What We're Reading

All the greats seem taken too soon.  Growing up in Chicago, Pulitzer Prize winning Mike Royko was a household name during his 30 year career writing for the Chicago Sun Times and Chicago Tribune.  He and Bob Green were daily fare as we rode the train downtown with their unique, engaging, almost addictive writing style.  I have no idea how I missed this gem but ladies if you haven't taken self defense classes, never fear.  From one of my favorite writers - here goes; enjoy!

We’ve had the year of the woman and it is still going on, with females being elected to high office and named to the Cabinet posts, and the power of Hillary Rodham Clinton.

But what about Curtescine Lloyd? You never heard of her? Well, she is my choice as one of the most amazing and heroic women of recent years. Ms. Lloyd is a middle-aged nurse who lives with an elderly aunt in the rural hamlet of Edwards, Miss., near Jackson. This is her story, most of it taken from the court transcript.

One night, Ms.

It feels good to actually be making money on the short side for once and not struggling.  Yes, leadership has evaporated with utilities being the only real strength right now with head-and-shoulders tops and double tops as far as the eye can see.  Transports, financials and even oil/gas is seeing profit taking at this juncture.  The Nasdaq has lost it's 100d SMA which was historically great support.  Remain hedged; there will be more downside.  Whether we bounce a bit first (back and fill) to bring in more sellers is an unanswered question but don't buy the dip.............not yet.

I drink my tea on this cold and rainy day and my first thought, as I looked at this chart, that screamed in my brain was "the debt the debt!  omg what are they thinking?"

History suggests that China’s Minsky Moment is approaching quickly, since corporate debt has topped 150% and total debt is over 210%. Investors around the world should prepare for the inevitable demand shocks and falloff in global growth … regardless of the specific outcome. The Chinese government may have the assets to backstop a truly horrific crisis and maintain slow growth in the 2-3% range, but history suggests that China could land very hard.

Over the last fifty years, every investment boom coupled with excessive credit growth has ended in a hard landing, from the Latin American debt crisis of the 1980s, to Japan in 1989, East Asia in 1997, and the United States during both the late 1990s internet bubble and the mid-2000s housing bubble.

The lesson is always the same, and it is hard to avoid.

Economic mira

This weekend I focused on the LARGER, long-term picture of the stock market to make it overall easier for my brain to comprehend. 

1. Merely when "what" moving average crossed what moving average (on a monthly, not daily or weekly chart) would be a decent indicator of trend?   I wasn't going for exact science here but more a common sense approach when it comes to the long haul.  Just "when" should I bail and sit on my hands with my IRA?  *This" unfortuantey is a topic for another conversation.
2. The BIGGER question was at what point do I really want to jump back in and "buy on the cheap"?  

I should explain that I trade based on 80% technicals (fibonacci combined with chart patterns) and only about 20% fundamentals but my trading style is to buy at a support rather than a breakout.  This became my personal preference after having been "shook out" of breakouts once too many times over the years.  This style is not for everyone but buying at support, I feel my downside risk is more c

Corporations have had no choice but to learn quickly that, like it or not, support on the the issue of same-sex marriage has been steadily (and rapidly) gaining steam across the nation faster than the interracial debate of past and that *not* supporting it publicly creates quite a the backlash.  Just ask Chick-fi-a and Prop 8 donor, now Mozilla ex-CEO Brendan Eich.

Maybe the smart decision for CEO's would be to remember just "who" is their target customer and who are they going to offend with your (CEO) personal view?  Do they truly match those of your company's core beliefs and Corporate code on diversity?

Consider AdWeek data showing women make 73% of the purchasing decisions in the home so maybe what it boils down it is...........before you go an open your pie hole, consider just how many women you're going to alienate.

Hats off to Nabisco Foods and parent company Kraft ($KRFT) for taking on the subject full frontal with their latest Honey Maid commercial and responding to the hater

• 200 million social security numbers breached @ Experian.  US Attorney General to launch probe. (nothing is safe if a credit bureau is hacked)
• The DoJ confirms the FBI is investigating high frequency trading (HFT).  With the way broker/dealers (AMTD, ETFC, SCHW) were slapped heavily last week, it looks like this time it's serious.
• The FBI is asking the public (traders and stock exchange workers) to blow the whistle on HFT.
• The SEC (accustomed to making it's own decisions when it comes to TBTF banks) feels their authority has been undercut and doesn't care for Dodd-Frank or The Financial Stability Oversight Council, who now can make it's own regulations with respect to "systemically important" financial institutions.  Shocking.........because the SEC did such a horrible bang-up job of stopping the last financial crisis. Heritage.org
• Where have all the workers gone?  WSJ takes a look (free access).  If you ask me, there's no incentive with minimum wage so low and those long o

Market strength in safe havens as utilities hit a new high.  Financials and oil/gas holding up but concerns will now be if tech and small cap (continued) selling will spill over into the other indexes (a la 2000).  With fewer and fewer leaders, selling begets selling.  (click image to enlarge) 

