Articles on the Dubai "crisis"

Sampling of articles picked up in the Twittersphere:

• Distress Over Dubai is Overblown by James Altucher (@jaltucher)
• Will the debt crisis in Dubai mean another downturn? (@vaidynath)
• Pimco's El-Erian: Dubai triggers "overdue correction" in stocks (@edwardnh)
• What to Read on the Financial Crisis by Timothy Taylor (@HamzeiAnalytics)

Intriguing Market Action

DOW: 10309 -154

S&P 500: 1091 -19

NAZ: 2138 -37

The overall markets reacted yesterday to news of Dubai's financial crisis. Read a Dubai Q&A

Perhaps RSW & FAZ will start to cooperate with us but we're adding to neither yet. We're continuing to hold BWX, TIP, DIS, SHY, BIL, SHV, TBT, RSW, XLP, & FAZ.

• Fari Hamzei (@hamzeianalytics) posted a Bloomberg article written Wednesday, November 25th describing a shakeup in Dubai.
• Read more on the current state of affairs on @abnormalreturns Friday links.

Fib. from October 2007 high of 1576 and March 2009 low of 666 on the S&P gives me a 50% level of 1021. The index peaked recently at 1113. The 38.2% level is 1014 but a lot of damage would be done long before 1014 is even tempted. Pivotal levels of 1080, 1073, 1041, and the recent lows of 1029, and 1019 would be fuel adding to negative sentiment. Despite the action would a dip to 1014 be considered a buying opportunity?

I've got to believe that once 1029 and more importantly 1019 is taken out that we're in bad shape but, hell, we're only talking about giving up the last 3 months of gains, that's all. So do you buy these levels?

CPI Fairly Tame

Released this morning the CPI-U, on a seasonally adjusted basis, rose 0.3 percent in October and now stands at -0.2 percent over the last 12 months on a not seasonally adjusted basis.

Next release date is December 16.

Watching Financials...Again

We're watching for the slightest chink in the armor of some of the largest financial institutions before loading more FAZ. Quite a few are on the ropes right now.

• HSBC 62.82
• JP Morgan 42.75 (Watching 41.52)
• Bank of America 15.66 (Hittin' its head on 50 dma)
• Wells Fargo 28.16 (Watching 28)
• Citi 4.18 (Having trouble with 4.25)
• Goldman 176.51 (170ish?)
• Visa 79.51 (Trouble @ 78)
• Morgan Stanley 33.38 (32 along w/ 50 dma)
• U.S. Bancorp 23.53 (23 and 50 dma)

GDP Numbers

GDP data:

Q3 2009: 2.8%

Q2 2009: -0.7

Q1 2009: -6.4

Q4 2008: -5.4

Q3 2008: -2.7

Q2 2008: 1.5

Q1 2008: -0.7

Next release dates are November 24th & December 22nd.

No Inflation...Yet.

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in September. The index has decreased 1.3 percent over the last 12 months on a not seasonally adjusted basis.

Read more on the CPI release October 15, 2009 http://www.bls.gov/cpi/

The next release date is November 18, 2009

Recession is Over?

September 15, 2009 Bernanke declared recession over. Technically speaking it is.

Cautious on stocks or a double dip recession:

Nouriel Roubini has staked his claim repeatedly.

Here are some others that state their case on CNBC

Doug Kass is bearish on stocks via Seeking Alpha & Edward Harrison.

Dr. Faber is worried on the long term.

Buffet, however, is "very much against" another significant downturn for the overall economy in the near term.

Be Very Cautious

Caution signs are flashing. Fundamentally, Doug Kass has chronicled his commonition while tweets are surfacing with technical warnings such as those mentioned by @marketfolly finding the S&P's down-trending MACD and its short interest, the lowest level since February 2007, reason for concern.

Historically, investors have been the most leery of September and October. The S&P 500 has registered a -.85% return on 34 down years and 25 up years between 1950 and 2008 in the month of September.

The S&P 500 is currently up 57% from its March 2009 low. Is a pullback impossible to predict? Is it a crapshoot? Perhaps. But when glancing at October '92, October '97, September '98, October '99, October 2000, September 2001, October 2002, October 2004 and October 2005 I like my chances.

Caution is King.

DIS

Disney with a break above 27.30

Look at their acquisition of Marvel

Earnings on November 12

Buffett: U.S. in fiscally "unchartered territory".

Buffett goes on to warn of the growing risk of inflation and that the dollar is in the hands of Congress.

Todd Sullivan has included the full op-ed piece and a Fox Business video.

I like the fact that we started going into TIP last week in the $100 neighborhood.

Urban & Ford

After posting our interests June 2nd Urban Outfitters (URBN) and Ford (F) go on to have a good summer. Too bad we didn't jump in. Another missed opportunity. What is going on?

