Stocks are higher in early trading on several positive earnings reports as well as a bounce back after three straight down days in the S&P 500. Yesterday the S&P got down near 1300 before buyers stepped in. That level also coincides with the 20-day moving average for the SPX.
The S&P 500 is poised to close out January with solid gains. Those who follow the "January effect" will note that the Stock Traders Almanac says that as goes January, so goes the year. The implication is that when January shows gains, it bodes well for a positive year in the market.
In earnings news, we are seeing more positive reactions in stocks this morning than negative. Among the gainers are: PFE, BIIB, LLY, TYC, UPS, PCAR, HRS, MAT, and ARMH.
Stocks falling after report earnings include: XOM, AVY, MHP, ADM, and the big loser today - RSH.
In economic news, the Case-Shiller Index showed another 1.3% drop in November from October. The Chicago PMI Index fell to 60.2 from last month's 62.5. And the Consumer Confidence index fell to 61.1 in January from 64.8 last month.
Asian markets were higher overnight, and the euro is higher this morning after speculation over continued progress in Greek debt talks. This one has really been a yo-yo, with lots of ups and downs. There is also talk that European officials have reached some agreement on future bailout funds for the eurozone, but I haven't seen details.
Commodities are higher today. Gold prices are up to $1747, oil prices have topped $100 to $100.50, and copper and silver prices are higher as well.
The 10-year yield continues to languish, still hovering near the 1.83% level. And the VIX is up a touch to 19.55, but hasn't closed above 20 in nine days.
Trading comment: After 3 consecutive down days and a test of the 1300 level yesterday by the S&P 500, I would have expected dip buyers to come in stronger. The SPX has bounced back to 1312 as of now, but already in early trading the gains have faded. We will have to see if buyers come back in later today. Also, the market continues to work off its overbought condition. There are a lot more stocks reacting positively to earnings reports this morning than ones that are selling off. Also, the SPX is on the verge of a golden cross, where the 50-day crosses above the 200-day average. This generally bodes well for further gains in the market.
31 Ocak 2012 Salı
30 Ocak 2012 Pazartesi
Monday Morning Musings
The market is lower in early trading after closing last week higher for the 4th straight week. Guess how many times the market closed higher for 4 straight weeks in 2011? Zero. So it's the first time in awhile we have seen that streak. The market is also overbought and sentiment has risen to bullish levels in recent weeks. All of this sets the stage for a normal pullback-- possibly.
There isn't that much in the way of market moving news this morning, so the markets are taking their cues from overseas. Asian markets were lower overnight, and Europe is lower this morning. Concerns about Greece's ability to reach a compromise to its debt situation is weighing on Europe, and the euro is also weaker.
Commodities are sliding. Gold prices have eased back to $1725; oil prices are lower near $98.80; and copper and silver prices are down also.
There were a few companies reporting earnings this morning, but nothing too notable. Earnings season continues this week, but many of the biggies have already reported.
All 10 of the S&P sectors are lower so far today. Energy stocks are down the most, while utilities are down the least. Among international ETFs, China (FXI) is down the most in early trading.
The buying in the bond market has been furious since the FOMC meeting, and the 10-year yield continues to drop as a result. The 10-year yield is now below 1.85%, and nearing its lows from mid-December. Last year's lows back in September were 1.70%.
As for the VIX, it is spiking +9% today back above the 20 level. That's right about at the downtrend line that has been in place since late November, so we will have to see if that trendline holds.
Trading comment: We trimmed a few positions last week as the market got overbought, but will look to add back to positions on any further pullback. Usually the normal course of these short-term pullbacks is that the market gets overbought, pulls back a little to relieve that condition, and then rallies back again. If it goes on to make a higher high, the uptrend is in tack. But if the market makes a lower high, it is often a sign that a deeper or longer consolidation is in the works. For now, let's not get ahead of ourselves and see how quickly this dip gets bought. I think a lot of portfolio managers were not positions for the strong January we have seen and remain underinvested.
There isn't that much in the way of market moving news this morning, so the markets are taking their cues from overseas. Asian markets were lower overnight, and Europe is lower this morning. Concerns about Greece's ability to reach a compromise to its debt situation is weighing on Europe, and the euro is also weaker.
Commodities are sliding. Gold prices have eased back to $1725; oil prices are lower near $98.80; and copper and silver prices are down also.
There were a few companies reporting earnings this morning, but nothing too notable. Earnings season continues this week, but many of the biggies have already reported.
All 10 of the S&P sectors are lower so far today. Energy stocks are down the most, while utilities are down the least. Among international ETFs, China (FXI) is down the most in early trading.
The buying in the bond market has been furious since the FOMC meeting, and the 10-year yield continues to drop as a result. The 10-year yield is now below 1.85%, and nearing its lows from mid-December. Last year's lows back in September were 1.70%.
As for the VIX, it is spiking +9% today back above the 20 level. That's right about at the downtrend line that has been in place since late November, so we will have to see if that trendline holds.
Trading comment: We trimmed a few positions last week as the market got overbought, but will look to add back to positions on any further pullback. Usually the normal course of these short-term pullbacks is that the market gets overbought, pulls back a little to relieve that condition, and then rallies back again. If it goes on to make a higher high, the uptrend is in tack. But if the market makes a lower high, it is often a sign that a deeper or longer consolidation is in the works. For now, let's not get ahead of ourselves and see how quickly this dip gets bought. I think a lot of portfolio managers were not positions for the strong January we have seen and remain underinvested.
29 Ocak 2012 Pazar
ARGUING WITH THE MARKET
I figured out early in my career that arguing with the market more often than not ends up costing one money. If you are one of those people who are unable to change your mind, this business will almost certainly chew you up and spit you out. Never has that been more true than today.
Folks, we are in the middle of an ongoing currency war. That is creating investing conditions unlike anything most of us have ever seen before. There's a reason why very few money managers have been able to make any profits over the last year and most of them have lost money. That reason is an ever-changing investing environment.
As most of you probably already know my investing strategy is based around cycles, sentiment, a long-term bull market in precious metals, and a dash of technical analysis thrown in to help spot entry and exit points. Those tools give me a rough outline of what to expect going forward. I then place my trades based on the best odds for success. However, none of that excuses me of the responsibility to change my mind if the market tells me my expectations are wrong. It is precisely the ability to reverse direction 180° that enabled us to generate a 25% plus gain in the model portfolio during the last six months, despite being in a market that has confounded most professional money managers. Additionally, our portfolio has always been unleveraged with never more than 75% of capital invested at any one time. I daresay that, on a risk-adjusted basis, the SMT model portfolio has outperformed probably 99% of the money managers in the world.
As an example let's use my recent expectation for 2012 to be one of the worst years in history. First off, let me explain how I came to that expectation. To begin with, the dollar's three year cycle low was due to bottom in the spring of 2011. And indeed, it actually did bottom in May of 2011. Further, the stock market's four year cycle low is due to bottom in the fall of 2012.
Since most bear markets tend to last about 1 1/2 - 2 1/2 years it was reasonable to expect that the next bear market would begin as the dollar started to rally out of its three year cycle low. Low and behold what happened in May as the dollar cycle bottomed? That's right, the stock market started to collapse as deflationary forces began to push the dollar higher and asset prices down. Everything was unfolding exactly as our cycles tool had suggested it would.
However, in late November the markets started to deviate from our expectations. As the dollar continued to rally stocks began to decouple from the strong dollar. At this point one could either stubbornly hold on to their bearish outlook and lose money, or they could accept that the market was doing something different than what they expected, change their mind, and deal with reality as it is, instead of how they wished it to be.
The fact that the S&P wasn't doing what it should have been doing was the main reason I've been warning (pleading really) with traders not to sell short. This market should have begun the move down into a daily cycle low two weeks ago. The fact that it refuses to move down into that overdue correction is sending a strong message that something else is going on.
The inability to change one's mind when the market tells you that you are wrong is one of the toughest habits to break, but one that is absolutely necessary if you are going to make money in this business. For whatever evolutionary reason, human beings have a very hard time admitting when they are wrong, and an even harder time reversing their thinking 180° even after they know they're wrong. For the vast majority of traders it is less painful to lose money than it is to admit an error and reverse a trade.
In my previous post I went over my expectation for gold to move down into its daily cycle low along with the stock market. This should have corresponded with the dollar rallying out of its cycle low. On Wednesday morning everything was set up perfectly for this to unfold. Gold had formed a swing high and was beginning the move down into its daily cycle low, stocks were in the process of reversing back down through the coil, and the dollar had bounced off of the 50 day moving average and was holding strongly above support at 80, clearly in the process of putting in a cycle bottom.
However, as you can see from the chart all of that changed Wednesday afternoon on the Fed statement. The stock market reversed the early-morning weakness, closing strongly. Gold reversed dramatically, closing up over $40, and the dollar collapsed back down through 80 negating what would have almost certainly been a powerful rally out of that cycle bottom. One could either ignore what had just happened, thus exacerbating losing trades, or they could recognize that something fundamentally changed that afternoon and quickly get on the right side of the market.
That is exactly what we did. When the dollar reversed and gold started to rally we immediately bit the bullet on our long UUP trade, took a small loss, and reentered GDX. None of our tools (cycles, sentiment, or technicals) were predicting this. However, that still doesn't give us an excuse to ignore what had happened and quickly make the correct adjustment.
Bernanke didn't actually confirm QE3 Wednesday afternoon, but the market obviously perceived the Fed statement as a guarantee that QE3 is in the works. That has the potential to break the dollar's rally out of its three year cycle low and derail the expected move by stocks down into a four year cycle low later this year.
If Bernanke can break the dollar rally and get the dollar moving south again there is no way we are going to experience a deflationary bear market this year. In this scenario 2012 would be the beginning of an inflationary period, culminating in a dollar crisis at the next three year cycle low, due in late 2014. If this is what is about to unfold then we need to alter our expectations from a deflationary bear market to an inflationary bull market.
The four year cycle low for stocks, instead of occurring in late 2012 would probably get stretched out to late 2014. And the recession we should experience this year will be pushed out to 2013/2014 once inflation raises high enough to poison the economy.
The big question now is; did Bernanke break the dollar rally? Confirmation will come once the dollar finds its daily cycle low, and if the rally out of that low fails to move to new highs and rolls over quickly forming a new pattern of lower lows and lower highs.
If this scenario plays out then we can jettison the deflationary bear market hypothesis and begin positioning for the inflationary scenario which should culminate with a dollar crisis in late 2014. This scenario also has the potential to drive the bubble phase of the gold bull market.
A lot is riding on the dollar right now.
Folks, we are in the middle of an ongoing currency war. That is creating investing conditions unlike anything most of us have ever seen before. There's a reason why very few money managers have been able to make any profits over the last year and most of them have lost money. That reason is an ever-changing investing environment.
As most of you probably already know my investing strategy is based around cycles, sentiment, a long-term bull market in precious metals, and a dash of technical analysis thrown in to help spot entry and exit points. Those tools give me a rough outline of what to expect going forward. I then place my trades based on the best odds for success. However, none of that excuses me of the responsibility to change my mind if the market tells me my expectations are wrong. It is precisely the ability to reverse direction 180° that enabled us to generate a 25% plus gain in the model portfolio during the last six months, despite being in a market that has confounded most professional money managers. Additionally, our portfolio has always been unleveraged with never more than 75% of capital invested at any one time. I daresay that, on a risk-adjusted basis, the SMT model portfolio has outperformed probably 99% of the money managers in the world.
As an example let's use my recent expectation for 2012 to be one of the worst years in history. First off, let me explain how I came to that expectation. To begin with, the dollar's three year cycle low was due to bottom in the spring of 2011. And indeed, it actually did bottom in May of 2011. Further, the stock market's four year cycle low is due to bottom in the fall of 2012.
Since most bear markets tend to last about 1 1/2 - 2 1/2 years it was reasonable to expect that the next bear market would begin as the dollar started to rally out of its three year cycle low. Low and behold what happened in May as the dollar cycle bottomed? That's right, the stock market started to collapse as deflationary forces began to push the dollar higher and asset prices down. Everything was unfolding exactly as our cycles tool had suggested it would.
However, in late November the markets started to deviate from our expectations. As the dollar continued to rally stocks began to decouple from the strong dollar. At this point one could either stubbornly hold on to their bearish outlook and lose money, or they could accept that the market was doing something different than what they expected, change their mind, and deal with reality as it is, instead of how they wished it to be.
The fact that the S&P wasn't doing what it should have been doing was the main reason I've been warning (pleading really) with traders not to sell short. This market should have begun the move down into a daily cycle low two weeks ago. The fact that it refuses to move down into that overdue correction is sending a strong message that something else is going on.
The inability to change one's mind when the market tells you that you are wrong is one of the toughest habits to break, but one that is absolutely necessary if you are going to make money in this business. For whatever evolutionary reason, human beings have a very hard time admitting when they are wrong, and an even harder time reversing their thinking 180° even after they know they're wrong. For the vast majority of traders it is less painful to lose money than it is to admit an error and reverse a trade.
In my previous post I went over my expectation for gold to move down into its daily cycle low along with the stock market. This should have corresponded with the dollar rallying out of its cycle low. On Wednesday morning everything was set up perfectly for this to unfold. Gold had formed a swing high and was beginning the move down into its daily cycle low, stocks were in the process of reversing back down through the coil, and the dollar had bounced off of the 50 day moving average and was holding strongly above support at 80, clearly in the process of putting in a cycle bottom.
