Wall Street was very empty this morning.  Obviously everyone is sleeping or hungover except for a few crazy people like me.  For lunch, I went with a broker trainee to Georgio’s for pizza.  You walk down past the NYSE, The Setai, Bobby Vans Steakhouse, and Hermes, make a right at the first light and you’ll find a decent pizzeria.  Another person got shitcanned today, and a lot of trainees were shocked because it was this junior broker that they thought was doing well.  Some of the trainees smoked with him outside the building in the morning.  It’s like a revolving door at this firm, it just doesn’t seem like people last here very long.  Who’s it gonna be next week?

My friend’s cousin came up to the office today and we all went to Madison Ave/Midtown to check out places like Gucci, Bergdorf Goodman, Salvatore Ferragamo, and Dolce & Gabbana.  We were mostly looking at $300-$600 dress shirts from Turnbull & Asser and Charvet.  I didn’t buy anything.  There were tons of people out.  It’s Black Friday but these stores certainly don’t have discounts.

We made a quick pitstop at the Hilton in midtown, went all the way to the 44th floor, slipped into the executive lounge and basically ate the hors d’oeuvres for free even though we weren’t hotel guests.

Around 6pm, we went to DJ Reynolds for dinner to eat their $30 prime rib.  I have to say, it’s almost the same as Smith & Wollensky… yet at Smith & Wollensky, I paid like $60 for the steak and more than 2x more overall.  Now I’m with some family for a post-Thanksgiving function.  Not a bad day.

  Thanksgiving is sadly long gone, but the turkey, stuffing, roast potatoes, veggies and cake and ice cream was definitely worth the massive cleanup after! I have a feeling that I am going to be taking bags of leftovers back to Boston, which will be good for my tummy and my wallet.

 It was my sisters surprise birthday party today. I took her with Granddad out to a shop to buy a board game and when she got home a bunch of her friends popped out of their hiding spots and scared the living daylights out of her. Of course this was followed by presents, pizza and cake!

 And tomorrow its one of my sisters friends bar mitzvah where more food and cake will be available… I cant wait!

 I think I might get into stocks and investing. I opend an account with a online brocarage (Ing Direct Share Builder), and I guess im just tesing the waters. I have no idea what to expect, how to go about investing but I want to get involved. After all it will help the economy right?

 Right??

Traders around the country are erupting in furor over Jim Cramer’s unfortunate comments in support of the proposed Trader Tax.  Speaking on CNBC in his regular shoot-from-the-hip slot, Cramer basically said what amounted to “why not?” when asked about the Democrats’ backward idea to extract a percentage of every transaction on the markets.

I read his clarification on TheStreet.com this morning, and frankly, it was weak…something about how a Trader Tax would help bring jobs back or whatever, completely absurd.  I got the impression that he wished he hadn’t said anything on the subject to begin with and wished he could back off of his original support for it.  Oh well.

In the meantime, Eric Jackson, an activist investor, contributor to TheStreet.com and the voice of Breakout Performance, posted a very well-written look at what the consequences of a Trader Tax may mean here in the US:

While I support Cramer’s interest in seeing job creation flourish in America, I completely disagree that the “trader tax” will accomplish this aim. To the contrary, I think allowing such a tax to take root here would accomplish just the opposite. In my view, such a tax would encourage large amounts of capital to relocate outside of America, jobs would be lost (not gained) and total government tax revenue would likely go down.

For a preview of what could happen in the U.S. if this trader tax was imposed, look at Britain. At the moment, the U.K. is in even worse fiscal shape than the United States. Because of that, its Labour government recently introduced additional taxes that specifically target hedge funds’ trading profits. Government bureaucrats assumed this was an easy way of generating tax revenue. What they failed to appreciate is that capital has never been more fungible than in today’s global market.

London-based hedge funds immediately announced they were relocating to Switzerland in droves, where they would face none of the new taxes levied in the U.K. With those funds go certain administrative and back-office jobs. But more important, ask London bankers how they feel about losing the many profitable revenue streams attributable to doing business with hedge funds that will now be sent to Swiss banks.

