I would be excited for Friday except I cannot have any beers at all until after Monday!!!!! As is, I think there will be Friday Night stuff so get some requests in.
On the wireless front I was looking for info on my computer and many places said to install the supplied antenna for better results. Went to the basement and checked the box, there was an antenna there! It screws into the wireless card at the back of the computer. This works pretty well but still need to overhaul the system.
Google Beats Estimates
After the bell Google (GOOG) beat estimates by "a mile" or some stuff. I have no idea how estimates are made, and the employee options stuff gets me confused. In any case, ad revenue was rocking and the company is getting things going in all kinds of spaces, like my Android Revolution phone. I am actually a big fan of Google as they are best positioned to beat up on Facebook and Apple. Should inject some more drama into an already wild week that ends with options expiration. Which I think really happened today as I have read many times. I know, confusing.
Ben Bernanke "Don't Let me be Misunderstood"
After 3 days of similar statements and markets hanging on every word as if it was from Zeus, Bernanke must be listening to this Santa Esmeralda:
Yup.
For all the cheap seats:
Bernanke said there would have to be a real drop in things economic before new measures would be taken. As in, not today or next week.
Got it? After the wicked beat by the ISM last week, GOOG blowing it out of the water, and initial jobs claims dropping a monster 5k today things are on track for 3.5-4.5% GDP growth in quarter 3 and 4.
Still, had to grab this capture of a FINVIZ news feed today:
Damped speculation on new stimulus, what a guy.
Clearing Things Up
Last night I noted that I am more of a macro investor. But have I not been trading actively this year? Yes to both. I have large parts of my VAST (lol) personal wealth spaced into different ways of making returns. Long term accounts (where my physical metals reside and other stuff) which make up about 70%, and then my trading account which is 30% or so depending on what I want to put in play. I can operate shorter term with this, and it's more fun to lose to try and make money. I have big picture ideas that may make me more bearish on things, but for the swing trades I can move quick. It is not incompatible. As of now after being sick and not good at trading crazy wild markets the trading account is all cash. Looking to try some things next week I hope.
The good news: I am finally feeling much better! Like MUCH better. Energy is coming back online and feeling pretty good. Nice.
Land of Confusion
I have always been more a macro kind of investor. By that I mean I try to find things that will persist for a long time, get positioned, and basically forget about that stuff unless something major happens to change my mind. In that sense, not much has changed in 10 years; easy money is now a structural part of the world (predominantly the US) and this cannot really change without severe consequence. Lack of political will and a close alliance between big money, government, and central banks makes any reform and associated "pain" impossible. Of course this kind of wait and see thing is boring!
On a more immediate term time scale, the last 2 years have been absurd and exciting more so than any time since I have been following markets. Maybe some of the more seasoned players can name another time that has featured so much "never before seen" kind of stuff.
In any case, this blog started as a critique on the disconnect between perception and reality. Today we have none other than the Federal Reserve Headmaster himself, Albus Dufusdore Ben Bernanke, making a fool of himself and the US central bank on a grand scale. As this happens market players the world over cling to every word and action as if Bernanke can accomplish anything.
First up, a screen shot of the headlines running yesterday on FINVIZ after the FED minutes were released:
A "sliver" of hope for more stimulus! Joy!
I read the release and it was a twisted hunk of confusion, though that part missed CNBC: On the one hand, a few members noted that, depending on how economic conditions evolve, the Committee might have to consider providing additional monetary policy stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run. On the other hand, a few members viewed the increase in inflation risks as suggesting that economic conditions might well evolve in a way that would warrant the Committee taking steps to begin removing policy accommodation sooner than currently anticipated.
Got that?
Given the backdrop of a FED that has maintained that any inflation anywhere and the unemployment rate being high as transient, and seeing they believe growth will accelerate in the second half of the year it seems early to call for more stimulus. You see the problem? They say one thing then set up another.
Bernanke was in front of CONgress today and he has now changed his tune to one more apt to declare QE 3 than call for GDP growth of 4% in the second half of the year. That was fast! Josh Brown notes the following words that would be hard pressed to inspire confidence in anyone: "The sense is that employers are becoming more willing to hire and I think we'll start seeing some stronger payroll reports and some lower unemployment rates pretty soon."
"Pretty Soon" is one of those non starters that mean "fugget about it!". "Hey hunny, when can we do that crazy-sexy thing we did on vacation with the feather duster and the lighter fluid?" "Pretty soon dear, really". Yeah sure.
Today was lauded as a QE 3 green light, but it was not quite that bold in statement. What gets me is that the FED has maintained the second half recovery line, as has many analysts, yet a few words about more easing is seen as a needed policy right now. Where is the consistency? What can you believe?
Short term I am confused. The whipsaws going on daily are just too much for any trader not glued to the screens and ready to pounce to do much about. One day Greece is saved, the next it's not and neither is Italy. Until noon, then both are fine. On a Friday we get an ISM that beats expectations so the accelerated growth is at hand so things rally, then on a Tuesday poor economic performance is cause for QE 3 so we rally again. You cannot square this thought process, it is imbalanced.
