Some Sport

When I started the blog I thought I would discuss some sport regularly but the Economy is getting so interesting and there are so many things to consider like for example Deflation,Inflation , why the US$ went up and now why its falling so fast. Will Oil stay here or go higher ( or even lower) etc. etc. (not even bringing up he metals and tech here).
But the world of sports have been very very interesting. Here are my views:
Baseball, The yanks are doing what they do, but at least they are investing heavily into the team for the new ballpark. But I think the BoSox will have enough to again beat them but the team to beat is the Tampa Bay Rays. I keep hearing this great rotation they have with more than half a dozen great starting pitchers.
I think for many years the Yanks got a free ride with the AL East being just them and the sox. Now that other teams are finally getting better they're going to have to play hard.

The Phillies did great but lets see how the new team , if Burrel and other go somewhere else, looks like.
The Dodgers with Torre will be a good team. The Cubs need to prove a lot. The Mets, what about them? I see nothing great there.

I follow NHL too and look at the Sharks. I am a NJ fan and like the team , but the Pens and others are fun to watch. I really want either NJ or some small market team win , don't want the Wings to repeat, boring.

NFL , It is fun , i will root for the Giants but there is a lot of good defense. The Eagles might pull a few upsets now that no one expects anything from them.
I like Brett Favre, but the interceptions are really getting on my nerves now.Lets se if the Jets bring him back, else he might become a mercenary, going from team to team.

In NBA I would like to see the celtics win again but maybe Tim Duncan wants one more . The lakers of course look good . About Lebron I really do not think they can win the championship, Lebron is more interested in 2010 then anything it seems

Cricket( you know that game like baseball ) India looks good and so do South Africa. I especially enjoyed the thrashing Ricky Pointing and his boys got. Notice how I did not say Aussie in general. Thats coz I loved those guys , Waugh's and many others. But Pointing and co. are hot air imo .I do like some of em, but overall it gets boring when one team keeps winning all the time and its not your team right?

USO (Crude Oil ETf ) shows good signs of moving up

The 60 minute chart of USO ( oil etf ) shows a very good pattern. Click here for the chart.
The circle's show a Cup and Handle pattern, when the price breaks above the line at the top of this pattern ( shown by the blue line at $31), then that's a technical break-out and the prices should continue to at least $34.This is reached by taking the top of the pattern $31 and subtracting the bottom of the "cup" which is approx 28 or 27.73 to be precise. so 31-28 = 3. and then you have the 3 and add it to the breakout point, so 31 + 3 = 34. Therefore I say approx $34 is where USO might go.
Now this is all technical stuff and there is no guarantee it will go there.
But those using Technical analysis as a tool will see this pattern and look at it as a good risk/reward and probably buy this breakout. with a stop-loss just below $ 31.
Of course for this pattern to be complete, CUP and Handle, USO has to close above $31 today. SO far so good, lets see where USO heads.
Again in this market its better to trade only a very small portion of your portfolio and if you do not use Technical analysis, then just stand back and watch.
I am not giving advice here but just thinking out loud.
Remember also that $33 is the previous low on USO, so when USO breaks 33, it becomes even stronger technically. Also $34 is just a first target, it can continue going higher and futeher targets are derived looking at the charts.
So how good are these Technical patterns? they are good until they are not. Thats why trading is tough and someone came up with stop-losses.
Trading is not picking great stocks, trading is good money management.
More on that later.

The importance of January for the equity markets

On wall street there are many axioms. One of them is that as goes January so goes the year and as goes the first week of Jan so goes January. So thats like saying as goes the first week so goes the rest of the year, right?
So January is very important , not only due to the Axiom but due to many factors. Earnings ( or the lack of earnings ) season starts and this time around its very very crucial to see where companies stand.
Also remember I wrote about the Santa Rally, the Santa rally goes into the first 2 days on Jan ( if you believe in it at all). So the first week has a tendency to be good but not always.
I will be putting up many Polls like there is one for SP500 and Gold already on the blog and then I will put up some more, like Oil etc. If you get a chance vote so we know where most people stand. Sentiment is a very important part of wall street analysis. I believe in contrarian indicators, like the put/call etc.
The purpose is to find out if people are bullish or bearish and when the readings reach an extreme, thats the place where we get some turning points in the markets.
I will have a short write up about the Put/call indicator soon.
You can get updates about the put/call (p/c) numbers on cboe.com or click here.
Also there is a Call/put indicator , the numbers are maintained by the ISE, this is the exact oppsite of the p/c ratio. Click here for that. Its a good idea to see both numbers everyday so if both show an extreme you know somethings up.
Example, if markets are going up and the p/c is very low and C/P is very high, then you know we will have a pullback in the markets etc.
There are other sentiment indicators too , I will cover them later.