Catching up on GDP

GDP data:

Q1 2008: -0.7
Q2 2008: 1.5
Q3 2008: -2.7
Q4 2008: -5.4
Q1 2009: -6.4
Q2 2009: -0.7

Wells Fargo U.S. Economic Forecast

From my post October 16, 2008:

"I doubt we'll see terrible GDP numbers for the 3rd qtr. (2008) but certainly for Q4 and Q1 2009. With that said we'll likely set up quite nicely for the 2008 Santa Claus Rally, January Effect and ensuing run into April. Lighten up on equities thereafter and cash coast through the Summer 2009 doldrums. Is a double dip possible?"

The Prognosis on GDP was fair but the equities call was awful. The S&P 500 is up 10% from October 16 but not before hitting the dramatic low of 666 in March. Contrary to rallying in the spring and resting in the summer the markets cratered in the Spring and is now crushing the Summer.

What a Joke of a July

I've missed 6% during this rally. Am I too upset? Nah.

S&P 500: 997

Roubini: Double-Dip Recession Still Possible

I've been discussing the possibility of a double-dip recession with colleagues for some time. Nouriel Roubini is still juggling the notion. A short read and video on CNBC.

Follow Roubini on Twitter: @Nouriel

Back in No Man's Land

880 - 920.

S&P 500: 917.30

Imagine that

S&P closed yesterday at 879.56.

That's probably close enough to 880 to say that 880 is a pivotal level to monitor.

The 850 didn't materialize from the double bottom breakdown of June 22 but perhaps the 805 will from the double bottom breakdown signalled two days ago.

We'll see.

Support Levels

DOW 8260

S&P 880

NAZ 1770ish

Hedges still in place.

How Low Are We Going?

Question:

How low are we going? Is it too late for BGZ?

Answer:

Can't say but we did get a double bottom breakdown signal yesterday with a price target of 850 on the S&P 500. Since we're already into RSW and FAZ with spec. positions, I'll hold until 880 is broken. If 880 goes down then I'll ratchet up into a larger stake.

Could you get in now? You are in the no-man's land of 880 - 920. The index could bounce back up to 920 and you'd be upside down in a hurry.

You should likely wait until a break of 880 before doing anything.

Healthcare Reform?

With shrinking margins and the US government having it in its crosshairs as the next industry in which to destroy the free market healthcare seems to be a good place to short. Research time.

Granted the stocks have rebounded lately because of the "clarity" coming from Washington so, near term, who knows? In the long view I don't like the prospects of a well run industry.

Semiconductor HOLDRs (SMH 21.05)

Stop is $21

S&P and Financials Breaking Down?

Into spec stakes:

• Direxion Financial Bear 3X (FAZ 4.82)
• Rydex Inverse 2X S&P 500 (RSW 90.33)

Quiksilver (ZQK 2.98 -18%)

Quik getting crushed on near-term worries. The new financing arranged by the company is at 15% and gives rights to the lender to buy 20% of the company at $1.86, a very dilutive proposition. We're holding, now, but contemplating it's future. Read more on MSN Money

Broadcom (BRCM 25.91)

Cramer highlighted Broadcom on Friday's Mad Money.

Watching

• Chesapeake Energy (CHK 23.71)Watching for a break above 25 on good volume (25 mm shares).
  
• Fluor (FLR 53.04) Sitting on resistance. Look for a pullback to 50ish, reset and hope to make a run back through 53 on good volume. Ascending triple top breakout signalled today.
  

Penske Will Buy Saturn

Penske Automotive Group, owned by racecar legend Roger Penske, will buy GM's castoff brand. Read CNN Money.com

All news sources for Penske via Google

Jimmy Says, "Don't short the market!"

Jim Rogers on CNBC's stock blog says we're embarking on such a currency crisis that he's pulled all of his short positions.  The last time he did that was 1987.

Per GM Letter Delivered Today

First sentence reads:

"As you may know, GM is using an expedited, court-supervised process to accelerate the reinvention of our company."

What the hell does that mean?

Stops on Positions

• Quiksilver (ZQK) $3.00
  
• Urban Outfitters (URBN) $21.00

Dollar Tumbling, Inflation Forecasted: What to do?

You must have some level of inflation protection going forward, yes?

Read CNBC piece.

Reviewing our stategies in commodities, US Dollar & Gold.

The Markets are taking a breather

DOW 8619 -122

S&P 926 -19

NAZ 1811 -25

Gonna' continue to add to positions on this pullback unless S&P 500 920 is broken.

Semiconductor HOLDRs

Into more @ 21.07 for an equal weight position now.

S&P 500 Support

Support for S&P @ 920

S&P 500: 930.84

Semiconductor HOLDRs

Into SMH, spec stake, @ $22.01, yesterday.  Will try to get more @ $21.10 today.

Watching DIS & URBN

Into Disney with a break above 26.  I'll be delivering a hands on report in about 3 weeks, July 4 week.

