Thursday, February 25, 2010

Fatal killing of SeaWorld Trainer raises questions. Here's an answer!

CNN today has a question they are posing to their audience. The question is whether these creatures are predators or performers? I can answer that very easily with another question. In news reports, are you calling them Killer Whales or Orca Whales? Answer: Killer Whale! So what do you expect. These beautiful creatures in captivity like Shamu are called Killer Whales for a reason. In the oceans they are called Orcas and what they do there is hunt. Are you getting the picture yet? Thank you.

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Wednesday, February 24, 2010

Banks Lending: easy, unavailable or not necessary?

Much has been written about Bank lending being down and credit is tight. I think something else is going on. I think that people are wanting to pay off debt and do not want to borrow any money. To see if that belief is true, I have initiated a new Mini Poll on that very question. Please take the time to take the survey on the right upper section of this page and write a comment as to why it is that way for you in the comment section below this post. Thanks!

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Monday, February 22, 2010

President Obama has a "Not losing" strategy on healthcare, not a winning strategy.

Today President Obama unveiled his proposal for Healthcare (insurance) reform, which closely mirrors the Senate approved Health care bill, with a few minor tweaks. He took this most conservative approach, while at the same time 20 Senators have signed a letter wanting the Public Option included in any Healthcare Bill signed into law. If President Obama had a "winning strategy", he would have put that into his proposal as well. But his strategy is clearly in a "not losing strategy". It is very difficult, if not impossible, to put up a "win" in healthcare reform, if he isn't trying to win. Let me give you an example using the Olympics as the metaphor.

In the contest yesterday between the US and Canada's hockey teams, the US had a winning strategy, not a not losing strategy. The US took the game to Canada by continually bringing the puck to Canada's Goal Keeper in almost all 3 periods. This lead to more scores than Canada going into the 3rd period. If they were playing defense and surrounding their own Goal keeper to prevent Canada from ever scoring, they would have lost the game. Defensive postures rarely result in wins. I must admit in the last few minutes of the 3rd period, the US did start playing defensive and that was when Canada scored on them and I was thinking they might lose their advantage and the game. But they came through in the end. Just for once I would like to see President Obama put it on the line and go for victory on something, anything, and let it all hang out. Healthcare reform is as good a cause as anything. But I am afraid he is still playing a "not losing" game with his latest proposal, which ha nothing of his own mark on it. It is merely the Senate version of the healthcare plan. Where's the backbone Mr. President?

By the way, CONGRATS to the US Hockey team and Coaches. And Canada, you were good too and have nothing to be ashamed of. You gave us all an entertaining evening. Good luck to all in the rest of the Games.

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Wednesday, February 17, 2010

Market update.

It has been a while since I posted last. But the reason is there hasn't been much commentary to make on the market. As you can see from the chart above, the Dow did rise the last 2 days but on lower volume than there was 3 days ago. Many are awaiting resolution to the issue of Greece debt before commiting new money to the market. Besides the top of this market is just below 11,000 and no one is going to risk buying unless a correction of 10 % has been made. That is why volume is dropping instead of rising the past 2 days.

Another point to be made is the fact that the 200 Day Moving Average is rising and it won't be long before we go below that level. I expect it in the 10% major correction I expect before the end of March. That will be the end of the 3rd quarter and many will speculate about how bad things still are. Then comes the first few weeks in April where earnings are announced for the 1st quarter.

The Consumer has not increased spending, nor will they until the unemployment picture looks better. That, unfortunately, is a long way off. New Home Construction was up in January and the market moved up accordingly, but that isn't a good thing as there are many houses still in foreclosure or short sales and the last thing the housing market needs right now is more houses on the market. We need a little scarcity of available homes for sale right now, not building new ones to add to the market.

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Sunday, February 07, 2010

Iran: What's it up to?

Several news announcements coming from Iran today. The first, Iran's President Mahmoud Ahmadinejad gave instructions on Sunday for the production of higher-grade nuclear reactor fuel, prompting the United States and Germany to threaten carefully targeted new sanctions against Tehran. This would allow them to develop a bomb rather than just use it for Nuclear Power.

The second announcement was that they had detained 7 they claimed were tied to US-funded radio station they said was for spying. I have been watching Iran since their elections take actions to try to taunt Western powers, including the United States, into taking a bold move against them. I guess the figure, and rightfully so, that in doing so they would help unite this divided country. My guess is that they will continue to stick something in our eyes in hopes of precipitating a more severe reaction. We must not do this. Let the people of Iran decide what they want from their government. We should stay out of it. It will be difficult as they will continue to raise the stakes until either we respond to the provocation or Israel does.

If the people of Iran continue to show the courage to defy Ahmadinejad and Cleric Ali Khamenei, their "Supreme Leader" and are able to disrupt their government enough, they may have a chance to changing the history being written. It does take huge courage but every society has in its midst those who have the courage. We had Franklin, Jefferson and Washington to rewrite our history. They need to find their leaders of courage rather than the gangsters they have now.

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Saturday, February 06, 2010

Dow and markets in for more trouble (Update)

As you can clearly see from the chart, the Dow is staying below its 3 year downtrend line, shown in red. This week's failed auction in Portugal to raise money was the catalyst for world markets selling off. It is a very fragile situation and this coming weeks auction on Wednesday should reveal more weakness in markets, unless someone steps into the breach and buys.

There has been concern shown in news articles that the Euro itself may fail. There are at least 4 Countries with the problem of high debt and a high % of their GDP allocated to paying it off. The US is not as bad as some of these countries but we aren't the best either.

In the meantime, be ready for another leg down in markets as more nervousness takes hold. This will cause the Vix to rise up again while Gold and Silver will take another drop.

I still have my ETF Shorts, TZA, FAZ and my Silver ETF Ultra Short, ZSL.


One thing I forgot but thought was important to add and that was that the Total Put to Call ratio on Friday closed at 1.21 which is the highest it has been since October. The rebound during the day from the 165 drop in the Dow most likely came because of this technical Buy signal. It may be good only or a day or two of trading but I think we are headed lower. Listen to the video of Noriel Roubini on to hear his most recent comments on the world financial crisis facing the EU.

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Friday, February 05, 2010

Shorting Silver still a good trade

Today I have posted the chart on ZSL, the ETF Ultra Short on Silver. As you can see this has gained almost 50% from $4.00/share price where I have purchased it. It looks as though it is still headed higher but if you won this, consider selling it on the next big surge and buying it back cheaper afterwards. Actual Silver is now at $15.08/ounce and I expect it to go down to $13 to $14/ounce. Gold currently is at $1058/ounce and will break below $1000 in my view for the short term. But longer term Gold will rise and set new highs as inflation concerns drive the world economy. As with any trade, timing is everything.

The Dow is now comfortably below 10,000 and currently at 9963 and has decisively moved below the 3 year resistance trend line seen on the previous post. It looks like the market overall is headed lower as well as volume to the downside has been strong these past 10 days.

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