Bill Cara’s Blog for Jan 5, 2012

CTA Trading Desk Morning Report

[9:15am ET] Good morning, Geoff here.

Yesterday, the S&P 500 sold off in the morning only to find support just above the 200 dma. That marks 2 consecutive closes above that key level which will provide confidence to the bulls. However, the October high still has not been broken and a break above that level will truly confirm the breakout for the S&P 500.

This morning, the ADP report showed a significant increase in hiring in December as the private sector added a seasonally adjusted 325,000 jobs. That beat expectations and was up significantly from the 204,000 add in November.

Jobless claims fell a seasonally adjusted 372,000 which was roughly what was expected and marks claims falling in four out of the last five weeks.

Those two reports can be seen as positive signs on the employment picture. Tomorrow’s employment data will be watched closely by the market and as I noted yesterday; “At times when the market is stretched, a key economic data release can serve as the catalyst for a price reversal.” In other words, because the market is overbought, tomorrow may be a “sell the news” event if the data is positive.

The fly in the ointment for the bulls is the US dollar which is also poised to breakout. Right now, we are playing the game of chicken waiting for confirmed breakouts in either the dollar or the S&P 500.

We continue to be leaning long, but as I noted yesterday, we are poised to take a defensive stance very quickly. As I said; “with that scenario in mind, taking gains in current holdings that have rallied and/or adding downside protection at these levels would be prudent.”

Have a great trading day!

Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.

Symbol Name Last Trade Change Related Info
^ATX ATX 1,910.00 4:34AM EST Down 35.00 (1.80%) Components, Chart, More
^BFX BEL-20 2,101.40 7:01AM EST Down 19.71 (0.93%) Components, Chart, More
^FCHI CAC 40 3,161.84 7:01AM EST Down 31.81 (1.00%) Components, Chart, More
^GDAXI DAX 6,052.19 6:46AM EST Down 59.36 (0.97%) Components, Chart, More
^AEX AEX General 312.04 6:45AM EST Down 2.49 (0.79%) Components, Chart, More
^OSEAX OSE All Share 449.43 6:46AM EST Up 0.50 (0.11%) Components, Chart, More
^OMXSPI Stockholm General 312.89 6:45AM EST Down 1.10 (0.35%) Components, Chart, More
^SSMI Swiss Market 6,018.76 6:45AM EST Down 39.32 (0.65%) Components, Chart, More
^FTSE FTSE 100 5,623.27 6:46AM EST Down 45.18 (0.80%) Components, Chart, More
FPXAA.PR PX Index 905.60 7:01AM EST Down 21.80 (2.35%) Chart, More
ESI500000000.MA IGBM 840.06 6:45AM EST Down 18.27 (2.13%) Components, Chart, More
MICEXINDEXCF.ME MICEX Index 1,435.93 7:45AM EST Down 14.71 (1.01%) Chart, More
GD.AT Athex Composite Share Price Index 646.69 6:45AM EST Down 15.60 (2.36%) Chart, More

http://finviz.com/futures.ashx

http://finviz.com/fut_chart.ashx?p=m5&t=ES

http://finviz.com/fut_chart.ashx?p=m5&t=ZB

http://finviz.com/fut_chart.ashx?p=m5&t=DX

http://finviz.com/fut_chart.ashx?p=m5&t=GC

http://finviz.com/fut_chart.ashx?p=m5&t=SI

http://finviz.com/fut_chart.ashx?p=m5&t=CL

The team will check in during the day, reporting in the Discourse when there is a new entry.

Enjoy your day.


Cara on Trends & Cycles


Vad’s Catch of the Day


Kaimu’s Sound Money


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report


  1. [No set time] Chain Store Sales 7:30 AM ET Challenger... [#103176]
    By: davefairtex (5215 comments) Go to top ↑
    • [No set time] Chain Store Sales
    • 7:30 AM ET Challenger Job-Cut Report
    • 8:15 AM ET ADP Employment Report
    • 8:30 AM ET Jobless Claims
    • 9:45 AM ET Bloomberg Consumer Comfort Index
    • 10:00 AM ET ISM Non-Mfg Index
    • 10:30 AM ET EIA Natural Gas Report
    • 11:00 AM ET EIA Petroleum Status Report
    • 4:30 PM ET Fed Balance Sheet
    • 4:30 PM ET Money Supply
  2. 1 in Buy alert 2 in Distribution Zone 6 in Sell... [#103177]
    By: davefairtex (5215 comments) Go to top ↑
    • 1 in Buy alert
    • 2 in Distribution Zone
    • 6 in Sell alert

    Accumulation Zone: Monthly 7, Weekly 2, Daily 4
    Distribution Zone: Monthly 9, Weekly 10, Daily 29

  3. PURCHASING MANAGER INDEX MANUFACTURING Germany for... [#103178]
    By: Les (7233 comments) Go to top ↑

    PURCHASING MANAGER INDEX MANUFACTURING Germany for Dec
    Actual: 48.4 Cons.: 48.1 Previous: 47.9

    PURCHASING MANAGER INDEX MANUFACTURING EU for Dec
    Actual: 46.9 Cons.: 46.9 Previous: 46.4

    SVME – PURCHASING MANAGERS’ INDEX Switzerland for Dec
    Actual: 50.7 Cons.: 45.7 Previous: 44.8

    PURCHASING MANAGER INDEX MANUFACTURING UK for Dec
    Actual: 49.6 Cons.: 47.3 Previous: 47.7 Revised from 47.6

    PURCHASING MANAGER INDEX SERVICES Germany for Dec
    Actual: 52.4 Cons.: 52.7 Previous: 50.3

    PURCHASING MANAGER INDEX SERVICES EU for Dec
    Actual: 48.8 Cons.: 48.3 Previous: 47.5

    PMI CONSTRUCTION UK for Dec
    Actual: 53.2 Cons.: 52.0 Previous: 52.3

    PURCHASING MANAGER INDEX SERVICES UK for Dec
    Actual: 54.0 Cons.: 51.5 Previous: 52.1

    All PMI numbers show improvement MoM
    ——————————–

    UNEMPLOYMENT RATE S.A. Germany for Dec
    Actual: 6.8% Cons.: 6.9% Previous: 6.9%

    http://www.fx360.com/calendar/

  4. RETAIL SALES (YOY) Germany for Nov Actual: 0.8% Cons.:... [#103179]
    By: Les (7233 comments) Go to top ↑

    RETAIL SALES (YOY) Germany for Nov
    Actual: 0.8% Cons.: 0.7% Previous: -0.6% Revised from -0.4%

    INDUSTRIAL NEW ORDERS S.A. (MOM) EU for Oct
    Actual: 1.8% Cons.: 2.5% Previous: -7.8% Revised from -6.4%

    INDUSTRIAL NEW ORDERS (YOY) EU for Oct
    Actual: 1.6% Cons.: 3.3% Previous: 1.6%

    PRODUCER PRICE INDEX (YOY) EU for Nov
    Actual: 5.3% Cons.: 5.2% Previous: 5.5%

    http://www.fx360.com/calendar/

  5. ... [#103180]
    By: Les (7233 comments) Go to top ↑
    • "ECB, step up to the plate please!" As in? More... [#103185]
      By: Vadym Graifer (4341 comments) Go to top ↑

      “ECB, step up to the plate please!”

      As in? More intervention? More duct tape on what is going to fail eventually anyway?

      My suggestion would be: ECB, get out finally, let the failure fail. It will be painful, no doubt – but it will be much more painful when it happens later on, after you exhaust all your resources trying to rescue unrescuable.

      • I guess every CB looks at the 2008 TARP "success" story and... [#103188]
        By: jack black (2306 comments) Go to top ↑

        I guess every CB looks at the 2008 TARP “success” story and will try to emulate the bank “rescue.”

  6. unicredit down 12% Many other european banks down 3% or... [#103181]
    By: NYUGrad (4750 comments) Go to top ↑

    unicredit down 12%
    Many other european banks down 3% or more.

    allied irish is up 3% and barlcays up 1.2%, the exceptions.

    Euro did not do well in the globex session.

