Morning Corner 3.21.11

Gold (weekly info)
-no change (above mid)
trend=up
high= 1428.60
rev= 1342.40; mid= 1385.50




Weak longs are probably salty now that gold has resumed its move higher. It looks like it's ready to break to new all time highs.



USDJPY (weekly info)
-no change (below mid)
trend=no
direction=up (2 bars)
high= 83.88
rev= 80.42; mid= 82.25


So far it's hard to tell if any intervention is happening this weekend. Last week held one of the trend lines. Last week probably had a few banks ready to implode. Let's see how long the G7 can keep this up. Japan came out and said they were not sterilizing so they're printing yen. Are the other countries doing the same?



3 month vs Overnight Libor

Spread continues to increase. Everyone knows the overnight rate should be rising. The 3 month should be rising along with it. Spread was 0.051 on 1/3/11 and is now 0.104 on 3/18/11. That's not good.

163 comments:

Bruce in Tennessee said...

Rates have to go up, Amen. Ben has pushed on the string for several years now, but gas is 103 this morning, we've spent a billion on so on the new war in a couple of days, food and running shoes are climbing, and I think this year our US debt gets downgraded. There is still a small window of opportunity, but it is only open a crack.

Bruce in Tennessee said...

http://www.bloomberg.com/news/2011-03-20/wheat-seen-rebounding-11-as-global-stockpiles-decline-the-most-since-2007.html

Wheat Rebounding 11% as Global Stockpiles Drop Most Since 2007

Bruce in Tennessee said...

“Global need for food is as strong as it was before the Japanese crisis,” said Bill Gary, president of Commodity Information Systems Inc. in Oklahoma City, who has worked in grain markets for more than a half century. “We can only view the current state of market panic as eventually providing a buying opportunity.”

Bruce in Tennessee said...

http://www.bloomberg.com/news/2011-03-21/asian-hotels-stores-restrict-japanese-food-imports-after-radiation-found.html

Asian Stores, Restaurants Drop Japanese Food Imports After Radiation Found

Bruce in Tennessee said...

http://www.myfoxorlando.com/dpp/news/local/032111-gas-prices-jump-another-7-cents-a-gallon

"The average U.S. price of a gallon of gasoline has jumped another 7 cents over the past two weeks. The Lundberg Survey of fuel prices now puts the average price for regular at $3.57.

Analyst Trilby Lundberg said Sunday that's 76 cents higher than the price at this time last year.

The national average for mid-grade is $3.71. For premium it's $3.82 a gallon.

Lundberg says diesel prices rose 10 cents a gallon over the past two weeks, to $3.98."

Bruce in Tennessee said...

http://www.usatoday.com/money/autos/2011-03-21-prius-fit-rising-prices.htm?loc=interstitialskip

Panic buying raises prices on Prius, Fit

..CV, If you are ever down this way, I would let you ride in mine for free...if we could only get them to be powered by talapia!

Bruce in Tennessee said...

http://finance.yahoo.com/news/Why-inflation-hurts-more-than-apf-916813098.html?x=0&sec=topStories&pos=6&asset=&ccode=

Why inflation hurts more than it did 30 years ago

"Back in the '80's, the money people made typically more than made up for high inflation. In 1981, banks would pay nearly 16 percent on a six-month CD. And workers typically got pay raises to match their higher living costs.

No more."

..An article that states or restates the obvious to almost anyone paying attention...that would include you, Lefty..

CV said...

@Bruce

Not to start a fight this early in the morning, but this...

"Rates have to go up, Amen. Ben has pushed on the string for several years now, but gas is 103 this morning"

When you you going to get it thru your head that they've painted themselves into a corner whereby they CAN'T RAISE RATES (for multiple reasons)...

Not the least of which is the schedule of debt rollover (which has moved towards short term funding over the past few years)...

The situation is akin to someone who has $20,000 on a credit card and is making minimum monthly payments... An offer comes along for a TEASER rate and the person gladly takes it...

But then the situation doesn't improve, and next thing you know, that TEASER RATE is 29%...

While not THAT bad for the US... Even fractions of a percentage point would force us to either accelerate the borrowing, or default...

So what do you think you're going to do if you're the banker with the US (and its taxpayer base as its best customer)?...

Answer...

Keep lending money... Keep the charade going... Keep pocketing bonuses in the interim... & keep buying physical assets with the proceeds...

I don't know how hard that is to see for people ...

Jennifer said...

Looks like we're going to gap up right to the 1294 level...I want to get short there, but we'll see if I have the nerve.

BinT said...

CV,

Come on, you are smarter than that...

Portugal didn't raise rate either. They were raised for them. I do see a debt downgrade coming this year. Rates will go higher. It will be out of Bernanke's hands, however he responds. I didn't say he would raise rates, I said they would go higher.

..I hope this clears that up.

M E Hoffer said...

