I have to say, it has been an expensive education on the stock market since S & P 500 hit 950.
There are quite a few lessons learned, some of them I should have learned the first time around with the market leading up until sept 2008.
Lessons in life worth learning are often the hardest to learn.
Lesson #1
The market is its own game, current valuation has nothing to do with the current or future economy .
When I started trading in August 2006, the thought was after talking with John Chinnock that the economy was heading into trouble. Back then I was very tentative on when the market would turn, but turn it would was my belief. Looking back, my cautiousness on "betting" on my belief served me very well. From Sept 2006 until Sept 2008 I was shorting the market. The entire time many people thought I was crazy, especially when the markets hit new highs in fall of 2007.
Anyone can go back and see clear signs the economy had peaked by 2007, but the market kept going. It was on it's own drum beat.
Proof the market isn't a predictor is 2007 highs, was predicting what? That the greatest stock market collapse since the great depression was going to occur the following year?
What was March 2009 market lows of S&P 500 at 666 a predictor of, that the market was going to rally over 75% a year later?
For this latest rally, in my opinion, it has NOTHING to do with politics, stimulus packages, etc. What it had to do with is market dynamics unto itself, nothing to do with the economy. When the market fell down to 666, what was created was a hole, there was no more sellers left. If you got scared enough to dump stocks at any point from fall 2007 through March 2009, then you where out. The remaining people in apparently are scared of nothing. S&P 500 hitting 600 wouldn't have scared them out, nor 400. Those who got injured and scared got out, those who where left where in it for good. There was no momentum for the market to go lower. There was simply there where no more sellers. Any buying at all was magnified that there was very little sellers left. Prices have to jump higher to find shares to buy. Now it is probable that this only got the market to rally for next 2-6 months back then, not the full year, which leads to:
Lesson #2
Politics CAN change the course of the market.
We have had so many things in the last year or so that has created this latest bubble, such as:
1) No mark to market accounting for many asset classes. The owner of assets can set the price, regardless of what those assets sell in the open market. (I wish the bank let me do that with my house, and I could then get a nice large second mortgage)
2) The US government and Federal Reserve Bank can collude to take measures to create money and give it for free to those they see fit. They have full power currently to grant billions, if not trillions to industries, corporations, and countries as they wish.
3) Media reporting and spin tightly controlled to avoid looking at details.
Politics can "kick the can" down the road or get righteous and enforce the law. Both have effects on the market and the economy "on paper". But the reality will catch up and cannot be papered over indefinitely, that I am a firm believer. If you are not, then Communism, Dictatorships, and other forms of non-free market economies should fare well. They don't because they try to mask the truth, rather than face it, fix it, and move on.
Which leads to:
Lesson #3
NEVER try to get ahead of the market
This lesson, you would have though I learned in 2006-2008, as a shorted and was "wrong" for almost 2 years before being right. Reality peaked out, for a while, until the latest paper and corruption of law could mask the reality.
With lessons 1 and 2, getting ahead of the market is frankly, the wrong thing to do. It is good to be aware, and prepare for the future, but patience is needed.
Picking tops, and picking bottoms, is not viable. Watching, holding, and picking "lines" to be ready to change strategies is worth while, but on a monthly basis. Trends years, not weeks, so there is plenty of time to be on the right side of a trend trade.
Click here for what is probably the best indicator to use, one that I ignored to my own folly.
Lesson #4
Over time take positions
Because of the first three items, the only sane thing to do is to take positions over time. This is my hardest lesson, as an engineer type I tend to go all in, or out. I did well in 2006-2008 by rolling into positions, but after the chaos in oct 2008-march 2009, tended to get a bit more heavy on the positions.
What is the song, only fools rush in?
Lesson #5
Listen to yourself
This is the hardest lesson to learn, it is good to hear others opinions, but best do do what you think. A little voice in my head told me when S&P500 hit around 950, and did a head and shoulders pattern, creating a huge bear trap, one I predicted in Jan 2009. I ignored that voice.
When I talked to others when the market was around 950-1000, the spin was the market was overbought and would correct. My fear was, and it looks correct, that the laws being ignored and money printing could create huge price inflation in the markets.
These little voices are worth listening to, and the worst thing is not going with your gut.
Summary
I could rattle off probably 100 other little tidbits, but these 5 lessons I want to turn into practice rules. I said I would post about my market thoughts on direction a few weeks back. I will this week, but I wanted to do this post first.
My work had me on the road for four weeks, I am back now, and will try to get some good posts in this week.
Sunday, March 28, 2010
Saturday, March 27, 2010
Governor Chris Christies Budget Message
Full video coverage of Governor Chris Christie's Budget message.
If you live in NJ, its good to watch.
If you have a government pension in any state, or have a Union salary in any state, it is good to watch.
NJ is leading the start of the likely tide we are to see across the country, and that is cut costs, and unions will be getting hit. Most of it is justified, but like any pendulum change in direction, it may go too far, but not yet. I'll see how far Mr.Christie goes, but so far, I say Chris Christie for President.
I could not embed, click to watch the video.
If you live in NJ, its good to watch.
If you have a government pension in any state, or have a Union salary in any state, it is good to watch.