URBN, ascending Triple Top Breakout signalled yesterday. Looking to add to our underweight position.

You know that Ford is going to go through $6.50, don't you?

Quiksilver (ZQK $3.11)

Trying to bring Quik up to equal weighted position with limit @ 3.05 but only a partial fill this AM @ average $3.04.

Ford (F $5.99)

It's a certainty that Ford will chase GM's market share.  A break through 6.50 and we'll be into a spec. stake.

Art Cashin: This is a very, very dangerous period.

Art Cashin is very concerned about the dollar as it's fallen to a five month low among other metrics.

Quiksilver (ZQK 3.03)

Double Top Breakout signalled today with a p.o. of $7.25

Mark Cuban: The Internet is a Utility

Media Money with Julia Boorstin

Q1 GDP Revised to -5.7%

Read more at CNBC.com
Wall Street Journal
Yahoo Finance
MarketWatch
BBC

New Stop for CAT (34.17)

Caterpillar will be let go if $34 is breached.

Quiksilver (ZQK $2.53)

We'll be into a spec. stake today if the volume is there.

1:25 PM UPDATE: In at $2.61, stop $2.20.

News Catching My Eye

GM Speeding Towards Bankruptcy

Bottom of US Recession Hassn't Arrived: Roubini

Twitter's All Things Digital Conference

Support Levels

DJIA 8200

NAZ 1664

S&P 875

GameStop @ 22.90

We were stopped out of GME up around $28 and now it trades under $23.  Another example of discipline and sticking to it.

Bill Seidman Passes at 88

Grew up watching Bill Seidman.  Good guy.

Quiksilver (ZQK $1.99)

Quiksilver, good company,great brands, the best team, bad stock...for now.

Marketwatch article on Roxy brand.

Derexion Financial Bear 3X

Betting against the financials, underweight position.

Stopped Out

Stopped out of ORLY, BEBE, & SMH.

Difficult market to navigate.

BEBE

New stop on Bebe Stores is $8.50

GameStopped Out

Out of GME at 27.94

Stop Thinking The Bear Market is Over

Henry Blodget writes, "Now that stocks have rallied nearly 30% off their lows, pundits agree: It's a new bull market.  So be very afraid."

Read more at Business Insider.com

Making Moves With TIGHT Stops

Out of all hedges.

Into underweight positions:

• ORLY @ 39.05, stop 37
• CAT @ 35.03, stop 32
• URBN @ 19.07, 17.50

10:10 AM

• SMH @ 20.71, stop 20

Using Twitter to Trade

Everyone is using Twitter. Here is a list of financial personalities to twitterer or tweet or follow or chirp or...whatever you do with that thing. Congratulations to Brian Shannon, AlphaTrends, for being considered in the #2 spot.

Read more by SmartMoney.com via Yahoo Finance

Teed Up and Looking For a Reason Not To Buy

S&P 500 at 880!

• BRCM
• URBN
• CAT
• GME
• BEBE
• SMH
• financials

875/77 is a brick wall.

Picking a Bottom

"Monkeys spend all of their time picking bottoms" ~ Hugh Hendry

Q1 GDP Down More Than Expected

Q1 GDP -6.1% vs -6.3% Q4.  Analysts expected ~4.9%.  

This three quarter decline is the first since 1974-75.

Consumer spending (2/3 of the economy), however, was up 2.2% for the quarter riding on a durable goods increase of 9.4%

Semiconductor Holders (SMH)

Out of SMH @ $20.17.  Not feelin' it. We'll be back in here if the S&P cracks 877.

5 Reasons to Avoid Index Funds

This piece by Wayne Pinsent in Investopedia is interesting. Of the five listed I can only really buy into one argument, lack of downside protection. This reason was listed as one of five and along with discipline is our foundation for intended success.

Read more on Investopedia.com

GameStop (GME 30.50)

No matter the itch, don't scratch it, stay disciplined.  This is THE difference between the individual investor and the pro. GameStop is inching North, beyond the $30.50 limit we've identified, but it's doing so on little volume. This move higher must be with conviction or no deal. What's the worst that can happen. We miss out on the next move up in the stock? Nah, it's all good, we currently have an underweight position.

So Much to Talk About

• Financials continue to post good earnings. Credit Suisse profit exceeds forecasts.
• Apple blows the lid off. Apple came in above on the top and bottom line.
• AutoNation beats expectations and is up $3.42 (+20%) in pre-market trade. It is back to $17.70.
• Continue to tee up names in leading sectors in the case that the S&P moves through 877 and 943.

Will financials prove to lead this market out of the cellar once again? Despite the paradigm shift in the financial sector and the implosions that ensued it is logical to think that the backbone of the economy, the financials, will indeed pull through again.  

And remember, the US citizen has the shortest memory on the planet.

