Wednesday 29 February 2012

Midweek Metal Massacre

The Gold/Silver maniacs will be real mad tonight! They have seen a steady and increasingly bullish situation develop since year end. Even the clown channels this Monday were starting to highlight the 30% rise in Silver. Doubtless, there will be a lot of moody metal bugs tonight. If the doomster outlook is right, many of them will be even madder across the next few weeks and months.

There are two ways to look at this latest destruction cycle...

Whine and bitch that its being 'whacked by the manipulators' again.
Just buy..and keep buying physical Consider any fall a bonus opportunity to load the truck.

Gold, getting the big hammer treatment!

Silver...similarly getting whacked, with somer serious sell volumn

The nasty JPM meddling again?

Just yesterday I was saying to someone 'ohh, Silver is about due for a whacking'. I didn't even dare guess when it might be. Who knows the internal machinations of the infamous 'morgue', suffice to say, its quite well suggested all over the place they have been loading up on short positions for a few weeks now. I can only imagine the laughter at their HQ today.

Silver, mid term - the balanced outlook

The following chart is something I put together last year. It just seemed - as recently as this Monday that 35/36 was going to be a real problem for Silver. I'm still ultra bullish long term. Is there anyone really out there who still thinks Silver is not worth at least $150 an oz? Long term, it seems an easy trade/physical purchase.

The power of the 10MA

Today's SLV 5min chart is a great example of the importance of the 10MA as support/resistance. The 'red line of doom' is arguably the first line in the sand for any given cycle chart you care to follow. You can see how the buyers tried to halt the fall..but every time Silver failed at the 10MA.

An interesting site to check:

Mr Ferguson (yeah, I'll refrain from using his first name), he is one of the biggest metal maniacs out there. From what I noticed today, his site must have been tipped over the edge today due to server overload! I sure couldn't access it until just earlier. I'm a massive supporter of Mr F', but he is the ultimate permabull. At least the good thing is that in the long run, he will be ultimately proved right, and will hopefully get recognised for his great pro-metal stance. Good wishes to you Mr F! Hang in there, and ride that wave!

More carnage to come?

Considering the daily, weekly, and monthly charts for the metals – and the overall 'equity toppiness', it'd seem likely that both Gold and Silver will both retrace for some days to come. The only issue will be if they violate the key levels, and instead of a minor retracement, it becomes the start of a massive new wave lower. My personal 'best guess' doomster targets for Gold and Silver are $1200 and $20 respectively by late summer. As noted earlier, that should merely be treated as a bonus opportunity to load the metal truck as bargain prices.

Arguably, if you see SLV below 30, its super bearish, and opens the door again to an attempt to $20.

GLD looks even weaker than Silver (kinda unusual!). Any move under 160 will open the door to 120.

A bearish end to the month

Martin Armstrong (I'm a huge supporter) touted today as a possible panic cycle day, and indeed..again, he has been proved right.  See:

Its going to be a fascinating Thursday and Friday for the wider markets. A new month, the 'ides of March'. 'March madness'....the doom chatter will be pretty rampant out there this evening.

Good wishes..more later (if the chocolate energy starts to kick in)

Hull Breach ?

Two posts to come tonight, lets start with the main indexes (I'll deal with the metal horror story later).

Today was important. Benny kinda upset the markets a bit (always a nice start to any trading day), and the second LTRO was completed early in the morning in Europe. Its good to have the LTRO nonsense out of the way now. It has been a looming problem for the bears since the original one last December.

I'll focus on IWM (its the main index ETF I trade), it has been the second leading index (transports remain first) - as it was in summer 2011. The two broad scenarios are what matter. I suppose I could have many others, but broadly, these two cover the main two near term outcomes.


Bullish... (although mid term, still possibly bearish.. ;) 

IWM – the doomster long term outlook

Okay, now this is a crazy chart, but hey, lets consider what the mainstream are STILL ignoring. Both the transports, IWM, and the very broad NYSE did not breach the May 2011 highs. Further, the CRX was nowhere near making new highs. I don't care that the easily manipulated and limited dow'30 made new highs. I guess you could then say 'ohh, but what about the nasdaq?' Well, that is almost equally as messed up due to AAPL - whose gains contribute 30% of the total gains since the Oct'2011 low.