J-

T seems to be Up on the T-Mobile 'news'...

be careful of Market Ramps, straight from Central Casting..
~~

I tend to agree w/: "...they CAN'T RAISE RATES (for multiple reasons)...

Not the least of which is the schedule of debt rollover (which has moved towards short term funding over the past few years)..."

this: "...(which has moved towards short term funding over the past few years)..."

is, in a way, a 'rate-rise', in itself..

AAIP

Anonymous said...

Of Arms and the Man: War-Profiteers and Progressives Make Common Cause for Obama
March 21st, 2011

Via: Empire Burlesque:

Yet even now, the “progressive blogosphere” is ablaze with partisan fervor bent toward a single goal: the re-election of Barack Obama in 2012. Because if Obama is not re-elected, we might get a president who … kowtows to Wall Street, tortures Americans, kills innocent people — that is, who actually, literally, physically has children torn into splatters and shreds of viscera and bone — and sells arms to tyrants. And if we don’t support this, if we don’t “stop bitching and get to work” making sure that this continues, then we could end up with a Republican president who kowtows to Wall Street, tortures Americans, shreds innocent children into viscera and sells arms to tyrants. And that would be just terrible.

Related: Obama Consults with General Flustercluck Thanks, TJR.

http://cryptogon.com/?p=21345

ibid.

karen said...

good morning! looks like the DGDFE trade is on full tilt..

i've zero conviction this market will correct, now.. JBTFD.

CV said...

@AAIP

All they can do about rates anymore is "jawbone"...

Of course, they have idiots on TV like Steve Liesman who will bring other shills to DEBATE about it (which presents the illusion that someone is really thinking about it)...

If anyone believes QE is ending (whether it is "called" that or not), they probably also believe Geithner (or any other TS) when they favor a "strong dollar policy"...

CV said...

@AAIP

I have it from a relaible source that Obama is in Rio trying to learn the SAMBA & LAMBADA for his upcoming Dancing With the Stars gig...

Anonymous said...

cv--

speaking of 'Central Casting', this Name: Liesman, is, too, rich, no?

Lies-man , to 'draw' it out..

AAIP

karen said...

Buffett says Buy: http://flic.kr/p/9s8R1G

Anonymous said...

Large German Fund Freezes Accounts Because Tokyo Real Estate ‘Now Impossible to Value’
March 21st, 2011

Via: eFinancial News / Dow Jones:

Fears of a nuclear crisis in Japan have spilled into the commercial property sector with a large German institution suspending a €2.2bn fund as it said its holdings in Tokyo were now impossible to value...
http://cryptogon.com/?p=21336

Japan: Food Contamination Worse Than Previously Thought
March 21st, 2011

I thought that the information out of Japan would get clearer as the days passed, but it just seems to be getting blurrier.

So, it’s more of the familiar serious-not-dangerous shuffle.

Via: Reuters:

The World Health Organization said on Monday that the detection of radiation in food after an earthquake damaged a Japanese nuclear plant was a more serious problem than it had first expected.

“Quite clearly it’s a serious situation,” Peter Cordingley, Manila-based spokesman for WHO’s regional office for the Western Pacific, told Reuters in a telephone interview.

“It’s a lot more serious than anybody thought in the early days when we thought that this kind of problem can be limited to 20 to 30 kilometers,” he said.

Cases of contaminated vegetables, dust, milk and water are already stoking regional anxieties despite Japanese officials’ assurances the levels are not dangerous...
http://cryptogon.com/?p=21338

ibid.

let Buffett buy that..

CV said...

Japan: Food Contamination Worse Than Previously Thought
March 21st, 2011


I'm really glad I stocked up on food (for reasons that I'd never imagined before)...

Peeps ought to seriously think about buying some seed packets of various vegetables before the current supply runs out...

Mostly all those things that are grown in the California farm belt...

Might be your last chance for awhile to get unirradiated spinach seeds...

karen said...

anyone read the santoli article in barron's ?

http://online.barrons.com/article/SB50001424052970204011504576200610959397404.html?mod=BOL_hpp_dc

that was a very very quick (1min) pop to the overhead 20 ema for the $indu and 50 for the $spx.. love the % ups in that first min.. even steven for the spx and indu.

now what a 2-3% up day because parts of Libya and Japan are no man's land?

karen said...

look at the CAT chart.. you will not believe it..

karen said...

guess what is not joining the party? $copper.. JJC..
also banks already have black candles..

karen said...

Keith McCullough
Buffett thinks its a "buying opportunity" if something he owns in Japan is going down

karen said...

The Bernank: Every Breath You Take http://t.co/dh6gLZt

CV said...

@karen

Of course CAT makes "total" sense, right?

I'm sure those orders for bulldozers & heavy machinery are just STACKING UP ready to re-construct houses & infrastructure in a radioactively contaminated area...

That's why you see all the "high-rise" condo construction going on around Cherynobl 25 years later...

