Wednesday, March 31, 2010

SYNM: Time to take another look.

Today SYNM put up several flags that I like, but in addition to those, I consider the stock to be a "message board stock."  These cult followings search for and locate even the most minimal stock related and industry news.  Additionally, and favorably, for the swing trader they often over-value news in search of the huge one day gain and can't stand the idea of their precious issue dropping over time.  Momentum with these is the key.

  1. Inverse of the pattern mentioned in ZION here,
  2. a potential gravestone bottom signal,
  3. noticed this article ( ) come across the twitter stream from one of the Bulls on Wallstreet followers,
  4. increased attention in the news to the daily gyrations in crude,
  5. President Obama's indication that offshore drilling was now going to happen.
Daily chart here:

Sunday, March 28, 2010

Trading Rules

Props to twitterer @geckler for bringing this up, and to @rolcol325 for posting the original.

Dear Uncle Sam -

Herewith, please find enclosed half a ream of shit that your lackeys at the IRS will not read and a check which you will cash and draw against my account the same day.

With the money I realize that you must:
  1. pay the bureaucratic offices full of accounting wash-outs at the IRS,
  2. bail out the banks to whom you lend money at 0% and return the favor to me at 5% + fees, yet are no more credit-worthy than Buttercup and I are,
  3. give tax credits to the fiscally irresponsible dopes across the land, thereby incentivizing their over-reaching under effort backed life styles,
  4. back door bail out Greece through the IMF which you finance over 16% of,
  5. steamroll insurance legislation fully aware that the same assholes who couldn't afford it before will not be able to pay the "fines" for not having it now,
  6. top up the government pension fund,
  7. and, win the hearts and minds of the Afghans...again.
When you're all done with that, think you can funnel a few bucks back our way so the City will fill the potholes on my street?

Thanks in advance.

18 Months Later, whoda thunk it?

Back in September of 2008, I wondered aloud why the hell banks (and Congress) would prefer widespread foreclosure over moral hazard.

Now, 18 months later, we have both principal reductions ( ) and well publicized Too Big To Fail systemic fracturing which has only been compounded as previously huge institutions got huger by picking up failures for pence upon the dollar with Uncle Sam's backing.

My statements from back then:  ( )
immediately outlaw exotic loans and legislate the requirement of banks to adjust all mortgages to a 15 or 30 year fixed (buyer's choice) at principal + (current prime + 1) on the price of the house that was purchased, if the house was purchased at least 2 months before the bill was first voted - 
this means that anyone currently in a mortgage could perceivably have their house payment cut to 3% and recalculated retroactively - it's like...INSTA-EQUITY! 
forclosures stagnation would conceivably be mitigated by allowing the buyers of a forclosure to buy the note with the 1 time fixed rate cut - which i think would cause a land grab by people with good credit and flush with money from the reacalculated payments and increased equity against which to back up their borrowing - 
basically - let the people buy the paper if The People are going to buy the paper - let's be practical about it, though - why markdown when you can put a rate on it easily? 
voila - no money spent out of pocket and the banks that created the mess end up making money through the avoidance of loss of money -

Saturday, March 27, 2010

That's Not Fair!: The Arrogant American Mindset, Unions, and Chinese Monetary Policy

I feel fully aware of the world's perception of American arrogance now that the representatives of upper midwestern yokels like Sherrod Brown and Chuck Schumer, whose unions bought and paid for their seats, call for changes to Chinese monetary policy, though Republicans are certainly not without their jaw-jacking brethren.  Where once honor, pride, and loyalty reigned, the petulant cries for others to bend around their whims in order to liberate themselves of self-delivered local depressions smack of schoolyard exclamations, "that's not fair!"  Let us now examine the increasingly speedy decline in union stronghold due to the greed in their mindset, the idiocy of angering America's single largest trading partner by populous, and finally, how the return of pride and austerity could reignite the flame of this country's blue collar economies.

When were labor unions born?  During the Industrial Revolution, an era without safety standards set by OSHA and standard work weeks and minimum wages set by the Department of Labor, unions organized the often mistreated work force in order to wage war against the manufacturing elite primarily as a means of survival.  A now antiquated institution, unions are nothing more than labor monopolies whose pyramid enriches their organizers, leadership, and elected public officials while relegating the workers, supplanting the role of the "robber barons" of old.  Yes, in return for their solidarity, today's labor finds itself rewarded with a declining demand for jobs, pensions that won't pay, and the well-ingrained notion that few, if any, of these negative results are of their own making.

Without miring in the idea that this union idiocy continues unabated, let us look to just this past October in the case of the new Dreamliner assembly line to see the pragmatic backlash against the ever greedy fools, see article here.  Add to that that as a result of years of unchecked extortion against the auto companies UAW pensions, long-agreed spousal benefits, insurance programs, etc. cannot be met and are backed in part by government money, after being "reasonably" cut, of course.  So where jobs in Seattle and practical UAW pensions once existed, the scorched earth policy of greed in union leadership has forced the hand of those otherwise seeking to maintain status quo.

The most interesting facet of greedy union cognition lies in the answer:  who to blame?  The incentivized laziness embodied by labor pools?  The elected leadership that changed all reasonable mortgage lending practices to allow scumbags, liars, and thieves to borrow without intent to repay?  The same jerks that signed on the line knowing they didn't have the money to make next month's conventional payment, and therefore paid interest only instead?  No.  The complaints lie with the bankers.  Conjurers of wealth voodoo.  Big bad companies with names, but no faces.