The doomers need to see IWM in the 74s, and lower to confirm the wedge, and open up sub' Oct'2011 lows. It remains easily possible IWM will merely pull back to the 10MA of 78/79..and then bounce, or a slightly bigger move to 76/75. Regardless... 74s are a 'must-have' for the doomster outlook to have any credence.

Commodities under pressure

Bears need to see the CRX break out of the wedge, below 900. A move under 700 would confirm the super bearish wedge, and would open the opportunity to a second half 2012' market massacre.

VIX – the detonator clock is ticking

No real movement in the VIX today, but we did get a nice green candle on the rainbow (Elder impulse) chart. Should see 21 within 1-3 trading days, with a test of the recent 22 high. If 22 is broken, that opens up 24/26. The time to be adding to VIX calls!

The weekly VIX chart is clear, the 10MA of 19.32 is the first level to hold over, whilst 24 is a pretty important level. Look at the MACD cycle, we are still 2-3 weeks away from positive cycle. That will be the best opportunity for an explosive move back into the 30s.

Bears are first and 10, on their own 2 yard line.

So, the bears now have the opportunity to break lower, and at least test the first key levels – which equate to around sp'1320/1300. The 15 and 60 minute cycles are pretty low, so its entirely possible we'll have some kind of Thursday morning minor bounce. However, the bears will want to see a Thursday close in the red. Preferably, a good 12/15pts off the SP', with VIX +7/10%.

*Benny will speak at a Senate hearing tomorrow, so yet more opportunity for him to upset the capital markets with lack of  future 'QE' talk.

As noted, more later...on the metals!

Tuesday 28 February 2012

Tired...but still watching

Whilst the many doomers continue to talk about everything from the next 'imminent' flash crash to WW3 in March, the main market had a broadly up day. Again, every minor down cycle is being bought up.

Notably. again though, both IWM and the Transports are failing to share in this 'to da moon' adventure.

Mr VIX is still primed for some kind of very short term mini-surge. It would be a classic cruel tease to the bears to see VIX hit the 23/25 range...-with sp'1320/00, only to then max out, and decline all the way into late April, maybe even setting a new low of 14/13.

Shiny things

Silver had a very strong day. It is clearly having a strong upcycle on both the daily and weekly cycle. From the biggest perspective, the 20 year chart shows that Silver is either in a mid-term decline to 20, or is already in a bull flag, and is about to break into the 40s. Regardless of which, the long term trend is..past the moon and into the next Galaxy. Silver remains the ultimate trade of the century.

Arguably, if we see Silver over 43/45...its going to make a third attempt to break the big $50 level, and I'd guess it'll manage it. In which case, all sorts of things might start to happen as the metal-bears cause a very severe stop-cascade upward into the 60s, even 70s by late May.


We have more econ-data - the GDP (probably revised a touch lower), and Benny will be addressing the house financial services committee - which will get near blanket coverage on the clown channels.

*news today that the board will sit this Thursday, and decide if the CDS can trigger. Will they consider a near 80% cut in the bond value as a default, or will they pretend (at the behest of the ECB) that its all still fine and dandy in EU bond market land?

good wishes

The Consensus 4

Being a Permabear has never been easy. Its not something I wished to be (does anyone really like to be pessimistic about things?), the fundamentals are clear for the western economies, they are frakked. We are traders though, even in this walking-dead market, there will be up-cycles.

I've read around so much recently, and a scenario which I myself also had, currently seems to be right back on target...

First..lets look at the weekly...

We have a channel floor/bounce target of 1320/25. The 10MA is currently 1323, and certainly offers a natural level to be drawn to.

The Consensus Scenario

The lower channel line of 1320 - by next week would make for a near perfect area for a wave'4 to conclude. 1300 would make for a better low. The wave'2 retrace was around, 1370 minus us 1310 - right in the middle of the consensus '4 target range.

The transports - although just a 20 stock index, remains something to note, and the 'old leader'..has indeed probably been leading again - those Oil prices sure aren't helping. The Tran' has already broken way below the October low channel.

Equities rising into early Summer ?

