"Think big and don't listen to people who tell you it can't be done. Life's too short to think small."
— Tim Ferriss: Author, entrepreneur, and public speaker
10 Kasım 2010 Çarşamba
Is This More Than Just Another 2-Day Pullback?
The market is lower in early trading, after a reversal yesterday that saw stocks give back their early gains and finished in the red. Volume rose on the exchanges yesterday, making for a distribution day that we haven't seen in some weeks.
The big questions is whether this is just another 2-3 day pullback, or the start of something bigger? It's hard to say, but I still think there are too many buyers out there who are anxious to buy the dip and try to book additional gains into year end. So while we could see some consolidation that lasts for a bit, I don't see the conditions that would point to a larger slide.
Financials are holding up the best so far, with many bank stocks on my screen bucking the weakness (C, BAC, JPM, V). Materials stocks are down the most so far, after a big run in recent days. REITs (IYR) are also bucking the weakness, up 1% so far after yesterday's shellacking.
Asian markets were mixed overnight, while Europe is lower this morning. Wider yield spreads on some Euro nations (Ireland, Portugal, Spain) points to continued concern about sovereign debt, which may be a topic for the G-20 which starts tomorrow.
The pressure on the euro is boosting the dollar, and weighing on commodities. Gold prices have fallen back to $1392, while oil is back near $86.68.
Jobless claims fell 24,000 last week, which was better than expected. The economic news flow remains relatively light.
There was also a somewhat weak 10-year Treasury bond auction yesterday that caused a big spike higher in yields. The 10-year yield is higher again today, now up to 2.72%. Today we will see how the 30-year auction goes.
The VIX is up +2.6%, but still only back to modest levels at 19.60.
Trading comment: Given that the market has not had much of any pullbacks recently, I will likely look to do at least a little bit of buying today. My goal will be to look for those stocks that had strong positive reactions to earnings, and have pulled back since. Those are the best candidates for further rallies into year end after they get some rest. So big picture I am just looking for a pause that refreshes.
long BAC, V
The big questions is whether this is just another 2-3 day pullback, or the start of something bigger? It's hard to say, but I still think there are too many buyers out there who are anxious to buy the dip and try to book additional gains into year end. So while we could see some consolidation that lasts for a bit, I don't see the conditions that would point to a larger slide.
Financials are holding up the best so far, with many bank stocks on my screen bucking the weakness (C, BAC, JPM, V). Materials stocks are down the most so far, after a big run in recent days. REITs (IYR) are also bucking the weakness, up 1% so far after yesterday's shellacking.
Asian markets were mixed overnight, while Europe is lower this morning. Wider yield spreads on some Euro nations (Ireland, Portugal, Spain) points to continued concern about sovereign debt, which may be a topic for the G-20 which starts tomorrow.
The pressure on the euro is boosting the dollar, and weighing on commodities. Gold prices have fallen back to $1392, while oil is back near $86.68.
Jobless claims fell 24,000 last week, which was better than expected. The economic news flow remains relatively light.
There was also a somewhat weak 10-year Treasury bond auction yesterday that caused a big spike higher in yields. The 10-year yield is higher again today, now up to 2.72%. Today we will see how the 30-year auction goes.
The VIX is up +2.6%, but still only back to modest levels at 19.60.
Trading comment: Given that the market has not had much of any pullbacks recently, I will likely look to do at least a little bit of buying today. My goal will be to look for those stocks that had strong positive reactions to earnings, and have pulled back since. Those are the best candidates for further rallies into year end after they get some rest. So big picture I am just looking for a pause that refreshes.
long BAC, V
CURVE BALL
For some time I've been of the opinion that the dollar will control the fate of not only the stock market but also our favorite bull market...precious metals.
Since June the dollar has been collapsing down into a yearly cycle low. I didn't expect that low until the dollar reached at least 74 and I thought it even more likely we would see 71 before the cycle bottomed. However yesterday the dollar threw us a major curve ball. What should have been a minor bear flag that would resolve with a downward break has gotten unexpected traction.
Yesterday the dollar broke the down trend line and it now appears clear that the dollar has formed a shortened daily cycle low.
The gold cycle is a bit shorter at 15 weeks but still in the timing band for a top. If we end the week about where we are today then gold will form an exhaustion candle on the weekly charts.
This is why traders can't leverage themselves to the moon. These curve balls happen. If you get caught by one of these and you are leveraged to the max you will do catastrophic damage to your portfolio.
Since June the dollar has been collapsing down into a yearly cycle low. I didn't expect that low until the dollar reached at least 74 and I thought it even more likely we would see 71 before the cycle bottomed. However yesterday the dollar threw us a major curve ball. What should have been a minor bear flag that would resolve with a downward break has gotten unexpected traction.