Financial sector is setting up for a breakout. SPSY currently 137.51 and we'd been watching the 138/139 level. On UYG, it's $4.

Watching Select Names

We've had SanDisk (SNDK 15.54) since October 27, 2000. With the stock breaking down we'd advised a sale of a majority of the stake October 12, 2007.  This is the first time since that we're contemplating adding shares.  It's moved above its 200 dma, its 4o week and uptrending 50 dma. Watching for a convincing break above $15.

Also:

• More GME?
• CAT
• BRCM

New Positions: SMH & BEBE

Into underweight positions in both SMH and retailer, BEBE.

I like the way semis are acting and, based on Broadcom's willingness to buy Emulex, I'll speculate on the sector as a whole.

We've been in and out of Bebe Stores for 10 years. New position is underweight with a stop at $7.50.

Freddie Mac CFO Found Dead

Freddie Mac CFO, David Kellermann, was found dead from an apparent suicide.

Read New York Times

Pivotal Levels for the S&P 500

S&P 500 was up 27% in December to January run, 741-944.

31% in the current run, 667-876.

The 944 to 667 Fib gives us 838, 805 and 773.

A 667 to 876 Fib would give us 796, 771 and 746.

Is ~770 important or what?  Not only that but a downsloping line from 944 and February 10's 868 intersects 746.

S&P 500: 832

GameStop (GME 29.04)

GameStop, down over 2% into the 28s on above average volume, has reaffirmed Q1 numbers. The move that we'd wanted above $29 April 8th and 9th occurred with little volume and was not very convincing. If the stock moves higher, with volume, buying into and up to 30.50 will be the play. Looking for vol. > 7 or 8 mm shares. Judging by the 1mm or so in the first half hour it looks as though the volume is gonna' be there but which way will the stock go?

ETFs on CNBC.com

Interesting piece on ETFs.

Site: ETF Trends

RAlly for Real?

Investors Still Wondering if Stock Rally is for Real, CNBC.com

Credit to Fund My Mutual Fund

Posted yesterday on the state of buy and hold. Both, the herd and buy and hold, are topics in which we have strong opinions as well.

O'Reilly Automotive (ORLY $37.88)

O'Reilly is nearly breaking out to all-time highs. Like AZO, O'Reilly is a player in the automotive aftermarket parts and accessories market. I'll add with an underweighted position after it bases around $38 and prepares for a move higher on heavy volume of 7 or 8 mm shares. Don't pay more than $39.90.

Wells Fargo Record Profit

Equities will open strong this morning due in no small part to Wells Fargo's (WFC 14.89) record $3 billion in earnings. This surprised the analyst community and will likely shock Washington as well. They will likely step in and take some of those profits away from Wells since it is unfair to produce such an obscene profit.

WFC is indicating near $20, up 30%.

Read more on CNBC.com

Are financials telling us something?

GameStop (GME 29.25)

We've gotten the move we'd wanted from GameStop. Accompanied with big volume another move above $29 would warrant buying up (<$30.50) to equal weight.

S&P Throwin' Up Horns

P&F suggests a bullish triangle breakout for the S&P 500 with a price objective of 1065. We'd gotten a similar signal in December in the low 900s. I'd rather play close to the vest but queue names: 14% long & hedged to 10%.

S&P 500: 834

AutoZone (AZO)

AZO falling over 3% today on a Citi Analyst's downgrade to Hold.  I'm not worried about it unless it falls below its 50 dma, currently ~148.

Tee 'em Up

bebe Stores (BEBE): I've been in and out of bebe since September 25, 2000.  Watching for it to break above the 200 dma and, subsequently, the 40 week moving average coinciding at around $7.50. Anything near a million shares would be high.

Urban Outfitters (URBN): A lot of teen retailers are shining right now while Urban has been sluggish. Why? I'd like to be back into this favorite company of mine but not before we dig a little.

Free Enterprise at Work

Government just needs to give us a chance.  I know, I know at times it doesn't seem as though we can do anything for ourselves and that Big Brother should hold our hands all of the time.  But it seems as though AutoNation will have nothing of it.  A few weeks ago the company announced plans to assure car buyers that their payments will be paid in the event that the customer loses his/her job.

They came up with that all on their own?  Why?  To drive traffic to their capitalist machine?  To garner market share?  To turn a profit?  Oh no, the horror!  What if it works.  They'll prove that they didn't need assistance and that in dire times it may take some creativity and brass balls to be successful.

Now this is not to say that these programs aren't an indirect result of some government warm-and-fuzzy that allowed Ford, GM and AutoNation to proceed but it does raise the question as to what would have happened if bailout nation wasn't bailout nation.  Would have capitalism and the free markets prevailed?

We'll never know.

Read about Ford, GM and AutoNation in the South Florida Business Journal

GameStop (GME 29.82)

GameStop recently released good numbers and is acting well. I'm looking for it to fall back to a 28-29 range whereby it can launch a renewed assault above $29 on volume of 7 or 8 million shares. With that move we would go to an equal weight position.

