Don't Forget the Second Part

Having a one time transferable note will facilitate the delivery of assets to people who will service those assets.  Back when I discussed this the first time, I likened it to putting out a camp fire with one of those airplanes that strafe water, but now the campfire has spread and it may be the last resort.  Remember, what follows isn't a system to get rich, it's a plan to restore stability, predictability.  Importantly, writing down unrealized future interest ranks far superior to putting hundreds of thousands of families on the streets and onto the federal government's subsidy programs, their departure from which grows increasingly unlikely the longer they are enrolled.

The greatest shame isn't the idiocy that put this country here in the first place, rather the fact that the People's representatives first moved to protect the system, the elite, the way it's always been, rather than taking the opportunity for extreme measure to raise the country up.  Now we've got "moral hazard" at the corporate office, and somehow, that's better than in the hands of the minority who would not know how to wield it.

Click to enlarge.

Say what you want about financial firms, if this economy is built on consumer spending, consumer shelter and financial indoctrination are truly the cornerstones for our future.  Some rich assholes rolling paper over do not add to the economy, they "grow the economy" through interest on fractional banking.

Trading Rules

Disclosure.  The following list contains some original content, as well as a good deal of material that I simply wrote down because it sounded good.  Here's a raised martini to the inventors of the copied content.

• When looking for trend reversals start with low beta names.
• When a new macro trend is set deploy into small cap reversion.
• Do not trade options before 345 if intending to hold overnight.
• Most of your money is made when the markets are closed, through preparation.
• Remember that institutions are cumbersome, press investments until the chart makes a blowoff.
• When a stock closes at or near the high of the day on volume, think about taking half overnight.
• Do not miss a good trade over penny pinching the execution, pick good spots and pull the trigger.
• Scaling is the only way to trade unless a major macro move is on.
• The longer a sector non-leader defies comparable intraday gains/losses the larger the reversion candle will be.  (Attributable to ETF rebalancing?)
• Try to determine early on if the issue at hand (stock or market) is in for a trend day or a range bound day.
• Always be accountable for your plan and always hold your plan accountable for its results.  Existing conditions factor into the plan, they are not excuses for its failures or successes.
• Fade the loudest crowd in a counter-trender on any scent of a reversal and reversion to the broad market.
• When in doubt, palms out.  (Love that, just saw it on Twitter a few weeks ago.)
• Create a risk limit before buying.
• Do not overnight uncertainty.

The Whatever Bro Award

After beefing their 2q2010 to the tune of (0.84) per share against the expectation of only a 55 cent loss ZION ran over 10% in three days to close the gap left by that train wreck they called earnings.  They also announced a penny per share dividend as of last Friday.  How kind.

Charting.  Down trend remains intact until the $23 level, which also happens to be the present location of the 50 dma.

As a bottom picker, the weekly chart actually looks good for a shot if you can get past their consolidation of loan assets in the Western sand states.  These things aside, I have resolved to hate super regional banking into the core of my soul.  They're all telling bald faced lies in collusion with the same Fed and SEC that charged Goldman with failing to accurately disclose.

This blog post serves no purpose but to highlight the fact that this past week's run has been an equity grab of cosmic proportions.  Squeezing shorts may bring nice appreciation over the short to medium term, but eventually there better be fist behind the mouth.  For anyone feeling brave, or perhaps suicidal, Ford just hung two consecutive gapped candles into the nether regions outside of two standard deviations on the daily.

Quick and Dirty Market TA for 7.26.2010

In this edition of the Q&D I have divined some analysis from the SPX chart since everyone loves to talk about it so much.  As always, images can be clicked to enlarge.  Behold:

Friday's candle closed inside of an existing range, and signals a potential revisit to the lower side.  Quite a few Twitterers feel that present conditions warrant an overbought reversal, and should retrenching occur I'd be looking for support around 1065.  However, the weekend press feels quite bearish, and short covering adds the power needed to wipe out old resistances.

An aside.  The reason I prefer charting the DJI lies in the fact that the larger, lower beta components of the Dow better indicate institutional money flow, in my view.  Last Friday's candle on this index closed above two downtrends I have been charting, as well as above the 200 dma.  These in addition to its MACD which also made a decisive move off the zero line over the last 3 days of last week.