Yesterday the dollar broke the down trend line and it now appears clear that the dollar has formed a shortened daily cycle low.
If the dollar rises above 78.36 it will reverse the pattern of lower highs and the odds will rise significantly that we now have a shortened intermediate cycle bottom, which should also mark the yearly cycle low.
If that turns out to be the case then we can probably expect stocks and gold to turn down into an intermediate correction.
The stock market is definitely due for the intermediate correction as it is on week 19. (The cycle usually runs about 20 to 25 weeks so a top is now due.)
This is why traders can't leverage themselves to the moon. These curve balls happen. If you get caught by one of these and you are leveraged to the max you will do catastrophic damage to your portfolio.
Trust me when I tell you this. Massive leverage always ends in a blown out account. There are never any exceptions to this rule. Never!
9 Kasım 2010 Salı
Everyone might as well resign themselves to the fact that the SMT will be posted only to the website from now on. Every newsletter I've ever subscribed to is done this way and now I see why. There comes a point when it just gets too big to be sent as an email. The SMT has reached that point.
When I started this I had no intention of spending anywhere near as much time at this thing as I am. I'm retired and I fully intended to enjoy my retirement. I realize I've made my bed and now I have to lie in it, but I can tell you I'm going to do everything I can to make this easy on me. And right now that means the nightly emails are done. I'm going to write the nightly report once and post it on the website.
I will tweet when it is posted so everyone doesn't have to constantly check the site. However 90% of the time the report will be up by 6pm PST. Subscribers can just go to the site at 6 and usually find the report ready to go.
Intraday posts are pretty rare and even if you don't get the post till the evening it usually isn't going to make much of a difference whether you acted immediately or the next morning. But for those of you who think you have to react instantly I will tweet when I post an intraday alert. Most of the time they come premarket, so you could always just check the website before the market opens.
Now for anyone who is having trouble logging in. 90% of the time you have caps lock on. The other 10% you put the username in the password prompt and vice versa.
To make it easier the username will never change and it is very easy to remember. All you have to do is save the password on Sunday night when I send it out (perhaps on a sticky note on your computer) . If you loose the password email me and I will get back to you as soon as I can with the password for the week.
That's it. Now let's turn off the grumbling and get back to investing.
When I started this I had no intention of spending anywhere near as much time at this thing as I am. I'm retired and I fully intended to enjoy my retirement. I realize I've made my bed and now I have to lie in it, but I can tell you I'm going to do everything I can to make this easy on me. And right now that means the nightly emails are done. I'm going to write the nightly report once and post it on the website.
I will tweet when it is posted so everyone doesn't have to constantly check the site. However 90% of the time the report will be up by 6pm PST. Subscribers can just go to the site at 6 and usually find the report ready to go.
Intraday posts are pretty rare and even if you don't get the post till the evening it usually isn't going to make much of a difference whether you acted immediately or the next morning. But for those of you who think you have to react instantly I will tweet when I post an intraday alert. Most of the time they come premarket, so you could always just check the website before the market opens.
Now for anyone who is having trouble logging in. 90% of the time you have caps lock on. The other 10% you put the username in the password prompt and vice versa.
To make it easier the username will never change and it is very easy to remember. All you have to do is save the password on Sunday night when I send it out (perhaps on a sticky note on your computer) . If you loose the password email me and I will get back to you as soon as I can with the password for the week.
That's it. Now let's turn off the grumbling and get back to investing.
On CNBC's Kudlow Report Tonight
Tonight at 7pm ET on CNBC:QE2 HAS BECOME A FRONT-PAGE POLITICAL FOOTBALL ... WILL SARAH PALIN & GOP ATTACK ON FED POLICY FORCE BERNANKE TO LIMIT QUANTITATIVE EASING?
- Rep. Jeb Hensarling, (R) Texas; Financial Services Cmte
- Matt Miller, Washington Post Online Columnist; Public Radio's "Left, Right and Center" Host
- Jim LaCamp, Macroportfolio Advisors Sr. VP, Portfolio Manager
ETF TICKING TIMEBOMB? IS THERE SYSTEMIC RISK IN ETFs?
-CNBC’s Herb Greenberg reports.
- Harold Bradley, co-authored Kauffman Foundation's study
- Bruce Lavine, WisdomTree Investments Pres. & COO
IS OBAMA TAX PROPOSAL DEAD IN THE WATER? WILL GOP REPEAL OBAMACARE?