• Semiconductors are finally seeing some heavy volume this morning in $SMH.
• David Letterman (67) announced his retirement in 2015 as he has struggled in 3rd place with the much coveted 18-49 age group behind front runner Jimmy Fallon and Jimmy Kimmel.  Fallon has built himself a comfortable lead and maybe Letterman saw the writing on the wall.  I'd look to buy $CBS stock at lower valuations with eager anticipation of just "who" will be his replacement.  This would be an excellent opportunity for CBS to "update" their boring image (my opinion strictly).  Come on CBS - something with zombies please.  *lol*  

Merely a thought but could the IPO of gamer $KING have been the top for the much heralded Nasdaq?  After $FB $TWTR $ZNGA and now $KING, maybe the market held out just long enough for the $KING IPO before ringing the register.  Maybe the market has decided enough is enough when Farm Heroes pulls a $20/share price and a $6 billion market cap.   Just sayin'.  It's not a "thing".  They don't produce a product.  It's.......a.......website.  

Many in the twittersphere have already commented that this strangely feels like the 2000 top and when growth names like $AMZN and $NFLX can't get any loving, maybe they're right.  Maybe the $KING IPO was the top.  If so, they'll be doomed to the OTC graveyard faster than Jimmy Johns can deliver your lunchtime fare.

• Schwab says HFT is a "Cancer" that must be addressed.  "The primary principle behind our markets has always  been that no one should carry an unfair advantage. That simple but fundamental principle is being broken." When big players such as Schwab begin to speak out, one must wonder if this will gain attention now.
• GT sold some AMZN 360/365 bear call spreads.  Still feel that's a HST
• Citibank $C reports$400M in fraudulent loans out of their Mexico subsidiary; lowered profit forecast. 
• Kos is calling bearish head-and-shoulder tops in a few ETFs.  Find out which in our charts section.
• Corporate profits continue to show strength - this for the long term investor Califia Beach Pundit
• Using California as a proxy, enrollment in ACA has been good with the exception of Latinos and to a lesser extent young (healthy) Americans.
• After the close, CME lowered margin rqmts. on crude oil, gold, silver and coal..  Seriously?  As if we need higher gasoline to jeopardize the recovery?  Well, inflation

Certainly HFT (high frequency trading) takes advantage of minute price discrepancies and can fire off trades faster than your head can spin but is it "rigged"?  Is it illegal? Clearly big funds have an advantage over Joe the Plumber trying to trade his own portfolio.  They, after all, can afford all the bells and whistles, the fancy (more expensive) indicators, gain insider insight and if nothing else, insider information however can you say that's illegal or "rigged"?  Maybe it's more their presence causes concerns over stock market integrity with flash crashes occurring (it seems) on a continual basis now. 

We here at StockBuz strive to trade our ports, whether dollar cost averaging or full trades and do a darn good job at it so collaboration works.  Whether members feel "rigged" is the proper term to use is anyone's guess but right or wrong..............it certainly sells books.

For all the political yammering about raising the Federal minimum wage, it would seem that almost 1/2 of the country is already above the Federal level with Connecticut being the first to jump to $10.10 per hour just yesterday.

For all the fear mongering that raising the minimum wage would lead to job loss, the results don't match the scary bedtime story being spread.  To be honest, who really over staffs anyway (unless it's the holidays)?  In my opinion, businesses hire what employees they need to service their customer flow and keep down their bottom line but don't take my word for it. 

Examine San Jose, who raised their minimum wage to $10 an hour a year ago.  The results after one year have not been massive job loss and small business failure.  Rather San Jose has enjoyed a jump in small business creation, job growth and a drop in their unemployment rate.  With more money in the citizens pockets, it definitely seems to be translating into money flowing into local businesses and t

Many eyes are watching the VIX as it has not decayed recently and made another new low.  This holding pattern could be due to concerns over Russia possibly invading the Ukraine (who believes them when they say "nyet"), concerns over lackluster earnings, the dreaded "taper", fear of rising rates and a long-in-the-tooth bull run. 

Looking back over recent history, the VIX did a similar basing in the Spring/Summer of 2013 when each month, there seemed to be a "fear" the Fed would announce removing their foot from the QE gas pedal during their FOMC meeting.  18 Italian banks being downgraded just poured more fuel on that short term fire spiking it even higher.  Of course, the market recovered but there seems to be much more going on behind the curtain at this point.

To quote Marvin Zonis from last weeks CBOE Risk Management Conference, "“We are in the age of major, major political risk.”  Not only is taper on people's minds, but larger geo-political concerns are out there as well such as

Ah, 1978 and U.S. airline deregulation.  What a thing of beauty.  Suddenly there seemed to be a new airline popping up each year, all vying for a piece of the pie in the sky.  Then how to drum up business.  Remember the days of airfare wars?   A new start-up would lower prices to attract business and the big  boys , no longer with the luxury of their monopoly, had no choice but to follow suit as their passenger counts fell in step. 

The consumer was obviously elated!  Even those who previously couldn't afford to visit Grandma in Boca, were suddenly able to take to the skies; kiddies and all.   

Those were the clear benefits of deregulation and the consumer loved it - but corporate profits did not.

