Sunday Evening Post & Morning Audibles

Good Evening Capitalists,

I've actual written this yesterday because I'm on Galveston Island this weekend celebrating my oldest daughter's 13th birthday. Life moves quickly!

The short term bullish DXY count is 'hanging on by a thread,' with 82.60 being key near term support. A break down below that level would mean several days of congestion back to prices as low as 81.40 for next week. This would be consistent with the near-term bearish view on Ten Year notes.

The S&P futures ricocheted sharply off of the last line of support (1036) identified last weekend. This market looks headed higher this week. New bulls should use 1054 and 1037 and first and second levels of support for new length.

We remain 20% short S&P futures--it's amazing how relaxing trading is when you don't 'trade,' and just hold a core position.

We remain 40% long the DXY, but will reduce the position back to 20% on a break below 82.60, taking profits on the "double down" from a few weeks ago.

Hope everyone had a great weekend!

Market Update 29 Aug 10


MONDAY MORNING UPDATE (by CV)

Overnight, the yen had been weaker in anticipation of a FX move by the BOJ... Alas -

(from Bloomberg:)

The Bank of Japan expanded a bank- loan program, stepping up its monetary stimulus for the first time since March after the economy’s recovery weakened and the government pressured the central bank to act.

The BOJ will boost the amount of funds in the facility by 10 trillion yen ($116 billion) to a total of 30 trillion, the bank said in a statement after an emergency meeting in Tokyo. Governor Masaaki Shirakawa led the gathering after cutting short a U.S. trip in the wake of increasing calls from politicians for the BOJ to help stem a surge in the yen to a 15-year high.

Today’s decision reflects rising concern about growth in advanced economies that sent global stocks tumbling in the past three weeks. Federal Reserve Chairman Ben S. Bernanke three days ago signaled a willingness to implement further steps if needed to avert another U.S. recession, in a speech that triggered a gain in stocks and the dollar.

“The BOJ’s additional loosening alone may not be sufficient to reverse the market’s trend, but it could make it easier for the Japanese market to ride the waves of a global market recovery,” Takuji Aida, senior Japan economist at UBS AG in Tokyo, said before the announcement.

The bank-loan program that the BOJ is expanding was set up in early December in response to a November climb in the yen to the highest level since 1995. That mark was breached this month, when the currency hit 83.60 per dollar.

The yen recouped some of its losses after the announcement, trading at 85.55 as of 12:19 p.m. in Tokyo today. Any moves in the currency market today may be exaggerated by a U.K. holiday, closing the world’s biggest market for foreign-exchange trading.

---

Monday is undoubtedly going to be difficult to handicap... Piled on to this is the fact that London is closed today and that tomorrow is the end of the month (headed into a 3 day holiday in the US next week)...

Expect the markets to be somewhat schizo... In other "more subtle" news, McHugh posted that there had been a 5th Hindenburg Omen triggered on Fridays action... This was later disputed by some H.O. purists... CV is not a "purist" by nature... I'm more like Al Davis "JUST WIN BABY"... In any case, barring semantics, there was the "spirt" of a H.O. on Friday... That makes a cluster of 5 in a period since August 12th...

Bulls will be looking to extend the rally started on Friday... Failure to do so will snatch the ball right out of their hands... In the end, this may turn out to be a big 'ol sideways moves (with scary breakouts and breakdowns all along the way)...

Kind of reminds me of August-Sept '08...

209 comments:

«Oldest   ‹Older   1 – 200 of 209   Newer›   Newest»
AmenRa said...

Thanks Andy. Using the monthly 3LB range this is what I have for the fibo retrace levels:

0%= 86.59
14.6%= 85.68
23.6%= 85.12
38.2%= 84.21
50%= 83.47
61.8%= 82.74
76.4%= 81.83
85.4%= 81.27
100%= 80.36

Nic said...

Thanks SO much Andy.
Have a wonderful week on Galveston Island

Nic said...

Karen have a drink before you read this:
http://www.calculatedriskblog.com/2010/08/another-housing-tax-credit.html

Andy T said...

I'm sunburnt, tired, and 'full.' What a great weekend...stayed at the Tremont House, a haunted hotel on the Island, and then went to Schlitterbahn, a pretty decent water park.

All in all, a fun weekend with the family. Love the smaller crowds after school's back in session!

Hope Bucky can rally on Monday. I loathe stopping out of trades.

Andy T said...

CV:

I see we've got 6 signed up for FF. Do you need me to get one more? I can get a friend to join in if you'd like.

How do we submit the Ben Franklin?

Andy T said...

@Nic:

Just what we needed...more housing stimulus.

Whenever I see articles like that one, I always think back to the great essay on "Jaguar Inflation"....