- Rep. Dave Camp, (R) Michigan, Likely House Ways & Means Chairman
HOT COMMODITIES
- Harry Rady, Rady Asset Management CIO
- David Goldman, Senior Editor First Things Magazine; Fmr. Wall St. Economist: Bear Stearns & Credit Suisse
GLOBAL REFLATION? STOCKS...BUY, SELL OR HOLD?
- Art Hogan, Managing Director Director, Global Equity Product
- Alan Valdes, Vice President DME Securities
Please join us. The Kudlow Report. 7pm ET. CNBC.
Stocks Hold On To Recent Gains
After a six session rise, the S&P 500 gave back a whopping 2 points yesterday. Today, the major indexes are all slightly positive in early trading.
There is not a lot of market moving news. There was an acquisition in the energy space, with Chevron (CVX) acquiring Atlas Energy (ATLS) for $43.34, a 37% premium. The news has the energy sector up +0.93%, leading all other sectors. Financials are down the most so far, with a -0.58% decline.
The dollar is a bit lower today, and that is helping the commodity run continue. Oil prices are now up to $87.35, and gold has pushed further into new high territory by passing the $1400 level (currently $1420). Gold investors seem to be asking how high is high? But with every country trying to devalue their currencies to boost export demand, it still seems premature to try to answer that question.
Asian markets were mostly lower overnight; the 10-year yield is up a touch to 2.57%; and the volatility index (VIX) is testing recent lows below the 18 level.
Trading comment: More of the same. AAPL and GOOG continue to churn higher. Priceline (PCLN) reported great numbers and is up 10%. And the last cloud stock to sort of recover, VMWare (VMW) looks to be trying to recapture is overhead 50-day. So growth stocks continue to lead the market, but sector rotation hasn't left out other leaders from retail to restaurants to basic material stocks (CAT, DE, FLR, etc). So basically the mantra has been follow the leaders, don't bottom fish in the laggards.
long AAPL, DE, GOOG, GLD, VMW
There is not a lot of market moving news. There was an acquisition in the energy space, with Chevron (CVX) acquiring Atlas Energy (ATLS) for $43.34, a 37% premium. The news has the energy sector up +0.93%, leading all other sectors. Financials are down the most so far, with a -0.58% decline.
The dollar is a bit lower today, and that is helping the commodity run continue. Oil prices are now up to $87.35, and gold has pushed further into new high territory by passing the $1400 level (currently $1420). Gold investors seem to be asking how high is high? But with every country trying to devalue their currencies to boost export demand, it still seems premature to try to answer that question.
Asian markets were mostly lower overnight; the 10-year yield is up a touch to 2.57%; and the volatility index (VIX) is testing recent lows below the 18 level.
Trading comment: More of the same. AAPL and GOOG continue to churn higher. Priceline (PCLN) reported great numbers and is up 10%. And the last cloud stock to sort of recover, VMWare (VMW) looks to be trying to recapture is overhead 50-day. So growth stocks continue to lead the market, but sector rotation hasn't left out other leaders from retail to restaurants to basic material stocks (CAT, DE, FLR, etc). So basically the mantra has been follow the leaders, don't bottom fish in the laggards.
long AAPL, DE, GOOG, GLD, VMW
8 Kasım 2010 Pazartesi
WEBSITE ONLY FROM NOW ON
I've been in an almost constant battle with my email server now for the last couple of weeks. For some reason their system is set up to recognize bulk emails as spam. So when I send out the nightly report it occasionally triggers their system to shut down my outgoing emails for several hours.
After a 5 hour ordeal on the phone Saturday attempting to get the weekend report out, it has become painfully obvious that the nightly alert has become too large to continue as a mass email.
So from now on the reports will only be posted to the website .
You can still send email questions to me at the usual email address, but this too is starting to overwhelm me. So from now on I can't guarantee I will be able to answer every email.
If you have general questions you can always post them here on the blog.
I will try to have the nightly report posted to the website by 6pm PST but occasionally if I'm out climbing it may be later than that. Most days it will be up by 3pm PST.
If I post an intraday alert to the website I will also post on the blog to notify everyone to check the website and I will send out a notice on twitter. My username is garysavage1
After a 5 hour ordeal on the phone Saturday attempting to get the weekend report out, it has become painfully obvious that the nightly alert has become too large to continue as a mass email.
So from now on the reports will only be posted to the website .
You can still send email questions to me at the usual email address, but this too is starting to overwhelm me. So from now on I can't guarantee I will be able to answer every email.
If you have general questions you can always post them here on the blog.
I will try to have the nightly report posted to the website by 6pm PST but occasionally if I'm out climbing it may be later than that. Most days it will be up by 3pm PST.
If I post an intraday alert to the website I will also post on the blog to notify everyone to check the website and I will send out a notice on twitter. My username is garysavage1
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