Archive for October 2013

October 31st: Ed’s Daily Portfolio Summary   Leave a comment

BIDU: -4.13 to $160.80 ( -2.50% , 2.41% overall)– bought at $157.02
GNW: 0.18 to $14.53 ( 1.25% , 55.07% overall)– bought at $9.37
IAU: -0.19 to $12.84 ( -1.46% , -0.93% overall)– bought at $12.96
MSFT: -0.13 to $35.41 ( -0.37% , 5.86% overall)– bought at $33.45
NDZ: 0.01 to $8.27 ( 0.12% , -4.39% overall)– bought at $8.65
NNVC: -0.16 to $5.42 ( -2.87% , 113.39% overall)– bought at $2.54
PVCT: -0.02 to $0.77 ( -2.53% , -17.20% overall)– bought at $0.93
SWHC: -0.10 to $10.79 ( -0.92% , 1.79% overall)– bought at $10.60
TC: -0.08 to $3.21 ( -2.43% , -3.02% overall)– bought at $3.31
UNP: 0.81 to $151.40 ( 0.54% , -1.36% overall)– bought at $153.48
UPRO: -0.87 to $82.26 ( -1.05% , -0.47% overall)– bought at $82.65
YHOO: 0.37 to $32.94 ( 1.14% , 22.54% overall)– bought at $26.88

OVERALL: -0.71%

Posted October 31, 2013 by edmcgon in Open Thread, Portfolio

Traders Corner   7 comments

Yesterday’s drop pulled the S&P 500’s RSI out of overbought territory, and dropped the Williams %R down to just slightly overbought. Although the futures are down slightly, don’t forget today is month-end, which means there could be some fund managers doing portfolio dressing today. I would expect the big-name large caps to do well, and small caps could take a hit.

Whatever happens today, expect the opposite tomorrow. You have to go back to 12/31/2012-1/2/2013 to find an end-of-the-month/beginning-of-the-next-month pair which had the S&P 500 moving in the same direction on both days (it went up on both of those days).

The S&P 500 levels to watch today:

UPSIDE: 1764 (October 28th’s high), 1772 (October 29th’s high), 1775 (October 30th’s high and the all-time high), and 1793 (top of the Bollinger Bands).
LAST CLOSE: 1763.
DOWNSIDE: 1762 (October 29th’s low), 1759 (2 data points), 1757 (2 data points), 1752-1753 (3 data points), 1745-1747 (4 data points), 1740 (2 data points), 1735 (October 18th’s low), 1733 (October 17th’s high), 1729 (September’s high), 1721 (October 16th’s high), 1720 (20 day moving average), 1714 (October 17th’s low), 1711 (2 data points), 1709 (August’s high), 1703 (October 11th’s high), 1700 (October 16th’s low), 1698 (July’s high), 1691-1696 (7 data points and the 50 day moving average), 1687-1688 (2 data points and May’s high), 1680-1682 (2 data points), 1676 (October 8th’s high), 1674 (October 7th’s low), 1670 (October 3rd’s low), 1662 (October 9th’s high), 1660 (October 10th’s low), 1654-1655 (October 8th’s low and June’s high), 1647 (bottom of the Bollinger Bands), and 1646 (October 9th’s low).

Happy Halloween! Ed’s Daily Notes for October 31st   Leave a comment

Zombiebunnies

Now that the Fed is done, we can go back to earnings season. Today, we get the following companies reporting before the open: Exxon (XOM), ConocoPhillips (COP), and Mastercard (MA). After the close, we get American International Group (AIG). I am resisting the urge to make a “trick or treat” reference to earnings…

Bloomberg: Citigroup, JPMorgan Said to Put Currency Dealers on Leave

Say it ain’t so, Jamie?

Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) are putting their top London currency dealers on leave after regulators probing the manipulation of foreign-exchange rates started investigating the traders’ use of an instant-message group, three people with knowledge of the moves said.

…Regulators are focusing on an instant-message group the traders set up to share information about their positions and client orders over a period of at least three years, four people with knowledge of the probe said this month. The roster of banks in the group changed as the men moved firms and also included Barclays Plc (BARC), Royal Bank of Scotland Group Plc and UBS AG (UBSN), three people with knowledge of the communications said.