Housing news: case-shiller index

On bloomberg.com they have the latest about the case-shiller index on housing for the month of October.
Click here for the column.

More on Crude Oil and USO

I wrote that I thought crude oil might bottom, 2 weeks ago, when the Feb 09 crude oil futures ( ticker symbol CLG9 for the futures. Commodities are traded as Futures and there are futures just like there are options for different months) were trading around $42 or so. From there they went down quite a lot , continuing the downtrend,now it is bouncing back a bit at $40 or so.
I have used USO as a way to trade oil. I am posting the chart below, but the downtrend is intact. The only way the downtrend ends is when USO takes out its previous low at around $33 or so.
OK before that since Crude Oil trades in futures and USO like a stock, the price moves together but the price is not the same. Now crude Oil is at $40 and USO is at $ 31 or so.
In Technical analysis this downtrend is called as lower lows and lower highs.
That means the chart looks like a falling wave. with each new peak of the wave being lower than the previous low of the previous low.
So the down trend will be broken when USO closes strongly over $ 33 or so. Also remember just closing for a day does not count , it has to keep going up or at least sideways after that. Also usually lows are not a single point or bottoms are not "V" bottoms , a bottom is usually tested in weeks or months.
As of now check out this chart.
Here is a 10 min chart of USO.
Here is a daily chart of USO.
The only thing that's USO has going for it is the MACD . This bounce has to take it well above 33 on strong volume , anything less wold be just a bounce.

Retailers in trouble, 10 to 26% to go Bankrupt acc. to this article.

Its no surprise that Retailers are having a bad time as consumers spend less.
But over at clusterstock.com there is this article which says 10-26% of Retailers could go Bankrupt in the next 2 years.
It was my assumption that in a recession Walmart does very well. They did in the last slowdown in 2001-02. This time Walmart has not yet shown this in its stock , look at this chart , its similar to many other companies. But maybe now we will see people spending more at Walmart to save money.
It is very important for everyone to keep in mind that the ecomonic forecastors, analysts etc. always are either bulllish or bearish , depending on the economic picture they get more coverage.
Meaning during a financial boom no one wants to interview or cover a Bear or someone who warns of the coming recession. Similarly during a downturn more attention is paid to those who are or have been predicting this.
But just like the bulls get carried away ( almost always) the bears too, in my opinion , get carried away.
So now that we have almost all negative headlines, it seems no one wants to cover the Bulls and what they have to say.
I would recommend reading some level headed bulls and bears like Barry Ritholtz blog , there is a link to that over on the right on my blog. Also check out the other blog. I think these people talk sense and try not to build their own theories.
While it would be best to listen to those who have been right, like Peter Schiff and some others, if you read what Mr. Schiff predicts about the future now, one will likely want to go live in a Nuclear shelter imo.
Then there is this Russian professor who it seems is calling for the divided states. Click here for the clusterstock.com story.
In my opinion such people are always predicting something either to get attention or the person has no clue.
Remember things look the best at market tops and worst at bottoms.
I also like Bill Fleckenstein a lot. Check out his posts here.

Retail sales worst in 4 decades?