NJ is leading the start of the likely tide we are to see across the country, and that is cut costs, and unions will be getting hit. Most of it is justified, but like any pendulum change in direction, it may go too far, but not yet. I'll see how far Mr.Christie goes, but so far, I say Chris Christie for President.
I could not embed, click to watch the video.
Thursday, March 25, 2010
Dollar rises, interest rises, gold falls, where is the other shoe?
The buzz among every chartist is the same.
Dollar climbed hard Wednesday, along with 30 year treasury interest rates, and gold continues it's declines. The market just shuffled around.
I posted many times, the REAL game is the bond market. If these rates continue to rise, the market will fall, its that simple. Cost of debt is a key driver to the US, the world's largest debtor nation and debtor per citizen.
Dollar rising and gold falling with interest rates going higher is very odd, to say the least. But something is afoot, things are shifting. For now, the charts:
Dollar climbed hard Wednesday, along with 30 year treasury interest rates, and gold continues it's declines. The market just shuffled around.
I posted many times, the REAL game is the bond market. If these rates continue to rise, the market will fall, its that simple. Cost of debt is a key driver to the US, the world's largest debtor nation and debtor per citizen.
Dollar rising and gold falling with interest rates going higher is very odd, to say the least. But something is afoot, things are shifting. For now, the charts:
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Wednesday, March 24, 2010
New Market Highs
The market run can last a while, week, year, i have no idea.
But there is no real growth economy, infact with the health care bill in essence a new tax for every person was added. This cost will hurt small business not help, this cost will not help job growth. We are in a bubble, I am actually trying to enjoy the rosier outlook, but I unfortunately know the truth.
The banks are still operating under fictitious valuations for their assets, since FASB still has not returned to international accounting standards. There is no "mark to market". The government is still not enforcing the law, and when it does banks that are being taken over are woefully underwater. The unemployment rosters are still adding 100,000's per week to unemployment. There is no American economic boom driver, unless you count government programs.
The US is spending trillions of dollars per year in debt. We are witnessing what may turn out to be the implosion of the US as we all know it. It may take years, but this trajectory is unsustainable. The US isn't alone in this game, China has a huge part in it, as well as Europe.
But pretending we have a booming economy when there is no basis for it, except stock valuations, is not going to make it so.
It is the equivalent of giving every student in school an A in hopes that it inspires the students to actually become A students. Life doesnt work like that. As a matter of fact, when you mislead people through lack of law enforcement, when reality hits, it hits harder.
What I cannot tell anyone, including myself, how does this manifest? Through US dollar becoming devalued and stocks continue to rise as everyone's monthly expenses rise?
Through interest rates rising, crippling the debt machine and bringing the house of cards down?
Through a catalyst creating a stampede for the door as people try to keep their profits since march 2009?
I really cannot criticize anyone about keeping in cash, buying resources, or buying stocks. But I can say this. Look at your positions and make a firm GET OUT if the valuation crosses a line, and DO IT. Do not get caught hoping for a turn around.
I can tell you first hand, that strategy does not work.
But there is no real growth economy, infact with the health care bill in essence a new tax for every person was added. This cost will hurt small business not help, this cost will not help job growth. We are in a bubble, I am actually trying to enjoy the rosier outlook, but I unfortunately know the truth.
The banks are still operating under fictitious valuations for their assets, since FASB still has not returned to international accounting standards. There is no "mark to market". The government is still not enforcing the law, and when it does banks that are being taken over are woefully underwater. The unemployment rosters are still adding 100,000's per week to unemployment. There is no American economic boom driver, unless you count government programs.
The US is spending trillions of dollars per year in debt. We are witnessing what may turn out to be the implosion of the US as we all know it. It may take years, but this trajectory is unsustainable. The US isn't alone in this game, China has a huge part in it, as well as Europe.
But pretending we have a booming economy when there is no basis for it, except stock valuations, is not going to make it so.
It is the equivalent of giving every student in school an A in hopes that it inspires the students to actually become A students. Life doesnt work like that. As a matter of fact, when you mislead people through lack of law enforcement, when reality hits, it hits harder.
What I cannot tell anyone, including myself, how does this manifest? Through US dollar becoming devalued and stocks continue to rise as everyone's monthly expenses rise?
Through interest rates rising, crippling the debt machine and bringing the house of cards down?
Through a catalyst creating a stampede for the door as people try to keep their profits since march 2009?
I really cannot criticize anyone about keeping in cash, buying resources, or buying stocks. But I can say this. Look at your positions and make a firm GET OUT if the valuation crosses a line, and DO IT. Do not get caught hoping for a turn around.
I can tell you first hand, that strategy does not work.
Tuesday, March 23, 2010
The Great Debate, the Market Destiny
I pay for quite a few market pontificator's professional opinions on market direction. I am drawn to the ones that view the world with a skeptic eye, so none of my market pontificators say the US made great decisions by printing trillion(s) of dollars, giving it to banks in exchange for garbage collateral, and suspending standard "sane" accounting practice of valuing assets by the price they are paid for.
So my view is a bit screwed, from this aspect, that the financial ponzi schemes and fraud on a mass scale will manifest into losses. The Great Debate among the market pontificators is how.
