Looks like the full moon brought out the wolves, the futures carved out a new low, right after midnight.
Pull up the /ESH0 5m or 30m. You may see an ascending H&S after yesterday's downtrend (strengthening the H&S success rate). Left: Thurs 18:34 @ 1075; Head: Friday 00:00 @ 1070; Right: Friday 4:25 @ 1076.50. Projection: +10 points, ascending the bullish H&S channel.
Unfortunately, over the past few days, bullish H&S patterns have broken down quite easily on the right shoulder line, and the overnighters have been getting squeezed on morning gaps up.
The swings lately have felt like I need a T-square to plot the reversal direction. :-)
Friday, January 29, 2010
Thursday, January 28, 2010
Ominous Sign of Further Correction?
On Thursday's down day (after a week of "correction"), a coworker said "this market is headed toward 1200 before it heads down, I just hope it gets there, so I can sell my 401k."
This kind of hope to reach higher could mean the stage is already set for those holding the bags before another more significant correction.
This kind of hope to reach higher could mean the stage is already set for those holding the bags before another more significant correction.
More Stock Based Banker Compensation
Quote: "Jan. 22 (Bloomberg) -- James Gorman, who became Morgan Stanley’s chief executive officer at the start of this year, was awarded deferred stock grants valued at about $8.6 million for his performance last year, when the shares rose 85 percent even as profit lagged peers. Gorman, 51, will get 194,590 restricted shares, valued at $5.7 million at yesterday’s closing price of $29.34, plus the right to at least 97,295 more shares that would be granted in 2013 if certain company goals are met"
Morgan Stanley™'s Gorman Gets $8.6 Mln Stock Bonus (Update1)
This is the writing on the wall, but what does it say? A bunch of restricted stock (of which the details are not disclosed) and essentially a free three year call option, tied to "certain company goals". Those company goals can be guaranteed to be 100% attainable. This is possibly a politically driven action, where large salaries have been news, while stock based (supposedly "performance based") compensation is being offered to quiet the masses. Does the Morgan Stanley CEO expect the deferred stock grants to be worth more than today? That depends on the call option's strike price, and whether mark to magic remains in place.Mark to magic is the removal of the previously required "mark to market" pricing of a company's assets. This effectively erased all long term losses from the bank's books, as they amortize (aka hide) the potential risk and losses over the term of the asset class. Maybe in 20-30 years, the banks will finally take their hit, once their stocks reach new highs, they will offset the long term losses.
Apple BusinessModel & Product Line Analysis
Disclaimer: I own and use Apple products, but the recent shift toward consumer devices, instead of personal computers is changing Apple's business model. The new Apple consumer devices are enablers to change consumer habits.
The Apple product line's new introduction of the iPad, fits nicely between the MacBook and the iPhone. Apple's own "Shipping soon" graphic shows the manila envelope which the MacBook Air made infamous. The iPad effectively puts the MacBook Air on notice, that the iPad intends to move into that manila envelope, and kick the MacBook Air to the curb.
The price point, feature set, and data plan options are an Amazon Kindle Killer. The iPad is a much better device, lots of additional features, and is quite possibly the best commuter or college student's media consumption device.
The iPad's introduction of a multitouch screen in a larger screen, tells me the MacBook, MacBook Pro, & Cinema Display lines will not get a multitouch screen anytime in the near future. This would potentially eat away at iPad sales.
Apple touts 140,000 AppStore applications. MacOS X Laptop/Desktop developers have been placed on notice. This banner effectively says "Apple will direct all future sales through the AppStore, since we get a cut of every sale." The past premium for publishing software on the shelf will be back in Apple's control. The deteriorating price of "Apps" to the 0.99 price point on the iPhone/iPod Touch and the middle tier iPad pricing around 9.99 is an ominous sign for Mac OS X developers. Which platform does a Mac developer release on first, with what feature set, or price point? These are serious problems facing any Mac developer's ability to make a living.
The iPad SDK is available, but you cannot develop using the device itself, for that Apple requires an additional purchase of a Mac Laptop or Desktop, ensuring a closer binding to the laptop/desktop unit. Similarly, MacOS X developers, the savvy ones at least, will force a similar binding between the laptop/desktop tier and the consumer device tier.
The iPad, like the iPhone is not multi-user. This limits using this device in a shared home environment. The counterpoint being the device is "good 'nuf" and "cheap 'nuf" to buy more than one for a family environment. However, again, you need a laptop or desktop to sync your media/backup.
The lack of a camera means the iPad will not eat into the iPod Nano or iPhone 3GS sales. To be fair, a high quality IPS LCD needs a higher megapixel camera to do it justice, so many folks will opt to sync their digital cameras to the iPad via the Camera/SD Slot Adapter.
