fickletrader journal

Trading bot results for Friday 9-30-2011: -0.13%
(S&P 500: -2.49%)

I shorted another 25 UYM at $25.98 on Friday. I will probably short another $1k block of UYG on Monday, and that will be the last of it for now because I think the market will go into full blown meltdown this week. I won't short more until a bear market rally becomes exhausted.

I've been quite unsettled all weekend which is part of the reason I haven't posted to this journal until just before I go to sleep on Sunday night. What has captured my interest are the earthquakes in Virginia and Colorado that have coincided with this recent bout of market volatility and general decline in emerging markets, brics, and commodities. I have read reports alleging that the earthquakes were man made and demolished underground US military infrastructure. There are some intriguing videos on youtube that corroborate this story, such as trumpet sounds overwhelming a baseball stadium and seismograph readings that don't resemble natural earthquakes. A lot of people seemed to have come to these conclusions almost immediately following the earthquakes based on different information and it is unclear that if they were man-made whether it was done via nuke or HAARP.

It may sound strange that I'm even entertaining these possibilities, but when the market is probing new lows, it really gets my dander up and I want to know where any and all risk could come from.

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Trading bot results for today: -1.8%
(S&P 500: -2.84%)

I did short another 27 shares of UYG on the opening print this morning. I don't remember the fill price, but the open price was $36.46. I know I said I was done shorting for a little bit, but after reviewing things tonight and seeing confirmation in a lot of places, I will probably short another $1k of URE since I have just added to UYG and UYM over the past two trading days.

It doesn't seem like the S&P should go down much more from here given how much the BRIC's are already down, but I think that would be an incorrect conclusion. What is likely to be the correct conclusion is: "It's the big one Snake! Auoo!"

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Escape From LA is one of my favorite movies :D

Here's a chart showing a confirmed break of the neckline on the head and shoulders pattern on JNK I showed a few days ago:

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Trading bot results for today: +0.66%
(S&P 500: +2.26%)

I sold short another 28 shares of URE on the opening print at $35.96, as planned last night.
 
Trading bot results for today: +0.92%
(S&P 500: +1.83%)

Also I had a limit sell order execute for AGQ at $120 for my remaining 9 shares. My entry price was $217, so it was quite a loss percentage-wise.
 
Trading bot results for today: +1.9%
(S&P 500: +3.42%)

Getting the stuffing squeezed out of me! If the market consolidates and then acts like it is going to go higher I'll start peeling back off layers of the short positions I have. I will probably start by dumping the FSG I'm carrying because I don't like the way the paper metals markets are acting... the physical supply is too tight for the low prices in platinum and silver, so those paper prices could keep right on plunging since they should be a lot higher as it is. Either that, or we're going to see a lot of physical metal arrive soon. I'll probably make a visit to the coin dealer this weekend to see what I can find out (what are the premiums, what do I have to get on a waiting list to get, etc). I'd rather express a view on metals with physical anyway :cool:
 
Trading bot results for today: +0.36%
(S&P 500: +0.06%)

A couple of quick observations:

* IWM (Russell 2000 etf) volume over the past week has been steadily declining, with today the lowest volume day in the last month. Strangely, it is lower than yesterday which was a holiday. SPY also shares this same phenomenon, but I mentioned IWM specifically because the small cap index can exaggerate salient features present in the large cap index, thus confirming the phenomenon. My interpretation is that the current rally has now run its course. JNK and HYG (junk bond etfs) both had big down days today, which reinforces my interpretation.

* This is not actionable, but I did notice IEV (Europe 350 etf) had its biggest volume of the year today. This is particularly curious in light of the opposite effect in SPY and IWM. These are all 3 HUGE etfs and they shouldn't have such a divergence. I dug a little deeper and discovered that EWI (Italy etf) also had volume roughly equal to its biggest volume day of the year, however EWG (Germany etf) did not. My guess is that there is "turning point" options bets and other more exotic trading instruments being placed against the weaker European countries, and these shares are traded to hedge exposures by both the options buyers and the writers.

