Short term trades in the stock market •$$$$$•

[Madrus Rose]

AAPL pulled a nice swing reversal today tho, after touching down to $320 November high support pivot 3times , it reversed back up with may $340 calls going from $5.30 closing around $7.50 or so ....an 11pt reversal to close above $330 pivot !
http://stockcharts.com/h-sc/ui?s=AAPL&p=D&b=5&g=0&id=p64168148592

its still earnings season , AAPL was oversold near term & not many wanted to be short AAPL into weds report

(TXN short on revs and seeing impact from Japan quakes , reported tonight should take a small hit tomorrow )

 

[Madrus Rose]

" Pinched at The Gas Pump? Blame It On the Big Banks " A very good read here :
(good analysis by Dian Chu, oil/energy trader over on the Nasdaq site )

http://community.nasdaq.com/News/20...he-big-banks.aspx?storyid=69791#ixzz1JYGzBTvO

It All Started With Jackson Hole….

This run-up in oil prices started with Fed Chairman Bernanke`s Jackson Hole speech where the big banks realized they were going to get a bunch more juice in the form of POMO operations by the Federal Reserve to play around in markets with.

And what did the large financial institutions do with this newly created juice? Instead of allocating the almost zero percent money they are all borrowing to productive activities such as lending loans to small businesses which will create jobs and stimulate the economy, the big banks have decided that since the fed is electronically printing money and providing extra liquidity/juice for financial markets that this is inflationary and devalues the dollar.

All Fed Juice Leads to Commodities

And just to make things worse, the big banks have decided to take their cheap capital they borrow at basically zero percent , and invest into commodities, i.e., agricultural futures like Wheat, Corn, and Soybeans, energy futures like Oil and Gasoline (Fig. 2), and industrial and precious metals like Copper, Gold and Silver.

The unique aspect is that loose monetary policy isn`t problematic at face value when you are trying to stimulate growth, it is what the Big Banks are utilizing this cheap capital for that becomes problematic from an inflation standpoint. The very problem that the Banks are worried about in regards to inflation, they are in fact responsible for creating through self-fulfilling investment practices with regard to this cheap capital at their disposal.

Long Commodities, Short Dollar - Adding Inflation

But it gets worse because at the same time they also short the US Dollar, and going long the commodity currencies like the Canadian and Australian Dollar, which further exacerbates the slide in the US Dollar (Fig. 3), reinforcing the entire trade that they need to buy more commodities as an inflation hedge, further juicing up commodities like oil and gasoline.

Inflation Up, Purchasing Power Down

The consumer is hurt in two ways. First is that higher prices eat into their monthly budget with a higher percentage of their disposable income needed for purchasing items like milk, eggs, bread, and gasoline. Secondly, because the Dollar is losing its store of value, the consumer is losing their purchasing power, i.e., what a dollar is worth in relative terms around the world, and what it can buy. In other words, it is like getting a pay cut at work from your company, the amount hasn`t changed, but what goods that amount will be able to buy is less.

Consumers Getting Double Stiffed

The Big Banks like JPMorgan Chase, Goldman Sachs, Morgan Stanley, HSBC, UBS, and BOA-Merrill Lynch are some of the largest energy traders in the world. They all derive considerable trading revenue from the markets each quarter. So when you hear that Goldman Sachs, or BOA didn`t have a single losing trading day for a given quarter, these banks are taking a lot of money out of the market, and much of their hefty trading profits are generated from commodities like food and energy.

And guess who is footing the bill for these trading profits? Yes, the US consumer, the very same US consumer who bailed them out during the financial crisis. Talk about getting short shrifted twice. (I cleaned up the last sentence, but you get the gist.)

2008 Oil Bubble Redux

Currently, there are no supply shortages in the oil market, but what you have is a bunch of speculators going wild pushing up energy prices hyping the Middle East, Peak Oil, The Nigeria Card (remember in 2008 where every little Nigerian pipeline was under attack every day during that run-up, and all the sudden Nigerian pipeline attacks were inconsequential for two years—that`s the Nigerian Card-bring it out when traders are in Trend Trading Nirvana.)

What we have here is a 2008 redux. The Brent contract on the ICE exchange is being used to engineer prices up, as it is an unregulated exchange with no real transparency on position limits by the Big Banks. The Big Banks are also piling a bunch of money into commodity related ETF`s and mutual funds, which in turn have to buy exposure to the futures market in all these commodities. Add in the hedge funds, pension funds, money managers, and retail traders, and voila! you have these bubbles created which have no relation to the underlying fundamentals.

Trend Trading Hyper Leverage

It all comes down to fund flows, capital going into the commodity trade because it is going up, further adding fuel to fire that this is the place to be-- Welcome to the self-reinforcing cycle of Trend Trading.

