Daily Global Economic Calendar

Real Time Economic Calendar provided by Investing.com.

Friday, December 27, 2013

New T and Internals Update

First of all, there is this 3 year wide Nasdaq A/D T , that I've been watching for months and first wrote about here (link). Projected peak for NaADT11/2012  is late July - early August 2014.
Right next to it is new Volume Oscillator T12/2013. I think that shorter blue VOT12/2013 is a correct one, but reliability of this analysis is questionable, T-Theory had alot of misses lately as i noticed back in September in this post (link).

 A completely different look at Volume Oscillator weekly plot. Everything is different here

W VO T 2013
I see a possibility, that 'misses' of T-Theory in 2013 are entirely my own doing. Trying to fit T's into every zig and zag of market. Looking for action. Degenerate Gambler!  Volume trends are not a short term phenomenon, they take time, they can change, they are not constant. So I stepped back to try and see a damn forest.

In this post (link) back in May 2013 I plotted VOT 8/2011 with 1 year cash build up (series of lower highs and lower lows on Volume Oscillator), with multiple touches of down-sloping trendline and bull trap. Very similar to this VOT 6/2013.

VO T 6/2013
The center-post location is very different. Back in 2011 it was a very sharp 20% drop that felt like real bear-market. Summer of this year was nothing alike. I came into June'13 with sizable short position still under water and decided that "...market is not going down, so I have no business to hold shorts..." and became Non - Delta Neutral in this post (link). Then market went even lower. On OpEx day (link) I noted that :"All my A/D indicators are at "last stand" line. In recent past it led to hard V-type reversal." It did, although on June 25 (one day past the bottom) I was making parallels to 1987, noting "...how fast a pullback of a strong bull market turns into failure..." in this post (link). It was a period of high solar activity and geomagnetic storms, economic news where good, all other news where bad, Obama fired Bermonkey on live TV, and $VIX went to 21. That was the bottom.

Top? This is what I wrote 2 days before top on May 20: "Mostly all of internal divergences are gone, and aside from everything being overbought and obnoxiously bullish - there are absolutely no indication of immediate market top." I also laid out my case for being a Perma Bear in the same post (link). All the while I was holding hedge of at-least 3X position  size short via SDS, QID, HDGE, which end up costing me most of spring profits from longs. On May 22 I was 70% invested (post (link)

This year changed the way I think and trade in more ways than one. No one can successfully manage Kapital, while having this type of mush on a brain. Sucker...


Weekly Nasdaq A/D Cumulative (mentioned above)
My A/D indicator (NYSE) with BPSPX and SPXA50R
McClellan Suite: NYMO; NYSI; NAMO
T-Theory Volume Oscillator
Risk-on /Risk-off ratios, aka Confidence indicator (FAGIX:VUSTX;  HYG:LQD;  $SPX:$USB)
Golden Indicator with World Ratios


Wednesday, December 25, 2013


Zhongguo is the most common (mandarin) name for China, it means "Middle Country" or something similar. Here are some quotes from internets:
Ancient Chinese believe that China is the center of the world, its in the middle of earth... Some Western writers use the translation "middle kingdom" or "central kingdom" to imply that China has a deeply rooted self-centered psychology as the center of the universe...  The ancient Chinese believed that they are the only civilization on earth while being surrounded by barbarians... 
5000 years of national history is quite a claim, for sure. Plus there is this:
 Those assholes keep dissing Chinese, but they are the ones rocking made in China versace and driving in China manufactured Cadillac
ZHONGGUO investing is a challenge in itself, and has been a dud for a past few years. Complains? Fuck you.  Shanghai Composite Index ($SSEC) gained 6000% from 1990 to 2007, that is 60X your initial investment in less than 20 years, with plenty ups and downs to trade. Its resting now, but its not the first time its down 50% +. In a relatively short index history there where 2 such periods, lasting 4-6 years, followed by multi-year rip higher. Its not a question whether you will double your money, but how many times...
Below is a historical chart up to Dec'12. Notice - chart is log-scale !
Nothing much changed since then.
 I've been keeping an eye on a situation for years, even mentioned it here in April'12 (link).
There are some regulatory changes that will be at work for a next year or two. Specifically, there really isn't a straight way to invest in SSEC - its a composite index comprises of all the A shares (traded in local currency) and B shares (in foreign currency) listed on the Shanghai Stock Exchange. Up until recently foreign investors where not allowed to go into 'inland' market. So we buy A-Shares listed in Hong-Kong (H-Shares), or go for N-Shares (Chinese companies listed in US market, but may or may not be incorporated in China), or other various layers of this particular scam.

All this may be changing soon, as foreign access to A listings controlled under the Qualified  Foreign institutional investor (QFII) scheme, has been relaxed somewhat in 2012 and again in March 2013. It is expected that A-shares with increase in allocation by as much as 60% over next couple of years. In that process China will likely become 4th or 5th largest equity market in the World. Presently Zhongguo is on #9 spot. Liquidity? I got your liquidity right here...
Big Boys are all over it. More here:

Bunch of new ETF's popping up all over the place, all ready with enormous expense ratios, vague allocation rules, and not enough money to go around. I am still most interested in FXI (large cap A-shares in Hong Kong), and PGJ (US listed), with  possibly HAO (small caps)


PGJ - PowerShares Golden Dragon China Portfolio invests in N-Shares, Chinese companies listed in US.
Expense ratio 0.75%. Severely overweight in Information Technology (55%). Abnormally largest holding (8.5%) is CTRP - Ctrip.com - some kind of travel and lodging service I never heard of.

