Archive: September, 2011

A buy and a sell today.

It’s not window dressing, it’s window undressing. That’s what has the potential to do the greatest damage to the markets as we move into the weekend. It’s the end of the quarter. Very simply, this means that fund managers holdings suddenly become fully transparent, as they are required to report them via 13F filings every [...]

The rally today should not have fizzled in the manner in which it did.

Trades made today and current positions.

What Friday marked was a beginning in the trend down rather than an end.

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A picture speaks a thousand words. The blind leading the blind:

Risk has been taken off completely and totally in the name of job security.

A position initiated and some profits taken.

- I took profits on my short Euro/long Dollar position EUO at around 19.10. I initiated EUO on 8-29-11 at a price of 16.55. – I added to my position in TMV around 15 I currently hold DZZ, TMV and good ol’ American cash.

Out of the sea of disinformation then, we only need to be paying attention to two important factors.

The last time the ratio between the Nasdaq 100 and thirty year treasury yields got this high, the Nasdaq crashed. Which will crash this time? Bonds or tech? click chart to enlarge

As an investor, one of the most crucial elements in order to achieve the success you desire is to be 100%, unequivocally and without boundaries truthful with yourself. I have been doing this for some 17 years now, with a great deal of success as well as a great deal of setbacks along the path. [...]

We’re in for some short-term (3-5 days) choppiness

A news driven spin cycle driven by indecisive European finance ministers that detest United States monetary policy but increasingly find themselves with no other choice but to follow the path of the hated one. Of course, with such a description of our latest crisis situation one would expect volatility to become the rule rather than [...]

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To be functional in the capital markets you must develop an internal lie detector that is constantly seeking out those asset classes that are truth tellers and those who are devious liars. The most interesting and challenging aspect of this exercise is that on a month to month basis those asset classes we recognize as [...]

Structural changes took place in the markets this past week that are of note: 1. The Nasdaq 100 asserted its leadership role and left no doubt that the relative strength it enjoyed during the past several weeks was deserved. Any rally worth participating in over the past 15 years has been led by tech. 2. [...]

It was the talk of the town last weekend. This weekend it will be something new, I’m sure. The scenario drawn up in the chart review last weekend for what the market would do this week turned out to be fairly accurate. I was expecting a bigger penetration of the downside of the “bear flag [...]

3 good and 3 bad

A news driven trampoline of economic indecency and the prelude to a steady European diet of fiscally whorish behavior that would make Ron Jeremy blush. A break of the August lows would be my buy trigger on the downside. I’m looking for 1080 on the S&P 500 as an extremely favorable risk/reward entry. If I [...]

The current portfolio consists of the following positions

6 countertrend moves that could prove profitable.

Downside volatility a strong possibility over the next few days.

The macro view on the major asset classes.

Buying into group think isn’t a hallmark of successful speculation.

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There’s some serious lack of imagination from the financial community with respect to the markets at present. 2008 has made professional investors especially into starry eyed zombies that can’t differentiate between generational economic crisis (2008) and circumstantial economic crisis (2011). We could very well be in a renewed bear market. In fact, we may have [...]

On the 3rd trading day of each week, I like to assess the risk in the portfolio to see what positions have the chance to cause the most harm going forward. Today was risk assessment Thursday. It came and went without any action, whatsoever. I’m holding a macro portfolio currently. I feel that this will [...]

This article also featured on Forbes There are two distinct frames of thoughts with respect to the current state of the stock market: 1. We fall from current levels more or less unabated, in a horrific fashion that resembles 2008. 2. We fall from current levels more or less unabated, in a horrific fashion that [...]

Underallocation during a difficult year can lead to market moves that seem like they are powered by jet fuel and driven driven by juice monkeys.

Stocks: Neutral. There are reliable sentiment indicators that began flashing near record amounts of bearish sentiment with respect to the equity markets last week. During Friday’s decline, the put/call closed above 1.40 as we are nearing the August lows. This type of sentiment picture doesn’t allow for a break of the August lows unless a [...]

I get the sense that the market needs to eat more bears before the August lows are broken. I made the contention a couple weeks back that we are at a point where the deception mechanism in the markets is effectively broken. During one-way, maniacal bull or bear moves (think gold currently or the bear [...]

With futures down over 200 points on the Dow as I type, I will be delaying the weekly review until next weekend. We’re making a move to the bottom end of the range on the equity indices. I do not know which way this will play out. It could go either. We’re at a juncture [...]