Dave Johnson

No problem I think, I’ll do a quick search, find a setting/driver I missed and be on my way. This is what I found.

Unbeleivable.

- John

This is the type of trickle down that is just starting to work it’s way into the system from oil being $120+. These type of increases take months to make their way through the supply chain and be reflected in consumer prices.

- John

- John

Here is a post with the present holdings.

Many of these will probably start to exit based on a cross of the Ultimate Oscillator crossing the 50 line. We’ll know at the close.

Once we get back to cash I will do a full review.

Dave Johnson

Pakistani Investors Stone Karachi Exchange as Stocks Plunge

The history of dumbasses is a well littered trail, yet the ones that got together at the Karachi Exchange decided to :

In Karachi investors today broke windows, threw plant holders in the parking lot of the building, burned shareholder statements and at least one protester was injured, prompting intervention by police and the paramilitary. Investors were also protesting outside the Lahore and Islamabad stock exchanges, Geo Television reported.

and

Police surrounded the exchange after hundreds of investors stoned the building and shouted anti-government slogans. They directed their ire at the government and Securities and Exchange Commission of Pakistan, which this week removed a 1 percent daily limit on price declines. The measure was aimed at halting a slide that wiped out $30 billion of Pakistan’s market value in three months, threatening to undo a 14-fold rally since 2001.

That is right folks. A 14 fold rally since 2001. Yet prices slide 25% in a short period and this requires stoning the building. Here is the recent chart. Were there any obvious warning signs in the past 3 months? Of course.

Dave Johnson

Source:

http://bigeyedeer.wordpress.com/2008/07/15/this-cartoon-wrote-a-sweary-word-on-your-toilet-wall/

Dave Johnson

On the other we have a largest bank failure in decades, which is will cost the FDIC billions.

And of course we have the beginning of earnings season where we learn how realistic those 3rd quarter EPS projections really are…

No summer doldrums this year :).

- John

Consumers are lining up for hours for the opportunity to spend $199 to buy a new iPhone.  Has there ever been any activity that makes less economic sense than waiting for hours/days in line to buy a product that will be mass produced to the point of saturation?  It boggles my mind.

- John

IYF 67.66 - 69.69

IWP 102.22 - 105.29

EWA 25.69 - 26.46

IWB 70.79 - 72.91

EWY 51.43 - 52.97

EWT 14.21 - 14.64

EWU 20.81 - 21.43

EPP 132.89 - 136.88

The other exit criteria is the Ultimate Oscillator crossing above the 50 level.

In this foray below 20 on the T2108 indicator we have had 9 entries. IYF was entered twice with the first entry exiting at its 3% profit target. We presently have a full position now with 8 holdings. 

Dave Johnson

IYF- We were in and out of that profitably last week

IWP

Here is a look at those ugly charts.

These are at tomorrows opening price.

This brings the system to 8 full positions and the system will no longer add any more positions unless we get some exits.

Dave Johnson

EWA

Australia

Alright Australia it is. With the the one exit today this kind of evens things back out again at 6 holdings. Maybe tomorrow we can get a really really big down day to fill out the portfolio. We’ll see

Dave Johnson

The 3% targets for the other 5 entries are as follows:

IWB 72.91

EWY 52.97

EWT 14.64

EWU 21.43

EPP 136.88

Remember the other potential exit is the Ultimate Oscillator crossing 50 if the profit target is not reached.

Dave Johnson

EWU should be in place of that second EWY. I posted it that morning, I just screwed up the list.

EWU entry was @ 20.81

Dave Johnson

Remember our exit is either a 3% profit target or the Ultimate Oscillator crosses above the 50 level.

Here are the 6 holdings and their entry prices.

IWB @ 70.79

EWY @ 51.43

EWT @ 14.21

EWY @ 51.43

IYF @ 67.43

EPP @ 132.89

Remember the only reason I am trying to highlight this system is because it has a couple key elements I have found in backtesting.

1) High win/loss percentage
2) Favorable profit factor when comparing cumulative profits versus loses over the long term
3) Although risk is open ended it can be mitigated by using a small percentage of the overall portfolio

If, again If, this catches a major swing point you just might be able to let a small portion of these positions run with a major swing low as a point defense. If the overall trade begins to hit profit targets make sure those runners are small enough that if they hit those swing lows you are still ensured a profitable trade. Keep the overall trade small and if those runners represent 1% of your overall portfolio you just might have the basis of a some exposure to extreme oversold conditions.