Holiday Sales are down this holiday season, but you already had assumed that I am sure.
But the sales were the lowest in 4 decades acc. to this Bloomberg.com report.
Not only did people shop less but indications are they shopped for discounted goods and cheap stuff, meaning lower margin stuff for retailers.
This means many retailers will report very bad numbers during earnings.
So why is all this spending so important?
That's because the US is a consumer economy, meaning around 70% of the economy is consumers spending money and when the consumer does not spend money that makes the economy bad. Why is the US a consumer economy? because as you see most things we buy here are not made is US , they made in China or some other country.
This is the primary reason many economists and the govt. are calling for stimulus packages to jump start the economy. They argue if the consumer spends , the economy will come out of the recession.
But there are the others who argue that spending ( mindless spending ) is what got us in trouble in he first place.But this a subject for another time.
The US consumers, on an average are usually in debt. Which is what the companies like. In fact many "experts" argued why save? "Saving is for other countries" , yeah right.
So now that signs are that US consumers are paying down debt and trying to save that's sending ripples in the markets.
That is also creating problems in China and other countries which supply primarily to the US consumer.
I will cover more on this later but for now lets see how the retailers come out with their report cards. AMAZON.com came out with great news this morning, click here for the marketwatch.com story. But Amazon is basically a discount internet retailer. Different model altogether.
I went to the mall on Wednesday and the mall near me was packed, no parking ( that could be an mall issue, less parking spaces ) , lots of jams. So it looked ok.
I stepped into a jewelry store and had to wait for someone to show me stuff, so they were selling stuff. But this is also the place where house prices have not come down much at all.
Well we will know soon.

Is this the right time to Buy a new house?

The answer will depend on who you ask. The folks at the Realtors and others related to that business will say yes, "home prices have come down so much" and interest rates are down so much etc etc. Many friends ask me this question.
I am no housing expert but I have some common sense.
But read this artcile at Bloomberg.
Clearly if they are working on a plan to get Mortgage interest rates to 4.5% for 30 years fixed kind of loans, then why bother now and why not wait.
But even without that program the rates are down to around 5.3%. So should one buy?
Depends on you specific situation. Lets say you buy a house and it falls in value, are you ok with that, if you are buying to live there for a long time, if you can pay the mortgage even if you lose your job , then it might not matter. House prices have in no way bottomed in my opinion , no matter what the guys on TV tell you.
Click here for todays housing data on bloomberg.com.
There are many many people out there who are calling this a bottom for housing, well just check how many times have they called for a bottom before in the past 2 years.
If the recession is not over then how has housing bottomed? Just because prices have fallen too much?
If they need a new plan to bring interest rates to 4.5% for mortgages then it has certainly not bottomed now has it?
Also some people talk as if if you don't buy it now , prices will go up like they did in 2000-2002.
Really? you think after a HUGE recession prices will go up as soon as they bottom? Will they not just stagnate? One would think so.
Anything which goes up or down in a hurry , first stabilizes before changing the course.
So why should anyone try to hurry and buy given all this?
If you find your dream home and get a loan for it now and can afford it even if you lose your job , then maybe you can go ahead and buy. If you are getting a foreclosed home for very cheap maybe you can buy.
But let the folks who try to call bottom in housing not fool you.
Read this and this from bloomberg.com.
There is a case-shiller index for housing data. Try to follow that index though it will be lagging in nature. Meaning once housing really bottoms it will tell you only with a delay as it does not forecast but reports data.
Its worth it , especially if you believe that before going up , home prices will stagnate for a looong period after bottoming out. I certainly believe that.

Some recent market calls ( bullish and bearish ) and analysis by experts

Jeffery Saut, Strategist from Raymond James, thinks we are near a turning point for the stock markets. His article is on seeklingaplha.com or click here.

Here is a column from John Evans which explain why he thinks deflation will continue. Click here.

Here is an bloomberg link where Daniel Sanz see Oil reversing and rebounding to $93.

This Bloomberg article says a few Bernard Madoff's clients who took money out before this fraud was discovered might have to return it, thats crazy. Click here.

There are a lot of ideas out there, but finally you have to make the decision yourself.

