Market Thought... curious

I find the 10yr treasury yield chart curious.

It is an obvious indication of slower GDP growth, but it is approaching an interesting level.  Last summer, when it breached the 3% mark, I indicated it would put the fear-of-god in the big boys causing them to sell the market, due to the deflationary implications. And that is what happened.

Hopefully the lesson that the market learned last summer was that earnings were not affected. The big boys were reminded that the stock market is a function of earnings, not 'indications of' GDP.

The EU PIGS solvency issue caused the systemic threat that facilitated the market sell off, and fear of deflation last summer. But what is the threat going to be this go around?  Will it be EU debt restructuring? There have been chatter of a 'soft' restructuring first, then a 'hard' restructuring.

The only time restructuring would matter is if we have heavy leverage within the system.  After Goldman (and other banks) reported, banks are not excessively leveraged. They are at about 12-1. The only time I heard about excessive margin use or leverage, was today with Cramer mentioning it. (I have no corroberation of the magnitude, outside of the contradiction from the banks. So I can not make a decision based on Cramer's qualitative statement. But I will keep my eyes and ears open, and try to look into it further.)

We will see how the market decides to take it. IMO, the above does not merit an SP500 move that breaks 1300, as highlighted in the 'charting' post.

Although the current movement in the 10yr note appears to be frustrating PIMCO's Bill Gross. Probably because, at the time being, he is on the wrong side of the trade.

trades

1. So-So report from AOL, but as I stated the other day, with this bounce I unloaded. (But I do think it is seeing the synergies from their Ad efforts, and incorporating a technology component that the market will eventually like.)

2. Looking to add to POT at 53.30 and IBM. (I will let the intra-day guide my additions to IBM.)

update: Got more POT at 53.30 and IBM.

Still fairly cash heavy, but not hesitating to enter.

Market Thought... charting

With the strong push upward, there is a lot of support. The daily has the 14 SMA and horizontal support near 1340.

If the rally is to continue there should be a bounce off the 14 SMA or the 1340 level.

If negativity creeps in the psyche due to geopolitic or EU issues (potential Greek debt restructuring in June), the SP500 may bounce off the daily 62 SMA (1320), the weekly 28 SMA (1282) or worst case, the daily 150 SMA (around 1265). (The debt ceiling issue got pushed back today to Aug 2th due to tax receipts.)

Random notes on Apple and AOL:

1. I completely agree with Karen Finerman regarding her opinion on Apple's cash position.

2. AOL put their Pictela biz front and center before they report tomorrow. Could this be Armstrong's way of saying AOL is a technology company again? On top of a content company. (And I noticed Politico.com has a large noticeable ad which leads me to think its from Pictela.)

trades

1. entered MF

2. I am looking to add to POT, near the 150SMA on the daily.

3. I will most likely unload my position in AOL and LLNW after they report. (For a day-trade, and a willingness to hold through chaos that is earnings, AOL looks interesting here.) I am obviously anticipating the stocks act well after earnings, but regardless as to how they react, I will unload them after they report.

some thoughts... ATI, LLNW, MF

1. ATI - Last time I mentioned ATI was right before Easter. (This is a missed trade due to my previously incorrect market thesis.)  Since then, I witnessed it melt through its upper-level resistance, and have been patiently waiting for a consolidation.  I will be entering a position around high 66-68.

2. LLNW - The stock is oversold, and looks really interesting here, as it is sitting on a support trend.  The trading was corrupted by AKAM's quarterly report. If the margin issues translates to LLNW, it can break the current support. If they are the ones taking share away from AKAM and benefiting, then they could see a nice boost. Flip the coin and close your eyes :)  I still own the position I entered on the 27th, and unless it rallies to 7 before earnings, I plan on holding it through earnings.

3. MF - I was itching to enter a position today, but MF is not as consolidated as I would like. Also, the intra-day action did not entice me to enter. However, near 8.09 to 8.12 I will enter. (As I have been patiently waiting to do.)

trades... pot, pbr, aol

As indicated in my weekend post, I like the technical set up for POT, so purchased it.  The price was higher than what I originally wanted so I decided to unload PBR.

(I will keep an eye on PBR, but I will probably not enter it again until I get a better feeling of trust from the Brazilian Gov.)

Update 05/02/11, 11:28am: I am also going to hold AOL through their earning report on May 4th.

cool

Over the month of April there was a rise in page views by 131%.

Since I shifted to the blogger platform, in July 2010, the level of site page views has consistently increased (from July 2010-March 2011), rising slow and steady by 221%.

The jump in page views in April felt pretty cool, and me being who I am, was trying to figure out why.

1. I spread the word - I have not noticed myself increase the level of my comments on other blogs that would link back to here over the past few months. (This takes time, and I still have a full time job, which prevents me from doing this. Also, I care far more for the quality of information I obtain to trade very well verse promoting page views.) So I do not take this as the reason.

2. I posted the address on my info Facebook page and Tumblr page in Feb. This could of been a catalyst to the 'bots' that search these sites. Or they are real people viewing it, but I have not been actively promoting it via the social aspect.

3. You guys/gals are spreading the word. I'll take this as the reason :)

4. Google analytic is wrong. Probably, but I hope not.

I would like to think the reason is # 3 ;), which I think is pretty cool, and would like to send a truly heart felt thank you.

(and if its facebook or tumblr 'bots', shhh--eeee---sshhhh, the modem translation to 'thanks' ;)

Thanks, and to the new peeps, welcome.