Someone told me today that if the "GOP could gain control" that the deficit would be paid off within 6 years. I have bad news. They are dreaming. From Clinton's no deficit, to Bush and now to Obama, we have created a debt that is so insurmountable no political party could pay it off. I believe our children's grandchildren will still have a deficit, unless major changes are made in valuation to the dollar, or Keynesian economics is followed where truly "deficits" don't matter.
The market yesterday trade ranged through 2.20 p.m. We know the support and resistance lines, but would personally see more of a downside IF the market moves below 10,676, slightly below the Fib retracement. No matter what the downside, we see upside following.
I stopped viewing the market at 2.20 p.m., and just left the computer with sell orders in for both open positions. We'll continue following the same options, as the call was a perfect trade, available at 7.80, far below prior day close, on an easy entry at opening, and selling to highs of 9.40.
We'll play the same options, reducing profit goals, and closure of positions by day end Friday.
_______________________________
I am taking bets on how this will be construed:
http://www.huffingtonpost.com/2010/09/26/citi-boosts-executive-pay_n_739391.html
And further bets on who was behind it.
Thursday, September 30, 2010
It Makes Me Cry
Yesterday started with a downturn. Bristol Myers Squib (BMY), one of our core Blue Chip holdings, hit an 8 year high, and Coca Cola, the evil producers of sugar water, hit a 52 week high. Telecoms and utilities have been market leaders, and low bond yields continue to really benefit dividend-paying stocks. All of this points to even more of an up market.
Gold hit a record high, and silver is close behind it. The rising silver/gold ratio is good for the stock market. as is the recent rise in retailers. However, the S&P 500 nears its charting test of neckline in a head and shoulders bottom.
The market moved from theoretical Dow tops of 10,910 by 1 p.m., and had hit lows of 10,688 in early morning trading on the first "sell off" before run up.
Both our put and call were profitable! And both are listed as new trades again. The call is overbought, the market is topping, but the bulls have the handle.
Tony Judt in Ill Fares The Land, a superb book, writes:
*We are experiencing the symptoms, without yet knowing it, of collective impoverishment. Over the past 30 years when obsession with wealth began truly shifting in the U.S. And during this same period poverty, alcoholism, obesity became more pronounced than in Central Europe.
What matters is not how affluent a nation may be, but how unequal it may be.
As we used government programs, and Greensberg free credit, and as we pulled billions into Iraq on the planned guise of FEAR, and now throw the same money into Afghanistan, as we allowed the rich to pay less taxes than the poor proportionately, as we freed oil and financial regulations, and as we ate too much we created:
Broken highways, bankrupt cities, collapsing bridges, failed schools......and even as the U.S. now budgets tens of billions of dollars on a futile military campaign in Afghanistan, we fret nervously at the implications of any increase in public spending on social services or infrastrucure."
The fond myth that economic growth brings prosperity for everyone has been unmasked as a myth, and the emergence of China has discredited totally that "strong democracies grow" while totalitarian regimes do not. Tell that to China, or to Halliburton who took their ill won "no bid" dollars and moved their headquarters to Dubai.
Of great interest is that after World War II and up until 1975 the U.S. was fully on the side of what collective government can do, and supported all these "liberal ideas" such as fixing highways, building bridges, and saving money.
When the conservatives today fill us with fear of what the government will do, and misinterpret actions as "big government" or that the debt has been substantially driven up (most still being medicare and Social Security payments) we are given propaganda that it "is okay that 1/4 of our nation is in poverty," and it is BAD that the unemployment rate (this being the big bug used to squash on our windshields) and one man in office for two years is blamed for this entirely.
My question: what happened to the completely free and clear national debt after Clinton left office, and why during that eight years, and not now, was it "okay" to spend?
All the money from our "superiority" wars, where we do nothing to solve terrorism, that's where Clinton's free and clear budget went.
Yet somehow, someone has led us well, by the nose ring, that we are headed into a socialist world.
It makes me cry.
Gold hit a record high, and silver is close behind it. The rising silver/gold ratio is good for the stock market. as is the recent rise in retailers. However, the S&P 500 nears its charting test of neckline in a head and shoulders bottom.
The market moved from theoretical Dow tops of 10,910 by 1 p.m., and had hit lows of 10,688 in early morning trading on the first "sell off" before run up.
Both our put and call were profitable! And both are listed as new trades again. The call is overbought, the market is topping, but the bulls have the handle.
Tony Judt in Ill Fares The Land, a superb book, writes:
*We are experiencing the symptoms, without yet knowing it, of collective impoverishment. Over the past 30 years when obsession with wealth began truly shifting in the U.S. And during this same period poverty, alcoholism, obesity became more pronounced than in Central Europe.
What matters is not how affluent a nation may be, but how unequal it may be.
As we used government programs, and Greensberg free credit, and as we pulled billions into Iraq on the planned guise of FEAR, and now throw the same money into Afghanistan, as we allowed the rich to pay less taxes than the poor proportionately, as we freed oil and financial regulations, and as we ate too much we created:
Broken highways, bankrupt cities, collapsing bridges, failed schools......and even as the U.S. now budgets tens of billions of dollars on a futile military campaign in Afghanistan, we fret nervously at the implications of any increase in public spending on social services or infrastrucure."
The fond myth that economic growth brings prosperity for everyone has been unmasked as a myth, and the emergence of China has discredited totally that "strong democracies grow" while totalitarian regimes do not. Tell that to China, or to Halliburton who took their ill won "no bid" dollars and moved their headquarters to Dubai.
Of great interest is that after World War II and up until 1975 the U.S. was fully on the side of what collective government can do, and supported all these "liberal ideas" such as fixing highways, building bridges, and saving money.
When the conservatives today fill us with fear of what the government will do, and misinterpret actions as "big government" or that the debt has been substantially driven up (most still being medicare and Social Security payments) we are given propaganda that it "is okay that 1/4 of our nation is in poverty," and it is BAD that the unemployment rate (this being the big bug used to squash on our windshields) and one man in office for two years is blamed for this entirely.
My question: what happened to the completely free and clear national debt after Clinton left office, and why during that eight years, and not now, was it "okay" to spend?
All the money from our "superiority" wars, where we do nothing to solve terrorism, that's where Clinton's free and clear budget went.
Yet somehow, someone has led us well, by the nose ring, that we are headed into a socialist world.
It makes me cry.
Sunday, September 26, 2010
I smile
Study our lengthy and revised Dow projections this morning and play the market around futures.
We hit solid highs above the Fib retracement and held Friday, leaving the optimistic with hopes of crossing 11,000.
Despite what the news bytes and GOP say, the economy is essentially strong, just not moving fast enough, and with the "unemployment" number now the only thing America thinks about.
I smile.
During the Bush Admin the true unemployment ran just near 10%; they always proved lower. During the Obama administration the unemployment rate is probably in reality closer to 15%, and there is not one damn thing that will restore unemployment other than small business credit accessibility, held up by the GOP for the last 5 months, and finally passing.
Large and small corporations have learned how to make do with less workers, and also are forced to reduce labor force in order to obtain realistic margins to stay in business.
In America, we must buy "on sale" and "at a bargain," and with the consumer now so knowledgable (internet) we've successfully phucked it up so that fewer companies actually make money.
This is called the Wal-Mart effect.
On Friday risk traders that had bought the October 510C were rewarded with a 49% jump from the prior day close, with sales up to 14.20.
Traders also learned, if they had kept the put til Friday, that they had to stop loss, even though the position was "tightly" profitable the two days prior.
There is a lesson here:
1. On clear bias ( up or down) when we suggest an alternate signal buy also, always be ready to sell at tight profits.
2. Following support and resistance lines, and recalculating through the day, is the best way to under the pivot , and where the next step will be.
We hit solid highs above the Fib retracement and held Friday, leaving the optimistic with hopes of crossing 11,000.
Despite what the news bytes and GOP say, the economy is essentially strong, just not moving fast enough, and with the "unemployment" number now the only thing America thinks about.
I smile.
During the Bush Admin the true unemployment ran just near 10%; they always proved lower. During the Obama administration the unemployment rate is probably in reality closer to 15%, and there is not one damn thing that will restore unemployment other than small business credit accessibility, held up by the GOP for the last 5 months, and finally passing.