Santa Rally

Despite the recent weakness and bad news we can still get a Rally. This is one of he best times of the year for stocks and markets to rally.
But the recent put/call ratio is too low , so the rally might not be a big one . The numbers can change though .
The VIX has been moving lower even on some down days , this helps the bulls. Also the volume was low today as the markets tested some support levels.
Also there are some reports suggesting that online retailers are not having a good holiday season, but keep in mind that despite all the bad news we can still rally. Why? all the bad news is already factored into stocks, people know that sales will be down.
No one might come out with bad news at this time of the year and that will keep the bias upward. But if someone does then a test of recent lows is probable.
I still feel that this market is just for traders that too with very limited exposure, small sizes and tight stops.
Oil ( USO ) looks pretty good for a trade and Gold ( GLD ) needs to pullback a bit.
Agriculture was down today, Jim Rogers must be buying more .
Jan 09 will be earnings season and by then the earnings picture will get clearer, somewhat.

Is this the right time to Invest money in the markets?

Many folks are wondering if this is the right time to invest. But in my humble opinion this is not the right time unless you want to trade. The talking heads on TV want you to invest, they need your money imo.
But think of it this way, the markets are down 40% this year. Earnings in companies has started going down and there is no sign that it has stopped or reversed.
The government has already had a stimulus package in early 2008 and now they are thining of another one in 2009 , about $775 billion or so.
The FOMC ( or Ben Bernanke and others ) and Central banks in many countries together have pumped in Trillions of dollars to help save the financial systems and they have said they will keep doing it. The interest rates in US are now near 0%, lower than those in Japan as of now.
We are clearly in a recession which is not just any other recession but a major one and also in a deflationary period.
The currency market has been very volatile with the US $ jumping all around.
In such circumstances ordinary people who do not try to understand the markets day to day should just keep out .
Those who are already invested and have lost a lot of money , for them it might not make sense to withdraw now. But there is no need for anyone to invest right now.
The markets might bounce up a bit but THIS IS NOT THE START OF A NEW BULL MARKET.
Many will say the bottom is in, oh yeah , just check how many times they have said that inn the past.
The major Wall street analysts had Target of S&P 500 to be around 1400 or 1500 by end of 2008, well it amost half that. Now they think the bottom is in , how can you ever trust these analysts who never saw this huge recession coming.
All this is just my opinion but you have to think for yourself before you put in any new money to invest.
Just google PETER SCHIFF , check out his videos on youtube.com. He had been warning and other "expert analysts" were ridiculing him.
He might be Ultra bearish but these Wall street guys are, imo Ultra bullish.

Put/call ratio ridiculously low

The p/c ratio is very low right now,
http://www.cboe.com/data/IntraDayVol.aspx

Perhaps its options expiration hangover, but the p/c equities ratio is at 0.465 as of now , that the lowest I have ever seen. This means there is too much bullishness for the "Santa Rally". usually when this is the case, then imo the rally never comes.
Lets see what happens.

Price of Gold and Dow to meet? at 5000?

According to Peter Cooper's column at seekingalpha.com, the price of Gold and the Dow index could meet later next year. Read the article here:

http://seekingalpha.com/article/111853-hedge-fund-redemptions-may-crash-q1-markets
Is this possible?, well I can say this that not many thought that S&P500 and Gold could meet so soon but they did, so this has a chance imho.

A few sites for traders/investors

Here are a few sites I think cover the markets well ( there are tons but these are what I usually look at ).

www.bloomberg.com
www.minyanville.com
www.thestreet.com
www.seekingalpha.com
Yahoo finance
Google finance
www.clusterstock.com
www.marketwatch.com
www.breifing.com

Will keep updating the list .

Chart of USO ( U.S. OIL FUND ETF )

This following Chart shows the positive divergence in USO, a good ETF to trade crude oil.
I think Oil is going to move up and if it moves down , the downside is limited.
Notice how it made a lower low but still the macd , the RSI etc. all did not make lower low.
Thats positive divergence, confirming the move up.Thats the reason I feel USO is moving up.

http://stockcharts.com/h-sc/ui?s=USO&p=D&b=5&g=0&id=p92309611985&a=157235155

Berkshire/Buffet , not a slam dunk investment afterall, or is it?

