The Potty Bowl???

I can't help myself.
I have to link this one here--some Arizona weirdness, to be sure.
I can't find any odds on tradesports, though, as to who's favored in the Go!Wipe!Flush!Wash!Dry! obstacle course.
You can't make this stuff up.
Besides, this is a chance to shamelessly plug my alter ego blog, devoted to general nonsense.

Thinking or Not

Trader Mike had an interesting post linking to a review of Malcolm Gladwell's Blink. What fascinated me was the implication that really sharp "intuitive" traders probably can't really explain what they do, and thus (taking it a step further) they can't really teach someone else how to do it. This is in stark contrast to the Turtle Trader guys, who believed being a successful trader was eminently teachable, that they had done it, knew how they had done it, and could teach it. It is also in contrast (though not necessarily in contradiction) to the Van Tharp/NLP school of thought that says careful observation of the skilled practitioner allows the skill to be "modeled". I say not necessarily in contradiction because I believe Tharp et al claim the practitioner may not be able to explain what he does, but a skilled observer (Tharp, of course) can carefully observe him and figure it out.
It's an important question: is it useful for me to try to learn from the successful traders, or not?

Another very pretty chart

Another chart really caught my eye today.


courtesy of stockcharts.com

This is the iShares TIPS ETF.
Its been a buy everytime it gets to that uptrend line.
I'm glad to have had some money in this one, but as always, position sizing is key, right?

More Haiku

I write the haiku
Ugly writes haiku comment
I'm glad for traffic

Market Haiku for Monday

Many breakdowns here
Google RIMM Starbucks are three
Thanks Ugly for Shorts

Sunday Night Charts

I get a little too caught up in daily charts sometimes.
I'm going to try to set back and look at a little bigger picture tonight.
First the Nasdaq. This is a weekly chart of the COMPQ.

courtesy of stockcharts.com

There is a long term uptrend since fall 02 that is still in place, barely. If this uptrend line doesn't hold (and let's face it, where exactly this line is drawn is a little subjective--some versions have it violated already), there isn't much support--its look out below from a technical standpoint.


Next is the USD


courtesy of stockcharts.com
I've shown this chart before, but it bears repeating, because it really is a beautiful chart. The USD keeps coming up to resistance, touching it, maybe even caressing it a bit, flirting with breaking through, and then breaks down to a new low. This pattern will repeat, of course, until it stops.

Next is the CRB commodities.


courtesy of stockcharts.com
Nice uptrend--but could it be that this long uptrend is being broken??
Could be. But I'll wait a little bit--again, I consider these lines to be a little subjective and "fuzzy".

Finally is Gold.

courtesy of stockcharts.com
Uptrend still intact, although not much room to manuever.

CONCLUSION
Uptrends in Nasdaq, Gold and CRB still intact, downtrend in USB still intact
BUT it won't take much for any of these to be violated.
Interesting that all of these are close to their trend lines.

We'll see what next week and another bar will bring.

Gala Time

A blog I've started to read regularly is Kaushik Gala' s GalaTime. He had an excellent executive summary of the LBRGroup's Night Owl Session--a Sunday night chat (7-9 CST) with some chart reading. I gave myself a virtual head slap when I saw his summary because I had meant to check out the Night Owl Session but forgot. My summary of his summary--be ready to short the rallies in weak equities, and get ready for oil to make another leg up. Specifically mentioned to short on retracements to their 20 ema were AEP AGN AMAT BBBY BBH BEN CAT COST CSC DAL JDSU JPM DGX DHR DRI ESRX ETN F FD FDO JNS FDX FNM FON FRE GT IBM IP ITW KSS LIZ LLY MER MERQ MTG MU NXTL SLM SPLS TER TRB TXT.

Thanks for the summary Gala.

I may own or be short or have no position in any stocks mentioned in this blog, and otherwise all elements of the disclaimer are still operative.

Weather in the desert

I guess there was a lot of snow back east.
Sorry about that.



sunny and 70 in the desert today.

Efficient Markets

I came across a thought provoking post on the excellent PFblog. The author was talking about ordering TiVo, and mentioned the TiVo rewards program, you know, one of those earn points and get stuff programs. Points can be earned by referring friends to TiVo, and the twist is that people are offering money on eBay for you to get TiVo, and name them as the refer-er so they can earn points. I haven't made an exhaustive analysis of this, but a quick and dirty once over makes it look like the going rate is $25-35 USD for a referral. This gets one 5000 points in the TiVo rewards program. In the program one can get a Linksys USB100TX that works with a TiVo for 4500 points. This retails for about $30 or so, or about par--i.e. item costs the same as what somebody is willing to pay for the points on ebay. As you move up the scale, one can get an 20G Apple iPod for 2000 points--this works out to be about $140 bucks for a $250-300 item.
I love markets.

Today's Market Haiku

Sixth World wants haiku
He's right I'm wrong about CREE
There's your haiku pal

Return of the Market Haiku

Nasdaq gap down big
Support becomes resistance
Time to short, Chairman?

Loser List

Today's AM Loser List

SINA--looks like a short to me below 28 or so.

CME--a buyable dip if it stays above 200.

