Thursday, March 31, 2011

MLB Opening Day Randomosity

  • imageLast day of quarter!  So we interrupt our regularly scheduled stock market activity for quarter-end mark-ups.  Seems like maybe that’s the reason for the rampage the last week, eh?  Plus, we have the monthly strength cycle as 401(k) money is dollar-cost averaged into mutual funds.
  • Why fight it?  Not doing any trading today. Just watching.  Still long, but in low-beta stuff.
  • Baseball opening day!  Tigers and Yankees streaming on my computer as I type.  Another $100 down the drain.  (And that’s Minami Matsumaka playing for the “Naughty” team.)
  • Gold settles in at record highGold futures notched a nominal record high Thursday, as a weaker U.S. dollar, ongoing instability in Arab countries and euro-zone debt concerns lured investors to the precious metal.
  • Keeping it short for now…

Wednesday, March 30, 2011

#73: The End of Debit and Credit Card Rewards?

Dow Nears New 2011 Highs

Dow nears new highsJust a few weeks ago there was a wall of worry made up of Europe, Japan, Libya, Egypt, oil prices, and the Sacramento Kings moving to Anaheim.

Doesn't matter to Wall Street. We are near new bull market highs.

I mentioned in the past that eventually Wall Street would look past these external events and refocus on the economy. After all, stocks represent current value and future views of corporate expectations.

Long lines at the Cheesecake Factory and at casino slot machines translate into optimism about consumer spending and company profits.

So here we are. Stock prices moving towards new highs. Still within the trading range defined by the previous highs and the recent 6% correction. Sure doesn't feel like we are going to revisit that. Does it?

I'm long. Low beta stuff.

Tuesday, March 29, 2011

What's Next for Gold Prices?

Gold pricesHas the optimism on the price of gold become too extreme?

Interesting column up at Marketwatch from Mark Hulbert taking a look at investor sentiment in the gold market, and wondering if the most likely move from here is down.

Look I've been wrong about gold. And this year, I thought the theme would be investors fleeing gold and bond and buying stocks. Well, it looked like that was the pace as the year began.

But then, Egypt, Japan, Libya... Inflation in China. More uncertainty about Europe's fiscal health. (And America's, too).

Gold is the safe haven. And when there is turmoil and uncertainty, people turn to gold.

But how much of this is priced in? Are those most likely to flee to safety, or exploit those who do, already in?

Good column from Hulbert!

Monday, March 28, 2011

Monday Market Thoughts

For most of this move in the stock market, the market has finished the day strong. Today felt a little different. We saw the market tail off and sell off in the final hour.

It is just one day. But let's let our minds wander a bit, just for fun. And just to play Devil's Advocate. (I liked that movie, by the way).

Today's bump in the road is happening just as the media is reporting how resilient the market is, and how we've been able to shrug off Europe, Japan, and Libya. We've even seen better economic news and upwards revision of previous economic data. We're also two years into a bull market, and people are starting to believe. What could go wrong?

My working theory at this point, is that we may be in a trading range defined by the previous highs and the 6% correction (SP500). Maybe that 6% pullback was caused by Europe, Japan and Libya. Maybe those were the catalysts for the sell off everyone anticipated for months. Or maybe those were background noise for a tired market, roaring ahead as Americans are still looking for jobs or working for stagnant wages as the costs of commodities and gasoline rise.

I'm not looking at any charts as I type. I'm not bearish. I'm invested conservatively, in lower-beta stuff rather than high-beta tech. So, if the market goes up, that's great. If the market meanders back down, I'm ready.

Just thinking out loud as I let the mind wander...
***

Glad Monday is done. One day into the work week, and I'm anticipating the weekend. The weather here has gone from gloomy to spring, and temperatures will hit 80 degrees this week. I'm blaming my malaise on Spring Fever.

I've also started (yesterday) Week 7 of my bodybuilding routine, increasing some weight on a few of the exercises, while struggling in a few others. Keeping on...

Debit Card Rewards Drying Up

As the government cracks down on fees and such that banks can charge customers, some of the perks are going away.

Such as, debit card rewards.

Many still have credit card rewards programs. These are the frequent flyer miles, cash back bonuses and the like.

But it seems obvious that those may be the next to go.

Sunday, March 27, 2011

Is There a US Civil War, Rich vs. Poor?