AutoNation (AN)

AutoNation has been a WINNER.  Up over 8% today and eclipsing $15 for the first time since June 2008.  Support around $14.

Watch and Wait

US equities are expected to open stongly this morning on news coming out of the G20. Don't get too excited. Notes from March 30 post:

Keep longs and hedges in place and watch the floor of ~800 on the S&P.  The Fib. from the January 944 top would suggest support levels of 805 and 773 and resistance of 838.

S&P 500: 811

S&P Support Broken

800 on the S&P 500 appears to have been breached. Next support around 772. 

I was weary of any exuberance on March 10th (Bear Market Rally Begins?) and 11th (No Buying) when warning against buying and holding.  I mentioned that while a trade to 8000 was possible the odds of seeing 6470 again were good.  

I'd be weary now too. DOW 7608/S&P 797 is not a time to buy the dip.  It is time to maintain a high level of caution and discipline being highly proactively against losses.

S&P 500: 797

Support and Resistance, Oh My!

What is it?  Resistance, support, support, resistance.  Let's just call 800ish a pivotal level.

I can't justify doing anything right now.  9% Long, no new positions and hedged to the penny. If I were to guess, I'd guess South.

S&P 500: 799

Wagoner Ousted

GM's Rick Wagoner was pushed out by the Obama administration in order to make way for a government led overhaul of the American automobile industry.  The threat of bankruptcy for GM or Chrysler has the U.S. equity markets on edge and we're likely to see a lower open.

Keep longs and hedges in place and watch the floor of ~800 on the S&P.  The Fib. from the January 943 top would suggest support levels of 805 and 772 and resistance of 838.

S&P 500 Closed Friday at 815.94

HOTT

HOTT was up large today.  Triple Top Breakout. Pay no more than $10.38. 

Bear Market Rally or New Bull Market?

Stocks Soar on Geithner Plan, BusinessWeek, March 23, 2009

If Rally is Real, Here's Where Investors Will Turn; Jeff Cox, CNBC.com, March 24, 2009

We'll obviously have trouble with 820.  Thereafter I would look at 845 and 877.  The 800 area is now support.

S&P 500: 815

Markets Up Nicely on Government Details

RSWs will need to be closed at a loss if the S&P moves convincingly above 800.

RSW @ 129.81

There's probably a trade to the downside for speculative money.

S&P 500: 793

Pivotal Resistance for Indexes

A series of speed bumps coming up for the DOW as it should start to have a little trouble right here with 7450-7500, then with a declining 50 dma, currently around 7730.

The S&P will fight with 800.

Rydex Inverse 2X S&P 500

Into a little RSW @ 138.63 to protect a 9% equity position.

Consumer Inflation Up 0.4% in February

Consumer prices rose in February by the largest amount in seven months.  Clothing costs jumped the most in nearly two decades and two-thirds of last month's increase reflected a big jump in gasoline prices.

It appears as though the index wasn't as "muted" as it had been speculated: Consumer Prices up 0.3%, 2/20/09

Bear Market Rallies

Bear market rallies are explosive and convincing by their very nature. They have a propensity to suck in some speculative capital and perhaps even make the common investor believe that everything is ok, that it's safe to go back into the water.

You're fooling yourself if you think that the train has left the station without you and that a call for action is urgently required.

Read The Treacherous Nature of Bear Market Rallies 1/10/02

Read What Does a Bear Market Rally Look Like 11/5/08

Bear Market Rally Could End as Quickly as it Started; Blogging Stocks, March 11, 2009

Read some interesting bullet points from both sides: Bear Market Rally or New Bull Market?

S&P 500: 778

No Buying

Do not buy into this rally with any long-term view.  There may be a tradeable bounce but you can't bottom-fish here and think that you've timed the bottom.  Even if we trade back to 8000 this market will retest 6470.

S&P 500: 720

Bear Market Rally Begins?

The markets are up nicely on Citi news.  The CEO, Pandit, said that the bank produced an operating profit of $8.3 bb before taxes and special items through February, thus far the stongest performance since July-September of 2007.

S&P 500: 719

AZO +$15 (11%) Today

Autozone is in the fast lane amid the car-repair boom.

Read more at CNN Money

The Carbon Way thought that AZO was a reasonable hedge against a slow auto market.

Goodbye Citi

Say goodbye to Citibank as we've known it.  The James Stillman Citi, the Sandy Weill Citi, the first U.S. bank with $1 billion in assets, the inventor of the CD, and once the largest commercial bank in the world will now be 36% owned by the US Government.

A government big enough to give you everything you want, is strong enough to take everything you have.  ~Thomas Jefferson

RSW (147.93)

Yes, it appears as though I let go of RSW far too early.  Paring equities to 13% since that post has helped but the recent lows have obviously been tough to swallow without a hedge.