And now we witness the Democrat controlled Congress of this United States, catering to their electorate, the lowest common denominator with all the classic Washington DC stylings of living this way, but preaching that.  Taking a page directly from the unions, rather than legislating the one consistency in this entire debacle (the yuan peg), the path of first choice seems to be scorching earth via name calling, with the potential to escalate import/export tariffs, and worst case, drive off the primary fiscal supporter of US debt.  So where American "monetary policy" meets Chinese "currency manipulation" the strings of ethnocentrism find themselves harmoniously strummed in an effort to keep the public sufficiently fleeced.  Only when the Chinese, with their enormous US debt and forex positions, have been pushed so far by cocky, undereducated, and seldom worldly Congressmen, and begin economic warfare on this country will the sheeple realize that we have mortgaged our future for Escalades and swimming pools.  And thank you in advance to the vacuous mouthpieces on Capitol Hill for escalating the schedule of this next great war.

Though untenable for American manufacturing, the Chinese currency peg is not a new device in the economic landscape.  Therefore, calling foul many years and many trillions of dollars later not only looks foolish, but highlights the tail-wagging decision making that uber-partisanship has crippled this country with.  Where egos fail, economics succeed.  In order to fight problems with solutions, I charge the legislative bodies to consider that on American soil where there also exists an unskilled and semi-skilled labor surplus, the (not necessarily government) fees of employment force mega-cap multinationals to look overseas because over there, unregulated unions cannot run roughshod over their manufacturing centers and threaten what should be an actuarial study in human production.  Rather, we must encourage these people that college does not have to be the final answer.

Self-sufficiency, fiscal responsibility, and humble effort:  these tenets shall bring about the new age in economic balance.  A balance of white and blue collar jobs where the proportions of production and management align more closely with that of an exporting nation.  Nearly complete in the process of destroying themselves, unions have shown us that letting the economics of a policy play out ultimately result in the sunsetting of out dated thinking.  In conclusion, let us not concern ourselves with affairs over which we have no control.  Let us focus on optimizing our existence and frame our future with sound policy and a spirit of cooperation.  When everybody wins, everybody wins.

Friday, March 26, 2010

A favorable setup in ZION.

Today, Zions Bancorp (ZION) made a setup that I have found marks high probability tops (and bottoms, in mirror reverse).  The setup is a higher high on the daily with a lower high on the MACD at the time of a fast EMA cross.  Admittedly, though, this pattern does not typically take 2 months to develop.

Other factors:  commercial real estate exposure, 25% short interest, potential FAZ bottoming pattern, larger cap regionals are extended, geopolitical risk (South Korean torpedo incident), quarter closing out.

I tried getting short about 15-20 minutes before close when the stock tried to break 22 and then covered for broker fees and got short again into the close at 22.21.  Setting stop at 24.20.

Daily Chart (top);  5 min (bottom)

Watching for a Reversal: The FAZ Trigger

I have been watching for FAZ to make a daily candle foray into the area between 2 and 3 standard deviations of the 21 day moving average to signal a capitulation top.

This wait has brought over one calendar month (since about 2/23) of virtually unabated financial strength.

Today's daily chart, though, gives me pause as I consider the candle narrow enough to be called a "dragonfly doji."  Add to this the nice length of the lower shadow coupled with the volume slightly less than double the last 10 days' average daily volume (~63MM) and we've got cause for deep, meaningful rumination about the short term future of this market.

Here's the chart:

Thursday, March 25, 2010

Is it important to keep track of what happens after you close a trade?

Posed hypothetically, and then answered in a stream of poignant 140 word or less quips, fellow trader and Twitter user @FuturesTrader71 caused this trader to consider affairs in a different way.

What follows are direct quotes, edited so as to demonstrate control of the English language in an environment without limitation as to length:
Does a pro athlete need to know how the details of what happened at a tournament after he/she is out?  If so, why is it relevant?
If you are still trying to gain consistency in trading, ignore what happened after your exit.  Your journal is a way of tracking how well you execute your plan.  It is not a document that is very full of info about the market.
There is an exception to this, if you feel that your exits are poor, then it makes sense to monitor what happens after you close the trade.  Otherwise, work on basics first.
Your primary goal:  Determine if I have a good plan and if I stick to it.  Period...that's it.
Secondary goal once primary is achieved:  Can I improve my expectancy / profitability with my plan?  This comes later.  Without the first, there is no second.
Simplify the information.  This is why I say, "remove anything from your screen that is not part of your setup." 
Keep it simple and focused.
In the example of the athlete, next year's team will be different.  Let the coach worry about what happens after you're out.  Just do your job when playing.

Wednesday, March 24, 2010

Blog Ideas.

The Theory of Modularity
The Libertarian Revolution
The California Marijuana Precedent
The Future for Silver
The Nuclear Solution
Real World deployment of Personal Capital Resources as an Investment
That's Not Fair!:  The Upper Midwest Mindset, Unions, and Chinese Monetary Policy
Pension, Jet Set, Experience Not Required:  Are Congressmen hiding from the Pay Czar in plain sight?
How much Palladium is in George Jetson's Car?
The Disincentivization of Effort and Success in America
Watching for a Reversal:  The FAZ Trigger

AMED: Breakdown?

Insert investment thesis regarding AMED here:

Healthcare, high margin/high profit/high growth, several recommendations to reform reimbursement structure, reiterating buys by analysts, high short interest, noted near the money put activity today (Apr 60), etc.

Here's a 5 minute chart: