Cara's Commentary & Community Chat, Tues., Feb. 3, 2009

[8:00am ET] I have been so busy, I just picked up this blog entry from kaimu from Monday morning:

ALOHA!!

I am now freezing my ass off in Dallas, headed to San Diego then back to Hawaii about mid Feb …

Even though I was under the weather, with a bad cold, almost the whole time I was in the Bahamas I had a great time there and was able to do some business, even marketing orchids!

My thanks to Bill & Co … for an insiders look at the BAHAMAS … Very enlightening! I enjoyed the “mates” and the “piss up” at the CRICKET CLUB!! No “cricket” !!

Really very awesome tour, via private plane, of the outer islands. Much appreciation to Jim Watt (CTAB) for his expert pilot skills and a “wee bit” to his Scottish co-pilot!! HA!! When Bill gets to posting the photos they are a must see! Thank you BILL for an excellent adventure!

Whoever here who is lucky enough to go to the upcoming CTAB CONFERENCE will be well rewarded no matter what reasons you use to go there! I can say there is much behind the scenes planning for the CTAB event going on now. You will be impressed!!

Once again Bill … thank you … MAHALO !!!

Gotta plane to catch !!! TA!!!

Kaimu, the Scottish co-pilot says to tell you,


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Grym
Grym
February 4, 2009 1:10 pm

Mackinaw,

Dream subject matter

LOL! At 71 the quality of my dreams is not what it was at 17 either!

Grym
Grym
February 4, 2009 1:07 pm
Grym
Grym
February 4, 2009 12:53 pm
Ron Sen
Ron Sen
February 4, 2009 11:40 am
Seamus
Seamus
February 4, 2009 10:51 am

Checking in from Australia, taking advantage of the weak AUD to check out a few things and catch some R&R. Monitoring the markets from afar and planning on checking in, now and then. First impression here in Sydney is very positive. Friendly people. Diverse population. Economy does not appear to be as bad as U.S. or others, although some talking heads opine Australia lags 6 months behind economically. Would have to say majority of visitors/tourists appear to be from Asia, mostly Chinese, although there are a number of Europeans, Canadians and Americans. Prime Minister just announced a $42B stimulus that… Read more »

Dboy
Dboy
February 4, 2009 7:03 am

I use WealthLab (free if you have an account at Fidelity, but only runs on Windows). Some people use Amibroker..costs money. Just Google “trading back testing” and you’ll find something.

Dboy

jrinbc
jrinbc
February 4, 2009 6:35 am

Good Evening (Morning?) all; Can anyone suggest a good piece of software that can be used for back-testing TA strategies? I’ve been developing some simple rules that I like to use, but I’m concerned about the long-term viability of these rules and need confirmation before I start throwing a lot of money at it. I’m still learning to accept small losses (but now do so with a shrug) and look for the big trends. It’s been a real eye-opener over the past couple of years to see how much of a role personal psychology plays (i.e. confirmation bias) in my… Read more »

David
David
February 4, 2009 5:33 am

at $9.5, so as to trap a potential down spike in the morning.

Illini
Illini
February 4, 2009 5:18 am

Symbol Last Trade
BAC Feb 3 5.30 Down 0.70 Down 11.67% 356,020,097
C Feb 3 3.46 Down 0.19 Down 5.21% 166,696,084

The precipice is the $5 thresh hold. How much bad can the system stand? Maybe the bookies of Las Vegas ought to run this one.

nofed
nofed
February 4, 2009 5:15 am

Kevin Depew Deflation & Coming Soon? Punitive Taxes on the Rich Why is the Fed so phobic about such an important word? Two reasons: First, the Fed itself IS inflation. Increases in the money supply are what causes inflation. Rising prices are simply the result of the Fed’s inflationary policies. Two, recognizing this fact, Fed members will rarely utter the word deflation publicly because doing so is similar to an outright admission of impotence. Put another way, if the Fed says it is concerned with “undesirably low levels of inflation,” then what they are really concerned with is a lack… Read more »

nofed
nofed
February 4, 2009 5:12 am

Michael Phelps Threatened by Sheriff This case is no different than any other case,” Lott said yesterday. “This one might be a lot easier since we have photographs of someone using drugs and a partial confession. It’s a relatively easy case once we can determine where the crime occurred Leon Lott, the Richland County, South Carolina sheriff, wants to charge Phelps with a crime. http://backporch.fanhouse.com/2009/02/03/michael-p… This outrage is minor compared to the problem the US has created in Mexico with it’s “war on drugs”. Nobody would be more upset than the Drug Cartels if we decriminalized pot. Legalize it and… Read more »

NYUGrad
NYUGrad
February 4, 2009 4:16 am
Illini
Illini
Reply to  NYUGrad
February 4, 2009 4:41 am

That did not work as I googled news “Heat Rises on Dow Chemical”

http://online.wsj.com/article/SB123358978236239621… is the link.