In tough market conditions many wonder if they should invest in Berkshire , the reasoning is he a living legend who never gets it wrong.
But in recent times he has been wrong a lot, just google it, or check out the links below.
The media loves to praise him and talk as if he is Mr. Right in investment all the times. Maybe the media wants someone like this , but do not forget , he recently invested around $5 billion in Goldman Sachs when GS was at $115 and also to GE when it was at $22 or so. Well GS is at 80 now after touching $60 2 weeks ago and GE is at around $60. But of course he gets a huge dividend.

http://www.thestreet.com/story/10447422/1/kass-warren-buffett-has-lost-his-groove.html

http://www.schaeffersresearch.com/plus/archive_commentary.aspx?ID=88927

Now I do believe he has been great in the past, but he is not Right all the time like the media would like you to think.
So before blindly investing in Berkshire and buying whatever Buffet buys, think.

BUT acc. to this blog if you invested in wat he invested , after he made it public, then you make money too, just by imitating his picks.
NOW HOW ABOUT THAT?

http://worldbeta.blogspot.com/2008/12/let-warren-buffett-manage-your.html

To be fair , I found the above at the following Blog by Jeff Miller.

http://oldprof.typepad.com/a_dash_of_insight/2008/12/market-curiosities.html

Put/call ratio is too low

The intra day p/c ratio over at http://www.cboe.com/data/IntraDayVol.aspx shows that everyone is bullish, which is a contrarian indicator. Meaning not good for the markets in general.
The equity p/c is 0.7 which is not bad not good but the index ratio is 0.84 which is way too low.
Anything below 1.00 for the indices is low.
Lets see where it stands at the end of the day. Of course if options expiration today so that might skew the numbers a bit. But still , its low.

Teixeira NOT being signed by BOSOX acc to Yahoo story?

Teixeira not being signed by BOSOX? acc to this story on yahoo.com http://sports.yahoo.com/mlb/news;_ylt=AgWI_aNcgcdOCqbAhxYMuW05nYcB?slug=ap-redsox-teixeira&prov=ap&type=lgns
I think its not a big deal unless the SOX fall due to their offense, which is not probable. They have a good line up. Of course they could use him. But they will miss a big hitter for sure. But I believe team chemistry and other things matter more than having an all-star line up .

USO long position

So this AM I finally got some USO calls , Jan 38 calls for 1.25. Lets see how that works out.
I should have got feb , but this is such a small position I can get out anytime.

New bull market? Keep dreaming in my opinion

Most people on TV , finance TV, talk about a bottom and next year will be great and how we have seen the worst . Well in my humble opinion ( imho ) we are in a bear market and will get bear market rallies every now and then. Bear market are very sharp meaning like we see now, 3-5% in a day .
Most veteran trades advice to keep trading size low and not to chase stocks.
Discipline is very important in trading . In fact some traders , successful one's say its the discipline which makes profits , not the stok picking.
Anyone can tell you when to buy, its the selling part which is tough. No one tells when to sell.
So traders have to have a plan. Do not buy until you have an exit strategy is a very good advice I had read years ago.

Deflation vs inflation

So we'r in a deflationary spiral? or is it inflation. The CPI shows no inflation ( or very low ).
Everyone seems to agree we are in a deflationary period now but Gold's up and the Dollar just fell off a cliff against the Euro. the Gold bulls say just wait , in some time we are going to have HYPER-inflation and gold will see new all time highs. Many of them expect Gold at 1200-1300 . When? some say soon , some say once we'r out of this deflation .
But Oil clearly shows that its deflation and so do the commodities. Or is it that Oil is being pushed down by the same guys who pushed it up at 147.
Whatever the case , maybe load up your vehicles now while oil is at 36. The risk/reward ratio for going Long oil is great ( meaning buying oil ). Many talk of oil b/w $25 and 30. Others say its going to bounce from here. I am eyeing the USO to trade it on the long side. I will probably buy USO calls for Feb 09.
Its sure feels good to fill up my car and pay aroud $1.6 per gallon. It might be lower again now .
One can also look at the DIG , Proshares Ultra Oil and gas which moves 2X the move in crude oil.
Similarly there is DUG which is proshares UltraSHORT oil and gas and moves 2 times the opposite side of Crude oil.
But I try to stay away. One would think DUG is at its all time high with Oil so low, but its not . It was almost 80 some time ago when oil started fallig, go figure. Many veteran trades say when in doubt try to stay out.
So I will try to trade USO, but I do not want to buy it and watch as oil keeps falling at 30 or lower. So wait and watch is the key.