Finviz screen: China, over 300mil market cap, over $5, over 100K average volume. 49 results.
Most of top ones are in PGJ, but at different weightings.

FXI - iShares FTSE China Large-Cap ETF, based on FTSE China 25 index, consisted mainly of  H-Shares - blue chip stocks of largest 25 Chinese companies (H Shares, Red Chips and P Chips) listed on the Stock Exchange of Hong Kong. This seems to be the best access to A-Shares, as we have only few US traded, Hong Kong listed, Chinese main land companies to invest. (CHL, CEO, CHU, MPEL?)
...Easy as ChinaKing menu...
September 2014 they will change it to FTSE China 50 index, doubling allocation to A-Shares.
http://www.ftse.com/Indices/FTSE_China_Index_Series/index.jsp  FXI has 0.75% exp ratio, 2% divi. Abnormally large allocation is  Financials 56%.http://us.ishares.com/product_info/fund/overview/FXI.htm

UPDATE 11/26/2014
$SSEC started to rally at the end of summer 2014, and by November took out  2400-2500 resistance that started way back in winter of 2011. FXI is lagging somewhat, still fighting 40-42 level, but development is positive no doubt.
Investment landscape is poisoned by alot of scams and hype surrounding all kinds of internet, software and game stocks, plus BABA (ipo'd in September '14) pulled a lot of funds from everything China. Technically, stocks split into two distinct groups (for reasons unknown to me) -  some gap and jump all over the place, others trade tight with good daily patterns. I focus on latter kind. Specifically I want to avoid anything with wide following, many news and busy Yahoo message board.


Of note:
all make money, except NORD
all don't have a lot of debt, except XRS and NORD
all don't have a lot of shorts, except ZPIN and MR (MR 16% float short; 23SR !)
all don't have high P/E, except JOBS (P/E 60!)
This list is not perfect by any stretch of imagination, but offers some alternatives off the beaten path, and should compliment FXI very nicely in 2015 and hopefully beyond.

Monday, December 23, 2013

Dow Leaders, 2013 Free Lunch and Fat Fingers

FAT FINGERS are popping up on a bunch of issues I watch and trade. I call them 'Big Stick Red Top', because they are usually a mark of topping issue. At-least I don't want to mess long with markets that behave so erratically after substantial advance.
XHB, VNM, BG, small one on SEA (since overcame), now this 30-year bond, and possibly TSCO.
This is not a coincidence.
FREE LUNCH of 2013
This strategy is from StockTradersAlmanac. I watched it last year. It worked
Full monty is here:
“Free Lunch”  is purely a short-term strategy... Traders and investors tend to get rid of their losers near yearend for tax loss purposes, often driving these stocks down to bargain levels. Research has shown that NYSE stocks trading at a new 52-week low on or about December 15 will usually outperform the market by February 15 in the following year.
I used similar  filters in Finviz:
50mln+ market cap;  50K+ average volume;  over $1 price
(they using 20mil market cap and 10K volume... c'mon, its a little bit out there, IMNSHO)
0-3% above 50day low;  50%+ below 52week high
The closer to 52week low, the better
Results as of  12/23/2013 BMO, shows alot of gold miners (no surprise here)
These results are so horrible looking. How can I even touch this garbage?..oh

UPDATE 12/24/2013
On a second thought here are my picks. High short interest may be squeezed, low inst ownership may be increased, etc ... all weak reasons. I rather buy strong stocks on a rise, but willing give it a shot with half-position size an about half of these:
Conservatively I should take 10% profit as soon as I have it, and not wait for mid February exit time-window. Entry low is the stop. No exceptions. Lets see...

UPDATE 1/16/2014
 Now their list is revealed, and surprisingly it doesn't match mine very much. WTF?
18 stocks they selected show an average profit of 15%, with couple of small losers and  several big winners.
I traded:
Now all out with small profit to show for my efforts, but I felt very uncomfortable, as this strategy goes against my philosophy of buying high and selling higher (also sell low and cover lower).

The idea for DOW LEADERS  came from here:
by Bruce M. Kamich, CMT (never heard of him)
This is another approach, very much in spirit of System 12. I see it can be used not only as warning signal, but also as strategic allocation tool. Here is the gist:
From time to time we like to dissect the Dow Industrials. We look at each component and classify it as being in a clear uptrend or a sideways/neutral trend or a downtrend. Starting at 3M and going stock by stock to Wal-Mart Stores we found that we could only count 10 Dow stocks in clear uptrends even as the Dow made a new all-time high Wednesday. The 20 other stocks have been a drag on the famous average. This same exercise back in October 2007 found only 8 stocks making new highs while the remaining 22 were in bad shape (just think about the names that were subsequently removed)....We suggest keeping a closer watch on those ten uptrends – MMM, AXP, BA, DIS, DD, XOM, GE, GS, NKE, and V – and if they weaken without rotation into the other names then a more defensive posture should be assumed.


Staying 50-70% invested. All long, bonds short (via TBT), with shorter and shorter holding periods. The bias is to reduce, protect gains, cut losses absolutely ASAP (if stock doesn't go in a market like this - it doesn't go at all).
I've been working inside this list, essentially for months, with only few changes.