Urghhh, I certainly hate to say it, but the consensus scenario would indeed suggest we retrace 3-5% in the coming 1-3 weeks, and then rise from 1300/20, to around 1400/20 by early June. In VIX terms, that should get us to at least 24/26.

I suppose its easily possible the final wave'5 could truncate, take just a week or two to conclude, and might not even put in a higher high (ala late July 2011). That would sure make for a great short opportunity though, especially on a 3-6 month basis into year end. Jan 2013 SPY Puts anyone?

What about Greece? 

Mr Market still seems not to care. Maybe it'll care about $150 a barrel WTIC? Lets be clear though, no bear..not even the most ardent permabear can afford to attempt to ride out a move from a wave 4 retrace of sp'1300 to wave'5 completion around 1400. The doomers (myself included) - despite the endless doom-chatter, need to be even more mindful this coming March. Big down moves are coming, but from a wave count perspective, the bears may need to wait a few more months for any significant action.

Monday 27 February 2012

Slow motion turn...into Spring

Hmm, from the open of dow -100 to +30, with a closing of -1pt. Again, its pretty dull and tiresome.

Whilst this nonsense continues, it seems best to focus on the bigger picture. Moves of less than 1% are merely noise, not least when the last 3 weeks has been a super tight trading range.

IWM remains stuck in a 3 week distribution formation. Pretty clear, a break over 84 it higher..and break under it lower.

VIX is still suggesting 2-3 weeks until the first opportunity for an explosion upwards – somewhere in the upper 20/low 30s.

The master index arguably broke out of the baby wedge purely due to being squeezed out for time reasons.

Some more dynamic due.

We have lots of econ-data to come this week, not least of which might be a Q4 GDP number likely to be revised somewhat lower.

Near term (within 3-7 trading days) targets:

Bearish: VIX 21/22, SP' 1320, IWM' 79

Bullish: VIX breaking <16, with SP' 1385, IWM 84+

Moody Posters

I am noticing more moodiness out there across the various boards. The doomers are getting increasingly desperate for a major move lower (hell, many of them were shorting at sp'1250 in November) -which increasingly looks unlikely. Meanwhile the cheerleaders are on an ever more confident tirade, touting new market highs sometime this year.

Clearly, the very limited trading range we are now stuck in, is starting to really frustrate a lot of the posters out there.

Regardless of the crazy posters, March is this coming Thursday. Spring is coming......its time for some of those 'Green Shoots' again.

NYSE weekly- baby wedge within giant wedge

Hmm, that is indeed one hell of a wedge.

Contrary to what many of the deluded might believe, the markets are still not even above last summers high. I dismiss the stupid dow'30. That index remains laughable, and should be the dow'100 for anyone to take it seriously. Same for the Transports which only have 20 components (surely they can find at least 50 companies that are in the transport sector?).


1 The big 8000 level must be broken below, for ANY bear to get excited
2. We need to at least hit the 10MA - which by March'2 will be around 7900.
3. 7600 -  for the doomsters to genuinely have some serious evidence that wave'2 is complete.

These are not even bold targets. They should be easily attainable in a standard retrace. That is not to say of course that we won't get a really annoying higher high. However, as noted in previous posts, the smarter ones -with the big money to short, will be waiting for a lower high to occur on any subsequent bounce.

Sunday night futures wheel is spinning of course, marginally lower.

Market moves remain noise until we see a dow -175 day, and close at that, or better.

Sunday 26 February 2012

Three Bubbles

 *As inspired by original poster (from the Daneric message board) - KBMCK

Looking back over two decades of lunacy

The day to day nonsense that are the capital markets of the western world often lead us to lose sight of the  bigger picture. Even a 5 year view is often too close to grasp the grander cycles. Stockcharts allows us to look back 20 years (I wish it was further!).

The Renko chart style was used by user KBMCK this weekend, and I've taken it, and added a few small notes of my own.

Its certainly a chart I intend to refer back to again later this year. If the doomster case is correct then the NYSE should be under 5k, and it'll be 'game on' for the permabears. Of course, if we are consistantly above 9k, then the H/S pattern - for this bubble is arguably busted, and we could easily spiral upward in an inflationary lunatic move inspired by none other than the Bernanke himself.

