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Saturday, June 30, 2012

New Buy Signal

Today our mechanical Thrust/Trend Model (T/TM) for the S&P 500 switched from NEUTRAL to BUY. For our purposes, the S&P 500 represents "the market."

The signal was generated by the Thrust Component of the T/TM, which consists of the PMO (Price Momentum Oscillator) and the PBI (Percent Buy Index). Once both of these indicators have moved above their EMAs, a BUY signal is generated. You can see that the PMO crossover occurred earlier this month. The PBI crossover occurred today, which was more delayed than we normally see.
While the T/TM is intended for intermediate-term timing, the Thrust Component of the model is really more short-term oriented and its intended effect is an earlier entry than we would normally get from the Trend Component alone. This makes it vulnerable to whipsaw.
At this point we will wait for the Trend Component to confirm the signal, which will happen when the 20-EMA crosses up through the 50-EMA. This will take a while because there is still a lot of separation between the two. (See arrows on the thumbnail chart above.)
The timing model is far from perfect, but it has proven to be a fairly reliable tool for identifying changes in trend. At this point we have to assume that a new up leg is in progress. Our intermediate-term market posture is now bullish.

The Real Indicator

The latest look at one of our favorite charts: The S&P (red line) vs. initial jobless claims (inversed, blue line).
Talk all you want about Europe, the Fed, etc.
US economic fundamentals matter.

Read more:

Friday, June 29, 2012

Loius CK

Update on Dollar

Pursuant to my last post on the dollar where I indicated that we were entering a sell area on the dollar due to reaching 83 on slow stochasttics; we have now had lower highs on the dollar.....This might be the beginning of the end of the dollar!

Thursday, June 28, 2012

Some European Banks To Short

Can You Say Double Dip Obama?

Yo! Speaking of them Head and Shoulders Tops, y'all, this here sho' 'nuff do look like another one!  Reckon we're sliding' into one of them there double-dip re-cessions I heard about on the tee-vee. 

BIG Head and Shoulders

Lungs Not Required

This may seem like something out of a science fiction movie: researchers have designed microparticles that can be injected directly into the bloodstream to quickly oxygenate your body, even if you can't breathe anymore. It's one of the best medical breakthroughs in recent years, and one that could save millions of lives every year.
The invention, developed by a team at Boston Children's Hospital, will allow medical teams to keep patients alive and well for 15 to 30 minutes despite major respiratory failure. This is enough time for doctors and emergency personnel to act without risking a heart attack or permanent brain injuries in the patient.
The solution has already been successfully tested on animals under critical lung failure. When the doctors injected this liquid into the patient's veins, it restored oxygen in their blood to near-normal levels, granting them those precious additional minutes of life. . . .

Wednesday, June 27, 2012

Dollar Index Is At A Sell Zone...

Last three times the DX got over 83 on Slow Stochastics it began to roll over...This monthly chart shows this is a good area to get out of the dollar and into something like Gold....Plus Gold is now entering a seasonally strong period!

This Is The New Normal

Patriotic Rally Coming?

Stock investors are familiar with the Santa Claus Rally, and the historical data backs it up. However, there’s another less-known rally that happens around the middle of the year.
From June 29 to July 6, the Dow has averaged a 1.31% gain. That may sound small but bear in mind that it’s roughly one-sixth of the Dow’s average annual gain, and it’s come in just one week.
The July 4th Rally is the first leg of a larger historical summer rally that extends from June 29 to September 6. Over that time, the Dow has gained an average of 4.07%.  That’s more than half the Dow’s annual gain coming in just over two months.
By the way, these numbers are based on the Dow’s entire history from 1896 to last November (that’s when I ran the study).

Interesting Chart

Monday, June 25, 2012

Syria! Not America's Problem

Best News I Have Heard In Awhile

A couple of glasses of wine each day improves your quality of life, researchers say.

Moderate drinkers had better health and lifestlye than those who drank sparingly or too much, Boston University found
Moderate drinkers had better health and lifestlye than those who drank sparingly or too much, Boston University found Photo: Alamy
A study finds that those who drink in moderation - no more than 14 drinks a week and no more than three a day for women and four a day for men - have better overall scores than those who abstain completely.
The quality of life was measured using the Health Utilities index, which looks at factors including dexterity, emotion, cognition and mobility.
Researchers from the Boston University School of Medicine studied 5,404 Canadians at age 50, and continued to observe them over a follow up period.
Most showed a stable alcohol consumption pattern and 'persistant moderate drinkers' were identified.
They found that these regular moderate drinkers scored highest in each of the health indices.