My Free Lunch: (started buying on 12/24/2013):

New watch:

Saturday, December 14, 2013

Copper Season

I've been watching Copper prices since summer, noticing how stubbornly strong it was. Although not a Precious Metal, it sits between Platinum and Palladium on Finviz Futures page. Right next to Gold and Silver. A lonely speck of green in the ocean of red. Strong? Lets say: Not as weak...with strong support near $3.
I think my position is well known:
This economy has been shit since 2011, and got worse since 2012.
I wrote about it here just recently (link) and also back in May (link) , all against the backdrop of Roaring Bull Market (link).  (How is it possible? Dow Paradox, bro...you feel me?)           
Seems to me that Dr Copper, PhD in Economics, kinda agrees with bitter yellow fruit here about the state of real economy.

There are only 4 copper miners in Finviz. FCX is the biggest, with highest dividend and smallest short ratio, but also with most debt.


Following System 12 rules, only $copper, JJC, FCX, RIO, LIWA qualifies for position. COPX is 10% under 200sma! Volume Profile is horrid on all. Nobody buys copper miners.

Here is Jeff Hirsch of Stock Trader Almanac on strong seasonality of Copper from mid-December to end of February.
Since 2001 there was only 2 loosing years 2006 and 2012.
I notice, that although 2012 officially failed, there was a material rally from beginning of November 2012 to beginning of February 2013. Important not to overstay my welcome.

They pick SCCO, because of correlation to metal. I don't see that correlation to $COPPER or JJC at this moment at all. In fact, judging by Price Relative study nothing correlates very much here. Non of miners look like metal. Miners themselves are all different.

There is an etf from GlobalX http://www.globalxfunds.com/COPX with 0.65% exp ratio, and 5% divi.
COPX has less then 30 holdings, with FCX, SCCO and Glencore at about 5% each. Top 2 holdings are Canadian companies III.TO and CS.TO.

Another etf is FirstTrust CU, with even higher exp ratio, less holdings, 3% divi and RIO as biggest position.

 COPX Fund Holdings Data as of 12/13/2013
 % of Net Assets   Name 

Friday, December 13, 2013

Theme Compound of 2013-2014

. NOTE: as of 7/1/2015 this compound will not be updated any more.....
.             head over to new Theme Compound of 2015 (link)              ....

I will attempt to organize various themes that are of interest to me in this Theme Compound of 2013.

The notion of  Theme Investing has been paying off for years. So much so, I decided to make it my main approach to investing. "Cut your losses short and let your winners run" is a great principle of most winning traders. It doesn't have to be applied only to positions... I can use it for strategy selection.

I wrote about System 9 and Theme Investing in this post (link). Its a start...

Tuesday, December 10, 2013


A Trader’s Journey

As I continued trading, I managed to make those periods of blackouts shorter and shorter. I accepted that they would happen, without frustration or panic. When they occurred, I cut back on my activity and tried
to minimize my losses while waiting for my clear state of mind to return. Step by step I developed some new ideas for returning to the correct mindset more quickly. I wrote several mantras that I would read and repeat, in a sense meditating on the subject. After a while I wrote mantras for specific trading problems. Regular repetition of them helped me reduce the number of those undesirable periods and make the ones I did experience much shorter. I regained control over myself once again. The mantras follow.

Thursday, December 5, 2013

The Big Dogs and HorseShit

Things don't fit together any more. Never mind the usual wall-of-worry, markets have gone haywire and its getting worse.

Stocks are at all time highs, volume and participation are very low, there is no public interest (nobody wants to talk to me about stocks).
Gold, Silver and miners are on a death spiral down. That great rally I picked from July to September is all gone. Since then (and especially in November) every bullish signal, every attempt to rally was blown. Its like stocks, only in reverse.  I talked some people into buying coins...they don't talk to me anymore
Gov Bonds are in bear market, that nobody trades, nobody recognizes. I've been telling people to get out of bonds for a couple of years now. Nobody did. Meanwhile rates doubled!
Commodities are in a toilet. All of them (except may-be Cocoa and Rice).

Without a doubt, all this represents an opportunity of lifetime. Literally. Especially commodities.Corn and Copper are not going to zero, not going to bankruptcy, and not going to reverse split either. Oil stands kinda separately , I think people use it as a 'store of money', a last inflation hedge that's working. It's a mistake - a foolish mis-allocation that lasted long enough to become 'a norm'. Oil worth less than 100 (may be alot less), just as surely as Coffee worth more than 100 (may be alot more). Commodity stocks is a different story (I'm working on it).

Housing recovery my ass! We got 47 million people on food stamps (largest ever, growing every year).
 What middle class? Is it a housing recovery? You know, the house - an american dream...
Here is their own fucking data:

This is kind of data I like. Un-massaged. No ratios to GDP, or unemployment, or inflation, or any kind of statistical ratios. GDP is the worst. First of all they restated it going back years (happened couple of years ago). Then it depends, how you calculate GDP. Here is ShadowStats alternative plot. Big difference, its been negative for years. Incidentally, this view corresponds very well to my own business in America since 1991. That drop during 2000-2002 recession, and then recovery somewhat into 2004-2006, exactly as I experienced myself.
My business blow-up at the lows, there was almost no recovery - that industry is still just a remnant of its former self.

