Box of Rocks Revisited:ATO

We got a nice ugly candle on this one. I do not have a position, but you can see that this is the type of activity that needs to happen to pull the shorter moving average into a cross of some significance.

I did update the sector charts for those of you with about 10 minutes of patience. Click on the resources tab.

BWA

I was in BWA as a true short a bit early. I stopped out. But elected to re-enter via JAN30 puts.

There's quite a bit of volume under this price area. Accordingly, I think that a breach might present a cascade of selling. I don't believe that autos is the sector to be in. BWA was my single best short (via puts) in 2008. It was not a crowded trade then. It is a crowded trade now.

Weapon of Choice

(Click to be transported)

If you love Christopher Walken, as I do, then you will not be disappointed by this music video. I've listened to it an embarrassingly high amount of times. I think that you will enjoy it. Blogger, Biffermas, at Slope of Hope, offered it as a musical selection and it has been a worm in my brain ever since. And...there is a lyric line: Walk without rhythm, and it won't attract the worm.... And you can tell he is having fun in this video...and he definitely has rhythm, as he is a damn fine dancer.

ATO: A Box of Rocks

While I do not pretend to have a refined eye, I do find this level of activity interesting.

For every buyer, there must be a seller. That we know is true. But that is a high volume day. Where is the support underneath? Note this also corresponds with ATO being inaugurated into the S&P 400.

For subscribers only....

Remember to click!


In my continuing quest to add value, I will start asking the Magic Eight Ball selective questions. You can see its honesty to the following questions. That's about on par for most paid services, and you can get it here for free!

If you have personal question that you would like to ask of the Magic Eightball, you can do so here.

Edit.....Okay, I'm going to add another chart before going to bed.....

When Dividends Fail

Do click!

You've heard the oft-said with dividend stocks, "you get paid to wait". Well here is an example of what happens when the dividend get cut, "you get chopped into bait." A 27% dividend gone south.

The Woodshed

Here's a blast from the past...March, 2007

For those of you who read Bill Cara (that man is a saint!), you will know that frequent contributor MarkM infrequently self-imposes punishment of going to the woodshed.

Here's a woodshed that we can all hang out in for smokin' , drinkin' and cussin'--all of the things that promote civil discourse and social cohesion--

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What I don't understand is why Goldman Sachs would come out with their own revision of GDP just one day prior to the government's doing so. I'm consigning them to the woodshed!

I sold some of my SPY calls into this AND I lightened up on some puts (XRAY, CFR, DUG calls). I also sold EDZ out of my spec account. I also thought that I had sold SMN, but apparently, that did not launch.

I was particularly angry this a.m. For the second day in a row, Fidelity had a bad feed. Yesterday OIH was not even a recognized symbol. This a.m. I had two option symbols that were not recognized. I also got a 1.59 fill on a SPY option sell that had a bid of 1.63. This is the second time that has happened. I have an expectation with liquid options that that the market is the bid. That's the second time in a week. Do not, then, put in market buys/sells even on liquid options as you may get a bad fill.

I'm wondering if today's GDP report will create a 'sell the news', or create some euphoric response. I truly believe that the market always WANTS to go up. Certainly it got some reason for that.

Time for some charts:

Here's LYBI. I found this on StockFetcher doing a scan....Your editor sold into the giant candle. The bid/ask spread was about .30 on this small stock. Not liquid, and I made a nice little profit on it on a modest holding of 500 shares @ $3.96. I sold at $5.20, though the stock hit a high of $5.60.
I guess it might be $10 tomorrow...but the wide bid-ask throughout the day was troublesome. I pocketed $600 net of commissions on a 2 week holding. I'll take that 31.3%....


I'm still holding this puppy.

I'm neutral to modestly short. Tomorrow is month end. Who knows what brooding will take place over the weekend. I still believe that we are at an inflection point where news is the main driver. In issue after issue during earnings season, we are seeing beneficent rewards and hammering punishments delivered when the good news surprises or the bad news disgusts.

I've manage to salvage my portfolio from the evils of the COST puts gone awry....but who knows what danger may be lurking?

Hope your day went well.

Are you Tooting?

From my post yesterday...........

I did hear the news (though apparently some (clearing throat) did not), that GS had revised GDP downward. Now the government number comes tomorrow. Now wouldn't it be a hoot to make you toot if the government's number is larger than GS's?

Wee in the Early Hours POst

(Yes, I should be in bed, but it's a dog thingy. While I wait for them.....)