There is an article up on Marketwatch by Paul B. Farrell that claims the super rich and GOP are leading a civil war between the rich and “us.”

image

Wake up America. You are under attack. Stop kidding yourself. We are at war. In fact, we have been fighting this Civil War for a generation, since Ronald Reagan was elected in 1981. Recently (Warren) Buffett renewed the battle cry: The “rich class” is winning this war. Except most Americans still don’t realize they’re losing, don’t see the prize at stake.

Okay, Paul.  Settle down.  Step away from the talking points.  You didn’t like Reagan.  Let me guess:  You don’t like either Bush, Karl Rove, the Koch Brothers, Michelle Malkin, and the current make-up of the Supreme Court – oh, and you threw away your Ted Nugent albums years ago.  Hey, “Cat Scratch Fever” was a great song, but this is war!  Sacrifices have to be made!

Paul’s column quickly moves down the line items on the left-wing’s laundry list of “who to blame” on the Right.  Look at it.  Read it.  There’s nothing there that isn’t echoed on left-wing blogs.

But is this civil war really between the Rich and the Poor?  Or is it between the Capitalists and the Entitlementists?  (I made that last word up, but it seems like a good one, and “socialists” and “communists” have run their course as usable or meaningful words.  But it basically means those who believe they should take or be entitled to a spoil of your earnings – their “fair share” of your labors).

Now, we all want schools, roads and firefighters.  We all want to help out those who need some help here and there to get their lives back on course.  This isn’t about that.  This is about our national debt.  More specifically, this is about the interest payments on our national debt.  This is about our nation’s solvency.

The Washington Examiner has an article up today, that details what this means.

Servicing the nation's staggering national debt down the road will cost more than the current annual Pentagon budget -- including funding wars in Iraq and Afghanistan.

By 2019, the federal government will pay more than $700 billion a year on its debt load, currently ringing in at $12 trillion.

As the US debt level rises, more and more of the tax revenue has to be applied to interest payments on the debt.  Should interest rates rise, as many believe, the debt will have to be refinanced at higher interest rates, consuming even more tax revenue.  This leads to less money available for other things.

Many people have recent personal experiences on what this means.  Folks who started using credit cards, received their bills and gladly paid the minimum monthly payment without much effect to their overall budget.  But, as the credit card use increased, that minimum monthly payment went higher and higher.  Eventually, the minimum monthly payment rose so high that people had to make a decision on whether to pay for the rent or house payment, groceries, or the utility bill.  Bankruptcy became an option for many of these folks.

Bankruptcy is not an option for the United States.  We can and will print dollars.  That’s not a rosy scenario.  The US dollar has already declined in value, and we can see what this means when we go buy groceries or fill up at the gas station.  Printing more dollars and increasing the US debt leads to cheaper dollars.

Becoming wealthy isn’t about entitlements and taking away money from others.  It isn’t about deficit spending.  Receiving checks in the mail or increased government services is not the path to riches.  Becoming wealthy is a personal choice based on the decisions we make as individuals.  It is going to school, studying and getting good grades.  It is about staying away from drugs. It is about investing in yourself, applying your skills to the best of your ability, appropriate risk taking, and working hard.

Paul quotes Warren Buffett, but I would urge everyone to read about how Warren Buffett became who he is.  That is a lesson in hard work!  Buffett is also one of this nation’s greatest philanthropists, and helps out many who need help.  He is to be applauded for his efforts.  Warren Buffett is a fantastic role model, but I think he mischaracterizes the current disagreement between the Left and the Right.

Paul, if there is a civil war here in the US, it’s not between the Rich vs. the Poor.  It’s between the Capitalists vs. the Entitlementists.  For all our sake, we should be cheering on the Capitalists.  We should hope for equal opportunity that empowers people to achieve great things.