The put/call ratio is so low , it shows tarders are too bullish. We can rally into the year end but there is some selling pressure.
The USD is up a bit and Oil is below 40. I am trying to see if i can pick up some USO or DIG to trade Oil on the long side. Not sure if Oil will bounce today or go to $35 first. But the risk/reward is pretty good for a trade. Meaning the risk is Oil falls to 35( maybe ) and reward is it goes up to 50 and beyond.
This is what I might do, I will put in very little money buying some calls. Some analysts have said Oil might go to 25 , in that case the whole trade is off. Thats the reason its so tough to trade.
Trade at your own risk.

Those who saw the fall coming

Barry Ritholtz is one of the guys who warned of the recession. This blog is a must read.
http://bigpicture.typepad.com/

I read minyanville.com very often. These guys are ahead of the curve when it comes to the stock markets and the economy.
Here is a column from Kevin Depew.
http://www.minyanville.com/articles/GS-AXP-GE-C-Fed-ms/index/a/20374

Oil and more stock market stuff.

Oil is really looking good here. The best way to trade Oil is to buy oil futures, but there are easier ways.
USO is an oil fund. One can buy USO if you feel oil is going up or short if one think's its going down. I would prefer buying calls on USO , it can go down more but it made a low at 33.08 when Oil hit $40.5 or so last week. Now USO is $34+ after going as high as 37-38.
Long term USO might be a good buy here, but keep in mind many analysts are talking of $25 oil. in any case the risk/reward ratio looks good here.
Best way is to scale in , but a bit now, that way if it goes down more, you have ammo left to buy more etc.
In any case while trading its aways best to use only 10% of the capital for any particular trade.
While buying options try not to buy the front month, buy as far out as possible. Meaning right now do not buy December calls, they expire pretty soon ( 2 days ).
Buy Jan or Feb if you want to buy. Also its best to buy in the money or at the money calls/puts.
Never buy too much out of the money just because the cost is lower.

Baseball

So the Redsox want Teixeira and it seems are willing to pay a huge sum , so do the Angel's. I think this is just because the Yankees have signed CC and AJ Burnett.
I feel the Sox are fine but whats the harm in buying a Big hitter. The fans pay lots of money to go to the stadium , so they cannot sit quite do nothing. If things go wrong people will blame that they did nothing.
I feel tha Yankees still are not a great team but will not be like last year , will be better. But from what I hear, the Rays have a very deep rotation. This guy on TV was saying they have 9 pitchers ready for , the 5 they already have plus 4 more.
WOW! I guess the Rays are the team to best again.

Dollar free fall

SO the US Dollar ( USD ) is in a free fall, thats sending Gold way higher. My guess is it will also send commodities higher. Why Oil is down , I have no clue.
Jim Rogers keeps talking up the AG and other commodities. Man, he says the USD will be much much lower. If that is the case and it does seem like that, then we will likely see huge rallies in commodities.
I am waiting for some small move up in the USD, consolidation , after it fell from 1.24 too 1.41 against the Euro in a few days. maybe it goes back to 1.36 or so? who knows. But cannot buy this rally, has to pull back a bit maybe.

My first blog

Hello all ( anyone? ) , have so much going in my mind , thought I gotta start a blog and share it.
Mostly markets, sports, food, maybe some music and everything else.
I love surfing the net for info. SO why not start a blog and invite some like minded people.

Markets rallied today, I sold my GDX way too early. Got some puts on some tech, I am thinking this rally might continue and I have to get out.
But I cannot find a good reason to get out of my puts. OK how about the trend is your friend and its clearly a bullish trend now.

Maybe its just a gear market rally , but why not make some money buying some calls. I thought of getting aapl , but its clearly under pressure , it fell after hours too.
Maybe some MOO , the AG etf should do.