It's all about the Dollar

Greetings all and apologies for the lapse in posting.  I had intended to write quite a bit last weekend, but the weather was so spectacular that I just couldn't bring myself to spend time indoors.  Then during this past week I've been on business travel, and simply haven't had the spare cycles to do much more than check the markets and manage a couple of positions. 

At any rate, let's take a look at how things are shaping up - the title of this post really does say it all.  Ever since the beginning of September, it has been all about the US dollar, and specifically, how the world perceives the Fed's actions related to the dollar.

CNBC produces a clip worth watching - The $150,000 bottle of Dalmore

"The 64-year-old Dalmore Trinitas, costs $150,000. That's about $32,000 a glass.    How good can it be?  'The Dalmore 64 tastes like purple heaven,' said master blender Richard Paterson, whose nose for whiskey is so attuned to the nuances of scents that it's insured for $2.5 million by Lloyd’s of London." 

So if anyone was struggling with that perfect Xmas gift for SingleMalt, your troubles are over.

Good News, Bad News....Does it Matter Anymore?

Yeeeeeeeee-Haaaaaaaaa!!!!

After a slew of negative economic data stocks ended the day almost flat.  The DOW was down just a point and a half, while the S&P was down 4 due to weakness in the banks.   

So why didn't we see a sell-off today?  Because Uncle Ben has made it all but illegal for the stock market to go down.

Revisiting Intel and a sudden return to POMO

If you read my post from this morning, you know that I wasn't buying the hype surrounding Intel's supposed "better than expected" earnings report....click here if you haven't already read this morning's post.  I was actually planning on waiting a week or two before posting on Intel again, but after today's action, we have a pretty good set-up that's worth reviewing.

Earnings Shenanigans Continued - the JPM Version

JP Morgan was the first of the major banks/brokerage houses to report earnings this morning, and once again we're getting an incredible spin job in the media because Earnings per Share (EPS) came in at $1.01 vs. an expected $.88 per share.  But wait a minute.....If net revenues are down by over $1.2 billion from Q2, and down by $3.4 billion compared with Q3 2009.... how is EPS coming in higher than expected, and what is there to cheer about???

Earnings Shenanigans Are Upon Us Again

Anyone who knows me or has read this blog a few times knows that I'm a pretty regular CNBC basher.  There are actually a lot of good reasons to bash CNBC, but since it's early and I'm too lazy this morning to list them all out, let me just show you the difference between non-biased reporting and what I like to call the CNBC propaganda machine.  The Intel earnings report makes for a great example.

#2 in a Series on the Mortgage Foreclosure Fraud - An Interview with Janet Tavakoli

From the interview:

"This is the biggest fraud in the history of the capital markets."

"The financial crisis was a product of our irrational reaction, which protected crony capitalism rather than capitalism. In capitalism, the shareholders who took the risk would be wiped out and the debt holders would take a discount but banking would go on."


Janet Tavakoli is one of the very few people in this country who not only had the brains to understand the complex topic of structuring synthetic financial derivatives like Collatoralized Debt Obligations (CDOs) and Mortgage Backed Securities (MBS's), but who also had the courage to raise her voice in warning of the systemic danger these types of derivatives could bring to the market if they continued to be created and traded in a completely unregulated fashion...and this, way back in the early 2000's.  These MBS and CDO products are one of the core issues at the center of the current foreclosure mess, but of course, back when Janet was warning anyone who would listen, no one in the banking industry or Congress gave her the time of day....they were all too busy getting richer, and now we, the citizens of the United States, are left holding the bag.

#1 in a Series on the Mortgage Foreclosure Fraud

Below you will find a very informative video clip from MSNBC's Dylan Ratigan, one of the few financial reporters in the main stream media who isn't bought and paid for by the corporate complex or the Wall St. lobbyists...hence why he no longer works for CNBC, but that's another story for another day.  Getting back on point, this video provides a very clear description of what is happening related to the foreclosure mess that has suddenly become a hot topic over the past few weeks.  The clip is 12 minutes long, but I highly encourage everyone to watch it in its entirety to see and hear for yourself why the banks have done what they've done (ah...profit & greed?), why the Government has done nothing about it (ah...so politicians could stay in office?), and what the potential ramifications are (depends on what, if anything, the Government does now).