Saturday, March 26, 2011

#72: Chevy Volt Sales and Reviews, GE and Taxes, Oil Prices

Saturday Randomosity

korean model basketball

  • The Black Box is rather sanguine about the market, as indexes are now above their 50dma.
  • Geraldine Ferraro passed away. 1984 was the first national election I voted in. I remember her debate with then-Vice President George H. W. Bush. I remember her being an inspiration to a generation of women. May you rest in peace. Thoughts and prayers with your family and friends.
  • Maloofs reject plan to keep Sacramento Kings in Sacramento. Jim Crandell has been talking about the last-ditch effort on the Channel Fox 40 news. Eh, let them go to Anaheim. I used to share season tickets to the Kings. It was fun, but just got too costly and the games are now on TV. Can three NBA franchises survive in LA?
  • DUI app makers respond to Senators. So, apps like Trapster and Phantomalert show speed traps and DUI checkpoints on your smart phone. The government worries that this helps folks drive around the enforcement activities. The app makers say maybe this makes folks not have that last drink.
  • Mike Sims-Walker wants to "pull a Lebron" and join the Dolphins. Er, Mike Sims-Walker is to the NFL as Lebron is to the NBA? Anyone buying that? I'm not even sure he'd be an upgrade from Hartline.
  • Did you see John Stossel's "Freeloaders" special on Fox News? He did a fantastic job talking about handouts at all levels, from panhandlers, to lawyers, to corporations, to the government., and even to himself. Well done!
  • I haven't bought an iPad 2. Chris Pirillo had a good "speed test" comparison on his blog. Not that much. I think I'll wait until the next generation. Sorry no link as I'm on the iPad 1 and feeling lazy (in a Saturday way) about fetching the link. And it's raining, which if there was a steroid-like injection to increase laziness, rain is it.
  • Butler made a nice run, but looks like Florida is asserting themselves. So goes March Madness. It's fun the first weekend as the little schools win some upsets, but then the big boys tend to take over the second weekend.

UPDATE: Butler!!!

Friday, March 25, 2011

#71: Stocks up Huge, Nintendo Refocuses, the Tina Fey Song, ab Exercises

TGIF Randomosity!

  • imageStocks rally! Reason du jourU.S. stocks rose for a third day Friday after upbeat results from technology giant Oracle Corp. and data showing the economy grew more than previously estimated at the end of last year.   Yes, indeed.  The recovery is real.  Gee, is that why the market has been rallying the past 2 years?
  • After non-stop rain in Sacramento, the sun is poking out today!
  • So should the American Idol judges have saved Casey Abrams last night?  Well, I don’t think so.  I thought the guy who sings with his eyes closed should go.  Or Haley.  But I understand the judges wanting to just be done with the save.  Now it’s truly up to the voters.  This is a talented bunch, though.
  • Oil news du jour, which makes no sense IMHO: Oil prices wavered Friday as the U.S. said its economy grew faster than previously estimated in the fourth quarter of last year while a financial crisis in Portugal raised concerns that another European country will need a bailout.  Shouldn’t a growing US economy mean more demand for oil?  And Portugal affecting oil prices?  Really? 
  • Well, you know what they say about a grease fire:  Don’t spray it with… bullets!  Syrian security forces fire on protesters.  The turmoil in the Middle East spreads.
  • Research In Motion Ltd. shares fell into negative territory for the year on Friday as brokers downgraded the stock on fears the BlackBerry maker will continue to lose share in the growing smartphone market.  Gee, ya think?  Going from the must-have phone to a phone that nobody wants anymore (with the iPhones and Droids)?  That matters?
  • Finished week 6 of my bodybuilding routine last night.  Now have a few days off to recover before starting week 7!  Since week 4, I've been doing 3 sets of each exercise.  That’s a killer.  Lighter weights, but very slow movements.  Getting much better results than just throwing around heavier weights like I did when younger.

Thursday, March 24, 2011

Feelgood Story: Household Wealth Down 23%

Household wealthHey! Household wealth down 23% from 2007 to 2009! What's so good about that?

I thought it would be worse!

And the stock market has been in a 2-year bull market and is up about 100%. So many folks who stayed the course with their investments and continued to dollar-cost average into the market are probably doing fine.

But those were some rough years, eh?

Economy Rolls On

Economy rolls onIt appears as if Wall Street is back to focusing on the economy after the external distractions of the last few weeks.

I don't want to slight the horrors in Japan, fiscal problems in Europe, or the turmoil in the Middle East, but Wall Street is a reflection of US economic prospects and the underlying value of corporations.

Tech shares are up. Oil prices are up. Jobless numbers fell. Orders for durable goods fell. Apple is having troubles meeting demand for the iPad 2.

I remain long in low beta stuff. Still thinking "trading range" between the highs and the 6% correction.

Wednesday, March 23, 2011

More Bad News Randomosity and Elizabeth Taylor

Elizabeth Taylor Cleopatra

  • Well, natural disaster, nuclear meltdown, war in Libya, and now Elizabeth Taylor. Other than that, Mrs. Lincoln, how'd ya like the play?

  • I'm not sure what to think of the market today. Good day and a good close. But still get the feeling something is off. I remain long in low beta stuff. I havent ran the Black Box for a couple of weeks, but now that we may be in a trading range it could add some value.