  7. ... [#103182]
    By: Les (7233 comments) Go to top ↑
  8. the survey was released this am and is higher (bull vs... [#103183]
    By: tobyt (208 comments) Go to top ↑

    the survey was released this am and is higher (bull vs bear) than it was for the previous spread highs (end of Oct beginning of Nov) caveat emporem or whatever…..believe we have only closed above 1278 twice in last 6 months..DYOD…..loved the banality quote yesterday..cannot overemphasize how much I enjoy this site, even posts from those dramatically opposite many of my social views….thanks bill/et al

    • I checked the II ratio and it reads only 0.62 and smack in... [#103190]
      By: jack black (2306 comments) Go to top ↑

      I checked the II ratio and it reads only 0.62 and smack in the mid range. The previous peak in 2011 was 0.77.

      Edit:
      Sorry, above I was talking about the II survey ratio and not about AAII..
      The AAII survey did spike to almost record 0.74, but that is useless, as the previous peak of 0.8 was back in December 2010, and months before shorting made money. Don’t ask me how i know that.

  9. ADP EMPLOYMENT CHANGE (Dec) Actual: 325K Cons.: 165K... [#103184]
    By: Les (7233 comments) Go to top ↑

    ADP EMPLOYMENT CHANGE (Dec)
    Actual: 325K Cons.: 165K Previous: 206K

    ADP doesn’t include govt. employment if I remember correctly, but still a positive.

    CONTINUING JOBLESS CLAIMS Dec 24
    Actual: 3.595M Cons.: 3.522M Previous: 3.617M Revised from 3.601M

    INITIAL JOBLESS CLAIMS Dec 31
    Actual: 372K Cons.: 375K Previous: 387K Revised from 381K

    http://www.fx360.com/calendar/

  10. Good morning. 07:30 Challenger Job Cuts (30.6%) 08:15 ADP... [#103186]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    07:30 Challenger Job Cuts (30.6%)
    08:15 ADP Employment Change (325K)
    08:30 Initial Claims (372K)
    10:00 ISM Services
    11:00 Crude Inventories

    ——

    AAPL – Apple initiated with a Buy at Auriga. Target $550

    AAPL – PT Lifted from $550 to $580 @ BTIG. Buy

    EXC – Exelon downgraded to Neutral from Buy at Citigroup citing the recent contraction in forward power and natural gas prices. The firm lowered its price target for shares to $44 from $48

    GOOG – Google downgraded to Hold from Buy at Benchmark Co. following Q4 data and channel checks that suggest strong domestic online advertising but a severe slowdown in Europe. The firm believes the U.S. outlook for 1H 2012 is increasingly uncertain and checks indicate slowing momentum at YouTube.

    MMM – Morgan Stanley assigns an Equal Weight on the Post-Its maker.

    VALE – Vale downgraded to Neutral from Buy at UBS citing high expectations, risk to production volumes, valuation, and lack of catalysts. Price target lowered to $24 from $31.50.

    ——

    Other Stocks of Possible Interest:

    EGO – Eldorado Gold upgraded to Buy from Neutral at UBS given the pullback in shares following the acquisition of European Goldfields. Price target lowered to $19 from $21.

    ——

    “That men do not learn very much from the lessons of history is the most important of all the lessons of history.”
    ~Aldous Huxley

  11. Lets see. Dollar exceeded the 12/29/11 high. Yet, equities... [#103187]
    By: jack black (2306 comments) Go to top ↑

    Lets see. Dollar exceeded the 12/29/11 high. Yet, equities, PM, and miners much above the 12/29/11 low. Bonds barely up. Looks like risk on again.

  12. (CN) IMF comments on Asia; sees need for China to boosts... [#103189]
    By: Vadym Graifer (4341 comments) Go to top ↑

    (CN) IMF comments on Asia; sees need for China to boosts increases domestic consumption; calls on Japan to trim its debt and increase growth
    - Notes that Asia countries have the capacity to help in Europe crisis

    I don’t even know where to begin… with China financing its domestic consumption by borrowing as it is, yet being called to do more of it? with Japan called to do two mutually exclusive things? with suggestion that Asia could help Europe while Asia is getting hit by that same European crisis?

    It’s like these guys just feel the need to produce airwaves and sounds for the sake of producing them.

  13. Vad - have you picked one up yet? Still working the... [#103191]
    By: Ron Sen (975 comments) Go to top ↑

    Vad – have you picked one up yet? Still working the learning curve…but looks great.