However, as you can see from the chart all of that changed Wednesday afternoon on the Fed statement. The stock market reversed the early-morning weakness, closing strongly. Gold reversed dramatically, closing up over $40, and the dollar collapsed back down through 80 negating what would have almost certainly been a powerful rally out of that cycle bottom. One could either ignore what had just happened, thus exacerbating losing trades, or they could recognize that something fundamentally changed that afternoon and quickly get on the right side of the market.
That is exactly what we did. When the dollar reversed and gold started to rally we immediately bit the bullet on our long UUP trade, took a small loss, and reentered GDX. None of our tools (cycles, sentiment, or technicals) were predicting this. However, that still doesn't give us an excuse to ignore what had happened and quickly make the correct adjustment.
Bernanke didn't actually confirm QE3 Wednesday afternoon, but the market obviously perceived the Fed statement as a guarantee that QE3 is in the works. That has the potential to break the dollar's rally out of its three year cycle low and derail the expected move by stocks down into a four year cycle low later this year.
If Bernanke can break the dollar rally and get the dollar moving south again there is no way we are going to experience a deflationary bear market this year. In this scenario 2012 would be the beginning of an inflationary period, culminating in a dollar crisis at the next three year cycle low, due in late 2014. If this is what is about to unfold then we need to alter our expectations from a deflationary bear market to an inflationary bull market.
The four year cycle low for stocks, instead of occurring in late 2012 would probably get stretched out to late 2014. And the recession we should experience this year will be pushed out to 2013/2014 once inflation raises high enough to poison the economy.
The big question now is; did Bernanke break the dollar rally? Confirmation will come once the dollar finds its daily cycle low, and if the rally out of that low fails to move to new highs and rolls over quickly forming a new pattern of lower lows and lower highs.
If this scenario plays out then we can jettison the deflationary bear market hypothesis and begin positioning for the inflationary scenario which should culminate with a dollar crisis in late 2014. This scenario also has the potential to drive the bubble phase of the gold bull market.
A lot is riding on the dollar right now.
27 Ocak 2012 Cuma
GDP Accelerates, But Still Below Expectations
The markets are mixed in early trading, with the Dow and S&P lower but the Nasdaq higher. Advance estimates on Q4 GDP came in at +2.8%, which is below consensus which was looking for +3.2% but still above last quarter's reading of only +1.8%. For those folks still calling for recession, GDP needs to either going to fall off a cliff or we are going to see some big revisions.
In other economic news, The Univ. Of Michigan consumer sentiment survey rose to 75.0 in January from 74.0 last month.
Earnings reports are being greeted with much cheer this morning. Despite a handful of better than expected reports, very few stocks are higher after reporting today. The few that are trading higher include: HON, EMN, and INVN.
But the list of disappointing reactions is larger and includes: RVBD, F, CVX, PG, SBUX, and MO.
The euro is higher this morning, and helping most commodities. Gold prices are up to $1732; oil prices are still above $100; and copper and silver prices are higher as well.
The 10-year yield has stopped dropping for the time being and found some support at the 1.93% level for a 2nd day. The VIX is fractionally higher to 18.75 and also looks to be bottoming.
Trading comment: I still think this overbought market appears a bit tired and in need of some sort of rest. If the market closes lower today it will be the first back-to-back down days since mid-December. That's a pretty long streak. What will be interesting will be to see how quickly dip buyers come in and look to get more invested on any market weakness. I suspect this first pullback won't gain much traction before rallying again.
In other economic news, The Univ. Of Michigan consumer sentiment survey rose to 75.0 in January from 74.0 last month.
Earnings reports are being greeted with much cheer this morning. Despite a handful of better than expected reports, very few stocks are higher after reporting today. The few that are trading higher include: HON, EMN, and INVN.
But the list of disappointing reactions is larger and includes: RVBD, F, CVX, PG, SBUX, and MO.
The euro is higher this morning, and helping most commodities. Gold prices are up to $1732; oil prices are still above $100; and copper and silver prices are higher as well.
The 10-year yield has stopped dropping for the time being and found some support at the 1.93% level for a 2nd day. The VIX is fractionally higher to 18.75 and also looks to be bottoming.
Trading comment: I still think this overbought market appears a bit tired and in need of some sort of rest. If the market closes lower today it will be the first back-to-back down days since mid-December. That's a pretty long streak. What will be interesting will be to see how quickly dip buyers come in and look to get more invested on any market weakness. I suspect this first pullback won't gain much traction before rallying again.
One-on-One with Newt Gingrich
Newt Gingrich and I go a long way back to the beginning of the Reagan supply-side revival of free market capitalism. I thought we shared that philosophy. But his attacks on Bain Capital using the class envy language of the left against capitalist success is a great disappointment to me. Newt resumed that Bain attack when he said in Florida that Mitt “lives in a world of Swiss bank accounts and Cayman Island accounts and automatic $20 million income for no work.”
Romney’s success earned his income. And his successful investments all represent market opportunities. However, once again I fear that Newt is all too willing to sacrifice his principles for political expediency in the heat of the campaign. Here is the interview with my criticisms and Newt’s responses (in two parts):
Romney’s success earned his income. And his successful investments all represent market opportunities. However, once again I fear that Newt is all too willing to sacrifice his principles for political expediency in the heat of the campaign. Here is the interview with my criticisms and Newt’s responses (in two parts):
26 Ocak 2012 Perşembe
Is The Market Tired Yet?
The market was higher in early trading, but has since faded back into the red. Yesterday's FOMC announcement provided some fireworks when the Fed said they would essentially be on hold with interest rates until "late 2014", and that they would remain extremely accomodative.
That isn't an explicit announcement of more quantitative easing (QE), but it sure is an implied one. Commodities wasted no time rallying, and everything from gold to silver to copper and oil took off. The CRB is up again this morning. Gold prices have reached $1725, silver and copper are higher, and oil is back above $100 to $100.50.
In earnings news, we are seeing positive reactions in stocks like: CAT, MMM, OI, JCP, and especially NFLX which is up 22% on a short squeeze.
Negative reactions include: T, VAR, UA, NVR, CTSX and SNDK.
In economic news, durable goods for December were better than expected at 3.0%, and last months orders were revised higher to +4.3%. Not bad. New home sales came in below expectations at 307,000, which is also below the prior months units of 314,000.
Asia was mixed overnight, while Europe is higher today on renewed optimism that progress is being made on Greek debt negotiations. The euro is also bouncing vs. the dollar.
The 10-year yield really plunged after yesterday's FOMC announcement, and today it is sliding further down to the low level of 1.95%. It is hard to tell if this is more a statement of a slowing economy or just the Fed pinning the long-end of the curve down with its 'operation twist'.
As for the VIX, it is up 2.1% this morning but still low overall at a level of 18.70.