Remember that QE 2 was hinted at in August 2010, then rolled out in November. Using UGA as a gas price proxy, lets see what we can see (click for larger view):
Notice that when QE 2 was hinted at, UGA was around $33. In November it was around $36. It then took off, hitting the upper bollinger band for a LONG time and still sits at $50 or so now. So the FED wants to add on to the pressures here, now? Ok.
In any case it seems a bull market is upon us because either things ARE great or QE 3 WILL make things great. At least a bull market in equities and commodities anyway. Don't expect any change in anything that may mean anything to a normal person anytime soon. Well, maybe pretty soon.
The only thing more annoying than being on antibiotics that you absolutely cannot drink any alcohol with (that would be me for the next week or so...) is my wireless internet connection sucking mad donkey balls. It has always been terrible, but acceptable in a dial-up throw back kind of way. Now with the heat (even with AC it's hot here) and maybe the router dying, I can't do much at all. I guess that's for the best as I was trying to take things easy and not get riled up.
Anyways, all you computer smarties out there here is my issue and I would love some ideas on what is best to do:
-Mother in law has a Mac computer and the in-law apartment is diagonal across from my den where my computer is
-When Comcast installed the wireless the inept guy had no idea how to handle a Mac, so we had to allow the MIL to have the direct connect while I got stuck with the wireless
-It does not work at all, sucks
-Offer best ideas to get a new setup, I was leaning towards hiring GeekSquad but it gets complicated with the Comcast hardware I think. Maybe I am wrong, please advise.
Scanning through the financial universe over the weekend and today I was struck by how many really bad things are going as stocks reach for new highs after the pump up around the 4th of July. All of the following are not indicative of a risk seeking bull market:
-Unemployment at 9.2%, really near 16%.
-A number of banking stocks worldwide halted during trading, crashing, then being halted again.
-Ban on short sellers gaining acceptance.
-Trillion dollar/euro central bank balance sheets that some day, some way (yeah right) will have to be sold back to the markets.
-Bond yields for countries you have actually heard about climbing north of 10, 20, 30%.
-Gold over $1500 an ounce.
-Open laughter about IPO's being a joke, but still getting funding.
-Low volume upside days and high volume sell offs.
-US 10 year yield under 3%.
-Banking stocks going to zero it seems.
There are more. What is good? Corporate profits are still coming in big as cheap funding and not hiring people has done wonders for bottom lines.
At any other point in history the mess things are in right now would be cause for grave concern. Right now it's sort of an interesting side note. Crazy times.
I forgot that we were going up to the White Mountains in New Hampshire for Saturday night into today. I have not been there is years, and it was really fun. Attitash Mountain is beautiful in summer.
Win a Copy of Jennifer Hillier's New Novel "Creep"
I know I have been talking about it for months, but my friend Jennifer now has her new hardcover on sale now! Very exciting time. Amazon page for the novel: Creep on Amazon
So I bought a mess of these and have set aside 6 copies for the readers here to try and win. How can you do that? Answer 5 totally random questions correctly and submit your answer to me via email (my gmail is listed at top right of blog). The 6 winners will be the ones that get all 5 questions correct, sorted by the time at which I get the emails. That's it.
The five questions are:
1.)Which novel starts with the following sentence?: In the week before their departure to Arrakis, when all the final scurrying about had reached a nearly unbearable frenzy, an old crone came to visit the mother of the boy, Paul.
2.)In the Star Wars Universe, what Dark Lord of the Sith instituted the "Rule of Two"?
3.)In the film "Ben Hur" what number was given to Judah Ben-Hur on the war galleon?
4.)Who won the "War of Currents" with his dedication to the Alternating Current power system?
5.)What horror classic was set at the "Overlook Hotel"?
Market Observations
Of course the day after I show a bunch of possible reversal candles the action today filled out a bunch of real clear ones! The abandoned baby setup is very rare and I saw it all over the place today after the big gap down. Normally this pattern is really powerful, but I would wonder how strong it is when it was so common after today? Not sure what to make of it all.
The jobs number was a total miss and at this stage of a robust recovery like we are supposed to be having, makes no sense. Main Street is not Wall Street though and market players want this stuff higher so bad it's amazing. Next week will be very interesting, especially if some volume can find it's way back to the markets.
Friday Night Entertainment
Some lighter things for a weekend setup.
Book Contest
I am going to run the Jennifer Hillier "Creep" giveaway contest on Sunday so that it will not get lost in a usual Friday night post. Stop in then for your chance for a free copy, there are 6 up for grabs.
Evil Robots Pretend They are here to Help
"Hello, I am a robot and I am here to help!" - famous last words
In what seems like a great way for a dental student to practice techniques without hurting someone, there is now a dental practice robot! Why risk a lawsuit by training when the robot feels no pain, cannot be reasoned with, and will not stop! Via Geekologie, here she is all nasty creepy:
We should destroy them.
Today in Financial History
From the great site, Little Bits of History, I learned that today in 1932 the DOW reached it's lowest point in the entire Great Depression. Nifty: Bear Market
Thanks!