Long time reader might remember when I shared a very personal story about my brother's suicide. Tim at Slope of Hope has had some guest posters recently. While I had no intention of being a contributor, I stumbled upon that post while rummaging around in my archives. It occurred to me that it might be a post of value. So I sent it to Tim (who I call Toshi!). It is word for word the post I wrote here (including my imprudent use of the f-word, not once but twice).

I see a couple of comments asking if I'm the Leisa who used to post on Bill Cara's blog. The answer is yes. I used to comment extensively there, on Tim's blog, Barry Ritholtz's blog and Roger Nusbaum's blog. Each of those places gave me an opportunity to write my meager thoughts. Bill Cara and Nona 2000 (who, introduced me to several blogs) were particularly encouraging of me in my efforts to start a blog. I wrote before Tim or Bill became blogging rock stars and their comments section a veritable Woodstock.

Fancy Charts?

Not here. We have a breach to be sure. There's lots of fancy charts, but you don't need one to see some of the 'obvious' places to look for support. I'd add that between 96 and 102.3 or so, there's a rather thin bar.

As you know, your hostess is not a trader. I had some lovely SPY 110's puts (in size for me) that I elected to peel off yesterday. Why? because I thought we had a decent chance of a bounce. I did hear the news (though apparently some (clearing throat) did not), that GS had revised GDP downward. Now the government number comes tomorrow. Now wouldn't it be a hoot to make you toot if the government's number is larger than GS's?

I had the opportunity to catch up with a fellow blogger, Iguanadon, at the Slope of Hope. What a treat it was to meet him. Here's a link to a pic if you care to take a look here. And I hope that if any of you are traveling through the Richmond, VA area, that you'll think to look me up (see my profile for e-mail address.

While I'm chagrined that I let a large put position get away yesterday, they were NOV puts, and those things can lose value fast. I did have the presence of mind to pick up some SPY MAR 95's. I currently have CFR DEC 50's and BWA JAN 30's. Oh...and DUG DEC 12 calls. I also have some NOV SPY calls....I'll hope for a bounce to unload them! I have some SDP, EDZ, FAZ (since 50, but a very small position) and SMN. I also bought some SH. I also bought some XRAY DEC

I've still cash to deploy, but I'm not brave enough to go full in short.

Louise Yamada Interview

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/10/23_Louise_Yamada_files/Louise%20Yamada%2010%3A23%3A2009.mp3

A blogger, MariAroma, at Slope of Hope referenced this terrific resource. If you do nothing else in the next 48 hours, I hope that you'll listen to this.

I've also placed this on the permanent tab.

Highs less lows and the respective moving averages revisited.

I know that you guys are smarter than I am, so I appreciate it when you contribute. I really appreciate the great comments.

I wanted to expand a bit more on the new highs/lows, and more particularly how they can point to a waning trend.
Sleepless noted that during a significant crash, there would be some bastardization regarding new highs/lows. And, we'd expect to see the line advance.

Please note the highlighted area. What we are looking for are divergences. Divergences are nothing really more than a "heads up" to open your peepers and be vigilant. First, note that the yellow rectangle shows first a flattening of the moving average of the net difference of new highs and new lows while the index continues higher. Second, the index and the moving average moves directionally aligned. Third, we should ask? What to expect next? I'm guessing that we'd expect to see a FLATTENING of the moving averages, no?

I also wanted to talk a little bit more about trending v. trading markets. Last summer (2008), I pulled out my 3" binder of all of the StockCharts stuff that I printed out in 2005. I actually did it in a day, and I remember clearly doing it on my deck. Somehow, I had missed the distinction of when you use oscillators v. a trend. I realized that I was having a 'moment'--a V-8 slap on the head moment. (It is also accompanied by a stain of embarrassment on one's cheeks).

Simply put, if a stock is strongly trending, your moving average and the MACD are your best friends. The MACD is going to tell you whether or not the short term trend (on either a simple or exponentially measured means) is moving further away from the long term average or closer.

If a stock is NOT trending, but rather chopping about in a range, then an oscillator is your best friend. I've seen several people in various places present charts and talk about the stochastics being pegged and a down move is soon to follow. When the down move does not come, then there's mumbling/grumbling about the PPT or what have you. In a strongly trending market, oscillators can stay pegged in either overbought OR oversold territory for some time.