Trading comment: I enjoy reading Jeff Saut's commentary each week. I have read him for years, and he often talks about these "buying stampedes" that we see in the market. Said stampedes usually last from 17-25 days, with very brief pullbacks along the way before eventually tiring out. Well folks, since this buying stampede started on Dec. 20th that is exactly what we have seen. And by my count today is day 25 of the current run. As such, I want to be careful about chasing things higher here. The market does appear poised for a rest. Hopefully that will provide a better opportunity to add to stocks that reported strong earnings and are poised to continue to lead.
KAM Advisors has long positions in: GLD, SLV, VAR
That isn't an explicit announcement of more quantitative easing (QE), but it sure is an implied one. Commodities wasted no time rallying, and everything from gold to silver to copper and oil took off. The CRB is up again this morning. Gold prices have reached $1725, silver and copper are higher, and oil is back above $100 to $100.50.
In earnings news, we are seeing positive reactions in stocks like: CAT, MMM, OI, JCP, and especially NFLX which is up 22% on a short squeeze.
Negative reactions include: T, VAR, UA, NVR, CTSX and SNDK.
In economic news, durable goods for December were better than expected at 3.0%, and last months orders were revised higher to +4.3%. Not bad. New home sales came in below expectations at 307,000, which is also below the prior months units of 314,000.
Asia was mixed overnight, while Europe is higher today on renewed optimism that progress is being made on Greek debt negotiations. The euro is also bouncing vs. the dollar.
The 10-year yield really plunged after yesterday's FOMC announcement, and today it is sliding further down to the low level of 1.95%. It is hard to tell if this is more a statement of a slowing economy or just the Fed pinning the long-end of the curve down with its 'operation twist'.
As for the VIX, it is up 2.1% this morning but still low overall at a level of 18.70.
Trading comment: I enjoy reading Jeff Saut's commentary each week. I have read him for years, and he often talks about these "buying stampedes" that we see in the market. Said stampedes usually last from 17-25 days, with very brief pullbacks along the way before eventually tiring out. Well folks, since this buying stampede started on Dec. 20th that is exactly what we have seen. And by my count today is day 25 of the current run. As such, I want to be careful about chasing things higher here. The market does appear poised for a rest. Hopefully that will provide a better opportunity to add to stocks that reported strong earnings and are poised to continue to lead.
KAM Advisors has long positions in: GLD, SLV, VAR
Obama's Tax Hike 'Designed to Come at Me': Romney
President Obama's proposal to increase taxes on the rich is "designed to come at me," GOP presidential contender Mitt Romney told me in an exclusive interview yesterday.
In his State of the Union speech Tuesday night, Obama proposed a minimum 30 percent tax rate on Americans earning more than $1 million a year.
The proposal—known as the "Buffett Tax" after Warren Buffett famously said his secretary pays a higher tax rate than he does— was a key part of the president's populist push for "fairness" in his speech to the nation.
The plan is "designed to come at me if I'm the nominee," Romney said in a taped interview. "If I happen not to be the nominee, he'll still take the 99-versus-one attack. He's really trying to divide America."
Romney, who gave a glimpse inside his personal fortune on Tuesday by releasing his U.S. tax returns, paid an effective tax rate of 13.9 percent in 2010 and expects to pay a 15.4 percent effective rate when he files his return for 2011.
Those rates are far below the top income tax rate on wages, which is 35 percent, because the U.S. tax code favors capital gains and other investment income by taxing them at 15 percent.
"The question is whether we're going to eliminate the capital gains tax break," Romney said. "So if you say we're going to raise that dramatically, you're going to choke off a lot of the capital that goes into creating new enterprises and creating jobs. It's the wrong way to go."
Romney said Republicans are not all about the rich. "I'm fighting to help middle class Americans get better jobs and better incomes. People who have been successful understand the path to success — we want everyone to enjoy success in America."
BROKEN DOLLAR
It has been my theory that this year we would see one of the worst performances by the stock market since 2008. However that has always been dependent on Bernanke not being able to break the dollar's rally out of its three year cycle low. As of this morning the dollar has printed a failed daily cycle. More often than not a failed daily cycle is an indication that an intermediate degree decline has begun.
I have begged and pleaded with people not too short the stock market over the last several weeks. For one it's very hard to make money on the short side for the simple reason that markets move down differently than they move up. Now I'm going to give you another reason not to short the stock market.
If the dollar has begun an intermediate degree decline then we should see it continue generally lower for the next 7 to 10 weeks. If this turns out to be the case then we are not going to see any meaningful declines in the stock market during this period. As a matter of fact the risk is great that the stock market could enter a runaway type rally if the dollar has begun the move down into an intermediate degree bottom.
As you can see in the chart below the last runaway move in 2006 lasted almost 7 months.
Runaway moves are characterized by randomly spaced corrections, all of similar magnitude and duration. As you can see in the chart above the corrective magnitude in this particular runaway move was about 20-30 points.
Keep in mind we don't have confirmation that a runaway move has begun yet. We would need to see how the first correction unfolds. If it is mild and brief, followed by the market moving back to new highs, then the odds would escalate that a runaway move has in fact begun.
Another big clue will come when the dollar bounces out of its daily cycle low, which is now due at any time, and if that bounce fails to make new highs before rolling over. If that happens it will reverse the pattern of higher highs and higher lows and confirm that an intermediate decline has indeed begun.
The scary part is that this may also signal the top of the three year cycle. If so then we are looking at an extremely left translated three year cycle that should generate huge inflationary pressures by the time the next three year cycle low is due in the fall of 2014.
It has been my expectation that we would see another deflationary period in 2012 before the cancer infected the global currency markets. As of this morning I'm not so sure that process hasn't already begun and the deflationary period has been aborted. Bernanke may have broken the dollar rally yesterday.
If this scenario unfolds it has the possibility of generating the bubble phase of the gold bull market. I elaborated on this in last night's premium report.
I have begged and pleaded with people not too short the stock market over the last several weeks. For one it's very hard to make money on the short side for the simple reason that markets move down differently than they move up. Now I'm going to give you another reason not to short the stock market.
If the dollar has begun an intermediate degree decline then we should see it continue generally lower for the next 7 to 10 weeks. If this turns out to be the case then we are not going to see any meaningful declines in the stock market during this period. As a matter of fact the risk is great that the stock market could enter a runaway type rally if the dollar has begun the move down into an intermediate degree bottom.
As you can see in the chart below the last runaway move in 2006 lasted almost 7 months.
Runaway moves are characterized by randomly spaced corrections, all of similar magnitude and duration. As you can see in the chart above the corrective magnitude in this particular runaway move was about 20-30 points.
Keep in mind we don't have confirmation that a runaway move has begun yet. We would need to see how the first correction unfolds. If it is mild and brief, followed by the market moving back to new highs, then the odds would escalate that a runaway move has in fact begun.
Another big clue will come when the dollar bounces out of its daily cycle low, which is now due at any time, and if that bounce fails to make new highs before rolling over. If that happens it will reverse the pattern of higher highs and higher lows and confirm that an intermediate decline has indeed begun.