If the US government enforced the law, and did not lend money to hopelessly bankrupt companies, the answer would be easy. The losses would be taken by the risk takers, after all, they took the risk, they should take the losses. But what we have witnessed is "socializing" the losses, meaning the US taxpayer is playing hot-potato with the losses as the government takes various steps.
There are basically two camps, one that views the US dollar will fall, starting this year, the other is the US dollar may over the long haul be destined for lower, but not yet. Why not yet? Well the world also participated in the financial games, so in a world of crooks, the US is not "as bad as a crook" as the other crooks. Hardly a title to be proud of, but in these financial times, something to grasp at.
The thought goes, that in a deflationary collapse, as the one the US entered in 2008, and continues to experience despite mass media saying otherwise, the value of cash should rise. Ben Bernanke in doing various financial games "cheapened" the US dollar as the US dollar fell compared to other currencies. However more recently starting with the Dubai crisis, Greece and soon other countries, the USD has regained some strength.
In any event, I could rant for pages on the 100 different ways to dissect movements of US dollar valuation and the why's. That is a whole post onto its own.
So lets ask the question, do you think the USD value between now and 1 year from now will be higher, about the same, or lower?
If higher, then cash is king, low risk and a good keeper of wealth. Interest rates should trend lower, so buying US bonds today at a fixed rate is a good thing to do. In general natural resources should not fair well.
About the same? Cash is good, but probably will be a rocky year as the USD bounces around for the next year. Interest rates should bounce around, buying US bonds today at a fixed rate is OK. Stocks may fair well, as stability continues, natural resources should bounce around too, but probably overall trend a little lower.
If Lower, then cash is NOT King, you want your savings in something that retains wealth, not loses it. Interest rates should rise as US debt Risk increases, houses will spiral lower, business will have higher cost to service debt including the US government. And buying natural resources is good if not great. As the USD falters old-school storage of wealth such as gold, etc will gain popularity as the premium is paid.
This being the crux of the question, the bottom line no one knows direction in the next 3-9 months. After 1-2 years I am in the camp the US dollar will start to trend down as the debt burden catches up with the US, probably as we approach the next presidential election. But this is probably wishful thinking. The government continues to act as if debt is endless, and interest rates will always stay low. The world may call the US bluff on paying back all debts and the US dollar start to plummet in short order.
Gary of the Smart Money tracker is one service I pay for, and he is in the camp the USD is going lower sooner rather than much later. Therefore buying gold/silver/resources if/when the market dips significantly is the right play. Since the politicians when faced with a falling market will break the rules once again and start the printing presses. This should in effect break the back of the US Dollar once and for all. I recommend you pay for Gary's service for a length, detailed opinion on the markets. For your sampling below is a great compilation graph Gary gave me permission to reprint.
In any event, rolling 5-20% of your life savings with Gary's direction is prudent, since no one really can know exactly when the dollar will die, but over the long term, I think the US dollar is destined to be lower. So natural resources continues to be a play I am keeping an eye on.
So my view is a bit screwed, from this aspect, that the financial ponzi schemes and fraud on a mass scale will manifest into losses. The Great Debate among the market pontificators is how.
If the US government enforced the law, and did not lend money to hopelessly bankrupt companies, the answer would be easy. The losses would be taken by the risk takers, after all, they took the risk, they should take the losses. But what we have witnessed is "socializing" the losses, meaning the US taxpayer is playing hot-potato with the losses as the government takes various steps.
There are basically two camps, one that views the US dollar will fall, starting this year, the other is the US dollar may over the long haul be destined for lower, but not yet. Why not yet? Well the world also participated in the financial games, so in a world of crooks, the US is not "as bad as a crook" as the other crooks. Hardly a title to be proud of, but in these financial times, something to grasp at.
The thought goes, that in a deflationary collapse, as the one the US entered in 2008, and continues to experience despite mass media saying otherwise, the value of cash should rise. Ben Bernanke in doing various financial games "cheapened" the US dollar as the US dollar fell compared to other currencies. However more recently starting with the Dubai crisis, Greece and soon other countries, the USD has regained some strength.
In any event, I could rant for pages on the 100 different ways to dissect movements of US dollar valuation and the why's. That is a whole post onto its own.
So lets ask the question, do you think the USD value between now and 1 year from now will be higher, about the same, or lower?
If higher, then cash is king, low risk and a good keeper of wealth. Interest rates should trend lower, so buying US bonds today at a fixed rate is a good thing to do. In general natural resources should not fair well.
About the same? Cash is good, but probably will be a rocky year as the USD bounces around for the next year. Interest rates should bounce around, buying US bonds today at a fixed rate is OK. Stocks may fair well, as stability continues, natural resources should bounce around too, but probably overall trend a little lower.
If Lower, then cash is NOT King, you want your savings in something that retains wealth, not loses it. Interest rates should rise as US debt Risk increases, houses will spiral lower, business will have higher cost to service debt including the US government. And buying natural resources is good if not great. As the USD falters old-school storage of wealth such as gold, etc will gain popularity as the premium is paid.