  • Mark Hulbert notes that insiders are buying all the gloom. Just when things seem at their gloomiest can be a great time to buy. Even if it seems like crazy talk!

  • A liberal plan to fix Social Security. Oh boy. So, the usual. Raise the cap. Reduce the benefits for the rich. Raise the retirement age.

  • No alternative to nuclear power. Hamsters. Try hamsters. Well, Forbes is right. I think we need a "lessons learned" drill and then keep going.

  • In week 6 of body building. Noticeable! Speaking of... Time for arms.

Tuesday, March 22, 2011

Stock Market Roller Coaster Randomosity

Babes on roller coaster

  • Market roller coaster ride not over. Today feels like the "clank clank clank" of the roller coaster being pulled up to the top. Slow. Steady. And you know there is something coming soon

  • 7% of US households worth seven figures or more.

  • NY Times asks Twitter to shut down those going around the firewall for content. Drat! There will soon be no such thing as a free lunch.

  • William Shatner turns 80. Yikes.

  • Drill, Brazil, Drill. President Obama urges Brazil to drill for oil. Nice. Well they probably don't have the same, fierce, environmental hurdles to get over like we do.


Reflex Rally?

Reflex rallyAh, so the last few days have been a "reflex rally." Got it.

I suppose if that's the case, the the overnight 4.5% surge in the Nikkei was as well. But what if the previous sell off was a reflex sell off? Then what is this?

Who knows!

Anyway, I get the point and understand the argument. I'm of the belief that we have more to do and may be in a trading range represented by the previous highs and the 6% correction.

Economic news out today a little weaker than expected. And the rumors are there may be some tech warnings coming.

Keep your eyes peeled for reflex reactions, in either direction.

Monday, March 21, 2011

#70: War on Libya, Japan's Nuclear Plants and Warren Buffett, ATT and T-Mobile, Stocks Gap Up 3 Straight, March Madness Gambling

Stuck in Reno!

Cal NevaI was stuck in Reno yesterday due to the snow storm closing the freeways over the mountains. Trying again this morning.

Looks like the market had a 6% correction and is now bouncing back up. Maybe the trading range will be between the previous highs and the 6% correction lows.

Or maybe we will continue up. Looks like optimism has returned. The Japan nuclear crisis has subsided. The relief efforts, recovery and rebuilding are beginning. There is a "just" war in Libya with full UN and allied involvement.

And I'm the top seed in the fantasy basketball playlets.

Good news everywhere!
***

Picture is of Cal Neva casino in Reno. With light snowfall...

Friday, March 18, 2011

Another Nice Day

Another nice day in the market. Whether it was options week, No Fly Zone/ceasefire in Libya, or the lack of fear regarding japan and fear of economic data, buyers wanted in today.

Lack of news flow for me as I'm in travel mode. I still think the market is in long term bear, intermediate term bull, and short term correction. Still long low beta stuff.

Still in Reno betting on march madness. Washington and Notre Dame hurt me, but holding my own today.

I don't get the Beer Pong thing. I guess it's a generational thing. Looks a little weak to me. But if it's just an excuse to drink beer, I get it.

Thursday, March 17, 2011

#69: Market Storms Back and Friday's March Madness Lock!

Stocks Rally on March Madness

Rally I think the reason du jour for the market rally was Morehead St. beating Louisville.

And who doesn't like Morehead?

Seriously, the sports bar here in Reno was chanting "Morehead! Morehead!" as the game was winding down.

So, we had a strong bounce today an the official reason is better economic data, but I think they were just grabbing a headline and then watching the games on the iPhone and iPad March Madness app.

March Madness Ramdomosity 1

Early rally West Virginia hit a three at the half-time buzzer to tie Clemson, but that hasn't bothered the market.

Nice rally after some bad days. I guess increased volatility is the norm for now.

Still long low beta stuff. Not planning on doing much.
***

At the sports bar betting and watching games. Have Butler and WV early.

Tuesday, March 15, 2011

No Worries! Economy on Firm Footing!

Economy on firm footingNo worries. Ben Bernanke says the economy is on a firmer footing.

Rejoice!

Things aren't as bad now as they were earlier. This has been the market pattern as of late. Early dips recover somewhat towards the close. We are still down, but feels like it could be worse.

Watching Japan. Haven't traded at all today.
***
March Madness starts at 3:30 PDT!

