Bill Cara’s Blog for Aug 14, 2012

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

Good morning.

I’ll leave the blogging for today to Geoff, Deron and others. The one picture I have in mind is this one:

blog12_aug_14.1.gif

Recent comments here are that some writers are loathe to get into political subjects whereas I am not. The truth is that we all have opinions and this is a community forum to express those opinions.

It is a fact that politics affects capital markets. For sure social equity is materially influenced. Some older Americans today are concerned about the likes of Rep. Paul Ryan joining the GOP ticket, for instance. So, we can and do talk about these matters here. This is a blog, not a newsletter or newspaper.

Another comment referred to this community as being “progressive” — in the political sense I suppose. I may be a progressive in the manner that I speak out against Humungous Bank & Broker (HB&B), but clearly my Cara 100 are mostly very large business corporations. I may also be viewed as progressive in some countries, and not others. Bottom line of course is that I am a populist.

Wrapping it all together, I am of the older generation who is fiscally conservative. If I were American, I would not fear Paul Ryan. I would endorse him, just as I do the budget conscious mayor of Toronto, Rob Ford.

Have a good day.


Good morning, Geoff here.

In a low volume rally, stocks continue to show promise but $VIX has fallen out of bed.

This has many traders worried of a quick decline, but the market can continue to rise on short covering.

Neither the equity put/call ratio nor the McClellan Oscillator are flashing warning signals, but the put/call ratio could quickly change.

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We remain long, but are cognizant of the markets current overbought position. If you are long and worried, put options as a hedge are not expensive at the moment.

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.

SymbolNameLast TradeChangeRelated Info
^ATXATX2,052.95 6:44AM EDTUp 1.74 (0.08%)Components, Chart, More
^BFXBEL-202,334.70 Aug 13Down 1.30 (0.06%)Components, Chart, More
^FCHICAC 403,439.20 6:59AM EDTUp 12.79 (0.37%)Components, Chart, More
^GDAXIDAX6,966.66 6:45AM EDTUp 56.98 (0.82%)Components, Chart, More
AEX.ASAEX General333.35 6:45AM EDTUp 1.97 (0.59%)Components, Chart, More
^OSEAXOSE All Share483.59 6:45AM EDTUp 2.24 (0.47%)Components, Chart, More
^OMXSPIStockholm General331.90 6:59AM EDTDown 0.47 (0.14%)Components, Chart, More
^SSMISwiss Market6,492.82 6:45AM EDTUp 26.64 (0.41%)Components, Chart, More
^FTSEFTSE 1005,862.22 6:45AM EDTUp 30.34 (0.52%)Components, Chart, More
FPXAA.PRPX Index927.30 7:00AM EDTUp 5.50 (0.60%)Chart, More
MICEXINDEXCF.MEMICEX Index1,455.43 7:00AM EDTUp 3.45 (0.24%)Chart, More
GD.ATAthex Composite Share Price Index623.76 6:44AM EDTUp 0.54 (0.09%)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 100 Company research notes from brokers


Vad’s Catch of the Day


Kaimu’s Sound Money


Deron’s Daily ETF Analysis

Since August 9, the iShares Nasdaq Biotechnology Index Fund ETF ($IBB) has been on our watchlist as a potential pullback trade entry. Though it has not yet traded through our trigger price, it formed a bullish hammer candlestick pattern yesterday, which could lead to upside follow-through in today’s session. Further, it “undercut” (briefly dipped below) near-term support of its 20-day exponential moving average, as well as the low of its six-day trading range. This is illustrated on the daily chart pattern of IBB below:

$IBB chart pattern

When an ETF “undercuts” a key moving average, as IBB did yesterday, this serves to sweep poorly placed stops and shake the “weak hands” out of the trade. This has the effect of absorbing overhead supply, thereby clearing the way for the equity to move higher. When a bullish reversal candle forms after a stock or ETF has “undercut” a key level of support, we refer to this type of buy entry as a “pullback entry” (which is one of the preset technical scans on our new technical ETF Screener). Pullback entries develop when an ETF gently retraces from the most recent “swing high” of its uptrend and finds technical support at an area of horizontal price support and/or a key moving average. After this happens, it is important to wait for the ETF to form a “pivot,” which allows for a relatively low-risk pullback entry for swing trading. The best buy pivots tend to occur when an ETF or stock forms a bullish reversal candles (such as a “hammer”) that sharply undercut a key support level on an intraday basis, but subsequently recovers to close near the high of the day. When this occurs, our trigger for buy entry of at least partial share size is simply above the high of the reversal candle. Because of the combined “undercut” with reveral candle that IBB formed yesterday, subscribers to our Wagner Daily newsletter should note on “today’s watchlist” that we have lowered the trigger price for buy entry this trade setup.