This being the crux of the question, the bottom line no one knows direction in the next 3-9 months. After 1-2 years I am in the camp the US dollar will start to trend down as the debt burden catches up with the US, probably as we approach the next presidential election. But this is probably wishful thinking. The government continues to act as if debt is endless, and interest rates will always stay low. The world may call the US bluff on paying back all debts and the US dollar start to plummet in short order.
Gary of the Smart Money tracker is one service I pay for, and he is in the camp the USD is going lower sooner rather than much later. Therefore buying gold/silver/resources if/when the market dips significantly is the right play. Since the politicians when faced with a falling market will break the rules once again and start the printing presses. This should in effect break the back of the US Dollar once and for all. I recommend you pay for Gary's service for a length, detailed opinion on the markets. For your sampling below is a great compilation graph Gary gave me permission to reprint.
In any event, rolling 5-20% of your life savings with Gary's direction is prudent, since no one really can know exactly when the dollar will die, but over the long term, I think the US dollar is destined to be lower. So natural resources continues to be a play I am keeping an eye on.
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| From WebSufinMurfs FinancialBlog2 |
Monday, March 22, 2010
This Week In Charts
The market bears are saying a near term top is in, market is going to correct this week. I am sure if I watched CNBC the market is in full steam ahead going back to market highs in 2007.
For now, I'll see what unfolds, if the market bear returns in force, this will be a multi-year effort. I'll be posting some thoughts from Gary and other bloggers, and explain how the crux of everything is the US Dollar valuation.
For now, this week in charts, draw your own thoughts.
For now, I'll see what unfolds, if the market bear returns in force, this will be a multi-year effort. I'll be posting some thoughts from Gary and other bloggers, and explain how the crux of everything is the US Dollar valuation.
For now, this week in charts, draw your own thoughts.
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Sunday, March 21, 2010
George Soros comments on Obama and US Economy
I have blogged about George Soros before, click for Wikipedia summary on Mr. Soros.
In any event, interview on Mr. Soros thoughts on Obama and US economy.
In any event, interview on Mr. Soros thoughts on Obama and US economy.
Saturday, March 20, 2010
Former UnderSecretary of Treasury for Reagan
Charles Munger, Warren Buffet's business partner recent comments (click) triggered this interview with Paul Craig Roberts, former US Under-Secretary of Treasury to Ronald Reagan.
Decent quote here...
"The world has never seen a country say We can make very few rich by making the everyone else poor simply by moving lowest cost labor abroad."
Decent high level review of some basic economic issues.
Decent quote here...
"The world has never seen a country say We can make very few rich by making the everyone else poor simply by moving lowest cost labor abroad."
Decent high level review of some basic economic issues.
Wednesday, March 17, 2010
New market Highs
Frankly, I am stunned. I'll give this time for me to digest, but by March 28th, I'll probably have a post re-assessing everything I believed was going to happen since March 2009.
For now, some charts for digestion, we may be witnessing what I thought wouldn't happen, the US Dollar turning down, and the bounce may be over.
If thats the case, this is not good, may be good for the markets, but not good for America.
For now, some charts for digestion, we may be witnessing what I thought wouldn't happen, the US Dollar turning down, and the bounce may be over.
If thats the case, this is not good, may be good for the markets, but not good for America.
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Monday, March 15, 2010
Market hits new highs
I am skipping my weekly post on stock charts, and would like to point out the market hit new highs on Friday. Also this weekend is stock market expirations, so games will be afoot once again.
I got to tell ya, I am starting to think the market will continue from SPX 1152 through 1250 before terminating before or near 1,300. In the extreme short term here is some food for thought.
One of my pay services, "Elliot Wave International" has an interesting statistic I'll reprint here. For more context subscribe to their service.
The stock market is stretched and, we think, exhausted. The NASDAQ 100 has now closed up for a Fibonacci 13 consecutive days, equaling the previous streak of 13 straight up closes from December 19, 1991 to January 9, 1992. Our CQG data starts in 1983 and the only longer streak during this entire 27-year period was an incredible 19 straight up-close streak from April 27 to May 24, 1990. So streaks of this magnitude are rare.
Back in March of 2009, my friend John Chinnock stated that the market must revert to the mean, and thats when I posted buying "lottery ticket" stocks. We both bought, but not nearly as much as we should and both of us didn't hold as long as we should.
In any event, the quote above should give everyone pause. This streak is RARE, and granted it could become the longest streak and hit 20 up days. It really could. But its not going to hit 30 up days. And the pullback should be 10% or more, as we revert back to the mean.
Elliot wave goes on to say about pullbacks from such over-stretches:
But the 1991-1992 up streak did end four market days before the high of January 15, 1992. The NASDAQ 100 doubled topped a month later on February 12, and then declined 19% to a closing low four months thereafter, on June 16, 1992. And after the 1990 streak, stocks suffered a horrendous decline from July 1990 to October 1990, with the NASDAQ Composite losing over 30% of its value. So a reasonable conclusion is that the NASDAQ, and by inference the broader market, is "stretched" and due for some degree of a setback.
Notice they did not quote the declines happened immediately afterwords. Their point is, such upswings is not normal, and reversion is brutal when hyper extension takes place.