Monday, March 14, 2011

$EWJ: Just Thinking Out Loud

Godzilla$EWJ is the ETF for the Japanese stock market. There is widespread fear and panic. There is blood on the streets.

I recall someone saying that absent trend lines, charts, Elliot Waves, candlesticks, and MACD histograms, "blood on the streets" is the time to buy.

Granted, this is potentially more serious than Toyota's breaks failing or GM getting a government bailout. But, still. And on the other hand, if the containment structures hold, it's all a bunch of nothing. Just the media sensationalizing and playing on peoples' fears.

In addition, the NDX (QQQQ) is another possibility if there is sympathetic selling in the US.

Not saying I will do any of it, either EWJ or loading up on the NDX. Heck, maybe this lingers on a while. But darn if it doesn't have my attention. History rewards, and punishes, risk takers.

Your thoughts?

World Turmoil Randomosity

ucla cheerleader

  • Well, it's tough to think about anything other than what is unfolding in Japan. But it looks like the Libyan rebels are taking a bit of a beating by Gaddafi's forces. Meanwhile, Saudi Arabia sends troops into Bahrain.

  • As it was in the days of Noah, I guess.

  • GE stock falls on the Japan nuclear story. Folks are afraid GE could be liable for something.

  • ATT to cap data use for their DSL and U-Verse customers starting in May. Ranges from 150gig to 250gig depending on your service, and each additional 50gig will cost $10. Not bad. But I bet I come close due to heavy Netflix streaming.

  • On that note, I'm re-watching season 6 of Lost via Netflix. Watched the first four episodes yesterday. And then I notice the little clues to what comes later in the season. LOL.

  • Market turned around a bit towards the close. Again, it seems like things should be worse. It is options week. March Madness week. You wonder what the market would be like without the world turmoil!

  • I went to the Apple store today and played with the new iPad 2. Okay, it's lighter and feels better in the hands. The speed improvement was a little noticeable, but not blazing. The magnetic cover is pretty cool. So I'm not sure I'm upgrading to the new version just yet. We'll see.

  • I read on the CNBC app, which doesn't let you copy links, that investors poured over $1B into Japanese ETFs prior to the earthquake. How's that for market timing?

  • You know, this kind of thing will lead to a strong rebuilding effort. So investing in post-disaster Japan isn't the worst idea.

  • In Week 5 of bodybuilding. Tired! Had an early dinner so waiting a bit before I hit the shoulders and back!

Is the Correction at Hand?

Stock troubleIt has been a long time in coming, but it feels as if this market pullback is for real.

I think the debate is on the severity of the correction. We are two years into the bull market, and we had an incredible run since September. The run was so nice and defied pullbacks no matter how much any of us were convinced that one was just around the corner.

As you know, I lightened up on January 18th by selling higher beta and buying lower beta. That's still where I am.
***

It's Monday. Feels like it. Watching Japan. They are going to need tons of support. You know what to do. Red Cross. Salvation Army. Etc.

I did a jailbreak on the iPhone. Installed MyWi.

Sunday, March 13, 2011

Japan: And Now, it Gets Worse

Japan: Earthquake, tsunami, nuclear power plants, volcano, and now this: Godzilla.

Okay, so maybe I’m being too flip too early.  But it just seems that everything that can go wrong, is going wrong.  It’s like dog pile time on Japan.  I don’t think Godzilla did this much damage in the old black and white movies.

Meanwhile, the Nikkei is getting hit (imagine that).

imageJapan's equity futures fell 6 percent on Monday as investors took stock of the economic damage from the massive earthquake and tsunami that devastated
the country's northeastern region. 

The yen also slid against the dollar, reversing earlier gains in a volatile morning in which dealers were cautious about
being able to settle trades in thin trading conditions.

Japanese automakers, electronics firms and oil refiners saw their share prices drop as much as 12 percent after having to
shutter key factories after Friday's earthquake and tsunami,
which are feared to have killed more than 10,000 people and
severely damaged infrastructure.
    

Have you seen the before and after pictures of Ishinomaki (via the NY Times)?

 

image

NCAA Selection Sunday Randomosity

ohio state cheerleader

  • Democrats urge tapping strategic oil reserves to protect economy. I disagree, as this just temporarily helps. Eventually that oil has to be replaced and creates artificial demand, keeping prices higher. Is this a real emergency? Not yet. Besides, why not open up drilling if you really want to have the ability to increase oil?

