"I paint a window just as I look out of a window. If a window looks wrong in a picture open, I draw the curtain and shut it, just as I would in my own room. One must act in painting as in life, directly."

-Pablo Picasso

Give the Gift of a Lease

What a great idea. If you (or someone you know) eat your weight in goat cheese, or maple syrup, coffee, or grapefruit then this might be the gift idea for you. Buy a lease in a respective farm and share in their bounty. Go to Rent Mother Nature.

Today's Trade

The first one (UAUA) being a (penant/flag on the 5-minute chart) narrow range break play:

the next(WLP) being a cup w. handle play:
It's nice to finally have some momentum in the markets.

Hard at Work

Pretty cool insight into the fabrication of NYC manhole covers in India. Be sure to check out the audio/video slideshow. I thought it was fascinating to see the workings of a "laundromat" when I was in India, this far surpasses that. It's also not at all shocking to see the barefoot and practically naked wiry men working with molten steel. It's work.

Yes I

Stock Watch

Miscellaneous stocks I'm watching.WLP Primed to break a pivot or come back in to the 50EMA?

RIG looks exhausted and ready for some retracement.

CVD faking out the longs on a pivot break or ready to move?

AOC making a move?

What I've Been Reading

I have enjoyed this fairly quick read of Ken Fisher's book "The Only Three Questions That Count." I won't give away what those three questions are, but just say that they have to deal with not believing the hype, and in most cases the myth, that many investors feed into (i.e. high/low P/E stock markets are bad, as well as a high federal budget deficit, high oil prices, and a weak dollar are all bad for stocks). Critical thinking is certainly the theme of this book. Though it may seem like the author is a typical contrarian, he's definitely not one to assume the exact reverse will occur from the herd mentality, just make sure you look elsewhere when everyone else is looking for that noise in the bushes. The author's point throughout this book is to turn concepts on their head. Derive an earnings yield via a P/E ratio and end up with an E/P ratio. A federal budget deficit does not lead to poor stock returns (actually the opposite is shown with supporting statistics); ever look at the return on assets from the excessive spending that leads to these deficits?
Some interesting ideas taken from this book include:
- Pay attention to the global yield curve
- 1980 Revisited
- The Wizard of Oz as monetary allegory ( Oz had to do with an ounce of gold).
- Think a 300-point drop in the Dow is bad? Why not use a Global Benchmark instead.

Back on Track?

Or is it all smoke and mirrors? Only time will tell. The Nasdaq isn't looking all that bad though when in perspective. Not quite a 68.2% correction isn't that extreme.

Fuzzy Math

After sitting through a number of Jim Rogers interviews on Uglychart a theme which stuck out for me was his warning about financial institutions using "level three assets" to prop up their balance sheets. Level three assets are illiquid, hard-to-value assets that are valued according to in-house estimates (think distressed mortgages and CDOs) which deepens concerns about the transparency and strength of bank balance sheets.
Rogers' belief is that current accounting methods which use level three assets essentially hide potentially destructive future corporate value and we'll be hearing more about this accounting practice come next year when these assets must be divulged. This, Jim Rogers warns, is going to spell (even more) trouble for these financial institutions' earnings growth. Some interesting articles dealing with this topic are here and here.
A notable quote from that second article is this:
"Figures that have been disclosed show Lehman with $22 billion in Level 3 assets, 100% of capital, Bear Stearns with $20 billion, 155% of capital, and J P Morgan Chase with about $60 billion, 50% of capital. However those figures are almost certainly low; the border between Level 2 and Level 3 is a fuzzy one and it is unquestionably in the interest of banks to classify as many of their assets as possible as Level 2, where analysts won't worry about them, rather than Level 3, where analyst concern is likely."

nice one

"...the economy will get worse before it gets better."

leroy jenkins

interesting

EXM & DRYS

Good Times with Charts

a puurrty chart. How low can it (C) possibly go?

It's Official...