    • No, it's still not available here as they fulfill... [#103193]
      By: Vadym Graifer (4341 comments) Go to top ↑

      No, it’s still not available here as they fulfill preorders. Apparently, this is the most pre-ordered Android tablet ever – 7 times the expectations. Glad to hear you are happy with yours, I’ll be following you soon enough :)

  14. Look at the QQQ:UDN ratio. Self explanatory. Also notice... [#103192]
    By: jack black (2306 comments) Go to top ↑

    Look at the QQQ:UDN ratio. Self explanatory.
    Also notice the 50 vs 200 DMA crossover couple of months ago.
    Looks bullish to me. The only thing that holds nominal values hostage is the dollar/euro exchange ratio.

    Disclosure: no position in nasdaq or dollar. Long position in PM, miners, and emerging markets.

  15. Les, regarding your comments and charts on the thread... [#103195]
    By: Menock (39 comments) Go to top ↑

    Les, regarding your comments and charts on the thread yesterday; I don’t think you can assume technical indicators work on TLT (bond prices/yields) when the full might of the central banks is intervening to sustain low low interest rates for an extended period. It sounds like a set up for a loss resulting from entering a trade expecting a normal technical move.

    • Hi Menock, I don't necessarily assume it. I did forget that... [#103198]
      By: Les (7233 comments) Go to top ↑

      Hi Menock, I don’t necessarily assume it. I did forget that the Fed is active at this end of the curve and that could be what is propping up TLT when previous sell offs were clean tops and rollovers.

      Right now I’m scratching my head and wondering if the market is ready to panic or is Uncle Buck setting up a bear trap. Show me which and I can better put a spin on TLT’s behaviour.

      But I agree with what you’re saying. News driven action and interventionism arguably undermines the tenets of TA. Yet see attached for another perspective on TLT, from stockcharts.com, which is a more accurate than freestockcharts.

      Price sits on the 8MA in the weekly time frame, crossing below signals risk off for bonds. That’s all I need to see. I can see degraded stochastics and MACD indicating bearish divergence, but all I need to see is price fall below the 8MA, and correspondingly rise above the 8MA in $TNX.

      The indicators suggest this is going to be the case, so I maintain my exposure to UXG. But we need to see price move in order to see capital flow from bonds to equities, as Bill would say.

      Most of all I think the market is trying to wear out traders. JMO. cheers.

  16. http://seekingalpha.com/article/317509-top-underva... I'm... [#103196]
    By: jack black (2306 comments) Go to top ↑

    http://seekingalpha.com/article/317509-top-underva

    I’m long HL from the ones listed.

    Here are the numbers for HL: “down 54% in 2011, and the stock trades at a discount 10-11 current P/E and 1.3 P/B compared to averages of 18.1 and 2.9 respectively for its peers in the silver mining group, while earnings per share are projected to grow at a 41.4% annual rate from 29 cents in 2010 to 58 cents in 2012.”

    Only CDE is cheaper.

  17. UXG reported that it will produce 30,000 oz. of gold... [#103194]
    By: lessmore (322 comments) Go to top ↑

    UXG reported that it will produce 30,000 oz. of gold annually starting mid 2012 (this year) from just its 1st phase. That’s a good start.

  18. http://www.zerohedge.com/news/retail-investors-pul... Are... [#103197]
    By: jack black (2306 comments) Go to top ↑

    http://www.zerohedge.com/news/retail-investors-pul

    Are they smart money or dumb money? (rhetoric question).

    The only real question is whether Europe breaks up or not. Feel free to bet.

  19. Market tells you a lot from the way breakouts work. If... [#103199]
    By: Sedona (77 comments) Go to top ↑

    Market tells you a lot from the way breakouts work.

    If breakouts do not have immediate follow through it indicates weak conviction. This is the case currently. Many breakouts fade by end of the day.

    Similarly if you see breakouts to new high getting sold , it indicates distribution by larger players. You will see hundreds of examples you can see currently.

    If you see only late stage stocks breaking out it indicates tired market unlikely to make big move. This is the case currently where new leadership is lacking.

    If you see large stocks breaking out and making moves it indicates funds are seeking safety. Large caps have been leading recently.

    If you see beaten down stocks dominating breakout list it indicates lack of conviction and short term commitment by funds.