  • Japan economic toll from the earthquake and tsunami? Experts say Japan's economy will suffer only a temporary setback from the quake and could bounce back in a matter of months once spending on the rebuilding efforts starts to kick in.

  • 10 reasons you should worry about the stock market. Financial cockroaches?

  • Next fight in Wisconsin is at the ballot box. There will be recall efforts across the board. And as the legislation gets challenged in the courts, all eyes turn to the election of the next WI Supreme Court judge, as the balance is for the GOP now but that vote could change things.

  • Stocks hanging on despite world turmoil. The Dow and S&P 500 have climbed about 4% so far in 2011, and the Nasdaq is up more than 2%. "Given that there are a host of hurdles that have cropped up in recent weeks, I think the fact that stocks are not far off from recent highs is a sign that the financial markets are extremely resilient right now," said Michael Sheldon, chief market strategist at RDM Financial Group.

  • March Madness and your portfolio. Mark Hulbert on the impact of the Dance on your stocks. An academic study found that investors tend to act irrationally following losses by their favorite sports teams. This should serve as a powerful reminder about how hard it is to keep our emotions out of our investing...

***
Ohio State and Penn State on as I type!

Saturday, March 12, 2011

Japan Impact on Nuclear Power Industry

The nuclear power industry is F'd.

I'm definitely concerned about Japan and the potential nuclear meltdown. Also aware that there may be some overhype coming from the anti-nuclear nuts.

But this is probably the death of nuclear investments here in the US. We will be rationing power before building any new nuke plants.

There is so much misinformation on nuclear power. But this major threat in Japan will only fuel the fear.

Invest in natural gas, oil, wind and solar. Forget nuclear.

I do expect other countries to continue to develop nuclear energy. But it is dead here.

Saturday at the Casino

At the casino where the only meltdown is occurring in my wallet.

If I was "market timing by anecdote" I'd go 120% long Monday. The casino is packed. No empty slots. Tables are full.

Hooray for the consumer. They are back, baby.

Friday, March 11, 2011

#68: Japan Earthquake and Tsunami, Stocks Reverse, Gas Price Gouging

Thursday, March 10, 2011

Stocks Tank on Data

Saudi ArabiaIn addition to bad data, Saudi Arabia gets added to the reason du jour for the stock market route today. And there was no late-day rally to bail us out.

Hey, Saudi Arabia was only firing rubber bullets into the crowd. Why the worry?

Well, the one day Day of Rage is on tap for tomorrow. And the way things are going in the Middle East, does anything get settled in one day? And do investors want to be long with a weekend ahead of them?

The good news is that these are external fears that may be short term in duration and may not have that big of an impact on our economy. Too early to tell what this means for oil prices. Oil was down big early on bad data, but recovered some on the Saudi worry.

So, tomorrow will be interesting. We keep having rallies that rescue us from the brink of a correction, but doesn't it feel like that's coming to an end?

It’s Data!

Stocks tanking early, and the reason? Data!

Or maybe it's his evil brother Lore.

U.S. initial jobless claims rose by 26,000 to 397,000 in the week ended March 5, the Labor Department said Thursday in its weekly report. The prior week’s figures, when claims fell to the lowest level in almost three years, were revised up slightly, to 371,000 from an original estimate of 368,000.
Investors spent much of the morning eyeing overseas developments. Besides continued unrest in Libya and the Middle East, a rating agency’s Spain downgrade and a slowdown in Chinese exports sent global markets lower.
“The market is in a tug of war right now between the recovery and evidence that the economy is slowing, and frankly, [is] dependent on quantitative easing,” said Terry Morris, Senior Vice President at National Penn Investors Trust Company.


To top that off, even the oil companies are down because oil prices are falling! Is there no good news out there?


Well, once again we have market volatility playing with our senses. Up a hundred plus, down a hundred plus. Lather. Rinse. Repeat
I think this does add to the notion that we are seeing a topping process in the market.
--

UPDATED:  For some reason, I deleted this entry on my iPhone and it impacted the post on the blog.  So this is a repost.

Wednesday, March 09, 2011

From 677 to 1320: Happy Birthday Bull Market!

Bull market Happy birthday bull market! We have two years in already and have rallied from 677 to 1320 on the SP500.

Who wants cake?


Oil Prices and Recessions

Oil and recessions Will higher oil prices lead to another recession?

Ugh. Let's hope not.

But maybe this will squash inflation. I realize many believe that higher energy prices lead to inflation. But the reality is that we will pay the price to drive, but reduce our consumption (ie demand) for other things (goods and services).

