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Thursday, December 31, 2009

Market Thought... fear too soon

The players are selling before the new year. We saw the initial hint of fear earlier this week w/the VIX up as the SP500 was up. The current move continues to takes us off the market's overbought position, and IMO, sets us up for a new year rally.

I still think the Vix breaks down, and that complacency should drive protection. The SP500 is just not at that point yet. I covered my call protections with this weakness.

If market weakness is seen on Jan 4th, I will probably be a buyer into the weakness. If we rally (and I think we rally come Jan 4th) I will be a seller of Jan calls for GS, COST and look to buy SP500 put protection.

Also, a toast to a great 2010. Have a very happy New Year everyone.

Wednesday, December 30, 2009

Market Thought... interesting action

So we have a situation where the push upward is still in play. The internals (key individual stocks) do not suggest a correction just yet.

The Vix came off its oversold position, and the market looks like it is consolidating. I am still waiting for the Vix to really come down before I start protecting.

I have noticed some weakness in IBM this morning. Will enter a second position at 130. (It came really close this morning, but I may have missed it for the next leg up.)

The WSJ is now questioning AAPL's move due to the hype in the iSlate. I recently gave a warning on this, but my warning was centered around a forceful push upward that was occurring to fast. Generally speaking, w/out the iSlate, AAPL is worth more than 210.

Some Good News... i'm engaged :)

Haven't talked about my personnel life in quite some time, but I just wanted to pass along to everyone that I got engaged last night. (She said yes :)

Okay... back to trading... gotta make the money I spent for the ring LOL.

Tuesday, December 29, 2009

Wireless Data

The wireless infrastructure reports just keep coming in, and reports are not so good. There has only been one device that truly maximized the potential of a wireless world, the iPhone. It has sparked uses that many thought were science fiction until they actually witnessed the device. Now, a second network has had issues (1. ATT and 2. O2).

The iPhone is not to blame. Technically, the providers are to blame for not watching the trends and being proactive in adding capacity on their network fast enough. I blame the decision makers at the network providers.

IMO, this is not isolated. With the world seeing the future, the network providers must accommodate to this future. Android has done a decent job (not as good as the iPhone, but good enough) to bring data driven devices at center stage.

My guess is that Verizon will have these issues soon enough, if enough Android phones are sold or if they take on the iPhone. (But the executives at Verizon Wireless have simply done a better job at their wireless build out. So maybe they are on-top of these trends, and are a few steps ahead.)

Whatever the case, the point of this post is not to point fingers, it is to profit from the obvious need to add capacity.

I know Cramer has been tauting the Mobile trend and even created a Mobile Index, if anyone is interested. I try to boil down the sector to one or two top picks, so I can actually trade the trend.

IMO, the best trades, specifically around the build out of new or added capacity toward the infrastructure, is CSCO and QCOM. At the moment both are not ready for an initial position, and need a bit of a consolidation. For CSCO an initial position can be merited around low/mid 23, and for QCOM around 45-46.

Monday, December 28, 2009

Utterly Ridiculous

I am reading his article about how we need 'search neutrality', and I can't help but think this notions is utterly stupid.

Let me explain... Adam tries to tie net neutrality w/ a concept called search neutrality. But there is a huge flaw in this analogy. The flaw is simple... end-user decision versus end-user being forced to use a service.

The pipes are controlled by a few companies. By allowing companies to pay for priority will effectively give the current big boys in the space continued control because they will always be able to out-bid the smaller compeditor. And when there is an external artificial factor allowing a big boy to maintain control, the end user no longer decides on what service he/she uses. History has taught us innovation will suffer. (Case in point, Microsoft's operating system.)

Net Neutrality is important because there are limited number of pipes to use regarding the Internet. A situation can take place where 'the few' can pose a serious barrier of entry to a new player, creating severe limitations on Internet innovation. This simply can not be allowed for innovation sake.

Search Neutrality is a none starter. The reason: With Net Neutrality, anyone can create a search engine. If its better than the rest, it will win. There is NO artificial use of Google. NO ONE is FORCED to USE Google. If I am unhappy with their search results, I will use Ask or Yahoo or or any other engine.

For all the services Google has sparked innovation (ie Cloud computing, mobile OS, online video... etc) does not mean people will use them for search. Google simply hopes people will use Google search, and Google's other services.

71% of 'end users' DECIDED to use Google. This effectively makes the notion of 'Search Neutrality' utterly ridiculous.

A word on Iran

After the events that took place over the weekend (article) I do not know how anyone can view Iran's current form of government as a Theocracy (or at least view it as such w/a straight face).

The current gov. needs to diffuse the situation, and give concessions. Instead they kill and arrest the very people who will act as symbols to inspire the protesters to take protesting to the next level.

Iran will have a full blown revolution on their hands, and come 2010, the veiw of Iran as most Americans currently know it, will be no more.

Market Thought... interesting and AAPL

The VIX is up fairly nicely, while the SP500 is up too.

This is usually a sell signal. I do not want buy SPY put protection just yet, but I have been trimming with this move up or selling calls on others.

I am tempted to buy protection sooner rather than later.

Also, a note on AAPL. This is the first time I ever noticed such a uniform acceptance to AAPL's newest unknown product (iSlate or their tablet). Everyone and their mother is starting to price in this new device already, and I fear a 'sell the news' type of situation when it is finally released. (And I think that will be a buying opportunity.) But if your in AAPL, just be mindful of this situation.

Friday, December 25, 2009

Happy Christmas

Merry Christmas everyone.

Here are a few presents. After the final week of the year, the market may come down some, if that happens, here a a few stocks I have on my top 40 (approximately) list that I plan on keeping in as my top spots for many many years to come:


(I don't own them all, but certainly trade around them. And think the trend for all of them is up in the long run.)

Wednesday, December 23, 2009

head scratcher

All my trades are doing pretty well, except for GS. The financials are sucking wind, and the level of weakness I am seeing makes me scratch my head. I understand the macro economic effects that are plaguing the banks, but to be seeing the level of weakness in GS after a multi-month consolidation is perplexing.

Basically from August until now, the financials have done nothing. Which means the market has been consolidating their monstrous move. That makes complete sense. But there is a chart set-up in GS (w/in the daily chart) that suggests further weakness. That part makes very little sense to me.

IMO, fundamentally speaking, the banks are in a position to stall. To trade range bound until their balance sheets are really cleaned up. There are too many negatives to cause a next leg up rally, but their are multiple positive developments to prevent a break down.