DOW 7352

NAZ 1428

S&P 766

Big Bear Doug Kass Predicts Recovery

Mr. Kass suggests to Fast Money that investors are not fully considering the impact of recent government stimulus or mortgage packages and that we could be out of recession in about 12 months.  He goes on to say that pessimism is at a fever pitch and that some investors are concerned that the worldwide economies will never recover.

FCX mentioned.

Read More on CNBC.com

S&P 500: 770

Consumer Prices up 0.3%

Consumer prices were up 0.3% in January as a result of increased energy costs.  Though this is the first increase since July it is believed to be short-lived as the slow economy keeps the index muted over the month to come.

Read More on CNBC.com

Bottom Fishing

Some names that caught my eye yesterday:

• SNCR up nicely, +13%, big gap up - maybe it needs to take a breather and settle down to around $9.30, the 50 dma?  Watch closely as it's had a history of this price action since Oct 2007.
  
• GME bouncing off of 50 dma
  
• SIGM Double Top Breakout 2/12/09, pay no more than 12.45

Interesting to note that two of these names had gotten my attention over a year ago.

Out of RSW Too Soon

Getting out of the RSW trade was a little premature yesterday.  Markets are indicated lower today and leaves my 25% in long equity positions exposed.

AutoNation

Gate's Cascade Holds Talks With Autonation; Bloomberg Miles Weiss:

Gates holds over 12% of AN stock while Eddie Lampert holds over 44%.

USA Today piece on the Auto Industry's struggles.  Tom Durant and Classic Chevrolet mentioned.

Todd Sullivan on Autos in Seeking Alpha piece.  Sullivan's interview with Mike Jackson.

Rydex Inverse 2X S&P 500

Out of the RSWs @ 127.13

Stimulating News

News on "stimulus":

$3 Trillion!; AP David Espo

Too Few Details in Bailout 2.0; AP Martin Crutsinger

Stocks Plunge as Government Unveils Plan; AP Tim Paradis

Stagflation A Topic Again?; Washington Post Frank Ahrens

Monstrous Mess by theage.com.au David Hirst

Total Cost of Stimulus is $9.7 million?; Newsmax.com Jim Meyers

Most Say Lawmakers Don't Understand Stimulus; Newsmax.com Dave Eberhart

Stimulus Plan Paves the Way for Socialized Healthcare Plan; Newsmax.com David Patten

Stimulating Downturn in Markets Today

DOW - 403, S&P -45, NAZ -68

With the recent sampling of new positions such as URBN @ 17.76, GLW @ 11.68, AN @ 11.47, AZO @ 144.84, and MOS @48.23 it seemed only reasonable to put on some more RSW @ 118.30 in advance of the "stimulus" vote.

Stops: 

URBN 16 (-9%)

GLW 11 (-6%)

AN 10.65 (-7%)

AZO 133.25 (-8%)

MOS 41 (-15%)

Observations Drafted, Never Posted

FCX above 31.44

MOS, 41.09, 43.10

MON, 87.32

URBN (17.75 +.91)

Snacking a little more Urban Outfitters, currently up 17% for us. Equal Weight.

Unemployment Rate at 7.6%

The unemployment rate edged up to 7.6% topping December's 7.2%.  Payrolls slashed by 598,000 in January the largest decline since 1974.  The street was forecasting -525,000.

This will most certainly fuel a Obama led tirade, ala Christian Bale, onto the GOP encouraging the passing of the "stimulus" package.

DOW 8063

S&P 846

NAZTY 1546

Obviously, it's hard to read the market's reaction to this news and the possible stimuli.  Just get out of the way.

Not!

DLTR, Ready or Not?  Apparently "not" judging by the -$3 opening we're looking at.  Proof positive that you don't speculate, that you trade the market you've been given.  Awesome.

10 AM update: Dollar Tree is getting its face ripped off: -$6.91 (16.56%)

DLTR, Ready or Not?

Dollar Tree closed yesterday at 41.75, the level I'd mentioned yesterday as a possible nibble.  We'll see how it reacts in the face of a negative vibe on the street.  

I won't likely take any speculative position right now but would opt instead for calculated measures.

Tee 'Em Up

Wait for FPL, AZO and DLTR to settle before staging a convincing push through the levels we'd indentified.  There's your entry.  Waiting, watching.

Dollar Tree may warrant a speculative position at the 50 dma around 41 3/4.

Corning (GLW 11.01)

Corning is cutting 3500 jobs worldwide.  Upturning 50 dma.  Building a little momentum but wait for a committed move above $11.59.

SPSY 121.08

Watch for the S&P 500 Financial Sector Index to move up beyond 138/139 before getting excited about financials bottoming.

If you use UYG then it's $4.  Not a penny earlier.