PAAS-has languished for a while. Might be at some support at 14.5.

AACC-thinly traded, so be careful. Might be a buyable dip above 20. Or not.

PLUM--mentioned in the Chairman's chat today. I also saw some fundie posts about it (I forget where)--although I'm sure the fundie guys think its overvalued now. Might be a buy above 5.

SIRI--again as mentioned in the Maoxian chat, looks like it is going to 4--although who knows, maybe it will go to 10 first.

Based on the last couple days, though, you're probably best off if you fade me.

RSS feed to keep up with the Rothschild's et al

Paul Kedrosky has a nice RSS feed on his side that gives you easy access to the latest 13F filings at the SEC. If you want to keep up with what the big boys are buying and selling, this is a pretty efficient way to do it.

NOTE-I already posted this here and forgot all about it. Man, I guess I am a loser. . .

Follow the Big Money

Or so they say.

In case anyone was wondering what the Rothschilds were doing . . .

Jeet_kun.jpg

Li xiao long

Wheat and "Liquid Metal"

Couple pink sheets to look into--

SSKWF, the Saskatchewan wheat pool, a play on a commodity, but maybe an M&A target as well?

LQMT, which makes something called "liquid metal" which Samsung apparently uses.

Both of these come from the excellent DYDD site.

As the site says, Do Your Own Due Diligence.

These are probably wholly unsuitable stocks that are going to zero.

Gold charts

As I promised before, I finally managed to get those gold charts posted on Flickr so they could be seen here.

The daily


courtesy of stockcharts.com

The trendline is just barely intact. Really need to see a move upward from here.

The weekly


courtesy of stockcharts.com

(Take a moment to appreciate this chart. It really is a beautiful chart)
The trendline is solidly intact.
My conclusion--the long term bull market in gold is still running. This may well prove to be a buyable dip.

Gold, Random Roger, etc

Random Roger, who always has a nice response for me when I comment on his stuff, has a nice little chart of gold and asks the provacative question, is gold in trouble? I think I come to a little different conclusion than he does. I'll post the charts as soon as I can, but Flickr (my image hosting site) is balky right now. Basically, the daily chart shows gold still above its 200d ma, and just at a trend line. The weekly chart is an absolute thing of beauty--the long term trend line is solidly intact, and this looks like a dip to buy.

update on CREE

Yesterday I made some comments about CREE, after a post on SixthWorld.
I indicated I might go long about 25, believing it was at support there.
Today, I haven't gone long. I'll post a revised chart after the close, but taking a close look at the chart today, I'm putting the support right about 25.5-25.8, and taking into account yesterday's heavy volume, the price by volume bars show a lot of volume right below 25. With that gap down to below the 200-d, and the fact that it has traded below its open all day, I really need to see a strong close above 26.35 (today's open) to go long here.
Film at 11.

WSJ on the falling dollar

"a growing chorus warns that the U.S.'s gaping budget and trade deficits will lead to a crisis in which the dollar falls much more sharply, driving up interest rates and squeezing the economy. . . "(subscription link, sorry)

Well, its official, then. I'm no longer very worried about this scenario. If this meme can become so widespread that it makes it to the front page of the Wall Street Journal, for goodness sake, it has already been so thoroughly discounted by the marketplace as to be unlikely. My bias has always been that the more everyone can see it coming, the less likely it is to happen, Richard Russell and the Mishedlo board at the Fool notwithstanding.

Plus I think there's only a couple million guys over at the Yahoo boards telling each other they suck who believe this as well . . .

CREE chart as promised

courtesy of stockcharts.com

CREE

Sixth World posted a nice little chart of the action in CREE. The comment was made that he wouldn't be interested until it found support around 20. In the interests of showing that it takes two sides to make a market, I'll argue that it has found support at 25(where it previously made a double top), and that there is also some support at about 23.5, with a lot of price volume at that price as well. I'll even consider buying it tomorrow, if it opens above 25, with a stop just below that.

I'm trying to post an annotated chart with price by volume, but I'm having "issues." I'll try again later.

US College Financial Aid

on the off chance someone will find it relevant this link has a calculator to estimate how much US college financial aid one might qualify for.

Today's thought is on position sizing

If the stock goes down, your initial position was too big.
If it goes up, your position was too small.

(can't remember who I stole this from . . .)

Technicians vs. Fundamentalists

As I mentioned earlier, I want to write a little about this whole idea of technical analysis vs. fundamental analysis. Technical analysis is defined simply as the use of price action alone, without regard to the underlying facts of the business or commodity in question, as a way to make decisions about buying and selling in the marketplace. Fundamental analysis, then, relys on the relationship between underlying information about the business itself--balance sheet, income statement, cash flows, etc.--and the price, to make buy and sell decisions. Put another way, technical analysis usually means that if the price goes down, you would sell, whereas fundamental analysis usually means you would buy more (since its a better bargain).