Price of retail ground beef 1980-2013. Presented below with no comments. Really

Percentage of working Americans 2000-2013, as civilian employment to population ratio. Again, based on their own fucking data.
Any questions?
(stolen from ZeroHedge)


 All the hoopla about gov. economic statistic is bad enough. Consider alternatives, remember revisions, adjust forecasts...doesn't help. Now even more confusing, but also with mind-boggling numbers. Billions, Trillions. Like its nothing, not even paper - just digits on a screen.

Instagram sold to Facebook for 1 Billion Dollars. 5 people in a room, $100K revenues, no profit.
SnapChat turned down offer for 2 Billion. 2 people in a bungalo. No revenues.
Twiter is a 22Bil market cap company; FaceBook 117Bil
"Hey, Boichik. How much money do you want to make?"
" A Billion, pa"
15 year old kid. Left me speechless.

I see all this as a steaming pile of HORSESHIT!
Every number they spin around is either a guess, or wish, or lie.
Think about it - You can buy entire Long Bond market for about 1.5bil in margin account. I mean ALL of 30-yr bond open interest! This number is the ONLY real number I need to know.
Everything else - just somebody's agenda.
 Charles Biderman of TrimTabs: GDP & BLS Job Numbers Are Worthless Garbage!


In a spirit of System 12, here are THE BIG DOGS
10 mega corporations that control output of almost everything we buy.
Now, this is 'statistics' I can get behind....and may-be run with a Scammers for a bit...

Along these lines here are 6 companies that control 90% of american media, and 4 largest banks:

"It isn't the stuff you don’t know that will kill you – it's the stuff you're sure about but is totally wrong that will do you real harm."                   Mark Twain

Friday, November 22, 2013

12 Thoughts on Bigger Picture

The guy asked this: http://evilspeculator.com/?p=39382
...you repeatedly carry the banner saying we're all screwed....  there are some good minds here & I'd like to see a little discussion on the matter sporadically about long term methods to prepare...

This is a bait I can't refuse...lol
Here are some thoughts generally, and also about finances and investments.

Saturday, November 16, 2013


Holly Shit !  1800!
This thing is going parabolic, full retard to upside.


I've been looking at this Weekly Nasdaq A/D line for months. Its kinda different from other internal indicators, because it shows a cash build-up phase for all of 2011-2012, with low on Nov 12, 2012 and high on Feb 14, 2011. Projected peak end of July 2014. Reliability of this analysis is questionable, T-Theory had alot of misses lately, it may be unsuitable for run-away bull market conditions.

Of note (and may-be more actionable) is a negative divergence in oscillators between July and October peaks of A/D line. Daily version of  Nas A/D Cumulative plot also shows this divergence.
It's been my (non-scientific...lol) observation - this rally sucks.
Nasdaq A/D T 11/2012




Update 11/26/2013
Just to illustrate how illiquid this market has become, here is a 5 minute chart of E-mini S&P contract ESZ13. Overnight markets are notoriously illiquid, as seen 10pm to 2am. Surprisingly similar price action clearly visible during previous day session - between 10am and 2pm, and especially so around  after 12pm and again around 1pm.

And again, even worse, on 12/10/2013

I have another personal observation. I've been watching ES streaming live chart for years. Its a lively, active contract, and machines loved it. You can still see them working at open and close, when candle starts jumping at incredible rate, bid/ask size fluctuates greatly, and trades come in 1000's of contracts. Other than that, I have not seen bot activity in Months!

 I am sure they are still there, executing strategies for arbitrage and working large orders in a way that it doesn't move markets much. I just don't see them the way I used to. Did machines walked away, or did they kill each other off, or may be they just waiting for command? That I don't know. For better or worse, the nature of this market has changed. I don't know what it means to me and my own Systems. That's all.

Tuesday, November 12, 2013

Spring to Action

Spring of 2014.
New action plan calls for a major change less than half a year from now.

This day-time job of mine is killing me. Makes me afraid of change, unable to act, old. Sometime during this past year I started feeling stuck, drowning in endless routine, scared of the world and very pessimistic. This must change, otherwise nothing better will ever happen.

The side-gig has been a great financial help this year. So much so, it almost doubled my income. If it will continue next year, I will be able to make ends meet during the busy season April thru October. This is my window of opportunity. Although it remains to be seen, I am fairly confident that jobs will come thru. I should know more sometime in February. Then I can give a generous notice at work, train a replacement, maybe stay part time for few weeks. I want to leave on a high note, just like I did in a past.

Timely quote I found on http://blog.stocktradersalmanac.com/ (Thanks Jeff)
"Self-discipline is a form of freedom. Freedom from laziness and lethargy, freedom from expectations and demands of others, freedom from weakness and fear, and doubt."
—Harvey A. Dorfman (Sports psychologist, The Mental ABC's of Pitching, b. 1935)
 I am going to need that 'self-discipline'. The time freed-up from dead end day-time job will have to be used productively. 

UPDATE 1/19/2014
Time flies. Over past two months I was able to formulate a pretty good game plan and set things into motion.
I gave notice at work last week. Surprisingly, my bosses seems a little panicked, but didn't offer me pay-raise as an incentive to stay. Guess I am not as valuable, as I thought... he-he. They promised to find a replacement by mid-February. I figure it will take a month or two to train, so I am looking at April. Freedom is so close, I can almost taste it.