Taking a small short position into the close

If you scan the blogs and business media sites, you see a lot of folks thinking that today's poor unemployment numbers are going to guarantee more Quantitative Easing by the Fed come November 3rd, and hence believe that a floor has been placed under stocks with no place to go but up.  That may end up being the case, but I'm not buying into it just yet.  I took a modest short position on the SPY right around 116.80 in the last 10 minutes of trading, and will stop out on a daily close over 170.50.  The 170 area should be a decent resistance point, so if we breach it and close above it early next week, it will be a sign that the bulls will likely take us back up to 1200, and I'm out with a small loss.  And just for the record, I did day-trade the bullish move up today.  Though a bear at heart, as a trader, you have to go with the prevailing winds, and today there were gale force gusts coming out of the land of the bulls. 

Have a good weekend all.  I'll be posting a number of articles over the coming days to help everyone understand some of the more serious issues that have been percolating in the media the past few weeks.

And the numbers are in - a big miss

NFPD comes in at -95,000 vs an expected -5,000 jobs for September.  The knee jerk reaction was an immediate sell-off, lasting less than a minute, then euphoria, as traders digested the news and realized that worsening unemployment raises the probability of additional Fed intervention in the form of QE2 in November.  Now the euphoria seems to have worn off a bit, and we're back down inside the range we were in prior to the announcement, and appear to be dropping.  Maybe people are finally starting to figure out that additional Fed intervention is not such a good thing after all????  Hmmm.....

Non-Farms Payroll Data (NFPD) On Deck

Well, I certainly over-estimated the bulls yesterday.  I guess there's only so much buying they can do when the POMO spigot has been turned-off.  At any rate, the big gap-up that we saw as a result of the better than expected unemployment report was immediately sold-off at the open, and after 10:30 or so, we basically just chopped around the rest of the day. 

Today comes the much anticipated NFPD jobs report at 8:30 EDT, and there has been much speculation in both the blogosphere and mainstream media about what the results will be, and how said results will impact not only the market action today, but what the Fed has planned regarding Quantitative Easing in November.  I'll probably post something on QE later this weekend.  For now, nothing much to do but wait and see the data.

The Bear Trap Has Been Sprung

As suspected in my post from two days ago, anyone loading up on shorts yesterday based on the CNBC.com article about a gloomy employment figure coming out this week are likely to get shanked at the open today.  Initial jobless claims came in at 445k, or 10k lower than the expected 455k, and we're now spiking in the pre-market as a result.

And as predicted, the CNBC propaganda machine was ready and waiting with this headline article [Jobless Claims Edge Down to Lowest Level in 3 Months] - gotta love the spin doctors!

But don't forget another one of my posts earlier this week [Market Manipulation Addendum] describing how the Bureau of Labor Statistics (BLS), the folks who report these numbers, have had to upwardly revise their initial estimates in 22 out of the last 23 reporting instances.  Well scratch that, and make it now 23 out of 24 because today's report also shows an upward revision to last week's number by 3k in initial claims.  Anyone want to take a bet that today's number gets revised next week???? 

And while we're on the subject, Reuters has an article out today entitled, [Job Losses in 2009 Likely Bigger than Thought] indicating that the BLS will likely be coming clean on watered down reports for all of last year as well.  Absolutely pathetic. 

As for today, let's see how high this surge takes us this morning.  If Alcoa meets or beats, we could see an additional surge for the bulls....but then I think the party is over.  More on that later.

A Little Comic Relief

It's Thursday morning and Q3 earnings season will officially kick-off with Alcoa releasing numbers after the opening bell.  Now that we have POMO behind us, at least for the next few weeks, it should be interesting to see how well the market holds up.  I think we should head down the rest of the month, but as I've laid out in previous posts, the manipulators have numerous tricks up their sleeve, so we shall see.  In the meantime, here's a clip that I ran across awhile back that seems all too appropriate for the times.  Enjoy!

Last POMO day

Has been  a busy morning so not much time to post.  Last hour we had the ADP jobs report that came in very negative:  -39k vs. +20k consensus expectations.  This brought futures back down below yesterday's close, and we'll probably see some initial selling at the open.  Barring any further bad news, today's $2 billion in expected POMO activities should be enough to keep the market up, but I wouldn't expect to see the huge gains we saw yesterday....never know, tho'.  

I do however think that we are at, or very near the top of the rally that started in Sept.  I may put on a few small short positions later today, but will wait until after Friday's Non-farms payroll data to come out before getting more aggressive.  As mentioned yesterday, I think we have a decent shot to see one more bear-trap via a manipulated NFPD report, so I don't want to get over exposed to the short side just yet.