Dave Johnson

IYF and EPP

Big gap down which helps a bit

Dave Johnson

EWT

EWU

Taiwan and United Kingdom.

This brings us to 4 holdings and we have 4 more slots available as long as we remain under 20 on the indicator. Market is very very very fear wrought at the moment. It has the feel of a really big down move coming. But I suppose that is why bounces in this type of environment can be quite powerful as people look to quickly gain long exposure and shorts cover their positions. Either way we’ll know soon enough.

I see John did a post. I have reasons for not keeping up with the blog that are a bit different. I am quite lazy and get kind of bored trying to post same the same crap over and over. Maybe the blog muse will visit me sometime soon.

Dave Johnson

The second is that I’ve been trying a slightly different approach to my trading. Where I used to be a voracious reader of everything market related (news, blogs, books, forums, etc), this past quarter I’ve done little more than update telechart to look at charts, read my favorite blog (alchemy of trading) and of course IM/talk with Dave.

In spending less time, I’ve noticed my trading has become less taxing. I’m no longer worried if I miss an open, or if I haven’t read any news. When on business trips, days go by without me even having a chance to look at my IB account.

The result of all this has been positive, my account has been doing well and trading no longer feels as much like a 2nd job. I’m not worried about missing a few days action one way or the other.  Trading is such a strange thing, unlike almost every other profession, the results are often not at all commiserate with the amount of effort expended.   For those of you that have full time jobs, remember that making 10% spending 10 hrs per week, is a much greater return on your time than making 15% spending 50 hrs per week.

- John

Today that system is buying:

IWB and MDY

If we get another big down day you can expect it to buy another pair of ETF’s tomorrow. Remember based upon historical drawdowns keep this system a small portion of your total portfolio. 10% is about right. Have to do something with my high cash position since equity trend stuff went to cash over last few weeks.

Have a Great Day!

Dave Johnson

Fed Speech

What would be your solution to the problem? or if you even perceive it as a problem.

Raise taxes? Massively cut discretionary spending? Do you think the next administration will address this problem?

Dave Johnson

Dave Johnson

- John

Full link 

In Season 2, the most interesting characters were Lance and James who are brokers at an unnamed (but obviously not top tier) firm and appear to be straight out of The Boiler Room cast.   What I found most interesting about them (other than their obvious over the top sales strategy) was what they were doing with their clients money.  They appeared to be primarily using fundamentals to select their stocks and their #1 stock (they said they had 60-70% of all client money in it) was SNDK.  Sandisk has a great story and has had good growth in the past.  It is by no means a pump and dump penny stock (like those in Boiler Room) or one set to go to zero.

However, the one thing that Lance and James never paid attention to is the overall market tone.  In the time the show was filmed (appeared to be June/July -> Dec), the US stock market transitioned from a Bull market to a Bear one and experienced it’s worse decline since 2002.  In these types markets, the market will simply not pay the same multiples for stocks as it will in a Bull market.  With contracting PE multiples, even if a companies earnings growth stays constant (difficult to do in a recession), the price will still go down.  The opposite happens at the start of Bull markets.  Even companies with marginal growth go up because their earnings multiple are expanding.  Long story short, you can be right about the company and still lose large amounts of money because of market conditions.  Just something to remember when you’re allocating your portfolio.

- John

Read it when you have some time.

Have a Great Night!

Dave Johnson

In this article by Ambrose Evans-Pritchard it is noted that

“The share of foreign buyers (”indirect bidders”) plummeted to 5.8pc, from an average 25pc over the last eight weeks.”

Having not followed the longer term statistics related to foreign purchases in the debt market it is hard for me to quantify the actual change this implies, but clearly there was a big move by foreign buyers away from our debt in the short term. I will be curious to see whether this snowballs or tends to plateau, if and when the credit issues level out because this is the linchpin that has allowed our crazy national spending spree.

Have a Great Day!

Dave Johnson

- John

Have a Great Night!

Dave Johnson

Bear Stearns CEO

This was on Tuesday!

Have a Great Night!

Dave Johnson

$2 per share, $236 million, same as Audible.com