This one never gets old: Jaguar Inflation

Bruce in Tennessee said...

AHA! More tortured thinking that if one keeps rates too low for too long, that policy may have unexpected consequences! (BinT is not Bullard...)

http://www.hussmanfunds.com/rsi/zerobound.htm

The Paradox of the Zero Bound

"In effect, Bullard is saying that a policy that makes a promise to investors that rates will stay low for long periods of time backfires. While the Fed may intend to fan inflation concerns in order to motivate aggregate demand, the private sector begins to assume a semi-permanent state of very little change in inflation, and a growing inability for the Federal Reserve to do anything about it."

Bruce in Tennessee said...

"The longer that Japan has kept its policy rate low, and continued to promise to keep rates low, the more persistent and intractable the pattern of deflation has become in Japan. In the US, the risk is not only the detrimental effect to the economy if we enter an “unintended” state, but also the effect that an erosion of the faith in the Fed would have in pricing stocks. The answer to Fed President Bullard's question to policymakers is as equally as important to Bernanke as it is to investors. Will the policy currently in place to protect the economy against slipping into deflation end up being the primary culprit for that same outcome?"

Nic said...

You are right Bruce. Did you see this one too:

The Economist - Interest Rates: The Zero Percent Solution

Leftback said...

Morning all...

EURJPY falling out of bed. UK closed, but other European markets are down. It looks like a good day for those who went short into the weekend.

Data in a minute...

CV said...

@Andy (9:54)

Yeah... If you could invite someone in that would be good (and I'm doing the same)...

I may have to postpone the draft (scheduled for Tuesday) until we get all the teams registered...

We'll handle the rest of the details later...

CV

CV said...

@LB (8:28)

Yeah... Yeah so far so good (as I'd added to shorts into the Friday close)...

But I'll tell you something...

I don't trust this market one way or another right now...

I'm a little inspired by the fact that the S&P futures rallied last night right to about an important resistance level (1072), then retreated...

But it also may be something that needs a few tries to accomplish (if it's going to happen)...

OTOH - The more it fails, the more bears are going to start growling... & September is approaching fast...

Both sides should be adequately nervous at the moment... I know I AM...

Bruce in Tennessee said...

Hadn't seen that one, Nic. It appears though, that even though economists are split about whether prolonged low rates lead to deflation or inflation, it seems all the ivory tower eggheads agree that prolonged low rates are bad, not helpful.

Leftback said...

Spooz aren't really reflecting the currency move. This suggests a lot of leveraged carry trade artists may have taken the week off. LB may do the same....

2small2bail said...

@C (8:34) More time for mock drafts ... :-)

Bruce in Tennessee said...

Both sides should be adequately nervous at the moment... I know I AM...

...Three Dog Night sang about this years ago, CV. Momma told you not to come...that cigarette Ben is smoking, it scares me half to death too...

Leftback said...

A bounce in Treasuries. Whether this is generalized fixed income buying after Friday's rout, or just risk aversion we will have to wait and see.

CV said...

Simplicity at its finest...

ZH's "FRONTRUNNING" (this morning)...

- Bank of Japan’s Moves Fail to Contain Yen (WSJ)
- ECB Likely to Extend Emergency Bank Support (FT)
- Which leads to the following - European Economic Confidence Highest in Two Years (BP) all on life support
- Bernanke Faces Scepticism on Policy Tools, May Need Fiscal Aid (Bloomberg)
- The Uncomfortable Mathematics of Monetary Policy (Reuters)
- Bubble at any cost - China Fortifies State
- Businesses to Fuel Growth (NYT)
- An end-of-summer puzzle for investors (Reuters)
- As nationalism rises, will the European Union fall? (WaPo)

---

Collectively - They all sound like GREAT REASONS to be long risk assets [snark off]

CV said...

@2small2

I just have to make sure you're in for the PRIZE package (which means a $100 entry on this)...

Which I only do for FF...

Leftback said...

Today feels like risk-off but also like low volume.

Hit the snooze button, Karen...!!

CV said...

@LB

Low volume isn't so bad considering it's PLACEMENT...

Even if we end up green for the day... It'll hardly be inspiring for bulls...

The bulls REALLY NEED a high volume UP day to confirm Friday...

CV said...

Or else it'll just be what CV was crowing about all day Friday...

Just a bunch of "hopium" on Bernanke yap (which didn't make any sense anyway)...

By tomorrow, everyone will have forgotten that he was ever in jackson hole to begin with, and will find some some OTHER butterfly in China flapping its wings to cause a hurricane in Toledo...

Leftback said...

Bulls will not get a high volume UP day. There isn't any.