This is where I am scratching my head. These positive developments, which are supporting the general market, are being completely ignored w/in the financial space at the moment or so the chart set up suggests.

At times I question why I even bother with fundamentals. It gives me such an interal conflict at times. Ignoring fundies would spare me much self generated turmoil through the years... 'woah is me' ;) But then again, two very recent examples where the charts gave a very wrong (and negative) impression of the fundamentals were in CHK and PWR. So I guess that 'ying and yang' effect has some merit.

Monday, December 21, 2009

Market Thought... i believe

A few weeks ago I posted the 'Market Thought... maybe, just maybe'. I think we are in the middle of it taking place, and the financials bouncing off their low-end trading range, will facilitate the upward push.

When the VIX does hit the bottom red dotted line, I will be inclined to protect the stocks I do not plan on selling .i.e GS, IBM (after I buy it tomorrow), SQM and AAPL.

A word on IBM

IBM is one of the 40 stocks I follow very closely. While listening to Fast Money via the video on demand (great feature), the chartist -Carter Worth- indicated IBM is on the verge of a long-term breakout. His argument was sound, and it was purely technical. Basically it has been consolidating for 10-11yrs, and at its top line resistance with a very low PE.

Understanding the technical analysis is great, but a long-term rally is really driven by fundamentals. Fortunately enough, IBM has them.

There is a major problem in the world. Apparently the world has become too complex. This thesis famously highlighted by the book 'The Black Swan' or the lesser known 'The Age of the Unthinkable'. IBM's growth driver over the next decade or so will be to solve these complexities. The software is risk analytics or predictive modeling or whatever fancy term you want to give it.

The power house in this field, generally speaking, is a privately held company called SAS. SAS has been doing it for a long ass time, but IBM is really making their way. And, imo, the concept is grossly under-utilized. (This concept is a major reason why I really like VRSK. VRSK owns the insurance and mortgage segment, and will render the rating agencies obsolete, at least for the mortgage rating game.)

Between the two companies, if SAS ever went public, I would invest in SAS. But the next best play is IBM, and since IBM is invest able, invest in the trend with IBM.

At the moment IBM is a buy. It is consolidated, and looking to bounce. And with the above info, I am running out of excuses to not purchase the common.

IBM has their hands in a lot of different pies. A reason for their compressed multiple is due to the amount of money coming in from their consulting biz. Once the sales from the tangible growth drivers kick in, IBM should begin to see some multiple expansion along with nice growth.

Trade - TBT

The TBT looks to want to break from its 48-49 level of resistance. Judging by the action in the 10-yr yields, it most likely will.

Friday, December 18, 2009

Trade - SQM

It consolidated from its resistance level (40), and I think part of its weakness is on the back of POT's weakness. I entered an initial position here, as I think it is on track to rally past 40 in its next leg up.

Keep in mind, SQM is on the heels of two very big areas of growth spanning the next decade: 1. agriculture and 2. alternative energy (lithium producer)

Thursday, December 17, 2009

tisk tisk MSFT

Loading up a page today, and for whatever reason, the legitimate web address did not go through. But guess to where I was redirected?

Now I know Bing just saw a spike in users, but could the above be the reason? I think MSFT was accused of this before. Its definitely shadey considering I never use Bing, nor have I ever used it on the computer I am currently using. So I really do not know why I was redirected there.

Just some food for thought, in case anyone thought GOOG was loosing any lead in search.

At the moment I am not in GOOG, so I have no vested interest, but it is an interesting observation. (And if this observation happens too much on Microsoft Explore browsers, imo, will merit a Justice investigation.)


Queen of Doom brought her estimates of GS down to consensus level. Actually her estimates are still higher than consensus.

I fail to see how this fundamentally changes the view of GS over the next year/few years, considering consensus estimates are still being achieved. But then again, the stock is declining so the market does not agree with me.

Wednesday, December 16, 2009

Trade - Citi (don't believe I am writing this)

The secondary is priced to a point to which entertains me, which means it must be entertaining a TON of others that would never even have looked twice at Citi.

The 3.15 price point is simply too low. Everyone is talking about it, but the fact remains the low price will cause high demand. I will most likely enter Citi on the back of this secondary.

Make no mistake, I am no fan of Citi, their culture, their management or pretty much anything about the company. It is an over bloated piece of crap that should be dismantled. Pandit is a complete joke, and Citi even more of a joke for grossly overpaying for his below average Hedge Fund.

Irrespective, at the price of the secondary and a stable economy, 3.15 is too low of a price. (They still have some pretty interesting assets. They just need a real leader to turn this piece of led into gold.)

Tuesday, December 15, 2009

AAPL chart

The reason I like AAPL, for an initial position, right now is because of the mini consolidation it has seen.

From the powerful move it saw last week, the stock is now hugging the 10 SMA. It is showcasing a mini consolidation from that strong move. The set up looks like AAPL wants to change direction, and push upward.

Fundamentally speaking, if the month-long weakness was due to the Nexus One Google phone, that is a bad reason for sellers to come out. (Lets not forget AAPL is more than an iPhone.)

I purchased the common here, not options. (Would like to ride past 205, but knowing my trading habits I will be trading around it rallying.)

Trade - AAPL

Purchased a few shares of AAPL as an initial position. Will post a chart later tonight.

Monday, December 14, 2009

Nat Gas derivative play - PWR

It is amazing how one event can change the perception of things. With Exxon buying XTO nat gas is in the forefront. A derivative play of nat gas is PWR, especially with their recent purchase of Price Gregory Services.

PWR now looks very interesting for two important reasons, and I think the big boys have realized they threw it away for no reason. (IMO, that is why it is up so nicely today.)

1. the largest windfarm is being constructed

2. PWR positioned themselves beautifully for nat gas construction.

(hind sight is always 20/20)

Nat Gas - wow

Exxon just made a ringing endorsement on Nat. Gas w/the purchase of XTO. I have been playing the nat gas theme with CHK.

I think we can assume other integrated names will be looking at the independent nat gas providers as well.

Also, with big oil getting serious about nat gas, it may start getting pushed in Washington. Should be concerning to the coal sector.

Saturday, December 12, 2009

Trades - and a word on proofreading

Simmer down.

When I re-read some of my weekday posts I cringe sometimes when I notice a missed word or words spelled incorrectly. I can not proofread during the day. I simply lack time. I am not a full time trader. (It would be nice to work for GS and trade full time, and make a very very nice living for myself.) My day job requires me to manage multiple people and manage multiple issues that can have a very real impact on the output of a multi-billion dollar product. Most of the time, on the weekdays, I write my thoughts or my trades, and publish.