But first things first. As one of my favorite 'Characters', Captain Vrungel pointed out: "How you name a boat, is how it will sail." So here it is:
Bergamot Capital Management
I like it!

The mission of BCM is to create and manage a life-changing generational wealth.
Nothing less will do.
There is an important condition, that may be an impediment to fast success. No partners, no outside investors. I put in all the labor, I will reap all rewards. May take me a bit longer, but 'overnight success' always requires years of hard work anyway. I experienced that before, at the height of  MSPV, it was very rewarding both financially and emotionally.

I don't want to dwell upon rise and fall of MSPV. I am at fault as much as my partner, who neglected his duties for years, leaving me with abnormal share of work, yet collecting equal compensation. It was I, who failed to recognize importance of  technological changes in early 2000's. Social and economic changes that followed kinda destroyed that industry anyway. In hindsight, I could have done something about it..., but I didn't. MSPV closed its doors almost 5 years ago, to my credit it was a graceful exit. No bankruptcy, no debt, no stiffed creditors. I did waited until "fat lady sings", so I have nothing to show for a 20+ years career.

Two recent experiences with 'investors' made me change my mind about outside money. Especially liquidation of Flagship account in October 2012, which was a very dramatic experience. It took me months to recover psychologically. I don't really care that the guy lost money, as it was entirely his doing. He decided to pull money during less than 15% drawdown, and as I later find out - he didn't really even needed that money, just didn't want to 'play' any more. Obviously, I can't tell what would happen to that account otherwise. But here is what happened to LB account (which I traded almost in parallel to Flagship) - by beginning of 2013 it not only recovered all losses, but was already in profit. LB became my main account and been pushing new equity highs ever since.
Muppets always manage to shoot themselves in a foot.
I don't want any part of it.
And that's that.



Top shippers:

Wednesday, November 6, 2013

Twiter IPO

Finally, this day has come!
Actually its getting 'priced' today, but will start trading tomorrow.


IPO market is super hot. Companies coming in droves, with no revenues or profits, and surely double on a day of IPO. If I was ever looking for an event that could mark the top of this bull market... TWTR would do. What top? This is the 4th biggest bull market in modern history. Tulips, yep

Since before Gov shutdown, I am having a hard time catching any data releases. There is very little discussion on Bloomberg and NPR. Admittedly, I watch even less news than before, but not completely cut out, so something should have gotten to me. OTOH, ZH featuring articles about major misses and deterioration of all kinds of economic data, or at-least parts of it.

btw, I am reading ZeroHedge on purpose. There is no other website I know of, that offers real important news fast, plus analysis of economy and financial markets in real time. The only drawback is that Tyler offers it with a bit more hysteria than I would prefer, and with definite perma-bear bias that I share at this time (never mind that more than half of my portfolio is long at this time).

From ZH: here are dates of tops and bottoms of all bull and bear markets from 1929
Field of research is narrowing. Air is really thin up here
this the fourth biggest bull market in US history

There is going to be a 'scheduled' electric grid shut-down on November 13-14 to test US/Canada electric grid. info is very scarce, mostly rumors.
11-13-13 Another date too easy to remember (like 9/11, 7/7 etc)?
Also it seems too easy to make parallels to other false-flag events of recent past and how gov ... and bla-bla-bla
I asked an opinion of RedDragonLeo - a major doomsday expert, numerologist, Legatus watcher etc. Guy is very skilled and called in advance every major top over past couple of years, except none of that ever worked. So much so, he had to resort to penny stock pushing/pumping... very sad.
Red replied here: http://reddragonleo.com/2013/09/28/the-stage-is-being-set-for-a-possible-3000-point-drop-in-the-dow/#disqus_thread  
Here is an excerpt:
"I heard about that electric grid shutdown too but so far ever last thing predicted since about 2009 forward never happened. We all got scared with Planet Nibriu, Mayan Prophecy of "the end" in 2012, and dozens of other scary forecasts... but none of them happened.  I don't think this one will either...
 ...While a pullback is still likely to happen I'm starting to think that they are going to rally this up much higher then we believe possible next year, and maybe the year after that too? While you can't trade off what Lindsey Williams says I do believe his statement that the elite aren't done creating enough debt yet...
... The next meeting is Feb 6th-8th, 2014 but until we top 2000 SPX I wouldn't even think for a minute that the "real crash" is coming...."

 Like I said, Bears are Extinct.


I don't think i mentioned it before in this journal, but there seems to be an almost a determined effort to destroy financial industry. Knight, PFG, MF Global, SAC etc are gone; and numerous cut backs of trading desks across financial instruments. Not to mention S&P Chicago pit, now almost deserted.

Banks aren't helping themselves either, as widespread market manipulation scandals come to light.
Here is Matt Taibbi of Rolling Stones:
 "The only problem is that the scale of the misdeeds in these various markets is so enormous that even the most half-assed attempt at regulation will cause a million-car pileup...If they're guilty, they're done."


This is how this shit really works these days. The real pro's of Wall Street, the modern day market makers, 'specialists' - algorithm builders. Complex system of markets is more complex than ever.