Diminishing Impact of Fed Policy

Sunday, June 24, 2012


CRB At True Long Term Avg - Time To Buy?

Talk to anyone out there regarding the US Dollar and they will tell you that the Federal Reserve's actions over the last few years have steadily eroded the purchasing power of the US dollar.  The reality is that commodity prices are currently right inline with their average prices going back to 2000.  The chart below shows the CRB Commodity Index going back to 2000.  At a current level of 268.20, the index is currently trading exactly at its average closing price since the start of 2000. 

The Move To Corporate Bonds

Nice Graph

Friday, June 22, 2012

What Congress Did Not Ask Jamie Dimon...But Should Have!

1) It is reassuring to hear that JP Morgan has more than enough of its own capital to cover the trading losses that triggered this hearing. But suppose for the moment that under some circumstances the size of the loss were to grow to a substantially larger amount than you now anticipate. If you didn’t have enough capital to cover the loss, would you ever consider taking money from your customers’ accounts to cover the losses? That would be illegal, wouldn’t it?
Permit me to ask you one more not-so hypothetical question: If you were standing in the lobby of a JPMorgan Chase branch, and you saw through the window that one of your customers was robbing the candy store across the street, and the customer then ran into your bank with a bag of cash, would you let that guy pay off his car loan with the cash in his bag?
Isn’t that in essence exactly what happened last October with your customer, MF Global? According to the very detailed report released on June 6 by Trustee Giddens, the infamous transfer of $175 million from MF Global to your bank on October 28 to pay off an overdraft was a transfer entirely between JPMorgan accounts: From the segregated customer trust account to the MF Global Treasury house account to a JPMorgan London account. All of these moves were completely transparent on your blotter.
Your own employees, Donna Dellosso and Barry Zubrow, witnessed those transfers and were so concerned about them that they immediately requested a letter from Jon Corzine and Laurie Ferber, basically stating that they were not stealing customer money. You never got that letter, but kept the money anyway. Weren’t you concerned about receiving stolen property, and potentially being an accessory to the looting of customer accounts? Did you call the CFTC or SEC to report your suspicions?
[Mr. Dimon told the Senate Banking Committee that his bank received verbal assurances that the transfer was legitimate; however the Giddens report directly contradicts this………see page 134: MF’s in-house attorney, Dennis Klenja, “advised that he made no assurances of any kind to JPM”.]
JP Morgan was MF Global’s primary banker. You knew that they were scrambling to come up with cash to stay alive, day-by-day, hour-by-hour. Did you really think that they suddenly found a couple of hundred million dollars of excess cash in the segregated account? Or did you watch them steal customer money for a JPMorgan account,  and then ask for the letter as a CYA in case they got caught?
2) Last month, your bank returned approximately $168 million in funds to the MF Global estate, money that you had been holding for over 7 months. Mr. Giddens believes that JP Morgan is still holding on to money that rightfully belongs to MF Global, and stated in his report that he will be suing you if no agreement to return the money is reached within 60 days. Are you aware of that? Can you tell us here today how much MF Global money is still being held by your bank?
Do you have systems and controls in place to identify what money belongs to you and what money belongs to your customers?
Millions of people have custodial accounts at JPMorgan for their retirement funds or their children’s education. Should they be worried about their funds being commingled with the bank’s own funds?
It seems that JPMorgan has a habit of commingling its own funds with customer segregated funds. Weren’t you fined 33 million pounds in the UK last year for failing to properly segregate $23 billion in client assets? That improper commingling took place over a period of 7 years, correct? And isn’t it true that in April of this year the CFTC ordered you to pay a fine of $20 million to settle charges that JPMorgan mishandled segregated customer funds at Lehman Brothers between November 2006 and September 2008? The CFTC also stated that after Lehman Brothers filed for bankruptcy, JPMorgan improperly declined to release customer segregated funds linked to commodity accounts.
Is that your modus operandi, Mr. Dimon, when a customer of the bank seems headed for bankruptcy to grab onto as much cash and collateral as possible, and then only release it after being sued or ordered to return it by regulators?
3) MF Global had many subsidiaries scattered throughout the world, but effectively operated as one company under one management. Were you surprised by the fact that in bankruptcy, MF Global was treated as two entities, with the Holding Company allowed to continue operating under Chapter 11, led by the very same executives who had blown up the company? Did your attorneys (either in-house or outside counsel) ever meet with MF Global executives and/or attorneys to discuss or plan the structuring of the bankruptcy?