Returning to the SPX, see the blue boxed MACD making a nice series of increasingly tall bars in the histogram and with a good angle on the signal line when taking out the zero.  If the market wants higher, I feel like we need to open at or above Friday's close and put in another full bodied candle or two before back-testing the 1102 level.  The confluence of 200 dma and 2 standard deviation Bollinger indicate clear resistance at the 1113-1115 level.

Going back to the Q&D for 5.24.2010 take a look at the DJI weekly.  Presently we see a curling under of the MACD on the DJI weekly here, and a weekly close right at the 10430-ish area that marks the top of a developing resistance area.  Here again, the angle of incidence on this indicator says time to put in a weekly candle above 10434 with an objective toward 10610 over the next few weeks to months as we put in our next lower high.

Many, many stock specific charts have set up with individuals beginning to go off like bottle rockets.  For now, I've got the consolidation scanner at the top of the daily checklist, especially favoring those right angled ascending triangles like the one FNSR broke out of last week.  Props to @ldrogan and @downtowntrader for picking up on that one just days before it exploded.

Good luck.

Notes to El Presidente (0)

Found another email that I had sent to President Obama this past spring, March 8th, 2010, to be exact.

President Obama - 

While "spreading" aid in the form of government stipends and mandated earmarks for housing relief, please consider how the fiscally responsible feel. 

I grow ever more weary of my federal tax dollars going anywhere but for causes of the preservation of global democracy. 

Like pigeons, giving free aid simply for the idiot to arrive and take breeds and positively reinforces laziness. We have seen this for years in medical malpractice and workers comp suits whereby the marginally employed (abuse the system and) take the hard working to the cleaners. And again we see this with food stamps where having greater numbers of illegitimate children rewards the bearer with increasing handouts all at the cost of the common tax paying man. 

I feel like I see in you a pragmatist, though your agenda is railroaded by pandering to Wall Street and your increasingly liberal Democratic Party. 

There come times when the government must admit its fault. Now is that time. The GSE's need to exercise every contractual ability to return falsified mortgages to their original preparers and let the banks solve these problems on their own. 

If the banks feel they can sit on all of this shadow inventory and come out ahead, let them. 

Generational changes such as fiscal responsibility do not come from fringe pain, they come from deep, personal regret precipitated from personal action. 

Action > Reaction > Lesson, in that order.

Now that almost five months have passed, emergency unemployment just got extended again, FinReg is [string of expletives] over complicated, misses point, fails to act in a practical time period, and the GSE's became fully nationalized, I suppose I got my answer on whether or not he reads these emails...

Green Lining: Will Cloud Conversion drive a new Tech Bubble?

Stayed up too late last night going over the changes between Citrix's 2008 and 2009 Form 10K's and experienced a lightbulb moment.  Given that:

• Tech is one of the few sectors that the United States still leads,
• large companies have enormous sums of cash on their balance sheets,
• near to medium term economic reticence leaves these companies seeking more avenues to streamline,
• stupid shit like NFLX are finally starting to give up their Nasdaq "leadership" roles,
• and that The Cloud is an important technology still young in its wide acceptance,

could we not expect the tech sector, to be even more stretched due to reallocation into this last bastion of growth?  While it may seem that widespread recognition has already occurred given the PE's of companies like FNSR, CTXS, JNPR, FFIV, and VMW, their market penetration has only just begun.

As we remain in a buyer's market, smart enterprises, like smart people, will continue invest in themselves,  laying the foundations for future growth, before gambling with uncertainty.  I like tech here but make sure to keep tabs on market share data.  Some segments have begun to get crowded and there will be winners and losers, first though, widespread recognition of the trend must occur after more companies perform handily in this blood bath of a market.

The White House - Presidential Correspondence (1)

In a nod to the tough task of sending an email without ending up on someone's spam list I received the following today from, noreply-WHPC@whitehouse.gov:

Dear Friend:

Thank you for writing me. Each day, I hear from concerned Americans who are struggling in this economy.  Their stories encourage me to work harder to ensure every American can find a good job so they can support their families and their communities.

I have listed below just a few of the actions we are taking to help hard-working American families get through these tough economic times.

CREATING JOBS AND GROWING OUR ECONOMY

My Administration has taken critical steps to get us back on our feet. Our economy is growing again, and last year's flood of job losses has slowed considerably. These are good signs for our future, yet they are little comfort to those who are out of work or struggling to keep their home. We are working tirelessly to push our recovery forward and promote economic growth, accountability, and transparency. To follow developments and track local projects, visit: www.whitehouse.gov/issues/economy and www.recovery.gov.