ECRI's Lakshman Achuthan on Bloomberg
"we believe a US recession began in 2012"

Wednesday, October 30, 2013

Bears are Extinct

This discussion was here: http://evilspeculator.com/?p=39044#comment-1103748606

i Bergamot

bears are extinct

"Extinction" from Wiki:
In biology and ecology, extinction is the end of an organism or of a group of organisms, normally a species. The moment of extinction is generally considered to be the death of the last individual of the species, although the capacity to breed and recover may have been lost before this point.

How will forest survive without these 'species'?
Or may be this time is different...?

Monday, October 14, 2013

Third Week of Gov Shutdown

Government is really not completely shot down. ZH said that 83% still operational. State and local are working, but still... Treasury will run out of money this week. It happened before and always resolved itself.
“Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.”
~ Milton Friedman
Positions:   Almost 30% cash

Entire Precious Metal (PM) portfolio is under water, with TRX, SIL, RGLD, GDX down 25%+. This PM trade is failing and, barring a miracle recovery, will have to be liquidated.

Watch list :
TSLA and FB no re-entry. Info only

Jim Chanos of Kynikos Associates.Talks about China, how hard to be a short seller (yea, no shit). "...its a celebrity market - its who is buying a stock , not why..."  MLP and REIT's

Wednesday, September 25, 2013

Internal Indicators

Being completely lost, as far as market direction is concerned, and invested at 50% - I want to review some key market indicators.



Volume Oscillator T's continue to be unreliable in 2013. T4 and T6 missed the tops, and T8 is doing something wacky. Admittedly,  I couldn't recognize T8 bottom as it happened.
VO T April-September 2013
 Risk-on /Risk-off ratios, aka Confidence indicator (FAGIX:VUSTX  LQD:HYG $SPX:$USB)


$SUPADP   $SUPUDP      S&P 1500 is a great index for breadth indicators because it combines the S&P 500, the S&P Midcap 400 and the S&P SmallCap 600

Here is a new idea (UPDATE 12/15/2013)
 $SPX:$GOLD used not as a ratio, but as SPX priced in Gold, aka Bullshit Indicator.
If its rising - all is good in the land of stocks.
If its falling - stocks are Bullshit!
also trying to look at following ratios without referring to S&P (plot not included in this study)
$SPX:EFA   $SPX:EEM   EFA:EEM seems to produce at-least 2-3 months trends
It is not necessary to invest in under-performing areas of the World


Daily  http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p71533435672
Weekly   http://stockcharts.com/h-sc/ui?s=$SPX&p=W&yr=3&mn=0&dy=0&id=p41109488212
Volume Profile  http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=9&dy=0&id=p89183620435

...................In The News..........................
All about gov. shutdown and debt ceiling. General opinion is that its much ado about nothing. They shut government down before, causing some turbulence, but then market quickly recovered. Debt ceiling debacle caused August 2011 collapse. I remember it well - debt-ceiling was lifted at the last moment, but market crashed anyway. So basically we are conditioned for a 'recovery' after....hold on, after what?

Here is ConvictScott:  (from here http://evilspeculator.com/?p=38564)
 Given that we have the money honeys and affiliated news clowns yabbering about the gubmint shutdown, the odds favor uncertainty with a strong chance of an epic short squeeze.
Just the same fucking circus as September 18 "No Taper" announcement. Everybody kinda agreed that 10-15bil taper of fed purchases would probably be good, and thats what fed was talking about all this time. I don't think they know what to do. I think there is a problem we are not aware of. Why? Market topped on that announcement, with general consensus that softness is temporary and recovery after... is most assured.

We have been going thru this nonsense for few years now. I am not sure if its always been like this. I can't learn all I need from history. My problem is that I have been investing during period after 2000, and don't have my own experience of secular bull market. Was it like this? An endless climb of wall of worry?

Wednesday, September 11, 2013

The Wonder of Dow Paradox

Its a well publicized and known fact that Dow Jones Industrial Average changes  composition of its 30 stocks every so often. These changes are made by commission of editors of Wall Street Journal. Yes. Journalists - not economists, writers - not businessmen, 'opinion heads' - not 'movers and shakers'. The 30 components of Industrial index suppose to represent some kind of slice of economy, but its a muddy picture at best - most of stocks are not 'industrial' at all.

Yesterday the news came out about upcoming changes. This is not a common event,  Index goes without any changes for years and years, and then one of companies merges or sold, or dropped. Now they are changing three! Goldman Sachs, Visa and Nike will be added to the Dow Jones Industrial Average. Out: Hewlett-Packard, Bank of America and Alcoa.

I wrote here: http://evilspeculator.com/?p=38292#comment-1037098392 :            
              When shoe maker and payment processor replaces aluminum and computers in INDUSTRIAL average - makes me wonder about state of american industries. Lest not forget about replacing a branch bank with gambling casino.
             Thou methinks it will be good for index, as new addition are active issues, so kudos to Wall Street Journal editors for running DJIA like a top-notch ponzi scheme

 This is an essence of Dow Paradox.
What is a point of doing long term technical analysis on a price chart of $INDU or DIA, or SPX, or many other so called 'indexes' ,when composition changes so much - its not the same index, not even close. Companies dropped from major index suffer massive outflows, sometimes for years, and often even go bankrupt (remember Kodak). The purposeful manipulation of index components is designed to produce positive outcome, thus creating an upward equity slope - an illusion of increasing wealth and prosperity - The Dow Paradox!