Yes, video streaming is becoming more a reality. Bandwidth is increasing, and the generation of "good 'nuf" is driving a lower quality, give it to me now mentality. The lack of Blu-Ray in Apple's Desktops and Laptops, now that Blu-Rays have broken a critical $20.00 barrier, is evidence of Apple's preference toward the Apple Store's online media services. Again, Apple gets a cut from every online Apple Store sale, and a significantly larger cut for videos/rentals, rather than offering Blu-Ray.
The Apple product line's new introduction of the iPad, fits nicely between the MacBook and the iPhone. Apple's own "Shipping soon" graphic shows the manila envelope which the MacBook Air made infamous. The iPad effectively puts the MacBook Air on notice, that the iPad intends to move into that manila envelope, and kick the MacBook Air to the curb.
The price point, feature set, and data plan options are an Amazon Kindle Killer. The iPad is a much better device, lots of additional features, and is quite possibly the best commuter or college student's media consumption device.
The iPad's introduction of a multitouch screen in a larger screen, tells me the MacBook, MacBook Pro, & Cinema Display lines will not get a multitouch screen anytime in the near future. This would potentially eat away at iPad sales.
Apple touts 140,000 AppStore applications. MacOS X Laptop/Desktop developers have been placed on notice. This banner effectively says "Apple will direct all future sales through the AppStore, since we get a cut of every sale." The past premium for publishing software on the shelf will be back in Apple's control. The deteriorating price of "Apps" to the 0.99 price point on the iPhone/iPod Touch and the middle tier iPad pricing around 9.99 is an ominous sign for Mac OS X developers. Which platform does a Mac developer release on first, with what feature set, or price point? These are serious problems facing any Mac developer's ability to make a living.
The iPad SDK is available, but you cannot develop using the device itself, for that Apple requires an additional purchase of a Mac Laptop or Desktop, ensuring a closer binding to the laptop/desktop unit. Similarly, MacOS X developers, the savvy ones at least, will force a similar binding between the laptop/desktop tier and the consumer device tier.
The iPad, like the iPhone is not multi-user. This limits using this device in a shared home environment. The counterpoint being the device is "good 'nuf" and "cheap 'nuf" to buy more than one for a family environment. However, again, you need a laptop or desktop to sync your media/backup.
The lack of a camera means the iPad will not eat into the iPod Nano or iPhone 3GS sales. To be fair, a high quality IPS LCD needs a higher megapixel camera to do it justice, so many folks will opt to sync their digital cameras to the iPad via the Camera/SD Slot Adapter.
Yes, video streaming is becoming more a reality. Bandwidth is increasing, and the generation of "good 'nuf" is driving a lower quality, give it to me now mentality. The lack of Blu-Ray in Apple's Desktops and Laptops, now that Blu-Rays have broken a critical $20.00 barrier, is evidence of Apple's preference toward the Apple Store's online media services. Again, Apple gets a cut from every online Apple Store sale, and a significantly larger cut for videos/rentals, rather than offering Blu-Ray.
Monday, January 25, 2010
A Thought to Consider
The best part of a short term rally is the thought of selling positions into another bear cycle.
Many trendlines were broken on Friday, some cascading occurred, but the 5min bars were fairly orderly. It was quite a thin buying market at times, some mid-day buys were easily able to push the market higher, showing bull weakness by the day's end.
Sometimes these sharp down days are the best contrarian play. Find a bullish credit spread you think has been grossly overvalued, and take it. The market has been wounded, but it tends to retest the mean before purging occurs.
I see /ESH0 around 1125 as a nice swing high, if a bear takes form. If we touch & go around 1105, then 1040-1050 is a good place for a bullish stand. There are too many fibs and lines crossing in that area not to pose resistance.
Given the news perking up to the market movement, grinding around 1090-1120 would probably be most suitable to infuriating both bulls and bears. Got theta?
What goes down, must come UUP, right? Is it possible a dollar carry trade with equities has fueled part of this rally? Did Goldmine Sachs receive a margin call from Uncle Sam? The tape tells me exactly what I would like to hear. ;-)
Many trendlines were broken on Friday, some cascading occurred, but the 5min bars were fairly orderly. It was quite a thin buying market at times, some mid-day buys were easily able to push the market higher, showing bull weakness by the day's end.
Sometimes these sharp down days are the best contrarian play. Find a bullish credit spread you think has been grossly overvalued, and take it. The market has been wounded, but it tends to retest the mean before purging occurs.
I see /ESH0 around 1125 as a nice swing high, if a bear takes form. If we touch & go around 1105, then 1040-1050 is a good place for a bullish stand. There are too many fibs and lines crossing in that area not to pose resistance.
Given the news perking up to the market movement, grinding around 1090-1120 would probably be most suitable to infuriating both bulls and bears. Got theta?
What goes down, must come UUP, right? Is it possible a dollar carry trade with equities has fueled part of this rally? Did Goldmine Sachs receive a margin call from Uncle Sam? The tape tells me exactly what I would like to hear. ;-)
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