Another well intended but futile set of housing interventions ahead.

http://noir.bloomberg.com/apps/news?pid=20601087&sid=acDvDnxqjtzg&pos=9

Where is my LEFTBACK RENTAL SUPPORT and STABILIZATION PROGRAM? What's that? I don't think you should use words like that, Timmy....

2small2bail said...

@CV (8:43) I'm in for the prize (or donation to someone else's glory)

CV said...

@2s2b

cool

Judge Smails said...

@LB

"You'll get nothing... AND LIKE IT"

AmenRa said...

Buenos dias. Que pasa. I see the market has a problem finding its direction this morning.

CV said...

@Amen

Creditcane has been updated to "Earl" and is expected to hit New York... :-)

CV said...

http://www.zerohedge.com/article/hurricane-earl-upgraded-category-3-expected-graze-new-york

AmenRa said...

CV

Yeah I noticed that earlier...

Obama said...

"If Earl comes anywhere near Washington, or my "puppeteers" in New York... I'm going to kick its ass"

karen said...

AR, likewise I am having a problem ! morning all.. watched Blade Runner last night.. loved it!

AmenRa said...

Karen

You are in need of coffee. Solves many of the mornings problems :-)

CV said...

a Hugh Hendry sighting...

http://www.zerohedge.com/article/hugh-hendry-talks-geopolitics-potash-grains-and-other-scarcities-bbc-newsnight

karen said...

zerohedge- Do Pimco "managers" manage anything anymore ot just write OpEds?
mrtopstep - 4 handle trading range says it all...

CHS- What If We Ditched Quantitative Easing and Just Printed (&Distributed) Cash to households? http://bit.ly/c32wL8

karen said...

mrtopstep
#futures $ES_F SPU goldman bot 300 1062 area

HousingWire
TrimTabs wonders if Fed tools are enough http://goo.gl/fb/7RUGH #hw

karen said...

my dream day: spx breaks 1060 and retests "dbl bottom" at 1040 for the fifth or sixth time, LOL

karen said...

more never ending nightmare from BreakingNews - NATO says 7 US soldiers killed in 2 roadside bomb attacks in southern Afghanistan

Bob Pisani said...

@karen

"my dream day: spx breaks 1060 and retests "dbl bottom" at 1040"

"The market is doing a RE - RE - RE -RE -RE -REtest of 1040, and traders on the floor tell me it's holding nicely..."

karen said...

Greek Banks Face Further Rise in Non-Performing Loans: Video

http://www.youtube.com/watch?v=HHkjqKh47Pw

karen said...

Monday, August 30th, 2010, 9:17 am
Source: MarketWatch
Singapore said Monday it would increase the down payment required on second-home purchases and broaden government duties on the sale of properties held for less than three years, in an effort to cool rapidly rising prices.

The moves coincided with warnings from a government official of mounting risks from the fallout of a collapse in prices.

CV said...

@karen (10:20)

Good thing Obama got our soldiers out of harms way in Iraq, and over into the peace & quiet of Afghanistan...

CV said...

Like Andy's previous link...

When you get to your 16th Jaguar...

karen said...

1060 is the new 1040! (said with great mirth : )
oops, make that was.. okay 1059 is the new 1039..

Leftback said...

"my dream day: spx breaks 1060 and retests "dbl bottom" at 1040"

LB's dream day, Karen sits in his lap at 10.40 and he enjoys a perfect "dbl bottom" until noon.

Fixed income is bid across the board today and divis are also firm.

CV said...

CV's dream day...

END THE FED

CV said...

Let everyone f(end) for themselves...

Isaac Newton said...

CV:

APPLE falls, on GRAVITY....

karen said...

LB, i am quite sure I would slap your face if proximity allowed.. in mock horror, of course..

CV said...

CAT rises...

On 9 lives theory...

karen said...

zerohedge

Dallas Fed misses expectations, comes at -13.5% on consensus of -10.0%

karen said...

meanwhile, back in the USSA:

1 person transported to hospital after shots fired at Sullivan Central High School in Blountville, Tenn. -- WCYB http://bit.ly/9oKDF9

karen said...

some interesting links/ideas here:

http://www.minyanville.com/businessmarkets/articles/todd-harrison-stock-market-economy-rally/8/30/2010/id/29858

Leftback said...

We are finally starting to see a rotation in equities, as managers are selling "recovery" stocks - commodity stocks and banks, and buying "bear market" stocks, utilities, pharma and dividend-paying stocks.

karen said...

interesting when you have time:

http://247wallst.com/2010/08/27/eight-of-americas-most-secretive-companies/

Leftback said...

Lovely little commentary from Toddo. LB agrees, upside potential is always present when Armageddon is in the headlights. Also like his 888 target too, but that comes in a later phase, when growth is stronger.

