Blog
We are committed to charitable giving and as such, we set aside 15% of our earnings in support of the following:
The Intelligent Trader's - Long and Short of It
|
From: Robert A. Christy Editor/Publisher, ‘The Intelligent Trader’ http://www.intelligent-trader.com http://www.christyinvestments.com
Date: October 26, 2009
The Numbers
Major Index Bullish Percent
The market continues to struggle. The NYSE flipped back to offense and the OTC and S&P 500 have remained locked in place. Patience is key here while we work through earnings season.
The talking heads will start yapping about “buying the dip”. This is pure noise. We’ll take our cue from our indicators and go from there.
Major Sector Bullish Percent
Sub-Sector Bullish Percent
Green = Favored Yellow = Average Red = NOT favored X = Offense O = Defense
Note: Please note the color change in many of the sectors.
This week’s diatribe …
It has been two weeks since my last missive and a lot has changed. I took some time off to move, which I hopefully will not do again anytime soon and to enjoy the birth of my second grandson. Preston Reid Christy got here three weeks early and it’s been a whirlwind since his arrival.
That said, the market has been treading water for the past couple of weeks. I wrote about how the selling had begun in earnest, only to see the market shift a little and bounce. As I write this, the market was down on Friday and is down roughly the same amount today.
Crude oil has also been moving and was up 1.9% last week. There has been a lot of noise in the news about the topic of Peak Oil. If you aren’t sure what it is, shoot me an email and I’ll explain it the best way that I can. It is a serious topic and one not to be taken lightly.
Treasuries are also in flux and have registered the highest yields in over a month.
The talking heads were all over the news regarding existing home sales being up 9.4% for the month of September. I’m taking a more cautious stance because a lot of sales were registered because the tax credit is expiring.
I also noted that not many were talking about World Trade slipping in August. This should be ringing a warning bell or two because it appears to me that the world economy may be more fragile than some think. The headline of UK GDP being down 6 straight months should have caused at least some concern.
Obama Fiddles While Pakistan Burns
I continue to be surprised at how political every decision coming out of Washington has become. I am no fan of what is happening over in Iraq and Pakistan. I’m a little jaded having been an officer in the Marine Corps. When your top commander in the field says he needs more troops, the commander in chief has a responsibility to listen to what the folks over at the Pentagon have to say about it. Having John Kerry go over to take a look around isn’t the right approach. Kerry cut and ran in Viet Nam and has made a name for himself ever since being antiwar. The man has serious credibility issues.
The troops will probably be assigned, but my best guess is that Obama will drag his feet for as long as possible until the state elections are over in early November.
I mention this because people around the world are right now taking stock of America. Leaders are looking to see whether we’ll step up and do what’s right or if we’ll cow tow and try to believe that discussions are dialogue are the way to bring the ills of the world into line.
As Obama diddles – the dollar is getting killed. The correlation is pretty obvious and it is not a pretty one. As of today, the euro is trading at $1.5026 USD. The dollar is weak and getting weaker. Not good at all for the home team.
I’ve been pounding the table on this for some time now. Currencies are the place to be. Period.
Galleon Group.
I am watching this closely because the sheer size of Galleon is such that a liquidation of the fund will cause enormous amounts of stock to hit the market. This case, which has been in the works for years, is all about insider trading and the improper use of proprietary information.
The insider trading is pretty easy to discern. What I’m curious about is the information flow. Trader’s success or failure depends on information. Every conversation has at least some element of “what do hear on the street?” I talked to traders every day and we share information. How am I to know if something that I am told in a casual conversation is privileged? I don’t unless the other person tells me specifically that he has the inside skinny on something.
Jim Cramer made his fortune trading information. The hedge fund game is all about information. Jim paid millions of dollars in commissions just like Galleon did to be the “first call”. When I was in the business, my speed dial was set so that when a piece of actionable information hit my desk, I just started punching buttons. The first call did not go to Aunt Tilly. My first call always went to my biggest and most important client.
If you want to make money in stocks, you need to have an edge. That’s why I have my indicators and the screening process that I do. My edge is the math used to determine if we are buyers or sellers of a particular name. I don’t trade on inside information – period. It’s stupid to do so because the computers used by the regulators can pick up the slightest anomaly in trading volume.
Will people trade on inside information? They will until the end of time. Did Galleon do it? That’s up to the courts. The fund holders are heading for the exits in droves. The perp walk did what it was intended to do and that is blow up the guy’s business.
Where we go from here is anyone’s guess. As for particulars, I am:
Long gold and silver Long oil and oil service Long agricultural commodities Short Treasury bonds (I expect yields to go up over the next 6-12 months) Have a modest short position on the S&P 500 – which I will increase if the market breaks down through current support levels.
I also have a couple of short positions on some financials.
The last thing I’ll mention this week is that I am long a number of names and I have stop losses on all of my positions so that I can get to the safety of cash if things get dicey.
I’m as anxious now as I have been all year. I am long until I am wrong.
That’s about it for now. Let me here from you if you have any questions.
Robert Christy
P.S. You can now sign up and follow us on:
Twitter: stcktradr Facebook: The Intelligent Trader and/or Bob Christy (Atlanta area) Skype: stcktradr
P.S.S. The currency market is the place to make money this year. If you’d like to know more about how you can participate in this, just send me an email and I’ll send out the information to you.
P.S.S.S. Please fee free to forward this to your peers, friends and anyone you think would benefit from its contents. They will thank you for it - and so will I!
The Intelligent Trader's ‘Long and Short of It’ is a free OPT-IN e-letter. Sign Up to receive your own free copy at: http://www.intelligent-trader.com or http://intelligent-trader.blogspot.com. Please note: We do not spam or give personal information to third parties-ever.
Be sure and bookmark our blog: The Intelligent Trader. There you will find our daily market comments and diatribes about life in general.
About 20% of e-mail is never received due to spam filters. If you have a spam checking program installed on your computer, please be sure to add rac@intelligent-trader.com to your "safe list."
Robert Christy is a professional currency trader, stock trader, money manager, author and speaker. Mr. Christy is the President CEO of Christy Investment Group, Ltd., a fee-only registered investment advisory firm. He is also the Managing Partner and Portfolio Manager of Crabapple Capital Group, LLC and the editor/publisher of The Intelligent Trader, a subscription based long/short trading service. At the time of publication, Mr. Christy may from time to time write about stocks in which he, Christy Investment Group Ltd, Crabapple Capital Group, LLC or The Intelligent Trader has a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a specific recommendation to buy or sell stocks. Mr. Christy appreciates your feedback and invites you to send it to rac@intelligent-trader.com .
Robert Christy The Intelligent Trader
The Christy Investment Group P.O. Box 625 Alpharetta, GA 30009-0625
To unsubscribe or change subscriber options, please contact us: online: http://www.intelligent-trader.com by email: info@intelligent-trader.com
© Copyright 2009 Robert A. Christy, The Intelligent Trader
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