Buffett says it's a buying opportunity...

AmenRa said...

I'm speechless because of this morning ramp job. We've seen desperate moves before but this is too much.

ben22 said...

~50% retracement of the C wave thus far, still smaller than the B wave in that case and taking a different form as well, so all the alternation still applies.

also, this is the third time in this rally since the most recent lows that we started the day with monster internals of more than 30:1 up/down ratio, of course, the other two instances we just drifted down/sideways the rest of the day and internals ended average at best.

just sayin....

karen said...

zerohedge
Treasury Quid To Banker Pro Quo: "You Can Raise Dividends If You Buy My Toxic Mortgages" http://bit.ly/i6KVn5

karen said...

AR @ 9.44 you took the lack of words right out of my mouth..

karen said...

Business Insider
Robert Prechter: These 6 Trends Are About To Reverse http://read.bi/hG2soq

Jennifer said...

All the options quotes on Ameritrade are seriously messed up...bids way higher than asks for puts.

karen said...

Prechter argues there are several themes out there right now that investors, economists, and markets all believe to be true just like they did with interest rates in the 1980s.
The dollar - everyone is bearish.
Interest rates - everyone thinks they're going to rise.
The stock market - everyone is bullish but corporate insiders.
Inflation expectations - everyone thinks it is going to go higher.
Economy - everyone is confident in 2011.
Oil - everyone thinks it is heading higher.
It may be time for investors to turn on these trends, and bet the opposite way, according to Prechter.


Read more: http://www.businessinsider.com/robert-prechter-6-trend-reversals-2011-3#ixzz1HF7JP37C

karen said...

fiatcurrency
*FED MUST RELEASE BANK LOAN DATA AS SUPREME COURT REJECTS APPEAL

karen said...

March Existing Home Sales.. Non Existent Homes Sales.. there, fixed that.

karen said...

looking at the ten min chart of the indices.. one could say that equities rallied across the board on the existing homes data.. because, um, it can't get any worse?

karen said...

uup is gonna go lower..

karen said...

watching xlf and $bkx..

Anonymous said...

J-

you ever check out
http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=Interactive+Brokers ?

AAIP

karen said...

interesting.. gold has not taken out last week's high..

Bruce in Tennessee said...

http://www.cnbc.com/

Existing-Home Sales Plunge, Setback for Housing Recovery

"Sales of previously owned U.S. homes fell unexpectedly sharply in February and prices fell to their lowest in nearly nine years, an industry group said Monday."

...I would consider this news as probably deflationary. Because this is, as the bankers term it, a "non-producing asset"...

Jennifer said...

MEH -- I must be old...the thought of learning a new platform is repulsive, even with the flaws of this one!

karen said...

FREQUENTLY ASKED QUESTIONS ON TREASURY’S PLAN TO SELL MBS
The following frequently asked questions provide further information regarding Treasury’s plan to wind down its $142 billion portfolio of agency-guaranteed mortgage-backed securities (MBS) at a gradual and orderly pace. Starting this month, Treasury plans to sell up to $10 billion in agency-guaranteed MBS per month, subject to market conditions.

http://www.treasury.gov/press-center/press-releases/Documents/03.21%20Portfolio%20Disposition%20FAQs%20FINAL.pdf

karen said...

Matt Peters, CMT
$TRIN ?? My data may be quirky this a.m. - I have $TRIN at 3.23 which is completely opposite a trend up day. Does anyone else see this? $$

Jennifer said...

Karen -- that's where I've got TRIN too...been watching it closely.

Anonymous said...

J

Steep learning curve, but probably worth it, as former amtd'er.

Anonymous said...

J-

I hear you, re: learning 'new Platforms'..

was, just/also, wondering if you were aware of IB's 'other Rates/Fees, etc.'..

...IB Lends USD at 1.3%

Central banks are flooding the world with cheap money and the markets haven’t moved much. Interactive Brokers will lend one million US dollars at just 1.3% for every 200,000 USD in your portfolio margin account....

as ex.

http://www.interactivebrokers.com/en/p.php?f=news&p=n&ib_entity=ibg

AAIP

Jennifer said...

MEH -- I hear that ad all the time -- just what I need!

Anonymous said...

J and AAIP

Would recommend staying Reg T, see london 2008.

CV said...

@karen

The game is on as to whether central banksters can STAY IRRATIONAL longer than Prechter and his followers can STAY SOLVENT...

ben22 said...

it's b/c of the way the Arms Index is calculated that it looks like that today I'm thinking, I have the same data feed so unless ours are both screwy that's what it is.

Arms Index = (Advances/Declines)/ (Up Volume/Down Volume)

Generally a high number above 1 is bearish, however take an example of a day when 1,000 issues advance and 100 decline with 1m up volume and 200k down volume. From these numbers, the Arms Index would be calculated as 2.00, which is bearish, though it's pretty clear that's a bullish day.

there are ways to smooth TRIN out when problems like this arise....it's early though and stuff is screwy, NYSE up/down volume is nearly identical whereas on the NAS it's still amost a 90% up day, that hasn't been happening much lately more often there is a very close sync, lets give today some time...we paused almost right at the 50% retrace as mentioned earlier, that's hardly abnormal

ben22 said...