Then came the rise of jet fuel.  Did the government intervene to stop it?  If they did, it was too little too late.  (click chart to enlarge)  It doesn't take a rocket scientist to imagine what that did to profits and prices.

Oddly enough with dramatically less demand, fuel prices haven't

A plan, which on the surface, appears to be very Reaganesque and commendable however business (in my opinion) has mutated since the '80s and I immediately envision Congress ripping this to shreds eliminating the following:

• Eliminating tax loopholes while lowering the Corporate tax rate to a "fair" 28%  - seriously?  As if Corporations suddenly want to pay what someone may deem their  fair share?  It's all about profits baby and low-to-no taxes means profits.
• Removing incentives to relocate overseas.  Corporations have and will continue to shift their mfg to wherever costs are lowest.  What's he smoking and why isn't he sharing?

Give them incentives TO manufacture here (more tax breaks)

He also proposes the sale of America Fast Forward (AFF) bonds to attract private capital to invest in infrastructure investments.  This reminds me of the bonds which were sold in the 50's...........which I don't recall anyone raving about what a great investment they turned out to be.  Just say

While running a simple screen for Cheap Growth stocks, I had something unusual happen. There was not a single stock that met the criteria. That's right, zero, zilch, nada. The screen only had three criteria; a PEG ratio of .75 or lower, a debt to equity ratio of .8 or lower, and an expected growth rate of 25% for the next 5 years. Only two possible conclusions can be drawn from this. Conclusion A, growth stocks are way over valued at this time. Conlusion B, analyst estimates for earnings growth are still very bearish, too bearish in fact.

My past experience with this screen leads to me too conclusion B. I started using this screen six months prior to the beginning of the bear market. At that time, there was no shortage of cheap growers. In fact I had to add a market cap component to reduce the number of possible candidates. Since the screen depends heavily on analyst earnings estimates and considering the events that occurred half a year later, I would conclude that analysts were too

First let me state, It's not my deliberate intention to make supportive case for the rampantly growing
already, and bursting at the proverbial seams, laced with redundant, inadequate, and antiquated govt jobs,
Super Bureaucracy of today. That to include it becoming any overbearing, oppressive, Orwellian,
and Nanny State Day Care-ish, that's already now! Yet, I am understanding or of the mindset. That eventually technology will shrink the bureaucracy considerably fold. Thus yielding a correction to the parabolic growth rate it has been in and executing now. No parabolic growth is sustainable indefinitely. And the Masses will soon realize that alot can be done with less in today's real/live time interconnected world.

Second, I am going to try and demonstrate throughout, that the exponential advancements in technology made
thus far, will not only allow us to do this, but undeniably require it at some point. That being taking a
REAL/LIVE time, monthly micro economic management and observa

Re: Quant funds & high frequency trading - are they the reason that there issome perception that the market takes an appearance of "climbing smooth hills"(etfs). I heard that this presented a problem for some traders. It seems to meto be the opposite (nice and smooth, some etfs). I wonder if this would at somepoint smooth out the curves on underlying stocks and might be a reason that somecomment that sometimes earnings announcements, etc. seem to get ignored in termsof market action around them, e.g. the conflict between quant fund patternperformance and fundamentally oriented models, etc. My question: for those ofyou that are familiar with the quant fund domain, is it your opinion that the"smooth" price chart forms will continue (up or down). Or, do you think thatwith a down turn (future) that some of the inverse ETFs might smoothly rise. Itseems like 2008 was an extreme situation. I was wondering if a smoother bearmarket (future) would be possible with the new funds/etfs, etc. (wishf

First, if you are going to criticize something...be prepared to offer solutions/remedies to what your criticizing...Otherwise you are just a wind-bag-arm-chair-critic! I have a plan to put about 400,000 people to work in the next two months time. With no more than a signature of a pen.There's roughly about 140,000* gas stations (70% of them having convenience stores and gas stations) in the USA. Now, only in New Jersey and Oregon is it illegal to pump/dispense your own gas at the station. Thus requiring a filling attendant to put gas in your automobile.Well, if we, meaning individual states governors of the states that dont have them self service laws. Enact similar laws....no....I change that to town ordinances...I say ordinances because this could be started by municipalities passing city ordinances to do this first..citing local unemployment #'s and blithe and economic hardships...to get the legal ball rolling...And make gas stations hire workers to fill tanks. Albeit they will be l

Charles Schwab Corp. (SCHW) did almost double it's volume today. Saber rattling from Fed on punch bowl yank. Everyone knows CHUCK stands to make good scratch come rate raising time. More so than most. I think today we seen people getting there in the trade. Eat my dust....I 've been there for awhile....;).and riding nice shr avg....Someone is going to look at these guys for deposit/asset base and the retail trading arm that a buyer might be looking for or lacking of.... as bonus. I always felt Chuck was a poster child for asset integrity in all this. Took no TARP. And what little loans were made seem to be low risk. Or I could be wrong...and they're heading for door....last one out get the lights...will ya....lolI wrote the below last AugustI have to tell ya...After reading through the Q at (SCHW)-Charles Schwab...I amreally optimistic about the future for them. Let me state some points. First,someone asked me yesterday why is CHUCK a good long term stock to buyhere?....My reply was th