The commentary above is an excerpt from The Wagner Daily newsletter, which we have been publishing since 2002. Subscribers to the full version receive our clear entry and exit prices for swing trading our best ETF and stock picks, access to our market timing system, and daily technical trading commentary. Sign up for your 30-day risk-free subscription today by clicking here or visit our trading blog to learn more about our rule-based trading strategy.


OptionOracle


Harp’s Roadmap


Cara on the Metalminers


Cara on the International Markets


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report


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Illini
Member
Illini

“So, Mr. deep thinking voter, some 18 year old prick with a meth habit cancels your most esteemed vote if paid enough in cash or promises in kind!”

Ilya, I suspect you are over the cliff with this statement. Those types are non-consequential as voters if they vote at all. Maybe I am wrong. I am not confident in the voting system nowadays although I still abide by it. As we all have to.

Corner Stone
Guest
Corner Stone

Dave,
I apologize for that. I just find it hard sometimes to discuss critical issues with people who refuse to educate themselves on the context involved.
Here’s some info that may help you understand the nature of what I am discussing:
http://www.washingtonpost.com/blogs/ezra-klein/pos

Dr. Strangelove
Member
Dr. Strangelove

Vad –

Why return your money and how am I misunderstanding Livermore?

Grym
Member
Grym

It had to happen. I’ve been telling a couple of friends for 20 years that this this would be so easy. Before I ever had a computer I read suspicions about a South Korean election. The simple plan: Tinker with totals only in districts which often are very close. It only takes a minor addition or subtraction to swing an election. Ever wonder about Florida and W’s election? Hanging chads? Come on! Grym ——– http://tiny.cc/31olcw The Ability to Commit Vote Fraud is Becoming Push-Button “The good news is that this firm promptly reports precinct-level detail in downloadable spreadsheet format. As… Read more »

Ynot
Member
Ynot

Bill said he supports Rob Ford because he is fiscally conservative, while I cannot support him because, while he is indeed a fiscal conservative, in my eyes he is an even bigger buffoon. Corner Stone made some strong points regarding the GOP and their tactics in office with the tea party cheering them on. Dave, you are bang on vis-a-vis Bill Black – Obama and his ilk have done NOTHING regarding the big-time fraud Wall Street perpetrated on the global financial community. But in end, Ilya gets it right – as well as Martin Armstrong in his latest letter –… Read more »

davefairtex
Member
davefairtex

Corner Stone – Your response is short on fact and long on rhetorical question. I’ve seen you do this before; it wasn’t convincing to me then, and its not doing any better this time around either. If you care to provide me with numbers and references, then please by all means, do so. “Riddling me” just says to me that for some reason you choose not to conduct any real research and come up with facts and/or evidence to back up your claims. I actually am convinced by evidence. Unsupported claims – not so much. As for your claim that… Read more »

Corner Stone
Guest
Corner Stone

All I know is, when Ilya posts I stop and listen. I wish you were a featured commentator here.
Thanks!

Ilya
Member
Ilya

Jeez pleeze, Why are current politics even a topic of discussion. ‘Politics’ have become a juvenile excercise, purposely orchestrated such that you are forced to choose up sides on the playground. NONE of these assholes knows diddly squat about governing. Elections have devolved into crass power plays, funded in excess to the aggrandizement of silly ‘talking heads’ who offer milk toast solutions to serious and potentially fatal problems confronting what used to be a Republic. A POX on all of them… Our problems stem not from the last political cycle, the last decade, the last generation or even the generation… Read more »