I truly enjoy observing current events, understanding their effects and create a trading strategy around it. Trading is a means of monetizing that desire. (and I have worked very hard to become very good at it) I can not satiate this passion at my day job. This blog is a means to vent that passion.

So basically, I don't have time to care about proofreading while i am doing a 12hr day, trying to understand what is going on in the world, then trade on it. All while I am battling an unfriendly boss, and work-related time-consuming issues.

Alright, enough of me venting. Here is a trade I took on Friday, but did not have time to post about it. (if I did I would have re-read the other post and deleted it, but I will keep it up just because of the comment.)

COST is consolidated, sitting on its 50SMA and fundamentally impressive. I will unload when it gets over bought, but I do like it for the long-term.

A stock I have mentioned before and been trading is NLC. The chart justifies an initial position, but I am waiting for NLC to hit the 38 SMA. If this happens, I will enter a position.

Friday, December 11, 2009


I am curious to know how much money, on a percentage basis the Government for all the banks. GS indicated it was about 21% annualized return. (from the reports I have seen, only GS indicated an annualized return)

I am sure Citi and BofA will be some of the highest % gainers, but am curious as to some of the more healthier banks.

Thursday, December 10, 2009

GS is smarter than the Masses

GS is just smart. Even when they cater to the masses.

(The conspiracy folk are just out to make a few bucks on the term 'conspiracy'.)

GS will pay their people w/stock this year. That means executive 'X' will get $1M in stock instead of $1M in cash. All because the masses are protesting the 'cash bonus'.

But the mob is stupid (even though the individual may be smart). With this viral world, the individual became a part of this 'hate Goldman' mob. Where by smart individuals became stupid. (at least for this issue)

Let me explain:

GS is giving stock instead of cash, and stock they can only sell in 5yrs. Cash bonuses are taxed north of 35%, directly sent to local, state and federal taxes. Stock bonuses are not. They act as capital for the company.

So the mob has prevented the state municipalities from receiving much needed cash (in terms of millions of dollars), firmed up the company so that the stock will most likely triple w/in the next few years, and that $1M will most likely become $3M in 5yrs making the execs that much richer.

GS... i still got your back.

Tuesday, December 8, 2009

Market Thought... confusion

There is such a huge ass divide between the heavy weights, its hard for us little people to gauge what is going on. On one hand there is the Queen of Doom talk her book on CNBC in the morning, and suffice it to say she was negative. On the other hand, we have John Paulson (who puts a lot of money where is mouth is) is touting how cheap certain equities are, and that he has no short positions on credit.

What are us schmucks to do?

I do not hesitate to short things, but I have this horrible habit of being fiercely loyal to hand that feeds me. And however cheesy this sounds, that is America. I just see too many good things out there. I don't try to justify why 'the good' is really 'not good'. I accept the good for what it is because there is usually multiple data points that support 'the good'. For instance, the jobs number is real. It is supported by the HUGE productivity being seen. Productivity that is no fucking way sustainable. I say 'no fucking way sustainable' because my company is such an example. I, and my people, have simply too much work (and its obviously fustrating). Things are simply not getting done because of the sheer volume.

I think there are a shit load of other companies like this out there. They need to hire or they run the risk of disrupting meaningful output.

Irrespective of the above, there is a trade happening that we can prepare for. The dollar strengthening is causing FCX (metals) and PBR (oil) to decline. Have been waiting for a correction in these names for some time now, and will take advantage soon.

Want FCX around 68

Want PBR around 45 (43 if we're lucky)

Monday, December 7, 2009

Market Thought... psst, let me tell u a secret

The VIX, as an indicator, only really works at times of fear, not complacency. So when anyone tries to use the VIX as an argument that the market is complacent, they are wrong.

I use many many indicators (I look at over 70 charts to give me a sense of what the market is doing daily... yes daily), but I rely on the VIX quite a bit. For example, it was the VIX that primarily indicated to me to sell my entire portfolio, except for the market short, the Thursday before the weekend Lehman went under.

In a normal market, using the VIX to show a sign of a market top is extremely difficult, but it will show signs of a market bottom (you just have to know how to look at the data). In a trader's market, it will show signs of both. We can witness the irrelevance of the VIX spotting market tops in any bull market, and the relevance in trading bottoms and tops from July 2007-to-present.

At the moment, a quick look at the VIX would suggest we are still in the "trader's market" stage, but I think that is going to change as I highlighted such an opinion about two weeks ago with 'Market Thought... maybe, just maybe'.

The markets are getting to that point where the VIX can go down, so any time media outlets start preaching complacency, its technically not correct.

Don't get me wrong, no indicator should be ignored. But I think we maybe approaching a situation where we will not be able to easily highlight market toppiness w/a low VIX anymore.

Saturday, December 5, 2009

Market Thought... H.F.T.

Anyone looking into yesterday's market action as any measure of anything is looking at the wrong day. IMO, yesterday's roller coaster was due to High Frequency Trading (HFT) programs.

The market rally is for real, it is driven by real earnings and that is why the market has been so resilient. (not animal spirits... look to gold for where that term applies)

Here is a play-by-play of yesterday's action:

1. Jobs report was great. Sending the futures higher, rightfully so. Better jobs number means less defaults, means the banks in particular should go up.

2. AAPL started to crack. Or rather continue its weird trading from Thursday afternoon. Apple's fundamentals do not merit such crazy action. period. Uncertainty causes the type of trading AAPL is seeing. We know everything within the company is fine, except for one thing: Steve Jobs' health.

3. Once AAPL started to crack, so went the market. Why the hell does ONE stock make the entire market to go down. Because the way Program Trading works. Most programs look to many different factors, and weigh these factors, to trigger automated 'sell' responses. AAPL happens to be a market leader, and IMO, the type of break down it saw triggered massive program selling.

4. Once the human aspect got involved to see what was going on, they overruled the computer. AAPL's special situation takes it out of realm of 'market leader', and should not be looked to as a reference. And so normal market action took place.

At the moment, the market is consolidating. But lets not confuse the situation. Specific situations for specific companies are not always indicative of the entire market. Sometimes they are, other times they are not. Its correctly identifying when they matter. (obviously this is not easy to do)

Goldman Sachs is also mentioned as a 'market leader'. However, the financials (nor GS) have not lead this market since August. The financials peaked in Oct, and the market kept moving. That means they have quietly lost that status from a sector rotation, and the market simply did not care. As it should not care. They have their own special situation due to rule changes entering in Jan. But with the new back-drop of a better employment picture, they should become leaders again.