If anyone is actually following Prechter, as in fallowing everything he says to do, there is no way you are going to become insolvent regardless of how long it takes the market to correct, his "followers" are supposed to have virtually no assets at all in the stock market.

Anonymous said...

J-,

right? I find that ad hilarious, but the Margin & the Rates can be useful..

esp., for ex., when "NFLX" is ~200+, those 'tracts are ~20 000, each, in 'Margin Weight' ...

anyway, something to consider..

and, to be clear, I'm down with the ads' 'Thesis' ( levering 'div.'-paying 'Stocks' )

AAIP

Anonymous said...

I'm down with ...

should have been,

I'm no, no, no Not, down w/ ...

ibid.

CV said...

his "followers" are supposed to have virtually no assets at all in the stock market

I take it you're 100% cash then...

CV said...

oh wait... you said "virtually"...

So one should only put their "virtual" money at risk... Or something like that...

CV said...

Does prechter like the dollar because of it's "intrinsic" value...

He must not like crude because of it's LACK of "intrinsic value"...

CV said...

As for me? I like food because of its "caloric" value...

ben22 said...

Um, no, I'm not 100% cash as it should be pretty clear by now I do not follow everything he says to do and have not agreed with any of his market forecasts for well over a year now. Why that question is even being asked of me, who knows.....fitting I guess.

Also, virtually none doesn't mean 100% last I checked....it means put money in the market that you can afford to lose, which for most people isn't going to be much if it is anything at all, everything else should be in gold, silver, and cash, in other words, you won't become insolvent listening to him those comments above are made very clearly in his letters to be for speculators.

Jennifer said...

My daughter, when 3, upon learning about the lack of nutritional value in a french fry, declared "I like fat and salt!"

CV said...

But Prechter will be able to buy 10x the amount of food that CV has when the collapse comes...

At that moment, they'll probably be GIVING food away for free, right?

AmenRa said...

karen

I was looking at TRIN also. Here are some other views:

S&P TRIN 9.65
DJ INDU TRIN 2.96
NASDAQ COMP TRIN 0.56
RUSSELL 2K TRIN 1.0
NYSE TRIN 2.61

karen said...

http://citywire.co.uk/money/silver-manipulation-claims-spark-discord-at-us-watchdog/a479805

CV said...

@ben22

Look - I'm not trying to bash Prechter here... I like a lot of his reasoning on things (mostly the subject of "Socioeconomics")...

As for wave counts... Sure, if you look at them you can retrofit labeling numbers on them...

But hell... One could also take a different perspective... Here's a hypothetical one for example...

What if the 2000 and 2007 peaks were just the first two peaks in a big assed 3P&DH fractal???

Well I suppose that would mean that around 2014 we get a 3rd peak (with a DH coming perhaps up to a decade later)...

By that time we're talking 2025-2030...

I'm sure someone will be around to LABEL it... But it won't be me... I'll be chasing butterflies around the looney farm...

Who knows if the dollar will even exist by then???

Or if the REICHdollar becomes the RENTENdollar (and the entire DOW gets re-weighted by a factor of 10)...

Then prechter gets his DOW 400... But sorry, it means nothing to anyone...

Anonymous said...

J-

w/this: declared "I like fat and salt!"

that's, actually, very spot-on, and, very 'self-aware' for such a young'un..

must be good Good Parenting~

ibid.

karen said...

http://dealbreaker.com/2011/03/warren-buffett-extends-challenge-to-goldman-sachs/

Matthew said...

"I like fat and salt!"

Me too.

AmenRa said...

I like fish.

karen said...

http://www.theatlantic.com/technology/archive/2011/03/does-anne-hathaway-news-drive-berkshire-hathaways-stock/72661/

karen said...

ReutersBreakingNews
Libyan ground forces moving south from Benghazi, forces have 'little will or capability' to operate – U.S. commander

CV said...

For all you fatty, salty, fish lovers...

Surströmming
http://en.wikipedia.org/wiki/Surstr%c3%b6mming

It's a 'delicacy'! Trust me

Anonymous said...

Posted: 10/13/2010 01:00:00 AM MDT

Smoking fish, such as this trout, is a way of curing it to preserve it, as well as give it a great flavor. (Los Angeles Times | Glenn Koenig)There is an old road in Japan that runs from Wakasa Bay to the city of Kyoto known as the Saba Kaido, or Mackerel Road. For centuries, the road was used to carry fresh mackerel roughly 50 miles south from the sea to the former imperial capital.