Saturday 25 February 2012

Fair Value Series: 1. AMZN

Introduction to the fair value series

Its been my intention for some time to do a 'fair value' series for a wide variety of stocks. Yes, there are the crazy over-priced ones that many traders are fully aware of, but I also aim to get around to looking at...(wait for it)...under-priced stocks! Yes, even a permabear should look for under-valued (but high quality) stocks to purchase.

This first posting for the fair value series will be longer than subsequent ones, so that I can hopefully convey the underlying philosophy. Taken together, I believe fundamental + technical analysis are important for any trader. Clearly, this is just the start, and with more posts, hopefully the standard will develop to become something worthwhile.

Fair Value theory verses an ocean of lunatic and misguided analysts

Fair value is a concept I've been touting massively for a few years now. It has almost become a long time joke where if someone touted one of the momentum (momo) stocks (like NFLX, GMCR, AMZN), I'd just say 'divide by 10', and then give my 'fair value' price.

Dividing by 10 is admittedly overly harsh for even some of the very worse momo stocks, but the point stands, most of them were – and still are, grossly overvalued.

What is fair value?

Say you're an investor with $10,000. How many years do you want to endure before your investment provides a 100% gain. Lets not get into the sub issues of 'how' the returns are generated, whether by capital gain or via dividends. The issue is about return on investment.

Would a century be too long? Ohh, then I guess you don't much like stocks with a Price Earnings (PE) ratio of 100?

How about 15 years, does that seem like a reasonably good time frame to get a 100% return on your investment? Arguably, for most people, 15 years is a reasonable time frame.

Historically (and interestingly!), the PE for the US equity market is usually somewhere in the 10-15 range. During the bubble periods, ratios of 30, even low 40s have occurred. Similarly, a 'depression era' PE of 5 is also important to recognise.

As at Feb'22 2012: S&P 500 PE Ratio: 22

Now, one final issue about PE ratios. There will of course be a range between different stock types during any given era, such as the following that I suggest we presently have...

Slow growth/stable companies: 10/15
Mid-level growth: 25/40
Hyper-growth 50/75..even 100

*there have of course been some insane tech/social media IPOs in recent years where the PE is 1000/1500 or worse.

There are many other smaller issues about PE ratios. Most notably, there is no PE ratio of course is a company is losing money. Secondly, if a company is making a VERY small amount relative to number of shares, its possible we get bizarre PE ratios of 5000, or even higher.

The PE ratio is certainly not everything when considering a company, but contrary to what many have come to forget, it is still usually a great starting place.

For further details see:

A brief reminder on 2011's greatest decliner

Look at the Netflix chart. It had a superb run, truly amazing – justifiably based on massive revenue growth and ever increasing profits. Such near-exponential growth though could never last. Besides having to deal with the 2008 collapse wave, increasing competition (legal or otherwise), NFLX faced a number of problems – not least shooting itself in the foot via changing its price structure which really annoyed its unreliable customer base.

The point is that in a matter of just a few months, the once beloved NFLX became a horror story. No company, no matter how many cheerleaders on either of the financial clown channels it has, is immune to real world problems/corporate mistakes.

AMZN – the online retailer almost everyone uses

So where do we start with this retail behemoth? Current market cap of $82bn

Current PE: 131
Forward: 67 (fiscal yr-end Dec'2013)

Profit margin: 1.3%
operating margin: 1.8%

Cash/Debt: 9.6/1.8bn

*for some good details on AMZN's key numbers

Initial summary: The obvious problem is profit margins are razor thin, plenty of cash, debt is not a problem – and thus AMZN is at least not significantly exposed to any future rise in interest rates.

So, what would 'fair value' be for AMZN.

All other things being equal, lets take 3 scenarios.

A. AMZN - starts posting losses...and losses increase through 2012.
B.AMZN – remains posting in-line earnings, but growth remains low
C. AMZN – profit margins start to rapidly increase, and growth accelerates

Fair value philosophy – a summary

First, the chosen PE ratios 15, 25, and 35. Why have I chosen these? I'm trying to take the more 'bullish' approach, and thus the eventual $ price levels are the minimum targets, rather than what might be the ultra doomish ones.