There's a helpful tool called the ADX, or the Average Directional Index. You can read about it here. I used to have something taped to my monitor to REMIND me to look at the ADX if I could not discern trend. If the ADX was rising, I'd look to the moving averages. If the ADX was stalled, I'd look at an oscillator.

Your handy source for technical indicators is here. Understand how indicators are crafted and what is a leading v. a lagging technical indicator (just as you ought to know those things for economic indicators!)

SPY today

Please click this chart to make larger





We're not quite dead yet are we? I'd expect the trend line to start flattening out (meaning down days to bring the average down). I'm watching for the moving averages, and we've got one more to hold or fold through (32EMA) We're still in markup and there my be one more Lazarus move.

I've enough puts to be happy if we go down, and enough longs to not be nail biting.

Perspective/Retrospective

(Here's a draft of something I was pulling together on Saturday morning...It never quite jelled. Nevertheless, I'm going to post it as Sleepless left a prescient comment that was as if he had been peering into my computer!)

~~~~~

My favorite thing to do on Saturday mornings (when I'm not doing a dog transport--and I've today off), is to drink coffee, listen to the technician on Financial Sense OnLine (R.McHugh this week), and nose around a bit.

There's a certain miasma between waking and caffeinating that I find helpful in getting things that have been marinating in my brain to raise their hand and say they are ready to get on a hot grill and sizzle.

To say that I've had a dearth of sizzling of late is an understatement. But I've an efficacious subconscious, and I know that it is working sub radar. It will choose in its own good time and schedule to 'reveal' itself to me. I'm still waiting for a revelation.

MarkM's comment below

Hi L. My model, eh? :)

Just need to watch the internals on any pullback here. Market was WAY overbought on a ST and intermediate term basis so we have the CAPACITY for a nice, big pullback maybe to the 900 level. That gap from last September was finally filled and for a technically driven market that was huge.

Watch what the advance decline line does. Watch the new lows. Etc. Is the pullback orderly or messy? If it gets messy with lots of bad action underneath, then we go to 900ish. If it's orderly, then we can base and pop this into year end and Abby Joseph Cohen gets her day in the sun (1200 on the Spoos).

Watch for basing action around the bottom of the channel. Usual pattern is then a blast above it sending the programs off to the races. That pattern needs to change to have a meaningful decline. Otherwise it's just garden variety profit-taking and re-accumulation for the next leg up. (If little ol' me is seeing this then it's time for the bulls to switch playbooks, perhaps with mid-channel switch or better yet from 5% or so below the channel.That would REALLY cream the shorts.)

Hedgies and program traders have been driving this market and they already have their number for the year so this is a dangerous time.

MarkM

inspired me to pick up my Mamis book...The Nature of Risk. I have about 100 post flags in this book. Naturally, I have some 'special' flags, too, to give a bit of a hierarchy between good and great. And one of the 'great' flags is an indicator that Mamis uses on the New Highs/New Lows. He considers this indicator one of the single best indicators of trouble...in that it signals first with a divergence. And the market, much like my subconscious, will move at its own particular pace to reveal what it has in mind. You, though, need to be mindful of its 'fixin to get ready to...." status.

Here's what Mamis says:

In the preceding chapters, you will have noticed a considerable reliance on the number of new highs or new lows as an example of a useful market-"language" statistic. The reason for this is simple: it works. No other indicator--whether readily available, as this one is every day, or not--has such a consistent success record.

Here is a chart of the New Highs- the New Lows. You are viewing a net difference calculation, and I've chosen to do this for the NYSE.



What is telling in a kick- in-the-stomach sort of way is the velocity and verocity of the March sell off. What is further telling in a rub-your-eyes-this-does-not-make-sense sort of way is that there does not appear to be any weakness in either of those two moving averages.

Here's another chart for the NYSE showing a weekly moving average (10/30/2000 through now) for the Advance- Decline.


Here's the Nasdaq moving averages of the NH-NL against the composite index price.





Conclusion? A Monty Python, "I'm not quite dead yet?"

Waters appear choppy and dangerous, but it is mutual fund year end, no? A push higher? A fall lower? We're as likely as not to see both. We are in the netherworld of "if the market doesn't suit you today, wait for tomorrow" era.

For no other reason but because I could.....

First, if you've not stopped by Michael Davey's, Centrifugal Deforest's blog, do stop by. You can find him here:

I see that he has some interesting picks, and some of them from the Chinese bone yard which you know that I love to pick through. I posted ORS, and he mentioned that he does not buy stocks less than $2 unless the market cap is higher. It made me wonder how of the Chinese ADR's, what was the relative market cap of particular issues.

Here are the top stocks that comprise 90% of the market cap of China stocks according to FINVIZ numbers (click to read!).


PTR and LFC are almost 70% of the entire Chinese ADR's market cap. Add CHA and ACH and you are almost at 80% with just 4 stocks.

Now....if you want the entire excel file, go to the 'Resources' tab at the top of the blog, and you can find it there.

Housekeeping

As I take a break from my EPA cleanup at home, it occurred to me that I need to resurrect an Upload tab. While I adore this blog skin, I've not taken time to ferret out the CSS code to make it as usable as what I used to have. Remember those nested menus that I used to have?!

Anyway, I did manage to correctly assemble the tab above--formerly called "What's New", but sadly never had a damned thing in it.

So check there for various uploads/resources for you. I'll update the two there weekly, and I'll add to that list

PerfCharts Redux

Glenn's comment about sector performance inspired me to put together this week, month and YTD view of John Murphy's sectors for you to see relative performance among those three slices of time. I think that I'll do this more. I did note in my sector charts that biotech is looking a little ragged.

DJ Sectors_102309

Here's the PDF for the DJ Sectors for those with an interest.

http://www.box.net/shared/static/o10jp78hep.pdf

Sunday Morning Charts

I'm on my final day of slumming. I was going to take a brief nap yesterday. I find an afternoon nap a terrific luxury. In fact, I seldom sleep as well as I do in taking one of these naps. Oh...and it's not a cat nap, "power nap". It's generally a 1-1.5 hour nap. And when I wake up, I'm awake.

My three dogs seem to enjoy these naps. Unfortunately, Daisey was so excited she took her paw (and she has big feet) and managed to hit me in my eye. Luckily, there was no abrasion because of the beauty of our blink. However, but I had about an hour where I was having some real discomfort, and I was wondering whether my eyeball had been pushed to far back in its socket. The worst of it passed...but there went my nap!

I did not have a chart free day yesterday, rather, I looked at a few charts (but not TOO many). I wanted to share a few with you. The market is getting a little jiggy, and you know that I do not give recommendations on stocks. But this is a blog all about sharing my process (the good, the bad and the ugly). You should know, though, that I don't always publicly crow/lament about all the good/ugly, but I do try to to give some representations of both.

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Here are some charts...remember to click to make larger.

Here is my WH...my little Chinese tubular steel maker. This stock is fixin' to get ready to do something. I've a few shares of this, and of course I'd like for that direction to be up.

Now you might be mumbling, "Leisa, just use a stop".

See the image above....If a stock gaps mightily, then your stop is pretty useless. It works for very liquid stocks. Many of these stocks that I am in are not that way. I'm not saying that you should not use stops. Merely, if you use them, understand that you can still get a huge loss. First your stop has to be triggered. Second, there's a minor issue with it needing to be filled. In fast moving market, your fill may be a long way down the price road.

The next one (another Chinese stock..you know I look at these charts most weeks!) is ORS. I've no position in this stock.




In a discussion on SOH, water treatment was mentioned. I was reminded of MWA, and I created an updated chart:






As we know, nothing in a chart can tell us about the future of stock direction with any certainty. But charts yield clues as to price performance, volume patterns, price/volume patterns (e.g. support, overhead supply). I'll go to my grave still peeking at fundamentals. I do care about them secondarily. So I'm not a purist practitioner of either fundamental or technical analysis. But if we are doing anything at all it is evaluating the weight of the evidence. Some passing understanding of the company's fundamentals helps inform of potential knowable risks (bankruptcy, patent expirations, drug trials, economic pressures). And you ought to have an idea of where the business cycle is and whether this stock is in the mature phase of that cycle or not. For regular as clockwork, money moves through those cycles.

Here's PeterDag's business cycle

If you click on the graphic above, you'll see his PDF explaining this cycle. It's important information to understand....you do not want to buy good companies in cyclical industries late in their cycles.

Bird Doggin'

Please click on the picture to view this artist's work at Art.com

Given that I'm slumming, that also means that I'm trying to connect some random dots that mean only that I'm doing my usual random pattern of "oh, this is interesting" that will lead to an "Oh!" That means Bird Doggin' in honor of my beloved Lucy. I've not flushed and pointed out anything new and interesting for you in a while, so I'm trying to make up for some lost ground.