WSJ still thinks its news is worth $$ while its editorial crap is too obviously free and flawed.

Dr. Strangelove
Dr. Strangelove
February 4, 2009 4:01 am

Looking for oil production costs by region/country?

Here’s a chart I’ve seen around and repost from Jessie’s blog that shows oil in the $70 to $80 range for marginal costs. Something or someone’s gonna give with oil at $40 as suggested by Bill.

http://2.bp.blogspot.com/_H2DePAZe2gA/SYj8f8EoTGI/AAAAAAAAH_c/liZqa38kC4s/s1600-h/CERAoilcost200810(2)_0.png

David
David
Reply to  Dr. Strangelove
February 4, 2009 4:37 am

Dr. Strangelove, this chart most likely reflects the costs of starting a new project (and less likely it is just made up). Suncor predicted (in their most recent earnings report a couple of weeks ago) that their oil production costs for 2009 will be in the $33-$38 range. I am attaching a chart showing the operating costs for the other producers. If oil stays below $20 for the long term, then all Canadian oil sands will be shut down. However, based on this chart they produce only 2.4 million bpd, and with the current demand the world will not notice… Read more »

Dboy
Dboy
Reply to  David
February 4, 2009 5:34 am

“So it is reasonable to start scaling into oil now” I’m watching the energies very closely. Depending on the time-frame you’re looking at, oil is either flat or down, so I don’t see any particular reason to start scaling in now. Of course my opinion may change tomorrow as the whole MARKET seems like a coiled spring. Then again that coiled spring could turn out to be a Slinky walking down a staircase. I’ve seen some oil-related stocks begin to turn upward (such as PBR), so a turn certainly could come soon, but the trend is definitely not up yet.… Read more »

Mark Barry
Mark Barry
Reply to  Dr. Strangelove
February 4, 2009 4:30 am

Dr.- How does the article define “marginal Costs”? I can’t open the link. According to a client of mine that was in the business on the global side, and is still the Chairman of a small exploration and production Co., the #’s you are looking at include exploration. I spoke with him yesterday and he said that all of the independent Ex/Pr guys have buttoned down tighter than a drum. Remember these are the companies that actually go out and find/supply the majority of the oil. Seems like a compressed spring to me…We wont ever learn.

jock
jock
February 4, 2009 4:00 am
Dr. Strangelove
Dr. Strangelove
February 4, 2009 3:52 am

Here’s Markopolos’ testimony tomorrow (almost today) to Congress on how the SEC lawers ingnored him and his team for 9 years and how to reconstruct the failed SEC or eliminate it. Very interesting and entertaining read.

Starting to believe we’re not gonna take it anymore, Bill!

http://online.wsj.com/public/resources/documents/M

Cheers.

Mackinaw
Mackinaw
February 4, 2009 2:46 am

Perhaps you’ve read the classic “Lying With Statistics”? Same principles apply to stock indicators. With a bit of experience you can tweak even the same indicator to “tell” a different story. e.g. modify a MACD’s slow and fast time frames and you can get it to show a positive divergence or not. Attached is an example I inadvertently made this evening while checking out the general Market Indicators (which I think contain much useful information).

The first is an encouraging take on NYSE Advancers Minus Decliners

The second is much less encouraging.

NYUGrad
NYUGrad
Reply to  Mackinaw
February 4, 2009 2:58 am

I’ll bite…

1st off, i appreciate you sharing! But isnt this also the reason 1 indicator is never enough? much harder to tweak a set of indicators and comparisons with other stocks, vs just using 1 indicator.

Mackinaw
Mackinaw
Reply to  NYUGrad
February 4, 2009 3:03 am

I’ll bite back…

If every single indicator can be tweaked – by modifying its parameters – to tell 2 opposing stories, then 1,2,3,4,5,… indicators can all be tweaked to tell the same story. 🙂

NYUGrad
NYUGrad
Reply to  Mackinaw
February 4, 2009 3:15 am

Not when you apply that indicator with a price action up or down.

Ex SLW

Except the blue arrow/blue vertical lines on Oct & Nov, if you count the 7 others, where stochastic was turning up from oversold and crossing thru it, the price moved up. that is irrefutable.

If you sold on each red vertical line, when stochastics was turning down crossing thru the overbought line, it would also have saved huge losses. Also irrefutable

🙂

My mission is to learn from this.

Mackinaw
Mackinaw
Reply to  NYUGrad
February 4, 2009 3:58 am

I think I’d argue with a few of your entry and exit points on that chart. I see it more like this:

NYUGrad
NYUGrad
Reply to  Mackinaw
February 4, 2009 4:03 am

Great stuff. I will add that gif to my folder. I actually did that particular mickey mouse chart after i had sold. I was never an investor in that time period on the chart. but i went back to look at how slw reacted in bull mode.