I think both technicals and fundamentals can work (or not work). Again, as I mentioned in the previous post, I think the real issue is having a thesis, and most importantly having a plan for what will make you decide that your thesis is wrong. I think the beauty of the technical approach, if you have good discipline, is that if the stock moves against you, you get out and preserve your capital for another day. In the fundamental approach, its fine to "average down", but again you have to have a plan ahead of time--will you average down to zero? What if you are wrong and are left with worthless stock? Will that cost you a significant chunk of capital?

True fundamental story--a few years back there was a small chain of home improvement stores called Home Base--kind of like Home Depot. The stores themselves weren't bad. The stock was in the toilet, and selling for less than the cash and assets on hand--the breakup value of the company, presumably, was worth more than the market capitalization. What's more, the CEO bought a huge block of stock in the market with his own money (not cashing in options). How could you lose--a classic Ben Graham/Warren Buffett cigar butt, with heavy insider buying. By now, you know the rest of the story--company tried to re-engineer themselves, spent their cash, and went bankrupt. You can always be wrong.

Bottom line, sometimes I buy/sell on the technicals, sometimes on the fundamentals, but I always have a plan ahead of time.

Loser

Let me just re-iterate, as I should have in the previous post, that I'm not a registered investment advisor, and in fact, I call myself Just Another Loser On The Internet. Who wants to believe what a loser says?

Seriously, evaluate what I say in the context of your knowledge and experience.

"Long term" outlook and timeframes

This is a good time to refresh my long term outlook, and give a little philosophy as well.

Previously, I've given my "long-term" view that equities will go down, at least on an inflation adjusted basis. By "long-term", I mean 10-15 years or so. If so, why do I talk stocks all the time? Because its all about the time frame. If you are looking to buy individual stocks and sell them after a few days, weeks, months, or even a couple years, you may do very well. If on the other hand you have a 30-50 year (or greater) time frame, where you can leave the money alone till the end of that time, the historical evidence is pretty good that buying and forgetting a broad basket of equities will do okay. If, however, you expect to dollar cost average into an index fund and get 10% returns and retire rich in 10 years, I think you will be sorely disappointed.

Why do I believe this? History. The historical evidence, in this country, shows alternating periods, of about 10-20 years or so, of rising equity prices alternating with equity prices going nowhere or down. The periods of rising equities start with low valuations and run till valuations are high, and then the bear kicks in and equities fall till the valuations are low (or stand still till earnings rise enough to make the valuations low). Roughly, bull market in the 1920s, bear until mid-1940's, bull 1946-1966, bear 1966 to 1982, bull 1982-2000, bear 2000-?. Michael Alexander in his excellent book Stock Cycles, goes into this in some detail and fleshes out some reasons why this may be so.

The other reason I believe this is that there is just too much of "the crowd" in index funds. When John Bogle pioneered the idea of dollar cost averaging into "the market" via low expense index funds, it was a great idea because it was new, simple, and most of all, it was historically a great time to do this (1970's) because stocks were at low valuations and thus we had a great bull market ahead. Now, with equities still at historically high valuations, I think just blindly DCA'ing into indexes is a sure way to throw money away unless your time frame is 30-50 years, i.e. long enough that you can ride out this present cycle. Let me add that when I say your time frame is X number of years, I don't mean just are you going to live that long, I mean you don't need to touch the money, principal, interest, any of it, for X number of years--because that is really the key--to be able to ride out the lows in valuation until they start to rise again.

Thus, to try to put it together, if you have money that you will "need" in 5, 10, or perhaps even 15-20 years, I think you have to be more of a trader. You have to be willing to 1) have a thesis for why a stock will go up, 2) decide at what point your thesis will be proven wrong, and 3) be willing to cut your losses when your thesis is wrong. This last point, cutting your losses, I think leads into another point about technical v. fundamental analysis, which simplistically, is the difference between, when prices go down, do you sell to cut your losses, or do you buy because its a better bargain. I think actually I should expand upon that in a future post, but for now I'll say again, you need to decide in advance on what will make you decide that your thesis is wrong. Obviously, if you are trading on the technicals, it will be purely a matter of price that changes your thesis; if you trade on the fundamentals, then its a matter of has the valuation story changed. However, if your thesis is fundamental, then I think money management is even more important; you have to accept that you may be wrong on your thesis, the bargain may be a bargain because it is going to go bankrupt, and if you lose all of this investment, it doesn't break you.

In future posts I intend to 1)expand on the technical v. fundamental idea, 2) talk about what kinds of equities I believe are exceptions(hubris alert!!!) and may be able to outperform over the next few years, and 3) talk about other asset classes--commodities, etc.

couple more sites I read

are VIC and DYDD. Both are membership based sites, with some useful access still available to non-members, where stock ideas are exchanged. The ideas tend to be deep value, in the case of VIC, and overlooked micro-cap, in the case of DYDD. Each has, in the words of Jim Cramer, "made me big money."

JNJ chart as promised

my feeds

added some new feeds to my bloglines, including Bill Cara and Sixth World.

Ugly

Uglychart has a nice little scan that lets you find Naz stocks that are a certain percentage above or below their moving average. Cool.

another site

Want to give a plug to another great site, PFblog, not really so much an investment site but a "diligent personal finance management" site. You know, its not how much you make, its how much you keep, and this guy seems to be putting a lot of effort into figuring out how to keep it. Its definitely worth keeping up with. RSS feeds here(RDF) and here(XML).

sounds like a great weekend . .