(The daily chart in GS is ugly, but the weekly suggests its current move is a consolidation and a buying opportunity. Especially given the employment picture, and the 2 consecutive months of very high productivity. This is a leading indicator to job hiring that will take place very soon.)

The more and more I think about how much money of the stimulus package was not spent, how the normal economic effect of hiring is taking place, with the new jobs from Alternative Energies and when the rest of the stimulus money will be spent; fundamentally it makes me very very bullish on America and the American stocks.

now, where is my broom? ;)

Friday, December 4, 2009

AAPL... saddened

I fear the worst when I see AAPL's stock move the way it is moving. We all know what it could possibly mean, and I don't even what to say it because I hope all is well with Steve. I really really hope so.

I am going to put in a limit order at 182, although it will be the saddest order I will ever have executed (if the market is predicting). I hope this order does not happen, and the market is being very very wrong.

Wednesday, December 2, 2009

got balls?

Seriously thinking about starting a short position in Gold. I look at these charts and I just itch to take on the trade.

The move has obviously become parabolic, and has been in such a position for a month now. The shear momentum is not sustainable. Prior to November, the move was steady and consistent to the fundamentals of the world economy. But now the momentum is at a point where economic fundamentals does not merit the acceleration.

The scenarios include:

1. Inflation - There is none at the moment, and rates simply do not justify it.

2. Safety - Understandable. Supported by the money being pumped into Treasuries. However banks are getting better capitalized, and Bank of America exiting TARP is a prime example. Things have gotten better.

3. Currencies are obsoleted - That is the ultimate of bullshit reasons. Fiat currencies will never go away.

4. Central bank are buying to diversify - Understandable, but due to #3, stupid.

Whatever the case, I feel the trade is getting tired. Not taking the trade now, but will be waiting to bounce on it. Ideally, would like to position the trade as rates are rising, pushing the dollar higher, because that is when I think it will really collapse.

Will play it via the DZZ.

Tuesday, December 1, 2009

GS - i'm all alone

Everywhere I look, I feel like I am the only one defending Goldman. From every corner of the media universe GS is getting its ass kicked. I feel like the Wall Street Journal wipes its ass with GS.

The indie bloggers have always hated GS, the big boys now hate them, the sophisticated folks are getting in the act via Vanity Fair, and the mass public has been out in front of their building on Broadway with torches for some time now... its not pretty.

I know all the reasons why GS is not liked, seriously I do, and I will argue every point with a legitimate counter-point the haters never seem to fit into their unbiased stories.

Here is what I have to say to haters:

For fuck-sake people, its is a company, a company that makes money. Get over your warp sense of righteousness.

Here is a sense of righteousness, how about Regency Enterprises or Chuck Palahniuk (or whoever owns the rights to the content to Fight Club) sue the hell out of for blatantly infringing on copyrighted characters.

I thought we were all in the market to make money. GS happens to be good at making money. Oh, but wait, the haters make money too.

Those very people that bash GS are the very people (every single fucken one of them) making the most money from the bashing. Some sense of righteousness.

GS, I got your back. Even though I'm all beaten up, and alone in the dark scary woods, I still got your back.

PS... Lloyd, keep performing well as a company, maintain the GS culture and keep your mouth shut. Stop giving the haters fuel. They don't need more. Its already an inferno. k?!?

Technically speaking, this is why I like the stock here:

Saturday, November 28, 2009

Market Thought... think

The more and more I hear the term 'Animal Spirits' the more and more I get annoyed by it. (Despite the fact that I utilize the psychology of the market to assess my view of it, and its the premise of my blog ;)

At the moment, I just think it is over played. We all know all markets are subject to wild swings, but the underlining assessment of an asset is based on value. period. Uncertainty allows for a mispricing of an asset. Depending on the level of uncertainty, the magnitude of mispricing is correlated.

So, will this Dubai thing cause AAPL or GOOG or retailer or countless other companies, to reduce their earnings potential, which during this last quarter many proved is very much intact?

I seriously doubt it.

It will most likely affect some European bank earnings, definitely some individual investors, and Industrials. But will the repricing of debts cause massive de-leveraging from hedge funds or individual investors, when we just went through a period of the greatest de-leveraging in 80yrs?

I seriously doubt it.

So we have a situation with Dubai that many think will be a catalyst, but the more I think about it the more I realize there is no domino. It is a catalyst to nothing.

Even if there is multiple situations where repricing of debt becomes wide spread, the credit holders are the fucked one taking in less money. (As they should be, this is the name of the game, if they don't like it, get out of the game.) If this did not come off the heals of a massive de-leveraging process I would think it can cause damage. But at the current moment, I do not think that is the case.

Thursday, November 26, 2009

Market Thought... oh boy

I'm gonna take a nice paper hit tomorrow. After buying GS a day before this news comes out, I so feel like the turkey :)

Dubai's situation is obviously taking down markets, and we are seeing it in translate in the futures market.

Anyway... enough bitching, and lets look at the situation.

The most telling aspect was the bond market. The bond markets were telegraphing 'something' over the past two weeks w/the short-term yields Treasuries going negative, and the 10yr yield declining. That 'something' was most likely 'Dubai'.

I think there will be a ton, a ton, of over-reactions regarding this. I will monitor tomorrow very closely, but from what I can tell I do not think there is a legitimate domino effect scenario from Dubai World wanting to reorganize its debts.

It is just like any other large company wanting to renegotiate, or going bankrupt. Obviously the ripple effect is there via the banks exposed to this mess, but their assets (other than real-estate) are real.

Out side of GS (what a pisser LOL), PWR, CHK and TBT; my cash position is still quite large (approximately 60%). Depending on the action, and certain price levels, tomorrow maybe my 'black friday' where I can buy up names I wanted to re-enter.

Will be looking at KMP, SQM, AAPL and GOOG, among others.

Selling PWR is a mistake

LinkThe US and China have committed to reducing their carbon emission. (article) The goals set out by the President means more alternative energy (AE) projects (via Wind, Solar or whatever) for the United States. PWR is at the heart of these projects.

With the credit market functioning again, AE projects will start up again, and PWR will have their hands full of projects to do.