Because there was no refrigeration, the prized fish were salted to preserve them for the journey. It's been said that if one transported the fish in a single trip, without sleeping, the brilliant blue fish arrived in Kyoto fresh and perfectly seasoned.

The art of curing is an ancient technique, born of necessity and found the world over. Almost lost with the dawn of modern preservation methods such as refrigeration and canning, curing is making a comeback — and in a big way. .... http://www.denverpost.com/food/ci_16312900#ixzz1HFr8h84Y

CV said...

Tilapia bitchez! :-)

karen said...

"Judging the phases of a bear market or correction cycle is remarkably more difficult than judging the phases of a bull market cycle. I believe this is due to the fact that fear causes more emotional reactions in human beings than does greed. The more emotional a move in the market becomes, the more difficult it becomes to predict and the more chance it has to overshoot any reasonable technical targets. The loss of one's hard-earned dollars seems to inflict greater emotional reactions than the greed driven ecstasy of making enough money to buy a new Jaguar. Make sure to keep this in mind as we discuss the various phases of a bear market or correction cycle."

http://www.thestreet.com/story/11052086/1/4-phases-of-a-bear-market.html

CV said...

Modern day cows, they are...

You need 20 acres for full bore cattle grazing...

about a 300 gallon aquaruim will fertilize about 32 sq ft. of garden...

Anonymous said...

...After dropping her in Oldenburg, the helicopter left for Oberschliessheim, near Munich with its three-man crew on board and just a few minutes into the flight and at an altitude of about 1,600 metres, both rotors of the Superpuma 332 chopper broke down.

It fell from the sky like a stone and the pilots succeeded in restarting the engines and stabilising the machine only a few hundred metres above the ground, Bild newspaper reported in its Sunday edition.

It was forced to make an emergency landing in Augusburg.

Chancellor Merkel had flown by the helicopter earlier on Wednesday for several hours to take part in two other CDU campaign meetings in the state, Bild said.

She was informed about the near-crash of her helicopter after she completed her campaign assignment in Oldenburg and from there she took a car for the next lap of her journey..."
http://timesofindia.indiatimes.com/world/europe/German-Chancellor-escapes-chopper-crash/articleshow/7751562.cms

wunsacon said...

CV, check out HQS.

The valuation looks so low, I gotta wonder "what's wrong with it?"

wunsacon said...

>> the near-crash of her helicopter

Get to the choppa!
http://www.youtube.com/watch?v=6kGAQ0pdkdQ

Anonymous said...

20-Mar-11 03:07PM HQS Delays Earnings: No News Could Be Bad News at Seeking Alpha
16-Mar-11 01:05PM HQ Sustainables earnings report will be late at bizjournals.com -15.10%
08:38AM InPlay: HQ Sustainable Maritime Industries to postpone fourth quarter and fiscal year 2010 earnings release date Briefing.com
08:08AM HQ Sustainable Maritime Industries, Inc. to Postpone Fourth Quarter and Fiscal Year 2010 Earnings Release Date Marketwire
07:07AM Q4 2010 HQ SUSTAINABLE MARITIME IND INC Earnings Release - After Market Close CCBN
09-Mar-11 08:28AM HQ Sustainable Maritime Industries, Inc. to Announce Results for the Fourth Quarter and Fiscal Year Ended December 31, 2010 Marketwire
http://finviz.com/quote.ashx?t=HQS

Fallout x 2

CV said...

That "Chopper" incident was the Bernank trying to toss Merkel out the window along with his clownbux...

CV said...

she'd better steer clear of Book Depositories while she's at it...

karen said...

this just in "Why Apple is killing it with the ipad"

http://www.9to5mac.com/56971/this-is-why-apples-killing-it/

Mel said...

Komatsu...

http://www.komatsu.com/CompanyInfo/press/2011031820024313505.html

[Contents of Assistance]
·Charge-free lending of construction equipment, forklift trucks, temporary housings, power generators and other products that the Komatsu Group owns.
·Donation of prefabricated structures for use as temporary clinic and care centers.
·Cash donations

ROR...buy CAT

karen said...

http://www.housingwire.com/2011/03/21/stress-tests-suggest-economy-may-slide-back-into-crisis-ira

Jennifer said...

Anyone else have the weird tick down to 60 on the GS chart today? Wouldn't that be nice if it were pointing the way? Couldn't happen to a nicer company :-)

karen said...

Jenn.. i don't have that bad tick.. looking at a ten min, two day chart.. there was a giant volume spurt 10 min before yesterday's close, however.

karen said...

i told you uup would go lower.. 21.63

CV said...

"Why Apple is killing US with the ipad"

http://www.youtube.com/watch?v=bVnfyradCPY

There... fixed it!

ben22 said...

apparently the only thing actually being traded today is Citi....

if you can, look at leading volume losers and winners, you'll see why TRIN is so effed up today....

just a note on various $TRIN mechanical trading systems, according to Bulkowski most all of them have been huge failures since 2000.