Auto Sales Plummet

Auto sales plummeted to the lowest level in 27 years.  Read Washington Post

A handful of Asian car makers bucked the trend. Hyundai's sales jumped 14.3 percent, Subaru's climbed 8 percent and Kia posted a 3.5 percent gain.

AutoZone (AZO 139.08)

AZO was up nicely today.  Look at the stock's run from the Spring of 2001 to the Fall of 2002.  A committed move through 138 will justify an underweight position.

FPL (52.20)

Despite a Florida in despair and lower revenue the FPL Group reports record profits and the stock is looking powerful.  Worthy of an underweight position with a move through $52 opening the door for an assault on $53.31.

HOG (13.73)

Harley is up big today on news that their unsecured debt paying 15% ANNUALLY is getting support from Buffett and Davis Advisors.

Fund my Mutual Fund commentary

Forbes.com

Southern Company

Out of SO at $33.42.

Smoke 'Em if You Got 'Em

Tobacco might be healthy right about now.  Back into the safe harbor of Altria Group (MO $16.91).

WOW. GDP -3.8%

A Q4 decline that is much better than expected.  Of course, this will be adjusted in the months ahead but still a very agreeable number.

The markets should act nicely today but who's to say.  Once you think they will they won't so don't trade on speculation, trade the market that is.

GDP Release Today; Expecting -5.5% Q4

We will finally start to see GDP numbers materialize that supports the critical condition of the economy.  Today's release will be the first of a couple of bad quarterly reports.

A drop -5.5 number would be the worst since 1982.

Broadcom and Urban Outfitters

Markets are acting poorly and the new "stimulus" package is drawing much deserved criticism.

Out of BRCM today following a series of lower highs.  Long term I expect greater things from Broadcom but considering the current state of uncertainty I will error on the side of caution and book 11%.  And now I see that it's down about $0.83 in the after hours trade.

URBN will be gone too if it breaks below $14.93.

Fund my Mutual Fund

It seems this gentlemen is a tireless worker and I appreciate some of his work:

http://www.fundmymutualfund.com/

http://www.fundmymutualfund.com/2009/01/im-old-school.html

AutoZone

Let's see AZO move above 142 before a nibble and past 144 on 3 mm shares for a bite.

Caterpillar (32.65)

CAT's upside volume never materialized, no position taken and now the stock is falling apart down $3.00 in pre-market action putting it at $32 and retesting its October 2008 lows.  At some point, regardless of technical merit, fundamentally the stock is going to offer a reasonable risk/reward tradeoff.

The company announced record revenues and profit per share for 2008 but falls short in Q4 and expects a very challenging 2009.  CAT plans 20,000 job cuts and forecast sales to plunge 25%.

Broadcom (17.54)

BRCM is up nearly 6% on above average volume of 13 mm shares on a pretty rocky day in the overall market.  Itchy trigger to add more but must stay disciplined looking for the move up and above $19.15 on heavy volume.  Yes, it is worth the opportunity cost of 9% in order to be more confident in the stock's overall strength.  Hang tight 'til it's right.

S&P 500

Breaking 804 would be a sign to me that we're going to test the bottom, 740.  In that case I'd put on the RSWs.

Urban Outfitters

URBN closed at $15.93.  I'm looking for a break above $16.58 on good volume in order to add more.

Oil Heading Back to $65?

Goldman Sees ‘Swift, Violent’ Oil Rally Later in Year

Bloomberg article

Florida Power & Light

FPL Group (FPL 49.83): I'm looking for a break above $53.

Plane Crash in the Hudson

What a fantastic story of grace under pressure.  Captain Chesley Sullenberger puts down flight 1549, an Airbus A320, into the Hudson River without a casualty.

Dow Losses Mirror 1988's January Start

1237 ET 14Jan2009-Dow losses mirror 1988's January start -- CitiFX ------------------------------------------------------------------------------

 The losses of the Dow Jones industrial average so far this year are tracking close to the start of 1988, according to technicians at CitiFx.

 They noted that following the recovery off the 1987 low, the Dow rallied through year-end to peak at 2,066.15 on the 5th Jan. 1988. It then corrected to 1,850.96 over 12 trading days (-10.4 percent)

 The peak so far on the rally off the November 2008 low was posted on Jan 6 at 9087.82. The market has since been falling for 6 trading days. "A similar drop of 10.4 percent off the 9087.82 high gives a level of 8,140.87. The low today (so far) has been 8142.16," CitiFX said in a note.

 Reuters Messaging: ellis.mnyandu.reuters.com@reuters.net 1139 ET 14Jan2009-Widespread selling among broader marke

Urban Outfitters. Again?

Into an underweighted position of URBN at $14.87.

Tee up RSW

890 has been breached so the warning flag is up.  Sizing up hedges and looking for a break only below 850 on the S&P 500.  850 to 870 is limbo.