An interesting aspect of the article that hit me hard was China's already built AE projects that do not contribute to electricity usage due to their location. This also is a problem for some US projects, but have not yet been built. China's current approach is to use Ultra-high-Voltage transmission lines, but I think a serious alternative to the UHV lines is American Semiconductor's (AMSC) superconductor electricity pipes. (see description)

In the States, I think AMSC will be used for projects far away from electricity users to connect to the grid closer to users, and PWR will be the contractors who will facilitate the building of the AE project, the pipe and connect it to the grid.

Those blindly selling PWR, and the chart indicates some idiot big boys are do just that, are making a huge short-sighted mistake here.

(I already own PWR at current prices, and will look to pick up AMSC when the technicals are to my liking.)

Happy Gobble-Gobble Day

Happy Thanksgiving everyone.

Wednesday, November 25, 2009

fyi... GS

I initiated the GS trade, but eased up on some of the purchased calls due to the equity purchase.

Will sell a Jan call when GS gets away from its very oversold condition, and enters an overbought condition. (Could be below 180 judging by today's action.)

Tuesday, November 24, 2009

Trade - GS

I want to take on the following trade... its tricky, so don't do it if you don't know anything about options.

GS is so freaking attractive here it hurts. It is over sold, and nicely positioned. But the financials are consolidating here, and after their move I understand why. I like GS for the long-term as well, so I want to commit to buying the stock, and selling calls around the position.

I will buy 100 shares of GS tomorrow, pending on the morning's action the purchase will be before or after 10am. (I would preferably like to see GS break the 170 support, despite having Calls on GS, so I can make the purchase at mid/high 160.)

There is fairly solid support at 170, and I do not anticipate it breaking.

The chart in general looks fairly weak for GS. The weakness is obvious. It broke its SMA support weeks ago, and the SMAs are now acting as resistance. Despite this, I do not think it is the start of a downtrend. (There is just too much earnings power in this company.)

The Slow Stoch indicates it is oversold, and the DMI reveals the weakness is not that strong. Or at least not from blind selling (like PWR or CHK are experiencing). Basically the negativity is very controlled.

I already own Calls betting on a push upward from here, but I want to try a new income strategy from selling calls, and hopefully benefiting from a potential dividend increase.

If the markets rally by the end of the year, there is a very real possibility that GS can go to 185. So, I want to purchase 100 shares tomorrow, when it pushes to 180, sell a (one) 180 Jan 2010 Call.

Then let the stock and sold call run their course.

If the stock does not hold 180 by Jan 15 2010, the sold call premium is mine, and I do the same execution for the following month.

If the stock goes keeps rallying to 185 past Jan 15, I will be forced to sell the 100 share at 180.

(This isn't the typical strategy employed by option traders. Typically, with option strategies you would buy a long position, and hedge w/another at the same time. For instance, buy the 100 shares and sell a 175 Jan call right away. This protects against down side, but also limits your potential. I take a great deal of effort to minimize the probability of loss when entering a position, via the technicals, and would rather utilize the 'timing' aspect of the trade more efficiently. As described above.)

Boring Action

While the market has maintained a relatively high level, there have been stock that were thrown away.

CHK and PWR are examples of, IMO, big boys dumped for whatever reason. (Maybe they lost patience in the NatGas theme or Alternative Energy build out.) I think throwing these two stocks away is a mistake, and at current levels very attractive.

The market seems to just want to churn, but the potential upside would not surprise me. The churning aspect may come from the financials. Them breaking down does not seem likely, but them rallying hard from here is not likely either. They should be trade bound until the end of the year, but I do think they are at the low end of their trading range. A strategy that may pay out is buying the stock, and selling short-term calls against the position for income. I will do it with JPM, and will post what I do.

BKE - GS has them as a sell, and from what I figure it was due to margins topping out. I do not generally agree with the reason, but does suck away at the momentum of the stock, obviously. Right now it is trading near a support level, and already inexpensive. But if we take Goldman's report for what its worth, BKE should be trading at a depressed multiple due to the peek in margins.

However, despite the downgrade, trading for BKE over the years has been fairly consistent. The trailing PE usually has a peak trading range of 14-15, and the low end is around 10. (Meaning buy when the trailing PE is around 10.) Regardless, keep in mind, this is a slow and steady stock, whose management owns a lot of the company. They play for the long-term, and smart.

Monday, November 23, 2009

Market Thought... maybe, just maybe

The market might be able to move higher from here. During this unraveling of the credit bubble, the Vix has been trading at an elevated level since July 07 to present. The high in the Vix is obvious, but the low (in this elevated trading range) is not so obvious.

From the recent rally the low end was around 21-22, but if we were to take a step back, the low is lower.

This version of the chart suggests the market can rally to +1150 given the VIX declines to the high teens.
(The Vix is the moving Blue Line, the SP500 is the moving Black. The Dotted Red horizontal line is the very low-end for the Vix under the overlay chart condition, the Blue horizontal line is the low end Vix support so far for this current market rally. The Solid Red horizontal line is the top end resistance for the Vix.)
The Vix has entered its low end, and that would trigger some selling. I think a retest of the very low end is very possible.
I will let the pundits create a reason for the move upward ;), but the possibility of a push upward is not out of the question.

Sunday, November 22, 2009

Goldman Sachs

From envy-to-the whipping boy, quicker than I ever thought possible. The powerful institution teaches anyone willing to currently listen, that 'a-lack-of-hubris' is a strong component of success.

The year of the collapse was one of my most successful years as a trader. I did not indicate as such last year because I felt guilty. I could not bring myself to post about it simply because there was too much negativity all over the place. Too many people loosing too much money. This year, everyone, and their mother, benefited with the rising market, so I felt it was 'okay' to post my performance.

If I can understand this very simple principle, Goldman can definitely understand it. But, the real question is, can they act on the understanding of humility?

Right now, they are sucking wind. They are getting their ass' kick pretty badly, despite making money hand over fist. The worst, imo, is the "Goldman's Non-Apology" from the NYT. It just kicks them while they are down, probably breaking a few ribs :).

Make no mistake, I am a huge fan of Goldman, huge. But I am a bigger fan of what is going on around GS. While everyone is bitching and moaning, and watching Goldman scramble to find a strategic plan, it is showcasing the awesome power of a Democratic society. A society centered around 'debate', and regardless of how powerful you think you are, you realize you must always accommodate to the wishes of 'the-hand-that-feeds-you'.

I am currently long GS, and at the current level, it is a great entry point for long-term investors.

Thursday, November 19, 2009

Market Thought... still don't know

All I know is the fundamentals that fed the rally are still in place, and I am expecting a noticeable deceleration in jobless claims, that should translate to fuel real economic growth.