Motor city madman Ted Nugent interviewed on Fox News today, and asked about, among other things, his upcoming tour with Toby Keith, said "We're rehearsing right now . . . actually, we're shooting machine guns and barbecuing."
The man is one of my heroes.

Fox Saturday Morning "Business Bloc"

I like to watch the Fox Saturday Morning finance shows, not necessarily because the info is great (although I usually get some ideas to research) but 1) for the entertainment value, and 2) for the rough indication of sentiment.

My observations for today--
Perma-bull Joe Battipaglia was on--he was gone from the airwaves for a while, and now I've seen him quite a bit lately. Why do I think that is a sign of a top?
Jim Rogers was on, as usual, plugging his book and pushing commodities and natural resources. I guess I agree to a degree, considering my positions in gold and oil.

Some specific ideas
JNJ--Gary B. Smith showed a long term chart of JNJ and pushed it as a long term buy and hold (which he almost never does). I think JNJ is a "great company" though that doesn't always mean "great stock." I do have a long term position in JNJ, though. Gary's chart looked great, with JNJ staying above a long-term trendline. My chart doesn't look as good, and arguably shows JNJ making a double top. Unfortunately, I'm having trouble posting my annotated chart right now but I hope to have it up a little later.

XTO, an oil and gas explorer, was also mentioned, getting a mixed review. I do like oil and gas, I think its hard to go to wrong with it over the next few months and years, although some concerns were raised about its corporate governance.

TXI, Texas Industries, a supplier of building materials, was mentioned as a play on rebuilding after all the natural disasters here and elsewhere recently. Although this sounds like the broken window fallacy, while the economy as a whole won't be better off because of natural disasters, certainly some segment may benefit at the expense of others.

NSC, Norfolk Southern was mentioned by Wayne Rogers, who has come up with some good picks in the past.

Jonathan Hoenig mentioned floating rate funds, closed-end funds holding corporate debt where the rates rise with rising interest rates. He mentioned these before at the start of the interest rate rising cycle, and they haven't fared too well from there. The concept is appealing, but I always feel I don't really understand them too well--they don't seem to track interest rates as you would think they should. At any rate, he mentioned VVR, PFL, FRB. Others in this group that I have owned are PPR and TLI.

Anyway, I hope to post some charts later.

13Fs

Paul Kedrosky is an interesting guy who has, among other things, a blog called Infectious Greed. He also has put together an RSS feed of 13F filings with the SEC (link is an RSS feed, so it may not look right depending on your brower) so you can easily keep track of what "the boys" are buying and selling.

Scanning the 13Fs yesterday night, I noticed a filing from GMO, Grantham Mayo VanOtterloo, home of Jeremy Grantham who always has some interesting things to say about the market. (Link might require registration). There were a number of large foreign positions in their filing-- America Movil (AMX, Mexican cellphones), China Mobile Hong Kong (CHL, Chinese cellphones), China Telecom (CHA, more Chinese cellphones), Grupo Financiaro Galicia (GGAL, Argentinian bank) Sk Telecom Ltd (SKM, South Korean cellphones, Telefonos De Mexico S A (TMX, Mexican telecom), and Votorantim Celulose E Papel Sa(VCP, Brazilian paper)

Movies

Two hilarious movies I've seen lately (yes, I know I'm late to the party):

Napoleon Dynamite and Harold and Kumar go to White Castle.

Neither one is everyone's cup of tea, but I laughed like crazy.

AM watchlist

I don't find very much exciting today.

SGP looks like there is some support right at 20, but I'm a little nervous buying after a 2 gap downs like it had.

AACC has broken out above a previous high and might be a buy above 21.5.

I'm not very enthused about either of these. I'll probably trim some positions that are going nowhere. For some reason I'm not real eager to hold too much through this weekend, although I don't have any rational reason to feel that way.

mystery stock

The latest Phillips Publishing "mystery stock" is simply Samsung. There, you don't have to spend money on their free offer.

Today

Didn't see much to do today, made some more money by sitting.

Ugly had an interesting pick--RICK, although I'm not sure whether it was for a day trade or a table dance.

Fascinating

Absolutely fascinating piece on oil. I learned a lot I didn't know. Read it, and tell me if you think oil will ever be below $40 a barrel for any significant period of time again.

Not much today

Didn't see many moves to make today, so I didn't make many.

Made some money by sitting, not by thinking.

ATR

I'm not any great expert on trading technique, but I have a thought on time frame and volatility. One metric that I try to look at routinely is ATR, or average true range. Stockcharts.com defines ATR as a 14-period moving average of the greatest of 1)The current high less the current low; 2)The absolute value of current high less the previous close; or 3)The absolute value of: current low less the previous close. Basically it is an indication of how much a stock can move in one period. Thus if a stock has an ATR of 2 on a daily chart, it means that over the past 14 days, 50% of the time the stock moved MORE than 2 points between high and low, and 50% of the time less than 2 points. I think of this as just normal back and forth, random noise if you will.
Why should I care? Timeframes. If my timeframe is more than a couple days, and my trailing stop is within the ATR, then I stand a good chance of getting stopped out just by the normal back and forth movement of the stock.Maybe this is obvious to everyone else, but its something I need to keep working on -- I've gotten needlessly stopped out by normal volatility because I didn't pay enough attention to the ATR.