Gold and the Dollar

A question was posed to me last week, "why is the dollar and gold moving in the same direction?" Historically gold and the dollar have an inverse relationship so you could speculate that the move is rather anomolous and can't be rationalized as some paradigm shift in market principles. As expected expanding your reach beyond just a couple of days of price action doesn't yield much of a deviation from that long standing position.

I'd found that the USD bottomed around the middle of March 2008 and has continued to rise from the end of September/beginning of October while gold hit it's high in the middle of March and continues to fall.  Most recently, the dollar has lost some ground since the beginning of December but gold increased during the same time frame.

Like a number of financial securities and derivatives with similar relationships there will certainly be anomolous blips when USD and gold deviate from their historical norm but for now it's unlikely that some paradigm shift has taken place and that the dollar to gold relationship, as we know it, is intact.

S&P 500 Hedge

Look to hedge this market again if the S&P falls below 890.

Unemployment Rate at 7.2%

U.S. employers slashed payrolls by 524,000 in December, driving the unemployment rate to its highest level in almost 16 years, a government report showed on Friday, suggesting that the year-long recession was deepening.  

Read CNBC report

"Suggesting that the year-long recession was deepening."  I'd like to know who did not think it was deepening before it gets better.

When the unemployment rate starts to ease and the news of recovery hits the wires it will be late in a equity up-cycle.  You won't need to be told that the economy is getting better.

Retailer's Reports are Weak

Bucking the sector's beat down today is Urban Outfitters (15.46 +1.46).  They'd released decent retail numbers today and the stock surged 10 % on healthy volume.  Don't get too overzealous though a break above 15.80 = good.

GameStop (GME 25.58 +2.97) had good numbers.  Look for a move above $26.51.

Earnings were better than expected at Sears.  The stock was up over 20%.

EZCORP (EZPW 14.18)

Seemingly inevitable restrictive policies out of Washington is weighing heavily on the stock of this pawn shop and pay day loan company.  

$1,000,000,000,000

Is a trillion dollars in stimulus really necessary?  Do we really need the package?  Do you get the feeling that we're bottoming anyway?  Afterall, the bad news is almost at a fever pitch and the misery and suffering is euphoric.  In fact the consumers are starting to save money rather than spend it and as a consumer driven recession that has been the crux all along and therein lies the paradox of thrift.

What about the $500 "stimulus" check that all citizens will receive whether you've paid income taxes or not.  That sounds reasonable.  Wellfare and socialism in full effect.  Why not just have a tax holiday. If the government is willing to fund a trillion dollars than why not forgo a trillion dollars in tax revenue and let the consumer reap the benefit where he dictates.  Additionally it is the only way to be certain that the consumer puts his own stimulus package to work rather than save it.  The entire $500 check is unlikely to get spent much to the government's chagrin.

S&P 500 Financial Sector Index (SPSY)

Despite their catastrophic performance the financials will likely play a pivotal role in signalling a bottom.  SPSY moving up past 183 would be a positive development for the overall market.

Broadcom (BRCM 18.64)

Nice action today.  Look for a break above $19.15 on 15 mm shares or more.

Madoff Bailouts Coming?

Please, please say it ain't so.

Newsday.com article

Toyota, Honda lead declines in Dec. auto sales

DETROIT (AP) -- Toyota and Honda's U.S. sales fell more than their U.S. competitors' in December, with Toyota's 37 percent decline and Honda's 35 percent drop showing the Japanese company's popular fuel-efficient models were little help as consumers steered clear of showrooms due to the dismal economy.

Read Full Article

Jobs Isn't Dead

Jobs isn't dead but he's not healthy either.

3 PM Addendum, more on Jobs.

I Heard the News Today oh, Boy

I heard a news broadcaster trumpet this morning, "2008 and the worst economic performance since the Great Depression is behind us."  You must be joking me.  Unemployment that hasn't even approached 10% and two quarters of negative GDP, -.17% Q4 of 2007 and -.5% Q3 2008, has produced the worst economy in 80 years!

A quick Google search yields:

Grasping Reality: Worst Economy since the Great Depression?

It's the worst economy since the great depression.

Worst Economy Since the Great Depression: GOPUSA.com

I have been advocating since Q4 2007 that a recession was looming and while there is a certainty of negative GDP numbers for Q4 2008 and similarly the likelihood for the Q1 2009 results is there really evidence to support calling this the worst economy in 80 years?

Just keep this in mind.  We won't need economic news nor the proclamation that the economy has bottomed before we're fully invested into US equities.  When the rosy news fills the airwaves we will have already filled the blotter with buys.

Step by Step, Inch by Inch

I like the way DLTR, CAT & EZPW are acting.  

EZPW moving to 18 would be good up and past 19.25 would be great.

CAT with an Ascending Triple Top Breakout signalled we just need volume to fill in. Convincing up volume would be around 15 mm shares.

DLTR moving through 44 would be good and 46 even better.