Large and small corporations have learned how to make do with less workers, and also are forced to reduce labor force in order to obtain realistic margins to stay in business.
In America, we must buy "on sale" and "at a bargain," and with the consumer now so knowledgable (internet) we've successfully phucked it up so that fewer companies actually make money.
This is called the Wal-Mart effect.
On Friday risk traders that had bought the October 510C were rewarded with a 49% jump from the prior day close, with sales up to 14.20.
Traders also learned, if they had kept the put til Friday, that they had to stop loss, even though the position was "tightly" profitable the two days prior.
There is a lesson here:
1. On clear bias ( up or down) when we suggest an alternate signal buy also, always be ready to sell at tight profits.
2. Following support and resistance lines, and recalculating through the day, is the best way to under the pivot , and where the next step will be.
Saturday, September 25, 2010
I Treat the Options I Own as if Selling Fruit
The market was clearly on a negative bias with futures and "news" and no traders should have entered on the call. The Oct490Put was profItable to 4.50. Most traders have now exited this position profitably. We'll list and hold it today, for sale by end of day. It is likely we could have an overall 239 point drop overall from market highs, or a 584 point drop. We'll see how strong the bulls really.
I follow Dow theory and the chartist below mentions the market is not yet a buy signal to the Dow theory, however drops are less, and the market appears to be "waiting."
Chartists shared with the world:
-- NO DOW THEORY BUY SIGNAL YET
-- TRANSPORTS HAVEN'T CLEARED AUGUST HIGH
-- SMALL CAPS HAVEN'T BROKEN OUT EITHER
-- S&P 500 RETESTS NECKLINE SUPPORT
-- FALLING US RATES HURT DOLLAR
-- FALLING DOLLAR BOOSTS COMMODITY ASSETS, FOREIGN CURRENCIES, AND AND FOREIGN STOCKS
-- S&P 500 WEEKLY MACD LINES HAVE TURNED BULLISH
_________________________________________________________________________________________
Well, the Republicans have finally told us what they will do:
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aCjfPtAA5lMc&pos=8
This is the most frightening and short sighted thinking to benefit the rich and large corporations I've ever seen.
Makes me want Christine O'Donnell. She knows what masturbation does, and what you just read is mindless masturbation.
___________________________________________
It's my last day of vacation. I was looking back at what I wrote in my OEX commentary yesterday. The rules listed were most of what I do to win, and win well.
I set stop losses and never fail them. I almost always buy below prior day close. I study my emotions carefully as I watch 1 and 5 minute Pnf charts or as I simply watch the numbers.
I try to "fall in love" with at least, if not two options for as extended a period as I can find. Falling in love means all I do is watch this option trade, the volume, the bid vs. ask, and pit myself against the seller or buyer, depending upon market conditions.
I treat the options I own as if I sell fruit.
I follow Dow theory and the chartist below mentions the market is not yet a buy signal to the Dow theory, however drops are less, and the market appears to be "waiting."
Chartists shared with the world:
-- NO DOW THEORY BUY SIGNAL YET
-- TRANSPORTS HAVEN'T CLEARED AUGUST HIGH
-- SMALL CAPS HAVEN'T BROKEN OUT EITHER
-- S&P 500 RETESTS NECKLINE SUPPORT
-- FALLING US RATES HURT DOLLAR
-- FALLING DOLLAR BOOSTS COMMODITY ASSETS, FOREIGN CURRENCIES, AND AND FOREIGN STOCKS
-- S&P 500 WEEKLY MACD LINES HAVE TURNED BULLISH
_________________________________________________________________________________________
Well, the Republicans have finally told us what they will do:
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aCjfPtAA5lMc&pos=8
This is the most frightening and short sighted thinking to benefit the rich and large corporations I've ever seen.
Makes me want Christine O'Donnell. She knows what masturbation does, and what you just read is mindless masturbation.
___________________________________________
It's my last day of vacation. I was looking back at what I wrote in my OEX commentary yesterday. The rules listed were most of what I do to win, and win well.
I set stop losses and never fail them. I almost always buy below prior day close. I study my emotions carefully as I watch 1 and 5 minute Pnf charts or as I simply watch the numbers.
I try to "fall in love" with at least, if not two options for as extended a period as I can find. Falling in love means all I do is watch this option trade, the volume, the bid vs. ask, and pit myself against the seller or buyer, depending upon market conditions.
I treat the options I own as if I sell fruit.
Thursday, September 23, 2010
Study Your Emotions
Yesterday we began hesitancy, and trade ranging. Although we saw theoretical Dow lows of 10,660 and highs of 10,845 the market struggled most of the day at 10,745 Fib re-tracement area.
Buys were possible all on the call.
Because of the tight, almost no movement of the day, no trades were executed.
_______________________________________________________
It is a full moon today. It is also the Fall equinox. " Astrology chartists believe markets rally into full moons, and bottoms on the new moon" (Key Turning Dates.com)
Study Dow Projections. Recalculate support and resistance lines at least once through the day. Be willing to take tight profits. Study your emotions while you trade.
Buys were possible all on the call.
Because of the tight, almost no movement of the day, no trades were executed.
_______________________________________________________
It is a full moon today. It is also the Fall equinox. " Astrology chartists believe markets rally into full moons, and bottoms on the new moon" (Key Turning Dates.com)
Study Dow Projections. Recalculate support and resistance lines at least once through the day. Be willing to take tight profits. Study your emotions while you trade.
Wednesday, September 22, 2010
A Full Moon
Everyone awaited the FEDS to tell us what we all knew they would tell us. The market was so flat until 1:30 p.m.
Traders easily bought the October490Put as low as 2.35 and could have sold to 3.50. Existing holders still hold.
Call traders on the October510C could only buy slightly below prior day close, if they bought, and gain $1.50 per contract.
The upside was very short, and immediately began decline, allow put profits.
The Dow has now hit the theoretical 10,847 and the low of 10,675 despite the market feeling yesterday as if it had not moved.
We closed right dead on with our Fibonnaci re-tracement.
Certainly the market is oversold but there is a strong possibility of a run to 10,950, before a potential drop, if we are following recent history, there could be as much as a 584 point
downside, near 10,366. If there is a downside it will be in stages, and may not be as dramatic as our typical whipsaw, as the market remains bullish.
I'm more sold that the NASDAQ will continue its run while the Dow and S &P 500 may begin to crack.
___________________________________________________________
It's a full moon tomorrow. This is meaningful to astrology chartists, usually predicting a rally.
But I'm alive, I'm sickened again, shaking my head, ready to move to Canada.....
You must read this. Matt Taibbi has done it again. Masterful journalism and expose.
http://www.rollingstone.com/politics/news/17390/204277
Traders easily bought the October490Put as low as 2.35 and could have sold to 3.50. Existing holders still hold.
Call traders on the October510C could only buy slightly below prior day close, if they bought, and gain $1.50 per contract.
The upside was very short, and immediately began decline, allow put profits.
The Dow has now hit the theoretical 10,847 and the low of 10,675 despite the market feeling yesterday as if it had not moved.
We closed right dead on with our Fibonnaci re-tracement.
Certainly the market is oversold but there is a strong possibility of a run to 10,950, before a potential drop, if we are following recent history, there could be as much as a 584 point
downside, near 10,366. If there is a downside it will be in stages, and may not be as dramatic as our typical whipsaw, as the market remains bullish.
I'm more sold that the NASDAQ will continue its run while the Dow and S &P 500 may begin to crack.
___________________________________________________________
It's a full moon tomorrow. This is meaningful to astrology chartists, usually predicting a rally.
But I'm alive, I'm sickened again, shaking my head, ready to move to Canada.....
You must read this. Matt Taibbi has done it again. Masterful journalism and expose.
http://www.rollingstone.com/politics/news/17390/204277
Monday, September 20, 2010
FOMC Babbles
The Dow went beyond the Fibonccaci lines and held. This was a major day for the market, with some predicting the 2007 recession is now over.
Regardless we saw theoretical Dow tops of 10,814, t
raders were only able to gain entry to the call if they followed our "pay above prior day close to 10%" and entered at 12.40 up, to sell to 16.50 highs.