Investigators are weighing whether the messages amounted to attempts to manipulate the market, two people said. The five firms account for about 47 percent of the $5.3 trillion-a-day foreign-exchange market, according to a May survey by Euromoney Institutional Investor Plc. (ERM) Two other traders, who weren’t part of the conversations and who asked to not be identified because they do business with those involved, said that they and others in the market referred to the message group as “The Cartel.”

Banks manipulating currency markets? And we bailed them out why?

The Blaze: RAND PAUL SAYS HE WILL BLOCK YELLEN’S NOMINATION AS FED CHAIR UNLESS THE SENATE VOTES ON THIS

Sen. Rand Paul (R-Ky.) told Senate Majority Leader Harry Reid (D-Nev.) Tuesday that he will move to block Dr. Janet Yellen’s nomination as the next Federal Reserve Chair unless the Senate votes on his legislation which allows the Fed to be audited.

“I am writing to convey my objection to floor consideration of the nomination of Dr. Janet Yellen to Chair the Board of Governors of the Federal Reserve without also considering legislation to bring much-needed transparency to the Fed,” Paul said in a letter to Reid.

I see that as a perfectly reasonable, and long overdue, request.

Detroit News: Study says ‘Cash for Clunkers’ created few jobs

No shock here:

The nearly $3 billion “Cash for Clunkers” program approved by Congress in 2009 did little to boost the environment and created few jobs, a new study released Wednesday found.

A Brookings Institution study found the $2.85 billion program “provided a short-term boost in vehicle sales, which were pulled forward from sales that would have occurred in subsequent months. There was a small increase in employment but the implied cost per job created ($1.4 million) was far higher than other fiscal stimulus programs.”

The study — from researchers Ted Gayer and Emily Parker — said the “Car Allowance Rebate System,” or CARS did little to boost employment. This is at least the fourth major study since 2012 that has raised questions about the value of the program.

The study said far more jobs could have been created using other government stimulus programs — increasing unemployment benefits (at $95,000 per job); $80,000-$133,000 per job created for cutting employers’ payroll taxes; $222,000 per job created for reducing employees’ payroll taxes; $200,000 per job created for providing additional Social Security benefits; or $222,000 per job created for allowing the expensing of investment costs.

Are we ready to throw out the idea that “government creates jobs”?

Posted October 31, 2013 by edmcgon in Economy, Federal Reserve, News, Stocks

Quote of the day   1 comment

“Obama says if you’re having trouble on the ObamaCare website, you can mail in your application. Only the federal government could develop a website slower than the Postal Service.”–Jay Leno

Posted October 30, 2013 by edmcgon in Humor

October 30th: Ed’s Daily Portfolio Summary   Leave a comment

It is always a great day when I finish in the black, while the indexes finish in the red:

BIDU: 5.52 to $164.93 ( 3.46% , 5.04% overall)– bought at $157.02
GNW: -0.22 to $14.35 ( -1.51% , 53.15% overall)– bought at $9.37
IAU: -0.02 to $13.03 ( -0.15% , 0.54% overall)– bought at $12.96
MSFT: 0.02 to $35.54 ( 0.06% , 6.25% overall)– bought at $33.45
NDZ: 0.01 to $8.26 ( 0.12% , -4.51% overall)– bought at $8.65
NNVC: 0.09 to $5.58 ( 1.64% , 119.69% overall)– bought at $2.54
PVCT: 0.01 to $0.79 ( 1.28% , -15.05% overall)– bought at $0.93
SWHC: 0.06 to $10.89 ( 0.55% , 2.74% overall)– bought at $10.60
TC: -0.04 to $3.29 ( -1.20% , -0.60% overall)– bought at $3.31
UNP: 0.02 to $150.59 ( 0.01% , -1.88% overall)– bought at $153.48
UPRO: 0.48 to $83.13 ( 0.58% , 0.58% overall)– bought at $82.65 today
YHOO: -0.60 to $32.57 ( -1.81% , 21.17% overall)– bought at $26.88

OVERALL: +0.20%

Posted October 30, 2013 by edmcgon in Open Thread, Portfolio

Traders Corner   9 comments

Yellow alert! We have a new technical added to the overbought category, with the RSI now above 70. That doesn’t mean the S&P 500 will fall today, especially not on a Fed day, but it does mean we are getting closer to an extremely overbought condition. Caution is warranted from here, especially with the markets getting stretched out, with about an 8% gap between the top and bottom of the Bollinger Bands, which means a correction here could be especially painful. If the Fed disappoints today, look out below!