..."The Fly" has announced his barn burning come Monday. I, for one, can't wait to see the pomp that ensues up until 10:00a.m. Monday. I have a feeling it will turn out something like this when all is said and done. 10:00a.m Monday is time for the "man dance"....

Watching

Today I paper traded (I know it's lame) GS. The 15-minute chart showed a Double Bottom
over the past two days. Today's early morning bottom came on decreasing volume (at least in terms of the close for each candle, rather than the true low of the day). My "buy" point was once price closed above the 5EMA which on paper for me was at $217.20. My "sell" point was at resistance of the opening highs and once the doji-esque candle closed at $221.75.Some other things I'm keeping an eye on include; a bull flag for ISRGAlso, GRMN looks like it's going to stage a Capitulation recovery.

Time for Concern?

We all knew the U.S. Dollar "shit the shower" after the U.S.Dollar index broke through it's 80 support level. If you didn't, then perhaps you're catching on now that Gold woke out of it's hibernation and has accelerated gains into the $824 range. If not, then perhaps you're aware of it when you start reading things like this:
Supermodel Rejects Dollar Pay
Jay-Z Music Video flashin' Euro's instead of Benjamin's

When to Start Buying?

Time to start chipping away at Goldman Sachs? Of course we all know the Financial Sector has suffered losses that have evaporated gains accumulated over the past 5 years for many of the big names (MS, MER, C, BSC). GS has mostly been the exception for the short sellers. Of course back in August was an ideal buying opportunity. It's now back to the 50EMA for GS which got a resistance bounce from the 100EMA in this afternoon's trading. Also, today's low range coincided with the low from 10/22, $0.20 off from that low pivot range.

Deceptive ETF's

From SeekingAlpha; something to keep in mind is their synopsis of the Q's and other ETF's. Particularly with the weighting methodology - The Q's do not mirror the tech sector. "Only 65% of the fund is devoted to technology, with the rest tied up in healthcare, consumer discretionary and more." Also, "Microsoft (MSFT) is twice as large a company as Apple (AAPL) ($346 billion vs. $164 billion), but Apple has twice the weight of Microsoft in the index (12.3% vs. 6.5%). The fund is also very concentrated in its largest holdings, with 46% of the fund in the top 10 holdings."
Using EPP to get exposure in the Asian markets. However, "As of September 30, 65.4% of the fund was in Australian stocks, with a further 1.5% in New Zealand. Only one-third of the fund was in what most of us consider Asia: 20.9% in Hong Kong and 11.3% in Singapore." Perhaps a better ETF to gain exposure in Asia is their recommendation of GMF.
The Emerging Europe ETF GUR; "As of September 30, the fund had a 58% weight in Russia, compared with 13.5% in Poland, 12.6% in Turkey, 7% in Hungary and 5% in the Czech Republic. Missing entirely are Poland, the fast-growing Baltic states like Finland and Estonia, and places like Austria, Croatia and Bulgaria."
So, knowing the weighting and coverage of these ETFs perhaps one can position their hedges/investments with more concise accuracy.

FLY Short Squeeze

The big news in the trader's blogosphere today has to do with the comment made this morning by "The Fly." As he succinctly puts it; "don't forget, "The Fly" will soon be shutting down this fucktarded blog-- in order to melt away into the confines of glorified internet folklore." This comment sure got people amped up, just check out the dialogue on Wallstreak. I thought it was pretty funny to go to a trading chat room and read the comments of people arguing with one another (and getting really angry) all because "The Fly" said he was closing up his blog. At any rate, if "The Fly" were a publicly traded company there certainly would have been a short squeeze in play today, sending FLY off the charts. Anyway, I'll definitely miss "The Fly" and all of his witty commentary. However, once he's gone maybe I'll find myself using the term "fucktard" a little less. Which wouldn't be such a bad thing.