So I am not adding a single short, nor buying gold, and may continue to go to cash. But this is not a Bull market, its a Bear market rally, one for the record books. And stepping infront of it is not the wisest thing to do, nor play chicken and join it hoping to get off before it snaps. Cash is King.
I got to tell ya, I am starting to think the market will continue from SPX 1152 through 1250 before terminating before or near 1,300. In the extreme short term here is some food for thought.
One of my pay services, "Elliot Wave International" has an interesting statistic I'll reprint here. For more context subscribe to their service.
The stock market is stretched and, we think, exhausted. The NASDAQ 100 has now closed up for a Fibonacci 13 consecutive days, equaling the previous streak of 13 straight up closes from December 19, 1991 to January 9, 1992. Our CQG data starts in 1983 and the only longer streak during this entire 27-year period was an incredible 19 straight up-close streak from April 27 to May 24, 1990. So streaks of this magnitude are rare.
Back in March of 2009, my friend John Chinnock stated that the market must revert to the mean, and thats when I posted buying "lottery ticket" stocks. We both bought, but not nearly as much as we should and both of us didn't hold as long as we should.
In any event, the quote above should give everyone pause. This streak is RARE, and granted it could become the longest streak and hit 20 up days. It really could. But its not going to hit 30 up days. And the pullback should be 10% or more, as we revert back to the mean.
Elliot wave goes on to say about pullbacks from such over-stretches:
But the 1991-1992 up streak did end four market days before the high of January 15, 1992. The NASDAQ 100 doubled topped a month later on February 12, and then declined 19% to a closing low four months thereafter, on June 16, 1992. And after the 1990 streak, stocks suffered a horrendous decline from July 1990 to October 1990, with the NASDAQ Composite losing over 30% of its value. So a reasonable conclusion is that the NASDAQ, and by inference the broader market, is "stretched" and due for some degree of a setback.
Notice they did not quote the declines happened immediately afterwords. Their point is, such upswings is not normal, and reversion is brutal when hyper extension takes place.
So I am not adding a single short, nor buying gold, and may continue to go to cash. But this is not a Bull market, its a Bear market rally, one for the record books. And stepping infront of it is not the wisest thing to do, nor play chicken and join it hoping to get off before it snaps. Cash is King.
Sunday, March 14, 2010
S and P 500 chart trend dating back to 1986
Over at thebullzandbearz, there is an interesting chart showing stock market trend dating back to 1992 to today. I expanded the trend line back to 1986. Update: Added second back to 1970.
Not sure if this long term trend line has any meaning, or just a random observation on random stock market valuations.
But worth watching moving forward. Very interesting. Feel free to post in comments your two cents. Would love to have chart data to go back to the start of this line to see what was the catalyst for this long term trend move.
Not sure if this long term trend line has any meaning, or just a random observation on random stock market valuations.
But worth watching moving forward. Very interesting. Feel free to post in comments your two cents. Would love to have chart data to go back to the start of this line to see what was the catalyst for this long term trend move.
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Financial Sense News Hour
One of the many excellent information sources for a wide variety of financial opinions is "Jim Puplava's Financial Sense News Hour".
On March 13th, they interviewed Robert McHugh and Gerald Celente. I highly recommend clicking on the link and listening to both their interviews.
The blog also has a page of supporting graphs available by clicking here.
I put a direct link to the MP3 version here for easy access.
On March 13th, they interviewed Robert McHugh and Gerald Celente. I highly recommend clicking on the link and listening to both their interviews.
The blog also has a page of supporting graphs available by clicking here.
I put a direct link to the MP3 version here for easy access.
Saturday, March 13, 2010
Mish and Marc Faber
Mish and Marc Faber where interviewed on video about the economy.
I strongly recommend all readers click on this link, and watch the three videos.
I could not embed the video on this blog, also see Mish's commentary on his blog post.
I strongly recommend all readers click on this link, and watch the three videos.
I could not embed the video on this blog, also see Mish's commentary on his blog post.
Friday, March 12, 2010
Is the bull market back?
Do I think the bull market is back, nope. But I do realize that this critical juncture does call for me to rethink everything. There is no way I add 1 share short in this position, if anything, I'll take a little more off the table.
We are facing one of a hundred scenarios, but here are my view of top 4.
1) Market in parabolic blowoff aka 2000, we may be in for month(s) of new highs, independent of US dollar.
2) US Dollar valuations, although holding up, are about to crack bigtime, possibly keeping the market rally going for many more months.
3) 15% market gains in 8 weeks is too good to be true, market about to reverse shortly (day-2 weeks)
4) Bull market, bear market, climbing unemployment, whatever, the market doesn't represent economic valuations and will go where it wants.
I really dont want to see #2 happen, anything but that. The damage to the US will be too great.
If you think the market has seen the worst, PLEASE invest with stops. Also consider waiting to buy gold/silver miners when Gary of Smart Money tracker next pulls the trigger, at a minimum the resource play is there to augment your stock position.
For me, I am dazed and confused, pretty much a deer in headlights, waiting for the sweet bliss of the bus hitting me. All kidding aside, just watching and waiting.