Congrats to the Chairman

and Mrs. Chairman and little Jr. Chairman.
Assuming the date of birth is the 11th, the youngster shares an auspicious birthday with the architect of the USA financial system Alexander Hamilton.

Bearish?. . .

chart courtesy of stockcharts.com

Lots of bearish sentiment out there, including RandomRoger and ugly at uglychart.

The Naz is bending that support I pointed out. I think of support and resistance as bands with some "give" rather than hard thin lines, so I could see things bouncing from here. If it doesn't bounce, its down to 2050, 2000, or even lower.

Time for the Disclaimer

My attorneys would want me to say the following.:
-All information on www.jaloti.com and jaloti.blogspot.com is for entertainment purposes only. No trading advice is being given; it couldn't be, because the author of this website is not a Registered Investment Advisor. Investing is all about taking risks. Short term trading in stocks, options and futures contracts is very risky and large sums of money can be lost. If you can't handle losing all your money, bury it in the backyard, at night, when you're sure your neighbors aren't looking. Make sure, 'cause otherwise the next night they'll dig it up and you'll lose it all anyway. If you want a government guaranteed rate of return, go to the bank and get a savings account, or maybe a CD if you don't need the money to buy smokes right away. If you want to invest, do your own research, make your own choices, and be responsible for your own decision, and therefore your own gains and losses. It is possible to do better or worse than Jaloti. Past performance is never a guarantee that future results will match it. But, whatever you do, don't do what I'm doing, cause after all, I call myself JustAnotherLoserOnTheInternet, so you'd be a bigger loser, or a fool, to emulate what some loser on the Internet is doing, right? I mean, you don't even know me. Jaloti is not liable for any losses incurred in trading by readers of this blog. Do not taunt happy fun ball.
-I may have a position in any stock, option, commodity, future or whatever I mention and those positions may change at any time. Some of the stocks, options, commodites, or futures that I mention may be small illiquid ones that can be changed by mentions on the internet, so be careful!
-Actually, I don't really care what you do, as long as you don't try to sue me.

Tuesday's watchlist

Some interesting picks this AM.
Most seem to fit in the category of pullback to support after a breakout.

RMI, a pick of ugly at uglychart.com, has broken out, and now pulled back to just above its previous high. I think its a long above 3.5.

STEM, mentioned in the Chairman's chat the other day, has pulled back to just above a penultimate high of 4.8.

XMSR, the rich man's SIRI, is just above a previous high of 31.5.

All look like low risk entry points, with stops just below the old highs.

One of those days. . .

So far, seems like most things are down except for what I have puts on . . .

Barely out of the shower. . .

. . . and here's what I've learned already.

If you google Chairman MaoXian item number 3 is Jaloti. Cool!!

There is apparently some sort of fantasy stock market for weblogs, and jaloti is listed. Also cool.

Jaloti is apparently also a city in India. Very cool!!

Pretty good day today

Jesse Livermore, thru his alter ego Larry Livingston, in Reminiscences of a Stock Operator, said something along the lines of "It was never my thinking that made me money, but my sitting" as well as "buy right, and sit tight." In other words, hold on to a rising stock and resist the temptation to sell a winner.

I bought WILCF, an ADR of an Israeli grocer, at a split adjusted $2. It closed today around $5. I've been tempted to sell many times along the way but didn't. I'm still holding.



courtesy of stockcharts.com

Social Security "Privatization"

Random Roger has a thought provoking post on Social Security "Privatization." Its already drawn some comments, including mine. As I state there, I really try to avoid anything remotely political, (although I guess I drop a number of hints re: my politics from time to time). I try to stick to "how can I make more money in the markets" since I think we can all agree on that. However, I think social security is an important issue on several levels, and we need to try to discuss it.
I suspect Roger and I may be far apart on this issue, but I want to hear what he and everyone else has to say about it.
Thanks for bringing it up.

Gold and USD

The lightbulb finally went on in my head.
Look at the USD chart here.


courtesy of stockcharts.com

Look at it in conjunction with the gold chart below and here.
As I mentioned before, USD is just below what I expect will be resistance, and gold is right at what I expect will prove to be support.
Gold has moved up at least in part, because the dollar is going down.
What this means is I'm probably a little early buying GLD--more certainty could be obtained by waiting for gold support to hold, and dollar resistance to hold. However, when gold moves, its been moving quickly, and being early may benefit me here.
Or, I could be wrong and support/resistance may not hold. I won't wait for much of a downward move to get out of GLD.

Gold chart

Courtesy of stockcharts.com

Here is the aforementioned daily chart for gold. I see support right under 420 or so--and in fact I picked up some GLD, seeing this as a low risk entry. Drop below 418 and I'm out.

Monday AM observations

Nasdaq has found some support right below 2100, at the level that I identified previously.