Okay...maybe I will not get the big "Oh!", but I'm giving my starved brain some inputs from which POSSIBLY to gain some future traction that will lead to who knows what.

I was reminded to visit f. W. Engdahl's 'space' which you can find here. In doing so, I came across this series of Real News interviews which you can find here. I liked it so well I became a contributing member. You can find The Real News Network here.

A few things perhaps off your beaten path?

Give a Listen, Won't You?

One of the habits I've gotten out of the habit of of, is listening to Gary Kaltbaum.  While I adore his market commentary, I tired a bit of his political carping...so I tuned out.  But his Friday's show is spectacular.  You know that I believe that he is one of the honest voices out there.

 

You can listen here

 

http://archives.warpradio.com/btr/InvestorsEdge/102318.mp3

 

I have a post coming later, but it is still in my quality control department undergoing a 10 point safety check!

Slumming and Comparative Resources

The men folk took off for West Virginia for a dirt bike ride with some others. This trip is one that is much anticipated, and they try to go 2 times a year. Last weekend they were rained out. It's just me and my girls. My daughter just stepped out the door for her plans. But earlier, we took a nice walk with the canines. Lovely warm, Indian Summer evening.

Below is a picture of Malcolm Smith (left) and Ken. Malcolm Smith is in his 70's and Ken is likely in his 60's. The picture was from a couple of weekends ago from Hatfield and McCoy, where these men are still enjoying this sport called dirt bike riding.

Malcolm is considered the father of dirt bike riding. It's a terrific picture of two men passionate about this sport and still engaged in it.

I'm going to make some good use of my time away from having to take care of the needs of others and get some stuff down around the house.

I'm going to spend a quite evening looking at charts. We are bumping into resistance...here's a previously shared chart.

There's a picture in my head that we could carve out a whomping big "W" bottom which would fit well with a gnashing and thrashing economic scenario. I wonder if we will have 1 more push up...a last gasp so to speak, or if we've already had it. Perhaps MarkM's model will tell us?

I'm pretty much of the mind that either direction would not surprise me.

Glenn asks about a quick way to see changes in sectors from week to week. One way to do this would be to use this view of the PerfCharts on Stockcharts (click on graphic to be transported).

Also, Finviz offers a nice graphic (click to be transported)

And finally, one can go to the Market Data page in the WSJ

These are my typical go-to sources to get the broader feel of the market.

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PerfCharts and Dumpster Diving

Glenn asks: Leisa, have you worked the Stockcharts "PerfCharts" into any part of your routine sector analysis?

Rather than answer in the comments, section, I thought it worth answering in a post. StockCharts is one of my favorite places in the world. My first technical analysis 'book' was the 3 inch binder that I created by printing off every TA article off of StockCharts. Reading this material (yes, I read every single article) helped direct my future reading. I have to consider John Murphy my favorite technician because of his gift of teaching. I appreciate the 'voice' that he brings to his writing, and his gift of objectivity without ego.

You can find the PerfCharts that Glenn asks about here. Here is what it looks like.

This happens to be a pre-packaged one on commodities. Over a period of time (using the slider) you can see how each group has performed relative to the other. You can also do that with stocks you are considering in a sector to see relative performance among each other.

Now to answer Glenn's question. No, I don't use them. Rather, I do it the hard way! And Glenn, if you want to share how you use these, I'd love to post it.

I really do find it comforting to look through a great number of charts through the week in different sectors--though to be sure, PERFcharts give a shortcut to that. The detail, though, gives me a 'feel' for what the underlying movement is under the market. Plus...it helps me find setups in the making.

If you are not familiar with StockCharts, then I'd encourage you to spend some time there if you have an interest.

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I have no position in NSSC, but I've owned it in the past. While the pattern is constructive (a lovely base) today's volume on the bar was not very high. I had this idea (when I entered the position who knows when) that security products might be in demand due to the future social unrest that all are predicting. Personally, I have my pact of dogs that though they would not kill anyone, make enough noise to disabuse someone from attempting trouble.



I'm gonna keep my eye on this. It's a low rent stock, but for some reason, I seem to have pretty gook luck with these.

I did buy some of WUHN. Notice that the volume is only 1500 shares. I happened to be 1,000 of those shares today.

From their website:

