AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection.

Creditcane™: Run away. Don't look back. You will not be able to pull the trigger fast enough to get out.

Bullish long day (bearish harami confirmation denied yet again). Midpoint above EMA(10). Still above all SMA's. New high on daily 3LB (reversal is 1271.89). QE2infinity.

Spinning top day (start of morning star?). Midpoint below EMA(10). Failed the 38.2% retrace (80.63). Back below SMA(144), SMA(21) & SMA(55). No daily 3LB changes (reversal is 79.03).

Bearish long day. Midpoint below EMA(10). Below all SMA's. Daily 3LB reversal down (reversal is 17.75). Stuck in the "no fear" zone. Still has a monthly 3LB reversal.

Bearish long day. Still below SMA(55) & held SMA(89). Midpoint below EMA(10). 0.0% retrace holding. Now below the 23.6% retrace (1368.14). Daily 3LB reversal down (reversal is 1387.00). Must have the precious.

Spinning top day (start of evening star?). Midpoint above EMA(10). Held its 38.2% retrace at 1.3121. Still above SMA(21) & SMA(144). No daily 3LB changes (reversal is 1.3395). Closed at the weekly 3LB reversal price (1.3364).

Bullish short day. Midpoint above EMA(10). Back above SMA(89) and still above SMA(21). No daily 3LB changes (reversal is 40.47).

Takuri day (extreme hammer). The 23.6% retrace at 32.75 was tested and held. Still below SMA(21). Midpoint below EMA(10). No daily 3LB changes (reversal is 32.36). Failing upper trendline.

Bullish short day. Midpoint above EMA(10). Above all SMA's. No test of new 0.0% retrace. No daily 3LB changes (reversal is 323.94).

Bearish LONG day. Midpoint below EMA(10). Now below all SMA's. Made a new 0.0% retrace (11.15). New low on daily 3LB (reversal is 12.30).

Bullish long day. Midpoint above EMA(10). Still above all SMA's. Made a new 0.0% retrace. New high on daily 3LB (reversal is 16.30).

Bearish long day. Midpoint below EMA(10). Below all SMA's. Tested and failed its 76.4% retrace (92.50). No daily 3LB changes (reversal is 90.94).


The Bond Report 1.14.11

Bloody hell, chaps. This isn't your grandma's bond market. A chap can't even go to one's club for lunch in peace. Here we are between the amuse bouche and the prawn cocktail (to say nothing of a big G & T) and one is getting a call to let one know that there is a meltdown in the muni bond market. MUNIS !! I mean, usually munis move 0.01% in a day and that's because they are getting nudged around by Treasuries. Sacré bleu, as one of the French chaps, observed.

Deep Merde, is more like it, old bean, my old gran was white as a sheet after losing 20% in two weeks in some fancy bundled vehicle of Detroit GO and LA water treatment plant bonds that her broker had shoveled her into last year. Zounds.

Meanwhile, in another corner of the investment garden, the fairy Fedmother continued to wave his magic wand and the equities beanstalk continued to rise to the clouds on no volume, as all continued to be well in the Best Of All Possible Markets that has reached a permanent but constantly elevating plateau, with investors safe in the knowledge that stocks will Never Go Down in Our Lifetimes.

HY continued up, IG and Ts were sold today as we tried not to look at the muni investors in the corner, losing their religion.

Corpies: LQD -0.48%; AGG -0.21%; JNK 0.33%; HYG 0.16%
Govies: TLT -0.64%; IEI -0.08%; TIP -0.43%
Munis: IQI -2.87; MUB -1.08
Mortgages: MBB -0.15
Hedgies: TBT 1.15%

We are frankly scared shitless by this market now, and we added more bonds to our accumulating pile and hedged our equity exposure.

Equities, 14% long. 21% short.
Fixed income, total 38%. No hedge.
[HYG 18%, LQD 3%, AGG 10%, TLT 2%, TIP 5%]


George Armstrong Custer said...

"We are frankly scared shitless by this market now..."


That gives me 100% confidence to "charge right in"...

karen said...

AR, thank you, thank you for picking up the ball! i bet you could just kick us off in the morning (rolling my eyes at my sports analogy, but it's fitting) and let that run thru the evening.. gives you more options for the morning kickoff, too.. you can always tag the evening's bond report onto your morning missive as well.

I was very happy that CV commented today because without his quips and outlook , i am not going to survive this market..

I know you all think I'm just a chatty cathy, yapping away.. but, with no one to pull my string no and then, I'll just sink back into my own little world. I'm already struggling to stay aboard this boat (not the blog, but the market!)

Anonymous said...


if you get bored, do some Research on this one:


BinT said...


If someone comes up to you and asks you to pull his finger...don't...