Gold is at a medium term support line. If I have the courage of my convictions, this 42 might be a good level to pick up the gold ETF, GLD.

USD continues to bounce up. Long term chart shows that after each decline, it recovers to at or below the level of the penultimate low. If that pattern holds, I'd look for the USD to climb to about 84.5-85 or so before it declines again. If it breaks 85 solidly, maybe the long dollar decline has halted.

TIP, the TIPS ETF, is slightly below the uptrend line. Will it hold?

I haven't identified much other than GLD as a possible play today.

What I follow

Among other things, today I'll mention some links that I gain insights from.
One is Jonathan Hoenig. He's not your average portfolio manager. He's got some worthwhile insights about trading, and also comes up with some interesting picks that you won't hear about anywhere else. He writes a weekly column for smartmoney.com that appears on Tuesdays, and an archive is here. It's mostly a pay site, but his columns are free after a week or so, and his picks tend to be more medium to long term anyway-no real day trades.

John Hussman runs Hussman funds, and he's got a pretty good record over the last few years. He also has insights that are not the "same old-same old", and seems to come from kind of a combination of technical and fundamental analysis, taking into account both earnings and price action. He writes a weekly report that appears on Mondays, and the archive is here.

Ugly at uglychart.com is somebody I've started following as well. He hooked me this morning with his Dr. Alexander Elder quote about being a loser.

I'll add more later.

Analysts.jpg

At the trough

Congrats

to Chairman Maoxian for a nice write up in this weeks Barron's. I suspect the "Barron's bounce" applies to web traffic, as well. If you're a subscriber, the link is here. For non subscribers, best I can do is email it to anyone who emails me asking for the link.

I'd try to make some sort of smarmy comment in Mandarin, but the Chairman has already corrected my pinyin once, so I'll just leave it at zaijian!

Retail Investors

Retail investors chasing STEM

Sell Side Analysts

Analyzing. . .

Full Service broker

Large broker taking a nap

Investment banker

Out for a walk

Sunday Afternoon

and a visit to the financial district. The accompanying pictures show some of the life there . . .

Today

is The King's 70th birthday

Enough said.

Random Roger

Random Roger made a comment the other day about capital leaving all asset classes except the US Dollar. That is what it kinda seems like. I guess the questions being begged are why? for how long? to where is the capital flowing? and (most of all) can I get a piece of the action somehow? Or should I just be content with losing as little as possible?

I don't have any answers, BTW.

Bloglines

I see that Jaloti is listed in the bloglines of both Trader Mike and Chairman MaoXian. Thanks guys! Guess I'm going to have to try to blog stuff somebody else will want to read!

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What its all about

Stuff

Just a few stocks and stuff:

Oil seems to have found some support
I see some support for the Naz right under 2100, where it is right now. If this doesn't hold look out.
I'm toying with long OTE above 8.4, long ABXA above 8, long OSTK above 62.
Got GOOG 195 puts yesterday--so far its okay.

today's short list

May add to my ACAS above 32.3 or so.

Might get back in NFI.

will keep an eye on long CKCM above 14.5, CRNT above 6, and, especially, WEB looks good above 10.5.

MaoXian chat

Just want to plug Chairman MaoXian, and his daily 8-9 AM (Eastern time) chat. Talked about a lot of stuff this AM, and even a few stocks--I'll be watching ISON, SCON, RMBS, SIRI, ENTU, BPUR, XLNX. Not sure I'll do anything, but I will watch.

watchlist

While gold is down below a previous high of 433, and most gold shares are down, some of the cheap speculative miners are actually off their lows and up a bit--DROOY, MNG, RIC, VGZ. Might be time to take a poke at a bottom on these.

GOOG can't stay above 200. Time for puts?? (As if I didn't lose enough last time).

Looking to get back in NFI.

December-January

Quick glance at a Naz chart shows that tops for the last four calendar years have been in December or January . . . hmmmm . . . .

Today . . .

I'm looking at--

BGO, already in it, if it stays above 2.95 or so I may add more.

NEM--if it stays about 42.5-43 I'll consider it, but I don't want to get overweight in gold.

GOOG--I guess I must be obsessed with shorting it. I still believe the thesis that the lockup release will drive it down. At any rate, around 200 is a top, so if it can't crack above it solidly, I may pick up puts.

NFI--been in it, stopped out last week, may get in again if it stays above 48 or so.

???

gold down, oil down, but VIX up?? (shakes head in confusion)

Scaling

I had a thought this morning while making the coffee. I've thought for a while that its all (or at least largely) about the timeframe--i.e. a stock might be a winner in the next few hours or days, but a loser over months or years, and vice versa. I've also thought that there are trades that are good on a small scale (few hundred shares) but can't be done in size (tens of thousands of shares) because of liquidity, etc. My insight this morning was to sort of combine the two ideas, and wonder if maybe trading technique doesn't scale well. An example would be maybe letting winners run and placing passive stop-loss orders as they move up is a good strategy over weeks and months, but that doing the same over hours and days doesn't work as well as just selling after a pop.
I know, maybe this is trivial, or maybe everyone else has figured this out already, but it is a new insight for me.