Wuhan General designs and manufactures industrial blowers and steam and water turbines.Industrial blowers are used to move large amounts of air in applications such as power generation, coal mining, sewage treatment, subway system ventilation, and the production of products such as steel, chemicals, and paper. Relative to power generation and the manufacture of industrial products, blowers are often used both to feed air into the process and also as part of the air pollution control system that cleans air emitted from the process.

Steam and water turbines are used to generate electricity. Our steam turbines can be used in various types of power generation facilities including those that consume coal, oil, natural gas, and nuclear fuel. Our steam turbines are also often used in cogeneration facilities in which excess heat and steam generated from the manufacturer of industrial products (metal, chemical, petroleum, paper, etc.) is converted into electricity. Water turbines are used to generate electricity from at hydroelectric stations.

It's a speculative play....but this chart, to my eye, looks promising.

Ultra ETF's

For those of you who cannot get enough pleasure or pain (depending on which side of the trade you are on), I've uploaded the Ultra ETF's (long and short).

You might find these convenient to scroll through quickly......http://www.box.net/shared/static/q5515iq3us.pdf

P.M. Post.

Here's a snapshot of SPY. Click to make larger.




See my notes on the chart. We many not quite be at the edge of the cliff to dive off. I surely do not know, but from the H&S pattern (in cyan), the great promise of that chart did not deliver. To be sure, this rally is getting long in the tooth, and the easy money (is there such a thing?) has already been made.

Here's a one minute chart from today.


I would have had a better view of this if (1) my cable was not out and I could hear the TV and (2) if Fidelity had not become a pig. I knew the market was moving fast because of the Fidelity issue. I wasn't moving any merchandise though.

Below is a longer term chart.


We are getting into a vulnerable period of memory on the p/v chart. At any rate, the chart suggests that we need some consolidation of gains.

There is some attribution to the sell-off to Dick Bove, who single-handedly missed the bank stock debacle and believed that @ $40 (on its way down to <$1) that C was the buy of a lifetime, believed that loan losses were accelerating.

You will remember, that on September 14, I expressed concern that bank loan losses could be significantly higher than they have been in past recessions largely due to the poor underwriting and the inflated asset values. Well, looks like my eye and surmising are not so far off the mark.

I closed my CFR put position out today for a gain. The stock did not react as negatively to earnings as I expected. AS these were front month options (ex NOV) AND the stock was bouncing strongly upward from its low, I sold just off the low. Sadly, the stock moved very quickly and I had an iffy connection. So I made a gain, but one that diminished rather rapidly. I did sell at the high of the day a PIECE of the position.

I still have NOV 57.5 COST puts. Yes, I went to that well again after having drank from the poisonous bowels of it before. But....they are in the green today.

I hope that your day was a good one. It is nice to see both Glenn and Mark posting. I may have to dust out the cobwebs in the woodshed!

P. S. Nikkei is down as I write.

BEST

I have to say that my performance of late in stock picks/options positions has been nothing short of disappointing. There is one bright spot: BEST. BEST makes anti-counterfeiting films and films for food safety. China enacted food safety laws in June of this year, which should be beneficial to BEST. They were recently awarded a contract from Shineway, one of the largest meat producers in China.

This is a volatile stock, and I've written about it in the past. I've a basis of $1.14 in this.

S&P by Sector Then/Now

Here's the market cap weighting of the S&P as of yesterday and as of a year ago.

You can also see another comp that I did at the beginning of the year (01/09 v. 01/08)

DJ Sectors for week ending 10/16/09

http://www.box.net/shared/static/6hlr9a1me7.pdf

For any of the sectarians, I've uploaded the DJUS sectors for the week ending 10/16/09

Waste Management Stocks

Barron's had an article on waste management stocks. I saw the headline in my e-mail, but I've not read it. I did pull the charts in one place for you. If you'd like to view them, you can do so HERE.

Eldar Bob in the comments section noted SRCL about a week or so ago. Thanks EB

Long Term Perspective

Above is a monthly chart (click to make larger) of the NYSE composite. I drew fibs from the 1991 bottom to the most recent top for your viewing pleasure. Earnings season continues to offer a mixed bag with JNJ missing yesterday redeemed by INTC and JPM--both of which are offering some turbo charge to the futures.

I'm still of the mind that we've not had a constructive bottom. For those concerned about volume, the volume bars are still higher (ignore the last one as we are in a 1/2 month), post crash than pre crash.

Anyway, the big picture is always interesting to view; and we are undeniably at an important juncture. Ultimately, liquidity and emotion trump technicals--to important technical junctures (however one defines them) fail. If they didn't then you'd have a printing press, and nothing is so easy as that.