But there are some interesting plays, as I mentioned earlier in the day. Here are the charts:

CHK is too oversold, but the negativity is very blatant. I do not mind holding this, and if it continues lower I will enter another position between 20-22.

GS is around support, and since I am not expecting the market to completely break down I think GS will pop. I will most likely cover the trade between 178-180.

PWR is very very oversold, and in an obvious negative trend, but at the current level it is to interesting for me to ignore.

I will pick up some SQM at if it reaches its SMA support, around mid 38.


Utilized today's initial decline to buy some stocks, and placed a limit orders for others. Not everything is overpriced here.

For instance...

PWR - dropped too much for me to ignore.
CHK - dropped to a level that I really like technically, and i like the natgas story
GS - got in
SQM - waiting for mid 38. Really like the ag. story as well.

Wednesday, November 18, 2009

Market Thought... hmmm

The Baltic Dry Index is seeing some really nice strength over the past few weeks. This underpins real economic activity.

Then there is the rise in pretty much all the commodities (except for NatGas, which has been awesomely stable due to new supply). This could be due to true growth, or little growth w/ too many dollars casing few goods (stagflation).

Real economic growth, or stagflation, promote a scenario where rates should be rising. But instead the 10yr is seeing some fairly nice strength here. (which means rates are lower)

Where is this massive deflationary pressure, that all markets can ignore, except for the bond market?
Where and why is there such a huge demand for a bond yielding mid 3% when there are blatantly better returns elsewhere?

So many questions, and no real answers. I am left still wondering.

At the moment, the indicators are sending the signals that do not jive w/me. I fundamentally do not understand, so I have to sit back and observe until there is clarity. (how many times have you seen someone write that they do not know what is going on :)

Don't get me wrong, that will not stop me from trading individual stocks. For instance, GS is looking pretty interesting at the moment. But I am cautious overall until I figure out which market is correct. The lower rate in the 10yr is also taking place with a weaker to flat set of financials as well. (That correlation has not escaped me, and will give me an itchy trigger finger if I take on the 'long' GS trade.)

Monday, November 16, 2009

Market Thought... contradiction

There is a contradiction today. The market is up nicely, but the 10yr is up nicely too. To me, that makes no sense at this economic juncture.

The push into treasuries suggests a weak economy, but the rise in everything else suggests a stronger economy. Which is it?

Real economic growth sparks higher rates. That is a constant, unless there is a deflationary aspect that can cap the rates. However, at the moment, I do not see a deflationary aspect of the economy. Housing has stabilized, commodities are up and so are credit pricing. The only deflationary aspect to this economy is the lack of credit expansion, but I would not assume it to be a real deflationary threat given the commodity prices are up so much. (It is putting a pause on our economy growth, but not causing deflation.)

I am uncomfortable with this contradiction. It does not make sense to me. I will evaluate potential reasons, in order to re-adjust my thesis, but the reasons have to be pretty solid. (Right now I think the 10yr is still being bought by the Fed, which could be causing the imbalance.)

Looking at the recent rise in the Baltic Dry Index, I want to say the bond market is off. More on this later, w/charts. Assuming conditions remain.

Thursday, November 12, 2009

Market Thought... relentless

The market hit its resistance, and now the obvious question becomes, 'do we keep going down or break through the highs?'

The SP500 looks to want to consolidate to around 1075. At that point, observing the continued liquidity, the market may bounce around a tight band until the end of the year, and a full break down should not take place. If it breaks upward, I will be expecting limited upside from 1100. (hence my 'prudence' post)

An indicator to this is Oil. I do not think crude will break the low 70s, let alone 75, and this should add support to the overall market. (just like the financials were an indicator of weakness for the market the other day)

If crude is to see mid/low 70s, I will play it via PBR. (PBR may see around 47 at that point.)

With the consolidating market GS should retest 175, coming off of its SMA resistance.

Depending on how the market, and GS, acts around 175, I will enter 170 Jan 09 calls.

Keep in mind, any trades I take on from now to the end of year, has no illusions of grandeur attached to them. (unless other wise stated) When the move is made, I will bounce from the trade.

Tuesday, November 10, 2009

Market Thought... prudence

Everywhere I read or hear today market gurus are indicating "the market will continue to rally simply because the big boys are lagging and need to purchase stock." I am not an insider, so I do not know the dynamic of the structured 'money management' game, so this could be true. But I do know this, every time I hear bullshit like this, I want to sell into the strength.

Think about what this means for a minute. It means no smart person in the game can think of a fundamentally good reason for the markets to rally, so they are using the dynamic of the biz to justify a higher price. To me it is troubling, and increases the risk to trading this market.

Yet the market finds itself in a scenario of lower risk. The VIX continues to decline to the lower end of its current trading band.

When the VIX spiked I stated to buy the market, and I am happy I was right. But the move has now been made.

The SP500 is approaching 1100 again, and prudence simply dictates to take profits or protect. (I chose profits this go around.)

The SP500 is getting overbought as well. Along with overbought individual names, like AAPL and GOOG. In fact the few market leaders that are not overbought are the financials (even GS).

The financials are in an interesting situation. Despite the market hitting new highs, they are at a point of resistance. They will either break out or ride a negative trend. (The negative trend is fundamentally supported by the new accounting rule that will bring off-balance sheet assets to be accounted for by Jan 21st, i think.)

The overall set up has not sold me on the concept of 'the market will go up, just because'.

I would protect any dividend /long-term holding via selling Calls against the position, and have been selling my trades. And depending on the action w/the banks and market tomorrow, I may short the market for a trade.

One trade I will consistently take on however, is the TBT. The Fed will continue to issue more paper, and every time it does the rates rise. And they rise to a higher high. The Fed will no long participate in the auctions, and this will put upward pressure on rates. For this trade I take my ques from the 10yr yield. It is near support, worthy of an initial position.

The rate may move to the upper resistance of the negative trend line. If it keeps going lower, I will add to the TBT but I do not think the SMA's or the mid 3.3% support line will be broken downward.

Monday, November 9, 2009


The only measure of my performance that I closely pay attention to is whether or not my portfolio value is higher after a series of trades I make. (seriously)

The other day I was at a wedding, and a friend asks me how well I am doing. On a 'rate of return basis' I can not answer that question off the top of my head. Instead I can only qualify it by saying I am doing 'great'.