    If you see stocks after stock that made big move in last 2 year getting in to trouble and having hard breakdowns, it indicates distribution.

    In an environment like this unless you are a day trader your primary concern should be risk management.

    Your total risk exposure to the market should be at level where if things turn sour you should be able to get out with minimum damage.

    A real bull market lasts months and offers several opportunities. So if it shows up you will not have trouble finding setups and make big money if you have thought through your setups

  20. sedona nice... [#103200]
    By: mikede (121 comments) Go to top ↑

    sedona
    nice post

  21. Lets look at his quotes: "This current bear market rally... [#103201]
    By: jack black (2306 comments) Go to top ↑

    Lets look at his quotes:

    “This current bear market rally is comparable to the tragic fooler bear rally that followed the 1929 crash. But in extent, this bear market rally (I’m talking about the one that followed the 2009 low) was even greater than the 1929-1930 rally. And just as 1929-1930 fooled many investors, who re-entered the market thinking that they would recoup their 1929 losses, this giant 2009-2011 rally sucked in thousands of hopefuls back into the stock market again.

    The great bear market rally is now about over, following a very long period of deceptive distribution. I am warning all my subscribers again that we are back in the grip of a vicious and ruthless bear. The bear has been held back for almost two years, due to the so-called quantitative easing of an anxious and ignorant Fed. There’s no bear angrier than a frustrated bear. As a result, I believe we’re going to see a brutal stock market that will shock the Fed and the bulls and the public — and all who insist on remaining in this bear market.”

    - Richard Russell, December 2011

    “We’ve been in a primary bull market and we’re still in one. The costly and brutal decline form the 2007 high to the 2009 low was, in fact, an almost unprecedented correction in an ongoing bull market. The stock market panic-collapse was a direct result of the crash of the housing bubble. I mistakenly took the vicious decline of 2007 to 2009 as a turn in the tide and a bear market. … As of now, the bull market is still in force. Therefore, any forthcoming correction should serve as a buying opportunity.”

    - Richard Russell, April 2011

    Typical double speak from so called “gurus.” Look at his timing.

    • JB Richard Russell admits he was mistaken in his call... [#103215]
      By: MoKat (531 comments) Go to top ↑

      JB

      Richard Russell admits he was mistaken in his call… he mans up when wrong. I don’t agree it is “typical double speak”
      He’s no “so called guru” unless YOU call him one. He is much, much more than that.

      I remember his conflict in deciding whether we were in a bull phase of a primary bear or vice versa. He did a reversal and said the failure to return to the March low shows the primary bull market was never broken, the drop to 7000 was just a severe correction in the primary bull market. Maybe he was fooled by QE and Ben’s attempt to levitate the market to encourage consumer spending. Lots of people were dazed and confused by recent events. I know I was wrong about many things in the last decade.

      Here is a paragraph from Russell’s recent comment. Russell has had a stroke and recently a broken hip where he had to stay in a rehab hospital for some weeks. Home now, he continues to churn out his daily report. He just switched to Dragon so he can dictate his letter without typing. I am a long time subscriber to his letter.

      “$6.3 trillion wiped off the markets in 2011″ Page 1 headline from the January 1st Financial Times.

      “Lowry’s is one of the technical studies that I depend on in my appraisals of the stock market. Turning then to Lowry’s figures, what we see here is critically important. In early August, the Buying Power Index (demand) broke below the Selling Pressure Index (supply). Even more important, Buying Power since last February has been in a sideways movement — but in late-July Buying Power suddenly broke down and embarked on a long down-sloping trend. At the same time, Selling Pressure was gliding down gently but it suddenly turned up in late-July. What we see now is the two indices spreading apart which is extremely bearish — Selling pressure is steadily increasing while Buying Power is dropping like a stone. ( Current: Selling pressure exceeds buying interest +180 on the Lowrys Buying Index)

      This clear and steady deterioration in the market’s internals is being masked or hidden by a parade of good news regarding the US economy and by a persistent and deceptive rise in the Dow.

      At some point in the near future, the weakening internals of the market will cause the Dow to buckle and the bear market will burst into view again. “

    • I don't see something wrong here. In April 2011, Russell... [#103222]
      By: caonima (73 comments) Go to top ↑

      I don’t see something wrong here. In April 2011, Russell had a bullish opinion but he turned to negative eight months later.