Corner Stone
Guest
Corner Stone

I inquired of Bill for a very specific set of information. How any reality based knowledge of Rep. Ryan was a quantitative + and led to a hypothetical endorsement. He equivocated and now you’ve gone down the same rabbit hole. And again, your analysis is childish as it discounts any mention of R opposition. How many Cabinet positions are unfilled due to R intransigence? How many Circuit Court Judges? How many Federal Bench positions? Riddle me this, how many judge nominations were never brought forward for votes over the last 3 years? Care to guess what the historical average for… Read more »

davefairtex
Member
davefairtex

Corner Stone – So Bill stated at the outset that the capital markets are his focus. How exactly have the Senate Republicans stymied Obama in this area? Bill Black in a recent interview suggests that Obama’s two appointments have done exactly nothing to bring financial criminals to justice. Mary Shapiro has done zip at SEC, while Eric Holder at Justice (the Wall Street Lawyer) didn’t find any criminality in any part of the millions of cases of fraudulent mortgage origination. Justice has been completely silent – or should I say, silenced, and the main prosecutorial strategy seems to be to… Read more »

Corner Stone
Guest
Corner Stone

“After watching a disaster for four years, most of it based on the rhetoric of a great orator but one let-down after another in terms of execution” May I ask, does it not register that the Senate Republicans used the filibuster at an ahistoric level? That on Day 1 the R Senate Minority Leader said his job #1 was to defeat the president? Not promote good legislation, not help people, not defend his principles. Defeat an elected president. Then in 2010 the R’s took the House and promised to focus on jobs like “a laser”. They then proceeded to reduce… Read more »

Corner Stone
Guest
Corner Stone

“First, I don’t think the VP nominee determines the election.”

It probably shouldn’t, but IMO it’s pretty clear that for the last two elections the R VP pick has had an inordinate amount of influence on the final outcome.

Corner Stone
Guest
Corner Stone

“I looked at pros and cons from where I sit and I soon put Paul Ryan at the top.”

Oh. Ok then I guess. Thanks.

Vadym Graifer
Member

“the short term is nary impossible to follow with any consistancy” I guess I am going to have to return all the money I made over years on short term trends, and advise every profitable short term trader I know to do the same. Also, I am probably going to have to add a disclaimer to each blue blurb at the top of every trading day log at http://tradinglog.realitytrader.com/ : “All the profits you see in the log below are nary impossible.” On another note, this is second time you refer to Jesse Livermore, and with as much misunderstanding of… Read more »

Ron Sen
Member
Ron Sen

http://www.theatlantic.com/politics/archive/2012/0… First, I don’t think the VP nominee determines the election. Second, Ryan’s “record” is more talk than action…here’s one author’s take: If people can no longer tell the one from the other it’s because we now live in an age, as Ta-Nehisi Coates has so memorably noted, where “where counter-intuitive bullshitting is valorized, where the pose of argument is more important than the actual pursuit of truth, where clever answers take precedence over profound questions.” So far, Ryan has been an empty suit,whose deficit-reduction credentials are incongruous with his vote for TARP and the stimulus packages, and deficit expansion… Read more »

Dr. Strangelove
Member
Dr. Strangelove

Thanks to Les and the Trader Wizard for these confirmational charts. If you invest for a lifetime, just ride and tweek the secular trends to the major pivot points (technical black swans) and enjoy life. That’s how old honest money in real estate have operated through millenia.

As Armstrong points out, the secular trends are easy peasy to identify but the short term is nary impossible to follow with any consistancy (See Jesse Livermore for confirmation).

Got gold?

Grym
Member
Grym

Ynot,

“You get to sing ‘Tomorrow’ with Sigourney Weaver.”

LOL! That broke me up just picturing it.

I love it 😉

Grym

Ynot
Member
Ynot

You get to sing ‘Tomorrow’ with Sigourney Weaver.

Bill Cara
Admin

Corner Stone, I love the divide; however I’m not here to conquer (or even persuade). I just gave an opinion after looking at the top four or five betting favorites before the decision was made by Romney. I looked at pros and cons from where I sit and I soon put Paul Ryan at the top. You see, I don’t care about controversy or how much the opponents will hammer the Romney decision (or even Romney himself, who I am lukewarm about). I want campaign platforms that are clearly opposite, so the choice is easy. Does America want to go… Read more »

Bill Cara
Admin

Earlier today I reported the multi-million dollar value to 19-year old Keshom Walcott that Trinidad & Tobago bestowed on the young man after he won a gold medal at the London games. It got me to thinking that, with, apparently, some $2.5 billion that will be raised for the US presidential campaign, the value must be in the multi-hundreds of billions (perhaps trillions?) to the winner. We all know the White House is for sale. Has anybody ever seen a value placed on winning it for four years? I’d like to know that!