In ZIRP, everything is backwards weak or flat economic data are good, as they indicate the likelihood of more easing. Strong data become the enemy of the market, as they indicate liquidity will become scarce.

karen said...

Dying over Nic's link from Last Friday's Wrap!!

http://www.youtube.com/watch?v=-fTh2GffJsM&feature=youtu.be

I shut down on Friday after my last post about having a funny feeling about today.. Just went back and caught that hilarious Banker's Song..

wunsacon said...

Who's better at constructing empty buildings? China or the US? It's a heavyweight bout, I tell ya!

http://news.yahoo.com/s/ap/20100829/ap_on_bi_ge/ml_iraq_us_reconstruction_legacy
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a6i2PSZD.Jr4

Never count us out!

CV said...

@karen

I like reading that Minyanville stuff...

But here's where CV stands at the moment...

I still find it hard to believe the SPEED in which people change their minds these days...

Let's re-cap...

- We had a number of successive "bad days" (after the last 1130) to build up negativity... economic reporting didn't help...

- Things like H.O.'s didn't help either (and other things that splashed "negativity" across the MSM)... When MY NEIGHBOR starts talking about Hindenburg Omens, I get a little worried that the market is TOO negative...

- The Fed is basically painted into a corner, and the bond market is distorted relative to equities... Some of this can be "chalked up" to summertime blahs... But this has been going on for a LONG TIME and is yet unresolved...

- Despite being down for a couple of weeks, the market has still retained "support" at some critical levels (1040, and 1010 hasn't even been tested)... 1065 ought to be important as well, but not much is being made of the fact that the market has given up 1065 rather easily, and if actually finding it as a minor BARRIER at the moment...

- Even at that... 1065 is only a 12.7% "correction" from the April 2010 highs... Barely even a healthy pullback considering the outright DECLINE in economic indicators across the board since April...

- Nikkei has already re-traced as much as 20% from it's highs (as well as Shanghai)...

Anyway...

My point is... While I can "understand" the idea of contrarian market timers to call 1040 a low, and expect some kind of BOUNCE due to negative sentiment... I find it hard to join that CLARION CALL, because I simply think the market has, thus far, sunken to what it SHOULD HAVE sunken to this summer...

IOW - I don't think the real bad news is "PRICED IN" yet...

I'd be a bull "bounce", like Minyanville (or other traders)... From a much lower level though...

But that's what's TOUGH about the trade right now...

Leftback said...

A stable trading range can be very profitable. Pray for one.

CV said...

I'll pray for a WIDER one... How's that?

karen said...

NO WAY! LB.. not yet anyway.. "trading range" is the politically correct description of a directionless grind.. or cr*p shoot.. I want the dirt washed out of this market, so it is clean again.

CV said...

@karen

http://www.youtube.com/watch?v=HIAP364nxEo

CV said...

My guess is that 1057 will be the worst we'll get today...

TOPSTEP sayin' anythig?

karen said...

P&F for FAZ is 27.. i'd be happy with 19.. hard to believe it traded at 2018 (post rev split..)

karen said...

last mrtopstep: 22 min ago

unfrtnatly we did not c this obj but we had the direction on the IM [09:25:32 AM]: looking at 1055-56 area as a possible buy - wil update

karen said...

financialtimes

Confident mood runs out of steam: European and Asian stocks are getting a boost from indications the US Federal Re... http://bit.ly/9wx1Oy

CV said...

@karen

A little minor 5 would put it about right there...

Seems about right...

CV said...

@karen

"Confident mood runs out of steam:"

So now... basically... A trillion dollars worth of stimulus buys you...

- a 160 point DOW rally for 6 hours
- A weekend of rest in the Hamptons without having to worry about returning to your desk for a Sunday Night meeting...

CV said...

oh... and I forgot to mention...

You can never ACTUALLY DO the QE, because as soon as you did, the markets would crash...

CV said...

... then "rally" again on "hints" that you were going to bump it to $5 trillion...

Leftback said...

The FED will buy the short end on Wednesday. There are no long end purchases scheduled for the time being until September 13 (7-10yr).

So looking at your TLT charts (Lower high in the process here), then we'd say this isn't a positive set up for the long bonds, and it is STEEPENER city for a while.

CV said...

I'm guessing this 1057 level will get bought...

It SHOULDN'T... but what the hey... right?

CV said...

@karen

SPY 106 again... lol

karen said...

AFter this post, I've decided the guy is a real d*ck:

http://www.ritholtz.com/blog/2010/08/mortgage-defaults-driving-retail/

what is it about this that he doesn't get?!! this and extended unemployment benefits!!