The scary part is that this may also signal the top of the three year cycle. If so then we are looking at an extremely left translated three year cycle that should generate huge inflationary pressures by the time the next three year cycle low is due in the fall of 2014.
It has been my expectation that we would see another deflationary period in 2012 before the cancer infected the global currency markets. As of this morning I'm not so sure that process hasn't already begun and the deflationary period has been aborted. Bernanke may have broken the dollar rally yesterday.
If this scenario unfolds it has the possibility of generating the bubble phase of the gold bull market. I elaborated on this in last night's premium report.
25 Ocak 2012 Çarşamba
Apple Blowout Earnings Lifts Nasdaq
The markets are mixed this morning with the Dow and SPX lower, but the Nasdaq higher after Apple (AAPL) reported blowout earnings last night. Expectations were already running higher for AAPL coming into the quarter, and many people feared the stock could sell off after reporting just due to profit taking. But the upside that AAPL reported was far greater than expected in nearly every category. Earnings blew past estimates, unit sales were record, and margins were much higher than we have seen. Currently AAPL is up 7% near $450.
A few other companies beat estimates but their stocks are lower after reporting, including UTX, BA, and COP.
In economic news, pending home sales for December fell 3.5%, which was below consensus. This doesn't seem to have moved the market much. Participants are likely waiting to hear the latest monetary policy statement from the Fed, which will be released at 2pm EST. The big question is whether the Fed will change its language surrounding holding rates low "until mid-2013".
In Asian, Japan was higher again while China and Hong Kong remained closed for holidays. Boy, they sure do get a lot of market holidays over there. In Europe, markets are lower amid continued delays with creditors in getting the Greek debt terms revised.
The euro is also lower relative to the dollar, weighing on commodities. Oil prices are down near $98, gold prices are lower to $1653, and copper prices are also slightly lower.
The 10-year yield is off slightly to 2.06%. Today is day 4 above the 2.0% level, but it will be interesting to see how it reacts to today's FOMC announcement. As for the VIX, it is up another 1.6% to 19.21, the 5th consecutive day below the 20 level. I think going long volatility will be a good trade at some point, but haven't done anything yet.
Trading comment: The market remains overbought but pullbacks haven't gained any traction. The SPX hit 1310 five days ago, and today it is still right at that 1310 level. So while bulls were hoping for a pullback so that underinvested managers could put more money to work, all the market has given us is some sideways consolidation. As such, it is very possible that the market continues to frustrate the majority (as that is it's job) and stair-step higher into month end.
KAM Advisors is long AAPL
A few other companies beat estimates but their stocks are lower after reporting, including UTX, BA, and COP.
In economic news, pending home sales for December fell 3.5%, which was below consensus. This doesn't seem to have moved the market much. Participants are likely waiting to hear the latest monetary policy statement from the Fed, which will be released at 2pm EST. The big question is whether the Fed will change its language surrounding holding rates low "until mid-2013".
In Asian, Japan was higher again while China and Hong Kong remained closed for holidays. Boy, they sure do get a lot of market holidays over there. In Europe, markets are lower amid continued delays with creditors in getting the Greek debt terms revised.
The euro is also lower relative to the dollar, weighing on commodities. Oil prices are down near $98, gold prices are lower to $1653, and copper prices are also slightly lower.
The 10-year yield is off slightly to 2.06%. Today is day 4 above the 2.0% level, but it will be interesting to see how it reacts to today's FOMC announcement. As for the VIX, it is up another 1.6% to 19.21, the 5th consecutive day below the 20 level. I think going long volatility will be a good trade at some point, but haven't done anything yet.
Trading comment: The market remains overbought but pullbacks haven't gained any traction. The SPX hit 1310 five days ago, and today it is still right at that 1310 level. So while bulls were hoping for a pullback so that underinvested managers could put more money to work, all the market has given us is some sideways consolidation. As such, it is very possible that the market continues to frustrate the majority (as that is it's job) and stair-step higher into month end.
KAM Advisors is long AAPL
24 Ocak 2012 Salı
Blame Obama for Washington Gridlock: Senator Mitch McConnell
When President Obama outlines his goals for 2012 during Tuesday’s State of the Union address, he shouldn’t expect a lot of cooperation from Republicans, senate Minority Leader Mitch McConnell (R-Ky.) told “The Kudlow Report” Monday.
“With the Obama economy established now … unemployment is still at 8 ½ percent,” McConnell said. “It didn’t work, and we’re not interested in doing more of the things that don’t work.”
Obama will use his State of the Union address to outline a lasting economic recovery that will “work for everyone, not just a wealthy few.” He is expected to call for higher taxes on the rich, among other things.
While it sounds like more gridlock ahead in Washington, McConnell put the blame squarely on the president.
He said Obama was “AWOL” last year on his bus tour when Republicans wanted to tackle tax reform and entitlements, and he expects more of the same this year.
“He was not involved whatsoever,” McConnell said. “So I’m not optimistic, frankly, that in an election year that he’s likely to be any more engaged than he was last year.”
What’s more, he thinks the logjam in the nation’s capital is part of Obama’s agenda.
“That’s his strategy … to demonize Congress, to complain because he can’t continue to get everything he wants, like he did the first two years,” he said. “It’s all about his re-election and not about the country.”
One thing that McConnell thinks will get done is the payroll tax cut extension, which was extended for only two months in December when Congress couldn’t come to an agreement.
“We’ll be back at trying to figure out how to do that for the balance of the year and how to pay for it,” he said. “We don’t want to add to the deficit.”
Following The Greek Yo-Yo
The markets are lower this morning after a failure to find solutions to Greece's debt problems has put pressure on Europe's markets and also the euro currency. Greece's stock index is down -4.0% this morning and weighing on other markets. Data released this morning showed the manufacturing and services PMI readings for the eurozone both improved in January
Overnight in Asia, Japan was up slightly despite lowering its GDP forecast for 2012. China and Hong Kong were closed for holidays.
In earnings news, stocks are showing a mixed reaction to reports from last night and this morning. On the upside are stocks like: COH, EMC, WDC, and VMW. On the downside are TXN, MCD, TRV, VZ, CSX. Tonight AAPL reports and many are wondering if it will have the sort of reaction seen in GOOG. I think AAPL will fare better, although the fact that it has recently run to new highs does leave it vulnerable to some profit taking on the news.
The dollar is higher relative to the euro, and that is weighing on most commodities. Gold prices have pulled back to 1665. Oil prices are back below $100 near $98.90. And copper prices are down also.
The 10-year yield is roughly flat near the 2.07% level. As for the VIX, it has bounced 5% in early trading to 19.55, and briefly touched the 20 level before fading a bit.
