Morning Corner 12.13.11

FTSE (weekly info)
-no change (above mid)
low= 5040.76
rev= 5714.94; mid= 5377.85

FTSE is treading water above the weekly 3LB mid. It's failing the 61.8% minor retrace. It's still above the SMA(21) but the SMA(21) is sloping down. MACD has moved lower this week but is still above zero.

DAX (weekly info)
-no change (above mid)
direction=up (1 bar)
high= 6346.19
rev= 5189.93; mid= 5768.06

DAX is failing SMA(21) this week. It appears ready to test the weekly 3LB mid. It's below the 38.2% retrace.

FTMIB (weekly info)
-no change (above mid)
direction=up (2 bars)
high= 16653.55
rev= 13664.91; mid= 15159.23

FTSE MIB is failing resistance provided by SMA(21). It never recovered any of the minor retraces. Doesn't look too promising.

SHGC (weekly info)
WEEKLY REVERSAL new low 2315.27
direction=down (1 bar)
low= 2315.27
rev= 2528.29; mid= 2421.78

Shanghai Composite is in bad shape. The index is below the lows from 7/10 and 10/11. It's also below the 61.8% retrace so support is now the 38.2% minor retrace (2155.09). It's below all SMA's. This week is also confirming the weekly 3LB reversal down.


Anonymous said...

too bad the Seahawks have to play 8 'Away' Games, as well as the 'Home' Games..


ben22 said...

previous thread, yeah, all 401k funds have fees, and I mean all of them, even Vanguard. As far as Ferri, he's just playing a different game that perhaps you aren't as familiar with, also, he has at least a billion dollars in AUM, and charges .25 on a billion.....big deal, he likely started charging 1.5% to 2% and then lowered it as he got bigger, its really all about economies of scale.

I'm really quite interested if you actually got sold in this concept though:

"The truth, as John C. Bogle, founder of the Vanguard Group of mutual funds explained, is exactly the opposite. The more you pay for investment advice and products, the lower your expected return. This is especially true when you consider the fees, commissions, timing issues and investment selection errors. You don’t need to beat the markets when you can match the markets."

This is not a "truth" it's simply Bogles opinion, there's no data out there that shows that anytime you pay above passive strategies fees the more likely you are to lose. Further, lets say what JB did: bogle saw a niche in the market and he's made his own tens of millions promoting it and the concept of efficient and/or random markets and that "nobody can beat the market" which of course we know is totally false on both accounts.

Further, that entire page on Ferri's site under "investment philosophy" revolved around the idea that your goal was to "match the market", not even beat it.

really? that's all investors need to do is match the market? leaving any long term historical discussion aside, how about the last 12 years, matching the market? Can you retire now thanks to your low cost funds and matching of the markets loss? Further, how much did you lose in real terms with that strategy?

notice also that much of his claims are based on "academic studies" which are almost always biased, deeply flawed in design, and overlook what people operating in markets actually do in favor of academic theory. They later quote in their material than any academic study that shows that active management does work was not measured properly yet don't say why, and they provide no documentation or links to such studies....of course. Further, did you notice all the charts in their literature end in 2007? Why? Oh, that's because M-Star is starting to show that a great deal of managed funds have in fact "beat the market" in the 10 year trailing (see: they lost less and therefore "beat" it) All the quotes on there about asset allocation are academic in nature and deny periods when nearly all asset classes become positively correlated.

Last, I'm curious as to why there is no "market matching performance" listed on the site. This guy apparently has a great deal of experience with his "proven model" but my guess even with his low cost funds he's experiencing some sort of slippage.

so show the performance, if I had my own "model", a billion under management and thought I had "the way" I would most certainly disclose how I've performed, especially if it were my own company and not under the thumb of a giant brokerage as I am today

but whatever, he's got a billion in AUM which is far more than I've got, so good for him, and his strategy. I need people/investors like them to exist because lets not try to deny the fact that emotions come into play here, and someone that can do TA has got it all over the passive asset allocator that believes in efficient markets and "asset allocation for the long run"

Anonymous said...

"Modern Portfolio Theory/Management" is, just, so much 'hog-wash'..

esp. this.. "the concept of efficient and/or random markets and that "nobody can beat the market""-type of tripe..

I, still, can't believe that more peep haven't 'cottoned on' to "Covered-Call Writes", at the min.

let alone the concept of ~"Using Puts as Insurance Policies"(for their Portfolios)...

and, as a complete aside, who likes the 'half-off' "Sale" on this 'Name'(?)


cv said...

@ben (above)

I;m just trying to beat my 10 year 'Lipper Average'...


ben22 said...


you laugh man but I've had clients that won't buy DoubleLine funds because they quote: "didn't read about them in Kiplingers"

or of course, "why doesn't MorningStar give this five stars"

which then leads to a whole discussion about where those stars come from and whether or not it "means" anything

ben22 said...




didn't read on Ferri's site how the asset allocation model needs to be maintained based on the investors "risk tolerance"

I didn't see options on the list of "low cost passively run etf's and mutual funds" because you know, options require work, the kind of work that over time makes it evident that you should never simply accept "market matching returns" no matter what they are.....

Anonymous said...


yes, (re: danger!!!!!!), it's all too sad..

esp. coupled with the "I didn't read about it in "Kiplinger's"/"Why hasn't "Morningstar" rated it?"--'mentality'...

as an aside, do you read any 'Investment Advisor'-magazine?

they send it to me, it's a 'Real Treat'..hard to describe in, mere, words..


Andy T said...


Rumors of QE3 out there....

Keep shocking that dead frog as long as you get a reaction.

ben22 said...


Sure I've seen that magazine before but I couldn't say I was very familiar with what is in it. I do recall that they had some pretty good estate tax planning stuff in there but I probably have only mostly skimmed the investment stuff, if its the same one I'm thinking of they used to put various famous pundits allocation suggestions in the front

Liz Ann Sonders was usually very bullish and Gary Shilling mostly cash.

AmenRa said...

Merkel rejects raising upper limit for ESM. Iran practicing closing the Straits of Hormuz.

Getting dicey out there.

QQQQ said...

B22, yeh, found Ferri's site some time ago and did notice it didn't have any recent performance stats. Maybe just the way he presented himself caught my interest and I do like the idea of etf's. Easy in - easy out, anytime. But, I hear ya, they're in it to make a buck, high cost/low cost doesn't matter, show me the results!

speaking of options, I'm flat, 1st time in a very long time I'm not holding some kind of call or put on anything.
SSO or SDS and sometimes FXE - keep it simple man!
anyway, off to work so I can donate more to the cause :)

lol, Dunder Mifflin (from TV - The Office) is selling paper, what this world needs.... more paper

AmenRa said...

EURUSD below its 50.0% retrace (weekly chart). Next support is 1.2938 (61.8% retrace) and the low from the week of 1/14/11 (1.2794).

cv said...


I wrote that just because I knew you'd get a laugh out of it...

I was pretty much darn near certain that from your desk & phone, you face down those types all the time...

cv said...


Lesson to be learned (if there is one)...

Is that the BOOB TUBE is a pretty effective propaganda machine in the hands of anyone who wants to exploit it using saturation techniques...

cv said...

Joe: Lipper Average? WTF is a Lipper Average?

Jane: I don't know but they talk about it all the time so it must be important.

Joe: Sounds good to me then.

AmenRa said...

Why is the SPX trying to disconnect itself from the movements of DXY and EURUSD?

Anonymous said...


that's the same 'Jane', that, if she had misconstrued 'Joe', talking on the Phone, about "her 'Lipper Average'", would be in 'mid-backstroke', with the Frying Pan, about 0.67 seconds afterwards..


cv said...


ror :-)


Why is the SPX trying to disconnect itself from the movements of DXY and EURUSD?

Can't say for sure, but I'd start by taking a look at the representation of oil, & oil & gas services in the index...

cv said...

@Andy T

Tough beat (yesterday) in the Booey League...

You know... It's funny... There was ONE PLAY early in the game that Steven Jackson caught a pass in the backfield (for a 5 yard loss) & I said to myself right there & then...

"THAT'S MY PLAY... That's going to be the difference maker right there"

ben22 said...

no doubt CV, it's just like that

Lipper Averages....pfft

you know how many new benchmarks there are to beat now? its stupid

AmenRa said...

No QE3 announcement from the Fed (duh). The Fed is still employing its CYA monetary policy. How long before the talking heads quit hoping for a money printing lollapalooza?

cv said...

How long before the talking heads quit hoping for a money printing lollapalooza?


As long as it takes before the talking 'point' on the subject shifts from BANKER BAILOUTS to 'RE-UP's' on SNAP cards & Social Security checks...

Soon, they'll be BEGGING to print again...

cv said...

Not before a little 'frontrunning' (in each direction) occurs first though...

AmenRa said...

Careful out there. At this rate 1200 might get taken out.

AmenRa said...

...there goes SMA(21)

AmenRa said...

& EMA(200) R.I.P.

AmenRa said...

The upper side of the triangle in November, if extended, was the support for today.

Reftback said...

We were quite bearish going into this week. No chance of a QE3, dollar strong and EUR and commodities just asking to be whacked.

There will be a rally of some size at the end of the year, but there are a lot of over-eager managers out there who are behind the 8-ball, and they are getting hurt chasing into every little rally.

It's a great time of year to be sitting out not chasing performance and waiting for a really fat pitch to swing at. We have been hiding out in AGG, TIP and dividends.

Btw, divis including mREITs, have done quite decently of late.

Anonymous said...

Nobody thinks 1215 or 1200 will fail here.
Which means, it might.

Everyone and their uncle would come in on a deep sell to 1150-1175.

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