Read the rest:

Trading Tax Stiffs the Little Guy (BreakoutPerformance)

Read Also:

Cramer vs. Furor  (NYP)

Chuck Schumer Opposes the Trader  (TRB)

What do you think? According to a recent research report by ‘Goldman Sachs’, the market will see one of it’s biggest rally’s of 2009 by the end of December…

Source: read more Goldman Sachs says Big Rally ahead

The debt heavy ‘Dubai World’, and its economy and the uncertain future that may go with it, sent a shockwave throughout the world markets today…

Source: read more Dubai debt hurts stock marketss

If recent history has taught us anything (Argentina, Brazil, Mexico, Thailand, Malaysia etc.), it is that events like the recent technical default of Dubai World (owned by Nakheel) are not things that go away quickly and without widespread pain. Aside from the high-level macroeconomic effects involving the foreign exchange markets and capital outflows, there is a huge technical implication here (not to mention the damage this could do to other middle eastern and emerging markets economies and the associated moral hazard implications).

An extremely disproportionate amount of the market is short the dollar and an event like this could be exactly the kind of thing that would break down the trade and have huge implications on the equity markets, especially in the US. The S&P 500 has been extremely correlated to the movement of the US Dollar of late and a rise in the Dollar would very likely cause a drop in the market. There is also a possibility that the increased strain on budgets in the United Arab Emirates could put pressure on the price of oil as they consider increasing output for additional revenue.

A very big thing to watch will be the market’s reaction and perception to this news over the next couple of weeks as volume comes back in following the Thanksgiving holiday. It will also be very interesting to see how money managers will be reallocating to reposition themselves for 2010. Will the chase for performance continue or turn into a race for the exits?

- Michael J. Burns

Disclosure: Long EEM, ILF, IVV, GXC, COP, CVX, several foreign stocks and foreign oriented mutual funds

Yes, Let’s Tax The Speculators

Should we use taxes to deter financial By Paul Krugman, courtesy of Clusterstock

Should we use taxes to deter financial speculation? Yes, say top British officials, who oversee the City of London, one of the world’s two great banking centers. Other European governments agree — and they’re right.

Unfortunately, United States officials — especially Timothy Geithner, the Treasury secretary — are dead set against the proposal. Let’s hope they reconsider: a financial transactions tax is an idea whose time has come.

Keep reading at the NYT >

Dubai's Man-made Island "Sculpture"

UPDATE HERE: DUBAI AS COMMERCIAL RE CANARY IN THE COAL MINE

Dubai’s sovereign debt is the disaster du jour, Europe already took a 3% hit yesterday while we were ODing on tryptophan and cranberry relish.  We’re looking at a down 200+ open on the Dow as of this post (8am).

I’m still getting acquainted with the story, so I’ll post some headlines from the media below and comment later on today:

From Bloomberg:

Dubai World, the government investment company burdened by $59 billion of liabilities, sought this week to delay repayment on much of its debt.  Stocks fell around the world for a second day, commodities dropped the most since July, Treasuries rose and credit default swaps surged as Dubai’s attempt to delay debt repayments unnerved investors.

European banks like HSBC are most exposed, from the Wall Street Journal:

U.K. banks look the most exposed to Dubai debt worries says Credit Sights, and HSBC and Standard Chartered are estimated to hold half the U.K. total.  “Both HSBC and Standard Chartered had previously expressed concerns about weakness in United Arab Emirate economies and property markets, and both reported higher loan loss impairments in the region in 1H ‘09.”

The most interesting twist I’m seeing thus far is that investors are reacting by fleeing gold and reaching for US Dollars.  Bet ya didn’t see that one coming!  From Reuters:

Gold prices tumbled nearly 5 percent to a one-week low below $1,140 an ounce on Friday as investors fearing debt default in Dubai sought safety in dollars and cash.  “It’s mainly driven by this news out of Dubai (which) has had a large impact on risk appetite and resulted in a sharply stronger dollar,” said Daniel Major, a metals analyst at RBS Global Banking & Markets.

Never a dull moment.  Tune in later for more on the Dubai story as I get my arms around it.

Sources:

Commodities Drop, Emerging Markets Fall  (Bloomberg)

UK Banks Look Most Exposed  (WSJ)

Gold Tumbls as Dubai Triggers Stampede to Dollars  (Reuters)

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 2

In previous Blog, we had touched upon the aspect like analysis part of seasonal patterns in predicting the future prices of the commodity.

Seasonal Index - “Time is Money” Final Part

In this Blog, we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

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Annual Average Method

The annual average method can be used to generate a seasonal pattern as well as predicting the future prices of the commodity.