      Give you one example, I know one private fund with precious metal miners 100%. Around April 2011, the manager decided 100% cash holdings. Essentially, all of positions are sold for cash. about 5 month later, he bought back all of positions before the miners got hammered. from now, it appears that it is a very bad move. But who can accurately predict the outcome?
      I have not seen one yet unless you have the insider information like Goldman.

      • "But who can accurately predict the outcome? I have not... [#103223]
        By: Vadym Graifer (4341 comments) Go to top ↑

        “But who can accurately predict the outcome?
        I have not seen one yet unless you have the insider information like Goldman.”

        Seriously? This myth is still alive? Okay, let me try to bury it again: do google “Alpha Global fund”

        Just how many lives this Phoenix has… garlic, wooden stakes, sunlight, nothing seems to work.

        • well, are you talking about GS as a whole or... [#103225]
          By: caonima (73 comments) Go to top ↑

          well, are you talking about GS as a whole or individually?
          I always think GS will do some public show since it has so negative publicity. It will demonstrate that it has some funds to lose money.

        • Vadichka, You win a tin of... [#103226]
          By: Ilya (572 comments) Go to top ↑

          Vadichka,
          You win a tin of biscuits…

        • Its pretty clear that GS can't always pick the outcome... [#103227]
          By: davefairtex (5215 comments) Go to top ↑

          Its pretty clear that GS can’t always pick the outcome correctly.

          They do have other benefits, however. They got 16 Billion from a dead counterparty courtesy of their friends in government, paid at 100 cents on the dollar. As a reference, their revenues for the full year 2011 came in at 31B. They were the biggest beneficiary. Half a year’s revenue, done in one act, courtesy of the taxpayers.

          And when they engage in fraud, they aren’t prosecuted. Others have that benefit too, of course, not just them.

          immune to fraud prosecutions: check
          can get laws written – or watered down: check
          alums in SEC, Fed, Treasury, ECB: check
          complete control of markets: a work in progress

          • "Its pretty clear that GS can't always pick the outcome... [#103230]
            By: Vadym Graifer (4341 comments) Go to top ↑

            “Its pretty clear that GS can’t always pick the outcome correctly.”

            Apparently not… it would be what, 546th time I am trying?

    • ... [#103228]
      By: Les (7233 comments) Go to top ↑
  22. i wonder if all the "positive vibes", about the job numbers... [#103202]
    By: dberryclan (687 comments) Go to top ↑

    i wonder if all the “positive vibes”, about the job numbers and the anticipation is a set up to be sold tommorow. ?

    • I think the USD will give us a good hint of where the ship... [#103204]
      By: ballena (529 comments) Go to top ↑

      I think the USD will give us a good hint of where the ship really is heading. I expect (and hope for) a high volume day tomorrow.

    • That's what I'm thinking; but my alter-ego questions if... [#103205]
      By: Grateful (26 comments) Go to top ↑

      That’s what I’m thinking; but my alter-ego questions if that view is a set up? Many on this site lack confidence in this market…I lack confidence in my plans; though working on that.

      Yesterday, I planned to sell (reduce position sizes, but not get out completely) into expected opening strength. When market rose out of the chute, I held back – what if it goes higher…eventually did lighten my exposure, but at a lower prices than if I acted as planned.

      Now, I feel I should sell more into today’s strength and plan for pending pull back…I do love this stuff – wish I could focus more time on it, but day job gets in the way.

      Thanks for your recent posts – I’ve really enjoyed/benefited from your perspective.

  23. http://online.wsj.com/article/BT-CO-20120104-71282... In... [#103203]
    By: Bill Cara (4105 comments) Go to top ↑

    http://online.wsj.com/article/BT-CO-20120104-71282

    In 2010, I ran into someone selling one of these deals in Bahamas.