Vista v. Leopard (Round 1)

Let the comparison commence...Harry McCracken from PCWorld states: "Compared to Windows Vista, Leopard is a meatier, more polished, more immediately useful, less annoying OS upgrade." Meanwhile, if you're looking for a laptop that runs Windows Vista you might consider getting yourself a...well, a mac! Also from PCWorld; "The fastest Windows Vista notebook we've tested this year is a Mac. Try that again: The fastest Windows Vista notebook we've tested this year--or for that matter, ever--is a Mac. Not a Dell, not a Toshiba, not even an Alienware...the MacBook's score is far more impressive simply because Apple couldn't care less whether you run Windows."

Forgotten College Education

I'm perusing my Economics book from college and re-learning some interesting points. I figured I would post some of them here for my future reference. Today I'm reading about Budget Deficits and the Public Debt. We start out with Budget Philosophies, the first of which being;
Annually Balanced Budget: (which up until the 1930s was accepted as a "desirable goal of public finance." ) It has since been noted that an annually balanced budget actually intensifies the business cycle. So that if the economy experiences high unemployment and falling incomes then tax receipts will automatically decline. To balance the budget government must either increase taxes, reduce gov't. expenditures, or a combo of both. The problem being that each of these options further dampens, rather than stimulates, aggregate demand.
An annually balanced budget will intensify inflation since money incomes rising during the course of inflation, taxes automatically increase. So, to avoid impending surplus, government must either cut taxes, increase expenditures, or a combo of both. All three of these policies will add to inflationary pressures. An annually balanced budget is "procyclical."
Some economists advocate an annually balanced budget by arguing budget deficits "are a manifestation of political irresponsibility" and allow politicians to give the public the benefits of government programs while avoiding the cost of higher taxes. There is simply less public opposition to growth financed by deficits, rather than taxes,
thereby it is used by politicians as a means of getting elected. Deficits are, therefore, "a fundamental problem of government encroachment on the private sector."

Cyclically Balanced Budget: The idea behind this philosophy being that government exerts a countercyclical influence while balancing the budget. The budget would, therefore, be balanced over the course of the business cycle (over a period of years) rather than annually. The rationale being; "to offset recession, government should lower taxes and increase spending, thereby purposely incurring a deficit. During the ensuing inflationary upswing, taxes would be raised and government spending slashed. The resulting surplus could then be used to retire the Federal debt incurred in financing the recession." The problem which may arise is that the business cycle swings may not be of equal magnitude and duration. A long slump followed by a short period of prosperity would mean "a large deficit during the slump, little or no surplus during prosperity, and therefore a cyclical deficit in the budget."
Functional Finance:
Here is where either an annual or cyclical balanced budget is secondary. The primary concern here is that economy be balanced and not the budget by providing noninflationary full employment. "The Federal budget is first and foremost an instrument for achieving and maintaining macroeconomic stability. Government should not hesitate to incur and deficits and surpluses required to achieve this goal. Those who are concerned with a large Federal debt are offered three arguments:
1). Our tax system is such that tax revenues automatically increase as the economy expands. Hence, given government expenditures, a deficit which is successful in stimulating equilibrium GDP will be partially self-liquidating.
2). Given its taxing powers and the ability to create money, the government's capacity to finance deficits is virtually unlimited.
3). Finally, it is contended that the problems of a large Federal debt are less burdensome than most people think.

The Public Debt:
The public debt is the accumulation of all past deficits, minus surpluses, of the Federal budget and has increased substantially since 1929. The reason why the U.S. has incurred large and persistent deficits is threefold:
1). Wars, and their deficit financing.
2). Recession. Incomes decline (or don't grow), so tax revenue declines.
3). Tax Cuts which decrease revenue. Especially after incurring huge expenses (i.e. bailing out a financial industry).

"One might also assert that deficits and a growing public debt are the result of a lack of political will and determination. Spending tends to gain votes; tax increases precipitate political disfavor. While opposition to deficits is widely expressed by both politicians and their constituencies, specific proposals to raise taxes or cut either domestic or defense programs typically encounter more opposition than support.