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This seasonal price index is derived by calculating the annual average price, and then by expressing the price for each month during the year as a percent of the annual average.

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Here, the data which is used to derive the seasonal price patterns are the monthly prices taken between the year April’2004 & November’2009.

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The monthly indexes over the years are averaged to derive a price index that represents those years.

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An example of the technique is presented in Table 1.

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The seasonal price index table suggests that the index increases from the month of June, the time the buyers enter the market with full potential & reaches the highest till the end of the year.

In The Year 2009

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The prices movement of this year almost followed the seasonal pattern, except few months.

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The supply constraints of lower output, as farmers opted for cotton, worked as a high base effect for the futures with a flat production figure of 8.5 lakh tonnes in 2008-09.

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The recovery in prices was noticed owing to the unforeseen failure of monsoons & comfortable stocks of 25-30 lakh bags from last year for which guar prices traded higher all through-out the year.

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This commodity created a history as it made a life time high, since the date of launch at national bourse, on reports that the output is estimated at 30-35 lakh quintals, down 62% due to factors like scanty rains in the major growing areas.

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Stronger Rupee along-with volatile Crude oil prices brought some corrections in export earnings from Guargum markets in Europe/US.

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However, upcoming demand for by-products such as churi & korma from international markets kept the millers interested in processing guar.

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In a nutshell, if investors want to spin their money safely & stabilize their net returns, using seasonal Index can prove to be a fair advantage.

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Note : For More Latest Industry, Stock Market and Economy News and updates, please click here

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

Uncertainty over stocks leads to price volatility in turmeric futures:

In an unusual situation this week, far-term turmeric contracts were trading much below near-term ones, offering a big arbitrage opportunity for hedgers and speculators, on the National Commodity & Derivatives Exchange (NCDEX).

The price difference was 39 per cent.

Last year’s carryover stock is estimated to have declined steeply, at around 150,000 bags (a bag is 70 kg) as of today, as compared to around 700,000 bags around the same time last year.

Arrivals at the Erode market were 2,000 bags and sold at Rs 10,900-11,000 a quintal.

In Duggirala, prices were placed at Rs 9,800-10,500 a quintal and in Warangal at Rs 9,900-10,500 a quintal.

Turmeric exports climbed seven per cent to 4,000 tonnes in October 2009 from the same period last year.

Weak turmeric futures put downward pressure on spot markets, to send the product down by Rs 800 a quintal.

In Other major Commodities Updates also read Soybeans and Wheat Drop as Dubai Default Risk Dents Confidence of the Investors.

Soybeans, Corns and Wheat Drop as Dubai Default Risk Dents Confidence:

Soybeans, corn and wheat slumped after Dubai’s bid to reschedule debt sent equities tumbling and eroded investor confidence in commodities.

Soybeans for January delivery dropped as much as 2.7 percent to $10.2625 a bushel, the lowest level since Nov. 19, in electronic trading on the Chicago Board of Trade and were at $10.385 at of 10:50 a.m. Tokyo time.

The contract has lost 0.7 percent this week, the first such drop in three weeks.

Wheat for March delivery in Chicago lost as much as 2.4 percent to $5.5775 a bushel before trading at $5.595.

The grain dropped 3.7 percent this week, falling for the first time in four weeks.

Production may be around 21 million metric tons, down 2 percent from last harvest and lower than the 23 million tons forecast in October,2009.

Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Happy Thanksgiving!  I hope today, tomorrow (Black Friday), Saturday, and Sunday will be excellent for everyone.

I’ll be waking up in about 5-6 hours, and I’ll probably be seeing a lot of people out and about lined up for the insane shopping tomorrow.

Holidays used to be so much more festive when I was a kid in the 90s.  Now it’s just eh.

Today is US Thanksgiving.  Happy Thanksgiving to all my US friends! 

And a nod to the markets (that were open) as well.  With much of North America closed for the holiday, I still managed a decent gain today as the Canadian dollar was trading somewhere, and it took a beating.  On the news that Dubai might blow up.  Not as in terrorist blow up;  but as in I-can’t-meet-my-payments blow up.  Who would have thought?  A year or two ago Dubai was the great new happening place – the new jewel of the Middle East, and now its the new Argentina of a decade ago.  That spooked the Asian markets overnight, but really spooked the European markets later on in the day.  The big ones all closed down over 3%.   This sent commodities down, (except for natural gas, go figure), currencies down (against the dollar), and appears to have set up a potentially nasty morning for U.S. Thanksgiving revellers – especially with potentially thin (probably thicker now) trading tomorrow.  It will be worth watching Asia tonight.