Our put we took a larger second buy, for those that already owned, and new buyers could have gotten in as low as 2.70. We continue to hold this as a hedge and on FOMC babble day we may have good two way trades. We see more upside, if the market can pass 10,776 again to 10,850 to 10,950, before likely bottoms near 10,670 or 10,402.
The question is how fast. We would play the day trade on both issues if possible today. The market usually has whipsaw in the a.m. on FOMC, wafffles mid day, upswings and after the announcement takes off, or begins to fall, depending upon what is interpreted.
_____________________________________________________________
The FOMC babbles come out at 2.15 p.m. Historically there is volatility, and often a run up before or after, or both, on the announcement,which will say nothing.
Regardless we saw theoretical Dow tops of 10,814, t
raders were only able to gain entry to the call if they followed our "pay above prior day close to 10%" and entered at 12.40 up, to sell to 16.50 highs.
Our put we took a larger second buy, for those that already owned, and new buyers could have gotten in as low as 2.70. We continue to hold this as a hedge and on FOMC babble day we may have good two way trades. We see more upside, if the market can pass 10,776 again to 10,850 to 10,950, before likely bottoms near 10,670 or 10,402.
The question is how fast. We would play the day trade on both issues if possible today. The market usually has whipsaw in the a.m. on FOMC, wafffles mid day, upswings and after the announcement takes off, or begins to fall, depending upon what is interpreted.
_____________________________________________________________
The FOMC babbles come out at 2.15 p.m. Historically there is volatility, and often a run up before or after, or both, on the announcement,which will say nothing.
Friday, September 17, 2010
They Save Rather Than Spend
We are issuing dual trades, one an open signal for risk traders, and the other our profitable October call.
Follow futures carefully. Light fluctuations pre-market (40 point area) have best buy prices in for both signals. Heavier futures moves do not chase a position.
Remember, we are far ahead in our trades, 44 out of 46 as winners in all last trades in order. And one, our current put, sold to near or at breakeven Friday and is a new buy today.
________________________________________________________________________________________
The FOMC announces their babbles of the month Tuesday. Expect volatility. And speaking of all those wealthy folks and the tax relief, here's a laugh of facts:
Read this for fun:
Sept. 14 (Bloomberg) -- Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more.
“I would tend to wonder how much the tax cut actually influences spending behavior,” said Chris Cornell, an economist who mined government reports back to 1989 for West Chester, Pennsylvania-based Moody’s Analytics. “Spending by the top 5 percent of households seems much more closely tied to business- cycle issues than it does to tax-cut issues.”
The Moody’s research covering couples earning more than $210,000 found that spending by the wealthy is more likely to be influenced by the ups and downs of the stock market than changes in income-tax rates.
Stock-market performance is the “primary factor that is driving the savings of the top 5 percent of households,” said Mustafa Akcay, economist and co-researcher of the savings data.
Federal Reserve Data
The Moody’s economists examined saving rates by income groups back to 1989. Their study uses statistics from the Federal Reserve’s quarterly Flow of Funds report, which gauges the net worth of households, and the Fed’s triennial Survey of Consumer Finances, a measure of balance sheets, pensions and incomes of U.S. families.
When tax legislation was signed by Clinton in 1993 -- raising the top tax rate to 39.6 percent from 31 percent -- the saving rate fell from 12.1 percent in the second quarter to 9.5 percent in the first quarter of 1994. The Standard & Poor’s 500 Index rose 1.9 percent from July through September, after little change the previous three months.
When the first Bush tax cuts were signed into law in June 2001, pushing the top rate down to 35 percent, the wealthy boosted savings. The saving rate climbed to 2.8 percent in the first quarter of 2002 from minus 2 percent in the second quarter of 2001. The increased savings coincided with a 1.1 percent decline in the S&P 500 index.
Second Round
After the second round of Bush tax cuts in May 2003, the rich also increased their saving, with the rate climbing to 7.6 percent in the first quarter of 2004 from 2.2 percent in the second quarter of 2003, the Moody’s data show.
The analysis found some similarities across income levels in the 2001 and 2003 data. The wealthy and the remaining 95 percent of Americans both saved more of their incomes after the Bush tax cuts. The saving rate is defined as personal savings as a percentage of after-tax income.
The political debate over extending the Bush-era tax cuts, which expire at the end of the year, is intensifying with the approach of congressional elections in November.
Obama, at a White House news conference on Sept. 10, said the push by Republicans to extend cuts for the wealthiest Americans is a “bad idea” because it would cost $700 billion in government revenue at a time of record budget deficits. Obama also has said repeatedly that Republicans want to give a tax cut to “millionaires.”
Boehner, McConnell
Republicans including Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner contend that tax cuts should remain for all and any attempt to target the wealthy -- the top 2 percent to 3 percent earners in the country -- could hurt growth and investment.
McConnell, of Kentucky, said yesterday that he was introducing legislation “that ensures that no one in this country will pay higher income taxes next than they are right now.”
Boehner on Sept. 12 said he was prepared to compromise with the Obama administration and would vote for middle-class tax cuts even if it meant eliminating reductions for wealthier Americans, which he said would be “bad policy.”
“If the only option I have is to vote for some of those tax reductions, I’ll vote for it,” the Republican from Ohio said on CBS’s “Face the Nation” program. He added: “I am going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”
Senate Republican Whip Jon Kyl of Arizona said yesterday that Obama was waging “class warfare” that “has no place in our debate.”
Promised Effects
Some economists voice caution about the promised effects of a change in tax rates. The nonpartisan Congressional Budget Office in January analyzed policy options and possible short- term effects on growth.
“Policies that temporarily increased the after-tax income of people who are relatively well off would probably have little effect on their spending because they generally would be able finance their consumption out of their income or assets without such a change,” CBO director Douglas Elmendorf testified to Congress on Feb. 23.
On the other hand, tax relief for families with “lower income, few assets and poor credit would probably” spur spending, he said. Elmendorf said because of job losses and a drop in assets over the past two years more families “probably fit that description now.”
Hard to Predict
Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who follows consumer spending, said it’s hard to predict the impact of changes in tax policy. “We don’t know what’s going to happen when sizeable tax cuts are likely to be reversed,” he said.
The Bush-era cuts “coincided with a lot of volatile happenings in the U.S. market,” said LeBas, including the Sept. 11, 2001, terrorist attacks.
Cornell and Akcay also looked at 2009 -- a year of financial crisis -- and found wealthy Americans again saved less as the stock market revived.
High-income earners saved at a 9 percent rate in the first three months of 2009, when the S&P 500 dropped to a 12-year low on March 9. As stocks recovered, the saving rate fell to minus 0.5 percent in the second quarter and remained negative through March 2010.
Cornell and Akcay said higher-income earners were spending more than their disposable income, suggesting they used stock- market gains to support their spending. Interest and dividends account for nearly 8 percent of the household income of the top 10 percent of Americans, according to the Fed’s 2007 Survey of Consumer Finances.
Discouraging Wealthy
Economist Harm Bandholz said discouraging the wealthy from spending could weaken the economy, something Republicans argue will happen if the Bush-era tax cuts expire.
“Most of the consumption growth is coming from the higher- income groups,” said Bandholz, chief U.S. economist at UniCredit Global Research in New York. “The lower income groups, they are barely living hand-to-mouth.”
David Dyson, who co-owns an insurance company in Bethlehem, Pennsylvania, said he’s more concerned about the state of the economy than the prospect of a tax increase, which he figures will cost him as much as $30,000.
“I have more than enough money to live on and probably will go out to eat as much as I do,” said Dyson, 58. On the other hand, he may decide to postpone building an addition to his house. “That’s primarily on hold because of the economy, not necessarily my taxes,” he said.We are issuing dual trades, one an open signal for risk traders, and the other our profitable October call.
Follow futures carefully. Light fluctuations pre-market (40 point area) have best buy prices in for both signals. Heavier futures moves do not chase a position.
Remember, we are far ahead in our trades, 44 out of 46 as winners in all last trades in order. And one, our current put, sold to near or at breakeven Friday and is a new buy today.
________________________________________________________________________________________
The FOMC announces their babbles of the month Tuesday. Expect volatility. And speaking of all those wealthy folks and the tax relief, here's a laugh of facts:
Read this for fun:
Sept. 14 (Bloomberg) -- Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more.