CV said...

@karen

Who?

wesbury or BR?

CV said...

Rumor Mill...

Today's stunning if true news comes from Stratfor which has just issued a blast notifying of circulating rumors "in China that People’s Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country." If proven true, this will be the proverbial first rat bailing on the sinking ship. It gets scarier vis-a-vis prospects of US bonds: "The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBC, including Zhou."

karen said...

CV, BR, of course.. then, in another post i see he's complaining about ebay.. he puts bids in for $100k cars (a maserati) in this case.. and was chagrinned to find that a dealer contacted him..

karen said...

just now: mrtopstep

NY lunch time volume is pitiful so far # futures 4.3k SPUs and a total of 800k minis trade with over 250k of that coming from GOLBEX

Nic said...

Holy shit batman:
BREAKING: Rumor PBoC Governor Xiaochuan Has Defected From China After Suffering Half A Trillion In UST-Related Losses http://bit.ly/bOgGF4

karen said...

Nic.. LOL.. CV just posted that : ) that's okay.. we appreciate the leap before you look around here..

Mannwich said...

@cv: Just saw the draft scheduled for tomorrow? I can't make it. Will be at the Twins game. Any chance we can push this to Wednesday or Thurdsday?

Mannwich said...

If not, I might have to bow out of the league. Don't want to do auto-draft with cash on the line.

CV said...

@manny

I'm most likely changing the draft date because all the teams aren't in yet...

So don't worry...

CV said...

but being 'commish' is a pain in the butt sometimes...

like herding cats...

kind of like blog hosting financial markets in the summer as well... :-)

CV said...

but since I get paid so well... I don't mind...

CV said...

I wonder... next year... come July-August... I could actually DO like the FF leagues and put it on "auto blog"...

I'd create a BOT that determined if the markets were red or green and the blog post would be...

Markets were:

UP/DOWN/FLAT

on news about...

THE ECONOMY/JAPAN FEARS/WORRIES/HOPES
FED INTERVENTION
FED COMMENTS

Insert pic of OBAMA on vacation in:

SPAIN/MARTHAS VINEYARD/CHICAGO/HAWAII/THE LOCAL GOLF COURSE

Mannwich said...

OK, sounds good, cv.

Nic said...

Maybe Timmy will defect to Israel

CV said...

@Nic

Are you sure you want someone like that even NEAR a regional conflict?

We'd be safer if he defected to THE MOON...

Although his presence there might adversely affect the TIDAL flows and create a 'wobble' in the Earth...

karen said...

Wave Theory says the market will drop either Monday or early this week

Fractal Finance says a trading range this week and likely longer, with at least getting back to 1075 range if not running back up towards the Aug9 high to retest the top of the larger plateau

http://yelnick.typepad.com/yelnick/2010/08/the-market-is-looking-like-2008-all-over-again.html

karen said...

This Month’s Biggest Index Gains: Dotcom Travel Stocks, Chinese Solar Stocks, and IT Security Stocks

http://bit.ly/bxSR2L

Leftback said...

The 3-mo T bill has crept in to 13 bps.
Not a panic stations alarm, but one to keep an eye on.

karen said...

must read: http://annaly.com/blog/2010/08/27/BondBubble.aspx

karen said...

the tape is putting me asleep! which scares me a bit.. as it increases the possibility of a low volume ramp up..

CV said...

@karen

If we get a 3 up from here (that stalls around 1062), and then fails to get anymore aggressive legs... I'd be looking for an even lower low tomorrow...

Bulls need today to end strong (even on low volume - at this point - they might take it and try to call it a victory)...

I do think there will be several attempts to push past 1070 this week...

Snoozer...

CV said...

Bulls DIDN'T WANT a snoozer today tho...

Keep that in mind...

karen said...

Aug. 30 (Bloomberg) -- Meyer Shields says earnings at Warren Buffett’s Berkshire Hathaway Inc. will increase the most since 2006 this year. He’s also telling investors to sell the shares because the economic recovery is weakening.

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aTFaeF8cw.zM

CV said...

Lest everyone become TOO COMFORTABLE...

NEW CHART IN THREAD

1040 "triple bottom" act like 310 "triple bottom"?...

Naw... never happen... After all - we have all these "smart people" around nowadays who know how to FIX things...

CV said...

But I'm guessing that the 12% rally in 6 weeks on a major index was just your average "run of the mill" monthly move in a bull market of a TYPICAL RECOVERY...

You know... those TYPICAL recoveries where...

- Jobless benefits are extended to 99 weeks & beyond
- Purchasing power is reduced
- The government has $52 trillion in unfunded liabilities
- the Fed Chairman is poised on the hot button every day on QE
- They involve themselves on a daily basis in open market activities...
- Mark to fantasy accounting is needed to hide losses...
- Personal Bankruptcies & Foreclosures are on the rise...

