Monday, March 19, 2012

Will Apple ever go down again?

With the way pundits, bloggers, and hedge fund managers have been speaking of Apple recently it would seem the stock will never go down again. Me I'm a little more skeptical. Apple now has a larger market cap then the entire retail sector combined, and has dominated financial news headlines for weeks (first when it hit $500 a share, and now that its issuing a ~1 % dividend-who cares). The market is absolutely enamored with the company and I fear even the slightest headwind may send the company for a tailspin, and the entire market with it.
Just a word of trite caution: Trees cannot grow to the sky.

Wednesday, March 14, 2012


Coach Mike D'antoni has just resigned from the knicks, no doubt under pressure from the moronic front office headed by James Dolan. I'm not saying D'antoni was a good fit, but the knicks at least should have waited for the end of the season when his CONTRACT WOULD HAVE EXPIRED ANYWAY.

This is just one more blunder in a long line of horrendous management mistakes to have occurred under Dolan's reign of terror, and its gotten me thinking if MSG is managed even half as badly as the Knicks are, it is a raging SHORT.

MSG is also selling at a very high P/E of 35 and their revenue is dependent on the NY market, which should continue to face headwinds as the financial market contracts.

I'm not shorting anything yet, as I've only done cursory research. But I am very, very tempted.

Tuesday, March 13, 2012

Days like today

On days like today all I can think about is the idiocy of my maintaining short positions. It's about 2:30 and the markets are up almost a full percent. My portfolio is treading water and has been dragging dead weight along with it for the past couple of months now. Should I just cut the cord and let them go? Probably. At least that's what every behavioral stock trading book would suggest I do: cut my losses and let my winners run. But for the moment I can't bring myself to do so. Nowadays its hard to find much confirming my bearish bias except for zerohedge, Hussman, and the BOND MARKET but nonetheless I am holding dearly to my shorts.

One thing that did catch my eye today and give me a glimmer of hope in my short positions (in the very short term) was the $VIX hitting a 5 year low and then sharply rebounding. If the VIX can close above its open of 14 it looks like a $VIX Connor reversal signal will be in place which accurately predicts a short term top 65 % of the time.

Monday, March 12, 2012

Thoughts on credit events

At the end of last week a Greek credit event was declared by ISDA and most Greek CDS was triggered. In response the market's gave a collective yawn and pushed higher, erasing their losses from earlier in the week. At the moment it seems the money owed on the CDS is peanuts and will prove to be a non-event. But I think what is important is that the CDS was in fact triggered (something which many speculated the ECB would go to great lengths to prevent) setting a precedent that will likely be followed going forward.
Dealing with a Greek default is one thing, BUT what happens when Spain is on the chopping block?

Tuesday, March 6, 2012

Neyanyahu's speech to AIPAC

I just watched Benjamin Natanyahu's speech at AIPAC, and all I can say is WOW. He gave quite a speech.

After watching it I can't help but think that we will have a republican president in November.

Is that an odd train of thought? Probably, but here's my thinking:

Netanyahu spoke unequivocally that Israel must stop a nuclear Iran (if you believe him-and I do) that means an attack on Iran is imminet. If Iran's nuclear facilities are attacked oil prices will climb, and further cripple an already weakened global economy. If that were to occur, the US economy would be dragged into the gutter, right along with the other global economies, and the US would enter a recession (remember almost every US recession has been precipitated by an oil shock). If the US enters a recession before November, Obama's chances of reelection, despite a somewhat 'challenged' Republican field, would plummet.

....Maybe the above explains Obama's ambivalence (im being kind) towards an Israeli strike on Iran...

Friday, March 2, 2012

3 risks to the economy

I just finished listening to the latest interview with David Rosenberg on Financial News Sense Newshour. David Rosenberg as usual gives a fantastic interview, and in it, focuses upon what he sees as the three biggest risks to the US economy: High Oil Prices, Rising Taxes, and the Ongoing European Recession.

Do those things sound familiar? Well they should as all three were highlighted in my post last week, Things giving me pause.

Rosenberg doesn't see the US economy headed for a recession but predicts we have a repeat of last year where the economy is brought right to the edge and only grows at a rate of about .4 %.

Rosenberg ends the interivew by encouraging investors to reach for income, hard assets, and safety (all things I would encourage as well). Definitely give the interview a listen if you have time.

Wednesday, February 29, 2012

Bernanke and markets

Today Ben Bernanke spoke before the house financial services committee, and boy did he upset the markets. While the S & P only closed down half a percent, it did so on the highest volume in over a month, and corresponded with gold losing over 5 %, and the dollar skyrocketing higher. (That strange day in the market on Monday, looks to have just been a one day ordeal.)

So what did he say that got the markets so riled up? Well it was more what he didn't say. Namely that he didn't make any, even subtle, mention of QE3. In reality his silence on the matter should not have been so much of a shock, with oil around $110, the economy having just been told it grew at a 3 % clip in Q4, and Republican candidates calling for Bernanke's head (one of whom happened to be questioning him). And yet, it was a shock to the markets and they reacted strongly and negatively. I think this speaks volumes of what's been driving this market higher: loose monetary policies and the perception of their indefinite continuation.

What the markets woke up to today was the potential of a hiatus in money printing (at least in the short term), because as much as Bernanke would like to print, and the government needs him to print, he's in a bind, and cannot do so with asset prices this high.

Well see what happens over the coming weeks, but I wouldn't be at all surprised to see this realization sink in a bit further and lower asset prices along the way.