I’m covered; still have lots of short ETFs.  To me, equities and oil have have had a decidly soggy tone over the past couple of weeks despite trading near the rally high, and I’ve had the sense that any bad news out of left field could pop this balloon.  This Dubai thing might be it.  Real-estate and unemployment are still major boat anchors, and I don’t think it will take too much more weight (a feather perhaps?) to push this market down again.  This rally has felt surreal all along.  It’s been long, powerful, and persistent, but against a backdrop of such bizarre economic dysfunction.

But, whatever.  We’ll trade what comes.  And speaking of trading …

I sold the HNU because I missed a signal early last week, and this kind of evens everything out.  A bit more cash in the kitty if we go down, but lots of shares left to get profitable fast if we go up.

It’s interesting that my co-Scouter Steve’s best friend Brian, who flew 777’s for Emirates Airlines and was based in Dubai, left and came back to Canada a couple of weeks ago.  His decision may have been fortuitous in retrospect.  (I’m now trying to recruit him into Scouts; from the cockpit to the fire pit, as it were.)

Again, Happy Thanksgiving and a hearty Du-bye bye …

Cheers,
Allocator
a.k.a. George Parkanyi

From Global Investing:

Just when investors were settling down to lock in a few of the year’s profits and put their feet up for the end of the year holidays, a black swan has come waddling out of the desert to put everything on edge.

The unwelcome cygnus atratus came in the form of Gulf emirate Dubai telling creditors of Dubai World and property group Nakheel that debt repayments would be delayed.  Fears of contagion spread widely, hitting world stocks, lifting the dollar out of its basement and driving demand for European debt so much that a roughly 6-month trading range for futures was breached.

It all may settle down soon. Dubai says the problem does not apply to its big international ports group.  Meanwhile, the emirate is a pretty leveraged place, but fellow emirates and neighbouring countries such as Abu Dhabi, Qatar and Saudia Arabia are pretty flush with cash. They could even step in to help as a matter of solidarity.

At least for now, though,  it is showing just how interlinked everything is.  Ok, of course, banks get hit when people worry about expsosure. But who would have thought that a European car company  would get clobbered by a debt problem in the Gulf?

The issue is those sovereign wealth funds that have been recycling their country surpluses into investments elsewhere. Qatar owns 10 percent of Porsche, Abu Dhabi and Kuwait own 17 percent of Daimler between them. So it is not just investors worrying about their money in the region, it is investors also worrying about where the region’s money is.

S&P  Futures plunged overnight and Gold is on another elevator up.  Should be an interesting short trading day tomorrow.

This Thanksgiving morning and for the rest of the week for that matter I had intended to post nothing on this blog. However, I had one of those “looks like more than a mere coincidence” moments as I cracked open some of my usual morning news:

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6660618/More-than-1000-bankers-in-the-City-earn-over-1m-a-year-Sir-David-Walker-says.html

More than 1,000 workers in the City [London] earn over £1m a year, Sir David Walker said as he published a review that will force banks to disclose how many of their staff are on such pay.

He said that forcing financial institutions to publish the salary and bonuses of top earners would enable investors – the ultimate owners of a business – to raise questions about why remuneration is so high.
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The report, and the Government’s swift endorsement, will alarm the City where there has already been a barrage of complaints that Sir David’s original proposals on pay were too strict and would prompt an exodus of talent from investment banks to smaller firms.

Chancellor Alistair Darling said in a statement: “Sir David’s proposals are the blueprint for how banks must be run in the future… The Government strongly supports his recommendations and will take steps to implement them as soon as possible.”

Sir David’s review was commissioned by the Government in February to explore failures of corporate governance and management of banks and other financial firms. The draft version in July proposed 39 recommendations, most of which have been retained in the final draft. However, as well as the changes to the pay proposals, Sir David’s final review has sprung a surprise on boards with the suggestion that they put all the directors up for annual election, as well as the chairman.

In addition, Sir David has remained firm on his proposals to impose tougher demands on bank shareholders designed to make them more accountable owners.
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Similarly, the recommendation that the regulator should quiz investors who sell big stakes in the banks has also been ditched. It was criticised as being beyond the remit of the Financial Services Authority.