Sounds typical to me...

CV said...

I don't have to mention yields on notes & bonds do I?

karen said...

great comment by redpill at ZH on Golman's "Dominic Wilson, Director of Global macro and market research, asks the most critical question relevant for all market participants:i.e., has the market priced in the US economic slowdown."

Asking if it is priced in laughably suggests there was actual actual price discovery underway in the first place.

karen said...

Yup, CV, you hit the nails squarely on the head!!!

Fantastic new chart in thread, btw.. caveat emptor.

Marc Faber said...

"I don't have to mention yields on notes & bonds do I?"

and ze dollahr izz bekommink vurthlezz....

Leftback said...

Liquidity discovery is more like it.....

karen said...

okay.. to erase friday we need to go down exactly 1.66% across the indices, lol.. $compq leading the way down.. just as it lagged the way up.. that is probably the index we should be following.. it's got the most hot $$ of the 3 majors..

karen said...

oh i've got goose bumps!! just look at the $compq.. now where's that "dbl bottom" again ???

Leftback said...

RIsk credit is fine today.

CV said...

Do you mean that "generational low" DOUBLE BOTTOM that was hit 13 hours apart from one another?

karen said...

some great music posts at Kid Dynamite:

a fav of mine:

http://fridayinvegas.blogspot.com/2010/08/warren-zevon-lawyers-guns-and-money.html

and an LB, favorite (?) the precursor to Thunder Road
http://fridayinvegas.blogspot.com/2010/08/springsteen-wings-for-wheels.html

karen said...

GOTTA LUV alaidi
another retest of 1040 $SPX is inevitable and so is 10633 in $USDCAD & 74.80s in $AUDJPY $$

karen said...

CV @ 1:36.. please you'll have me choking to death on my laughter : )

CV said...

"another retest of 1040 $SPX is inevitable"

---

Then you might as well say another retest of 840 is inevitable...

Leftback said...

K.,

Did you ever catch my karaoke act ... ? Perhaps it's best not...
LB is a big fan of BOTTOMS, so let's have an icon, Karen...

Leftback said...

LQD having a massive rally. HYG and JNK also doing well today.

karen said...

eating a scrumptious endive and avo salad! now, my refrigerator is truly bare.. except for stellas.. and enuf water-melon lime juice for a single vodka martini.

karen said...

jnk up .21%
hyg up .37
lqd up .6%

forgive me if i don't fall out of my chair.. smirking, sorry!

karen said...

zerohedge

New post: Lehman Had "Absolutely No Idea” How Big Its Derivative Book Was In Days Following Bankruptcy http://tinyurl.com/275r9qa
12 minutes ago via Drupal
Reply Retweet

PIMCO
El-Erian: What's needed: pro-growth tax, housing reform; education; job training and other social safety and infrastructure investment.
13 minutes ago via web

alaidi
Consumer Confidence could drop below 50 figure tomorrow. markets pay attention to these things. $$
13 minutes ago via TweetDeck

alaidi
Countdown for a sub-50 ISM..will it be in Sep or Oct.. thats the next key signal for a double dip...WELL BEFORE #GDP $USDX $$

karen said...

http://www.housingwire.com/2010/08/30/restricted-credit-for-small-businesses-driving-delinquencies-up

Leftback said...

Karen, 0.6% is massive in bond world.....
Yes I know we had a 2.6% move in TLT, on Friday.

Nic said...

Karen
don't watch that bankers song too often, its very catchy, I woke up with it in my head.

If we retest 1040 again I don't see it holding this September.

Leftback said...

No 1040 today. This isn't across the board selling.

(The indices are leading..) Thanks, Harry, for that gem.

karen said...

LB.. and TBT is made about a 3% move earlier today..

Nic said...


In other news Paris Hilton has been charged with a drug felony for cocaine bust.

If she is convicted thats two strikes, one more and she will be a lifer FFS.

karen said...

LB.. i beg you.. please say spx will NEVER see 1040 today : )

Leftback said...

K.,

I am NOT a contrarian indicator....

Nic,

If she gets three strikes the prison will "always have Paris..."

Mannwich said...

This one got a chuckle out of me. Surreal times we live in.

Japan resort draws men with virtual girlfriends

http://www.physorg.com/news202359650.html

Nic said...

LOL
Today is tough. Avoiding avoid boredom trades and setups that aren't really there

Leftback said...

Karen,

Have you ever been to Paris?

Leftback said...

Nic,

I am sticking to the bond market for now.

karen said...

picking up momentum:

http://dealbreaker.com/2010/08/mike-mayo-citi-not-to-be-trusted/

Nic said...