Novelty

I've been thinking more and more about something that has been a constant thread in many of my posts of late, whether I'm talking about Richard Russell, Random Roger, Chairman MaoXian, Marty Whitman, or even Dwight Eisenhower--that's novelty, freshness, whatever you want to call it. The point is, do I get something that I don't get elsewhere. There's lots of media out there, and many of them say the same thing, or basically the same thing, tell you the same data, make the same arguments, give the same advice. Sometimes its worthwhile info, even if everyone is saying it, but other times (and markets are a good example of this) if everyone is leaning the same way, than the money may be in going a different way.

So . . . what I'm interested in, is getting something (facts, analysis, thinking, advice, suggestions) that you don't see everywhere else. That's where the real value added is. What's really a waste is PAYING for the same old, same old. This is where Richard Russell is right about a lot of the other old-line newsletter writers. There's a lot of people on the net giving away a different angle--why would I pay for the party line?

Amusing

Paul Kedrosky has a little snippet that I find amusing--I"m not sure why, I just do:

I was just re-reading some of Malcolm Gladwell's old articles and I came across one of his I had forgotten about: a profile of pitchman Ron Popeil. It is wonderful reading, better, I'll argue, than Gladwell's current fondness for faux academicism that has captured so many people's attention. This anecdote about Popeil's approach to pitching his GLH hairspray is a nice case in point:
But now that [Popeil] had told me about GLH it was unthinkable that he would not also show me its wonders. He walked quickly over to a table at the other side of the room, talking as he went. "People always ask me, `Ron, where did you get that name GLH?' I made it up. Great-Looking Hair." He picked up a can. "We make it in nine different colors. This is silver-black." He picked up a hand mirror and angled it above his head so that he could see his bald spot. "Now, the first thing I'll do is spray it where I don't need it." He shook the can and began spraying the crown of his head, talking all the while. "Then I'll go to the area itself." He pointed to his bald spot. "Right here. O.K. Now I'll let that dry. Brushing is fifty per cent of the way it's going to look." He began brushing vigorously, and suddenly Ron Popeil had what looked like a complete head of hair. "Wow," I said. Ron glowed. "And you tell me `Wow.' That's what everyone says. `Wow.' That's what people say who use it. `Wow.' If you go outside"--he grabbed me by the arm and pulled me out onto the deck--"if you are in bright sunlight or daylight, you cannot tell that I have a big bald spot in the back of my head. It really looks like hair, but it's not hair. It's quite a product. It's incredible. Any shampoo will take it out. You know who would be a great candidate for this? Al Gore. You want to see how it feels?" Ron inclined the back of his head toward me. I had said, "Wow," and had looked at his hair inside and outside, but the pitchman in Ron Popeil wasn't satisfied. I had to feel the back of his head. I did. It felt just like real hair.

Books

I've read recently include Crusade in Europe, by Dwight Eisenhower--his account of WW2, the big one, in Europe. It contains some insights on leadership among other things, and if you are interested in military history, you'll find it worthwhile.

More directly relevant to investing is Marty Whitman's Value Investing, which I'm working on right now. Whitman, of course, is the man at Third Avenue Funds, a value shop. There are many insights in here that I haven't come across elsewhere. One of my favorites is his critique of EMH. He points out that the problem with EMH is that it assumes everyone is what he calls an "OPMI"--outside passive minority investor, his term for a non-control investor who is just buying and selling shares in a market. Now that's most of us, but it ignores the fact that there are other people, who can get something else out of the deal, what Whitman calls "SOTT" or something off the top, i.e. control investors who can give themselves salary, benefits, options, fees, etc. out of the whole thing, regardless of what the stock price is. Its more complicated than this, of course, but the basic point that its a wider world than just what the NYSE or NASDAQ quote is, I think is a very important point to ponder.

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Viva la Revolucion Reagan

Flickr

Previous post was sent from my phone to the blog using Flickr, a new photo sharing web site that allows you to do this, and other things. Check it out.

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Happy New Year

Chairman MaoXian

had an interesting link to a Richard Russell comment. Russell was lamenting the disappearance of the old line newletter publishers, other than himself. He's pretty much got it right--the Internet and proliferation of "free" data and opinion. Russell's an interesting character--I subscribed to him for a while. He is a good writer, but for me, in the end, it was just more of the same "the sky is falling, the dollar is going to hell, gold is the only real money, the trade deficit will kill us, the US is the new Rome, Bush is an idiot" stuff that you can get for free (or at least cheaper) in a lot of other places on the net (like the Mishedlo board at the Fool). Some of that stuff may be true, but in all honesty I thought he was just regurgitating a lot of the groupthink from the New York Times, LA Times, Financial Times, etc, that he makes no secret of reading and liking. So while he's made some great calls over the years, in an ironic way he's kind of an exception to his observation--he's still around, even though you can basically get elsewhere for free what he offers for 300 bucks a year or whatever.

Random Roger

Once again, a nice little tidbit from Random Roger, a blogging money manager. I always find something from him that you don't hear elsewhere, and that's valuable, both on the net and in the investing world. There's a lot of people repeating the same stuff, but Roger has given me both different ideas (like his thoughts on money managing philosopy) and specific ideas (the covered call funds) that I haven't seen elsewhere.
New's Year Hat Tip, Roger.