This Ponzi Scheme is meant to be gamed by buy-and-hold approach, especially so by buying the dip. The bigger the dip, the more you buy, and then hold. Selling is really not necessary if time horizon is 10 years or more - your favorite index will be rebalanced by then, and off we go. Its been working just like this for over 100 years, and may work for a 100 more, or may break down tomorrow. There is no way to know for the outsider, besides very few people are asking any questions. Such is the nature of Dow Paradox.

Dow Paradox is thoroughly exploited by Scammers - Wall Street'ers, money managers, brokers, pension funds, insurance companies etc. For as long as Ponzi Scheme is running, there are fees to be collected, salaries and bonuses to be made - good life - money for nothing. Its beautiful! All paid for by willing Victims - sheep led to slaughter. There are millions of them, all unaware of Dow Paradox, ignorant to mathematical impossibility of pyramid scheme. Don't be sad. Its meant to be this way. Reality

The Wonder of Dow Paradox is ME! There are not alot of people like me, may be few thousand in the whole round blue World. I know about Dow Paradox, I use it fully realizing pitfalls and challenges, trying to fleece the Victims and rip-off the Scammers. Using money to make money on a money. Moving and shaking. The ultimate cog in a machine - The SUCKER !!!

Sunday, September 8, 2013

In Search for Darvas Stocks - 3D Printing

One of main principles of  my System 9 is "Theme Investing". There has to be a main idea, some kind of common sense reason for investing/trading the stock of a company. Afterall, somebody has to pay more for this stock at a later date... Why that "greater fool" doesn't do it now? May be I am a greater fool?

Successful speculating in financial markets requires some kind of variant perception of prevailing and expected trends. Even more importantly - there are many ways to skin that cat. One of the most obvious to use is a set of conditions when there are discounted expectations for future prospects of company. Just recently I had this experience with Tesla.

Most people on blogs and message board where skeptical that Elon Musk's company can actually produce damn cars and in quality and quantity promised. Price performance was lousy, earnings releases was a nightmare (thanks to their moron CFO), I was stopped out several times - a very frustrating experience indeed. Eventually this discrepancy was corrected in a very violent manner, as stock exploded higher, fueled by short covering and exceptional publicity blitz, rendering me a mind-blowing profit of 400%. Secondary offering was bought with vigor, and while TSLA is 50% higher than my last sale price, I am happily out of stock, as I am convinced that pendulum just swing to another extreme.

Herein lies the genius of iBergamot, greatest value investor ever lived... He-He
Variant perception is just that. It doesn't have to be right, infact just like everything else its 50/50. When its wrong, when "Investing Theme" holds water (influenced by media, or news hype, or biased personal experience), or when conditions change, on maybe it was just stupid fucking idea... - only then comes the realization of imperfection of individual variant perception. For every "Tesla campaign" I have a "Rare Earth's campaign". Same premise that worked on TSLA between 2012 and 2013, failed miserably on LYSDY and MCP just a couple of years ago. And the craziest thing - I still think that Lynas should be a $100 stock, not Tesla. ...disturbing... Lynas LYSDY last $0.36 (yep, 36c); Tesla TSLA last $166.97...  Some genius...lol

Nicolas Darvas in 1950's used another "obvious" approach to variant perception of financial markets: investing in
"stocks which were tied up with the future and where I could expect that revolutionary new products would sharply improve the company's earnings"..."I was constantly searching for stocks that would climb into a stratosphere because of the vision of their future"..."I made up my mind to buy high and sell higher".... "While the fashion persists, the forward-looking investor gets in and stay in."   Nicolas Darvas, 1960
 These stocks typically will exhibit a strong price move, in an environment of complete media black-out. There is no news, nobody follows these stocks, nothing on blogs and Yahoo message board is dead. Yet there is a huge change afoot, and smart money are buying stock that will soon become "fashionable" investment, with massive following and Tee-Vee coverage. Then (maybe years later) smart money will exit and move on to next "Theme". Rinse and repeat. Darvas Stocks are hard to find, especially for me - I only have few hours a day, and I already run several strategies which take most of that time to manage. It doesn't mean I will stop trying.

3D Printing.

The word is: this is a Third Industrial Revolution. Umm...
I can buy 3D Printer for as little as 500$. What am I going to do with it to make money? Its a toy. Fine. I suppose somebody else can figure out how to turn profit from this new technology. There are big(er) industrial models with no prices quoted from DDD. Interestingly that graphene - a real world-changing break-thru technology can't get off the mat, while plastic toys of ugly colors are all the rage. Follow the money:

Wednesday, September 4, 2013

Red Pill


         "The answer is to stay the fuck out of foreign countries and get our own affairs in order. Of course the 'end-game' scenario completely removes that option - at this point the banksters implicitly run the West and parts of Asia.

The United States remains in a constant state of war for decades now - it's become a routine for the American people. The incurred and implicit cost are the implications that are becoming increasingly more apparent every day. Failing school systems, failing government, failing infrastructure, failing economy, failing currency system, failing morals, failing social services, failing empathy, failing families, should I continue?
The best thing we can do is to detach ourselves from the day to day drama and solely focus on becoming independent economically and personally so that we are able to seek shelter and peace in an increasingly hostile and dangerous world.