Trading comment: Growth stocks took a back seat to defensive stocks for most of 2011. So far this year, growth seems to be readying for a comeback. VMW reported a strong quarter and got a nice reaction, similar to FFIV last week. MELI sold off in 2011 but is back in position to challenge new highs. And recent trades we have talked about including STMP and ULTA are both at or near new highs as well. While I expect 2012 to be choppy similar to last year, I do think there will be more opportunities for growth investors.
KAM Advisors had long positions in AAPL, COH, GOOG, MCD, STMP, and ULTA
Overnight in Asia, Japan was up slightly despite lowering its GDP forecast for 2012. China and Hong Kong were closed for holidays.
In earnings news, stocks are showing a mixed reaction to reports from last night and this morning. On the upside are stocks like: COH, EMC, WDC, and VMW. On the downside are TXN, MCD, TRV, VZ, CSX. Tonight AAPL reports and many are wondering if it will have the sort of reaction seen in GOOG. I think AAPL will fare better, although the fact that it has recently run to new highs does leave it vulnerable to some profit taking on the news.
The dollar is higher relative to the euro, and that is weighing on most commodities. Gold prices have pulled back to 1665. Oil prices are back below $100 near $98.90. And copper prices are down also.
The 10-year yield is roughly flat near the 2.07% level. As for the VIX, it has bounced 5% in early trading to 19.55, and briefly touched the 20 level before fading a bit.
Trading comment: Growth stocks took a back seat to defensive stocks for most of 2011. So far this year, growth seems to be readying for a comeback. VMW reported a strong quarter and got a nice reaction, similar to FFIV last week. MELI sold off in 2011 but is back in position to challenge new highs. And recent trades we have talked about including STMP and ULTA are both at or near new highs as well. While I expect 2012 to be choppy similar to last year, I do think there will be more opportunities for growth investors.
KAM Advisors had long positions in AAPL, COH, GOOG, MCD, STMP, and ULTA
23 Ocak 2012 Pazartesi
Are Yields Finally Reflecting Improving Economy?
The 10-year yield is finally getting a nice boost, currently near a 7-week high at 2.08%. In recent weeks as we have gotten mildly improving economic reports the 10-year yield continued to drift lower as if the economy were going back into recession. But the last few days have seen a nice lift from the lows. I would like to see the 10-year yield stay above 2.0% on future pullbacks.
Stocks are strong out of the gate this morning. Stocks have now been up 3 straight weeks to start the year. That's a better start than last year although the market now looks pretty overbought short-term.
In earnings news, the only notable report I saw this morning was Halliburton (HAL) which beat estimates but it's stock is selling off. In other news, RIMM kicked out its co-CEOs as it looks for new leadership to get things back on track.
The positive tone to the markets this morning also comes out of Europe, where Germany held a successful debt offering. The euro is higher on this as well as continued chatter that a plan to restructure Greece's debt from default is ongoing. France and Germany have also called for easier capital rules for banks, which is helping boost financial stocks.
The dollar is lower this morning, which is boosting commodities. Oil prices are higher near $99.55. Gold prices are up to $1675. Copper and silver prices are also higher.
As for the VIX, I would expect it to be lower this morning but it is currently 2.6% higher to 18.77. Some of this could be related to options expiration last Friday, during which the VIX had a big plunge lower to 18.25.
Trading comment: The market continues to work its way higher with very little pullbacks along the way. This keeps it difficult for most people to jump on board as most investors don't like to chase stocks higher. It's hard to say how long this mini-melt up will last. The market is overbought short-term and sentiment is growing more bullish as well. But so far those factors have been trumped by underinvested portfolio managers putting money to work.
KAM Advisors has long positions in HAL
Stocks are strong out of the gate this morning. Stocks have now been up 3 straight weeks to start the year. That's a better start than last year although the market now looks pretty overbought short-term.
In earnings news, the only notable report I saw this morning was Halliburton (HAL) which beat estimates but it's stock is selling off. In other news, RIMM kicked out its co-CEOs as it looks for new leadership to get things back on track.
The positive tone to the markets this morning also comes out of Europe, where Germany held a successful debt offering. The euro is higher on this as well as continued chatter that a plan to restructure Greece's debt from default is ongoing. France and Germany have also called for easier capital rules for banks, which is helping boost financial stocks.
The dollar is lower this morning, which is boosting commodities. Oil prices are higher near $99.55. Gold prices are up to $1675. Copper and silver prices are also higher.
As for the VIX, I would expect it to be lower this morning but it is currently 2.6% higher to 18.77. Some of this could be related to options expiration last Friday, during which the VIX had a big plunge lower to 18.25.
Trading comment: The market continues to work its way higher with very little pullbacks along the way. This keeps it difficult for most people to jump on board as most investors don't like to chase stocks higher. It's hard to say how long this mini-melt up will last. The market is overbought short-term and sentiment is growing more bullish as well. But so far those factors have been trumped by underinvested portfolio managers putting money to work.
KAM Advisors has long positions in HAL
22 Ocak 2012 Pazar
Optimism in a Seemingly Hopeless World???
Moab City Council: Resolution Abolishing Corporate Personhood and Money As Speech
Let Moab know you’re watching us!---------------------------------------------------------------------------------
Now... for my brainstorming-philosophizing: Somebody recently emailed me about finding it hard to be optimistic in such a tragic world. What to do?
Optimism is Faith, Self-Fulfilling Prophecy.
Pessimism is Faithlessness, Self-Fulfilling Prophecy.
Pessimism is Faithlessness, Self-Fulfilling Prophecy.
I keep coming back to Spirituality, because the most powerful and successful movements for social change, whether for good or for bad, have been religious. Religion is usually bad. But let’s focus on the small bit that’s good, because, as you will see if you read on, small good minority overpowers big bad majority. I'm not talking religious denominations or institutions, I'm talking states of mind.
Life's principle is to focus on the one sperm that makes it to the egg, not the millions of others that are doomed.
Thus, my focus here is on the tiny minority, the True Triumphant.
Look at the leading Abolitionists, like Harriet Tubman. Look at Gandhi, Martin Luther King, George Fox. Look at the movement against Apartheid in South Africa and Poland’s break from the USSR. What motivated them?
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| Harriet Tubman |
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| Mohandas Gandhi |
True religion is, by its very nature, unshakeable Optimism in the face of seemingly infinite Pessimism. I'm not talking fake smiles and bury-head-in-the-sand ignorant bliss of false religion.
Spirituality is the Faith of the small against seemingly impossibly-large odds. Faith is Optimism. Faithlessness is Pessimism. No movement, no revolution, can succeed for long without this Optimism. Without Optimism, a movement is spineless, cowardly, pathetic. Nothing succeeds without Faith. Faith is even the very essence of all scientific discovery. Even so, such Optimism always appears foolishly naïve and childishly small to everyone but the Sprititual Mind, and this seemingly small childishness against the immensity of Pessimism is what makes the triumph of this Optimist so splendid when it happens. This Optimist plays out our deepest yearning, our cultural mythology.