Yes, we send more cash overseas to Saudi Arabia and to our neighbors Mexico and Canada for oil. But then we spend less at Applebees and Best Buy.

The oil spike in 2008 led to a recession and historic lows in inflation and interest rates.
***
Mixed tape as I type. Dow up and NASDAQ down. Not very healthy but not too depressing. Pre-options week and all.

I remain long, but in lower beta and some oil stuff. Not trading much. Getting mentally prepared for March Madness!



Tuesday, March 08, 2011

Tuesday Randomosity and Paul Krugman

Asian bikini

  • What? Paul Krugman (not pictured) doesn't read TheMoneyGoRound? I was saddened, frustrated, and flustered to see that my blog didn't make Paul's list of daily reads. No, I don't know more than him on the economy, finance, or perhaps on anything else. But what about the pics? There are no sexy bikini pics on Delong's site. None!

  • Stocks are rallying as I type. Stocks were holding 1% gains Tuesday as encouraging comments from Bank of America's(:BAC) CEO spurred a rally in the financial sector and a decline in oil prices eased some concerns about soaring energy costs.

  • What's causing the pole to shift up to 40 miles per year? Excellent pic on that link. My first thought, from reading political blogs, is that this sounds like the evil doings from George Bush, the Koch brothers, or George Soros. Or maybe global warming or excessive public employee pensions are to blame. What say you?

  • The mob turns on crowdsourcing! These are websites that get content provided for free by participants, and then make money off it by selling advertising. Great column!

  • Charlie Sheen canned from Two and a half Men, and celebrates by wielding a machete and quoting Martin Luther King Jr. And the unraveling continues...



Market Thoughts

Gas pricesThe stock market has actually held up well considering the turmoil in the Middle East, with oil and gasoline prices climbing.

Those are the negative things. Oil shock usually, if not always, leads to a stock market correction. If people spend more on fuel, they spend less at retailers, restaurants, and other goods and services. That impact revenues and profits for corporations. We have also had lots of volatility, which can indicate a topping process.

On the plus side, these down days could be much worse. But we are seeing late-day buying. That's usually a sign of market strength. Triple point losses seem to vanish in the last half-hour of trading.

I am still long in lower beta stuff, and some oil plays.

My thought in January is that we were going to have a correction and then rally in spring. Looks like the market has just stalled a bit so far.

Sunday, March 06, 2011

Strategic Oil Reserves Randomosity and Alexis Glick!

  • Oil stoking inflation fears?  Actually, oil has the opposite effect. If you’re spending more money on oil, you’re spending less on goods and services decreasing demand.  Less demand does not lead to inflation.
  • imageSince I switched from DirecTV to ATT U-verse, I no longer get Fox Business Channel.  But here’s a pic of Alexis Glick anyway. 
  • So, I’m still leaning on some sort of market correction. The market volatility here near rally highs could be a sign of topping. Or, it could just be sideways action and consolidation.  Tough to get a feel.  The economy is improving. Heck, oil prices were going up before the Middle East stuff.
  • But if gasoline prices continue to go up, then folks will spend less on retail.  We know from past experiences that oil price surges lead to stock market corrections, bear markets, and recessions.
  • US Farms embracing solar power.  Uh, not to rain on anyone’s solar panels, but it only works about 4-6 hours a day, when it’s sunny.
  • Technical Market Report from Mike Burk. I expect the major averages to be higher on Friday March 11 than they were on Friday March 4.  Okay, Mike.  We’ll keep an eye on that.
  • Hey, Bob Brinker isn’t on today.  He must be watching some NCAA basketball.  Lynn Jimenez from SF’s KGO radio is on. 
  • Harry Reid going after legalized prostitution in Nevada.
  • From The Simple Accountant at Safe HavenThis looks to be another week characterized by elevated levels of volatility, event risk, and indecision. My outlook is to continue to play defense, closely monitoring open positions and avoiding new ones.  Defense wins championships.
  • Jim Rogers “insanely bullish” on commodities.  "Saudi Arabia has been lying about their (oil) reserves for decades. The reason oil is going up is the world is running out of known reserves of oil.”
  • I don’t agree with Jim on oil.  We have lots of oil, we just won’t drill for it.  Or, it’s at a price point where it’s not feasible to drill for it yet.  And we also have tons of Natural Gas, which we could drill for and use in cars.  But we won’t do that for whatever reason.  Though, you can buy natural gas cars now, and fuel up at home.
  • Hope you’re having a great Sunday!  Raining here in Sacramento. 