Visual Aides
Because seeing is easier than reading.
Star Wars Huge News
After many twists and turns, there WILL be a novel about Darth Plagueis coming at years end! If you don't know, Plagueis was the master of Darth Sidious (The Emperor) and found a way to create life using the midichlorians. There has been much speculation that Plagueis created Anakin Skywalker using this sith lore. We shall see! Here is the proposed book cover:
I can't lie, I already pre-ordered and really want to read this book.
As if that was not enough, a novel about Darth Revan (from The Knights of the Old Republic Game) is also on the way!
Film Clips
Serving as a Netflix puppet for free is so sad.
Sometimes a great car is worth more than gold and jewels. In the third Indiana Jones film, "The Last Crusade" Nazi gold was not worth much to the Sheik, but the newest Rolls Royce? Well, we have a deal:
"And I even like the color!".
The film "The Expendables" was actually better than I figured it would be. The action film torch was passed to Jason Statham in the film. In this scene he finds out his long time love was hit by her new boyfriend and, well, it's pretty freaking cool:
HE SHOULD HAVE SAID "FRIEND-O!"
Rock Blogging
Pandora has nothing on either an Ipod or YouTube.
Reader C-T, being a metal head, wanted some Led Zeppelin. It's funny but much like the band that cannot be named, I don't think their stuff is that great. Still, "No Quarter" is by far my favorite tune:
Chilling.
Gawains knows music and I was glad he requested some old school Jim Croce. Let's try "Working at The Car Wash Blues":
Nice.
One hit wonder? When I heard the tune "Freechild" by the local band Must I figured these guys would be HUGE. Bought the album, checked the whole thing out and, well, not so much. Have not heard from them since. Still, I like this song:
I always have mixed feelings for the song "It's My Life" by Bon Jovi. I love the song itself, but hate it because they played it right before the Daytona 500 in a biopic about Dale Earnhardt before the race at Daytona where he died. I always associate the song with that. Anyways, here it is live:
Two songs left and what will happen?
Ok, this is a film/music blend but when The Vampire Louis goes on a revenge rampage (using the darkside of the force no doubt) you don't want to miss the action nor the stellar music that shapes it: No embed available, you will have to click over. Sorry.
Bye bye Santiago.
Last call, get a drink and whatever else you may require.
A little Diane Lane, I mean Fire with "Nowhere Fast"?:
There will be Friday night, so get those requests in!
A Favor
There is a economic based blog list being circulated that has all the best sites out there. People can recommend and comment on the ones they like best. Somehow, EconomicDisconnect is listed! I would love it if any reader would stop by the site, here it is: EconomicDisconnect on the List
And hit the voting button. If you leave a comment (Disqus only, sorry!) that would be great too. Thanks so much if you do. Maybe one copy of "Creep" will be set aside for anyone I know voted for me. Shameless plug, yes.
QE 3 by Other Means
The more days go by in a "slow" economic summer the more I feel I have been hoodwinked. I think I had the basic mechanics right on my overall scheme, but was submarined by a compressed timeline and help for the "unfortunate" from all sides. What do I mean?
The BIG ONE: The ECB Will Accept Portugal Debt (and any other) No Matter the Ratings
Normal investors cannot buy junk debt if is rated so (I know, ratings agencies are a joke anyway) this is HUGE. I should have known, I outlined the whole thing a little while ago: The Easy Solution
This is why this site is great, you can read the news of tomorrow today!!!
Second BIG DEAL: Another CPI Calculation Change
Anyone in the know, knows the CPI was changed years ago to hide inflation. Not good enough. Using a "chained" inflation deal, the US can save big bucks by robbing savers and retired folks even worse! This has monster market effects as "panic buying" may ensue by 5 second chart trigger traders looking to lock in yield while they can in stocks or whatever. Another mess, and it seems the Democrats had, believe this, NO IDEA this path would screw the old folks via social security payments. Ok, I believe ya.
Candlesticks
I have been following market stuff, but not really looking at things in depth. I made new charts tonight and I think they can show how hard a time this is to get heavily committed to the market. Still, I see nothing in charts tonight that is bearish or hint at a reversal.
Here is an SPY chart going back into April. Click for a bigger view:
I am a daily chart guy, and today the SPY printed an odd gap up candle. But look close, it is not a classic hanging man (like the one I have noted at May 31st or so) nor is it really anything at all. I would also question the uptrend length to make this a topping or reversal candle. Looks good with the Stoch not even moving down. Volume is crap awful, but what's new.
Next up, the DOW Transports, IYT:
So here we have real volume coming in, but a good dragonfly doji after a short trend up. The Stoch is flat and has no hint of turning down. How much do you want to bet this is a reversal candle? Me? Not much at all.
Last, a backed out weekly for the S%P 500:
The volume is on recess, the Stoch is JUST turning up, and no danger candle in sight!
Not an easy show to make sense of. So I won't. Waiting for some confirmation candle wise, and the jobs number tomorrow is a gamble with only the size of the upside the question. Hopefully things will settle out by Sunday night and I can work on positions then.