ENACTING TOUGH WALL STREET REFORM

There were many causes of the turmoil that ripped through our economy over the past two years. But above all, this crisis was caused by failures in the financial industry. It could have been avoided if Wall Street firms were more accountable, if financial dealings were more transparent, and if consumers and shareholders were given more information and authority to make decisions.  But that did not happen. Special interests have waged a relentless campaign to thwart even basic, common-sense rules-rules to prevent abuse and protect consumers. In fact, the financial industry and its powerful lobby have opposed modest safeguards against the kinds of reckless risks and bad practices that led to this very crisis.  The consequences of this failure of responsibility-from Wall Street to Washington-are all around us: 8 million jobs lost, trillions in savings erased, countless dreams diminished or denied. We must do everything we can to ensure that no crisis like this ever happens again. That is why I am fighting to pas set of Wall Street reforms that would put an end to taxpayer bailouts; bring complex financial dealings out of the shadows; protect consumers; and give shareholders more power in the financial system. To learn more, I encourage you to read my April 22 remarks given at Cooper Union, just a few blocks from Wall Street.

ENDING CREDIT CARD COMPANY ABUSES

My Administration is also working to help Americans who have had their credit lines reduced orinterest rates increased without clear justification. Last year, I partnered with Congress to pass the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act. This landmark law took effect in February, and promotes greater fairness, transparency, and accountability in credit card practices. It requires companies to inform credit card holders of payment timetables and accrued interest, and it ends retroactive rate hikes and sudden changes to terms and conditions. To read more about CARD and how it affects you, please visit: www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders and www.whitehouse.gov/issues/economy.

These reforms will have a tangible impact on the ability of American families and businesses to achieve their goals. For information on credit and consumer protections, please visit: www.hud.gov/foreclosure or call 1-888MYMONEY.

ASSISTING HOMEOWNERS

Many Americans are also struggling to stay in their homes. Access to the American Dream is being tested by a mortgage crisis that threatens the stability of families, neighborhoods, and our entire economy. While many Americans have received help, far too many are still unable to refinance their mortgages or obtain loan modifications. This crisis has not only hurt home values nationwide, it has also had a dramatic effect on the credit Americans need to purchase cars, pay college tuition, and grow small businesses.

For assistance with a home foreclosure or to find a local housing counselor, I encourage you to call your mortgage servicer directly, speak with a housing specialist at 1-888-995-HOPE, or contact the Department of Housing and Urban Development at 1-800-569-4287. You can also visit www.hud.gov/foreclosure or MakingHomeAffordable.gov.

HELPING STRUGGLING FAMILIES

As our economy recovers, we must continue to help those who are losing their jobs and struggling to pay their bills. Every day, I meet with my economic advisors to make sure we are doing all we can to create good jobs and help Americans support their families and pursue theAmerican Dream. My Administration is helping Americans return to work by emphasizing job training in industries that cannot be outsourced. Recently laid-off workers receiving unemployment benefits have new opportunities to pursue higher education and job training programs, including easier access to Pell Grants. To encourage job creation in the United States, I am replacing tax laws that send jobs overseas with new incentives to create them here at home. Available assistance can be found online at:  www.dol.gov/recovery/implement.htm or www.Opportunity.gov. 

Together, we can help more Americans find and keep good jobs and enjoy a healthy standard of living. To locate an employment center near you, select your state at: http://www.dol.gov/dol/location.htm. For information on benefits and opportunities for those out of work, I encourage you to visit: http://www.dol.gov/dol/audience/aud-unemployed.htm. To find career resources, you may call 1-877-872-5627 or visit: www.careeronestop.org.

While it will take time to turn our economy around, I am confident that we will emerge from this crisis stronger than before. For more information on jobs, health benefits, housing assistance, and other public resources call 1-800-FEDINFO or visit: www.usa.gov. Thank you again for writing. 

Sincerely,

Barack Obama

Please bear thee in mind that this letter came in response to my Notes to El Presidente series with installments found here, and here.  Commentary on the above letter to follow.

Disclosure.  Apparently the press corps still uses teletypes because the above came in courier text without formatting of any kind.  Any errors or omissions are likely mine as there were hard returns and spacing through out the debacle.  That said, I took a speed read over the body of the edited version above, and the ideas appear to be communicated in whole as intended by the original text.