  24. Noteworthy given the hit the euro banks took this morning... [#103206]
    By: tpedward (34 comments) Go to top ↑

    Noteworthy given the hit the euro banks took this morning, along with Italian and Spanish bonds, and the EUR

    BKX back at Oct highs

  25. Interesting story, Gartman declared gold in bear mode as of... [#103208]
    By: Jeff B (715 comments) Go to top ↑

    Interesting story, Gartman declared gold in bear mode as of December prior to big plunge. He looked smart but has since declared he failed to re-enter the market at lower prices and believes a bull for gold is back on.

    http://business.financialpost.com/2012/01/05/gartm

    gold bulls will say this vindicates them, i say this only proves the worthlessness of guru’s trying to predict anything with any sort of regularity.

    gold moves no matter what any one in nice suits says.

    • "i say this only proves the worthlessness of guru's trying... [#103209]
      By: jack black (2306 comments) Go to top ↑

      “i say this only proves the worthlessness of guru’s trying to predict anything with any sort of regularity.”

      There is a website that tracks just that for equities and gurus’ accuracy usually range from 40-60%. I would say mostly random for most gurus. Some gurus actually score consistently below 40%. I bet they make money by writing, but don’t trade on their own advice.

      Hulbert tracks newsletters positions and it’s a great contrary indicator.

      • thx JB, this is a good link. funny how some choose to make... [#103210]
        By: Jeff B (715 comments) Go to top ↑

        thx JB, this is a good link.

        funny how some choose to make their money…

        • Watch gold now "plunge" to $1400 to finish off the... [#103211]
          By: westcoaster (1130 comments) Go to top ↑

          Watch gold now “plunge” to $1400 to finish off the demolition of Gartman’s reputation. He’s no better than any of us, and should acknowledge.

    • I wasn't aware that Gartman was a guru. Look at the... [#103212]
      By: Menock (39 comments) Go to top ↑

      I wasn’t aware that Gartman was a guru. Look at the performance of his actively managed ETF, a pseudo hedge fund, which Bill has pointed out.
      His credibility is so low I wonder if Dennis Gartman is his real name. I call him Pompous T. Blowhard

  26. Transports are 10% below their high of last year... [#103213]
    By: ballena (529 comments) Go to top ↑

    Transports are 10% below their high of last year. Industrials are just 3.5% below.

    The two stock market averages must confirm each other. When the performance of the averages diverge, it is a warning that change is in the air.

    $TRAN could pop any time, it is on the verge of breaking out. If not, the breakdown could be severe. A trigger is needed.

  27. I think that man we call our President is about to announce... [#103214]
    By: Sedona (77 comments) Go to top ↑

    I think that man we call our President is about to announce some kind of massive mortgage bailout. A trillion maybe? Everybody gets a 3 % mortgage if you are current. Can’t explain the front running of the banks.

  28. FYI Just passing this along as reference info. a list of... [#103217]
    By: MoKat (531 comments) Go to top ↑

    FYI

    Just passing this along as reference info.

    a list of the Fed Primary Dealers… the entities who serve as trading counter parties of the the NYFED and assist in the implementation of FED monetary policy. Only 7 of 21 are American. The lords of global finance. BMO and BNS are newbies. They were added after MF Global was kicked out of the club for bad behavior in less than a year as a member.

    Bank of Nova Scotia, New York Agency
    BMO Capital Markets Corp.
    BNP Paribas Securities Corp.
    Barclays Capital Inc.
    Cantor Fitzgerald & Co.
    Citigroup Global Markets Inc.
    Credit Suisse Securities (USA) LLC
    Daiwa Capital Markets America Inc.
    Deutsche Bank Securities Inc.
    Goldman, Sachs & Co.
    HSBC Securities (USA) Inc.
    Jefferies & Company, Inc.
    J.P. Morgan Securities LLC
    Merrill Lynch, Pierce, Fenner & Smith Incorporated
    Mizuho Securities USA Inc.
    Morgan Stanley & Co. LLC
    Nomura Securities International, Inc.
    RBC Capital Markets, LLC
    RBS Securities Inc.
    SG Americas Securities, LLC
    UBS Securities LLC.

  29. flat as a table intraday following a huge gap. How natural... [#103218]
    By: jack black (2306 comments) Go to top ↑

    flat as a table intraday following a huge gap. How natural is that?

    • "flat as a table intraday following a huge gap. How natural... [#103220]
      By: dberryclan (687 comments) Go to top ↑

      “flat as a table intraday following a huge gap. How natural is that?”

      this market is now prone to the , “supernatural!”