As a result of the Chapter 11, you were able to continue trading with MF Global, and were involved in a sizable transaction involving European sovereign debt in early November; is that correct? According to Mr. Giddens’ report and news articles published by the Wall Street Journal, more than $14 billion in MF Global fixed income positions were liquidated by the London Clearing House at below-market prices, resulting in substantial profits for the buyers. JPMorgan bought some of those bonds, along with the George Soros Family Trust, is that correct? And JPMorgan is one of the owners of the London Clearing House, is that also correct? Did you use your influence at the LCH to increase margin requirements for MF Global?
At the time when those transactions took place, it was already an established fact that more than $1 billion was missing from customer segregated accounts, and you were certainly aware that customer money had been repo-ed to support those sovereign bond positions. So didn’t it seem probable to you that you were dealing in stolen property, sometimes referred to as “fencing” or money laundering? How much money did you make from those bond purchases?
In his report, Mr. Giddens stated that “because these transactions took place at the LCH, the Trustee has not had full transparency into these transactions or the amounts that might be owed to [MF Global customers]”. Given that JPMorgan is a co-owner of the LCH, perhaps you could ask them to provide some transparency on those transactions to Mr. Giddens. Don’t you agree, Mr. Dimon?
In another transaction that took place two weeks after JPMorgan was placed on the bankruptcy committee, you purchased MF Global’s ownership share in the London Metals Exchange (LME). That stake is now worth $103 million, a gain of more than 150% in seven months. Here again, JPMorgan is making a huge profit from dealings in the remaining assets of MF Global, while customers who had segregated custodial deposits in your bank await the return of their missing $1.6 billion. Does that seem right to you, Mr. Dimon? Don’t customers have priority under the law for recovery of their stolen money?
4) When did you first become aware that MF Global was at risk of going under, Mr. Dimon?
 And which of the following choices best describes your reaction; was it:
A)    As a custodial bank, we have a legal and fiduciary duty to our customers. How can we make sure that their deposits are protected?      
or was it:
B)    Holy Crap! Those guys owe us over a BILLION dollars. What can we do to make sure we get our money back?
Trustee Giddens reports (page 131) that two employees of JP Morgan, Fernando Rivas and Barry Zubrow, called Jon Corzine regarding the $175 million they owed to JPMorgan-UK.  Are you aware of that call? Did they make it on your orders? According to Giddens, your employees threatened to stop handling MF Global’s asset sales until JPMorgan got its money back. It seems that you were willing to push MF Global over the cliff unless they wired the money to you immediately.
Is that the standard way that JPMorgan does business? Do you think that threat was a factor in MF’s decision to reach into customer segregated accounts to come up with the money?
When was the last time that you personally spoke with Mr. Corzine? Did you speak with him during the last two weeks of October, last year? Did you ever say anything to him that might be interpreted as a threat if MF Global caused losses at JP Morgan?
Mr. Corzine told our Committee under oath last December that he never directly ordered that money be taken from customer accounts to satisfy MF’s debts to you. Given that MF Global was in a desperate battle for survival and desperately trying to raise cash during the last week of October, do you think it would have been reasonable for him to think that suddenly MF Global had hundreds of millions of dollars in excess cash sitting around that they could wire to you? The total amount of customer money that is now missing, $1.6 billion, is equal to more than one and a half times the total net worth of MF Global as reported on their last financial statements. Would it be reasonable for a CEO to lose track of 150% of the value of his entire company? If, in fact, he didn’t ask about where the money was coming from, could it be that he it was because he didn’t really want to hear the answer, or already knew the answer? Isn’t this a classic example of WILLFUL BLINDNESS?
5) Did any JPMorgan executives or attorneys participate in any way with the discussions or process involved in structuring the MF Global bankruptcy, including the decision to allow MF Global Holdings to continue operating under Chapter 11? Did anyone from JPMorgan, or representing JPMorgan, participate in the big conference call in the early hours of the morning of October 31 where those decisions were made? Was JPMorgan represented at the November 1 hearing where the Chapter 11 petition was approved?
6) You have been a Director of the NY Fed since 2007, is that correct Mr. Dimon? Did you find it strange that, despite its small size and undercapitalization, MF Global was suddenly given Primary Dealer status by the NY Fed shortly after the arrival of Mr. Corzine? Prior to his arrival, MF Global’s application had been rejected, isn’t that correct? Do you think that the fact that Mr. Corzine was an old friend and colleague of Fed President Dudley, and has lots of friends in high places here in Washington, might have had any influence on that decision? Did you raise any objections to it, or warn the Fed about the weakening financial condition of MF Global in 2011? If not, didn’t you have a duty to do so in your capacity as a Fed Director?
7) As we sit here today, MF Global’s customers, many of whom had their segregated accounts at your bank, are still waiting for restitution of the $1.6 billion illegally transferred from those accounts. Who do you think is responsible for that? Should anyone be held accountable? Mr. Corzine, you, regulators??? Do you think that prison time would act as a good deterrent to this kind of thing happening again???