Seems a lot of things changed in 2000.

karen said...

wonder what it is about the crude/dollar correlation that the Bernank doesn't get.

karen said...

excellent comment, Ben.. i think that explains all.. and 2000 got bad but it's got nothing on HFT..

karen said...

Dick BovĂ© Doesn’t Know What Citi Was Thinking With This Reverse Stock Split http://bit.ly/eOZvdo

CV said...

"Dick Bove" & "thinking" don't often collide in the same sentence...

ben22 said...

Karen,

the more algo's I learn the more I become convinced that HFT hasn't actually changed the market path at all, it's just moved us along the path faster, if that makes sense, but where we would have gotten anyway.

What really will "bake your noodle" as the other oracle once said, is what breadth indicators are still working....there are lots that still do.

eventually everything gets arb-ed out of being effective anymore, so HFT was just the next logical step, I think this is why Glenn Neely does better than RP now, he took the next logical step with wave analysis.

here's another thing I noticed while studying this weekend, all the old Fed Indicators, especially the one's invented by Zweig are total failures since the late 90's, many can't even be applied when we are in the zero bound....this could lead to a lot of interesting conversation.

I-Man said...

I climb the road to Cold Mountain,
the road to Cold Mountain that never
ends.
The valleys are long and strewn with
stones,
the streams broad and banked with thick
grass.
Moss is slippery, though no rain has
fallen;
pines sigh, but it isnt the wind.
Who can break from the snares of the
world
and sit with me among the white clouds?

-Han-shan

karen said...

this day has flown by.. really.. and didn't we get here the first half hour.. what happend to nowhere to go but up? i guess that is for tomorrow.

I-Man said...

My market history lessons have lead I to the conclusion that it was decimalization that changed the tape more than anything else...

The Fed, HFT, and the uptick rule are the ones you hear more about though.

Wonder why that is?

ben22 said...

the decimalization was huge in the studies I was reading, authors claim there is no one reason many of those breadth indicators fail and that they might work again in the future but that this was likely a huge, if not the biggest influence (decimals)

I-Man said...

Probably worth some investigative work to find out "who" the main proponents of the shift to decimalization were...

And "if" they are some of the same folks with a vested interest in HFT.

Take away decimalization, and there is no need for HFT.

Might have to sick Hoffer on that one.

AmenRa said...

Anyone notice that the opening ramp closed the opening gap down from last Tuesday?

karen said...

simple chart theme: http://ibankcoin.com/scott_bleier/files/2011/03/spx-copy2.jpg

ben22 said...

it will never be that black and white I

one could easily argue that all market participants (even small timers) benefit from the smaller bid-ask spreads

I-Man said...

I think its just the opposite...

I think its increased volatility to the detriment of just about all traders.

From the top on down...

Thats why I'd be interested to find out who it really benefits.

Maybe nobody.

I-Man said...

Not to mention the fact that it was designed to "increase liquidity" when in practice, it has done the exact opposite.

Ask anyone who needs to trade large blocks of anything, and they will tell you the same.

ben22 said...

the volatility argument is hard for me on a number of levels, we could save that debate for another time

but, my guess as to who was helped the most with decimalization: Mutual Funds, Discount Brokers, and Small Day Traders as it is cheaper for them to trade (though even that's up for debate)

karen said...

BAC still hasn't broken up out of its forever triange..

ben22 said...

it most certainly has reduced liquidity, you have to make way more trades to liquidate a big position now, no doubt about that, that's why I put MF's first

in a sneaky way, this can be used to justify the insane fees MF's charge for 0 performance....

I-Man said...

We can debate it whenever you want...

I-Man said...

But if you increase the number of prices at which "things" trade, you increase the number of trades...

Therefore, you increase volatility.

Thats my baseline premise on the volatility argument.

karen said...

any bets on the last hour?

ben22 said...

it could also be argued it cost market makers lots of money, probably cost them the most of anyonoe, and so prop trading got bigger and bigger, and we all know who wins from that

but even that is changing, despite no change to decimals

I-Man said...

The market makers got screwed more than anyone. I agree with you on that.

No doubt that has increased volatility also.

karen said...

this is wild and nuts..

http://www.businessinsider.com/this-may-be-the-most-impressive-tsunami-video-yet-2011-3

ben22 said...

I,

I think the debate about who wins is easy, it's GS, JPM, BAC, etc, yet this is also just part of the game being stacked against, big changes in other big biz would appear to benefit the big biz first, and everyone else second, if at all.

as for what it does to markets, that's the part I think is up for debate and will lead me back to herding impulses/investor psychology, take this statement for example in a study about it:

"Yet, we find that investors have strong price preferences in post-decimalization price data. In
fact, we see a statistically significant increase in clustering after the switch to decimal pricing. Consistent with evidence from the psychology literature, we find that price clustering centers on “prominent” increments of 5 and 10 cents. While this tendency to cluster is consistent with a number of theories, the
overall degree of clustering is difficult to explain and appears indicative of a general psychological bias or attraction by investors to trade in prominent numbers."

http://efmaefm.org/EFM06/73-EFM06%20%20clusteringv12.pdf

any major change though in markets is going to benefit the primary market players first and foremost

karen said...