Here are charts for where we stand today. What I find most interesting is 30 year interest rates are at the level BEFORE the market started to fall. So if the market does mark upwards rising rates will at some point choke the advance.
We are facing one of a hundred scenarios, but here are my view of top 4.
1) Market in parabolic blowoff aka 2000, we may be in for month(s) of new highs, independent of US dollar.
2) US Dollar valuations, although holding up, are about to crack bigtime, possibly keeping the market rally going for many more months.
3) 15% market gains in 8 weeks is too good to be true, market about to reverse shortly (day-2 weeks)
4) Bull market, bear market, climbing unemployment, whatever, the market doesn't represent economic valuations and will go where it wants.
I really dont want to see #2 happen, anything but that. The damage to the US will be too great.
If you think the market has seen the worst, PLEASE invest with stops. Also consider waiting to buy gold/silver miners when Gary of Smart Money tracker next pulls the trigger, at a minimum the resource play is there to augment your stock position.
For me, I am dazed and confused, pretty much a deer in headlights, waiting for the sweet bliss of the bus hitting me. All kidding aside, just watching and waiting.
Here are charts for where we stand today. What I find most interesting is 30 year interest rates are at the level BEFORE the market started to fall. So if the market does mark upwards rising rates will at some point choke the advance.
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Thursday, March 11, 2010
How much is 1.5 trillion dollars?
Keep in mind, the US is in debt by 12-13 trillion dollars and counting. Lets round up and say we are headed for 15 trillion. Look at the image below or Click on this link to see a more detailed picture of quantifying 1.5 trillion dollars. Now assume 1 PIXEL is 10 million, then the larger picture is 15 trillion. I would love to see the same picture with a pixel being 10,000 dollars, a number more comprehensible to an average person.
Once you go over a billion, people including me cannot understand trillions, but a picture helps.
Thanks to Lomba for the image.
Once you go over a billion, people including me cannot understand trillions, but a picture helps.
Thanks to Lomba for the image.
Wednesday, March 10, 2010
Best Trade of 2010 so far
For those of you that know me, I have had two anchors in my trading, double and triple short funds, pretty much for losers, and the other short DECKERS (DECK).
On Feb 25th, I bought some Deck calls as a hedge against losses, 10 of them for March 125 strike. As of March 8th, I was up over 1,700% on the remaining 3 I hadn't yet sold.
1,700% in 8 stock trading days, not too shabby.
Here is why I am sharing, I have lost more than I care to write on this blog shorting deck. So this trade is extra painful, that my most profitable trade was AGAINST a primary position. Ohh the irony is too funny not to share.
The trade below will remind me when things are going well in the future, to not get too full of myself. A painful reminder of need to be more open to exact opposite trade is just as valid a play. A luck-shot trade as protection AGAINST my primary position. Laugh at me the next time you see me.
On Feb 25th, I bought some Deck calls as a hedge against losses, 10 of them for March 125 strike. As of March 8th, I was up over 1,700% on the remaining 3 I hadn't yet sold.
1,700% in 8 stock trading days, not too shabby.
Here is why I am sharing, I have lost more than I care to write on this blog shorting deck. So this trade is extra painful, that my most profitable trade was AGAINST a primary position. Ohh the irony is too funny not to share.
The trade below will remind me when things are going well in the future, to not get too full of myself. A painful reminder of need to be more open to exact opposite trade is just as valid a play. A luck-shot trade as protection AGAINST my primary position. Laugh at me the next time you see me.
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| From WebSufinMurfs FinancialBlog2 |
Tuesday, March 9, 2010
Market View
Once again, work is keeping me busy to the point I can't spend significant time on the markets. I am keeping 1/2 an eye.
As a reminder to readers, and myself, here is my basic stance.
Money is a debt note for work delivered today, for work to be returned tomorrow.
Failure to either deliver work tomorrow, or significantly over-pay for work today is a "loss", could be considered minor fraud even.
The world economy has over paid and is not able to pay for work delivered. The contraction of money/credit results in deflation/recession/depression.
The US and the world has done NOTHING to bring these losses to fruition, and instead is trying to cover/kick the can in hopes later they can pay back work owed, and prices for over-paid work (real estate here) will return to previous levels.
Until the LAW is enforced, and losses are taken, the economy has no chance of having a sustained growth pattern.
Currently, the amount of printing money and giving it to those who did not perform "new work" (banks) is a concern, money could suffer severe valuation losses (currency inflation/devaluation).
The US dollar could fall hard, resulting in higher resources, and possibly higher stock valuations soon. It is my view that this will not come to fruition in the near future. (but will in the longer term)
The dollar valuation is the crux of the question. The Federal Reserve, US Treasury, and US government risk losing the US dollar as a currency that will be accepted globally. If the dollar falls hard, the US government's existence will be challenged. For this reason, I do NOT believe the government is stupid enough (laugh now) to throw the US dollar into a deep hole.....YET. (they will in time).
What is more likely to happen is in an attempt to keep interest rates low, the money printers will allow the US stock market to fall, then rise, then fall, basically eying interest rates.
At some point however, this little game will fail, and interest rates hit some sort of uncontrollable trajectory, its pretty much game over until a politician gets a spine. Last time this happened was in the 70's, but with completely different economic reasons. And the crisis wasn't nearly as severe. The resolution was to get fiscal discipline.