Fib Study

For those familiar with the Fibonacci parameters, we can quickly take a look at some areas this selloff could go to.  But before I do that, I want to highlight how precise the rebound was to specific Fibonacci levels; in this case to the 61.8% retrace of the ENTIRE 2+ month selloff.
[click any chart to enlarge]
In a technically driven, computer operated market I think more and more people begin to follow these ideals, and they self reinforce.  Of course you don't know WHICH of the levels (38.2%, 50%, or 61.8%) will be the eventual level a bounce or retrace goes to, but it helps you map the market to a degree, once a move begins in a certain direction.
Now as for the pullback of this multi week rebound, we can see we are not even yet at the 38.2% retrace which would take the S&P 500 down to 1326-1327ish.  That would be the preferred pullback for the bull case, but a 50% (less bullish) to 1315 or 61.8% (least bullish) to 1304 are also possibilities.   A break of the 61.8% retrace of this multi week bounce and one would opine that the FTD day and bullish action is negated, and we're back into a larger correction mode.  Hence, it is very important to monitor the nature of this pullback… I was hoping it would be boring, but obviously that is not the case.  Even today's heavy selling is going to be marked as a distribution day and potential change in condition of the follow thru day.

Tuesday, June 19, 2012

Astro Archie!

Dare I Say The Greatest Drummer Ever! LMAOOOOOOOOOOO!!!

Generational Bottom

H&S bottom provides opportunity for generational bottom

At long last, a bottom may be in sight. The Natural Gas market has been in a cyclic bear trend since late 2005, as seen on the monthly chart below. I believe strongly that the low at 1.902 will not be seen again in my trading lifetime.
The continuation daily chart displays a classic H&S bottom. If this interpretation is correct the June low may serve as the right shoulder low.
This market is for long-term position traders willing to be long distant futures contracts at current levels without a stop order. Should the market slip back to 2.000 it would be an opportunity to add to long positions. Natural Gas should be viewed as a multi-year trade.
From a trading standpoint I am willing to extend leverage if the H&S bottom is completed on a closing basis. Shorter-term traders should wait for a retest of the June low or a completion of the H&S before taking a position.
The alternatives to play this market include owning distant futures (such as the February 2013 contract) or Natural Gas producers. I do NOT want anything to do with UNG or especially with the ultra long ETFs. In fact, I am willing to short the ultras on strong rallies.

Democracy Is The Secret Weapon


The market stalled out a bit earlier this afternoon at the 50 day moving average on the S&P 500.  This lined up very nicely with the very key 2900 level on the NASDAQ which is a multi year resistance/support area.  I'd consider the action today constructive as long as there is not a major flush here into the close.  1340 and 1370 on the S&P 500 are going to be key areas that those of you following along this year should be very familiar with – they have been battleground spots throughout 2012.