Harmony Restored | A PDF Resource for you.

With the installation of my new dishwasher, harmony has been restored in Leisa-land. The Miehle is extraordinary. High quality, very flexible basked design, and it is so quiet, I cannot tell it is running.

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I posted this on Slope of Hope. Some of you may find this a handy resource. I was experimenting with it for printing out some charts from Stockcharts.com. You can find those downloads a couple posts back. Some of you may remember that I used to do some pretty nifty downloads and they were popular with readers. I need to do more 'value added', and I will be posting these sector charts each week. I may do something else with them too....but I'm still ruminating on that. Here's the PDF post:

I also want to share a resource with you that you may not be aware of. There is a free download of an application called CutdPDF which you can find here: http://www.cutepdf.com/

Essentially it will set up a 'printer' that will print whatever you have in PDF form. It's pretty handy.

For a mere $50, you can get the professional version that will allow you edit, merge, delete, etc. For those of you with small businesses, you might find that handy. Last week I had to handle more than 1000 pages of data which required that I redact some stuff. This $50 program saved me alot of time and my client alot of money. (I had Kinko's copy the files with a pdf output for me to edit).

Anyway, something that you might find helpful in your off line life. I personally like to see charts on paper, and this was a handy way to print out the charts to pdf's and then merge them together.

(edit...I have no affiliation with this company, but I'm highly affiliated with ideas that save time/money and I like to share them)

DJ Sectors

I have one more resource for those that are interested. This is a combo of ALL of the DJ sectors. These are not as long a view as the gold charts. Long term readers might remember when I used to create the Weekly Sector Analysis and post it for you. It was a beautiful spreadsheet if I said so myself. Unfortunately they started adding moving sectors around. I couldn't keep changing my spreadsheet (combo of too lazy/not enough time).

I will run this for readers each week. You might find it handy.

Gold Stocks

I created a PDF of gold stocks that have the charts from my Stockcharts which you can access HERE. [EDIT: I've updated this file on 10/11 to show the ticker/GLD indicator)]

These are long term charts. Remember that you can go to FINVIZ and get this information, but not in this time frame.

Saturday Morning Post

Gold has broken out. Here's the chart:

The highlighted sections are the inverse head and shoulders points, and the line being the neckline which has been penetrated with decent volume. I have one gold holding: GBG.

I had this misguided (apparently) idea that the USD was oversold. I positioned for a bounce. Oh, we got it, but I failed to close out my positions (SMN/EDZ). My gain evaporated into a loss.




I'm reminded that I thought that UNG had bottom. Ahh...stupid stock tricks.

I'm still in a bit of a head scratching mode on the dollar v. the US stock indices. I understand that the weakening dollar helps multinationals as they get an FX tailwind in the translation (foreign sales are valued higher even if there is not a unit increase). However, for most dollar-centric companies with costs and sales denominated in dollars, I do not see that relationship. Why would they be more valuable when on a dollar valued basis they are losing on a relative basis to others? There's a dissonance there--and I've learned to pay attention to dissonances.

My less than 5 year old Fischer Paykel died and ingominious death. With two drawers and poor design that spells one thing: double trouble. Too expensive to fix. I ended up getting a Miehle (La Perla) . Top line at about a 22% discount + no sales tax for the 3 day Energy Star no sales tax holiday. I could not find one negative thing said about Miehle other than the expense. It was $1900. Far more than I would have cared to spend. But I cook alot; and a dishwasher is a heavily relied upon piece of equipment. Since I don't have a maid....I don't mind paying up. I do have a Miehle vacuum cleaner. Powerful. Quiet.

Back from a needed respite from everyday life. I look ten years younger due to the unintended but happy circumstance of being on the receiving end of a dermabrasion from the wind-driven sand. While I enjoy a brief jaunt to the beach, in reality, on a sustained basis, wind and and sand are not elements that I willingly embrace in the long term.

Mark and I survived the onslaught of overly excited canines who did not quite know what to make of our absence but quite what to do in the enthusiastically greeting our return. I've a broken dishwasher (and it is less than 5 years old). It is a double drawer Fischer Paytel. With two independent drawers, you have double the trouble. And I do have double trouble, to be sure. I have no plans to spend another $600 on this machine to get it fixed. I think that I'm going to get a Miele.