“I would tend to wonder how much the tax cut actually influences spending behavior,” said Chris Cornell, an economist who mined government reports back to 1989 for West Chester, Pennsylvania-based Moody’s Analytics. “Spending by the top 5 percent of households seems much more closely tied to business- cycle issues than it does to tax-cut issues.”
The Moody’s research covering couples earning more than $210,000 found that spending by the wealthy is more likely to be influenced by the ups and downs of the stock market than changes in income-tax rates.
Stock-market performance is the “primary factor that is driving the savings of the top 5 percent of households,” said Mustafa Akcay, economist and co-researcher of the savings data.
Federal Reserve Data
The Moody’s economists examined saving rates by income groups back to 1989. Their study uses statistics from the Federal Reserve’s quarterly Flow of Funds report, which gauges the net worth of households, and the Fed’s triennial Survey of Consumer Finances, a measure of balance sheets, pensions and incomes of U.S. families.
When tax legislation was signed by Clinton in 1993 -- raising the top tax rate to 39.6 percent from 31 percent -- the saving rate fell from 12.1 percent in the second quarter to 9.5 percent in the first quarter of 1994. The Standard & Poor’s 500 Index rose 1.9 percent from July through September, after little change the previous three months.
When the first Bush tax cuts were signed into law in June 2001, pushing the top rate down to 35 percent, the wealthy boosted savings. The saving rate climbed to 2.8 percent in the first quarter of 2002 from minus 2 percent in the second quarter of 2001. The increased savings coincided with a 1.1 percent decline in the S&P 500 index.
Second Round
After the second round of Bush tax cuts in May 2003, the rich also increased their saving, with the rate climbing to 7.6 percent in the first quarter of 2004 from 2.2 percent in the second quarter of 2003, the Moody’s data show.
The analysis found some similarities across income levels in the 2001 and 2003 data. The wealthy and the remaining 95 percent of Americans both saved more of their incomes after the Bush tax cuts. The saving rate is defined as personal savings as a percentage of after-tax income.
The political debate over extending the Bush-era tax cuts, which expire at the end of the year, is intensifying with the approach of congressional elections in November.
Obama, at a White House news conference on Sept. 10, said the push by Republicans to extend cuts for the wealthiest Americans is a “bad idea” because it would cost $700 billion in government revenue at a time of record budget deficits. Obama also has said repeatedly that Republicans want to give a tax cut to “millionaires.”
Boehner, McConnell
Republicans including Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner contend that tax cuts should remain for all and any attempt to target the wealthy -- the top 2 percent to 3 percent earners in the country -- could hurt growth and investment.
McConnell, of Kentucky, said yesterday that he was introducing legislation “that ensures that no one in this country will pay higher income taxes next than they are right now.”
Boehner on Sept. 12 said he was prepared to compromise with the Obama administration and would vote for middle-class tax cuts even if it meant eliminating reductions for wealthier Americans, which he said would be “bad policy.”
“If the only option I have is to vote for some of those tax reductions, I’ll vote for it,” the Republican from Ohio said on CBS’s “Face the Nation” program. He added: “I am going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”
Senate Republican Whip Jon Kyl of Arizona said yesterday that Obama was waging “class warfare” that “has no place in our debate.”
Promised Effects
Some economists voice caution about the promised effects of a change in tax rates. The nonpartisan Congressional Budget Office in January analyzed policy options and possible short- term effects on growth.
“Policies that temporarily increased the after-tax income of people who are relatively well off would probably have little effect on their spending because they generally would be able finance their consumption out of their income or assets without such a change,” CBO director Douglas Elmendorf testified to Congress on Feb. 23.
On the other hand, tax relief for families with “lower income, few assets and poor credit would probably” spur spending, he said. Elmendorf said because of job losses and a drop in assets over the past two years more families “probably fit that description now.”
Hard to Predict
Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who follows consumer spending, said it’s hard to predict the impact of changes in tax policy. “We don’t know what’s going to happen when sizeable tax cuts are likely to be reversed,” he said.
The Bush-era cuts “coincided with a lot of volatile happenings in the U.S. market,” said LeBas, including the Sept. 11, 2001, terrorist attacks.
Cornell and Akcay also looked at 2009 -- a year of financial crisis -- and found wealthy Americans again saved less as the stock market revived.
High-income earners saved at a 9 percent rate in the first three months of 2009, when the S&P 500 dropped to a 12-year low on March 9. As stocks recovered, the saving rate fell to minus 0.5 percent in the second quarter and remained negative through March 2010.
Cornell and Akcay said higher-income earners were spending more than their disposable income, suggesting they used stock- market gains to support their spending. Interest and dividends account for nearly 8 percent of the household income of the top 10 percent of Americans, according to the Fed’s 2007 Survey of Consumer Finances.
Discouraging Wealthy
Economist Harm Bandholz said discouraging the wealthy from spending could weaken the economy, something Republicans argue will happen if the Bush-era tax cuts expire.
“Most of the consumption growth is coming from the higher- income groups,” said Bandholz, chief U.S. economist at UniCredit Global Research in New York. “The lower income groups, they are barely living hand-to-mouth.”
David Dyson, who co-owns an insurance company in Bethlehem, Pennsylvania, said he’s more concerned about the state of the economy than the prospect of a tax increase, which he figures will cost him as much as $30,000.
“I have more than enough money to live on and probably will go out to eat as much as I do,” said Dyson, 58. On the other hand, he may decide to postpone building an addition to his house. “That’s primarily on hold because of the economy, not necessarily my taxes,” he said.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/
Follow futures carefully. Light fluctuations pre-market (40 point area) have best buy prices in for both signals. Heavier futures moves do not chase a position.
Remember, we are far ahead in our trades, 44 out of 46 as winners in all last trades in order. And one, our current put, sold to near or at breakeven Friday and is a new buy today.
________________________________________________________________________________________
The FOMC announces their babbles of the month Tuesday. Expect volatility. And speaking of all those wealthy folks and the tax relief, here's a laugh of facts:
Read this for fun:
Sept. 14 (Bloomberg) -- Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more.
“I would tend to wonder how much the tax cut actually influences spending behavior,” said Chris Cornell, an economist who mined government reports back to 1989 for West Chester, Pennsylvania-based Moody’s Analytics. “Spending by the top 5 percent of households seems much more closely tied to business- cycle issues than it does to tax-cut issues.”
The Moody’s research covering couples earning more than $210,000 found that spending by the wealthy is more likely to be influenced by the ups and downs of the stock market than changes in income-tax rates.
Stock-market performance is the “primary factor that is driving the savings of the top 5 percent of households,” said Mustafa Akcay, economist and co-researcher of the savings data.
Federal Reserve Data
The Moody’s economists examined saving rates by income groups back to 1989. Their study uses statistics from the Federal Reserve’s quarterly Flow of Funds report, which gauges the net worth of households, and the Fed’s triennial Survey of Consumer Finances, a measure of balance sheets, pensions and incomes of U.S. families.
When tax legislation was signed by Clinton in 1993 -- raising the top tax rate to 39.6 percent from 31 percent -- the saving rate fell from 12.1 percent in the second quarter to 9.5 percent in the first quarter of 1994. The Standard & Poor’s 500 Index rose 1.9 percent from July through September, after little change the previous three months.
When the first Bush tax cuts were signed into law in June 2001, pushing the top rate down to 35 percent, the wealthy boosted savings. The saving rate climbed to 2.8 percent in the first quarter of 2002 from minus 2 percent in the second quarter of 2001. The increased savings coincided with a 1.1 percent decline in the S&P 500 index.
Second Round
After the second round of Bush tax cuts in May 2003, the rich also increased their saving, with the rate climbing to 7.6 percent in the first quarter of 2004 from 2.2 percent in the second quarter of 2003, the Moody’s data show.
The analysis found some similarities across income levels in the 2001 and 2003 data. The wealthy and the remaining 95 percent of Americans both saved more of their incomes after the Bush tax cuts. The saving rate is defined as personal savings as a percentage of after-tax income.
The political debate over extending the Bush-era tax cuts, which expire at the end of the year, is intensifying with the approach of congressional elections in November.