LB :(
Next week will be better, we might have a clue which way anyhow

Ben22 said...

Whats up squad

Lots to be confused about today, selling is fairly broad based, all 10 sectors down on the day, about 80% down volume on NYSE, but total volume basically is crap and we aren't likely to have more new lows than new highs today. no action on the recent UUP calls purchased, which is a bit annoying, but it's the dollar, so you ask for this when you trade it.

I'll likely be an observer for the week.

good luck

CV said...

I'd like to take this opportunity to offer Paris Hilton my unconditional athletic support...

karen said...

mrtopstep

RT @otmrcc @mrtopstep No 10 handle rule today? this observation has more of a chance working in slower (cont) http://tl.gd/3divt4

karen said...

CV.. what ever happened to your August LA trip? Ben cancelled his, and I wonder if I-Man is still visiting San Clemente in September?

CV said...

@karen

I got hijacked into following drippy markets...

karen said...

Nic.. your diamond pattern and my straight edge are still in play : )

karen said...

http://www.bespokeinvest.com/thinkbig/2010/8/27/pick-a-stock-any-stock.html

LOVE THIS!! it's what i keep brining up!

"If you watch any of the business news networks during the day, you will invariably hear someone come on and describe the current environment as a stock picker's market. Usually the people saying this are saying it because that's what they do for a living. In reality, though, the current landscape isn't even anything close to resembling a stock picker's market. Friday, for example, the DJIA finished the day with a gain of 1.65%, and the S&P 500 and Nasdaq each finished up 1.66%. Even though each of these three indices contain different stocks and are weighted differently, they were all up virtually the same amount. In fact, over the last forty years, there have only been three other days where the one-day returns of all three major indices were so close together. So much for a stock picker's market."

Leftback said...

Karen,

My longs are up, if you know what I mean...

Leftback said...

You can't go naked all day, Karen. You need an icon.

karen said...

I won't have a worthy avatar till 1040.. : )

Ben22 said...

I'll make it to LA sooner or later, just had a little too much going on this year to take that trip, and I'm not really a fan of the company ra ra sessions anyway, would rather do a personal vacation when I get there.

karen said...

BAC chart is not pretty.. worse than C!

Leftback said...

2.54% on the 10y, 3.59% on the 30y.

These govies are either surging again or making a lower high.

karen said...

i swear my streaming quote list is at a stand still..
flipping a coin on my FAZ.. heads i take $1k of the table now.. tails I hold.. for $2k..

CV said...

I say...

Let's take the "southern" highway...

Leftback said...

C'mon Karen, we need an icon.

You know we like it when you give us an "EIFFEL".....

CV said...

@LB

Conspiracy Theorists are saying that the bond rally was "short covering" by the Chinese who had hedged their Treasury positions...

karen said...

new 52 week low on BAC..

Leftback said...

CV,

The bond rally was TECHNICAL.... on THE ECONOMY

It was actually Julian Robertson losing one of his boats..

karen said...

with so many banks near their lows i just question the further upside of FAZ.. what a ridiculous ETF..

CV said...

Tomorrow we see the Case-Schiller Home Price Index, Chicago PMI, Consumer Confidence & the FOMC minutes...

karen said...

we didn't even crack 200 today!

CV said...

@LB

Oh yeah... I forget THE ECONOMY ... (you know - THE FUN and all)...

CV said...

Something is telling me this move today is simply a technical bear trap...

A 61.8% retrace from 1040 to the high...

The market will await the numbers (3:37)... The numbers will probably suck... But then do what?

RALLY of course...

Ben22 said...

Karen,

I enjoyed that post up there about it being a "stock pickers market" that was spot on. We could also state that it is plain to see many of those writing against bonds right now are in fact equity fund managers.

This is bullish hangover speak, sometimes they say they'll find the stocks that "hold up", that's a good one.

Leftback said...

I think this is what we call the pre-suck sell-off.

Tomorrow, BTE, or NQSFAAE.... market goes up !!!

CV said...

1049 would be the 61.8% retrace

karen said...

cheers!

CV said...

(3:46)

x2

CV said...

Here comes the...

MUST... HOLD... DOW... 10,000 moment...

karen - is that new avatar you swapping out your DOW 10,000 celebration hat (which we'll inevitably dip below, then take out to the upside for the "n"illionth time)...

for a frou frou drink?

Nic said...

From twitter:
Lowest trading volume month since 1999 in equities and it shows.This is going to be a long week!

karen said...

that is hardly frou frou! it's my lime-watermelon-ketel martini.. i think i made it just in time.. : )

CV said...