      • http://en.wikipedia.org/wiki/Hyperbole Honestly,good... [#103221]
        By: tbar (303 comments) Go to top ↑

        http://en.wikipedia.org/wiki/Hyperbole

        Honestly,good analysis that transcends all time frames(seconds,minutes,hours, days,weeks,months.) is what I look for.

        Long term charts provide better clues IMHO and daily rhetoric about catastrophoc move makes me ill at best. They just dont matter in the larger scheme of things.

        Intraday moves hardly define trends in this market,have an argument to the contrary and I would really like to hear it. ??

  30. I had to educate myself on the AAII survey - I had... [#103231]
    By: Les (7233 comments) Go to top ↑

    I had to educate myself on the AAII survey – I had admittedly forgotten what it was about:

    http://www.forbes.com/sites/investor/2012/01/05/aa

    Contrary signal? I dunno, one analyst I do keep an eye on had this to say:

    Today we updated the AAII sentiment chart and more encouraging news is there too. Note the bull/bear ratio spike. When we’ve had similar high readings in the past few years, they have happened in the midst of or near the beginning of sustained rallies.

    See the following chart the author posted:

    http://www.financialsense.com/sites/default/files/

    The original link:

    http://www.financialsense.com/contributors/erin-sw

    I thought I’d take another look at VIX. I think it was Taleb who said something about trying to control volatility to the point where such backlashes will become more regular and severe (or something like that).

    This is clear enough I think and with reason, as central banks attempt to write off bad bank loans. Of course just writing off everything would be the solution, but the creditors lose out and it is clear that the creditors are presently in control.

    So what can the fear gauge tell us? If you take a look at the attached chart you can see a certain regularity to these fear ‘waves’ that put/call option activity generates. Why 15 tends to be base I have no idea. But it does correlate with the end of the phase of the Fed expanding its balance sheet, as the recent chart from Puplava shows:

    http://www.financialsense.com/sites/default/files/

    So, more of the same? Given that the Fed is once again expanding its balance sheet, this would be logical. From these levels (when VIX first touches 20 support), previous waves have taken approximately 6.5 months to create a base, before beginning to build up into the next sell off. Given the fragility of the Euro situation, this wave could certainly could certainly finish more quickly, but there is no reason to assume this.

    That’s not to say there won’t be bumps along the road, as is made clear by the irregular and periodic spikes in the fear gauge. But touching base at 15 is a clear warning signal that the party is about to end, even if it takes a 6 month topping pattern as we witnessed in 2011.

    What else can we observe of market action that may help lean one way or the other? The banks appear to be back in favour, for one. JPM has a relatively clean chart – I use it as a proxy for the financial group and not GS who appears to be suffering under the weight of its greed which is now coming back to bite its share price as lawsuit after lawsuit is filed.

    The descending triangle is apparent in both daily and weekly time frames. The action this week (including Friday’s close) will be important in determining whether a new trend is struck in finance or this is another false break, one which cost aggressive traders dearly at the end of October.

    As for me I just need to know if I’m keeping UXG into the weekend or not. I don’t want to over-trade it but neither will I accept holding it at a loss, having provided a 1:1 risk/reward profit. Miners appear to be resting following the post-Christmas bounce. Whether it has follow through going into EoW is something yet to be observed and will be indicative of whether this rally has follow through or is but another bounce in a long line of them.

  31. http://www.americanbanker.com/bankthink/JPM-Jamie-... 2012... [#103232]
    By: Bill Cara (4105 comments) Go to top ↑

    http://www.americanbanker.com/bankthink/JPM-Jamie-

    2012 is a major election year in the US. I’m thinking that many in Congress and the White House and those in pursuit will be spending millions in advertising claiming to be ready to take down the banksters. After all, they know that’s what the public want to hear.

    But how far will those in power actually go beyond the words?

    • Interesting. Hit Corzine as the election campaign gets... [#103233]
      By: Les (7233 comments) Go to top ↑

      Interesting. Hit Corzine as the election campaign gets underway, otherwise it ain’t gonna happen afterwards. That’ll get the mob cheering. I wish the author well in her prediction for Dimon, but he has maintained the appearance of being another kettle of fish until now. He appears to have judicial protection in the case of Madoff, what changes with MF?

      But damn that bank is dirty…