I'm very disappointed by the major headlines alleging an assassination plot against a Saudi delegate funded by Iran to take place on U.S. soil. It doesn't even make any sense that Iran would try to do that in the U.S. when they could much more easily do such a thing closer to home. In other words, the allegations are too unbelievable and smacks of war mongering by the U.S. administration. The same administration that walked out a few minutes into Iran's 30 minute speech at the U.N. recently. I listened to the entire speech and I wish some responsible American officials would address some of the questions that were raised. I'm American, and I'm ashamed of our delegates walking out. The stakes are so high; these delegates have a responsibility to do a good job, and acting snooty like they did here is a fire-able offense.

I read a funny comment at the bottom of the CNN article today referring to the detainees who supposedly confessed: "Wonder if Holder supplied them with the weapons????"

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Trading bot results for today: +0.59%
(S&P 500: +0.98%)

As I stated a couple nights ago, if the market kept going against me I would start to get squeezed out of my shorts, starting with FSG. So I sold my entire position, 32 shares at $34.34. My entry was approximately $42.75 on 8-17-2011, realizing a loss of ~$275.
 
Trading bot results for today: +0.02%
(S&P 500: -0.3%)

Alex Jones was sounding the false flag alarm today regarding Eric Holder's baseless allegations against Iran. There are are some articles at infowars.com and a good summary of the entire situation by ZeroHedge contributing writer George Washington.

The more our government mishandles their responsibilities, the more credibility we lose around the world, the more dangerous things will get for us at home. I fear a situation where our government is forcibly dismantled because they are out of control. It reminds me of the stories in Peter Bernstein's book "The Power of Gold" where people would create murderous war machines to accumulate gold by force of arms, and in the end it led to their death. One murderous hoarder died by molten gold forced down his throat in retribution for the crimes he committed to acquire it. The point is, if it comes to that, the American people will lose what remains of our liberties and sovereinty, at least temporarily. That's the rosy scenario, the ugly scenario is that we will be exterminated by a coalition of countries that can no longer tolerate that the United States government is the biggest terrorist threat to the world.

The stakes are extremely high; it is more important than ever to follow these issues and be a voice against war and central planning. This includes the rigging of the markets for government paper, artificially establishing a de-facto good credit rating. As a consumer, I need to earn a good credit score to get a low interest rate on the money I borrow. The fed just rigs the bond markets for congress so they don't have to worry about credit scores or rolling their debt as long as the world's citizens transact and save in dollars. This is generically called "open market operations" but there are endless variations.

I have recently decided to stop using my credit card for all purchases except for online purchases, opting for cash from an ATM that I don't have to pay fees to use. While I am foregoing my "bonus", realize that bonus AND MORE are paid to the credit card company by the vendor I bought from, usually around 3%. You have to realize that the credit card companies are making big profit margins for every purchase you make even if you pay off your balance immediately. As a consumer, you don't see it because you only buy from a vendor, the vendor pays the credit card company and passes along the cost to you in the form of higher prices. If we all pay with cash, market competition will drive down the prices we pay for everything by roughly 3 percent, way more than the 1% bonus I was getting. That's worth trying to do!

Let's look at a family who spends $1k per month on their credit card and pays off the balance each month. In aggregate, all the vendors that family bought from will have paid a total of $30 in fees to the credit card company. Some back of the envelope numbers. If the credit card company has to use one third of these fees to cover overhead, and one third goes as a reward bonus to the family, then what remains is an income stream for the credit card company of $10 per month from this family who probably has no idea this is going on. Let's identify a valuation for that income stream. How much 10 year treasuries would it take to make $10 per month?

$10 * 12 = $120 per year
2.2% annual yield on 10 year treasuries

120 / 0.022 = $5,454.54 estimated value per family

$1,000,000 / $5,454.54 = 183

So for every 183 families spending $1k per month that pay off the balance each month, the credit card companies are looking at a million dollars worth of income stream that they can package up into derivatives and trade around with the mega banks. The picture gets wilder and uglier when you start to look at families carrying balances and paying interest and fees from the point of view of the credit card companies and mega banks. Food for thought next time you swipe your card.
 
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