Saturday, March 05, 2011

Charlie Sheen’s Korner Randomosity

  • Did you miss Charlie Sheen’s Korner live web show tonight?  No worries, here it is:

  • And that’s more important than anything going on in Libya, Egypt, Saudi Arabia or Wisconsin.
  • Oil is still calling Wall Street’s tune“When I look at economic data there is nothing that gets me excited or worried, so I can only see the focus on oil, which conjures up a lot of negatives,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald.  This is very true.  Even if the oil shock due to Middle East turmoil is temporary, remember that oil prices were going up before this, as economies improve and demand for oil increases.
  • I bought MLB.tv early this year, so I could watch some Spring Training games.  You know what?  I’m not that interested in Spring Training games after all.  Too much of a mish-mash of potentials who will end up in farm systems.
  • Charlie Sheen says “Winning” a lot.
  • In tablet wars, many companies came out with models to compete with the iPad 1.  Now the iPad 2 is coming out.  Why buy those other models?  Anyway, they want to sell those other tablets? Offer unlimited data.  Seriously.
  • President Obama agrees to another $6.5B in budget cuts. Oh, brother.  There’s a budget deficit closing in on $2 Trillion. 
  • I watched North Carolina pound Duke tonight.   Sheez.  Yes, it was at UNC.
  • “You’re either in my corner, or with the trolls.”  Over 100,000 viewers Early on during the one hour broadcast, Sheen revealed a new tattoo on his inner left wrist that said "winning," his now-slogan.

Friday, March 04, 2011

#67: Oil Drives Market Down, Spiders Invade Mazdas, Jobs Picture Improves

Thursday, March 03, 2011

Big Monster Huge Stock Market Day

Today was the biggest one-day move in the DOW since December 1st. For those of us wondering if we would see some follow-through to the downside, it didn't happen.

Market Rallies HugeThe market romped today. No other way to say it.

Technically, we are still in the monthly strength window (the first four trading days of the month).

But, the reason du jour from Yahoo Finance is lower oil prices and better employment data. Initial jobless claims for the week ended February 26 totaled 368,000, which is less than the 400,000 that had been expected, on average, among economists polled by Briefing.com. There was also some stuff in there about the ISM number and Gaddafi accepting some peace plan from Hugo Chavez.

Seems kind of like a wishy-washy reason du jour for the most part. I'll give credit to Norm Fosback and the monthly-strength thing.

Hope you made a bunch today. Lots of green everywhere.

Wednesday, March 02, 2011

Wednesday’s Quick Randomosity

  • imageEh, not much to say about the stock market today.  I think the big news was Steve Jobs introducing the iPad 2. 
  • Stocks basically flat, oil moving up.
  • The iPad 2 to have a faster dual-core chip, a front-facing camera, and is slimmer than the first iPad.  Available March 11th, so get in line! 
  • China cutting taxesChina’s plan to raise the personal income-tax threshold would leave more money in the pockets of the nation’s vast army of low-income households, easing the impact of rising prices and spurring the consumer products and retail sectors, analysts say.
  • Preparing my tax return tonight.  Almost done.

Picture is of Mila Kunis!

Tuesday, March 01, 2011

How About Some Good News? Manufacturing!

I know we're all worried about oil. Well, all of us except for Ben Bernanke. But there was some good news on manufacturing today.

manufacturingYes, manufacturing growing at it's fastest pace in 7 years!

So we do have some economic stuff out there that gives us reason to believe that things are improving. And if the Middle East turmoil settles down and oil prices relax, folks can return their focus on our economy.

As far as my thoughts, I remain nearly 100% invested, but in lower beta stuff since January 18th. Not trying to be a hero, just lowering risk and anticipating a correction that hasn't yet materialized, although it seems ever near, right?

My thoughts are that we are going to have a correction, some sideways action, and then resume the rally.

We shall see.

1st of Month Winning Streak Ends!

Ben Bernanke says that costly oil poses no great risk to the economy.

I don't believe that.

I think that you and I will continue to fuel up, bit will cut back on other things. And that's where we were in 2008 while the stock market was on its way to 666 in the SP500.

If that happens again, I think there is great risk to the economy. Imagine the pain of pension funds then, for example.
***

First of the month win streak ended today. The Dow and NASDAQ were pounded, but the SP500 was basically flat.