So until I see fiscal discipline, banks being held to international accounting standards, valuating assets for their true value, the LAW enforced, I cannot "bet" the market continues to climb, by what amounts to fraud. But it could if US dollar does resume it's collapse.
I of course, will change my tune if gold hits new highs, and the market is rising, then, I'll have to go with the first, the US dollar is losing value and best to put money into resources today. I am just no there yet.
As a reminder to readers, and myself, here is my basic stance.
Money is a debt note for work delivered today, for work to be returned tomorrow.
Failure to either deliver work tomorrow, or significantly over-pay for work today is a "loss", could be considered minor fraud even.
The world economy has over paid and is not able to pay for work delivered. The contraction of money/credit results in deflation/recession/depression.
The US and the world has done NOTHING to bring these losses to fruition, and instead is trying to cover/kick the can in hopes later they can pay back work owed, and prices for over-paid work (real estate here) will return to previous levels.
Until the LAW is enforced, and losses are taken, the economy has no chance of having a sustained growth pattern.
Currently, the amount of printing money and giving it to those who did not perform "new work" (banks) is a concern, money could suffer severe valuation losses (currency inflation/devaluation).
The US dollar could fall hard, resulting in higher resources, and possibly higher stock valuations soon. It is my view that this will not come to fruition in the near future. (but will in the longer term)
The dollar valuation is the crux of the question. The Federal Reserve, US Treasury, and US government risk losing the US dollar as a currency that will be accepted globally. If the dollar falls hard, the US government's existence will be challenged. For this reason, I do NOT believe the government is stupid enough (laugh now) to throw the US dollar into a deep hole.....YET. (they will in time).
What is more likely to happen is in an attempt to keep interest rates low, the money printers will allow the US stock market to fall, then rise, then fall, basically eying interest rates.
At some point however, this little game will fail, and interest rates hit some sort of uncontrollable trajectory, its pretty much game over until a politician gets a spine. Last time this happened was in the 70's, but with completely different economic reasons. And the crisis wasn't nearly as severe. The resolution was to get fiscal discipline.
So until I see fiscal discipline, banks being held to international accounting standards, valuating assets for their true value, the LAW enforced, I cannot "bet" the market continues to climb, by what amounts to fraud. But it could if US dollar does resume it's collapse.
I of course, will change my tune if gold hits new highs, and the market is rising, then, I'll have to go with the first, the US dollar is losing value and best to put money into resources today. I am just no there yet.
Monday, March 8, 2010
This Week In Charts
Got to tell ya, I am real concerned the market will make a run for SPX 1150 in short order and throw us over. Then of course the bears will cover shorts, the bulls will double down bets, THEN the market rolls over a few days later.
Who knows, I am at the point best not to play anymore until clear direction unfolds.
Who knows, I am at the point best not to play anymore until clear direction unfolds.
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Sunday, March 7, 2010
Whistle blower on Madoff, SEC ignored, interviewed
Harry Markopolos does have a book being released, "No one will listen", so he is trying to get some sensational coverage. Mr. Markopolos proved Madoff was running a ponzi scheme, and reported it to the SEC four times, and the SEC did nothing.
A good watch
A good watch
Visit msnbc.com for breaking news, world news, and news about the economy
Saturday, March 6, 2010
Goldman Sachs
Very good video about Goldman Sachs, the most influential financial entity in the world.
Friday, March 5, 2010
Marc Faber, time to buy natural resources, Gold
Marc Faber focuses on Europe, Greece, and fiat currencies
Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System 'Corrupt'
Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System 'Corrupt'
Shahien Nasiripour
First Posted: 03- 3-10 07:00 PM | Updated: 03- 4-10 04:35 AM
http://www.huffingtonpost.com/2010/03/03....
One of the world's leading economists said Wednesday that the very structure of the Federal Reserve system is so fraught with conflicts that it's "corrupt."
Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's -- in which regional Feds are partly governed by the very banks they're supposed to police -- it would have raised alarms.
"If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure," Stiglitz said during a conference on financial reform in New York. "It's time for us to reflect on our own structure today, and to say there are parts that can be improved."
Read more by clicking on the link above.
Friday morning it will all be about reaction to job numbers.
Shahien Nasiripour
First Posted: 03- 3-10 07:00 PM | Updated: 03- 4-10 04:35 AM
http://www.huffingtonpost.com/2010/03/03....
One of the world's leading economists said Wednesday that the very structure of the Federal Reserve system is so fraught with conflicts that it's "corrupt."
Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's -- in which regional Feds are partly governed by the very banks they're supposed to police -- it would have raised alarms.
"If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure," Stiglitz said during a conference on financial reform in New York. "It's time for us to reflect on our own structure today, and to say there are parts that can be improved."
Read more by clicking on the link above.
Friday morning it will all be about reaction to job numbers.
Thursday, March 4, 2010
Still waiting for a decision on market direction
I am busy this week with work, more so that usual, hence my sparse blog postings.
Unfortunately, my postings may be sparse for the next 3 weeks. I'll make it a point this weekend to make a couple of good posts for Monday/Tuesday for next week.