21.62 uup now..

Jennifer said...

I think price clusters because people are bad at math. I think people "think" they want decimals because they don't understand fractions. I'm always amazed by the general lack of basic math skills out there ... at the monthly lunch for ladies of the hood with birthdays in March (which I organized with the sole purpose of placing it on a Sunday so that it would not interfere with my obsession) the problems figuring the tip would have been comical if they weren't so sad.

karen said...

Joe Saluzzi
$C volume represents 12% of overall stock market volume today. The days of these figures are now numbered .

I-Man said...

Ya dont need to be Pythagoras to know that pricing in 1/8s is a lot simpler than pricing in 1/100s...

I love that us two are debating this, and neither of us even traded pre-decimalization.

LOL.

I didnt anyway.

ben22 said...

Jennifer,

What do you expect, the people teaching the kids math can't understand the basic math of insolvency.

Also, in re: Tips

no problem....there's an app for that.

ben22 said...

I had no money to trade pre decimals.

Bruce in Tennessee said...

http://finance.yahoo.com/news/Portugal-govt-nears-collapse-apf-2677054041.html?x=0&sec=topStories&pos=4&asset=&ccode=

Portugal gov't nears collapse amid debt crisis

..It's always something..

Jennifer said...

Ben -- I just kept my mouth shut and let someone with an iphone use that app. It was bizarre...

I-Man said...

I didnt even know what the Dow was until 2005...

Go American Education!!!

karen said...

sorry.. i attempt to trade/invest. pre decimalization and it sucked! the bid ask spread was criminal and lined the pockets of the market makers.. they were a privileged class.. i think you had to be born into it : )

ben22 said...

That's funny about Citi

they will trade a billion shares in a day in the not too distant future I'm thinking

ben22 said...

anyone here trading MCD?

I did a lot of work on that chart this weekend.

AmenRa said...

DXY below low form 11/10 at 75.63. Next stop 74.17 from 11/09 and then 71.31 from 7/08.

I-Man said...

The B/A spread should be the cost of admission to the game.

Traders should stick to whats liquid, and they dont get killed by spreads.

It also forces you to make better trades, and trade less.

Just thoughts...

I-Man said...

When the spread is a penny, you dont think as much about your entry, and the chances that you will overtrade go up dramatically.

karen said...

I-Man.. don't forget a person used to have to "dial" a broker on the phone to make a trade.

AmenRa said...

So far this USDJPY intervention has failed to get a daily 3LB reversal. How much additional printing can be done before the effects are negative?

Jennifer said...

Ben -- re: MCD, if by "trade" you mean "own in a mostly ignored account" then...yes.

karen said...

I-Man.. do you know what an LP is? LOL..

karen said...

i was looking at MCD friday.. nice downtrend there.

karen said...

'When the spread is a penny, you dont think as much about your entry, and the chances that you will overtrade go up dramatically.' au contraire, I say!

AmenRa said...

karen

Believe it or not but it's mostly in the US that people don't listen to LPs. Digital sound is still just an approximation of the analog sound.

AmenRa said...

Limit in, market out.

I-Man said...

So you think small traders have increased their profitability since decimalization?

I'd say they lose just as much as they used to, and that they probably lose more.

But whatevs, just making conversation... but gotta focus now.

I-Man said...

BTW, the 50% retracement of the gap did NOT hold as support just now.

karen said...

okay so the usd broke the nov 2010 low today.. do you think that's it?? we've seen extremes everywhere.. aussie, yen.. euro under present conditions..

I-Man said...

YM 11962, for ref

I-Man said...

"LP" of course I do, it means "Little Person".

I-Man said...

You still calling them "midgets", Karen???

AmenRa said...

http://tinyurl.com/4adcyhj
Days Of (Inflationary) Rage Are Here: Man Goes On Shooting Rampage After Learning Taco Bell Hikes Prices On Beefy Crunch Burrito By 50%

Days of inflatiory rage come to the US:

Police say a San Antonio Taco Bell customer enraged that the seven burritos he ordered had gone up in price fired an air gun at an employee and later fired an assault rifle at officers before barricading himself into a hotel room.

San Antonio police Sgt. Chris Benavides says officers used tear gas Sunday night to force the man from the hotel room after a three-hour standoff. The man is charged with three counts of attempted capital murder. Authorities have not released his name.

Brian Tillerson, a manager at the Taco Bell/KFC restaurant, told the San Antonio Express-News that the man was angry the Beefy Crunch Burrito had gone from 99 cents to $1.49 each.

Police say the man fired on officers during a traffic stop after the restaurant incident.