The S&P 500 levels to watch today:

UPSIDE: 1772 (October 29th’s high and the all-time high), and 1788 (top of the Bollinger Bands).
LAST CLOSE: 1771.
DOWNSIDE: 1764 (October 28th’s high), 1762 (October 29th’s low), 1759 (2 data points), 1757 (October 28th’s low), 1752-1753 (3 data points), 1745-1747 (4 data points), 1740 (2 data points), 1735 (October 18th’s low), 1733 (October 17th’s high), 1729 (September’s high), 1721 (October 16th’s high), 1717 (20 day moving average), 1714 (October 17th’s low), 1711 (2 data points), 1709 (August’s high), 1703 (October 11th’s high), 1700 (October 16th’s low), 1698 (July’s high), 1691-1696 (7 data points and the 50 day moving average), 1687-1688 (2 data points and May’s high), 1680-1682 (2 data points), 1676 (October 8th’s high), 1674 (October 7th’s low), 1670 (October 3rd’s low), 1662 (October 9th’s high), 1660 (October 10th’s low), 1654-1655 (October 8th’s low and June’s high), and 1646 (October 9th’s low and the bottom of the Bollinger Bands).

Happy Fed Day! Ed’s Daily Notes for October 30th   2 comments

We get the Federal Reserve Open Market Committee announcement at 2 pm EST today. Expect nothing, but look for anything.

Bloomberg: Rebuilding Reserves Means U-Turn on Treasuries: Southeast Asia

Southeast Asian central banks are rebuilding their foreign-currency reserves, raising the prospect they will boost holdings of U.S. Treasuries for the first time since February.

Singapore, Thailand, Indonesia, Malaysia and the Philippines reported increases of about 1 percent to 3 percent in their international foreign-exchange holdings in September from the previous month, paring the combined decline this year to 2.6 percent. Monetary authorities in Asia are among the most aggressive sellers of U.S. debt in 2013 as Malaysia, Thailand and Singapore each reduced ownership by between 20 percent and 28 percent through August, data compiled by Bloomberg show.

Policy makers may resume Treasury purchases in the coming months as reserves rise, said Todd Elmer, head of Group-of-10 strategy for Asia ex-Japan at Citigroup Inc. in Singapore. Asian exchange rates rebounded in October after the Federal Reserve unexpectedly maintained stimulus last month, helping revive overseas investment and lessening the need for central banks to intervene to support their currencies.

“Shifts in Treasury holdings are more reflective of ups and downs in reserves holdings, more so than changes in appetite,” Elmer said in an Oct. 23 e-mail interview. “Investors are responding to expectations for delayed Fed tapering, with expansive liquidity arguing for dollar depreciation and inflows into Asian currencies.”

This is something to watch, because it could impact the dollar’s value, and indirectly the equity markets (even though the dollar doesn’t correlate perfectly to the equity markets, it does come awfully close over the long-term). However, it is still too early to expect a market impact yet.

CNBC: Why insurance will be costing more

This speaks for itself:

The fact that many current health-care plans do not offer all the benefits required under Obamacare means that many premiums are likely to jump dramatically, Aetna CEO Mark Bertolini told CNBC.

Bertolini, appearing on Tuesday’s “Closing Bell,” said that most Americans with current plans are below the 60 percent essential Affordable Care Act benefit requirement, and individual plan participants will have to pay a minimum of a 20 percent increase to upgrade, he said.

Citing the current economy and reduced Medicare rates, Bertolini said the health-care company must find a way to bridge the gap between what it will cost seniors to pay out of pocket and what Aetna will be able to cover.

“Aetna alone will pass through to its customers over $1 billion in taxes and fees associated with the Affordable Care Act that need to go into the pricing,” Bertolini said.

The Aetna chief went on to say increased costs to the plans include new taxes and fee implementations, including new changes in ratings to things such as pre-existing conditions as a result of expanding policy benefit requirements.

Posted October 30, 2013 by edmcgon in Bonds, Federal Reserve, Market Analysis, News, Politics