting the lows and get more aggressive.

That's what I think, sitting on the patio...

#107: Obama vs Republicans vs NFL; ATT