Other proposals include the appointment of a powerful Chief Risk Officer to the board of all banks.

There is an American version of this story as well:

The report from David Walker, former chairman of Morgan Stanley International, also proposed other measures to rein in risky activities at banks. It recommended strengthening the role of non-executives to give them new responsibilities to assess risk and payment and said active investors should sign up for stewardship duty so that they can play a more active role as owners of businesses.

“Institutional investors should be less passive and prepared to engage earlier if they suspect weaknesses in governance,” Walker said in the report. “Early preventive medicine through shareholder engagement can save everyone substantial time and money later on.”

So what has happened on the British market this morning? Just another badly timed coincidence?:

http://www.telegraph.co.uk/finance/markets/6660832/Technical-glitch-halts-share-trading-on-London-Stock-Exchange.html

Share trading on the London Stock Exchange has been halted by technical difficulties, a spokesman for the bourse operator said on Thursday.

As a result, all order-driven securities were placed in an auction call period at 1038 GMT, with all share prices currently to be considered indicative, he added.

The FTSE 100 index was frozen at 5,264.97, down 99.84 points, or 1.9pc, and while the FTSE 250 value is changing, this is due to exchange rate movements rather than price changes, the LSE said in a service alert.

In addition, the distribution of all FTSE UK Series real-time index values is also affected, the bourse operator said.

The length of the auction call period has not yet been decided, however, a minimum of 30 minutes notice will be provided ahead of the scheduled uncrossing time, LSE added.

In September last year [2008] the LSE suffered its worst systems failure in eight years, causing the share market to suspend trading for about seven hours and infuriating its users.

“Trading has been inoperative for over an hour. It has also affected platforms such as Chi-X, and Project Turquoise, leaving the entire market moribund,” David Buik, senior trader at BGC Partners said.

At least the Brits didn’t immediately resort to the “Squirrels chewed through the wires” story like the Americans did back in 1994:

What gives at Nasdaq? First it was bugs of the electronic sort, then a mammal of the squirrel variety. And now securities traders are wondering just how secure things really are on the nation’s second-largest stock market.

Technical breakdowns have caused three Nasdaq trading interruptions in the last few weeks. The most recent interruption lasted 34 minutes on Monday afternoon after a squirrel chewed through an electric company’s power line and the stock exchange’s own backup power system in Trumbull, Conn., failed to kick in.

Do you think I digress? How many times do people buy this stuff? How short are their memories?

Do you still remember Fall 2008 and the run up to the banker bail-out beginning here in the USA by Oct 2008? I can’t see this as just a coincidence today and I didn’t back in Oct 2008 when “The Common Chump” was posted. It’s happening again, people, and it may be weeks before you smell what the dogs have left for you on the floor under the kitchen table.

The factions don’t take holidays. But, the dangerous question I will ask today is: Why isn’t someone at the Telegraph actively connecting these dots for the public?

In one form or another, most all Americans own “shares of stock” in a business. Some own the entire business, others own a limited number shares, and many others have an interest in stock through mutual funds, insurance policies, and retirement plans.

Just what do these “shares of stock” represent? “Shares of stock” are an equity investment. In theory, they represent an actual ownership interest in a business; a “share” of the business. As the owner of a “share” of a company’s stock, you are entitled to share, on a pro-rata basis, in the profits and the future worth of the business.

Simple concept, easy to understand. In actuality however, the value of “shares of stock” have come to be more dependent on the trading value of the “stock” rather than on a “share” of the company’s earnings. How has this evolved?

Way back when,”shares of stock” where primarily sold when a business needed additional capital to operate. The business simply sold “shares” of the business to others that had money to invest.

The purpose of selling the shares was normally to acquire the additional assets, inventory, materials, or equipment needed to operate the business. The individuals who purchased the “shares” were buying a share of the profits that would result from the operation of the business.

In order to sell the “shares”, the business would offer evidence of its ability to generate the profits with the proceeds from the sale of its “shares”. Prudent investors, recognizing their investment depended exclusively on the success of the business, were careful to invest in businesses they understood or with people they had reason to trust.

If the business prospered, the investors received their share of the profits. If the business failed, the investors received only their proportionate share of the residual value. The investor’s share of income from the business was the exclusive motivation for buying a “share of stock”.

That income might be returned to the “shareholders” over time in the form of dividends or, those initial shares of profit might be reinvested in the business to increase the income earning capacity of the business so that it could pay a higher return to shareholders at some future date.