However, it gets even worse, because we have one-sided markets with no substantial pullbacks which normal healthy markets have. The Big Banks are able to add to their original positions with the profits they have locked in with stops that are already hugely profitable. The Big Banks are then buying additional futures contracts, pushing these same commodities up further, until eventually the bubble bursts like 2008, when everyone runs for the exits at the same time.

The effect is that by adding to original positions via locked in profits, the Big Banks have added even more liquidity/juice to the market – a form of hyper leverage without real risk. This results in the consumer paying more at the pump, not because there is less supply of oil in the market, but largely because of a trading technique that artificially inflates prices by adding more juice to the equation.

more....

 

[confused]

Hahahahahahahahahahahaha

 

[Sam the Caveman]

Nice post madrus. The repeal of the Glass-Stegal act created that shit. So now the lending section of a bank can loan money to the financial section of the same bank, and what do they do with all that money? (detailed above)

 

[TNTBudSticker]

Lots of news..Great posts.

TM-Toyota taking a nice long climb down.I Love it...lol

 

[Madrus Rose]

AAPL up 19pts off yesterdays swoon to the pivot low of $320 after the S&P warning news of US debt /credit yesterday ...now its running up into earnings ;o)

Many high flyers like IBM are popping then dropping after hourse after good reports , just profitaking? IBM traded as high as $170 tonight but gave it all back after hitting a lifetime all time high .

Goldman initially bid up this am to $157 then fell back as well as the financials still in the tanker ...many ecpecting them to be bottomed here , but who knows what happens with the Fed fiscal poilicies which prolly will see them leave the window open for more cheap borrowing & have to include raising the Debt Ceiling by Congress which is almost a given but runs many risks . Inflation leading to stagnation a very toxic combination but so far the earnings for some have been good .

 

[Madrus Rose]

Re Weakness in GM , this was just out yesterday ( not reporting eps till out in Mid May 16th)

U.S. plans to sell significant share of GM stake this summer, WSJ reportsThe U.S. government plans to sell a significant share of its stake in General Motors (GM) this summer, the Wall Street Journal reports, citing people familiar with the matter. The government would have to sell its remaining 500M shares at $53 apiece for the taxpayers not to take a loss, well above where the stock is trading now, the Journal added.

 

[SpasticGramps]

$53. Good luck with that. I wonder if China is going to swoop in and buy up all of the GM shares on the cheap? Tax payers of course being the suckers on the other side of the trade. Par for the course.

Firesale in the USA!

 

[Mountain]

Firesale in the USA!

Stop being a pessimist. There's nothing wrong with the financial situation in the US.

 

[SpasticGramps]

Stop being a pessimist. There's nothing wrong with the financial situation in the US.

I know. I know. I just like being the contraian. The economy is as strong as my Unicorn I keep. And let me tell you. It's a badass Unicorn.

Look. Everything up today. Oil past $111.00, Gold blowing past $1,500, Silver past $45, Stocks surging, everything melting up! It's fantastic. Just don't look at the Dollar Index collapsing and everything is fine.

In other news China said they are holding an "unreasonable" amount of currency. Sounds like the are going to start dumping the dollar. I'd say we get DOW 14,000 by the end of the year. Won't be worth anything in real terms, but it's a nice nominal number.

 

[Mountain]

IThe economy is as strong as my Unicorn I keep. And let me tell you. It's a badass Unicorn.

Ha ha. Most people in the US have their head in the sand regarding what's going on.

 

[Mountain]

DHX...flags fly at half staff...we'll see.

 

[joeuser]

Stop being a pessimist. There's nothing wrong with the financial situation in the US.

Dude...there wouldn't be a financial system in America right now without the FED pumping several BILLION into the banks EVERY day.

It's fucking amazing...EVERY day BILLIONS is given to the banks to "play with". Actually, to do the bidding of the FED. The bank "borrow" at 0% interest, they buy Treasury Bonds, then the fed, through POMO buys back the bonds, or bad mortgages, and the banks get to keep the profit. And ALL the bond sales are profitable for the banks, the bonds are chosen to be profitable. Plus, they get to charge the FED a fucking commission!

You see, nobody wants US treasuries any more, so the FED gives the banks money to buy our treasury bonds...and then buys them back, at a profit to the bank. Plus, the banks have a whole lot of junk mortgages left, the FED buys them too.

With Ben and his printer, plus the dollars created when oil is pumped out of the ground, inflation is starting to take hold. It's going to get ugly. The reason you don't see the homeless, the Hobo's, and the long bread lines like we saw in the "Great Depression" id because of welfare, section 8 housing, and SNAP (food stamp) cards. Without these programs to house and feed the millions and millions of poor, we'd be swamped by them. Supposedly, 44 MILLION people get food assistance. Many millions would be homeless without assistance. How about the 99ers? Unemployment benefits for almost 2 years? Where would THEY be?

Things are bad out there, and still getting worse. I didn't even mention the mortgage meltdown. You see, chain of title wasn't kept, nobody knows who owns the loan.