Yes, this Optimism is the Essence of our most valued myths and fairy tales in every culture in the world. My cynical Pessimist self thinks myth and fairy tale is silly fiction, and uses this as argument against my Optimist self. Little does this Pessimist know he is only adding to the splendor of the Optimist in her potential triumph!
Yes, the Spiritual Mind knows Myth and Fairy Tale express truths too deep for any pragmatic science to ever grasp. This is because spiritual understanding is not theory, but direct experience, direct knowledge, beyond thought (beyond symbol, beyond words, beyond images). Because it is beyond symbol, the symbols (stories) that point to it appear fantastic, as fairy tale! Scientific theory is wonderful, but it can only be theory, can never go beyond thought (symbol, words, images), can never be direct experience, can never truly be knowledge (gnosis), direct understanding.
Examples of Humanity's Ancient Mythology:
Our Power to Overcome
(you will recognize them, because they are our shared humanity):
(1) The small, insignificant peasant turns out to be the Prince in disguise who comes to rule. There are countless variations of this myth/fairy tale all over the world.
(2) “The stone that the builders rejected has become the Chief Cornerstone (or Capstone).” Jews, Christians, and Rastafarians readily recognize this one.
(3) The unassuming pauper goes through unfathomable trials, beating all his strong and glorious competitors, to triumphantly win the hand of the Princess.
(4) The little guy (eg David) slays the Giant (eg, Goliath).
(5) The unassuming man slays the Dragon (this is one of the most common and ancient and world-wide)
This mythology is the very manifestation of our biology and physics, the very principle of all of existence:
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| Cottonwood Seeds |
(
1) A cottonwood seed, so tiny it floats in the air, flies on random currents with no plan, to then fall into the ground as dead, and resurrect as a giant cottonwood tree.
(2) One single bacterium or virus can enter the body of a giant and conquer it.
(2) One single bacterium or virus can enter the body of a giant and conquer it.
(3) One single spark can mean the flaming end of an entire forest.
(4) One split atom has the energy to blow up a city.
(5) One single sperm cell, against millions of competitors, goes through incredible odds to reach the egg to become a life form unfathomably greater and more complex than the original sperm cell. And you, yes you, were one in millions who made it to the egg! And you were the egg!
Yes, the Sperm Cell journey is the eternal myth of the Pauper going through trials to win the hand of the Princess, the Egg.Now my Pessimist side, void of Intuition, can only calculate. He can take several samples out of millions of sperm cells that are headed to the egg. And each of his samples can contain thousands of sperm cells. He can scientifically prove that every single one of those thousands of sperm cells are destined for death, doomed. Why? Because none of his many samples happens to include that one and only sperm cell out of millions that will reach the egg! He can with full self-assurance say that he statistically and scientifically proved that all sperm cells are doomed and life is hopeless!
This is the comical trickery and essence of all of Life: Tiny Optimism triumphs over seemingly impossibly huge Pessimism. Life would not be life without seemingly impossibly huge Pessimism!
Optimism is Faith,
Pessimism is Faithlessness:
Both go together
My little person is Optimism, the Very Essence of Life. My Big Tyrant is Pessimism, the Very Essence of Death. But Optimism can’t be Optimism without Pessimism. Life can’t be life without Death. The Stone that the Builders rejected can’t become the Chief Capstone without being rejected! This is why the Stone says, “Forgive them, for they know not what they do.” All Life and every particle in the universe is playing out this One Myth, this One Drama, the essence of every story we tell, every movie we watch! Little Optimism faces off Big Pessimism and triumphs. This One Myth touches our “interesting” sensor more deeply than any other story. The Small is the Divine in disguise, and even appears to be defeated, even to the point of death, only to resurrect to overcome the Big in the end. Then we all clap our hands and cheer with tears in our eyes! You know exactly what I'm talking about.I once told a religious person that gay people were “the stone that the builders rejected,” in the same way that African Americans, or any oppressed people, are the stone that the builders rejected, eventually becoming the Chief Cornerstone. This person was appalled I could say such a thing, telling me I was blaspheming, because, he said, this “stone that the builders rejected” refers to Jesus, who was rejected, killed, buried and resurrected as King. But, according to this person’s own logic, if he really believes, as he says, that Jesus is God and God is Omnipresent and non-changing, wouldn’t Jesus be Omnipresent, the Non-Changing Essence of All Life and All Creation? Doesn’t his same Jesus say “I was hungry and you did not feed me” or “I was in prison and you did not visit me”? Isn't his whole point that he is right in front of your face and you don't recognize him?
The dying, the cripple, the mental, the unwanted, the unloved:
they are Jesus in disguise.
Not knowing my transcendent nature as Sovereign Lord of all beings,
fools condemn me as a man
(Bhagavad Gita 9:11)
Viewing all things with equal regard
he beholds the Self in all beings
and all beings in the Self.
He who sees me everywhere
and sees everything in me,
to him I am never lost.
The yogi, anchored in unity,
worships me abiding in all beings
lives and moves in me,
no matter how he live and move.
He who, by likening himself with others,
senses pleasure and pain for all as for himself,
is deemed to be the highest yogi. (Bhagavad Gita 6:29-32)
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| Mother Theresa holding real, live Jesus in the flesh |
they are Jesus in disguise.
--Mother Theresa
Not knowing my transcendent nature as Sovereign Lord of all beings,
fools condemn me as a man
(Bhagavad Gita 9:11)
Viewing all things with equal regard
he beholds the Self in all beings
and all beings in the Self.
He who sees me everywhere
and sees everything in me,
to him I am never lost.
The yogi, anchored in unity,
worships me abiding in all beings
lives and moves in me,
no matter how he live and move.
He who, by likening himself with others,
senses pleasure and pain for all as for himself,
is deemed to be the highest yogi. (Bhagavad Gita 6:29-32)
The person in me who can’t recognize that an oppressed Mexican immigrant or gay person or an abused puppy or a Third World sweat-shop child are Jesus also can't recognize that Jesus is a piece of rock that becomes the Chief Cornerstone.
And he cannot recognize that Jesus is the Buddha and the Krishna and the Muhammad and the Lao Tzu that he rejects. In fact, his own religious dogma that appears to be pro-Jesus, his religious intolerance, is the very spirit that crucified the Jesus he claims to honor!
An adult who abuses a child loses all conception that that child grows to an adult to haunt him, the stone he rejects becomes the chief cornerstone. His intolerance of Buddha, Krishna, Muhammad, and Lao Tzu is his inability to recognize that Buddha, Krishna, Muhammad, and Lao Tzu are actually one and the very Jesus he claims to honor.
However, it is his intolerant mentality, his Pessimism, that makes Optimism Optimism, his Death that makes Life Life, his Battling that makes Triumph Triumph. Again, the one who rejects the stone is the one who pushes the stone to be Chief Cornerstone.
