Wednesday, July 27, 2011

Calmer Heads in Volatile Times

I think I need to start a poll on whether readers know and have eaten Crispy Crowns! I say they beat tater tots all the way, but each to his/her own.

Calmer Heads in Volatile Times
I closed out all my open positions today (GFIG, CSU, SOXL) for a whopping, are you sitting down?, 1% gain in my trading account! Two weeks of ideas, mistakes, and a sell off and I am right back where I was a while ago. Round trip airfare included!

Debt ceiling issues? Slowing economic data? Summer doldrums? Best guess was a mini TARP like tantrum by traders showing how fast they can hit the exits should the US CONgress not get their act together. For a total disconnect get this from Jake at EconomPic:
With a Treasury closer to default The only ETF on the daily screen I run from time to time in positive territory... Treasuries!
You can't make this stuff up; a flight to US treasuries in case we "default"! It's all funny from a distance.

In tough markets the best writers and thinkers out there often pen some of the best stuff they write. It's called talent. Instead of me boring you I will point out a few good reads today to get you caught up, a clue, and calmed down as the drama goes on until the weekend.

For a great take on what may be happening now, here is Josh Brown's piece from JULY 24Th (SUNDAY!) which postulated the next 2-3 weeks:
So here's my roadmap: We will hear from 180 S&P 500 companies this week, from Ford ($F) to ExxonMobil ($XOM) to Merck ($MRK). Some of the more troublesome reports are already behind us - thanks Bank of America ($BAC) - the industrials and energy companies coming up should all be solid. In the absence of Euro problems (for a brief moment, we hope) the focus should be on three things - US earnings reports, debt ceiling negotiations and the first official estimate of second quarter GDP which is announced on Friday. The latter two are almost guaranteed to put pressure on the markets while the strong profit reports should keep that jittery sell-off from becoming a wipeout. That briefly-panicked move lower will fail, and from this failed move will come the fast move of stocks tearing through the overhead resistance they've toiled beneath these past six months.
Well today could have been the mini panic sell off.

High Chart Patterns Blog sets up the basic trend that has been in place for some time and has not failed yet:
On another note — as we have said repeatedly in our posts, we will stay in the bull camp until a) we stop bouncing where we should bounce (even today even though we closed near lows, we first bounced perfectly from trend-line to 20EMA, where we posted daytrader target had been met) and b) March 2009 trend-line is broken. Basically we won’t get worried until stocks stop bouncing where they should bounce . Then we’ll step back and wait it out.
Way more at the link so check it out.

ChessNwine has market recaps that keep you from getting crazy long when things are good and keep you from moving to a mountain hideout when things get bad. Chess is the calmest player I know ,and here is today's market recap:
Stock #Market Recap 07/27/11 {Video}

So where does that leave things?

I would think the debt ceiling issue will get resolved before the weekend. How much damage is done before then who knows. If you are a long term market player, this is just noise. If you are a short term player the hurt on single names varies from bad to totally broken. We could firm up and rally very hard from here, but playing that is going to be a daily sort of thing, not a swing trade or longer idea. The volatility will be high I think.

I don't have much of a plan right now. I am tempted to get involved looking for a wicked oversold bounce (the iBankCoin PPT is amazing for this!) but most of any move will come right at the open so I would have already had to put that trade on unless a multi day move is at hand. With all the rumors and news from Washington DC now is not that time. Maybe Friday.

In any case, stay sharp out there.

Have a good night.


Dino said...

Crispy Crowns kick all kinds of ass.

getyourselfconnected said...

THANKS DINO!!!! Yes, I agree 100%

CT-Hilltopper said...

And we have Crispy Crowns for the win!

Any chance of seeing "Personal Jesus" by Depeche Mode on Friday night?

getyourselfconnected said...

Better yet, I can locate a live version C-T!

GawainsGhost said...

I've never heard of Crispy Crowns. They don't sell those down here.

Anyway, this is interesting.

Bulldozers! Now that's something worth investing in. You could buy a fleet and rent it out to BofA for their demolition projects.

It is true there is a lot of inventory in the housing market. It's also true that some houses just will not sell, especially those in blighted neighborhoods. No one wants to live in them. And any investor worth his salt knows he won't be able to sell or rent them either. So they just sit there vacant and rot. Bulldoze!

I've seen entire subdivisions foreclosed on. Some developer buys land, builds houses, can't sell them, and goes broke.

One developer came down here from Houston a couple of years back and built cookie cutter houses. They sold for around $70,000. He had set it up so that everything was done by his company, financing, closing. Then he left, went back to Houston. The next year every house was foreclosed on. Know why? Because this guy never paid the taxes on the lots! So these poor people who bought these homes suddenly got hit with a massive tax bill they couldn't pay.

That's illegal, by the way, to sell a house without free and clear title. The buyers should have only owed taxes from the date of purchase. The developer is currently being prosecuted by the state attorney general.

This is all the result of cheap money fueling speculation, not to mention corruption and fraud. What a mess.

The Sovereign Bohemian said...

I vote for Crispy Crowns, too. But I don't buy them unless they're on sale, usually I settle for Best Choice Tater Puffs (or whatever they're called). Crispy Crowns are "company food"! :)

GawainsGhost said...

For Friday Night Entertainment, I recommend more Jim Croce.

"Operator," "Bad Bad Leroy Brown" (No. 1 song in 1972), or "You Don't Mess Around with Jim."

Perhaps I'm nostalgic, but the world lost a lot when it lost Jim Croce.

GawainsGhost said...

This is what I'm talking about.

getyourselfconnected said...

Good stuff Gawains, will pick one for tomorrow.

TSB, I cannot get your site to ooad all day? Any ideas?

Small Business said...

Great Stuff!