This is the first example of a domestic shooting incident following the surge in food prices courtesy of just QE Lite and QE 2. Just like in Tunisia, following the self-immolation of a fruit vendor, it will not be the last. And when we finally get QE3, then all bets will be off.

h/t John L

from zerohedge.com

ben22 said...

playing with the prophet charts in log scale, one could argue that MCD is very close to breaking at least one very long term trendline

looking at the daily chart in normal settings taking the early 08 low and forming a trendline there with slight angle adjustment shows that currently the chart seems to be "rounding over" under that line....which is very bearish, this might be a bit biased though, I need to work on the lines more.

Either way, near term I'd expect another leg down for it, perhaps to the 66-65.95 range or below at 61

I'm not short it though, looking to perhaps get long at the right levels but given those trendlines I'd wait until it broke a third fan line on the upside from the December 2010 highs before getting in.

karen said...

SPY is key here..

karen said...

ha ha, I man!

karen said...

important from Jamie..
\Last time interest rates differentials on the short-end of the yield curve were this wide in favor of the euro was back in mid-December 2008. What was going on at that time? The Fed announced that they would add Treasuries to their previously announced plan to buy mortgage-backed securities.
When the Fed announced it would increase QE1, EUR/USD spiked up to 1.47 before easing below 1.2580 in spring 2009 when the banking crisis hit its nadir and the US forced the banks to recapitalize after the stress tests.
We are now at nearly 110 bp in favor of the euro as US 2s yield a scant 0.64% and German Schatz at 1.73%.
The wider interest rate differentials have been a key driver of the firmer euro. I’d be reluctant to fade this trend until that spread narrows.

karen said...

if up can break 21.66.. might cause a chain reaction..

karen said...

MW might end up eating these words: "You don’t have a lot of bad news through May and June. And then you have some real challenges coming after June as housing starts to decelerate again as foreclosures resume and inventory really comes on the market. Investors who are looking for a strong second half may be disappointed. You may see a repeat of what happened last year. And inflation is a real issue. But for the next couple of months the markets should continue to do well."

http://dealbreaker.com/2011/03/meredith-whitneys-got-good-news-and-less-good-news/

karen said...

http://vigilantgrandpa.blogspot.com/2011/03/bernanke-has-5-days-to-give-it-up-on.html

ben22 said...

ah, good to see more bears flipping....if only for "a few more months"

DR was a big suggester of Japan purchase today as well, I also think it's pretty funny they think they can get $1,000 per year for his opinions on economic data.

karen said...

turnaround tuesday, anyone?

Matthew said...

@ben, Re: MCD

I commented on MCD in early January:

"Would you like to see a dinosaur with atrocious relative strength? Look at MCD compared to the S&P500 starting in December. In my opinion, this is a classic case of MF managers, who almost always use relative strength in addition to their fundamental analysis, dumping a bad stock.

Given that they were probably chasing it up (due to relative outperformance earlier in the year), I wouldn't be surprised to see them continue to unwind positions this quarter.

It's not cheap, the dividend is not as attractive as it was a year ago, and the selling pressure make this one a true dog.

Just some other notes: don't forget that they financed their Chinese expansion with Japanese yen. I call that a gamble; large upside or downside and certainly more vol."

http://traders-anonymous.blogspot.com/2011/01/morning-audibles-11211.html?showComment=1294847949148#c5909112620511832710

It didn't hit a hard down-trend like I expected, but it was certainly a laggard.

I-Man said...

It shall be done, Karen.

Jennifer said...

Karen -- yes please! Why is it that I can look at a chart and pick the perfect entry point...but if we actually make it there it is so hard to pull the trigger! Today seemed too strong to go too crazy with the shorts to me...I'm sure I'll regret it.

karen said...

inflation scare everywhere! Bloomberg News
#Pimco Buying Emerging Market ‘Rising Stars’ as Inflation Looms http://ow.ly/4j0tB

karen said...

gotta go! back tonight..

karen said...

ps.. some good targets outlined here: Art Cashin’s Encore Presentation - Market Commentary March 21, 2011 http://goo.gl/fb/m1DXn

I-Man said...

Tennessee will regret firing Bruce Pearl.

Just another bonehead move in a saga of bonehead moves by an inept Athletics Director.

ben22 said...

Matthew,

Ok, I thought I had recalled someone around here talking about it. Pretty good call overall as it never even came close to the dec high when the market was making new highs this feb. notice that rounding formation and how the volume nearly looks the same since 1/14/11....I read that as bearish near term.

ben22 said...

well, just read the update, wasn't sure about what he'd do as I still am learning his ideas but Neely hasn't changed his count at all as a result of today....

wunsacon said...

I hope it's "turndown Tuesday".

Anonymous said...

http://finviz.com/

how many times have we seen these Chart patterns?

(on the Dow.S&P/'DAQ)

AAIP

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