Between my wife and I we speak four languages which gives us access to large parts of the planet. We own almost nothing and we rent - in theory we can break up tent in a matter of days and be gone. My business is online and I can run it from almost anywhere in the world (Australia/Asia being the most difficult). If I decide to move to some island in the mid Pacific then all I need is access to a satellite and I'm good to go.
Possessions and debt is what drags you down - the game has changed completely and ultimate freedom is being able to choose and not being dependent on anyone. Which is also why I chose to become a trader - it is one of the few trades you can do from anywhere and nobody cares who you are and where you come from. All you need is a trading account and your smarts.

 Evil Speculator was founded on that very premise. To help others gain the ability to embrace independence and detach themselves from the 'machine' - or 'the system'. Evil Speculator inherently is 'red pill' - we don't waste our time with lofty discussions or debates on what makes the market tick or fundamental issues. We have no means to affect the outcome of what lies ahead - which has been in the works for decades now. What we CAN do is to adjust, focus on the change we can effect for ourselves, and thus secure peace, liberty, freedom, and prosperity for ourselves and our loved ones."
 Molecool of   evilspeculator.com

I wanted to add couple of my own thoughts on this matter, but really he put it so well, I would be just repeating. My views about life in general had changed alot over past couple of years. Molecool had a significant influence, and also works of Ayn Rand, Nassim Taleb, Michael Lewis, Daniel Kahneman and others. It was a quest to find answers to some important, but vague questions. A very frustrating experience until I realized that I was asking wrong questions.

Objectivism, by Ayn Rand holds that:

  1. Reality exists as an objective absolute—facts are facts, independent of man’s feelings, wishes, hopes or fears.
  2. Reason (the faculty which identifies and integrates the material provided by man’s senses) is man’s only means of perceiving reality, his only source of knowledge, his only guide to action, and his basic means of survival.
  3. Man—every man—is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.
  4. The ideal political-economic system is laissez-faire capitalism. It is a system where men deal with one another, not as victims and executioners, nor as masters and slaves, but as traders, by free, voluntary exchange to mutual benefit. It is a system where no man may obtain any values from others by resorting to physical force, and no man may initiate the use of physical force against others. The government acts only as a policeman that protects man’s rights; it uses physical force only in retaliation and only against those who initiate its use, such as criminals or foreign invaders. In a system of full capitalism, there should be (but, historically, has not yet been) a complete separation of state and economics, in the same way and for the same reasons as the separation of state and church.
From Ayn Rand Institute http://www.aynrand.org

Thursday, August 29, 2013

Positions and Watch List

8/30 - FB 41.97. Full pos. I think it will take out all time high (made on day of IPO), or fall apart right here and now.
9/3 - TBT 78.52. Re-entering just as planned. I've been riding this trend since 5/16. Last time I took profit on 8/23 at 80.40. Every trade in "Short US Treasuries" theme was profitable this year. This is what Bonds bear market does.

9/4 - SSYS 106.70. Taking small profit on this half pos trade. I don't like intraday action, plus I didn't buy it well. Will watch and may re-enter
9/4 - SIL 15.37. half pos size of silver miners. Now I have full pos on.

9/1 - WFC (from System12)
9/4 - TSCO

S&P Sectors+



 Watch-List Cleaner


Old Timers, gotta love 'em.
Moe Ansari talks to  Pamela Aden about everything

Sunday, August 18, 2013

Big Data and Cloud

Why am I so scared? A reflection of social mood or contrarian stance?
The weakest link - information, communication, cell phone and internet. There are redundancies, protection and back-up, but will it be enough? A small earthquake (about a year or two ago) - and everybody was lost, no phone, no plan... one can steal a City-Hall and nobody will notice until sometime later.

They think a stop-loss order will work. If you can put it in, if broker will receive it, if market functions properly and with liquidity enough to accommodate... Many if's

I hear a lot of stories about hackers and internet attacks. I hear stories about Big Data mining and spying. I hear that Cloud Computing will change the way we live and work on internet. I am asking a lot of question, I am asking computer programmers and users, I read, I research. I have NOT heard a meaningful and coherent explanation about how all this shit really works together. If the only people who should know, really don't - what about the rest of us?

There is a ISE Cloud Computing Index Fund - SKYY - its top 10 holdings (almost a half of assets) change quite a bit from month to month, plus they rebalance semi-annually. Expense ratio is 0.6%. Started trading in Summer 2011, it recently broke all time highs with strong Volume Profile (VP).

Cyber Security

----------UPDATE 2/16/2014------------------
            UPDATE UPDATE 4/9/2014
Less than 2 months later all Fly's picks from above look pretty pump-n-dumpish...

..............................................In the News.............................................
Less than 2 weeks after this post Nasdaq main computer broke down for 3 hours. As soon as it came back, NYSE computer froze. The following day Eurex Exchange broke down for over an hour. "Technical issues" are the reason. Yea, no shit. Trading was disrupted for some securities, and I actually had some of them, and I couldn't put the sell-stop order in. All this when volume was very low and many are still on summer vacation, plus Sell Rosh Hashanna on September 5. So the question from above post: "If you can put your stop order in?.. The answer is : NO!

Other than that, its all Sirya. We are not going in without UN resolution, which Russia and China promised to veto, except they walked out from meeting where voting was suppose to happen. Politics - show business for ugly people.