The reply I got from 'great' was... 'well, how can you not be doing great in this environment'. This obviously does not take into account the many many hours I put into this game, and the fact that money is made from understanding the dynamic of the market. Not simply if the market is up or down. (Although I am very sure my friend's intent was not to insult me.)

The convo got me thinking about the quantitative aspect of my performance since I consistently started trading the way I am trading (post DNDN 'initial' collapse, May 2007).

Basically, since May 2007-to-current portfolio value, the gain is (via two accounts)...

+324% and +276%.

(Ultimately the gain means nothing. Traders are only as good as the last trade, hence my strong belief in the first sentence of this post.)

heads up...

Sold off on a bunch of stuff. Across the board things are getting overbought.

Profits are just too good to pass up here. (If your not willing to sell for profits, an initial position in the SPY 110 jan Put Options would not be a bad idea.)


Today I am sad and angry. You see the inefficiencies of large corporations head on when layoffs take place.

I was not laid-off, but two of my former bosses were. These individuals are smart and very capable, and taught me a lot about being a good leader.

For all the bitching corporate America does regarding not having qualified engineers, today angers me about it. One of them is a part of the Army Core of Engineers. Recently spending 2 years in Afghanistan helping with the rebuilding effort over there.

The man is a hero, extremely intelligent, and a very capable leader, so what does one of the largest companies in the world decide to do... get rid of the talent.

Large corporations are stupid because they rely on inefficient measuring tactics. On top of which, the decision makers are ignorant middle management who are only focused on their specific job function.

Where are the people or metric to measure quality people in one area that obviously can not use the qualified people, to replace the unqualified people in other areas.

Large corporations have a great talent pool at their feet, yet they do not utilize it properly. That is a shame. Their is no reason why they have to be stupid. But a CEO, and senior management, have to be willing to challenge their middle management to keep the best people through the entire company, not just the individual group.

Obviously today (along with previous layoffs I witnessed) showed me that problem is too difficult to be entertained, but I do not see an attempt to solve it. Which is truly sad and stupid.

Saturday, November 7, 2009

Market Thought... tired

While waiting to see how the market should react over the next few months via the equation it will follow, the market will continue to act like a market. Moving up and down, having intra-thesis moves.

At the moment the market seems tired. It is approaching resistance, and VIX eased up quite a bit.

Within the SP500 potential resistance is obvious, but the 'tired' comes into play with the Slow Stoch and CCI. The Slow Stoch is getting overbought as the CCI is not, and I interpret that as weakness.

To add support to that, is the VIX. It is approaching the low end support.

The VIX looks to want to get lower, which could suggest the market stays at these levels or rises some more.

At the moment I am not acting on this, except for selling holdings into the current strength.

I will short the spy via Jan Put options when/if the VIX approaches 22 or so. Or when I feel the market is simply too exhausted for its current move.

Thursday, November 5, 2009

Market Thought... evaluating

The other day I indicated a new equation maybe in the works regarding the market. Currently, I feel there is a liquidity driven rally thanks to low rates and the dollar decline. The other day anomalies took place (highlighted in the 'new equation?' post) that puts to question the liquidity equation. However, there was no fundamental change to suggest the liquidity equation is altering.

A few things can change the equation, create an inflection point and force Fed action...

1. real economic growth by the US economy (that would spark higher market rates, higher dollar and higher equity markets)

2. stagflation (that would spark higher market rates, weak dollar and sideways-to-poor equity markets)

The other day, #2 was playing out, however one day does not make a trend. As such, we are at a point where data points need to be observed and evaluated. But observing the scenario, one can understand why I am a fan of TBT.

For the record, observing the current economic data I believe #1 is in our future, but ultimately I trade on the what the indicators are telling me. Hence the need for the evaluation.

HEADS UP: Today UUP went up pretty nicely, despite the fact that the dollar index ($DXY) was flat. Obviously that caused me to question the move. Suffice it to say, the move is artificial. Share of the ETF can not be issued, as they have run out, this will cause the UUP to move at a premium to the index. Because of this I will sell it tomorrow. Once they issue more, the premium will be lost and the value will decline. DO NOT BUY THE UUP until the bank can issue more shares, so it can track the index appropriately.

Perspective - BKE

BKE reported a same store sales number that was 1% lower than the Street estimate. 4.3% vs. 5.3%.

For this, the stock is down around 10%!! This massive decline, from such a small miss, while its forward PE is around 11.

Basically this very reasonably valued company just lost about $154M in market cap because it was shy 1% of the Street's estimates, which equates to about $5-6M in sales in Oct.

Something just does not add up. IMO, the market is incorrect here, so I added at these prices.

Wednesday, November 4, 2009

Market Thought... new equation?

The Fed vote said it all. Unanimous to keep rates low. So much for the rhetoric about rising rates. Wonder why the WSJ even allows Fed Governors to write op-ed pieces, when the governors themselves do not practice what they preach.

Fundamentally, nothing has changed. The low rate liquidity that has been driving this rally is still very much in play. (The unanimous vote is what is really bothering me.) There is no indication from the Fed that they will do anything regarding the excess liquidity, despite the positive data that is being seen. (CSCO's report is simply too telling.)

One market indication that I found interesting today was that the 10yr note declined, causing the yield to rise.

Granted the trend of the yield is still negative, but the fact that it went up today, imo, means something. The 'reflation' is kicking in, and the bond market seems to want to anticipate the inflation.

Along with the dollar decline, the market acted like crap after the decision. The combo troubles me.

The rise in the 10yr yield, while liquidity is everywhere (with the dollar falling) and the equity market now sluggish, to me signals a market (bond, equity and forex) about to get hit by inflation. (Equity markets do not like this type of inflation... aka stagflation)

With this scenario, IMO, the TBT is still the play.

If the new equation takes hold, ultimately the bond markets will force the hand of the Fed, and they will have to raise rates. Similar to what Volker did in the late 70s.

IMO, this delays the dollar rally, and takes Roubini's threat of the dollar carry trade unwinding off the table. (Although holding some UUP would not be a bad idea for a hedge, in case something triggers the carry trade unwind.)

Tuesday, November 3, 2009

Market Thought... same thought

My previous thought (Market Thought... same old) is the same. Still waiting on the Fed statement/decision. While waiting, however, some interesting plays are developing.

Look at AAPL and GS. They are oversold, and, IMO, when they decline to their lower end support, they want to be purchased.