AmenRa said...


I think I'll leave it open for CV. Playoffs baby. Playoffs. This will keep my mind off that BS squeeze they pulled today. Don't get me wrong. I think 1300 is a lock (1311.20 to be exact) for opex week.

AmenRa said...



It's after opex week that I'm more interested in.

Andy T said...


My boss, a really smart and rich guy, just keeps buying this muni bond fund on any dip.

I said to him today: "Man, you got more faith in your fellow man than me."

He said: "They have to pay the bonds back. They're going to raise your taxes in order to pay me back."

I said: "Really? Ok."

For some reason, I think there is a flaw in that particular argument.

Anonymous said...


we're closer to 'Tax Revolt'/sheer inability to pay (taxes) than many care to contemplate..


this art. speaks to part of it

Andy T said...


In re: Tax Revolt.

I know we're really close to this point, or in a place in time where it "could" happen.

We're in a "victim" culture now.

So, the citizenry of the muni that defaults will find a reason to blame someone else for their problems.

i.e. the 'bankers' tricked us into taking on more debt; or

"someone" screwed our city, and therefore we won't pay these debts any more; or,

"everyone" is hurting right now. We're no different. Please give us a "break."

It's very easy to visualize.

Thus, no munis for me.

Anonymous said...

Just curious, what happened to the Orange County munis when the OC went BK in the mid-90s? I can't find any info with a quick google..

ben22 said...

re: munis

as I'm to understand BK doesn't help a bondholder much, they eventually somewhere down the line take a haircut, and that's the end of it. There was a city in Alabama in 2008 that defaulted on something like $3 billion worth of bonds and that was the end result if I'm not mistaken, and I'm fairly certain the bondholders just took the haircut last year, just took a long time for it all to play out. This will no doubt happen to many investors over the next decade, there's lots of Muni paper rated Aaa that is surely junk, so I don't know how anyone could just buy a fund, but I could understand buying individual muni bonds.

As I see it anyone buying muni bonds solely because "they will raise taxes" is taking enormous risk wearing the hat of fundamental analyst. The main problem with fundamental analysis in this case is that its indicators are removed from the muni market itself. The analyst assumes causality between external events (taxes will be raised) and market movements, a concept which is almost certainly false. Just as important, and rarely recognized is that the fundamental analysis requires a forecast of the fundamental data itself before conclusions about the market are drawn. The analyst is then forced to take a second step in coming to a conclusion about how those forecasted events will affect the markets. Technicians only have one step to take, which gives them an edge right from the start. The main advantage is that they don't have to forecast their indicators. Simply put, the charts look effing terrible. Ignoring them could prove costly.

Now if we want to get into a discussion on forecasting the data we'll eventually base our decisions on, it's not entirely accurate, but this was from RR's daily, and perhaps something to consider when others talk of the ease of raising everyone's taxes:

"The population of this country is 300 million. 160 million are retired. That leaves 140 million to do the work. There are 85 million in school. Which leaves 55 million to do the work. Of this there are 35 million employed by the federal government. Leaving 20 million to do the work. 2.8 million are in the armed forces preoccupied with killing Osama Bin-Laden. Which leaves 17.2 million to do the work......."

Anonymous said...

Thanks b22. I was wondering what the magnitude of the haircut was. Did all the bonds become totally worthless? That would be my first assumption, but I don't think that is right.

I think your perspective on the "they'll just raise taxes" is right.

However, whoever RR is -- Richard Russell? -- I don't know where that 35 million number comes from. Federal civilian employment is about 1.5 million.

Anonymous said...

"Which leaves 17.2 million to do the work......."

This implies that the 17.2 million are the only ones paying taxes? I'd like to see the % of americans that pays taxes... ie... employed, retired, peeps on SS, etc... because they pay taxes also. You even get taxed on your unemployment income.

ben22 said...

I don't know what the haircut on the bonds is, probably varies based on how bad the situation is, maybe some end up only getting back a few cents on the dollar but that's probably the very extreme case, likely more along the lines of 20-40% haircuts.

As for RR, yes, Richard Russell, it was a subscriber that wrote that stuff, I think all the numbers are exaggerated for sure, but the general point still stands, the tax "solution" is getting less practical, iow, it's really not a solution at this point.

Post a Comment


This blog should not be interpreted as investment advice of any kind. The authors are NOT representing themselves CTAs or CFAs or Investment/Trading Advisor of any kind. The authors may or may not trade in the markets discussed. The authors may hold positions opposite of what may by inferred by this blog.The information contained in this blog is taken from sources the authors believes to be reliable, but it is not guaranteed by the authors as to the accuracy or completeness thereof and is presented here for information purposes only. Commodity trading involves risk and is not for everyone.