Obama, at a White House news conference on Sept. 10, said the push by Republicans to extend cuts for the wealthiest Americans is a “bad idea” because it would cost $700 billion in government revenue at a time of record budget deficits. Obama also has said repeatedly that Republicans want to give a tax cut to “millionaires.”
Boehner, McConnell
Republicans including Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner contend that tax cuts should remain for all and any attempt to target the wealthy -- the top 2 percent to 3 percent earners in the country -- could hurt growth and investment.
McConnell, of Kentucky, said yesterday that he was introducing legislation “that ensures that no one in this country will pay higher income taxes next than they are right now.”
Boehner on Sept. 12 said he was prepared to compromise with the Obama administration and would vote for middle-class tax cuts even if it meant eliminating reductions for wealthier Americans, which he said would be “bad policy.”
“If the only option I have is to vote for some of those tax reductions, I’ll vote for it,” the Republican from Ohio said on CBS’s “Face the Nation” program. He added: “I am going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”
Senate Republican Whip Jon Kyl of Arizona said yesterday that Obama was waging “class warfare” that “has no place in our debate.”
Promised Effects
Some economists voice caution about the promised effects of a change in tax rates. The nonpartisan Congressional Budget Office in January analyzed policy options and possible short- term effects on growth.
“Policies that temporarily increased the after-tax income of people who are relatively well off would probably have little effect on their spending because they generally would be able finance their consumption out of their income or assets without such a change,” CBO director Douglas Elmendorf testified to Congress on Feb. 23.
On the other hand, tax relief for families with “lower income, few assets and poor credit would probably” spur spending, he said. Elmendorf said because of job losses and a drop in assets over the past two years more families “probably fit that description now.”
Hard to Predict
Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who follows consumer spending, said it’s hard to predict the impact of changes in tax policy. “We don’t know what’s going to happen when sizeable tax cuts are likely to be reversed,” he said.
The Bush-era cuts “coincided with a lot of volatile happenings in the U.S. market,” said LeBas, including the Sept. 11, 2001, terrorist attacks.
Cornell and Akcay also looked at 2009 -- a year of financial crisis -- and found wealthy Americans again saved less as the stock market revived.
High-income earners saved at a 9 percent rate in the first three months of 2009, when the S&P 500 dropped to a 12-year low on March 9. As stocks recovered, the saving rate fell to minus 0.5 percent in the second quarter and remained negative through March 2010.
Cornell and Akcay said higher-income earners were spending more than their disposable income, suggesting they used stock- market gains to support their spending. Interest and dividends account for nearly 8 percent of the household income of the top 10 percent of Americans, according to the Fed’s 2007 Survey of Consumer Finances.
Discouraging Wealthy
Economist Harm Bandholz said discouraging the wealthy from spending could weaken the economy, something Republicans argue will happen if the Bush-era tax cuts expire.
“Most of the consumption growth is coming from the higher- income groups,” said Bandholz, chief U.S. economist at UniCredit Global Research in New York. “The lower income groups, they are barely living hand-to-mouth.”
David Dyson, who co-owns an insurance company in Bethlehem, Pennsylvania, said he’s more concerned about the state of the economy than the prospect of a tax increase, which he figures will cost him as much as $30,000.
“I have more than enough money to live on and probably will go out to eat as much as I do,” said Dyson, 58. On the other hand, he may decide to postpone building an addition to his house. “That’s primarily on hold because of the economy, not necessarily my taxes,” he said.We are issuing dual trades, one an open signal for risk traders, and the other our profitable October call.
Follow futures carefully. Light fluctuations pre-market (40 point area) have best buy prices in for both signals. Heavier futures moves do not chase a position.
Remember, we are far ahead in our trades, 44 out of 46 as winners in all last trades in order. And one, our current put, sold to near or at breakeven Friday and is a new buy today.
________________________________________________________________________________________
The FOMC announces their babbles of the month Tuesday. Expect volatility. And speaking of all those wealthy folks and the tax relief, here's a laugh of facts:
Read this for fun:
Sept. 14 (Bloomberg) -- Give the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more.
“I would tend to wonder how much the tax cut actually influences spending behavior,” said Chris Cornell, an economist who mined government reports back to 1989 for West Chester, Pennsylvania-based Moody’s Analytics. “Spending by the top 5 percent of households seems much more closely tied to business- cycle issues than it does to tax-cut issues.”
The Moody’s research covering couples earning more than $210,000 found that spending by the wealthy is more likely to be influenced by the ups and downs of the stock market than changes in income-tax rates.
Stock-market performance is the “primary factor that is driving the savings of the top 5 percent of households,” said Mustafa Akcay, economist and co-researcher of the savings data.
Federal Reserve Data
The Moody’s economists examined saving rates by income groups back to 1989. Their study uses statistics from the Federal Reserve’s quarterly Flow of Funds report, which gauges the net worth of households, and the Fed’s triennial Survey of Consumer Finances, a measure of balance sheets, pensions and incomes of U.S. families.
When tax legislation was signed by Clinton in 1993 -- raising the top tax rate to 39.6 percent from 31 percent -- the saving rate fell from 12.1 percent in the second quarter to 9.5 percent in the first quarter of 1994. The Standard & Poor’s 500 Index rose 1.9 percent from July through September, after little change the previous three months.
When the first Bush tax cuts were signed into law in June 2001, pushing the top rate down to 35 percent, the wealthy boosted savings. The saving rate climbed to 2.8 percent in the first quarter of 2002 from minus 2 percent in the second quarter of 2001. The increased savings coincided with a 1.1 percent decline in the S&P 500 index.
Second Round
After the second round of Bush tax cuts in May 2003, the rich also increased their saving, with the rate climbing to 7.6 percent in the first quarter of 2004 from 2.2 percent in the second quarter of 2003, the Moody’s data show.
The analysis found some similarities across income levels in the 2001 and 2003 data. The wealthy and the remaining 95 percent of Americans both saved more of their incomes after the Bush tax cuts. The saving rate is defined as personal savings as a percentage of after-tax income.
The political debate over extending the Bush-era tax cuts, which expire at the end of the year, is intensifying with the approach of congressional elections in November.
Obama, at a White House news conference on Sept. 10, said the push by Republicans to extend cuts for the wealthiest Americans is a “bad idea” because it would cost $700 billion in government revenue at a time of record budget deficits. Obama also has said repeatedly that Republicans want to give a tax cut to “millionaires.”
Boehner, McConnell
Republicans including Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner contend that tax cuts should remain for all and any attempt to target the wealthy -- the top 2 percent to 3 percent earners in the country -- could hurt growth and investment.
McConnell, of Kentucky, said yesterday that he was introducing legislation “that ensures that no one in this country will pay higher income taxes next than they are right now.”
Boehner on Sept. 12 said he was prepared to compromise with the Obama administration and would vote for middle-class tax cuts even if it meant eliminating reductions for wealthier Americans, which he said would be “bad policy.”
“If the only option I have is to vote for some of those tax reductions, I’ll vote for it,” the Republican from Ohio said on CBS’s “Face the Nation” program. He added: “I am going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”
Senate Republican Whip Jon Kyl of Arizona said yesterday that Obama was waging “class warfare” that “has no place in our debate.”
Promised Effects
Some economists voice caution about the promised effects of a change in tax rates. The nonpartisan Congressional Budget Office in January analyzed policy options and possible short- term effects on growth.
“Policies that temporarily increased the after-tax income of people who are relatively well off would probably have little effect on their spending because they generally would be able finance their consumption out of their income or assets without such a change,” CBO director Douglas Elmendorf testified to Congress on Feb. 23.
On the other hand, tax relief for families with “lower income, few assets and poor credit would probably” spur spending, he said. Elmendorf said because of job losses and a drop in assets over the past two years more families “probably fit that description now.”
Hard to Predict
Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia, who follows consumer spending, said it’s hard to predict the impact of changes in tax policy. “We don’t know what’s going to happen when sizeable tax cuts are likely to be reversed,” he said.
The Bush-era cuts “coincided with a lot of volatile happenings in the U.S. market,” said LeBas, including the Sept. 11, 2001, terrorist attacks.