Conserving

that wasting asset, time. Anything that saves time is worthwhile, so check out newsreaders and RSS feeds, if you haven't already. A good intro is here.

End of year

Time to combine end of year tax manuevers with good works by contributing to tsunami relief. A number of options are here.

Habit

will be another focus for me in 2005. Much of what we do everyday is habit. Once established, its just as easy to have beneficial habits, as deleterious ones.

I resolve to examine my daily behavior for habits, and to work on replacing the deleterious ones, with more beneficial ones.
(Like blogging every day.)

Resolutions continued

Next resolution is to blog at least once a day, no matter how short or trivial . . .

Losses

should be cut quickly, and ruthlessly. This has been a building block of my trading plan. I've done a good job of cutting losses early and quickly--except when I haven't. A couple large losses in 2004 have seriously affected my results.

In 2005, stop losses will be set before every trade, and adhered to ruthlessly. No exceptions.

Ironic

that the previous post was entitled "Time", since one of my resolutions involves time, the only truly wasting and utterly non-replenishable asset. Every day, we use time we can never get back. I look back at the year and see time that I did nothing productive, nothing educational, and nothing even enjoyable with.

It's irrational to expect that no time will be wasted, but I resolve to "waste" less time this coming year, and use more of this wasting asset to produce, to learn, to better myself, and simply to enjoy. I'll try to make a habit of asking myself--is this the best use I could make of this time?

Time

to think about what's gone right and wrong in the year past, and set plans for the year to come.
That'll be the theme for today--New Year's Resolutions.

Google

GOOG is still strong, breaking thru a downtrend line. Obviously, I've been wrong on my puts. Still time for that to change, of course, but in the short term, I've been wrong. Based on a simple inspection of the chart, and on plotting price by volume, I think there is a lot of support in the 165-170 area. Above that, I wouldn't fight it. Below that, its look out below.

Xmas week . . .

. . . and many people have other things to do. I'm finding it hard to say much of anything even marginally worthwhile, unlike Random Roger, TraderMike, MaoXian, et al. I thought Roger's post about not having the exact same personal portfolio as his client's was thought-provoking.

thoughts

Gold has support at its old high of 433--but it arguably has resistance, based on the chart of GLD, at the bottom of the gap at 440.

USD has resistance at its old low of 84.5--I'm thinking we may see a rally to that area.

Random thoughts on a Friday. . .

google still drifts--it will be interesting again at about 163-165--that's not only the top of the gap, its a fibonacci retracement of 61.8% (or 38.2%, depending on your point of view)

Gold bullion has been down the past couple days more than gold shares--which leads me to wonder (this is somewhat of a leap): is the new gold ETF (GLD, in case you've been in a cave) making gold more volatile?

Insurance stocks like AOC, MMC, AFL that have been "spitzered" lately all gapped up this AM, only to drop back, but then mostly move upward again. I'm not smart enough to know what, if anything, this means.

My biggest winner lately has been NFI, which I bought, almost sold a couple of times, but have managed to sit tight for a nice gain so far. Which makes me think of the Jesse Livermore line, to the effect of, it was never my thinking that made me money, its was my sitting there (in a stock on an uptrend, obviously)

Google . . .

just keeps tracing out a series of lower highs, and generally drifting lower, even as the Nasdaq moves higher. Perhaps Trader Wizard's thesis about the avalanche of GOOG shares being released from lockup is starting to play out. I hope so, since I have GOOG puts . . .

Naz reversal

Well, the reversal in the COMPQ came a little after 10 Eastern, confirming the wisdom of Trader Mike's rule. We're down below the open, not quite to yesterday's close but almost.

note to self . . .

Futures have been rockin since Intel announcement. Remember what TraderMike said, wait till after the 10 AM EST high, and buy above it.
I lost enough money yesterday, I don't want to get suckered in a reversal today.
Also noted, the dollar, gold, and oil are basically flat.

trades

My trades are smellin', but I'm still gellin'.

Caught up on reading Jonathan Hoenig--I always get good insights from him, as well as picks you won't get anywhere else.

SIRI

Chairman MaoXian has a beautiful chart of the coil, ascending triangle, range contraction, whatever you want to call it in SIRI. I guess a pop out of this is coming, just don't know which way and when!

Xie Xie nin, Mao xian sheng!

Gold ETF hurting gold shares?

Random Roger makes the intriguing suggestion that since the introduction of the Gold bullion ETF GLD, money has moved out of gold mining shares, and into GLD. Presumably, those who couldn't/wouldn't buy bullion, were buying miners, but now can/will buy bullion in the form of GLD. Something to keep an eye on.

hothothot--notnotnot

Yesterday I posted my "hothothot" list . Interestingly, on a day when the indices are flying, and most of what I own is up, and the market haiku reflects a lot of upside enthusiasm, almost nothing on the hothothot momo list has broken out--only WEB . Go figure.

Today's market haiku

Santa rally comes
Ev'rybody wants to buy
No one wants to sell