Since Obama took over...inflation has taken off, federal debt is going parabolic, and the world is melting down. I'm not saying he did it, but he's sure as hell not trying to stop it. How the hell is "free" health care for another 20-40 million poor people going to help the deficit?

This country is actually WORSE off then the EU. Our states are worse off than Greece, Portugal, Spain, Ireland, Italy, etc. We MAY be really fucked...I mean REALLY fucked! I hope you enjoyed your cushy life while the getting was good.

 

[Mountain]

I was JOKING!

 

[SpasticGramps]

Newbie.... at least he gets it though.

 

[SpasticGramps]

This country is actually WORSE off then the EU. Our states are worse off than Greece, Portugal, Spain, Ireland, Italy, etc. We MAY be really fucked...I mean REALLY fucked! I hope you enjoyed your cushy life while the getting was good.

Speaking of Greece.

Anarchy erupts in Greece as austerity bites The Independent
As Thessalonika riots, a town near Athens spins out of control with angry residents setting up massive roadblocks and hurling Molotov cocktails

As explosions boom, the town's loudspeakers blare: "Attention! Attention! We are under attack!" Air-raid sirens wail through the streets, mingling with the frantic clanging of church bells. Clouds of tear gas waft between houses as helmeted riot police move in to push back the rebels. This isn't a war zone, but a small town just outside Athens. And while its fight is about a rubbish dump, it captures Greece's angry mood over its devastated economy.

As unemployment rises and austerity bites ever harder, tempers seem to fray faster in Greece, with citizens of all stripes thumbing their noses at authority. Some refuse to pay increased highway tolls and public transport tickets. There has been a rise in politicians being heckled and even assaulted. Yesterday, in Thessalonika, scores of activists were arrested after violent clashes with police.

The anger is most palpable in Keratea, a town of 15,000 people 30 miles south of Athens which appears to have spun out of control. The state's attempt to start work on a planned landfill site on a nearby hillside in December caused locals to set fire to construction vehicles and erect massive roadblocks on a road that bypasses the town and runs to the capital. It's a fight that has galvanised the town, from the mayor and the local priest to shopkeepers, farmers, schoolteachers and teenagers.

Over the past four months, locals have developed increasingly inventive roadblocks to stop contractors from getting to the site. They have parked trucks across the street and built piles of rubble and dirt. Apparently in it for the long haul, they have erected a wooden hut by the side of the road to serve as protest headquarters, complete with campaign posters, news clippings and children's drawings of the riots. Their latest move was a nocturnal expedition to dig a shoulder-deep trench across both lanes of the road. That was one step too far for the authorities, who, on Thursday, sent in workers – protected by police – to repair the damage.

Within hours, the confrontation degenerated. Masked youths hurled firebombs and rocks at riot police, who responded with rubber batons and repeated volleys of tear gas. A police helicopter circled overhead. "The town is out of control. Business activity has stopped," said Yannis Adamis, a resident and mechanical engineer. "The stores are closed. The sirens are blaring, the [church] bells are ringing, people are on the streets. This cannot continue."

Not liking austerity so much it seems. Lots more of that in the pipeline unfortunately. This may effect the euro and be a minus for equities if the situation continues to evolve. Euro has been on an absolute tear as of late.

Could be one of those -200+ point Black Swan days if it continues.

 

[TNTBudSticker]

I found a cool site called http://usdebtclock.org/

U.S. National Debt Clock Real Time!! Credit card debt is going down and U.S. Consumers debt increasing and mortgage debt is getting paid off.

Been a Good week...NVR I Shorted in Google paper trading account and Made quite a few numbers there.

MMG finally went no place and I'm looking at ZAGG to see if a big bang going to happen.Same with REDF as its Rediff.com India Limited sort of a Bidu in China and Google in usa.We'll See.

 

[Sam the Caveman]

It seems hard to take paper trading seriously for anymore than 9 months.

 

[TNTBudSticker]

It seems hard to take paper trading seriously for anymore than 9 months.

Discipline is what it is or passion ?...Paper-trading can include contests,stock picking,portfolios and even Motley Fools.I've been paper-trading since 2006.Even called the top in 2007 AND the bottom in 2009..Gotta love paper-trading

My Fool's even kicking it good with the market.It's at 326 and floating

I have another Fools with dividends at 3100 points and I LOVE it...I'm 70 points from a 300 point stock gain on this stock.Yup,Paper-trading is where it's at.

Here's the portfolio from the beginning of the thread.Made some cool Jumps.

 

[SpasticGramps]

I found a cool site called http://usdebtclock.org/

U.S. National Debt Clock Real Time!! Credit card debt is going down and U.S. Consumers debt increasing and mortgage debt is getting paid off.

FYI. It's primarily going down because of defaulting not delevergaing. The total is getting added to the big number at the top. We are marco and micro bankrupt as a country.

Also, look at the $100 Trillion in unfunded liabilities exploding. Good luck living up to those responsibilities. Fire up the printing presses.