Frankly, being a permabear-doomster, I would be more inclined to look for PE's of 5, 10, 15. After all, if a company is regularly losing money, why would it not be slammed under PE'10?

The three ratios:

15 is a good historic average for a stable and comfortably profitable company.
25 is a touch above the current market average, and considerably over the long term average of 15
35 is historically on the high end, even the most bullish cheerleaders would struggle to justify this.

If Scenario'A, then how could anyone justify a PE over 15?
If B', how could AMZN be justified to hold a PE of even 25 ?
If C', despite recovering profit margins, would AMZN really be justified PE'35 ? That would still be historically high for a stock – no matter how good the company.

With AMZN currently trading at $180 per share, what does that mean for a 'fair value' price?

A. $21 (180/131 x15)
B. $34 (180/131 x25)
C. $48 (180/131 x35)

The above uses the current PE of 131 as guidance. Lets also use the forward PE of 67– as projected for year end 2013.

A. $40 (180/67 x15)
B. $67 (180/67 x25)
C. $94 (180/67 x35)

So, let me state clearly, even under the 'bullish' scenario – where 'everything in the world is a-okay', AMZN should not be trading above $94. The $100 level is obviously a huge psychological support level for AMZN, so its kinda interesting that my own rough estimates fail to even support AMZN above this level.

Worse case for AMZN, are we really looking at AMZN in the 20s? From a chart/technical perspective, the old $40 level was a huge issue for AMZN.

Baseline 'fair value' for AMZN is between $21 and $48
Best case 'fair value' for AMZN is between $40 and $94

One thing I will note at this point, is that of course there are so many variables, and at Q1 earnings, these 'fair value' targets would need to be re-assessed. However, based on historic data and standards, I believe the 3 ratios are very balanced, and in fact are overly fair to the bullish persuasion.

Will 2012 be the year AMZN acts like NFLX'2011 ?

The absolute determining factor will be earnings of course. Can AMZN stabilise falling profit margins, or will it start posting increasingly large losses? Q1 earnings (due late April) will be fascinating to see. I certainly would not be surprised to see a minor loss. The market appears to be looking for another minor EPS profit of around 10 cents.

A secondary issue will of course be the wider equity/capital market mood. If the doomster wave'3 were to occur, then it'd seem likely that AMZN will at least test the big $100 level sometime this year.

Great company - but not making enough profit.

Let me end this first posting for this 'fair value' series, by noting that AMZN is clearly a superb company. Since its incorporation in 1994 it has managed to become one of the worlds leading online retailers, and has seized a huge amount of sales from the old brick & mortar retailers. It has near saturation brand recognition, and has become a very established corporation, and doubtless has a strong future ahead.

Yet, in the immediate term AMZN does face serious issues. Those profit margins are truly razor thin. With just a minor increase in its cost base (whether its through wage inflation, energy costs, taxation), the point stands - AMZN either starts to rapidly expand – with good growth in revenue and much higher profit margins (to around the 8/10% level), or my fair value target 'should' in theory be attained at some point within the next 6-18mths.

When you take into consideration the larger economy, the stage of the economic cycle we are in, and the various chart support/resistance levels:

AMZN: fair value: $95, with potential for downside to the permabear-doomster level of $40

Friday 24 February 2012

Barely Red

Well another crazy week is over for this weeks wheel.

The Bears at least saw the more important R2k index close marginally red for the week. At least we're not up another few percent into the 84-86 range.

This is a hanging man candle I believe, and thus offers some promise next week for a sell off under 80, perhaps as low as 79/78.

More over the weekend :)

The top is in..(at least for R2k)

We have a pretty impressive 3 week top for the Russ'2000 small cap index. Yes, the dow broke above 13000 just earlier this morning, but the R2k is NOT confirming the stupidly small dow'30.

Clearly, bears need to see 81.00 break...that should offer 76 within 2 weeks.

However, the doomers need to be cautious in that it is highly probable we'll get a bounce at the 76 level - equvilent to around sp'1300.

The more conservative 'big money' players might do well to see if we can...

1. hit 76
2. see bounce to 80....then put in a LOWER HIGH....which would be confirmed once 76 broken.