No Confidence

People have been pulling money from Greek banks since 2009. And in the run up to the elections this past weekend, Greek deposit outflows gathered steam.
Some of this deposit flight has been attributed to companies withdrawing their money. Some has been funneled abroad by Greeks, some are dipping into their savings out of desperation, while some households are just hoarding their cash.
This chart from Jefferies' Sean Darby shows that Greece has lost just under half of its deposits since 2009:
greece total deposits chart

Read more:

Monday, June 18, 2012

Dr. Copper Is Speaking Again...Are You Listening?

Headlines from around the world are focused on the election results from Greece.  Is "Greece" the key word or is it about to be "De-flation?" 
Two decent barometers of global pricing pressures, Copper and the MS Commodity Index (CRX) may have created multi-year head & shoulders patterns, with the neckline support being tested right now
Should the necklines break in these patterns, the key action by traders would be to sell and the key headlines would become stories about deflation/lower prices!

Look To Iceland For Answers

Sunday, June 17, 2012

Hottest Celeb Lesbian?

Amber Heard

amber heard

The gorgeous Drive Angry and The Rum Diary actress has enjoyed screen time with A-list leading men (Nicolas CageJohnny Depp!), but last December she announced that her off-screen partner of choice is a lady. Heard attended GLAAD's 25th anniversary event with girlfriend Tasya van Ree. "I hate the idea of a label just as much as anyone else but I'm with who I'm with, I love who I love," she told at the event. "I think that the injustice of people staying in the closet is more than I can bear with a clear conscience." That said, Heard admitted to Metro UK in February 2011 that she doesn't exclusively like women. "I have had successful relationships with men and now a woman," she told the paper. "I love who I love, it's the person that matters."

Read More


The Russell 2000 ETF (IWM) got a bounce at the end of the week, but remains in a trading range since the June 6th gap. There are two dynamics at work on this chart. First, the medium-term trend is down after the ETF broke neckline support from a head-and-shoulders pattern. Broken support turned into resistance, which held in late May and early June. A convincing break back above this level is needed to negate the head-and-shoulders breakdown.

Click this image for a live chart.

The second dynamic is the short-term uptrend. This is a counter-trend bounce with a bigger downtrend. IWM formed an island reversal in early June with a gap and move back above the 200-day SMA. This gap is holding as the ETF consolidates with a volatile trading range. Notice how IWM crossed the 76 level at least five times in the last eight days. The gap is still holding and this week’s low marks support. A break below this low would signal a failed gap and a continuation of the medium-term downtrend. Of note, the indicator window shows the Price Relative (IWM:SPY ratio) hitting a new 2012 low this week. Small-caps are underperforming and this is a negative for the market overall.
Good trading!
Arthur Hill CMT

Why Europe is in a Shit Pickle

Many of Europe’s
Economies Are
Weakening . . .

. . . and Their Banks,
Which Dwarf Their
Economies, Are Hurting.

With Many Countries
Mired in Debt . . .

. . . and So Many People
Out of Work . . .

. . . Hundreds of Billions
In Aid Has Come Up Short.


Source: NYT


Opportunity Is Now

When analyzing a market it's always good to start with the big picture which is why we are looking at the monthly chart of gold posted above. As you can see, GLD is in a clear uptrend and has been for quite some time.

What I find interesting about the above chart is that the pullback we seeing take place right now is almost identical to the pullback from four years ago in terms of time. In 2008 the gold market sold off for 8 months which is exactly what we are seeing happen right now. Last month marked the 8th month of the decline which began in September of 2011. You'll also notice that the gold market
is right at the bottom of an up trending channel which may provide support.

What this suggests to me is the POSSIBILITY of a potential rally in the gold market. Now just because gold is behaving similarly to what has happened in the past does not necessarily mean it will happen again in the future which is why I look for other clues

Above is a weekly chart of gold futures and in the lower panel (red line) is the net position of the commercials. The higher the red line is, the more of a net long position the commercials are holding. As you can see this is the largest net long position the commercials have acquired in several years. If you look closely at the price chart it's pretty obvious that the 1500 level in gold is acting as strong support as of now.

In summary what all this suggests to me is the POSSIBILITY for a rally to take place in the gold market. Gold is in a long term uptrend, we are seeing a pullback that is similar to what we've seen in the past, the commercials are holding a large net long position and gold is holding a weekly support area. Now all I am waiting for is some kind of buy trigger to get me in the market on the long side. As always. we'll see what happens.

