Archive for February 2012

Ed’s Daily Summary and Open Thread for February 29th   13 comments

Just when I think I am going to have a profitable day/month, the market decided to crap on my parade:

AGQ: -1.62 to $62.95 (-2.51%, -2.51% overall)–bought at $64.57 today (as a short-term hold)
BAC: -0.14 to $7.97 (-1.73%, 0.25% overall)–bought at $7.95
EWY: 0.94 to $59.87 (1.60%, 2.48% overall)–bought at $58.42
GOOG: -0.14 to $618.25 (-0.02%, 6.18% overall)–bought at $582.26
NNVC: 0.00 to $0.70 (0.00%, -9.09% overall)–bought at $0.77
PALL: -2.07 to $69.20 (-2.90%, -2.86% overall)–bought at $71.24

OVERALL: -0.41%

Advertisements

Posted February 29, 2012 by edmcgon in Open Thread, Portfolio

Quote of the day   3 comments

“[There] are known knowns; there are things we know we know.
We also know there are known unknowns; that is to say we know there are some things we do not know.
But there are also unknown unknowns -– there are things we do not know we don’t know.”
–former U.S. Secretary of Defense Donald Rumsfeld

Posted February 29, 2012 by edmcgon in Philosophy

Daytraders corner   23 comments

If you ever watch the longer-term technicals, you may have noticed the S&P 500’s MACD moved into positive territory in mid-December, and has stayed there ever since. However, I doubt we will get any kind of serious correction today, since it is the last day of the month. The big boys have month-end reports to make pretty, so expect the market to hold it’s gains, at least for today.

If see a market drop, I would be surprised to see the S&P 500 go below 1360 (10 day moving average). On the other hand, we could see a challenge to the top of the Bollinger Bands at 1379. Regardless, don’t expect much movement: Since the last trading day of November (when the S&P went up 4.3%), last trading days have seen little movement.

Posted February 29, 2012 by edmcgon in Daytrading, Market Analysis

Happy Leap Year! Ed’s Daily Notes for February 29th   4 comments

There is good economic news this morning, as 4th quarter U.S. GDP got revised upwards to 3.0% growth (it was 2.8% on the first attempt). There is also bad economic news, as the GDP deflator (why do they call it a deflator when it is really more of an inflation gauge?) was up to 0.9%, from an initial estimate of 0.4%.

Bloomberg: Euro-Area Banks Tap ECB for Record Amount
http://www.bloomberg.com/news/2012-02-29/banks-in-europe-tap-ecb-for-more-three-year-cash-than-economists-estimated.html

This is great news for the European economy. No, everything isn’t fixed there yet, but this is a positive sign that liquidity isn’t an issue.

CNBC: Markets Start to Anticipate Obama Victory in November
http://www.cnbc.com/id/46556820

I am still waiting to hear a good reason why Mitt Romney, winner of the Michigan and Arizona primaries yesterday, can actually beat President Obama in November’s election. Calling Romney “electable” just means he is as exciting as Ben Stein on valium.

Say what you will about Obama, but we know what to expect from him, even if we don’t like it. Romney has more waffles than IHOP, so we have no clue what he will do. And don’t throw me the “at least he will overturn Obamacare” argument. Can you seriously tell me the governor who made the blueprint for Obamacare in Massachusetts won’t actually just tweak it around the edges? Judge a man by what he does, not what he says. By that measure, Romney is every bit as liberal as Obama.

The markets are starting to price in an Obama victory:

Obama’s chances of winning in November increased to above 60 percent on Tuesday, up from about 50 percent at the beginning of the year, according to the odds on prediction market Intrade.com.

On the bright side:

Intrade puts the Republicans’ chances of controlling the Senate and House after the November elections at 72 percent and 64 percent respectively.

That brings up another Wall Street maxim: “Market likes gridlock.” This way, a single party can’t mess it up.

Given the choice, I would rather see Republicans controlling the Congress, as opposed to Mitt Romney in the White House.

Bloomberg: Samsung’s Android Dominance Hits HTC, Motorola
http://www.bloomberg.com/news/2012-02-29/samsung-s-android-dominance-puts-squeeze-on-htc-and-motorola.html

If you want to understand why I have no problem with the fact that Samsung is over 20% of my EWY etf’s holdings, look no further than the article above. Samsung rocks!

CNBC: Dennis Gartman Sells Crude, Likes Natural Gas
http://www.cnbc.com/id/46563634

I like Dennis Gartman, and I respect Dennis Gartman, but I don’t always agree with him. I agree with his call to dump oil (obviously, since I did it yesterday), but I disagree with his call to get into natural gas. I don’t see a big enough increase in demand for nat gas to make it go up significantly.

Posted February 29, 2012 by edmcgon in Economy, Market Analysis

Ed’s Daily Summary and Open Thread for February 28th   Leave a comment

BAC: 0.07 to $8.11 (0.87%, 2.01% overall)–bought at $7.95
EWY: 0.55 to $58.94 (0.94%, 0.89% overall)–bought at $58.42
GOOG: 9.08 to $618.39 (1.49%, 6.21% overall)–bought at $582.26
NNVC: -0.01 to $0.70 (-1.41%, -9.09% overall)–bought at $0.77
PALL: 0.00 to $71.24 (0.00%, 0.00% overall)–bought at $71.24 today

OVERALL: +0.49%

Posted February 28, 2012 by edmcgon in Open Thread, Portfolio

Sell oil (UCO), buy palladium (PALL)   Leave a comment

I am selling my oil position (UCO) in order to move into a different commodity: palladium, or more specifically ETFS Physical Palladium Shares (PALL).

Why palladium? From a lot of sources, there are reports that we will be having both platinum and palladium deficits in 2012, due to increasing demand as well as multiple mining issues. Most of the mining issues surround problems in South Africa and Zimbabwe, where most of the world’s platinum supply is mined. Between increased safety inspections/requirements, unionized miners, and power supply issues, platinum could be facing decreased production in a year with greater demand for cars (all cars use either platinum or palladium for their catalytic converters).

In addition, for years now, Russia has been dumping their stockpile (stored up during the Soviet era) of palladium on the world markets, keeping prices down. It has been rumored for several years that Russia’s stockpile was running out, although they still seem to be able to supply palladium. Even if the rumors aren’t true, deficits of palladium are projected for this year.

You see where this goes? With deficits of platinum and palladium, prices of both will go up, and since palladium is the cheaper of the two, it stands to go up the most.

I sold UCO at 47.70. The final line:
UCO: +0.21 today, +0.05 overall to $47.70 (+0.44% today, +0.10% overall)–bought at $47.65

I added PALL at $71.24.

Posted February 28, 2012 by edmcgon in Portfolio Moves

Daytraders corner   23 comments

The P&F chart for the S&P 500 has changed, with a new price target of 1700. P&F charts are longer-term charts, so take it for what it’s worth.

With the index futures weakening after the durable orders report disappointment, it is easy to expect a down opening. However, look for the pop later. I would look for 1358 (10 day moving average) as the lower resistance, with 1346 (20 day moving average) as an even lower resistance if we get a larger sell-off.

If we get a bounce up today, yesterday’s high of 1371 should be considered the upper resistance. But I wouldn’t assume any of these resistance levels are “solid”. We are still in the upper atmosphere of the markets.

Posted February 28, 2012 by edmcgon in Daytrading, Market Analysis