All for now.  Good luck trading.

Wish every day was this easy

Based on the points outlined in my post below from this morning, and once we saw the ISM report for the Services sector come in "better than expected", it was pretty much a slam dunk that we were going to rally higher all day, so I loaded up with calls on the SPY, IWM and FAS at about 10:10 this morning, and traded out at right around 1:00 PM for a seriously good day.  Here's the thing with day-trading - often times, even the best set-ups have a pretty healthy dose of risk, and you end-up stopping out at break-even or a manageable loss, but every once in awhile, the market hands you a guaranteed winner (if you know what to look for), and today was one of those days.  It's almost like being one of those bankers back-stopped by the Government's too-big-to-fail policy.  You can leverage up a large position and really make a killing, because you know that Uncle Sugar, Benny B. and their Wall St. cohorts are not going to let the market drop today. Sure, I could've made even more if I would've stayed in until now (3:30 PM EST), but I had a target of 116 set for the SPY, and similar levels on IWM and FAS, so I cashed out when they hit.  There's another saying that I learned early in my trading experience - "Pigs get slaughtered!"  In other words, don't get greedy.  It has served me well.

On the downside, I just stopped out of my Amazon position a few minutes ago, but it was only a 50% position size to begin with, so the loss was small, and barely put a dent in the gains from today's trades.  I was clearly a bit early for my Amazon play, but I still like it, and will likely re-engage later this week.

Hope all of you had equally profitable days.   

Today should be an up day for the markets

After an initial buying surge in the first 15-20 minutes of yesterday's session, the sellers came in and took us down to bounce off that support line at 113.20 on the SPY (or 1130 SPX), which was the previous swing high from June.  After that, we basically chopped around the rest of the afternoon, rising slightly into the close. 5 minute and daily charts presented below for your perusal (click to enlarge).

After yesterday's selling, coupled with it being POMO Tuesday and a very light reporting day on the economic front (ISM Non-manufacturing data at 10:00 AM is it, I think), I would expect the bulls to ramp us back up to take back yesterday's losses at a minimum.  Wednesday is also a POMO day, but then that's it.  No more Fed liquidity injections are planned for at least the next two weeks, so I'm thinking that the party is over on this engineered rally by the end of the week, but more on that later.

Zerohedge also made a short post [here] yesterday that I don't quite understand. 

As circulated by a very prominent prime broker, the following names (and several others) might show up on buy-in lists tomorrow:  NOK and KLAC, but most notably SPY and IWM. As a reminder these kinds of broad index ETF buy-ins occurred in March and April 2009 when the market surged higher day after day without a care in the world.

Not being a Wall St. insider,  I'm not sure what this buy-in list referred to above is, or who gets it, or what, if any real impact it has, but thought it worth sharing.

As for later in the week, I think we could start seeing some significant selling, once Weds' POMO is behind us, but I would be careful about loading up on shorts prior to all of the employment data coming out on Friday.  I can't find the article now, but yesterday on CNBC.com they ran a headline article stating that there's good reason to expect that the jobs numbers coming out this week will be very poor.  When I see headlines like that from an organization like CNBC, who is usually the biggest cheerleader around, I start getting suspicious.  Sure, I don't expect that the jobs numbers will be very good either, but this sounds like another case of significantly  lowering expectations prior to the release of the report so that either (a) the impact of a very negative report is lessened (resulting in little market reaction), or (b) if the numbers are bad, but not quite as bad as what CNBC is expecting, it will be a reason to crank up the propaganda machine and pump the market again.  At any rate, beware of another potential surge to come, and of course, keep an eye on the news....as that (and the Fed) are the only things that are driving market direction these days.....certainly not company fundamentals or market technicals.

Good luck trading.

A few stocks

First an update on Amazon.  Last Thursday I mentioned [here] that I thought Amazon was looking good for a short entry, and on Friday things started heading in that direction with a close below the trading previous trading range support at 155. 

Unfortunately, my entry wasn't as good as I had wanted....I was hoping it would trade up to the top of the range near 160, but the stock started selling off immediately at the open, so I got into a 50% position on a bounce off the previous day's low on a bear flag pattern.  I only took a half position, as I thought there was still a chance we may have rallied back up higher in the range for another entry, but we didn't, so I'm holding the Nov 150 puts only.   The 5 minute chart from Friday is shown below with entry area shown. 

Now it's wait and see time.  Still looking for a drop down to 145 as an initial target, but since my entry was lower than anticipated, I'm bring my stop to 161 instead of 165.   If we trade down below 150, I will move stops to break-even.  The interesting thing for the coming week will be the POMO days on Tues & Thurs.  If the Fed injects another boatload of money into the system, we may see some continued upward movement, but as previously posted, the Fed's biggest Treasury purchases were front-loaded into September, so I'm not sure how market-moving these coming POMO's will be.  The important thing for anyone following this trade is to remain disciplined on your stops if Amazon gets ramped with the rest of the market.

And now a look at ISRG.  A friend of mine mentioned that he thought this was going back up to $400 in the near term, and since I hadn't looked at this chart in months, I figured I'd take a look see.  Daily chart below.

After reviewing and inserting a couple of trend lines, I'm not so sure I would agree that ISRG is headed back to 400 anytime soon, but who knows.  My main observation is that we are in a pretty defined downward channel going back several months on a series of lower highs, so that upper trend line will likely present stiff resistance.  On the bullish side, we could be forming the "b" dip of an ABC pattern, which would but C at 330 on a measured move - which would be a break of the upper trend line.  Bottom line I don't think I would go long at this stage.  A test of the upper trend line would make a good spot for a short entry, or if we trade down to the bottom of the channel again, I might look to go long on a bounce off the lower trend line, but I'm not seeing $400 at the current time.

Hope you all had a good weekend.  More to come later in the week.

Market Manipulation Addendum

At times over the past few months you have seen me post some minor rants when one of the weekly/monthly economic report comes in at "better" or "much better" than expected and causes a huge rally.  Then, a week or month later, that "better than expected" number ends up getting revised down, or up as the case may be, to the real number, which in fact only "meets" the original consensus expectation, or may even come in lower than expected.  Of course, a week or month later, that's old news, and when announced, we see no comparable selling.

Yesterday I penned a longer piece about our markets being manipulated and broken. Today, I make a quick call-out to the Government controlled reporting agencies who have been busy aiding and abetting the corrupt Fed and Wall Street bankers in their efforts to perpetually ramp the market higher.  In the spotlight today, thanks once again to the research of our friends at zerohedge.com, I present you with the Bureau of Labor Statistics, or BLS, which should now actually be shortened to simply "BS", after reading these statistics.  For those not aware - these are the folks who are responsible for tracking and reporting weekly/monthly initial and continuing unemployment claim data.

Most of you already know by now that the manner in which the BLS/Government reports unemployment as an overall percentage of the work force, significantly under-represents the true story (they publish 9.5%, but we all know it's closer to 20%).  This has even been reported in mainstream media and newspapers, so I won't go into that all now, but if anyone isn't sure what I'm talking about, leave a comment and I'll address it separately.  Today's topic however is focused on the published reports coming out of the BLS on a weekly basis regarding initial and continuing claims.  Full article from zerohedge can be found [here],  but the bottom line is, the BLS has misreported their initial claims for unemployment in 22 out of the last 23 published reports, and in all 22 cases, these figures have later been revised higher.  Clear text translation - in 22 cases, the BLS has reported initial unemployment claims being lower than they actually are, thereby attempting to paint a rosier picture of the economy.  Here's a nice little visual for you from the original ZH article.

Now riddle me this.....how long would you remain employed at your current position if you fucked-up 9 out of 10 weekly/monthly reports?  I mean seriously, most of us wouldn't even get the opportunity to reach 22 out of 23 times...so what are we to derive from this?  Either:

1.  Every single person within the BLS reporting chain is completely incompetent (possible, but not probable);

or

2.  The BLS is corrupt from the inside, and on their own, are purposely trying to make their unemployment numbers look better (again, possible, but not probable...after all, they're govt. employees and get paid regardless of the results);

or

3.  The BLS is being directed by the Administration, the Fed, Wall Street, or a combination of all three to purposely misrepresent their statistics.  In other words, to lie. Lie to you, lie to me, and lie to all Americans.  And why?  So the Wall Street crowd can goose the market higher on "better than expected" unemployment figures.

I'll go with option 3 above, and call it Exhibit 4 in support of  my broken, manipulated market thesis.  If you haven't read yesterday's post, Exhibits 1 - 3 can be found [here].

Good luck trading!