Cornell and Akcay also looked at 2009 -- a year of financial crisis -- and found wealthy Americans again saved less as the stock market revived.
High-income earners saved at a 9 percent rate in the first three months of 2009, when the S&P 500 dropped to a 12-year low on March 9. As stocks recovered, the saving rate fell to minus 0.5 percent in the second quarter and remained negative through March 2010.
Cornell and Akcay said higher-income earners were spending more than their disposable income, suggesting they used stock- market gains to support their spending. Interest and dividends account for nearly 8 percent of the household income of the top 10 percent of Americans, according to the Fed’s 2007 Survey of Consumer Finances.
Discouraging Wealthy
Economist Harm Bandholz said discouraging the wealthy from spending could weaken the economy, something Republicans argue will happen if the Bush-era tax cuts expire.
“Most of the consumption growth is coming from the higher- income groups,” said Bandholz, chief U.S. economist at UniCredit Global Research in New York. “The lower income groups, they are barely living hand-to-mouth.”
David Dyson, who co-owns an insurance company in Bethlehem, Pennsylvania, said he’s more concerned about the state of the economy than the prospect of a tax increase, which he figures will cost him as much as $30,000.
“I have more than enough money to live on and probably will go out to eat as much as I do,” said Dyson, 58. On the other hand, he may decide to postpone building an addition to his house. “That’s primarily on hold because of the economy, not necessarily my taxes,” he said.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/
GE is an Over-Leveraged Company
Yom Kippur. Blessings.
Now, allow me some soapbox time:
1. http://www.huffingtonpost.com/michael-moore/never-forget-bad-wars-are_b_718337.html
2. Drug use is up 9%. Perhaps the billions we spend in enforcing this silliness could be better utilized? Does anyone really think the illegal drug trade will stop as long as it is lucrative?
3. http://www.huffingtonpost.com/2010/09/16/ross-eisenbrey-on-the-ret_n_719385.html?ir=Politics
And to the market:
Yesterday was more and more flatlining, hung up at major resistance lines. By 2 p.m. the market had only moved from a theoretical Dow high of 10,615 to a low of 10,482, but the moves were so slight, so incremental, that trading was hard.
We are keeping both positions open with closure by end of day today. Risk traders only would consider holding the put.
_____________________________________________________________
Here's the kind of tip we offer in our Blue Chip Option commentaries:
*GE is an over-leveraged company. Keep a running PNF on this one and consider it as "short play" or a 6 month out ATM put.
Now, allow me some soapbox time:
1. http://www.huffingtonpost.com/michael-moore/never-forget-bad-wars-are_b_718337.html
2. Drug use is up 9%. Perhaps the billions we spend in enforcing this silliness could be better utilized? Does anyone really think the illegal drug trade will stop as long as it is lucrative?
3. http://www.huffingtonpost.com/2010/09/16/ross-eisenbrey-on-the-ret_n_719385.html?ir=Politics
And to the market:
Yesterday was more and more flatlining, hung up at major resistance lines. By 2 p.m. the market had only moved from a theoretical Dow high of 10,615 to a low of 10,482, but the moves were so slight, so incremental, that trading was hard.
We are keeping both positions open with closure by end of day today. Risk traders only would consider holding the put.
_____________________________________________________________
Here's the kind of tip we offer in our Blue Chip Option commentaries:
*GE is an over-leveraged company. Keep a running PNF on this one and consider it as "short play" or a 6 month out ATM put.
Thursday, September 16, 2010
It's That Fragile
It is amazing that the market moved over 200 points yesterday by 3.30 p.m. but seemed to go nowhere. Keep track of this against our Dow projections.
We saw highs of 10,613, and lows of 10,441. The Oct505C was available as low as 10.70, and sold to 12.60. Another profitable day. We'll keep the position open for those that have not sold out, and are holding for more profits.
Meanwhile the hedge put moved less than a $1.00. We have likely possibility to 10,746 Fib tops by end of week, and an equal potential for a drop to 10, 240 area on any bit of fear.
It's that fragile.
_____________________________________________________________________
Commodities began a bit of retreat, and the market showed many signs of continued upside, but with fragile conditions.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aLklf38Rfqxw&pos=3
Import price data, and the Empire State Manufacturing index will also report. This data measures well, and astute traders follow it's movement, and is relates to cause and effect, and supply and demand. Study our website in the password protected area to see how we use the Wyckoff Method to chart stocks, and to understand how to trade all options, around supply and demand.
And Fear and Greed.
We saw highs of 10,613, and lows of 10,441. The Oct505C was available as low as 10.70, and sold to 12.60. Another profitable day. We'll keep the position open for those that have not sold out, and are holding for more profits.
Meanwhile the hedge put moved less than a $1.00. We have likely possibility to 10,746 Fib tops by end of week, and an equal potential for a drop to 10, 240 area on any bit of fear.
It's that fragile.
_____________________________________________________________________
Commodities began a bit of retreat, and the market showed many signs of continued upside, but with fragile conditions.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aLklf38Rfqxw&pos=3
Import price data, and the Empire State Manufacturing index will also report. This data measures well, and astute traders follow it's movement, and is relates to cause and effect, and supply and demand. Study our website in the password protected area to see how we use the Wyckoff Method to chart stocks, and to understand how to trade all options, around supply and demand.
And Fear and Greed.
Wednesday, September 15, 2010
I Knew the Oil Game Would Begin, And it Did
The market went to highs to 10,598 and down 10,429. The market was so trade range bound that traders were able to either:
1. Sit on hands
2. Buy the call as low as 11.00 before 2.00 p.m, sell to 12.25, or continue to hold.
3. Buy the put at below prior day close, and buy as low as 5.20.
We are assuming traders either day traded yesterday or hold these opposing signals.
Now, these stories:
1. Trader KG is worried about me. He says I 've been much more quiet, much more subdued, and not nearly as political the past few weeks. I told him I'm just tired, and resting up.
2. Trader JR wrote that he felt personal political opinion should not be included in a professional trading publication and I advised him that I have done so for all my years, and that I planned to continue to do so, as I believe the lies and deceits of right wing thinking are the basis of our financial falsehoods, and lead us to fear. Trader JR pointed out there is deceit and lies in all parties, and he's right. The false facts are rampant. What scares me is that ALL of the GOP lies appear to have worked, created FEAR, enough to make 23% of America believe our President is Muslim.
These false facts are planned propaganda, and will allow the GOP to come back in with their games. I'm saddened by this, and share this kind of info in the same way that the DAY Bush was elected years ago...and I went out and bought hybrid cars. I did this because I knew the oil game would begin. And it did.
Now a great story about the young lady who handles much of our advertising and Web promotions, her tragic loss of a son in Austin TX to a street fight, and what she did.
This is so beautiful and so sad. My love to Missy.
The Story of Missy Evans:
http://weareaustin.com/fulltext?nxd_id=89695
1. Sit on hands
2. Buy the call as low as 11.00 before 2.00 p.m, sell to 12.25, or continue to hold.
3. Buy the put at below prior day close, and buy as low as 5.20.
We are assuming traders either day traded yesterday or hold these opposing signals.
Now, these stories:
1. Trader KG is worried about me. He says I 've been much more quiet, much more subdued, and not nearly as political the past few weeks. I told him I'm just tired, and resting up.
2. Trader JR wrote that he felt personal political opinion should not be included in a professional trading publication and I advised him that I have done so for all my years, and that I planned to continue to do so, as I believe the lies and deceits of right wing thinking are the basis of our financial falsehoods, and lead us to fear. Trader JR pointed out there is deceit and lies in all parties, and he's right. The false facts are rampant. What scares me is that ALL of the GOP lies appear to have worked, created FEAR, enough to make 23% of America believe our President is Muslim.
These false facts are planned propaganda, and will allow the GOP to come back in with their games. I'm saddened by this, and share this kind of info in the same way that the DAY Bush was elected years ago...and I went out and bought hybrid cars. I did this because I knew the oil game would begin. And it did.
Now a great story about the young lady who handles much of our advertising and Web promotions, her tragic loss of a son in Austin TX to a street fight, and what she did.
This is so beautiful and so sad. My love to Missy.