*a break of 76 should in theory open up a move to 66, which would be a very profitable short position for March/April..

Thursday 23 February 2012

Sears - selling off the profitable parts

Sears is certainly one wild ride lately. Today's near 19% move was probably largely due to a short-stop cascade upwards. How many bears who were heavy short on the SHLD were nuked today?

Clown channel (aka CNBC/BS) even had a doomster analyst on today. Some lady - for the second time in the last 4 montsh touting her target of $6.

She made some points this morning, and it appears that Sears is merely selling off the good parts of its business. Obviously those are the ones the vultures are happy to buy - even right now at higher prices, but for Sears.. its means they are left with possibly a decaying mess.

I guess its possible they could radically innovate and rationalise the business. Do they have the leader to help guide that kinda grand reboot?

The ultimate problem though, retail is arguably already saturated, not least in the old style dept' store 1970/80s mall shop. Far more attractive would be Macys or even JCP. Hell, at least the JCP CEO genuinely seems to have a real vision to try to get the company back on track.

The $6 target is something I will keep in mind for rest of this year, but I sure ain't touching it. I've only meddled twice in retail stocks (via options of course)... M and GPS. Neither of those worked out so well, urghh.

VIX...floored (probably)

Okay, so I do the VIX post, only for today to see yet another truly stupid low-vol' melt up -after what was a minor opening 0.5 lower..

So today, the VIX hits almost exactly on the lower trend line that I projected - see chart.

Clearly, the bears do NOT wanna see VIX break into the15s. That would possibly signal that SP'1400+ is coming, contrary to everything many (even the mainstream clown channels) have been expecting.

No doubt the TVIX people are getting real edgy again, and who can blame them. Right now, the ultra stop would be a touch under the recent low of $14. There is certainly the threat of a further death-spiral melt down to..well, this thing could easily hit $10 if VIX breaks under 16 and trundles around for a few weeks.

Needing some 'big news/event'

Bears need a major 'issue' to trigger a proper market decline. The Europeans financials were really smashed up this morning, and yet again..the main market simply can't fall more than 0.75%. Even worse, the damn transport index looks like it might be floored on momentum cycle.

Right now, even sp'1300 looks a distant dream. Kinda ultra lame to admit that, but yes..1300..seems outta range near term.

I suppose a few might say 'be careful what you wish may get it'.

Frankly..I'm sick of waiting. Bring it.

Wednesday 22 February 2012

Volatility – floored

Since last August, the VIX has been in a pretty standard death spiral, all the way from 49 to 16 across 7 months.

The 4 year weekly chart gives a great view of the nonsense we've endured since 2008. The initial panic-hysteria 'OMG, its the end of the world', to the flash crash 'is it ending for real this time?' last summers 'surprise!, you just got downgraded' sell off.

VIX 2012 - Its all about 49

If we see the VIX break 49 at any time, the bears can start to party. A break into the 50s would likely not end there, and should offer at least a brief foray into the mid 60s. Anything above 65 is twilight zone area, and its impossible to even remotely guess if that is possible in these increasingly manipulated and HFT-induced sick markets.

So, be mindful of 49 being hit. Of course, 48/51 would make for a typical fail zone, at which point the market could floor, and then off we go again on another stupid low-vol' melt up for six lousy months.

The ultra-doom VIX chart.

The following chart is just a rough outline of the style that many of the doomsters out there in the murky corners of the web are touting. Some have overly said it already, but many are just hinting at what they are looking for.

Lets be clear, if the wave'1 and 2 (that many chartists have touted since last summer) have been correctly identified, then 3' is obviously next. Whatever the reason for such a 'doomer 3' to occur, what matters is that a 3 would likely last 6-9 months (the 2008 wave'3 lasted 10 months), and would broadly lead to a VIX as follows...

Sure, its highly improbable that the above will be even remotely the outcome for 2012, but the style would be correct, 'if' a market index '3 wave' were to occur.

VIX strategy

I don't like VXX -its a failed ETF (or ETN?), TVIX is certainly the new traders drug of choice – volumn looks set to hit 150/200 million on the next big down day this year, whilst the VIX itself breaks back into the 30s.