My how times have changed! Today, equity investments are no longer thought of as “shares” in the earnings of an enterprise. Stocks are now sold in all shapes and sizes for previously unimagined purposes.

“Shares of stock” have become simply “stocks”, a product unto themselves. They have a value and life of their own, often independent of the actual performance of their business. Some stocks are still traded even though the business in which they represent ownership no longer exists!

Is it little wonder why the individual investor is a vanishing breed in the “Wall Street” of today? Investing on the basis a “share” of income, while seemingly logical, can be dangerous if the majority of the investment community are trading the same “shares” based on different criterion.

While many fortunes have been made investing in “stocks” and “the market”, it appears that most individuals would be more comfortable investing in the original concept of “shares of stock”.

A recent published report discussed the personal investment preferences of the nation’s highest paid executives. These individuals, all with annual incomes well in excess of two million dollars, are primarily top executives in major publicly owned companies.

Interestingly, many of them did not invest in the stocks of other publicly traded companies. They invested in the businesses they ran and other businesses they knew or were closely associated with. It appears that their investment philosophy closely resembles the original concept of “shares of stock”.

Are there similar opportunities for the average private investor? There just might be some in your own backyard. Growing businesses and entrepreneurs, eager to begin, are always in need of capital. Private capital invested in private industry yields high returns.

Because your “shares” represent an ownership in the business, be careful to invest in businesses you understand.

It’s that time of year again and we would like to wish everyone a very happy Thanksgiving.

All the best,
Lucid Markets Team

On two counts – oil and gas moved my way, and I had 13 Scouts jammed into my living room for “German Night”.

Natural gas had a big day, moving up 40 cents.  The double-long ETF HNU was up 14.5% just todayand I sold a small amount – I have lots left if this is the start of another rally.  I held my nose and went more long crude oil by covering some of the double-long short ETF HOD and buying more of the long ETF HOU.  That worked out as well today, but I’ve got to tell you, I’m really bearish on oil (although that doesn’t necessarily mean I’m right).  I’ll be happier if we can get another profit or two out of the long side and then get more short.

I took a signal to buy DAG, the double-long agricultural commodities ETF, bulking up that position a little as well.

A couple of days ago my natural gas position was down 28%, today it’s down only 6.9%.  And I nicked my last and largest buy a dime off the bottom at $8.60.  I fortuitously piled in right at the bottom the last time around as well in September, and that had a lot to do with the robust recovery of the account.  Another rally like the September one and this gas trade, and the portfolio, will quickly become very profitable.   Now if I could only nick the tops.

As it stands the commodity ETF portfolio has held up very well through NG’s decline from $17 to $8.50.  I am extremely pleased with the adjustments I made to the program a while back, as it’s defensiveness has improved significantly.  If not for the algorithm mistake in the first month (started back in late June), that built up early losses, I’d be ahead by now.  I’ve been doing a lot of testing in the past couple of weeks, and my goal of successfully emulating a market-maker operation is within sight.  I have two main approaches, and variations of each are all very profitable in testing.  However one is a little less profitable but plays much better defence, and is therefore safer.  This is the current C-ETF program with a modified trade-sizing algorithm.  It can survive most of the huge declines like we saw in 2008 and early 2009, but not quite total implosions like the oil collapse of 2008 or the catastrophic losses on the more aggressive leveraged short ETFs.  Therefore diversification (and not starting the long side when oil is at $150 or gold at $1200) is still important.

The new system I’m just simply going to call PRES – Progressive REversal Scaling.  It systematically provides entry and exit set-ups and signals, and trade sizing.  It works best with more volatile stocks and ETFs, and the more sideways/range-bound the action the better.    But it still works with trending markets as long as there is some jiggle to them along the way.

“German Night” was fun.  It was at my house but hosted by Scout Alexander C, who lived in Berlin for a year before his family returned to Canada and he re-joined our troop again last year.  I cooked up some bratwursts on the barbecue that we then planted in mini-buns, to do it the German way, and Alexander’s mother Mary brought absolutely delicious home-made pretzels and potato salad.  Scouter Steve brought root beer (we can’t do the real thing with 11-13 year-olds) and collectively we scrounged enough beer steins to at least make it all look Bavarian.  I also put on some alpine/polka music for a while, and then a travel video on the region where the Mosul and Rhine rivers meet.  Alexander did a very concise and interesting presentation on the history of Germany, and brought all sorts of interesting artifacts and souvenirs, including million-mark notes of the great inflation of the 1920’s, Nazi Reichmarks, and pieces of the Berlin wall.   He even wore lederhosen, but these were apparently problematic in bathroom situations, and Alexander was pretty-much dancing back and forth as he was waiting for his mother to pick him up at the end of the night.