I would love to see AAPL hit 180, but I do not think it will happen. Regardless 185 looks good for an initial position. (or at least a day trade... to buy on the dip and sell on the intra-day rally)

Similar situation with GS. I am waiting to purchase around 165. (i day traded it the other day when it approached 164, and plan on doing it continuously if I can)

Regardless of the day trading, everyone and their mother knows these stocks and companies are solid, and merit a higher stock price. Start to take advantage w/initial positions, if not in them already.

Monday, November 2, 2009

Trade - CHK

Nat. Gas is getting interesting again. With the recent consolidation in the commodity, the equity names came down. In particular, CHK has entered a level and state of consolidation that caught my eye.

CHK is oversold around support, and even if it breaks down at current levels, fundamentally it is worth over $24/share.

Nat. Gas may decline some more, and may continue to bring down the related equities.

Irrespective however, CHK merits an initial position at this point. And I will probably enter a position in the AM tomorrow.

Saturday, October 31, 2009

Market Thought... same old

The market dynamic has NOT changed. IMO, this is a correction with the current dynamic. Since July (when the dollar collapsed from its support), imo, the market rally was a liquidity lead rally. This plays a major role in my current market view, and why I am playing the UUP and TBT. As such, the only thing that can de-rail this dynamic is a fundamental shift that will take dollars out of the system. We may get that, or a real threat of that, on Nov 4th via the Fed Meeting, but right now the market is not indicating that.

Regardless of my thesis, however, very real economic progress has taken place. This is why I am ultimately a bull, and certain stocks my seem like a good play at these levels. For instance GS, AAPL, BKE, PWR, NLC and F to name a few. (All oversold, and itching to be bought.)

Looking at the SP500, it is oversold and sitting on a support level.

Within this market decline, the 10yr yield went down, so this tells me the decline was not due to the anticipation of rising rates. Indicating the current dynamic is in play.

Now, combine that with the VIX. A huge spike is usually a buy signal to the market. (Keeping in mind, the VIX is not an investment, at best its a day trader tool to hedge the market, but its an indicator.) In a stable market, a VIX of low 30s is high.

So, the SP500 is at a support level, with a spike in market fear, and the liquidity in the market indicating it will remain (via the yield). I conclude this as being the 'same old', and merits stock purchases. Especially for large cash flow, lean, high growers like the names I indicated above.

Remember, the Fed Meeting is the wild card, but any liquidity to be removed from the market, IMO, is what can safely be removed not to hurt the economy.

Over the next few month, depending on what the Fed indicates, we maybe in a 'economic equation' shift where the dollar will stop declining in relation to an upward moving market, due to real economic growth and higher rates.

Friday, October 30, 2009

Trade - F

Ford is reporting on Monday, 11/2. I have used the recent consolidation in F to build a position. (I entered more today, increasing from the Wed purchase.)

Wednesday, October 28, 2009

Market Thought... consolidation

There is a consolidation taking place with the 10yr note. Previously I indicated if this was to happen I would look to get into the TBT.

The 10yr yield is coming down, and approaching its 38SMA, and stronger 3.33 support.

I will most likely use this decline to enter the TBT soon.

Also, this indication may suggest a market consolidation to which the SP 500 may bounce off the 62SMA support or the support around 1025-1030.

Right now, the clarity is on a bounce from the 62SMA for the SP500. IMO, this an opportunity to enter the UUP and TBT to play the dollar rally and higher market rates.

Hedging my market thesis, I also have long positions in NLC, just got a limit order executed for F, PWR and BKE. Also, if PWR see below 21 with this decline, I will enter a 'larger than initial' position as the SP500 approaches its 62SMA.

I am hard-pressed not to play AAPL or GS here for a bounce, but discipline holds me back.

NLC - nice quarter

What a great quarter. Growth is not there yet, but they are becoming lean and mean. Boosting their cash flow to a very impressive level. All this was done with a reduction of inventory by 17.5% from Dec 2008.

This is simply great.

When revenue growth kicks in (which management indicated it will start, especially in Asia, in Q4), the earnings power of this company will be very very nice.

Even with today's up move, NLC is still not overbought and I am hard pressed for reasons to sell into this strength.

As the market declines, I will be adding NLC into the intra-day weakness.

(The story here is not an economic sensitive story. Its a company turn around story, that will exponentially benefit as the economy turns.)

Tuesday, October 27, 2009

Market Thought... carry trade

After reading a few articles the other day, and watching Roubini on CNBC yesterday, I realized my thesis for the dollar rally is basically describing the 'dollar carry' trade, but not so elegantly. (But I was posting to prepare for it before everyone else :)

Anyway, I digress... saw this article on CNBC today, and it got me thinking. What would be the most severe impact if this unwind really swings in the other direction. A worst case scenario of sorts. After all, we have to keep ourselves a few steps of these so called 'experts', so we can beat them to the trade and ride their wave.

From what I can see, from a longer macro perspective of technicals, the possibility for the SP500 to reach around 950 is not out of the question.

I state this because 950 is a major support from this current market rally dynamic.

A look at closer more micro perspective indicates to me that there are multiple supports on the way to 950. One of which is very strong, the 320SMA. Still its around 950.

The red line, around July, is when the dollar started to collapse, and the market rallied due to it. So a bear can really argue that the true low from the carry trade to unwind is the low 900s on the SP500. But the strength and stability in earnings profits will prevent that.

Friday, October 23, 2009

Market Thought... cautious

I am being cautious here. The yield has breached a resistance point, and I am looking for the dollar to begin to rally. (This could also be a consequence of knowing the Fed will stop buying the notes.) Whatever the case, IMO, higher market rates will force their hand to raise the Fed fund rates.

Even with my thesis in play, I will probably not unload all my stocks. Will most likely keep BKE, PWR, UUP and any other stock that gets all of their revenue from the US. As I think the dollar is setting up for a rally.

Thursday, October 22, 2009

Trade - NLC

NLC looks interesting here, and I entered the name. Its consolidated, sitting on support and in an industry I really really like (clean water).

fyi... NLC reports next week. Can move the stock either way. If it rallies before earnings, I will most likely take profits. (But this is a name I like for the very long-term.)

Moody's... not so much of a hedge

Got to swallow this one. I indicated, in a previous 'Market Thought' post, I was playing MCO as a market hedge. Needless to say, it has not been working out... as a hedge or as a general trade.

MCO is still in its overall down trend, but areas to which I thought would not break upward with its overbought conditions, breached. (The box highlighted on the chart)

Basically, as a function of a market hedge it has failed me, and cost me.

I do not know if it has enough juice to break the negative trend, but with relatively favorable news regarding the credit rating agency bill Congress is voting on, it could move up.