Personally, I'd be tempted for near strike April VIX calls, somewhere in the $25 strike area. For the ultra doomers, 40s would be just about acceptable (although preferably for May, or further out), but..those are crazy unstable, severely prone to decay, and will implode to zero quickly if the VIX does not break into the high 20s.

HPQ -they do make nice printers (mine is 12yrs and still working)

Earnings were reasonable, but it looks pretty weak as a longer term stock. The P/E is still only 6-8, that is relatively cheap/fair value. Yet where is the excitement in this company? Err, no thanks. The market does not seem to like the CEO Whitman, another year..and she probably gets the boot.

*AH action, 27.90 was hit...currently 28.90..almost evens from the close. Hmm.

Well, the VIX remains something to watch in the coming weeks, the prime time for 'explosive action' would be in about 3 weeks - when the weekly cycle momentum goes positive cycle.

Good wishes!

Two sides to every story.

So, the Irish buy up properties at insanely high prices. A significant number of them were always doomed from the start - whether by their type of job, and/or their level of income. is yet another example of normal people trying to stop the bank foreclosing. Its worth watching, a great example of people who can't pay, wanting to play the 'you can't violate my rights, even though I failed to fulfil my agreed housing contract' card.

I can't say I blame them for trying to stop the banks recovery agent. He sure dug himself a few holes, and certainly seemed muddled on a few aspects.


THEY willingly overpaid for an asset, which they probably assumed would never fall in price (after all, that's what the politicos/mainstream told them).

THEY signed a contract.

They FAILED to meet the repayments.

..and now they want to keep living there anyway...probably for free...whilst regularly shopping for more AAPL products at the local Mall.

Sure, they can whine about the bank bailouts all they like, the mortgage fraud/corruption, and their 'constitutional rights', but when it comes down to it, the average lunatic home-buyer in the 2004/07 era - who grossly overpaid for a home they could barely afford in the first, they don't belong there.

I'm not saying they should get forcibly kicked out, - with the support of the local legal enforcement crew, but they sure didn't meet the terms of their contract.

The mainstream...are largely crazy.

Crazy mainstream populace.....and many in society still consider a home as an 'investment'. Its NOT an investment, its a place to live. Until that attitude changes (small hope of that), we'll just get another housing bubble - even though right now, that seems so far away.

I myself didn't realise that bricks, wood, copper piping, and some roof tiles would fail to produce a net annual production of 'something'. /s

No...a  house is a drain on was certainly never a 'investment', whether via revenue generating or capital gain.

For that particular Irish home, despite the protests, there will probably be new tenants...later this summer. Maybe the new prospective buyers will decide that 10x earnings for the house is not good enough? Historically, it was always 2-3x.    ...  and will be again.

The banks must be allowed to reclaim homes

A point few have highlighted is 'what if the banks are prevented en masse from making foreclosures?

Well, then why would any EVER lend again? The only reason they lend is because they know they can make a claim on the house if the buyer fails to pay at some point.We would be looking at the collapse of the mortgage industry and the wider to-buy housing sector. Even though I sympathise with tenants such as this Irish household, they did make the choice to take out the loan. The asset is clearly not theirs, and yet they have the audacity to attempt to remain there, in some cases...permanently, without ever intending to pay anything more.

If we are ever to see any normalised housing market, the non-payers have to get the boot. Where do they go? That issue is for another time.


Can anyone fly a plane?

Boring day.

I suppose at least IWM fell a bit, I want to see 80.50 by Friday – probably expecting too much.

Transport, monthly...finally showing weakness.
With 6 trading days left of February, need to see a monthly close back under the 10MA, sub'5000 level preferred. Would be a real sign for the market.


I'm really not familiar with this kinda ratio, but clearly...from a chart perspective, its a clear H/S formation.

Bears desperately need to strong momentum lower occur in March/April, and break the 2.5 level, which goes back as far as summer 2009.

Greek news..getting tired of it.

He foresees mostly flat trading, with seemingly sector-rotation, rather than major moves.

*Faber said same kinda thing today, does not see any equity collapse doom near term.

Airlines...oil problems

see any airline today, a major snap..probably more to come. Transports remain weak weak WEAK!

UAL remains arguably the best one to trade, but today... LCC was the most dynamic decliner.