And until the next time …

Prosit!
Allocator
a.k.a. George Parkanyi

    The banter about Wall Street is about the market consolidation and why it is holding.  Even “The Economist” magazine has an article about the two possible outcomes; either inflation or a corporate earnings disappointing and a resulting market pullback.  Check out www.economist.com Buttonwood – Something’s gotta give.  Banks are no longer taking on debt.  They are buying short term and intermediate term government bonds which is maintaining demand and keeping rates very low.   Gold is almost at $1,200/ounce and looks to continue to increase in value.  Copper and Silver are also increasing as a diversification asset class out of dollars.  It’s just a matter of time.  More data will be coming in that will reinforce that the economic recovery is not what has been hoped for.  It will probably be after the end of the year when we see the market dip.  But, who knows…  Happy Thanksgiving.

The yield on the 2-year Treasury note continued to decline last week and finished the week at a lower yield than at the start of 2009..

Source: read more CFP Jeff Rose – 2-year treasury note

The ‘bad’ News? One of the country’s most successful developers says rampant investment in commercial property has undermined China’s long-term prospects..

Soure: read more Financial Times: China’s Bubble’s

So the question becomes, what do you do for a return?..

Source: Read more Jim Cramer ‘Real Money’

On 4.5 hours of sleep this morning, I rolled into the lobby in a grey pinstripe suit with my Ray Bans looking pretty clutch.  I have to say that wearing these power suits really helps motivate me and it gives me a lot of confidence when I walk around.  It’s psychologically important to feel like a million bucks.  If you dress like shit, you’re going to feel like shit.  If you feel like shit at this job, you’re not going to last long.  There’s 12 of us right now.  Highly unlikely that we’ll all make it.

The training room is actually probably in the high 50’s or about 60 degrees.  I know I said 65 but the room is colder than the temperature outside.  I’m surprised I haven’t gotten sick.  Today I got out early at 4pm because it’s Thanksgiving Eve.  No Black Friday for me because I have to go into work on Friday, although I’ll probably go look around after work.  No such thing as vacation here until you’re a big producer.

The work hours compared to compensation right now is extremely disproportionate, but that will change after I work my fucking ass off.  I mean really work my ass off.  People think they work hard, but if I may be so bold to say, many of them have no clue what hard work really means.

I’m naturally a lazy person, but I have a high tolerance for pain and I’ve taken on a lot of jobs with little to zero compensation.  I’ve put in a lot of time and effort only to go nowhere in a LOT of things.  There’s so many times where I just wanted to give up on everything.  Now I’m pretty good at just moving forward and not looking back.

A journal should also help you see what you do well. Not just what you need to work on. If you know what works, you can concentrate on the same kinds of setups

Last month I traded BTU very well and I recorded it in my journal. Here are my notes:

10/8/2009  Showing up in my screens BTU again Coal and steel producers X

10/9/2009: Energy sector is breaking up. BTU has coal and NGas exposure which is also in an uptrend. Just crossed the ATR buy signal and price stays above 50 MA consistently. Bought at 40.11 with a stop at 38.41. Initial target of $45

10/12/2009 Columbus day and a light volume day. A candlestick bearish evening star is forming on BTU after crossing the 41.51 previous resistance level and retreating. There is still 20 minutes left of the market. We might give up some gains in the next few days.

10/13/2009 gaped lower at the open but rebounded nicely. This is a good sign. it bounced off of the ATR sell signal. Very long wicks on these candles. lots of indecision and a good range to trade intraday.

10/16/2009 Moved stop to 39.88 Just incase the stock tanks when they report earnings. I am not sure I will have access to the internet on Monday as I will be away from the desk.

10/20/2009 BTU reached its target and soared on better than expected earnings. This was a well executed trade. Might have been better off letting it run above target. Need to work on that.

I repeated the same kind of trade this month with POT for a nother profitable trade. Always note what has worked well so you can recognize the patterns when they repeat.

Happy Thanksgiving!!