Saturday, June 16, 2012

Coolest Restaurant in the World

The Waterfalls Restaurant

The Waterfalls Restaurant

Spot Cool Stuff has been to many restaurants that are next to a waterfall. We’ve even been a few that are above a waterfall. But we’ve only seen one restaurant that’s in a waterfall.
At the uncreatively-named Waterfalls Restaurant near the city of San Pablo in the Philippines, the Labasin Falls literally flows through the eating area. The water tumbles down nearly on top of the diners, passes below the (strongly bolted down) tables and then continues flowing on its way down a river.
The Waterfalls Restaurant

The Waterfalls Restaurant
The Waterfalls Restaurant
The Waterfalls Restaurant
Granted, the Labasin Falls themselves are not exactly a world class scenic wonder à la Niagara or Iguazu. It is not even a natural waterfall—the cascading water is simply spillover from a dam. But the visual and auditory effect that the falling water creates is completely wonderful. All that running water also has the advantage of cooling down the restaurant goers—no small thing in the heat of a Filipino day.
There’s something else we love about the Waterfalls Restaurant: the food.
The Waterfalls RestaurantThe Philippines, in the opinion of this blog, is one of the planet’s worst travel countries for food. At the very least, it is one of the worst in Asia. (And we say that as big fans of the country in general.) Why the Philippines, with its lush habitat and its rich mix of cultural influences, has such a generally poor quality of cuisine we don’t know. But exploring the country is generally a slog through meal mediocrity. Until you get to a rare place like the Waterfalls.
Nearly all the offerings at the Waterfalls Restaurant has . . . what’s that thing food is supposed to have? Oh yeah, taste. The ingredients are local and fresh. Most of the dishes consist of fish, meats and fruits, roasted and spiced and served with rice or pancit noodles. There’s a variety of local drinks too, including exotic juices and coconut milk.
Best of all, the food is all served buffet style. So you don’t need to know anything about local cuisine to order. Simply scope out the offerings and choose what you’d like.
The Waterfalls Restaurant

The Villa Escudero Plantations and Resort

The Waterfalls Restaurant is part of the Villa Escudero Resort. It’s a lovely place to spend a few days even apart from its aquatic eatery. The resort occupies a former coconut plantation. The dam, in fact, was the Philippines’ first hydro electric project and was originally built to power said plantation.
In 1981, the plantation was transformed into a tourist destination. Soon thereafter, the resort opened as a sort of culture-cum-recreation park. Guests can paddle traditional bamboo rafts along the river, tour a nearby native village, watch a local dance show and go on a bird watching expedition. There’s also a museum, swimming pool and other sports facilities.
Our favorite of the Villa Escudero’s overnight options are the bamboo cottages. They are scenically set along the river (above photo) and feature private porches for hanging out in a hammock (below pic). The cottages don’t have A/C, but between the fans and river breezes we found it plenty cool enough to sleep at night. The resort does have air conditioned western style hotel rooms, though compared to the cottages they’re both more expensive and less interesting.
The grounds of the Villa Escudero also has a few other places to eat besides the Waterfalls Restaurant. But they aren’t nearly as cool-looking. Or as wet.
published: 14 June 2012
The Waterfalls Restaurant
 Of course, it isn’t that every single meal in every single restaurant in the entire country is terrible. But the majority of it is bland. There’s a reason why Europe and America are filled with Chinese, Thai and Vietnamese restaurants while Filipino joints are rare.
The Waterfalls Restaurant

Planning your trip

When: The Waterfalls Restaurant is open for lunch only. Check with the resort for the exact hours.
If you go: Your feet and legs will get wet—choose footwear with this in mind. We’d recommend wearing a swimming suit.
Family friendly? Very much so. Though you do have to watch younger children playing in the rushing waters at the zenith of the falls, the water around the tables is more akin in a kiddie pool.
The Waterfalls Restaurant
The Waterfalls Restaurant
The Waterfalls Restaurant

The Waterfalls Restaurant
The Waterfalls Restaurant
The Waterfalls Restaurant
The Waterfalls Restaurant