FWIW

The 200 day moving average should show a tipping downward trend any day now...

Ben22 said...

wow, karen, is that a 12-C in the background of your picture?

sweet.

I always roll with a 12-C.

karen said...

she's cute Nic.. i'm going to follow her for a bit : )

CV said...

1048.91 settle...

x .009 (fibo)... on the open tomorrow...

Would amount to 1039.48...

Just saying...

Leftback said...

Karen,

You haven't commented on the magnificent towering edifice that serves as my new icon. NO, not the rooster....

LB is playing this as a lower high or a developing double top in TLT.
Obviously, if we break the previous high, this analysis is invalid....

karen said...

hot d*mn! fun close !!

Brian the Broker said...

What's that Johnny?... THE FUN

CV said...

Those MOMO Mondays sure are easy to play...

karen said...

I love your new avatar, LB, because I love a blue sky.. I thot I did comment.. must have been talking to myself and/or doing too many things at once.

The great close is being overshadowed by the extreme letdown of makings for only one martini..

CV said...

Black Monday... That was on a Tuesday, right?

72bat said...

k -
just realized, for you, martini(s) @ close = 1:00 p.m. pdt.
the sun is always over the yardarm somewhere.

Leftback said...

Cynicism about stock-picking is not without foundation...

However, several dividend-paying stocks were up today, and most were well ahead of the indexes, which were weighed down by turds such as C and BAC.

karen said...

i had something important to say and forgot it : (

oh! i remember.. took a foto of a blimp on saturday over the ocean with huge cloud bank hovering off shore.. darn blimp looks like a spec though so couldn't use it as an avatar ..

72bat said...

re 12c, tho' yours and k's no doubt get a work-out, nothing like this:
"Tough construction: One HP-12C was used by a zoo keeper to calculate feed mixtures. The zoo keeper dropped the calculator and it was consumed by a hippopotamus. The calculator survived the hippo's digestive process as well as the washing that followed. "

Leftback said...

The big grown-up market was a lot more stable. A risk-off day, to be sure, but IG corporate bonds were strong, even the high yield didn't get hammered. More on this later.

Karen, you seem to like taking pictures of cylindrical objects..

karen said...

bat! very sharp observation! LOL
yes, that 12-c is the only calculator i know how to use : ) mine is 25 years old at least.

okay, gotta run.. one green waste bin to fill before the beach!

Ben22 said...

It remains to be seen whether these dividend payers can

1. maintain the dividend through the duration of the bear market, which is certainly not over, (choose wisely, and with most stocks trending with the index your analysis had better be really really good)

and

B. Not just end up being a return of your principal as losses outpace the dividend payout

http://www.dogsofthedow.com/dogytd.htm


I'd rather rent equities during a bear market, but I suppose it all depends on your time frame and if you are in it for the "long term".

Ben22 said...

Um,

Karen,
I'm the one that's into your calculator!

lol

Ben

Ben22 said...

and I also can't use a regular calculator, 12-C's only, if they ever discontinue I'm toast.

Ben22 said...

bat, nice story on the 12-C/hippo,

mine's gotten around, but not like that...wow

72bat said...

ben -
you could do as cv would, stock up on 12-c's

Leftback said...

The Bond Report 8.30.10

A risk-off day in credit. LB is not a chartist, or a Fib merchant, but the moves in LQD, TLT and TBT were close to a 61.8% retrace of Friday's bloodbath.... today was a flattener, with the 7-10y being very strong. IG outperformed HY, and TIPS were well bid on a POMO day.

Corpies: LQD 0.65%; AGG 0.68%; JNK -0.10%; HYG 0.18%;
Govies: TLT 1.91%; IEI 0.52%; TIP 0.45%
Hedgies: TBT -3.73%

TLT is either making a lower high here, or else it will continue to surge higher as yields drive lower and lower on "the economy" and "the FED".

We tend to think that there will be a pull-back in Treasuries here, so we are hedging our fixed income for now. We are long AGG, LQD, JNK and HYG in various proportions.

For now, we are in the camp that says 1040 holds, yields have put in their lows, and there will eventually be a move out along the risk curve. If there is a decisive break of 1040, we will obviously re-evaluate.

Ben22 said...

OT:

Put this one on the wall o' strange:

http://rivals.yahoo.com/highschool/blog/prep_rally/post/21-year-old-poses-as-middle-school-football-play?urn=highschool-266086

Nic said...

I am so hot, and not in the way a girl wants to be. Still full on summer here.

K - Carley Garner is smart, wrote a couple of books on trading options and commodities

Leftback said...

Nic,

94 in Gotham right now, which as you can guess, is delightful. Have a restful evening, all, and we'll see what the computers do tomorrow.

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