And he cannot recognize that Jesus is the Buddha and the Krishna and the Muhammad and the Lao Tzu that he rejects. In fact, his own religious dogma that appears to be pro-Jesus, his religious intolerance, is the very spirit that crucified the Jesus he claims to honor!
An adult who abuses a child loses all conception that that child grows to an adult to haunt him, the stone he rejects becomes the chief cornerstone. His intolerance of Buddha, Krishna, Muhammad, and Lao Tzu is his inability to recognize that Buddha, Krishna, Muhammad, and Lao Tzu are actually one and the very Jesus he claims to honor.
However, it is his intolerant mentality, his Pessimism, that makes Optimism Optimism, his Death that makes Life Life, his Battling that makes Triumph Triumph. Again, the one who rejects the stone is the one who pushes the stone to be Chief Cornerstone.
What is Interesting Is Truth, What is Boring Is False.
What Is Good Tastes Good, What is Bad Tastes Bad.
Now you might think that by Truth I mean our usual definition of fact, which is idea. No! By Truth I mean Principles. No brain on earth can ever know facts, only theories that parade as facts! Science imparts theories parading as facts. Myth imparts Principles. Theories can only be believed. Principles are known, directly experienced. This turns around what we've been taught all our lives, that science is fact and myth is belief. If you meditate on what I am saying here, you will know the truth, the Principle.
Even if you define myth as fiction, I say that fiction, by the very fact it is interesting, is proof that it is Truth, imparting Principle. If fiction didn’t convey eternal truths, it wouldn’t be interesting, wouldn’t be a good story. What is not interesting is not Truth.
In the same way nutritious grass tastes good to a deer and toxic plants taste bad to the deer, so we, in our natural state, know that what is interesting is good for us. In our natural state, good food and truth tastes good and bad food and falsehood tastes bad. Truth is interesting and falsehood is boring. Do you get bored in Church? Now when we depart from our natural state, entering addiction, we start thinking crappy commercial fast food is good and mind-numbing corporate TV and malls and megachurches with slick manican ministers are "interesting." We think they are interesting, but we don't experience that they are interesting. But if you really know yourself, you know that you never enjoy food you are addicted to. If you enjoyed it, you wouldn't be addicted to it! Addiction is grasping for an idea you think about food or drugs that you once experienced or want to experience. Your mind is never on the food you are addicted to, never enjoying it. You know what I am talking about.
How Did We Get Into This Addictive State?
This brings us back to our myth of our Fall From Grace, taking on the Consciousness of Credit and Debt (Good and Evil), which I talk about in
and
The Serpent in Eden, giving the Fruit of the Consciousness of Credit and Debt. And he grows into the Huge Seven-Headed Dragon of Commerce, his Kingdom of Babylon controlling the whole world. He seems impossibly, infinitely powerful. Just looking at him fills you with Pessimism, hopelessness, because he is Pessimism Incarnate.
Now We're Back to the Myth of the Little Hero Slaying the Impossibly Powerful Dragon!
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| Ugaritic depiction of Baal vs Lotan (who becomes Leviathan in the Bible) |
Yes, hark back to the cottonwood seed becoming the tree. Hark back to the spark creating a forest fire. Hark back to the one sperm among millions reaching the egg. Hark back to David slaying Golliath. Hark back to the ancient world-wide myth of the little guy slaying the Dragon.
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| Hercules vs the Hydra |
Okay, I admit, I have a part of me that doubts, too. That's what makes this so damn scary and exciting, what makes it so interesting! If we knew for certain, this Drama wouldn’t be so on-the-edge-of-our-seat so scary and exciting, would it? Which do you choose, Optimism or Pessimism? Either one you choose, you are part of the Grand Drama.
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| Arch-Angel Michael vs Seven-Headed Dragon |
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| The Seven-Headed Naga Subdued, no longer being served, but being servant to Vishnu: the sign of Enlightenment |
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| Revelation's Queen of Heaven vs the Seven-Headed Dragon |
 |
| The Seven-Headed Naga Subdued, is no longer being served, but being servant to Buddha, the sign of Enlightenment |
20 Ocak 2012 Cuma
Google Drops The Ball
Today's reactions to earnings reports are pretty mixed, with Google being the big loser so far. I think expectations were running pretty high for GOOG to report a good quarter. So when they missed estimates by a $1, investors hit the sell button in a hurry. GOOG is down -8% so far today on a big jump in volume. We will have to see if it can recoup any of its early losses into the close.
Another stock that is taking it on the chin is ISRG, which actually beat estimates by a nice amount. GE and AXP are also lower this morning. On the plus side are IBM, MSFT, and INTC.
In economic news, existing home sales in December rose to a rate of 4.61 million units (vs. 4.55 consensus).
Asian markets were higher overnight. China rose 1.0% despite a PMI reading of 48.8 which marks the 3rd straight month the index was below the 50 level which marks the line between expansion and contraction.
The euro is lower this morning. Although there is talk of an agreement on the Greek debt issue, a colleague just told me CDS spreads are widening on Portugal to new highs, and Portugal is a much bigger issue than Greece.
The 10-year yield is finally moving above the 2.0% level to 2.01% currently. That is just above the 50-day moving average. As for the VIX, it closed below the 20 level yesterday and is currently a bit lower to 19.65 despite the market being down a bit.
Trading comment: The market could have been down a lot more following the GOOG miss and the reactions to GE, AXP, etc. So I think it is a slight positive that the market is only down slightly so far (although it is still early). I think most investors remain in dip buying mode, as many came into the year under-invested and holding too much cash. I want to focus on those companies that continue to beat estimates and lead the market. Unfortunately right now I cannot put GOOG in that category.
KAM Advisors was long GOOG and IBM
Another stock that is taking it on the chin is ISRG, which actually beat estimates by a nice amount. GE and AXP are also lower this morning. On the plus side are IBM, MSFT, and INTC.
In economic news, existing home sales in December rose to a rate of 4.61 million units (vs. 4.55 consensus).
Asian markets were higher overnight. China rose 1.0% despite a PMI reading of 48.8 which marks the 3rd straight month the index was below the 50 level which marks the line between expansion and contraction.
The euro is lower this morning. Although there is talk of an agreement on the Greek debt issue, a colleague just told me CDS spreads are widening on Portugal to new highs, and Portugal is a much bigger issue than Greece.
The 10-year yield is finally moving above the 2.0% level to 2.01% currently. That is just above the 50-day moving average. As for the VIX, it closed below the 20 level yesterday and is currently a bit lower to 19.65 despite the market being down a bit.
Trading comment: The market could have been down a lot more following the GOOG miss and the reactions to GE, AXP, etc. So I think it is a slight positive that the market is only down slightly so far (although it is still early). I think most investors remain in dip buying mode, as many came into the year under-invested and holding too much cash. I want to focus on those companies that continue to beat estimates and lead the market. Unfortunately right now I cannot put GOOG in that category.
KAM Advisors was long GOOG and IBM
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