Though I've not reached crackberry status, I'm finding my BlackBerry to be very helpful....NOW with my cable out, I'm hooked up. I see MarkM has noted from Barry R's blog an article in the New Yorker on Armstrong...you can read it here.

A Note from the Beach

Greetings from Hatteras. I'm thankful for my picture from a couple of years ago so that I have a memory of the sun. Though our travel day was beautiful, the weather has been iffy. I've been awake now for an hour (and it is 4:41 a.m. now) because of the blowing wind. I would have been an insomniac at Wuthering Heights.

We did have happy hour on the beach last evening. Fishing was out of the question, as the water was rough. I used yesterday to reposition some stuff (I had some OCT SPY calls that I wanted to close). While all eyes have been on the indices, there are still charts that look decent. I have a small theory that the SPY could remain supported by virtue of some healthy sector rotation. But you know that I like to watch sectors v. the indices. A small confessional, though....I've spent a bit more time watching the indices, and that has not been good for my results.

I've been expecting the dollar to bounce, but.... Expectations, while necessary, are not always met! Gold seems to have everyone in a lather. I'm finding that I'm doing more fence sitting than anything else. I'm trying to NOT be overly anticipatory....and scrolling through some charts makes me feel that much of the advance is supported by stocks that are forming healthy bases.

The wind is blowing so hard, I can feel the house shake, and the water in my water bottle is moving from that.

It has been good to see Glenn and MarkM in the comments section.

Housekeeping

I will be on vacation over the next few days. My B/SIL rent a place at Hatteras each October, and they are generous in inviting us down. This pic is from 2006. This is one of my favorite pics that I've taken. I'll have a laptop, but a little break from the computer would not be a bad thing. The blogosphere will likely benefit from my yapping less over the next few days!

Though I mostly listen to classical music, I do love Alice in Chains. They've a new album out....Black Gives Way to Blue. My son, now 18, picked it up. I'm loving it--doing some album immersion.

Financial Sense On Line has an interview with Russell Napier (see hour 3). I listen to RN every chance I get. He's the author of Anatomy of a Bear--a book that I highly recommend. He was also interviewed by Jim Puplova on his book, and you can listen to that here.

In this interview you will hear a few things that will likely surprise you. I'm not going to give it away, because I'm strongly urging you to listen.

Lots of cross-currents in the market....don't get caught in the rip tide. I'm totally on the fence for this week.

Captain's Log - Three Years

The Perplexed Investor celebrates three years today! I wanted to quote Jose Ortega y Gasset:

"The so-called spirit is an all too ethereal agent, permanently in danger of being lost in the labyrinth of its own infinite possibilities. Thinking is too easy. The mind in its flight rarely meets with resistance. Hence the vital importance for the intellectual of touching concrete objects and of learning discipline in his intercourse with them. . . Without the check of visible and palpable things, the spirit in its high-flown arrogance would be sheer madness. The body is the tutor and the policeman of the spirit."

Jose Ortega y Gasset, Man the Technician (essay)

I choose that quote today because writing is the concretization of thought. Always best to do it under the effects of caffeine in the morning. If I did not have a blog, I would have never written my series on Hedge Funds and Systemic Risk--the singularly most important work I've ever undertaken. And while many were talking about the obvious issues underlying the banks and brokers and housing and the like, there was no serious discussion in the blogosphere about the impending systemic risk. My writing that piece happened--with great difficulty on my part, because of the underlying technical issues and obscure economic equations that were beyond my training and experience--because there was a great dissonance between the news that was being reported, and what I believed to at issue. That great dissonance was due to the great oversimplification (subprime loans) of the issues and the potential consequences.

I've a few other things that I'd be tempted to pat myself on the back for, but self-congratulatory remarks are never entertaining nor useful. Nevertheless, I hope your not minding that I made one. Rather than blather, I wanted to leave you with a quote that John Mauldin used. Having come to that conclusion in October of 2008, it particularly resonated. I think that it is a fitting close:

"It will therefore be crucial that you see the world anew. That means looking from the outside in to reanalyze much that you have probably taken for granted. This will enable you to come to an understanding. If you fail to transcend conventional thinking at a time when conventional thinking is losing touch with reality, then you will be more likely to fall prey to an epidemic of disorientation that lies ahead. Disorientation breeds mistakes that could threaten your business, your investments and your way of life."

-- James Dale Davidson and Lord William Rees-Mogg, The Sovereign Individual, 1997