The Story of Missy Evans:
http://weareaustin.com/fulltext?nxd_id=89695
Tuesday, September 14, 2010
Historical Grounds
Wall Street hit historical grounds yesterday and breached its 200 day moving average. To many chartists and "averagers" using cycle methodology, this is a big thing.
It allowed the market to open and run up to a theoretical Dow top of 10,608 before 10 a.m. No new entry was possible to the call in the a.m., but for traders that still held inventory from last week, or had held partials, our October505Call hit 12.90 before 11 a.m., locking all profits.
Read our option update carefully to understand the dual positions we may have, and note that many "data" facts come out this this week. False facts like Redbook, CPI, et al usually created advance volatility. Most important Buffet has spoken about the recession. As an Obama economic voter, Buffet, the richest man in the world, sees through the GOP and the tax game, and judges his market reactions by how his companies are doing:
http://noir.bloomberg.com/apps/news?pid=20601087&sid=alg2Ocp_7phE&pos=2
____________________________________________________________________________
Traders in our Blue Chip Option service have recently traded a call option for 50% gains in a week, and were just instructed on 4 new stocks, or stock options, that we think could have huge returns.
Consider joining our other service: www.bluechipoptions.com
One good trade is a year pays for the service.
It allowed the market to open and run up to a theoretical Dow top of 10,608 before 10 a.m. No new entry was possible to the call in the a.m., but for traders that still held inventory from last week, or had held partials, our October505Call hit 12.90 before 11 a.m., locking all profits.
Read our option update carefully to understand the dual positions we may have, and note that many "data" facts come out this this week. False facts like Redbook, CPI, et al usually created advance volatility. Most important Buffet has spoken about the recession. As an Obama economic voter, Buffet, the richest man in the world, sees through the GOP and the tax game, and judges his market reactions by how his companies are doing:
http://noir.bloomberg.com/apps/news?pid=20601087&sid=alg2Ocp_7phE&pos=2
____________________________________________________________________________
Traders in our Blue Chip Option service have recently traded a call option for 50% gains in a week, and were just instructed on 4 new stocks, or stock options, that we think could have huge returns.
Consider joining our other service: www.bluechipoptions.com
One good trade is a year pays for the service.
Saturday, September 11, 2010
Futures are Very Important
Review our Dow projections carefully, which have now been in affect for almost 21 days, still operating within a 584 point range.
We believe there is a 60% chance the market could move to 10,650 to 10,746, the top Fib retracmement, a 20% odds the market will hesitate no higher than 10,550, and a 20% chance the market could reverse to the 9950 to 10050 area, before another attempt at upside.
We also have had only two losing trades now out the last 32, and feel our reading of public sentiment, and of how the market breathes, has been very accurate. Accuracy is "wilted" a bit, however, based on the low volume we have seen in trading this past few weeks, which makes less definition to a stronger upside than if higher volume.
Futures are a very important part of how one trades this market. I begin watching futures at 8 p.m. the night prior and as early as 4.30 a.m. the trading day, EST. I watch for severe fluctuations vs. moderate swings.
The market has become simple to trade: trade at the market open and the market close, as the period between 11 a.m. and 2 p.m., what we've always called the Dead Time Zone is even more so becoming that. The institutional and electronic traders are trading more and more just at the opening, and close, and honestly, going out golfing mid day. It's a new anomaly. Traders keep up with any market moves by smartphone, and have buy/sell/ triggers in place in order to alert them of any major move during this slow time, otherwise simply "not being on the floor."
Friday is both Yom Kippur and Quadruple Witching Option Expiry for September issues. Lots to be "shock news" could be taken from announcements this week.
We believe there is a 60% chance the market could move to 10,650 to 10,746, the top Fib retracmement, a 20% odds the market will hesitate no higher than 10,550, and a 20% chance the market could reverse to the 9950 to 10050 area, before another attempt at upside.
We also have had only two losing trades now out the last 32, and feel our reading of public sentiment, and of how the market breathes, has been very accurate. Accuracy is "wilted" a bit, however, based on the low volume we have seen in trading this past few weeks, which makes less definition to a stronger upside than if higher volume.
Futures are a very important part of how one trades this market. I begin watching futures at 8 p.m. the night prior and as early as 4.30 a.m. the trading day, EST. I watch for severe fluctuations vs. moderate swings.
The market has become simple to trade: trade at the market open and the market close, as the period between 11 a.m. and 2 p.m., what we've always called the Dead Time Zone is even more so becoming that. The institutional and electronic traders are trading more and more just at the opening, and close, and honestly, going out golfing mid day. It's a new anomaly. Traders keep up with any market moves by smartphone, and have buy/sell/ triggers in place in order to alert them of any major move during this slow time, otherwise simply "not being on the floor."
Friday is both Yom Kippur and Quadruple Witching Option Expiry for September issues. Lots to be "shock news" could be taken from announcements this week.
Friday, September 10, 2010
Was Our Money Wasted?
The theoretical Dow hit highs of 10516, and lows of 10368.
What most do not understand in the horrible and not so horrible bail out of the banks is two things:
1. A financial crisis that would have ended the value of all paper currency was averted.
2. The brilliant financial team that runs Washington (Wall Street), and the lobbyists, can change any program and divert
regulations or funds, and can still do so.
Was our money wasted? Yes. It was taken from us by the bankers, a second time. Community banks still cannot get money. And the bankers profited again.
At the same time, I believe that Paulson/Geitner were right the first time, and Obama and Geitner the second time.
None of us knew, and none of us even bothered to know, that we had created a bubble of fake money and lifestyles over a 30 to 40 year period that led to our undoing.
Drinking bottled water while on your cell phone in your Chevy Suburban. The kids are in the back seats watching their own videos.
Real life just flies by us.
What most do not understand in the horrible and not so horrible bail out of the banks is two things:
1. A financial crisis that would have ended the value of all paper currency was averted.
2. The brilliant financial team that runs Washington (Wall Street), and the lobbyists, can change any program and divert
regulations or funds, and can still do so.
Was our money wasted? Yes. It was taken from us by the bankers, a second time. Community banks still cannot get money. And the bankers profited again.
At the same time, I believe that Paulson/Geitner were right the first time, and Obama and Geitner the second time.
None of us knew, and none of us even bothered to know, that we had created a bubble of fake money and lifestyles over a 30 to 40 year period that led to our undoing.
Drinking bottled water while on your cell phone in your Chevy Suburban. The kids are in the back seats watching their own videos.
Real life just flies by us.
Thursday, September 9, 2010
I Know in Advance what I am Going to Do
The theoretical Dow hit highs of 10466, and lows of 10285. A nice day for our call which we had only one buy on Monday, with highs of 8.50 and lows of 8.
There are 5 basic rules of trading I live by:
1. I know in advance what I am going to do.
2. A budget is in place
3. I am ready to follow the market often and have buy/sell orders in, and changing all day.
4. Support/Resitance/Pivot I recalculate and use at least once, and often twice in a day
5. I am never too greed.
(I still struggle with being too fearful :-))
A must read:
http://www.bloomberg.com/news/2010-09-07/p-g-s-mcdonald-seeks-more-global-brands-as-sales-abroad-hit-60-of-total.html
There are 5 basic rules of trading I live by:
1. I know in advance what I am going to do.
2. A budget is in place
3. I am ready to follow the market often and have buy/sell orders in, and changing all day.
4. Support/Resitance/Pivot I recalculate and use at least once, and often twice in a day
5. I am never too greed.
(I still struggle with being too fearful :-))
A must read:
http://www.bloomberg.com/news/2010-09-07/p-g-s-mcdonald-seeks-more-global-brands-as-sales-abroad-hit-60-of-total.html
Wednesday, September 8, 2010
Large Moves
The theoretical Dow hit highs of 10486, and lows of 10,292. The market saw large moves today.
We had open the 505 Call that had highs of 8.10and lows of 7.
____________
All the Pee Party members and the GOP have it figured out:
*Renew the Bush tax cuts so that only the rich benefit
*Get it rolling again, stop this damn moratorium on deep water drilling without more regulations, we're losing jobs.
Ooops, another oil rig crashed and burned last week. I always wonder how they answer this stuff?
BTW, has anyone heard a GOP plan when they "take over" soon, and try to "impeach Obama" (my favorite). I've looked everywhere, and can find no plan at all.