Points taken. will stare at it some more.

Thanks again for playing down to my level in this rendition of charts for dummies with NYUgrad.

Quasi
Quasi
Reply to  NYUGrad
February 4, 2009 3:33 am

Agree NYUgrad, you have to know the characteristics of your stock, how it reacts and what indicators / settings work for it. Now those indicators and settings won’t necessarily work for another stock or index and some just are unpredictable over the long term and only very short term indicators can be used. Mackinaw, I understand your point but I think the NY advance decline line is not the best example as it is really only a very short term indicator and applying a 50 period MA or EMA is not fair. Over the long term that indicator is more… Read more »

NYUGrad
NYUGrad
Reply to  Quasi
February 4, 2009 3:41 am

Quasi said “you have to know the characteristics of your stock, how it reacts and what indicators / settings work for it.” that is what i am starting to learn and forgot to point out. there are subtle intricacies in each stock, especially in between the oversold/overbought lines for rsi and stoch, for diff stocks and sectors. before i buy any new stock, I try to do my mickey mouse chart exercise with diff combo of indicators to see what worked for it in the past 12 months and the past bullish phases. as well as what indicators worked well… Read more »

tango6
tango6
February 4, 2009 12:57 am

I meant, you see a BEAR trap. Focus Tango! Focus!

tango6
tango6
February 4, 2009 12:56 am

A bull trap? Am I missing something?

BillySundance
BillySundance
February 4, 2009 12:55 am

Apparently the Zimbabwe government announced they are allowing gold companies to sell there own bullion instead of selling it through the Zimbabwe Central Bank. They still owe gold mining companies millions.

Zimbabwe frees up gold trade as output falls sharply

http://tinyurl.com/bcxbcm

I found a small gold producer stock in Zimbabwe – ND.TO – crazy chart. From the looks of it someone knew this news was coming at least 2 weeks ago!

Chickenpookie
Chickenpookie
February 4, 2009 12:48 am

Prices=(Money in system * Velocity of money) / Quantity of economic output

Price increases as:
Quantity of economic output -> 0
Money in system -> infinity
Velocity of money -> infinity

Mackinaw
Mackinaw
Reply to  Chickenpookie
February 4, 2009 3:00 am

I had a funny dream the other night, CP. It was about the velocity of money (don’t ask why …). Anyway I was a huge-ass company and my business was simply selling a product to another business and using the cash to buy it back at the same price, and then repeat the process, over and over, at ever increasing speeds. End of quarter I reported billions in revenue, and not a penny in profit. Sounds a bit like many of the balance sheets and ponzi schemes that have been exposed recently, no?

NYUGrad
NYUGrad
February 4, 2009 12:22 am

http://tinyurl.com/9v426
(you may be subject to an ad cnn sells prior to the Obama interview)

I dont even think it’s his fault. He is the President. Is he supposed to audit every appointee’s taxes? I am sure he goes to bed thinking “what have i gotten myself into?”

I am glad those who were found to have a violation stepped down, except Geitner. Under Bush, all these roaches would have gotten a pass. we wouldn’t have even heard about it on the news.

fireworks
fireworks
February 4, 2009 12:11 am

Welcome to the Club Citigroup… Wells Fargo & Co. abruptly reconsidered a pricey Las Vegas casino trip for employees Tuesday after a torrent of criticism that it was misusing $25 billion in taxpayer bailout money. The company initially defended the trip after The Associated Press reported the company had booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas, beginning Friday. But within hours lawmakers on Capitol Hill had scorned the bank, and the company said it was reconsidering. The conference is a Wells Fargo tradition. Previous years have included all-expense-paid helicopter rides, wine… Read more »

Grym
Grym
February 3, 2009 11:40 pm
shark_attack
shark_attack
February 3, 2009 11:23 pm

Gold breaking out after hours

shark_attack
shark_attack
Reply to  shark_attack
February 3, 2009 11:43 pm

Bill called it

Chickenpookie
Chickenpookie
Reply to  shark_attack
February 4, 2009 12:13 am

Shark – Spot POG has fallen slightly (-$4), what are you referring to?

jock
jock
February 3, 2009 11:08 pm
tgifbipo
tgifbipo
Reply to  jock
February 4, 2009 1:45 am
yvrapx
yvrapx
Reply to  tgifbipo
February 4, 2009 2:48 am

Excellent piece, just started my sub with Portfolio and on a related note, Alan Greenspan is on Paulson & Co’s board. He who didn’t know how to identify a bubble, encouraged floating rate/sub prime mortgages and the like is ‘advising’ Paulson.
Made me want to hurl when a buddy passed this on to me last year.
http://tinyurl.com/dxl25r
Why wouldn’t one hire the clown that created the mess?