What the market prognosticators are looking at right here and now is the trading range. The economic fundamentals in the economy is weak at best. Any positives are trumped-up positives from trillions of dollars in deficit spending. What the US government and many economists don't get is printing money is not the road to a long term recovery.
Sure for the time being we all feel a little bit better, but over the long haul only one thing matters. Basic driving forces of an industry lead economic driver like .com boom of 1995-2000, Car revolution in the 1920-1929, etc.
The nation needs a leader, to set the "game" straight, to enforce LAW, to change law and influence / inspire industry, to reign in fiscal irresponsible behavior.
The bush years get quite a bit (deserved) critique from the left. One digging point is Clinton had an economic surplus and a deficit of 5 trillion. Bush left with the government deficit spending over a trillion, and a debt of 12 trillion.
But apparently the thought goes Bush's deficit spending was wreckless, and Obama's is needed?
Lets change the sentence above, and see what you think:
The president of XYZ is continuing the deficit spending of the previous administration, resulting in their countries debt soaring from 35% of GDP to 80% of GDP over the past 10 years. The country is on track to eclipse 100% of GDP in a couple of years, and expects an economic boom to follow.
I say above is unrealistic.
But this has only one thing to do with the markets, will this result in the next 1 to 12 months in the US dollar falling or the US dollar rising in a world with economic turmoil as OTHER countries also have debt issues.
Frankly, no one knows, we are repeating the great depression mis steps of countries all trying to act reckless to force their currency lower and "boost" economic activity. The main difference is countries had a gold standard to restrict the amount of money creation, today we do not. One thing is for sure, the next 10 years will look NOTHING like the previous 10.
For now the question is, will the market break into a new high, or break below dow 10,000 and presumably on track for going lower. Going higher is probably an indicator time to go into natural resources as the currency may be starting to resume it's fall into new territory. I'll pontificate, as many others will, once we finally break out of this range.
Good luck
Unfortunately, my postings may be sparse for the next 3 weeks. I'll make it a point this weekend to make a couple of good posts for Monday/Tuesday for next week.
What the market prognosticators are looking at right here and now is the trading range. The economic fundamentals in the economy is weak at best. Any positives are trumped-up positives from trillions of dollars in deficit spending. What the US government and many economists don't get is printing money is not the road to a long term recovery.
Sure for the time being we all feel a little bit better, but over the long haul only one thing matters. Basic driving forces of an industry lead economic driver like .com boom of 1995-2000, Car revolution in the 1920-1929, etc.
The nation needs a leader, to set the "game" straight, to enforce LAW, to change law and influence / inspire industry, to reign in fiscal irresponsible behavior.
The bush years get quite a bit (deserved) critique from the left. One digging point is Clinton had an economic surplus and a deficit of 5 trillion. Bush left with the government deficit spending over a trillion, and a debt of 12 trillion.
But apparently the thought goes Bush's deficit spending was wreckless, and Obama's is needed?
Lets change the sentence above, and see what you think:
The president of XYZ is continuing the deficit spending of the previous administration, resulting in their countries debt soaring from 35% of GDP to 80% of GDP over the past 10 years. The country is on track to eclipse 100% of GDP in a couple of years, and expects an economic boom to follow.
I say above is unrealistic.
But this has only one thing to do with the markets, will this result in the next 1 to 12 months in the US dollar falling or the US dollar rising in a world with economic turmoil as OTHER countries also have debt issues.
Frankly, no one knows, we are repeating the great depression mis steps of countries all trying to act reckless to force their currency lower and "boost" economic activity. The main difference is countries had a gold standard to restrict the amount of money creation, today we do not. One thing is for sure, the next 10 years will look NOTHING like the previous 10.
For now the question is, will the market break into a new high, or break below dow 10,000 and presumably on track for going lower. Going higher is probably an indicator time to go into natural resources as the currency may be starting to resume it's fall into new territory. I'll pontificate, as many others will, once we finally break out of this range.
Good luck
Tuesday, March 2, 2010
California is losing the debt game, to Kazakhstan
When a Country, state, county, town, or company issues debt, the rate the entity has to pay is an indicator of risk. For a low-risk debt note, the company pays less interest than a high risk debt note.
Pretty simple.
California is now a "higher risk" for bond purchases than Kazakhstan, Uruguay and Lebanon. The question is, how much interest can we all pay as a debtor nation before it spirals out of control?
Let's hope we never find out.
Pretty simple.
California is now a "higher risk" for bond purchases than Kazakhstan, Uruguay and Lebanon. The question is, how much interest can we all pay as a debtor nation before it spirals out of control?
Let's hope we never find out.
Monday, March 1, 2010
This Week In Charts
Really, there is no significant change. Greatest change is US 30 year treasury interest rates. Cost of debt is a key for kicking the can further down the line.
NOTE, I am unsure of my availability to post this week, due to work.
An interesting read from xtrends, Atilla is a multi-million dollar stock trader, and his thoughts after Friday's action.
NOTE, I am unsure of my availability to post this week, due to work.
An interesting read from xtrends, Atilla is a multi-million dollar stock trader, and his thoughts after Friday's action.
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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