We had open the 505 Call that had highs of 8.10and lows of 7.
____________
All the Pee Party members and the GOP have it figured out:
*Renew the Bush tax cuts so that only the rich benefit
*Get it rolling again, stop this damn moratorium on deep water drilling without more regulations, we're losing jobs.
Ooops, another oil rig crashed and burned last week. I always wonder how they answer this stuff?
BTW, has anyone heard a GOP plan when they "take over" soon, and try to "impeach Obama" (my favorite). I've looked everywhere, and can find no plan at all.
Tuesday, September 7, 2010
Fear and Uncertainty
The market last Friday opened 122 points up, right to our 10,416 top, and the risk traders still holding the Sept500C were able to sell to highs of 5.85 by 9.49 a.m. for an 84 to 114% return depending upon your first entry. We hit profits every day this past week!
It is time to move to October options, and time to review where the next resistance line will be, and IF we are in a short term bull rally. As you review the economic calendar make note that the early part of the week has little "news" and traders are just returning to the market.
I'm pleased personally that the market held up three days to the upside and was able to hit good resistance areas. 10,550 is strong resistance. If the market can move 10,609 or upwards this week we have a short term bull rally, that has come in good incremental stages, and not huge run ups, a good sign of steady upside.
But it's a market filled with FEAR and uncertainty, and definitely governed by the electronic traders playing for pennies.
We will not yet buy a put, but will follow our rules on BEST buy only on a call purchase. There is ALWAYS a way to make money in the stock market.
And trader KG, who uses our support and resistance lines, wrote :
Floyd,
Bought the 500 sept put for $7.80 right around r-3 and sold for $9.30 a quick 20% profit
It is time to move to October options, and time to review where the next resistance line will be, and IF we are in a short term bull rally. As you review the economic calendar make note that the early part of the week has little "news" and traders are just returning to the market.
I'm pleased personally that the market held up three days to the upside and was able to hit good resistance areas. 10,550 is strong resistance. If the market can move 10,609 or upwards this week we have a short term bull rally, that has come in good incremental stages, and not huge run ups, a good sign of steady upside.
But it's a market filled with FEAR and uncertainty, and definitely governed by the electronic traders playing for pennies.
We will not yet buy a put, but will follow our rules on BEST buy only on a call purchase. There is ALWAYS a way to make money in the stock market.
And trader KG, who uses our support and resistance lines, wrote :
Floyd,
Bought the 500 sept put for $7.80 right around r-3 and sold for $9.30 a quick 20% profit
Friday, September 3, 2010
Our Goal
Our goal was to hold at least to yesterday's close by day end, as it would signal some strength to a light volume rally. Talk about low volume and "death" moves. By 1.30 p.m.the market had barely moved. Risk traders were able to buy the new recommendation to the Sept500Call, as low as 3.00 in early morning trading. As the option closed at 3.40 this "best buy" was a stretch, and not quite a "best buy," but we are listing for any risk traders that may have bought in at 3.00. It could have sold for 3.40 by 3.21 p.m., but we'll bet most risk trader kept the issue for day close tomorrow.
We'll hold this position, and note again only risk traders, for any slight bump on Friday, pre-holiday weekend. Do not trade any other new signals, and enter the holiday weekend with no inventory.
We'll hold this position, and note again only risk traders, for any slight bump on Friday, pre-holiday weekend. Do not trade any other new signals, and enter the holiday weekend with no inventory.
Thursday, September 2, 2010
Massive 45 to 130% Profits!
The market jumped and hit theoretical Dow highs of 10,319, right near our first top. Traders that held the out of the money Sept485 were ready to throw the towel in, but we were saved in early trading with a jump on to 3.40, well above any of our buying prices.
Traders that owned the Sept500Call truly made the profits, which hit highs of 11.20, with an average cost of 3.90 to 5.20. Huge profits, and easy to follow, as futures were up dramatically, and all of us had the Dow projections to know where we should top.
The market holding above 10,220, the S&P above 1071, and the NASDAW renewing above 812 are all very positive signs of a bull rally. BUT, it is also light trading and historically there is always a burst before Labor Day, often with a slight sell of in advance.
We've profited hugely on calls for many weeks, with 34 trades, and only two losses.
What 's the market going to do long term? Long term to me means next week. Who knows? Right now, the bulls took over and we think there may be one more trade to the call before the Labor Day weekend.
NOTE: Risk increases as volume becomes lighter towards the end of this week. We do not want to hold any inventory over the Holiday Weekend.
Congratulations on some massive 45% to 130% profits, traders!
_______________
This is one of the best articles I have ever read, helping us to understand the demand for financial assets is not like the demand for iPods:
http://www.economist.com/node/16792858?story_id=16792858&CFID=141777624&CFTOKEN=87198579economist/.com/blogs/buttonwood
if the link does not work, and then search up A Special Case. It's worth it's weight in gold
Traders that owned the Sept500Call truly made the profits, which hit highs of 11.20, with an average cost of 3.90 to 5.20. Huge profits, and easy to follow, as futures were up dramatically, and all of us had the Dow projections to know where we should top.
The market holding above 10,220, the S&P above 1071, and the NASDAW renewing above 812 are all very positive signs of a bull rally. BUT, it is also light trading and historically there is always a burst before Labor Day, often with a slight sell of in advance.
We've profited hugely on calls for many weeks, with 34 trades, and only two losses.
What 's the market going to do long term? Long term to me means next week. Who knows? Right now, the bulls took over and we think there may be one more trade to the call before the Labor Day weekend.
NOTE: Risk increases as volume becomes lighter towards the end of this week. We do not want to hold any inventory over the Holiday Weekend.
Congratulations on some massive 45% to 130% profits, traders!
_______________
This is one of the best articles I have ever read, helping us to understand the demand for financial assets is not like the demand for iPods:
http://www.economist.com/node/16792858?story_id=16792858&CFID=141777624&CFTOKEN=87198579economist/.com/blogs/buttonwood
if the link does not work, and then search up A Special Case. It's worth it's weight in gold
Wednesday, September 1, 2010
The Worst August in Nearly a Decade
Stocks suffered their worst August in nearly a decade. Blue Chips are down 4.4% for the month of August, and trading volume has been exceptionally light.
In fact, Monday was the slowest session of the year so far. We'll see much more of this light trading leading up to Labor Day Weekend. Historically, not that anything seems to matter historically any more, the market usually has a surge pre Labor Day.
It is also interesting to note that short sellers were not aggressive this summer, despite the market weakness.
We profited 28 to 29% on our newer call yesterday, will trade it again. For risk traders holding the OTM Sept500C risk traders only will hold this until the other call is sold, but the risk increases with how OTM the strike now appears, and the erosion of the option
_________________
We are paying special attention to the fear/greed gauge, VIX. It recently hit its highest level since July, and has actually, despite downturn some days, inspired some confidence in trader picks.
The public is exiting equities.
No one thinks of what this does. The money a company has to use to borrow money, and to be in business, comes from the value of its stock. If shares are redeemed, companies will go down in value, borrow less, hire less, and make less.
Post World War II we created this....an individual based stock market investing style. As we moved on with less and less regulations, everything we bought and sold was by "false facts" provided to us.
In fact, Monday was the slowest session of the year so far. We'll see much more of this light trading leading up to Labor Day Weekend. Historically, not that anything seems to matter historically any more, the market usually has a surge pre Labor Day.
It is also interesting to note that short sellers were not aggressive this summer, despite the market weakness.
We profited 28 to 29% on our newer call yesterday, will trade it again. For risk traders holding the OTM Sept500C risk traders only will hold this until the other call is sold, but the risk increases with how OTM the strike now appears, and the erosion of the option
_________________
We are paying special attention to the fear/greed gauge, VIX. It recently hit its highest level since July, and has actually, despite downturn some days, inspired some confidence in trader picks.
The public is exiting equities.
No one thinks of what this does. The money a company has to use to borrow money, and to be in business, comes from the value of its stock. If shares are redeemed, companies will go down in value, borrow less, hire less, and make less.
Post World War II we created this....an individual based stock market investing style. As we moved on with less and less regulations, everything we bought and sold was by "false facts" provided to us.
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